Customer Loan Agreement Relating to Launch #2 - CD Radio Inc. and Arianespace Finance SA
EXECUTION COPY
---------------------------------------------
ARIANESPACE CUSTOMER LOAN AGREEMENT
Dated as of July 22, 1997
between
CD RADIO INC.
and
ARIANESPACE FINANCE S.A.
Relating to Launch # 2
---------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
SECTION 1. DEFINITIONS......................................................................................... 1
1.01 Defined Terms................................................................................. 1
1.02 Other Definitional Provisions................................................................ 44
SECTION 2. LOAN PROVISIONS.................................................................................... 46
2.01 Amounts and Terms of Commitments............................................................. 46
2.02 Manner of Borrowing Tranche A Loans.......................................................... 47
2.03 Procedure for Conversion to a Tranche B Loan................................................. 48
2.04 Deconversion and Reconversion................................................................ 49
2.05 Prepayments.................................................................................. 49
2.06 Repayment.................................................................................... 53
2.07 Interest..................................................................................... 53
2.08 Fees......................................................................................... 54
2.09 Computation of Interest and Fees............................................................. 54
2.10 Payments by the Customer..................................................................... 55
2.11 Security..................................................................................... 55
2.12 Note......................................................................................... 56
2.13 ECA Enhancement.............................................................................. 56
2.14 ECA Additional Terms and Conditions.......................................................... 58
SECTION 3. TAXES AND YIELD PROTECTION......................................................................... 58
3.01 Taxes........................................................................................ 58
3.02 Increased Costs and Reduction of Return...................................................... 61
3.03 Funding Losses............................................................................... 64
3.04 Inability to Determine Rates................................................................. 65
SECTION 4. CONDITIONS PRECEDENT............................................................................... 66
4.01 Conditions to Initial Tranche A Loan......................................................... 66
4.02 Conversion Conditions........................................................................ 68
4.03 Tranche B Conditions Precedent............................................................... 70
4.04 Conditions to All Loans...................................................................... 76
SECTION 5. REPRESENTATIONS AND WARRANTIES..................................................................... 77
5.01 Existence and Power.......................................................................... 77
5.02 Authorizations; No Contravention............................................................. 77
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
5.03 Government Approvals......................................................................... 78
5.04 Binding Effect............................................................................... 79
5.05 Litigation................................................................................... 79
5.06 No Default................................................................................... 80
5.07 Use of Proceeds.............................................................................. 80
5.08 Title to Assets.............................................................................. 80
5.09 Taxes........................................................................................ 81
5.10 Financial Condition.......................................................................... 81
5.11 Environmental Matters........................................................................ 82
5.12 Subsidiaries................................................................................. 82
5.13 Insurance.................................................................................... 83
5.14 Project Compliance........................................................................... 83
5.15 Collateral................................................................................... 83
5.16 Collateral Documents......................................................................... 83
5.17 Sufficiency of Loan Documents and Satellite
Contracts.................................................................................... 84
5.18 Disclosure................................................................................... 84
5.19 Effectiveness of Loan Documents, Satellite
Contracts and Qualified Lease Agreements..................................................... 85
5.20 Employee Benefit Liabilities................................................................. 85
5.21 Investment Company Act....................................................................... 85
SECTION 6. AFFIRMATIVE COVENANTS.............................................................................. 85
6.01 Financial Statements......................................................................... 85
6.02 Certificates; Other Information.............................................................. 87
6.03 Notices...................................................................................... 88
6.04 Preservation of Existence, Etc............................................................... 89
6.05 Maintenance of Assets........................................................................ 89
6.06 Maintenance of Insurance..................................................................... 89
6.07 Payment of Obligations....................................................................... 96
6.08 Compliance with Laws......................................................................... 96
6.09 Inspection of Property and Books and Records................................................. 96
6.10 Environmental Laws........................................................................... 97
6.11 Use of Proceeds.............................................................................. 98
6.12 Project Maintenance.......................................................................... 98
6.13 Telecommunications Approvals................................................................. 98
6.14 Government Approvals......................................................................... 98
6.15 Rate Contracts............................................................................... 99
6.16 Operational Control and Re Export............................................................ 99
6.17 Performance of Loan Documents............................................................... 100
6.18 Performance of Satellite Contracts.......................................................... 100
6.19 Performance of Qualified Lease Agreements................................................... 101
6.20 Orbital Position. ......................................................................... 101
6.21 Export License.............................................................................. 101
6.22 In-Orbit Commissioning...................................................................... 101
6.23 Satellite Operational Reports............................................................... 101
</TABLE>
<PAGE> 4
<TABLE>
<S> <C>
6.24 Transponder Lease Agreements................................................................ 101
6.25 Further Assurances.......................................................................... 102
6.26 Priorities.................................................................................. 103
SECTION 7. NEGATIVE COVENANTS................................................................................ 103
7.01 Limitation on Liens......................................................................... 103
7.02 Disposition of Collateral................................................................... 104
7.03 Disposition of Assets Other Than Collateral................................................. 105
7.04 Transactions with Affiliates................................................................ 106
7.05 Notice of Indebtedness...................................................................... 106
7.06 Lease Obligations........................................................................... 106
7.07 Capital Expenditures........................................................................ 107
7.08 Change in Structure; Consolidations and Mergers............................................. 107
7.09 Accounting Changes.......................................................................... 108
7.10 Business.................................................................................... 108
7.11 Military Activities......................................................................... 108
7.12 Loan Documents.............................................................................. 108
7.13 Satellite Contracts; Qualified Lease Agreements............................................. 109
7.14 Loans, Deposits and Investments............................................................. 110
7.15 Subordinated Indebtedness................................................................... 111
SECTION 8. EVENTS OF DEFAULT................................................................................. 111
8.01 Events of Default........................................................................... 111
8.02 Remedies.................................................................................... 119
8.03 Rights Not Exclusive........................................................................ 120
SECTION 9. ADDITIONAL LOAN PROVISIONS........................................................................ 120
9.01 Category 3 Preview.......................................................................... 120
9.02 Conversion Process ........................................................................ 124
9.03 Additional Collateral....................................................................... 129
9.04 Security Interest in Collateral............................................................. 130
SECTION 10. MISCELLANEOUS.................................................................................... 134
10.01 Amendments and Waivers...................................................................... 134
10.02 Notices..................................................................................... 134
10.03 No Waiver; Cumulative Remedies.............................................................. 134
10.04 Costs and Expenses; Indemnification......................................................... 135
10.05 Successors and Assigns...................................................................... 137
10.06 Assignment.................................................................................. 137
10.07 Currency Indemnity.......................................................................... 138
10.08 Set-off..................................................................................... 139
10.09 Counterparts................................................................................ 139
10.10 Severability................................................................................ 140
10.11 GOVERNING LAW AND JURISDICTION.............................................................. 140
10.12 WAIVER OF JURY TRIAL........................................................................ 141
10.13 Entire Agreement............................................................................ 142
10.14 Confidentiality............................................................................. 142
</TABLE>
<PAGE> 5
<TABLE>
<S> <C> <C>
10.15 Headings.................................................................................... 142
10.16 No Third Party Beneficiaries................................................................ 142
10.17 Survival.................................................................................... 143
10.18 Language.................................................................................... 143
10.19 Determinations by AEF....................................................................... 143
</TABLE>
ANNEXES
ANNEX 1 CATEGORY 1 CUSTOMER
ANNEX 2 CATEGORY 2 CUSTOMER
ANNEX 3 CATEGORY 3 CUSTOMER
ANNEX 4 LIST OF COUNTRIES
ANNEX 5 ACCEPTABLE CURRENCIES
ANNEX 6 LIST OF PERMITTED LOCATIONS
SCHEDULES
SCHEDULE 5.03 GOVERNMENT APPROVALS
SCHEDULE 5.05 LITIGATION
SCHEDULE 5.10 BASE FINANCIAL STATEMENTS
SCHEDULE 5.11 ENVIRONMENTAL CLAIMS
SCHEDULE 5.12A SUBSIDIARIES
SCHEDULE 5.12B EQUITY INVESTMENTS
SCHEDULE 10.02 ADDRESSES FOR NOTICES
EXHIBITS
EXHIBIT A FORM OF NOTICE OF DRAWDOWN
EXHIBIT B FORM OF ASSIGNMENT AND ACCEPTANCE
EXHIBIT C FORM OF NOTE
<PAGE> 6
This CUSTOMER LOAN AGREEMENT is entered into as of July 22, 1997, between CD
RADIO INC., a corporation organized under the laws of Delaware (the "CUSTOMER")
and ARIANESPACE FINANCE S.A., a company organized under the laws of Luxembourg
("AEF").
WHEREAS, AEF has agreed to make available to the Customer certain loans upon
the terms and conditions set forth in this Agreement;
WHEREAS, the Lenders are providing loans to AEF for the purpose of funding the
loans contemplated by this Agreement;
WHEREAS, AE and CD Radio Inc., as the LSA Party have entered into the Launch
Services Agreement for the launch of the Satellite; and
WHEREAS, the execution and delivery of the Launch Services Agreement and the
Multiparty Agreement related thereto constitute the basis upon which AEF has
agreed to make the loans contemplated by this Agreement; and
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained herein, the parties agree as follows:
SECTION 1. DEFINITIONS
1.011 DEFINED TERMS. Unless expressly defined otherwise herein, capitalized
terms shall have the meanings set forth in this Section 1.01:
"ACCEPTABLE CURRENCY" means a freely transferable currency of a
country listed on ANNEX 5 hereto, the Euro or the ECU, provided that
the ECU shall cease to be an Acceptable Currency upon the adoption and
implementation of the Euro and any obligation denominated in the ECU
shall provide that it is convertible into the Euro upon such
implementation.
"ACCOUNT BANK" means Credit Lyonnais as account bank in such capacity,
together with its successors in such capacity, as designated by AEF.
"AE" means Arianespace S.A., a company organized under the laws of
France.
"AE ACCOUNT" means account number 036122-43, established by AE with
the Account Bank at its office in Luxembourg as such account may be
renumbered or any successor account identified by AEF to the Customer
from time to time.
"AEF" has the meaning specified in the preamble to this Agreement.
"AFFILIATE" means, as to any Person, any other Person, directly or
indirectly, controlling, controlled by, or under common control with,
such first-named Person. A Person shall be deemed to control another
Person if the controlling Person
<PAGE> 7
possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of the other Person, whether
through the ownership of voting stock, by contract or otherwise.
Without limitation, any Person that owns directly or indirectly twenty
percent (20%) or more of the voting stock or other equity interests of
a Person shall, for the purposes of this Agreement and any other Loan
Document, be deemed to control the other Person.
"AGREEMENT" means this Customer Loan Agreement.
"APPLICABLE MARGIN" means (a) during the Tranche A Term, the
percentage amount as set forth in the Fee Letter and (b) during the
Tranche B Term, the Customer Tranche B Margin set forth in ANNEX 1, 2
OR 3, as applicable to the Customer on and after the Conversion Date
in relation to the designation by AEF of the Customer into a Customer
Category pursuant to Section 9, provided that, if the Customer Tranche
B Margin shall be as set forth in ANNEX 1 as a result of ECA
Enhancement being procured with respect to the Customer, pursuant to
Section 2.13, and such ECA Enhancement shall at any time during the
Tranche B Term cease to be in full force and effect, the Customer
Tranche B Margin shall, from and after such date, be the Customer
Tranche B Margin set forth in ANNEX 1, 2 OR 3, as would otherwise be
applicable in the absence of such ECA Enhancement.
"APPRAISAL" means a report, dated no earlier than fifteen (15) days
prior to the date of its delivery to AEF, prepared by the Appraiser,
in form and substance satisfactory to AEF, as to the matters set forth
in Section 4.02(a).
"APPRAISER" means an independent appraiser selected by AEF and
reasonably acceptable to the Customer.
"ASSIGNMENT AND ACCEPTANCE" has the meaning specified in Section
10.06(a).
"ASSIGNMENT AND SECURITY AGREEMENT" means the assignment and security
agreement to be entered into between the Customer, any Affiliate
thereof contemplated by clause (g) of the definition of "Collateral"
and the Security Agent, in form and substance satisfactory to AEF,
whereby the Customer and such Affiliate (if any) grants to the
Security Agent a Lien on the Collateral in accordance with the terms
hereof.
"ASSUMED DISTRESS VALUE" means an amount expressed in Dollars, as
determined by the Appraiser in the Appraisal, representing the assumed
proceeds of a sale realizable from an orderly remarketing of the
Satellite and (if and to the extent included or to be included in the
Collateral) the TTC&M Facilities, under normal market conditions
prevailing at the date of appraisal, following an assumed Event of
Default on the In-Orbit Commissioning Date.
"AVERAGE LIFE" means, with respect to the Tranche B Loan, an amount,
expressed in years, equal to: (a) the sum of the products of each
Tranche B Required Installment Amount multiplied by the number of
years (calculated to one (1) decimal place) from the Conversion Date
to the Tranche B Principal Payment Date on which such Tranche
-2-
<PAGE> 8
B Required Installment Amount is due, DIVIDED BY (b) the aggregate
amount of the Tranche B Loan outstanding as of the Conversion Date.
"BASE CASE" means, as the context may require, any Preliminary Base
Case, the Conversion Base Case or each subsequent base case updated in
accordance with the annual updated Business Plan to be provided
pursuant to Section 6.02(c) if the Customer shall have been determined
to be a Category 2 Customer or a Category 3 Customer.
"BASE DATE" means (a) prior to the Conversion Date, the date of the
latest Base Financial Statements and (b) on and after the Conversion
Date, the date of the latest Conversion Financial Statements.
"BASE FINANCIAL STATEMENTS" has the meaning specified in Section
5.10(a).
"BASLE ACCORD" means the proposals for a risk-based capital framework
described by the Basle Committee on Banking Regulations and
Supervisory Practices in its paper titled "International Convergence
of Capital Measurements and Capital Standards" dated July 1988.
"BREAK FUNDING COSTS" means any amounts required to compensate AEF for
any losses, costs or expenses (including any loss, cost or expense
incurred by reason of the liquidation or re-employment of funds
acquired by AEF to fund or maintain the extensions of credit
represented by any Loan but excluding any loss of profit or margin)
that it incurs and any amounts required by AEF to indemnify the
Lenders for any of the foregoing types of losses, costs or expenses
with respect to the amounts made available to AEF to fund the Loans
and that it incurs, in either case as a result of any unscheduled
prepayment, repayment or acceleration of any Loan on a date that is
not the last day of an Interest Period.
"BUSINESS DAY" means (a) with respect to the provision of notices or
the lapse of any grace or other period, any day (other than a Saturday
or a Sunday) on which commercial banks are generally open for business
in New York City, Luxembourg, London, Paris and The District of
Columbia, (b) in the context of the definition of "Interest Period"
and for purposes of setting the date for the making of a Loan, a day
that is also a day on which dealings in Dollar deposits are carried
out in the London interbank market and (c) with respect to the making
of any payment, any day (other than a Saturday or a Sunday) on which
commercial banks are generally open for business in New York City and
The District of Columbia.
"BUSINESS PLAN" means, as the context may require, the Preliminary
Business Plan, if one has been submitted pursuant to Section 9.01(a),
or, if the Customer shall have been determined to be a Category 2
Customer or Category 3 Customer, the Conversion Business Plan prepared
by the Customer, as in effect from time to time as provided in
accordance with the terms hereof.
-3-
<PAGE> 9
"CAPEX BUDGET" means a plan for capital expenditures to be made by the
Customer Group over the Tranche B Term that a Customer determined to
be a Category 1C Customer may, at its option (but shall not be
obligated to), (a) furnish to AEF under Section 9.02(c)(i) and (b)
update and furnish to AEF within thirty (30) days before the end of
any fiscal year of the Customer to set forth a revised plan for
capital expenditures for the remainder of the Tranche B Term, such
updated plan to be in form and substance satisfactory to AEF.
"CAPITAL LEASE OBLIGATIONS" means all monetary obligations of a Person
under any leasing or similar arrangement that, in accordance with
Generally Accepted Accounting Principles, is classified as a capital
lease.
"CASH EQUIVALENTS" means the following investments, if and to the
extent they are denominated in Acceptable Currencies:
(a) securities issued or fully guaranteed or insured (i)
by the government of a country the short-term
sovereign debt of which is rated at least A-1 by S&P
(or any local affiliate or associated agency
thereof) or P-1 by Moody's (or any local affiliate
or associated agency thereof) and which is a member
of the OECD, or by any agency of any such
government, and backed by the full faith and credit
of such government, or (ii) by the International
Bank for Reconstruction and Development (the World
Bank), in each case having maturities of not more
than twelve (12) months from the date of
acquisition;
(b) certificates of deposit, time deposits, Eurodollar
time deposits, or bankers' acceptances having in
each case a tenor of not more than six (6) months,
issued by any Lender or by any commercial bank
organized under the laws of any country that is a
member of the OECD, and whose short term securities
are rated at least A-1 by S&P (or any local
affiliate or associated agency thereof) or P-1 by
Moody's (or any local affiliate or associated agency
thereof);
(c) commercial paper of an issuer rated either at least
A-1 by S&P (or any local affiliate or associated
agency thereof) or P-1 by Moody's (or any local
affiliate or associated agency thereof), and in
either case having a tenor of not more than three
(3) months; and
(d) repurchase agreements with any financial institution
whose short term securities are rated at least A-1
by S&P (or any local affiliate or associated agency
thereof) or P-1 by Moody's (or any local affiliate
or associated agency thereof), fully collateralized
by securities issued or fully guaranteed or insured
by the government of a country the short-term
sovereign debt of which is rated at least A-1 by S&P
(or any local affiliate or associated agency
thereof) or P-1 by Moody's (or any local affiliate
or associated agency thereof) and which is a member
of the
-4-
<PAGE> 10
OECD, or by any agency of any such government, and
backed by the full faith and credit of such
government.
"CATEGORY 1 CUSTOMER" means the Customer, if the Customer has
satisfied the requirements of ANNEX 1, as determined by AEF pursuant
to Section 9.02(e), and to which the terms set forth in ANNEX 1,
together with the other terms herein applicable to it, shall apply
during the Tranche B Term.
"CATEGORY 1A CUSTOMER" means a Category 1 Customer that has been
assigned to the 1A subcategory of Category 1 pursuant to Section
9.02(e).
"CATEGORY 1B CUSTOMER" means a Category 1 Customer that has been
assigned to the 1B subcategory of Category 1 pursuant to Section
9.02(e).
"CATEGORY 1C CUSTOMER" means a Category 1 Customer that has been
assigned to the 1C subcategory of Category 1 pursuant to Section
9.02(e).
"CATEGORY 1C QL LOAN LIFE COVER RATIO" means the ratio, calculated as
of the Conversion Date (and, subject to Section 7.13(b), at no other
time) of (a) the aggregate of (i) the net present value (at a discount
rate reasonably acceptable to AEF) of the aggregate QL Cash Flow for
the Tranche B Term, LESS (ii) interest (at a rate reasonably
acceptable to AEF) payable during the Tranche B Term on Indebtedness
secured (or entitled to be secured) by a Lien on any of the Collateral
and scheduled to be outstanding after the Tranche B Term, PLUS (iii)
the aggregate total of any funds placed in escrow pursuant to Section
11.09(a) hereof to (b) the aggregate of (i) the principal amount of
the Tranche B Loan then outstanding, PLUS (ii) any other Indebtedness
then outstanding secured (or entitled to be secured) by a Lien on any
of the Collateral and scheduled to be repaid during the Tranche B
Term.
"CATEGORY 2 CF LOAN LIFE COVER RATIO" means, as of the date of
calculation, the ratio, calculated as of such date under the
Conversion Base Case or, for purposes of Section 12.04(b)(iv), the
Base Case as updated from time to time to reflect the updated Business
Plan furnished under Section 6.02(c)(ii), of (a) the aggregate of (i)
the net present value of Total Cash Flow for the remaining Tranche B
Term (at a discount rate reasonably acceptable to AEF, taking into
account the Rate Contracts entered into in accordance with Section
6.15), LESS (ii) interest (at a rate reasonably acceptable to AEF,
taking into account the Rate Contracts entered into in accordance with
Section 6.15) payable during such year and each subsequent year during
the then remaining Tranche B Term on (A) Indebtedness secured (or
entitled to be secured) by a Lien on any of the Collateral and (B) the
principal amount of all other Indebtedness (other than Subordinated
Indebtedness and (to the extent agreed by AEF) Contingent Obligations)
of the Customer then outstanding, and, in each case, scheduled to be
outstanding after the Tranche B Term, PLUS (iii) the aggregate total
of any funds placed in escrow pursuant to Section 12.03(a) to (b) the
sum (without duplication) of (i) the then outstanding principal amount
of the Tranche B Loan, PLUS (ii) the principal amount of any
Indebtedness then outstanding and secured (or entitled to be secured)
by a Lien on any of the Collateral and scheduled to be repaid during
the
-5-
<PAGE> 11
Tranche B Term, PLUS (iii) the principal amount of all other
Indebtedness (other than Subordinated Indebtedness and (to the extent
agreed by AEF) Contingent Obligations) of the Customer then
outstanding and scheduled to be repaid during the Tranche B Term.
"CATEGORY 2 CUSTOMER" means the Customer, if the Customer has
satisfied the requirements of ANNEX 2, as determined by AEF pursuant
to Section 9.02(e), and to which the terms set forth in ANNEX 2,
together with the other terms herein applicable to it, shall apply
during the Tranche B Term.
"CATEGORY 2 QL LOAN LIFE COVER RATIO" means the ratio, calculated as
of the Conversion Date (and, subject to Section 7.13(b), at no other
time) under the Conversion Base Case, prospectively for each year
during the Tranche B Term, of (a) the aggregate of (i) the net present
value (at a discount rate equal to the debt interest rate used in the
preparation of the Conversion Base Case) of the QL Cash Flow for such
year and each such subsequent year during the then remaining Tranche B
Term, LESS (ii) interest (at a rate equal to the debt interest rate
used in the preparation of the Conversion Base Case) payable during
such year and each such subsequent year during the then remaining
Tranche B Term on Indebtedness secured (or entitled to be secured) by
a Lien on any of the Collateral and scheduled to be outstanding after
the Tranche B Term, PLUS (iii) the aggregate total of any funds placed
in escrow pursuant to Section 12.03(a), to (b) the aggregate of (i)
the principal amount of the Tranche B Loan then outstanding, PLUS (ii)
any other Indebtedness then outstanding and secured (or entitled to be
secured) by a Lien on any of the Collateral and scheduled to be
outstanding at the beginning of such year and each such subsequent
year and scheduled to be repaid during the Tranche B Term.
"CATEGORY 3 CUSTOMER" means the customer, if the Customer has
satisfied the requirements of ANNEX 3, as determined by AEF pursuant
to Section 9.02(e), and to which the terms set forth in ANNEX 3,
together with the other terms herein applicable to it, shall apply
during the Tranche B Term.
"CATEGORY 3 LOAN LIFE COVER RATIO" means the ratio, calculated as of
the Conversion Date (and, subject to Section 7.13(b), at no other
time) under the Conversion Base Case, prospectively for each year
during the Tranche B Term, of (a) the aggregate of (i) the net present
value (at a discount rate equal to the debt interest rate used in the
preparation of the Conversion Base Case) of Total Cash Flow for such
year and each such subsequent year during the then remaining Tranche B
Term, LESS (ii) interest (at a rate equal to the debt interest rate
used in preparation of the Conversion Base Case) payable for such year
and each such subsequent year during the then remaining Tranche B Term
on Indebtedness secured (or entitled to be secured) by a Lien on any
of the Collateral and scheduled to be outstanding after the Tranche B
Term, to (b) the sum (without duplication) of (i) the then outstanding
principal amount of the Tranche B Loan, PLUS (ii) the principal amount
of any Indebtedness then outstanding and secured (or entitled to be
secured) by a Lien on any of the Collateral and scheduled to be repaid
during the Tranche B Term, PLUS (iii) the principal amount of all
other Indebtedness (other than Subordinated Indebtedness and
-6-
<PAGE> 12
(to the extent agreed by AEF) Contingent Obligations) of the Customer
then outstanding and scheduled to be repaid during the Tranche B Term.
"CATEGORY 3 PREVIEW" means the preview process described in Section
9.01.
"C-BAND TRANSPONDERS" means transponders operating in the portion of
the radio-frequency spectrum that covers approximately 4 gigahertz to
8 gigahertz.
"CLA I" means the Arianespace Customer Loan Agreement of even date
herewith between CD Radio Inc. and AEF, providing for the financing of
launch costs under the Launch Services Agreement with respect to
"Launch # 1" as such term is defined in paragraph 6.1 of the Launch
Services Agreement.
"CLOSING DATE" means the date on which all conditions precedent set
forth in Section 4.01 are satisfied by the Customer or waived by AEF
as evidenced by a certificate to such effect executed and delivered by
AEF to the Customer.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLATERAL" means all right, title and interest in and to:
(a) the Satellite;
(b) the Satellite Purchase Agreement;
(c) the TTC&M Facilities, if at any time owned by the
Customer, or otherwise, the TTC&M Contract;
(d) any Government Approval relating to the Satellite,
and any other Government Approval relating to any
other part of the Project owned by the Customer, but
excluding any such Government Approval relating
solely to the construction of any portion of the
Project if such construction has been fully
completed;
(e) any intangible rights necessary to control, operate
and transfer ownership of the Satellite;
(f) the benefits of any indemnity, warranty or guarantee
in respect of the Satellite, the TTC&M Facilities or
the assets referred to in (g) below (but only if and
to the extent that the Project Financing is also
secured by a Lien on such assets);
(g) gateway, ground reception and similar facilities
owned by the Customer or any Affiliate thereof or
leasehold interests in such facilities leased by the
Customer or any Affiliate thereof, each to the
extent related to the Satellite where the Project
Financing is also secured by a Lien on such
gateways, ground reception and similar facilities,
and if, at any time
-7-
<PAGE> 13
after the date hereof, (i) the Customer or any
Affiliate thereof acquires title to any of the
foregoing items or (ii) any of the foregoing items
becomes subject to a Lien for the benefit of the
Project Lenders pursuant to any Project Financing,
such items shall thereupon form part of the
Collateral (it being understood and agreed that
until such time, if any, as either of the conditions
referred to in the foregoing subclauses (i) and (ii)
of this clause (g) is satisfied, the items referred
to in this paragraph (g) shall not be deemed to be
Collateral for purposes of this Agreement);
(h) if the Customer shall have been determined to be a
Category 1C Customer or a Category 2 Customer, the
Qualified Lease Agreements;
(i) if the Customer shall have been determined to be a
Category 1C Customer or Category 2 Customer, the
Transponder Lease Agreements (other than Qualified
Lease Agreements), PROVIDED that the Customer shall
not be in breach of its obligations under this
Agreement to the extent that the Customer has
diligently sought to effect an assignment of such
agreements by eliciting the lessee's consent to such
assignment and is unable to achieve the same;
(j) if the Customer shall have been determined to be a
Category 3 Customer that is a Leased Satellite
Customer, the Transponder Lease Agreements, PROVIDED
that the Customer shall not be in breach of its
obligations under this Agreement to the extent that
the Customer has diligently sought to effect an
assignment of such agreements by eliciting the
lessee's consent to such assignment and is unable to
achieve the same, PROVIDED that such agreements
constituting at least fifty percent (50%) of
aggregate projected revenues reflected in the
Business Plan shall have been assigned to the
Security Agent with all required consents thereto
obtained;
(k) if the Customer shall have been determined to be a
Category 3 Customer that is not a Leased Satellite
Customer, the Transponder Lease Agreements;
(l) if the Customer shall have been determined to be a
Category 1C Customer, a Category 2 Customer or a
Category 3 Customer, the Revenue Accounts and all
cash balances and investments held therein;
(m) in relation to a Customer offering an equity pledge
in accordance with Section 9.04(c)(i), one hundred
percent (100%) of its stock certificates or other
equity interests in such Customer or the special
purpose vehicle, as the case may be;
-8-
<PAGE> 14
(n) in relation to all Customer Categories, all proceeds
deriving from the above-specified Collateral in
subsections (a) through (m) above, as the same may
be supplemented pursuant to Section 9.03;
(o) rights to receive certain payments under the Launch
Services Agreement provided or to be provided for in
the Multiparty Agreement as a "delegation" under
French law;
(p) the proceeds of insurance maintained pursuant to
Section 6.06 in respect of which the Security Agent
is required by Section 6.06(c) to be named as loss
payee;
(q) any other rights or assets constituting additional
Collateral pursuant to Section 9.03; and
(r) any collateral provided by the Customer or an
Affiliate thereof to secure a loan by AEF to the
Customer or such Affiliate pursuant to another
customer loan agreement, provided that the Customer
or such Affiliate shall have been determined to be
in the same "Customer Category" in such other
customer loan agreement as hereunder.
It is acknowledged and agreed that, solely for purposes of determining
whether the items referred to in the foregoing clauses (f) and (g)
constitute Collateral, the term "Project Financing" as used in said
clauses shall be deemed not to include any financing that is not
secured by any of the items referred to in any of the other clauses of
this definition.
"COLLATERAL DOCUMENTS" means the Assignment and Security Agreement,
the TTC&M Mortgage (if applicable), the Consents to Assignment, and
other documents to be entered into in order that a Lien is granted and
perfected on or in the Collateral in accordance with the terms hereof
and all financing statements, registrations and other filings (or
comparable documents) now or hereafter filed or to be filed in
connection therewith and (without prejudice to the provisos contained
in clauses (i) and (j) of the definition of "Collateral" in this
Section 1.01) any consents required from any Person in connection
therewith.
"COMMITMENT" means, during the Tranche A Term, the Tranche A
Commitment, and, during the Tranche B Term, the Conversion Commitment.
"COMMITMENT FEE" means the fee payable quarterly in arrears by the
Customer to AEF calculated as a percentage per annum of the daily
average unused portion of the Tranche A Commitment Amount for each day
during the preceding quarterly period, in the amount and as set forth
in the Fee Letter.
"COMPARABLE FINANCING TRANSACTION" means the Customer's most recent
long-term, asset-based financing of comparable term, with comparable
security and on comparable conditions funded with debt from
international banks, if such financing
-9-
<PAGE> 15
was entered into not earlier than the date falling two (2) years prior
to the date hereof and not later than the date hereof.
"CONSENTS TO ASSIGNMENT" mean the acknowledgments and consents to
assignment to be given by Lessees of Qualified Lease Agreements in
accordance with the terms hereof.
"CONSOLIDATED NET WORTH" means the aggregate, on any date of
determination, of:
(a) the amount paid up or credited as paid up on the
issued ordinary and preference share capital of the
Customer Group (excluding any Disqualified Capital
Stock); and
(b) the amount standing to the credit of the capital and
revenue reserves of the Customer Group;
but adjusted (to the extent that the following items have not already
been added, deducted or excluded in calculating (a) or (b) above) by:
(i) adding any amount standing to the credit of the
profit and loss account for members of the Customer
Group since the Base Date to the extent the amount
is not attributable to any dividend or other
distribution declared, recommended or made by any
member of the Customer Group (other than to another
member of the Customer Group);
(ii) deducting any amount standing to the debit of the
profit and loss account for members of the Customer
Group since the Base Date;
(iii) deducting the sum of the following: cost of treasury
shares and the book value of all assets that should
be classified as intangibles (without duplication of
deductions in respect of items already deducted in
arriving at surplus and retained earnings) but in
any event including licenses, goodwill, minority
interests, research and development costs,
trademarks, trade names, copyrights and patents and
franchises;
(iv) reflecting any variation in the amount of the
Customer's issued share capital and capital and
revenue reserves after the Base Date; and
(v) reflecting any variation in the interest of the
Customer in any other member of the Customer Group
since the Base Date.
"CONSTRUCTION AND PAYMENT SCHEDULE" means the construction and payment
schedule prepared and certified by a Responsible Officer of the SPA
Party setting forth the specific dates for payments to be made under
the Satellite Purchase Agreement and the TTC&M Contract, and the
maximum amount of each such payment, as such specific dates and
payment amounts may be adjusted pursuant to the terms of the Satellite
Purchase Agreement and the TTC&M Contract (as the case may be).
-10-
<PAGE> 16
"CONSTRUCTIVE TOTAL FAILURE" has the meaning ascribed to that term or
a term substantially similar to such term in the launch and initial
operations insurance or in the in-orbit insurance (whichever is then
in effect) procured or caused to be procured by the Customer as
required by Section 6.06(b).
"CONTINGENT OBLIGATION" means, as applied to any Person, any direct or
indirect liability of that Person with respect to any Indebtedness,
lease, dividend, letter of credit or other obligation (for purposes of
this definition, the "PRIMARY OBLIGATIONS") of another Person (for
purposes of this definition, the "PRIMARY OBLIGOR"), including any
obligation of that Person, whether or not contingent (a) to purchase,
repurchase or otherwise acquire such primary obligations or any
property constituting direct or indirect security therefor, (b) to
advance or provide funds (i) for the payment or discharge of any such
primary obligation or (ii) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth
or solvency or any balance sheet item, level of income or financial
condition of the primary obligor, (c) 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, (d) otherwise to assure or hold
harmless the holder of any such primary obligation against loss in
respect thereof or (e) to purchase or otherwise acquire, or otherwise
to assure a creditor against loss in respect of, any Indebtedness.
For purposes of this definition, the amount of any Contingent
Obligation shall be deemed to be an amount equal to the maximum
reasonably anticipated liability in respect thereof, as reasonably
determined by such Person's independent auditors.
"CONTRACT" means (a) any agreement (whether bilateral, unilateral,
executory or non-executory, and whether a Person entitled to rights
thereunder is so entitled directly or as a third party beneficiary),
including an indenture, lease or license or (b) any deed or other
instrument of conveyance.
"CONVERSION" has the meaning specified in Section 2.01(b).
"CONVERSION AMOUNT" means the amount of Tranche A Outstandings
actually converted to the Tranche B Loan on the Conversion Date, the
aggregate of such amounts not to exceed the Conversion Commitment
Amount.
"CONVERSION BASE CASE" means the Base Case for the Customer as
described in Section 9.02.
"CONVERSION BUSINESS PLAN" means the Business Plan of the Customer
submitted to AEF as described in Section 9.02, which shall be
sufficient to enable AEF to determine whether the applicable
Conversion Conditions will have been satisfied as of the Conversion
Commitment Date in accordance with Section 9.02(e), and containing at
a minimum, and without limitation, the following information with
respect to the Project:
-11-
<PAGE> 17
(a) details of the Project sponsor or Project sponsors,
a general description of the Customer's business and
organization, the then-current equity holdings
therein and general biographical information as to
key management team members;
(b) projections of all capital and operating costs
(including material taxes) and revenues the Project
is projected to generate with sufficient information
(including the details of assumptions underlying
such projections) in each case for AEF and the
Lenders to assess the Project;
(c) a general description of the target market for the
Project, which shall include a statement of the
percentage of such target market that the Customer
proposes to capture;
(d) a technical description of the Project;
(e) an overview of the laws and regulations applicable
to the Project and the status of requisite
governmental approvals for the construction, launch
and operation thereof;
(f) a description of the Collateral that is expected to
be available for the benefit of AEF and the Lenders
and whether a first priority, perfected Lien will
and can be granted and perfected thereon;
(g) a general description of the proposed sources of
finance for the Project, along with a description of
the manner in which such financing will be secured;
(h) a general description of risks material to the core
business of the Project to the extent not otherwise
described in this definition of Conversion Business
Plan or covered by insurance; and
(i) details of underlying economic assumptions and
factors, including inflation, interest and exchange
rates.
"CONVERSION COMMITMENT" means the commitment by AEF to the Customer
issued on the Conversion Commitment Date for the Conversion (or
Reconversion, as the case may be) of the Conversion Commitment Amount
upon the terms and subject to the conditions of this Agreement,
relating to a Launch (or Reflight, as the case may be) to occur on the
then-scheduled date of Launch and extending up to ninety (90) days
after such date (to accommodate possible launch postponements).
"CONVERSION COMMITMENT AMOUNT" means the amount of Tranche A
Outstandings (including Tranche A Loans, the proceeds of which have
been or will be applied to the payment of Finance Costs) that may be
converted to a Tranche B Loan on the Conversion Date, such amount
being equal to the product of the Tranche B Advance Rate and the
Launch Costs (which product in any event shall not exceed an amount
-12-
<PAGE> 18
equal to the lesser of (a) sixty percent (60%) of the Launch Costs and
(b) eighty million Dollars ($80,000,000) less the "Conversion Amount"
as such term is defined in CLA I).
"CONVERSION COMMITMENT DATE" means the date, if any, on which AEF
shall deliver the Conversion Commitment Letter following the
determination set forth in Section 9.02(e).
"CONVERSION COMMITMENT LETTER" means the notice given by AEF to the
Customer on the Conversion Commitment Date, identifying the applicable
Customer Category and setting forth the terms and conditions of the
Conversion Commitment.
"CONVERSION CONDITIONS" means the conditions set forth in Section
4.02.
"CONVERSION DATE" means the date on which Conversion occurs.
"CONVERSION FEE" means the fee payable by the Customer on the
Conversion Date to AEF calculated as a percentage of the Conversion
Amount as set forth in the Fee Letter.
"CONVERSION FINANCIAL STATEMENTS" has the meaning specified in Section
5.10(b).
"CONVERSION REQUEST DATE" means the date that the Customer delivers to
AEF the items referred to in Section 9.02(d).
"CONVERT" means the occurrence of Conversion with respect to the
Tranche A Loans.
"COVERED PERSON" has the meaning specified in Section 10.04(b).
"COVERED PROPERTY" has the meaning specified in Section 6.06(a).
"COVERED TAXES" has the meaning specified in Section 3.01(d).
"CREDIT RATING" means, at any time, the credit rating most recently
established by a Major Rating Agency for the Customer's Relevant Debt
(as defined in the following sentence). For purposes of the preceding
sentence, "CUSTOMER'S RELEVANT DEBT" means money borrowed by the
Customer (a) the repayment of which is secured by, and only by, a
satellite comparable to the Satellite (including in respect of the
intended use of the Satellite) and other collateral comparable to the
Collateral, and is not supported by any other type of
credit-enhancement, (b) on terms and conditions comparable to the
terms and conditions of this Agreement, the Note and the Collateral
Documents that are applicable after the Conversion Date and (c) where
the ratio of (i) the amount, as reasonably determined by a qualified
appraiser in a written appraisal prepared prior to the establishment
of such credit rating, representing the assumed proceeds of a sale
realizable from an orderly remarketing of such satellite under normal
market conditions prevailing at the date of appraisal to (ii) all
Indebtedness of the Customer secured by a Lien on such satellite on
the date of the establishment of
-13-
<PAGE> 19
such credit rating does not exceed the ratio of (x) the Assumed
Distress Value to (y) Total Senior Debt Outstanding on the date of the
establishment of such Credit Rating; provided that if no such borrowed
money of the Customer exists, "CUSTOMER'S RELEVANT DEBT" means the
Customer's senior, long-term debt that is not secured or otherwise
credit-enhanced, if any.
"CURRENCY OF OBLIGATION" has the meaning specified in Section
10.07(a).
"CURRENCY OF PAYMENT" has the meaning specified in Section 10.07(a).
"CUSTOMER" has the meaning specified in the preamble to this
Agreement.
"CUSTOMER CATEGORY" means the category designated for the Customer
with respect to this Agreement by AEF on the Conversion Commitment
Date pursuant to Section 9.02(e) and in accordance with the criteria
set forth in the Annexes attached hereto.
"CUSTOMER GROUP" means the Customer and, if the Customer shall have
been determined to be a Category 1 Customer, the consolidated
Subsidiaries of the Customer. All financial calculations hereunder to
be made for the Customer Group shall, if the Customer shall have been
determined to be a Category 1 Customer, be made on a consolidated
basis in accordance with Generally Accepted Accounting Principles.
"DECONVERSION" has the meaning specified in Section 2.04(a).
"DEFAULT" means any event which, with the giving of notice or the
lapse of time or both of the foregoing, would constitute an Event of
Default.
"DEFAULT RATE" has the meaning specified in Section 2.07(c)(ii).
"DETERMINATION" has the meaning specified in Section 10.19.
"DISQUALIFIED CAPITAL STOCK" means capital stock of the Customer that
may be redeemed, purchased or repurchased, or in respect of which
sinking fund payments may be made, other than solely at the option of
the Customer.
"DISTRESS RECOVERY VALUE" means the product of the Assumed Distress
Value multiplied by the ratio of the Conversion Amount to the Total
Senior Debt Outstanding as of the Conversion Date.
"DOLLARS" and "$" means lawful money of the United States of America.
"DOMICILED" with respect to any Person means each jurisdiction:
(a) in which such Person is incorporated or organized;
-14-
<PAGE> 20
(b) that is the primary jurisdiction in which such
Person is domiciled for the purposes of calculating
corporation or other taxes on its revenues or
capital; or
(c) in which, in accordance with the determination of
any Lender, consistently applied, pursuant to the
policies or any decision of a Governmental Authority
or any court having jurisdiction over such Lender,
or another authority with which such Lender
customarily complies, such Person is domiciled.
"EBITDA" ("earnings before interest, tax, depreciation and
amortization") means, for any period, the net income or net loss (or
the equivalent) for the Customer Group for such period, determined in
accordance with Generally Accepted Accounting Principles as follows
(without duplication), using items reflected in the financial
statements of the Customer Group, to the extent applicable:
(a) after adding back (to the extent otherwise deducted)
any depreciation and amortization;
(b) after adding back (if negative and to the extent
otherwise deducted) or after deducting (if positive
and to the extent otherwise added) any extraordinary
items, including without limitation those that would
be treated as "exceptional items" under generally
accepted accounting principles in the United Kingdom
in cases where such generally accepted accounting
principles are the Specified GAAP for purposes
hereof;
(c) after adding back (to the extent otherwise deducted)
corporate taxes and the equivalents in any relevant
jurisdiction;
(d) after adding back (if negative and to the extent
otherwise deducted) or after deducting (if positive
and to the extent otherwise added) interest expense
and interest income, whether or not paid, deferred
or capitalized;
(e) before taking into account, to the extent not
received by the Customer Group in cash during such
period, any income of the Customer Group from any
Affiliate or other investments (or any such income
accrued in respect of any prior period which has not
previously been paid), and before taking into
account, to the extent not received by the Customer
Group in cash during such period, any share of the
profit of any Affiliate or other investments and
after taking into account dividends received in cash
during such period from any Affiliate or other
investments;
(f) after adding back (to the extent otherwise deducted)
the amount of pension contributions and vacation and
health benefits provided by the
-15-
<PAGE> 21
Customer Group in respect of such period but not
paid in cash, to the extent only that they are not
actually paid in cash (and, for this purpose, if
such amount for any annual accounting period is not
allocated on the basis of quarterly accounting
periods, it shall be deemed allocated equally to
each of the four (4) quarters comprised in such
annual accounting period);
(g) if the Customer shall have been determined to be a
Category 1C Customer, after deducting (to the extent
otherwise included) any gain over book value arising
in favor of the Customer Group on the sale, lease or
other disposal of any asset (other than the sale of
trading stock) during such period and any gain
arising on any revaluation of any asset during such
period;
(h) after adding back (to the extent otherwise deducted)
any loss against book value incurred by the Customer
Group on the sale, lease or other disposal of any
asset (other than the sale of trading stock) during
such period, or any loss on any revaluation of any
asset during such period; and
(i) if the Customer shall have been determined to be a
Category 1 Customer, after deducting (to the extent
otherwise included) the amount of profit (or adding
back the amount of any loss) of the Customer Group
for such period which is attributable to minority
interests in any Subsidiary of the Customer.
"ECA" means any one or more than one export credit agency as AEF may
approve that, at the request of the Customer, AEF, AE or any Lender,
provides ECA Country Risk Coverage or ECA Enhancement.
"ECA COUNTRY RISK COVERAGE" means political risk coverage, in
accordance with the statutory limitations in effect on the date hereof
on such coverage (together with changes thereto as may be acceptable
to AEF) available from the applicable ECA in an amount and on terms
and conditions satisfactory to AEF, provided by one or more ECAs in
support of the Tranche B Loan.
"ECA ENHANCEMENT" means commercial risk coverage, in accordance with
the statutory limitations in effect on the date hereof on such
coverage (together with changes thereto as may be acceptable to AEF)
available from the applicable ECA in an amount and on terms and
conditions satisfactory to AEF, provided by one or more ECAs in
support of the Tranche B Loan.
"ECA GUARANTY FEE" means the fees payable by the Customer to AEF or
any ECA in connection with ECA Country Risk Coverage or ECA
Enhancement as advised by the relevant ECAs.
-16-
<PAGE> 22
"ECA PERCENTAGE" means the percentage of the Tranche B Loan guaranteed
by ECA Enhancement, expressed as a percentage of the aggregate total
amount of the Tranche B Loan then outstanding.
"ECU" means the European Currency Unit being the unit of account used
by the European Monetary System, the composition of which may from
time to time be varied by the European Union.
"ELIGIBLE ASSIGNEE" means (a) any Lender for itself or on behalf of
any other Lender or Lenders or AEF, (b) a Subsidiary of any Person
described in clause (a) above (for purposes of this definition, such
Person being herein referred to as a "PERMITTED INSTITUTION") if such
Permitted Institution enters into a legal, valid, binding and
enforceable written guaranty, providing that such Permitted
Institution shall be primarily and unconditionally liable to the
Customer for all obligations of its Subsidiary, (c) any Affiliate of
AEF or (d) any private or public holder or holders of any Indebtedness
of AEF pursuant to any private or public offering or any trustee or
institution acting on their behalf.
"ENVIRONMENTAL CLAIM" means all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law or for release
or injury to the environment or threat to public health, personal
injury (including sickness, disease or death), property damage,
natural resources damage or otherwise alleging liability or
responsibility for damage (punitive or otherwise), cleanup, removal,
remedial or response costs, restitution, civil or criminal penalties,
injunctive relief or other type of relief, resulting from or based
upon (a) the presence, placement, discharge, emission or release
(including intentional and unintentional, negligent and non-negligent,
sudden or non-sudden, accidental or non-accidental placement, spills,
leaks, discharges, emissions or releases) of any Hazardous Material
at, in or from property, whether or not owned by the Customer or (b)
any other circumstances forming the basis of any violation, or alleged
violation, of any Environmental Law.
"ENVIRONMENTAL LAWS" means all national, local or foreign laws,
statutes, common law duties, rules, regulations, ordinances and codes,
together with all administrative orders, directed duties, requests,
licenses, authorizations and permits of, and agreements with, any
Governmental Authorities that are binding on, or are customarily
complied with by, the Customer, in each case relating to environment,
health and safety.
"ENVIRONMENTAL PERMITS" has the meaning specified in Section 5.11.
"EQUIPMENT COST" means the aggregate of the costs for the construction
and launch of the Satellite, the insurance procured and maintained for
the Satellite and the construction of the TTC&M Facilities.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
-17-
<PAGE> 23
"ERISA AFFILIATE" means any Person that for purposes of Title IV of
ERISA is a member of the controlled group of the Customer, or under
common control with the Customer, within the meaning of Section 414 of
the Code.
"EURO" means the unit of currency used or to be used in the European
monetary system following implementation of the European monetary
union.
"EVENT OF DEFAULT" means any of the events specified in Section 8.01.
"EVENT OF LOSS" means, with respect to the Satellite, any loss of,
destruction of or damage to the Satellite resulting in a failure to
achieve its performance specifications and meet its intended purpose,
any condemnation, seizure or taking, by exercise of the power of
eminent domain by any Governmental Authority or other Person, thereof
or the requisition of the use thereof pursuant to any final judgment,
order, decree or proclamation remaining unvacated, undischarged,
unstayed or unbonded pending appeal for a period of ninety (90) days
after the entry thereof, in all events including any Total Failure,
Constructive Total Failure or Partial Failure.
"EXCESS CASH FLOW" means, for any period, the excess of (a) the sum of
(i) EBITDA for such period and (ii) the decrease, if any, in Non-Cash
Working Capital during such period, over (b) the sum of (i) Total
Interest for such period, (ii) income taxes of the Customer Group paid
in cash during such period, (iii) capital expenditures of the Customer
Group during such period, (iv) scheduled payments of principal of
Indebtedness made by any member of the Customer Group during such
period other than payments of Indebtedness owing to any member of the
Customer Group, (v) voluntary prepayments of principal of the Tranche
B Loan made during such period pursuant to Section 2.05(a) and (vi)
the increase, if any, in Non-Cash Working Capital during such period.
"EXPERT STUDIES" means technical, feasibility and marketing studies,
prepared in respect of a Customer that may be or has been determined
to be a Category 3 Customer, dated no earlier than fifteen (15) days
prior to the date of delivery thereof to AEF, if appropriate to the
Business Plan and required pursuant to the applicable Conversion
Conditions, in form and substance acceptable to AEF, prepared by an
expert or experts selected by AEF and acceptable to the Customer.
"EXPORT LICENSE" means any license required to be granted to the
Customer or the Satellite Manufacturer, by the government of the
country of manufacture of the Satellite and the country of any
component thereof or any other asset necessary to the Project
requiring an export license, approving the export of the Satellite and
any such component or asset.
"FAIR MARKET VALUE" means the cash price in Dollars that would be
obtained for the Satellite (together with the launch services for the
Satellite, the supply of tracking, telemetry, control and monitoring
facilities, and related insurance), in an arm's length sale
transaction between an informed and willing seller and an informed and
willing purchaser or user, each unrelated to the Customer or any
Affiliate thereof and under
-18-
<PAGE> 24
no compulsion to effectuate the transaction and each having knowledge
of all relevant facts, as determined by the Appraiser in the
Appraisal.
"FEE LETTER" means the letter dated as of the date hereof by AEF and
acknowledged and agreed to by the Customer, specifying the fees
referred to therein, as described in Section 2.08, and the Applicable
Margin during the Tranche A Term.
"FINANCE COSTS" means any one or more of, as determined by AEF, the
ECA Guaranty Fee, the Upfront Fee and interest on the Tranche A Loans,
in each case, to the extent capitalized pursuant to Section 2.07(d),
as permitted by AEF.
"FUNDED DEBT" means, for any Person, Indebtedness of such Person
having a final maturity date more than one (1) year after the date of
issuance, incurrence or assumption thereof by such Person, including
the current portion of any such Indebtedness and including
Indebtedness that is renewable or extendable, at the option of the
obligor, to a date more than one (1) year after the date of issuance,
incurrence or assumption thereof.
"FUNDING-RELATED TAXES" has the meaning specified in Section 3.01(c).
"GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" means (a) at any time prior
to the Conversion Date (for all purposes hereof other than a Category
3 Preview, the determination of whether the Customer is to be a
Category 1A Customer, a Category 1B Customer, a Category 1C Customer,
a Category 2 Customer or a Category 3 Customer, and the establishment
of Conversion Conditions), generally accepted accounting principles in
effect at such time in a jurisdiction in respect of which an
internationally recognized independent public accounting firm has
furnished an opinion (containing solely qualifications acceptable to
AEF) in connection with its auditing of the Customer's financial
statements, (b) at any time on or after the Conversion Date (solely
for the purpose of defining the preparation and presentation of
financial statements to be delivered under Section 6.01), generally
accepted accounting principles in effect at such time in a country
listed in ANNEX 4 hereto or (c) at all times and for all purposes not
covered by the foregoing clauses (a) and (b), Specified GAAP, in each
case referred to in the foregoing clauses (a), (b) and (c),
consistently applied.
"GOVERNMENT APPROVALS" means all Telecommunications Approvals, all
Export Licenses, all foreign exchange control approvals, all
Environmental Permits and any other authorizations, consents,
approvals, licenses, rulings, permits, certifications, exemptions,
filings or registrations by or with any Telecommunications Authority
or other Governmental Authority required by applicable Requirements of
Law to be obtained or held by the Customer in connection with (a) the
due execution, delivery and performance by the Customer of its
obligations, and the exercise of its rights, under the Loan Documents,
the Satellite Contracts and any other agreement or instrument entered
into from time to time relating to the Project, (b) the construction
and completion of the Project and operation of the Project as
contemplated by the Satellite Contracts and, if applicable, the
Business Plan, (c) the export of the Satellite
-19-
<PAGE> 25
or any of its components and (d) the grant of the Liens created by the
Collateral Documents and the validity, enforceability and perfection
thereof and the exercise by the Security Agent of its rights and
remedies thereunder.
"GOVERNMENTAL AUTHORITY" means any international body or any nation or
government, any state or other political subdivision thereof, any
central bank (or similar monetary or regulatory authority) thereof,
any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government and any
corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
"GUARANTOR" or "GUARANTORS" has the meaning specified in ANNEX 1
hereto.
"HAZARDOUS MATERIAL" means all those substances that are regulated by,
or which may form the basis of liability under, any Environmental Law,
including all substances identified under any Environmental Law as a
pollutant, contaminant, waste, solid waste, hazardous waste, hazardous
constituent, special waste, hazardous substance, hazardous material or
toxic substance, or petroleum or petroleum derived substance or waste.
"INDEBTEDNESS" means, without duplication, any indebtedness of any
Person for or in respect of:
(a) borrowed money and any other amount raised under any
other transaction having the commercial effect of
borrowing;
(b) the amount of any liability in respect of the
purchase price for any assets or services, the
payment of which is deferred (including any deferred
amount payable under the Satellite Contracts);
(c) all reimbursement obligations with respect to surety
bonds, letters of credit, bankers' acceptances and
similar instruments (in each case, whether or not
matured);
(d) all obligations evidenced by notes, bonds,
debentures or similar instruments, including
obligations so evidenced incurred in connection with
the acquisition of property, assets or businesses;
(e) all indebtedness created or arising under any
conditional sale or other title retention agreement,
or incurred as financing, in either case with
respect to property acquired by the Person (even
though the rights and remedies of the seller or bank
under such agreement in the event of a default are
limited to repossession or sale of such property);
(f) all Capital Lease Obligations;
-20-
<PAGE> 26
(g) the aggregate amount that would be payable by such
Person under all Rate Contracts to which it is a
party if such Rate Contracts were terminated at the
time of determination minus (to the extent such
aggregate amount is subject to reduction pursuant to
valid and enforceable netting arrangements (either
within such Rate Contracts or in separate
agreements) with the respective counterparties) the
amounts payable by the respective counterparties
under such Rate Contracts upon such termination at
such time;
(h) indebtedness created pursuant to leveraged lease or
sale and leaseback financings intended to be repaid
from the rentals payable by the Person under such
leveraged lease or sale and leaseback financing;
(i) all Contingent Obligations;
(j) any lease which, in accordance with any applicable
tax law, is classified as a loan or finance lease;
and
(k) all Indebtedness referred to in clauses (a) through
(k) above secured by (or for which the holder of
such Indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien upon or in
property (including accounts and contract rights)
owned by such Person, even though such Person has
not assumed or become liable for the payment of such
Indebtedness.
In calculating the amount of any Indebtedness for all purposes hereof,
there shall be excluded any amount thereof that has been irrevocably
and unconditionally defeased by the deposit of cash or securities with
the holder or holders, or an agent or trustee for the holder or
holders, of such Indebtedness in accordance with the indenture, lease
or other agreement governing the terms and conditions of such
Indebtedness.
"IN-ORBIT COMMISSIONING DATE" means the date on which initial in-orbit
tests on the Satellite have been successfully completed and the
Satellite enters commercial service, as evidenced by a certificate of
a Responsible Officer of the SPA Party bearing such date and
certifying that the results of the initial in-orbit tests either (a)
comply with the required Satellite performance specifications as set
forth in the Satellite Purchase Agreement or (b) are otherwise
acceptable to the SPA Party.
"INSOLVENCY PROCEEDING" means, with respect to any Person (a) any
case, action, petition or proceeding before any court relating to
bankruptcy, reorganization, insolvency, liquidation, receivership,
dissolution, winding-up or relief of debtors or similar proceeding; or
(b) any general assignment for the benefit of creditors, composition,
marshalling of assets for creditors or other similar arrangement,
which in each case shall include any analogous proceeding or
arrangement under the laws of the jurisdiction in which such Person is
incorporated or any jurisdiction in which such Person carries on
business that is recognized by a Governmental Authority of competent
jurisdiction in the jurisdiction of incorporation of such Person.
-21-
<PAGE> 27
"INSURED PARTIES" means AEF, the Security Agent, the Lenders, the
Project Agent and the Project Lenders.
"INTERCREDITOR AGREEMENT" means, if applicable, the Intercreditor
Agreement to be negotiated in good faith and entered into on the date
specified in Section 2.11 among AEF, the Lenders (or an agent acting
on their behalf), the Project Agent (on behalf of the Project
Lenders), the Security Agent and the applicable ECAs (if relevant),
providing for, among other things, the sharing among such parties of
the Liens on the Collateral and the proceeds thereof.
"INTEREST BASIS" means, with respect to any Loan or unpaid amount for
any specified period:
(a) the rate of interest per annum that appears on page
3750 or any successor page of the Telerate screen
which displays British Bankers Association
Settlement Rates for deposits in Dollars, of the
offered quotation for deposits in Dollars for such
specified period, without rounding, at or about
11:00 a.m. (London time) on the Quotation Date; or
(b) if the rate described in clause (a) does not so
appear, the rate per annum at which Dollar deposits
are offered in the London interbank market at such
time for such specified period as evidenced on
another financial information service publishing
such rates as agreed by the Customer and AEF; or
(c) if the rates described in clauses (a) and (b) above
do not appear (including, in the case of said clause
(b), by reason of the Customer and AEF failing to
agree on an alternative financial information
service), the arithmetic mean (rounded upwards, if
not already such a multiple, to the nearest whole
multiple of one-sixteenth of one percent (1/16%)) of
the rates (as notified to AEF) at which each of the
Reference Banks was offering to prime banks in the
London interbank market deposits in Dollars for the
specified period at or about 11:00 a.m. (London
time) on the Quotation Date for such specified
period.
For the purposes of this definition "specified period" shall mean the
Interest Period of such Loan or, as the case may be, the period in
respect of which the Interest Basis falls to be determined in relation
to such unpaid amount.
"INTEREST PAYMENT DATE" has the meaning specified in Section 2.07(b).
"INTEREST PERIOD" means, with respect to any Loan, (a) the three (3)
month period commencing on the Business Day such Loan is disbursed and
each three (3) month period thereafter ending on the Interest Payment
Date of the final whole three (3) month period immediately preceding
the Conversion Commitment Date, (b) the one (1) month period
commencing on the Interest Payment Date immediately
-22-
<PAGE> 28
preceding the Conversion Commitment Date and each one (1) month period
thereafter ending on the Interest Payment Date immediately following
the In-Orbit Commissioning Date, and (c) the period from the end of
the immediately preceding one (1) month period to the date that is
three (3) months after the In-Orbit Commissioning Date and each three
(3) month period thereafter ending on the date that such Loan is
repaid or prepaid in full, in each case, subject to the following:
(i) any Interest Period that would otherwise end on a
day that is not a Business Day 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 begins on the last Business
Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end
on the last Business Day of the calendar month at
the end of such Interest Period;
(iii) if any Interest Period would otherwise end after any
Tranche B Principal Payment Date, such Interest
Period shall end on such Tranche B Principal Payment
Date; and
(iv) if a new Loan is disbursed on a day that falls
during an Interest Period for another Loan, the
first Interest Period for such new Loan shall end on
the last day of the Interest Period for such other
Loan.
"ITU" means the International Telecommunication Union, or any
successor agency thereto.
"KU-BAND TRANSPONDERS" means transponders operating in the portion of
the radio-frequency spectrum that covers approximately 12 gigahertz
to 18 gigahertz.
"L" means, as of any date of determination, the then-scheduled date of
Launch as determined pursuant to the Launch Services Agreement or, if
the Launch is then so scheduled to occur on an unspecified date during
a period that includes more than one day, the first day of such
period.
"LAUNCH" means "Launch # 2", as such term is defined in paragraph 6.1
of the Launch Services Agreement.
"LAUNCH COSTS" means all amounts payable by the LSA Party to AE for
launch and related services in respect of the Satellite pursuant to
the terms of the Launch Services Agreement.
"LAUNCH FAILURE" has the meaning ascribed to that term in the Launch
Services Agreement.
-23-
<PAGE> 29
"LAUNCH SERVICES AGREEMENT" means that certain agreement, dated July
22, 1997, between AE and the LSA Party, and any attachments related
thereto, for the launching into orbit of the Satellite by a Launch
Vehicle.
"LAUNCH SERVICES PRICE" means the reference price used to calculate
progress payments to AE for launch and associated services in respect
of the Satellite, as agreed on the date of the execution and delivery
of the Launch Services Agreement and provided for therein.
"LAUNCH VEHICLE" means the vehicle belonging to the Ariane family
(Ariane 4 or Ariane 5) chosen to perform the Launch.
"LEASED SATELLITE CUSTOMER" means any Category 3 Customer whose
Project involves one or more geostationary communications satellites
with ninety percent (90%) or more of the total bandwidth capacity
thereon comprising C-Band Transponders, Ku-Band Transponders or a
combination thereof being intended, pursuant to its Business Plan, to
be leased to commercial companies or governmental agencies for
communications services or broadcasting services.
"LENDERS" means the Persons providing financing to AEF for the purpose
of funding the Loans to the Customer, including any agent appointed by
such Persons to act for and on behalf of them.
"LENDING OFFICE" means, with respect to any Lender, the office or
offices of such Lender as it may from time to time specify to AEF as
such.
"LESSEE" means the party (other than the Customer) to any Qualified
Lease Agreement, which party (a) either (i) shall be a governmental or
inter-governmental agency, or a bona fide third party commercial
customer, in each case with a long-term senior unsecured debt credit
rating of at least Baa3 by Moody's or BBB- by S&P (or the equivalent
rating by another Major Rating Agency) or (ii) shall be a Person
acceptable to AEF following its good faith assessment of the risks
associated with such Person's ability to fulfill its obligations under
such Qualified Lease Agreement, (b) neither AEF nor any Lender would
be prohibited by any applicable Requirement of Law or by a
Governmental Authority with jurisdiction over AEF or such Lender, as
the case may be, or by another authority with which such Lender
customarily complies, from making loans to by reason of such Lessee's
connection with a Prohibited Country and (c) shall not be a Prohibited
Person.
"LICENSED" means the primary jurisdiction in which the Customer
obtained or will obtain its licenses, permits, authorizations and
consents in connection with the operation of the Satellite.
"LIEN" means any mortgage, pledge, hypothecation, assignment, charge
or deposit arrangement, encumbrance, lien (statutory or other) or
preference, priority or other security interest or preferential
arrangement of any kind or nature whatsoever, whether fixed or
floating (whether over present or future revenues or assets and
-24-
<PAGE> 30
including those created by, arising under or evidenced by any
conditional sale or other title retention agreement, the interest of a
lessor under a Capital Lease Obligation, any financing lease having
substantially the same economic effect as any of the foregoing, or the
filing of any financing statement naming the owner of the asset to
which such lien relates as debtor, under any applicable law) and any
contingent or other agreement to provide any of the foregoing.
"LOAN" or "LOANS" means any or all of the Tranche A Loans, the Tranche
B Loans or both.
"LOAN DOCUMENTS" means, collectively, this Agreement, the Note, the
Multiparty Agreement, the Fee Letter, the Collateral Documents and the
Intercreditor Agreement and all executed agreements, instruments and
documents delivered to AEF, AE or by the Customer or any Affiliate of
the Customer in connection herewith and therewith.
"LONG TERM DEBT TO CAPITALIZATION" means the sum for the Customer
Group on the last day of the Relevant Period, determined without
duplication in accordance with Generally Accepted Accounting
Principles, of (a) the aggregate amount of all Funded Debt (excluding,
for purposes of this definition, Contingent Obligations) PLUS (b) the
aggregate amount of all Disqualified Capital Stock (excluding, for
purposes of this definition, any portion thereof that has been
irrevocably and unconditionally defeased by the deposit of cash or
securities with the holder or holders, or an agent or trustee for the
holder or holders, of such Disqualified Capital Stock in accordance
with the instrument governing the terms and conditions of such
Disqualified Capital Stock), such sum to be expressed as a percentage
of the sum on such date for the Customer Group of (i) the aggregate
amount of Funded Debt (excluding, for purposes of this definition,
Contingent Obligations) PLUS (ii) the aggregate amount of all
Disqualified Capital Stock (excluding, for purposes of this
definition, any portion thereof that has been irrevocably and
unconditionally defeased by the deposit of cash or securities with the
holder or holders, or an agent or trustee for the holder or holders,
of such Disqualified Capital Stock in accordance with the instrument
governing the terms and conditions of such Disqualified Capital Stock)
PLUS (iii) Consolidated Net Worth.
"LOSSES" has the meaning specified in Section 10.04(b).
"LSA PARTY" means the party (other than AE) to the Launch Services
Agreement which may be the Customer (or any Affiliate thereof) or the
Satellite Manufacturer (or any Affiliate thereof) if the Satellite is
to be delivered to the Customer in-orbit.
"MAJOR RATING AGENCY" means S&P, Moody's, any other internationally
recognized credit rating agency acceptable to AEF, or any of their
respective local affiliates or associated agencies.
"MATERIAL ADVERSE EFFECT" means a material adverse change in, or a
material adverse effect upon, any of:
-25-
<PAGE> 31
(a) the operation, business, assets or financial
condition of the Customer Group;
(b) the ability of the Customer to perform its
obligations or enforce its rights under any Loan
Document;
(c) the value of the Collateral (including the revenues
to be generated therefrom);
(d) the legality, validity, binding effect or
enforceability of any or all of this Agreement, any
other Loan Document or any of the Satellite
Contracts; or
(e) the perfection or priority of any Lien granted to
the Security Agent or any Lender, as the case may
be, with respect to any Collateral under any of the
Collateral Documents.
"MATERIAL SUBSIDIARY" means, with respect to any Person on any date
(the "DETERMINATION DATE"), any Subsidiary of such Person (each, a
"PRIMARY MATERIAL SUBSIDIARY") that (for the relevant period or date
referred to below) accounted or accounts for ten percent (10%) or more
of any of the following items (each, a "FINANCIAL CATEGORY") for such
Person and its consolidated Subsidiaries: (a) gross revenues for the
period of four (4) fiscal quarters of such Person ending on or most
recently ended prior to the Determination Date, (b) operating profits
for the period of four (4) fiscal quarters of such Person ending on or
most recently ended prior to the Determination Date or (c) gross
assets on the Determination Date; PROVIDED that if the Subsidiaries of
such Person (other than the Primary Material Subsidiaries) that
accounted or account, in the aggregate, for more than twenty percent
(20%) of any of the Financial Categories for such Person and its
consolidated Subsidiaries, then the Material Subsidiaries of such
Person shall also include each Subsidiary of such Person that
accounted or accounts for a higher percentage of a Financial Category
than any other Subsidiary of such Person (excluding Primary Material
Subsidiaries) as at the Determination Date, together with each other
Subsidiary of such Person designated from time to time by AEF,
provided that there shall not be more than five (5) Material
Subsidiaries that are not Primary Material Subsidiaries.
"MATURITY DATE" means the date being the last day of the Tranche B
Term, as set forth in the Conversion Commitment Letter in accordance
with the conditions set forth in ANNEX 1, 2 OR 3, as applicable, which
in no event shall be later than April 14, 2009.
"MAXIMUM TRANCHE B TERM" means the period set forth in ANNEX 1, 2 OR
3, as may be applicable to the Customer on and after the Conversion
Date in relation to the designation by AEF of the Customer into a
Customer Category, which shall end, in any case, no later than the
Maturity Date.
-26-
<PAGE> 32
"MEASURING DATE" means, (a) so long as the Customer shall have been
determined to be a Category 1 Customer or a Category 2 Customer for
which quarterly financial statements are not required to be delivered
pursuant to Section 6.01, the last day of every semi-annual fiscal
period of the Customer for which financial statements are required to
be delivered pursuant to Section 6.01, commencing with the first such
fiscal period-end following the Conversion Date and (b) so long as the
Customer shall have been determined to be a Category 2 Customer for
which quarterly financial statements are required to be delivered
pursuant to Section 6.01 or a Category 3 Customer, the date of the
last day of each fiscal quarter of the Customer, commencing with the
first fiscal quarter-end following the Conversion Date.
"MODELLING LENDER" means a Lender identified by AEF to act pursuant to
Section 9.01(b).
"MOODY'S" means Moody's Investors Service, Inc.
"MULTIPARTY AGREEMENT" means the agreement dated as of the date
hereof, among the Customer, AEF, AE and the LSA Party, relating, among
other things, to payment instructions and reimbursement obligations
among the parties thereto.
"NON-CASH WORKING CAPITAL" means, at any time, (a) accounts receivable
and inventory of the Customer Group at such time MINUS (b) the
accounts payable of the Customer Group at such time.
"NOTE" has the meaning specified in Section 2.12.
"NOTICE OF CONVERSION" means a notice from AEF to the Customer stating
that the Tranche A Loans have Converted to the Tranche B Loan.
"NOTICE OF DRAWDOWN" means a written notice given by the Customer to
AEF, requesting the making of a Tranche A Loan, substantially in the
form of Exhibit A hereto, pursuant to Section 2.02.
"NOTICE OF LIEN" means any "notice of lien" or similar document
intended to be filed or recorded with any court, registry, recorder's
office, central filing office or Governmental Authority for the
purpose of evidencing, creating, perfecting or preserving the priority
of a Lien securing obligations owing to a Governmental Authority.
"OECD" means the Organization for Economic Cooperation and
Development, or any successor agency thereto.
"OTHER INDEBTEDNESS FOR BORROWED MONEY" means Indebtedness of the
Customer and its Subsidiaries that is not a Loan or a Project Loan and
represents Indebtedness for borrowed money.
"OTHER TAXES" has the meaning specified in Section 3.01(b).
-27-
<PAGE> 33
"P&I DEBT SERVICE" means, for any period, the sum of (a) Total
Interest with respect to P&I Indebtedness for such period PLUS (b) the
aggregate amount of principal payments of P&I Indebtedness scheduled
to have been made by the Customer Group during such period.
"P&I INDEBTEDNESS" means, without duplication, the following items for
the Customer Group, determined in accordance with Generally Accepted
Accounting Principles: (a) all indebtedness for borrowed money, (b)
all obligations issued, undertaken or assumed as the deferred purchase
price of capital assets, (c) all obligations evidenced by notes,
bonds, debentures or similar instruments, including obligations so
evidenced incurred in connection with the acquisition of property,
assets or businesses, excluding performance bonds, letters of credit
and similar undertakings in connection with the construction,
development or operation of any business of the Customer Group to the
extent that such undertakings do not secure an obligation for borrowed
money or the deferred purchase price of a capital asset, (d) all
indebtedness created or arising under any conditional sale or other
title retention agreement, or incurred as financing, in either case
with respect to property acquired by the Customer Group (even though
the rights and remedies of the seller or bank under such agreement in
the event of a default are limited to repossession or sale of such
property) and (e) all Indebtedness referred to in clauses (a) through
(d) above (whether or not incurred by the Customer Group) secured by
(or for which the holder of such P&I Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien upon or in
property (including accounts and contract rights) owned by any member
of the Customer Group even though such member has not assumed or
become liable for the payment of such Indebtedness.
"PARTIAL FAILURE" has the meaning ascribed to that term or a term
substantially similar to such term in the launch and initial
operations insurance the Customer is required to obtain pursuant to
Section 6.06(b) or in the in-orbit insurance the Customer is required
to obtain pursuant to Section 6.06(b), whichever is then in effect.
"PERMITTED INVESTMENTS" has the meaning specified in Section 7.14.
"PERMITTED LIENS" has the meaning specified in Section 7.01.
"PERMITTED LOCATION" means any country listed on ANNEX 6 hereto.
"PERSON" means an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint
venture, voluntary organization or Governmental Authority.
"PRELIMINARY BASE CASE" means the Base Case for the Customer as
described in Section 9.01.
"PRELIMINARY BUSINESS PLAN" means the Business Plan of the Customer
submitted to AEF as described in Section 9.01 or submitted to AEF
prior to the execution and delivery of this Agreement, which shall be
in form sufficient to allow the AEF or the
-28-
<PAGE> 34
Lenders to make the determinations contemplated in Section 9.01 and
containing at a minimum, and without limitation, the following
information with respect to the Project:
(a) details of the Project sponsor or Project sponsors,
a general description of the Customer's business and
organization, the then-current equity holdings
therein and, if such information is available,
general biographical information as to key
management team members;
(b) projections of all capital and operating costs
(including material taxes) and revenues the Project
is projected to generate with sufficient information
(including the details of assumptions underlying
such projections) in each case for AEF and the
Lenders to assess the Project;
(c) a general description of the target market for the
Project, which shall include a statement of the
percentage of such target market that the Customer
proposes to capture;
(d) a technical description of the Project;
(e) an overview of the laws and regulations applicable
to the Project and the status of requisite
governmental approvals for the construction, launch
and operation thereof;
(f) if such information is available, a description of
the Collateral that is expected to be available for
the benefit of AEF and the Lenders and whether a
first priority, perfected Lien will and can be
granted and perfected thereon;
(g) a general description of the proposed sources of
finance for the Project, along with a description of
the manner in which such financing will be secured;
and
(h) details of underlying economic assumptions and
factors, including inflation, interest and exchange
rate.
"PRE-TAX CASH INTEREST COVERAGE" means, for any Person, the lower of
(a) the arithmetic mean of the Pre-Tax Cash Interest Coverage
Components for such Person for the three (3) Relevant Sub-Periods and
(b) the Pre-Tax Cash Interest Coverage Component for such Person for
the last Relevant Sub-Period. For purposes of this definition, the
"PRE-TAX CASH INTEREST COVERAGE COMPONENT" for any Person for any
period means the ratio of EBITDA for such period to Total Interest for
such Person for such period.
"PROHIBITED COUNTRY" means, as to any Lender or AEF, any country into
which bank or other financial institution lending activity is
prohibited, declared unlawful or restricted by any authority
(international, national or regional, including any
-29-
<PAGE> 35
regulatory authority, the regulations of which are customarily
complied with by such Lender or AEF), having jurisdiction therefor in
Luxembourg, the jurisdiction of incorporation of such Lender, the
jurisdiction of the head office of such Lender, the jurisdiction where
such Lender primarily conducts its business or the jurisdiction of
such Lender's Lending Office.
"PROHIBITED PERSON" means, as to any Lender or AEF, any Person that
appears from time to time on the listing of Specially Designated
Nationals and Blocked Persons issued by the Office of Foreign Assets
Control, United States Department of the Treasury or any list of
similar nature prohibiting, restricting or declaring unlawful lending
activity to any Person (other than any list identifying Governmental
Authorities) issued by any Governmental Authority in Luxembourg, any
jurisdiction of incorporation of such Lender, the jurisdiction of the
head office of such Lender, the jurisdiction in which such Lender
primarily conducts its business or the jurisdiction of such Lender's
Lending Office or by any supranational body the regulations of which
are customarily or mandatorily complied with by such Lender or AEF or
a Person that is owned or controlled by, or derives any material
portion of its revenues from, a Person on such list.
"PROJECT" means, collectively, the construction, acquisition,
financing, launch and operation of the Satellite (if the Customer
shall have been determined to be a Category 2 Customer or a Category 3
Customer, as contemplated by the Business Plan), together with any
related assets constituting Collateral.
"PROJECT AGENT" means the agent, if any, acting for and on behalf of
the Project Lenders, and any successor Project Agent appointed
pursuant to the provisions of the Project Financing Agreements.
"PROJECT FINANCING" means, if applicable, the secured debt financing
for the construction, acquisition and operation of the Satellite, the
TTC&M Facilities and other Project components other than launch
services provided by the Project Lenders and secured by a Lien on all
or a portion of the Collateral; PROVIDED that (a) solely for the
purpose of the definition of "TOTAL ADVANCE RATE" (including, without
limitation, but solely for such purpose, as used in ancillary
definitions to the extent necessary to determine the "TOTAL ADVANCE
RATE"), the term "PROJECT FINANCING" shall be deemed not to include
any such secured debt financing that is not secured by the Satellite,
(b) solely for the purpose of Section 6.06, the term "PROJECT
FINANCING" shall be deemed not to include any such secured financing
that is not secured by the Satellite and the holders of which are not
entitled to share in the proceeds of any insurance maintained pursuant
to said Section 6.06 and (c) solely for the purposes of Sections 2.11,
4.01(a)(vi), 4.02(e) and 4.03(a)(iii), the term "PROJECT FINANCING"
shall be deemed not to include any such secured financing that is not
secured by the Satellite unless otherwise directed or agreed to by
AEF.
"PROJECT FINANCING AGREEMENTS" means, if applicable, the agreements
evidencing or governing the Project Financing.
-30-
<PAGE> 36
"PROJECT LENDERS" means the financial institutions party to the
Project Financing Agreements as lenders and any Person that has been
assigned any or all of the rights or obligations of a Project Lender
as set forth therein or any successor thereto.
"PROJECT LOAN" or "PROJECT LOANS" means any amount advanced by the
Project Lenders pursuant to the Project Financing Agreements.
"QL CASH FLOW" means, for any period, (a) the sum of the revenues from
rental payments due under all of the Qualified Lease Agreements of the
Customer for such period plus the decrease, if any, in Non-Cash
Working Capital for such period less (b) the sum of (i) the operating
expenses of the Customer; plus (ii) the income taxes paid in cash by
the Customer; plus (iii) the increase in Non-Cash Working Capital,
where the items described in clause (b) above have been allocated by
the Customer among its various operations and sources of revenues in a
manner acceptable to AEF (provided that, if such manner is not
acceptable to AEF, and AEF and the Customer do not otherwise agree to
an allocation, the full amount of such items shall be subtracted
pursuant to said clause (b)).
"QL WEIGHTED AVERAGE TERM" means: (a) the sum of the products of the
revenues from rental payments under all of the Qualified Lease
Agreements multiplied by the respective numbers of years (calculated
to one (1) decimal place) from the Conversion Date to the respective
dates on which such rental payments are due, DIVIDED BY (b) the
aggregate amount of all revenues from rental payments under all
Qualified Lease Agreements.
"QUALIFIED LEASE AGREEMENTS" means, if the Customer shall have been
determined to be a Category 1C Customer or a Category 2 Customer,
valid, binding and enforceable agreements for the lease of
transponders or use of the communications capacity of the Satellite,
in form and substance satisfactory to AEF, which agreements shall
have, without limitation, the features set out in ANNEX 2.
"QUOTATION DATE" means, in relation to any period for which an
interest rate is to be determined hereunder, the day on which
quotations would ordinarily be given by prime banks in the London
interbank market for deposits in Dollars for delivery on the first day
of that period PROVIDED that, if, for any such period, quotations
would ordinarily be given on more than one date, the Quotation Date
for that period shall be the last of those dates.
"RATE CONTRACTS" means any swap, option, cap, floor and collar
agreements, interest rate insurance, currency spot and forward
contracts and other derivative or hedging instruments and other
agreements or arrangements designed to provide protection against
fluctuations in interest or currency exchange rates.
"RCB" means the Radiocommunication Bureau of the ITU.
"RECONVERSION" has the meaning specified in Section 2.04(b).
-31-
<PAGE> 37
"RECOVERING PERSON" has the meaning specified in Section 3.02(a).
"REFERENCE BANKS" means the principal London offices of Credit
Lyonnais, ING Bank, and Societe Generale or such other bank or banks
as may from time to time be agreed between the Customer and AEF.
"REFLIGHT" means (a) with respect to an Ariane 5 Launch Vehicle, a
"Reflight" of the Satellite or (b) with respect to an Ariane 4 Launch
Vehicle, a Replacement Launch of the Satellite that is ordered during
the Request Period and that is paid for substantially by a "Relaunch
Credit Option", as such terms are defined in the Launch Services
Agreement.
"RELATED ACCOUNTING RECONCILIATION" means, with respect to any
financial statements prepared in accordance with Generally Accepted
Accounting Principles, calculations and explanations in reasonable
detail, and certified by an internationally-recognized independent
public accounting firm, demonstrating the derivation from such
financial statements of the results of the application in accordance
with Specified GAAP of the tests set out in ANNEX 1, 2 OR 3, or the
calculations in accordance with Specified GAAP necessary to determine
compliance by the Customer with its covenants contained herein.
"RELEVANT COMPANY" means (a) prior to the Conversion Commitment Date,
the Customer, (b) on and after the Conversion Commitment Date, (i) if
the Customer shall have been determined to be a Category 1A Customer
or a Category 1B Customer, the Customer or any Material Subsidiary of
the Customer, (ii) if the Customer shall have been determined to be a
Category 1C Customer, the Customer or any Subsidiary of the Customer
and (iii) if the Customer shall have been determined to be a Category
2 Customer or a Category 3 Customer, the Customer.
"RELEVANT PERIOD" means the period of three (3) consecutive fiscal
years of the Customer ending on or most recently ended prior to the
Conversion Commitment Date, PROVIDED that if the Conversion Commitment
Date falls in the second semi- annual fiscal period of a fiscal year
of the Customer, the "RELEVANT PERIOD" means the period of two (2)
consecutive fiscal years of the Customer ending on or most recently
ended prior to the Conversion Commitment Date and the portion of the
next succeeding fiscal year of the Customer ending on the last day of
the first semi-annual fiscal period of such fiscal year of the
Customer.
"RELEVANT SUB-PERIOD" means each fiscal year of the Customer that
falls completely within the Relevant Period, and if the Conversion
Commitment Date falls in the second semi-annual fiscal period of a
fiscal year of the Customer, the period of two (2) consecutive
semi-annual fiscal periods of the Customer ending on or most recently
ended prior to the Conversion Commitment Date.
"REPAYMENT PROFILE" means a schedule determined by AEF in its sole
discretion but within the parameters set forth in ANNEX 1, 2 OR 3, as
may be applicable to the
-32-
<PAGE> 38
Customer in relation to the designation by AEF of the Customer into a
Customer Category, and the amortization schedule set forth in the Fee
Letter, listing:
(a) the aggregate principal amount of Tranche A Loans
drawn during the Tranche A Term;
(b) the aggregate principal amount of Tranche A Loans
drawn prior to the Conversion Commitment Date;
(c) the aggregate principal amount of Tranche A Loans
that are projected to be drawn on or after the
Conversion Commitment Date;
(d) the projected Conversion Amount;
(e) the Tranche B Required Installment Amounts to be
paid during the Tranche B Term; and
(f) the Maturity Date.
"REPLACEMENT LAUNCH" has the meaning ascribed to that term in the
Launch Services Agreement.
"REQUEST PERIOD" means (a) with respect to an Ariane 5 Launch Vehicle,
the period as set forth in Section 4.7 of the Launch Services
Agreement and (b) with respect to an Ariane 4 Launch Vehicle, the
period that is six (6) months after the Launch, during which, in both
cases, the LSA Party may notify AE of a claimed right to a Reflight.
"REQUIRED DISTRESS RECOVERY VALUE" means the minimum required
percentage that the Distress Recovery Value is of the Conversion
Commitment Amount as of the Conversion Commitment Date and the minimum
required percentage that the Distress Recovery Value is of the
Conversion Amount as of the Conversion Date, as the case may be, as
set forth in ANNEX 1, 2 OR 3, as may be applicable to the Customer
upon the designation by AEF of the Customer into a Customer Category.
"REQUIREMENT OF LAW" means, as to any Person, any law (statutory or
common), treaty, rule, order, delegated legislation or regulation of a
Governmental Authority or determination of an arbitrator, in each case
applicable to or binding upon the Person or any of its property or to
which the Person or any of its property is subject.
"RESPONSIBLE OFFICER" means, as to the Customer or any other Person,
the chief executive officer, the director general, the secretary
general, the president or a duly authorized vice president, assistant
director general, a director or a managing director of the Customer or
such other Person.
"RESTRICTED PAYMENT" shall mean (a) dividends (in cash, property or
obligations) on, or other payments or distributions on account of, or
the setting apart of money for a
-33-
<PAGE> 39
sinking or other analogous fund for, or the purchase, redemption,
retirement or other acquisition of, any shares of any class of stock
of the Customer or of any warrants, options or other rights to acquire
the same (or to make any payments to any Person, such as "phantom
stock" payments, where the amount thereof is calculated with reference
to the fair market or equity value of the Customer or any of its
Subsidiaries), but excluding dividends payable solely in shares of
capital stock of the Customer, (b) the purchase or acquisition of, or
the entering into of any commitment for, any capital stock, equity
interest, obligations or other securities of or any interest in, or
make any advance, loan, extension of credit or capital contribution to
or any other investment in, any Affiliate of the Customer and (c)
(except to the extent included in the Business Plan if the Customer
shall have been determined to be a Category 3 Customer and except to
the extent acceptable to AEF if the Customer shall have been
determined to be a Category 1C Customer) management fees, payments
made pursuant to cost or tax sharing arrangements, or similar
payments, in any case to the extent paid to any Affiliate of the
Customer.
"RESUBMISSION" has the meaning specified in Section 9.01(b)(v).
"REVISED SUBMISSION" has the meaning specified in Section
9.01(b)(iii).
"REVENUE ACCOUNTS" means, if the Customer shall have been determined
to be a Category 1C Customer, a Category 2 Customer or a Category 3
Customer, the account or accounts of the Customer into which all
revenues from Transponder Lease Agreements, Qualified Lease Agreements
and all other agreements between the Customer and a lessee for the
lease of transponders or use of communications capacity on the
Satellite that are excluded from the definition of Transponder Lease
Agreements by virtue of clause (a) thereof shall be paid, which
account or accounts shall be held with a bank or trust institution,
and in a location acceptable to AEF.
"S&P" means Standard & Poor's Ratings Service, a division of The
McGraw-Hill Companies, Inc.
"SATELLITE" means the satellite to be launched by AE under the Launch
Services Agreement by "Launch # 2", as such term is defined in the
Launch Services Agreement, the launch and related services of which
are being financed under this Agreement.
"SATELLITE CONTRACTS" means, as of any date, collectively, the Launch
Services Agreement, the Satellite Purchase Agreement, the TTC&M
Contract and each material contract to which the Customer or an
Affiliate is party that is necessary to the construction, operation or
use of the assets referred to in clause (g) of the definition of
"COLLATERAL".
"SATELLITE MANUFACTURER" means the prime contractor and manufacturer
of the Satellite that is a party to the Satellite Purchase Agreement.
-34-
<PAGE> 40
"SATELLITE PURCHASE AGREEMENT" means that certain satellite purchase
agreement dated March 2, 1993, between the Satellite Manufacturer and
the SPA Party and any attachments related thereto, for the manufacture
and delivery of the Satellite and related satellite control facilities
and services if forming part of such satellite purchase agreement
(including warranties) by the Satellite Manufacturer, which agreement
shall be in form and substance satisfactory to AEF as determined on
the Conversion Commitment Date.
"SECURITY AGENT" means a Person acceptable to the Lenders, AEF, the
Customer and the Project Lenders, if any, acting as agent for and on
behalf of AEF, the Lenders and the Project Lenders, if any, and any
successor Security Agent appointed pursuant to the provisions of the
Intercreditor Agreement.
"SPA PARTY" means the party (other than the Satellite Manufacturer) to
the Satellite Purchase Agreement which may be the Customer or any
Affiliate thereof.
"SPECIFIED GAAP" means, at any time, generally accepted accounting
principles in effect at such time in (a) the United States of America,
(b) if the Customer has theretofore customarily prepared its financial
statements in accordance with generally accepted accounting principles
in the United Kingdom, the United Kingdom, or (c) such other country
as AEF and the Customer may agree, in each case referred to in the
foregoing clauses (a), (b) and (c) consistently applied.
"SUBJECT COLLATERAL" has the meaning specified in Section 9.04.
"SUBMISSION" has the meaning specified in Section 9.01(b)(i).
"SUBORDINATED INDEBTEDNESS" means Indebtedness of the Customer (a)
that does not constitute a Contingent Obligation of any Subsidiary of
the Customer, (b) that is subordinated to the prior payment of the
principal of and interest on the Loans, all Break Funding Costs and
all fees and other amounts payable by the Customer hereunder and under
the other Loan Documents (the "SENIOR AMOUNTS"), and (c) upon terms
providing that, until payment in full of the Senior Amounts and the
termination of the Commitments, (i) the holders of such indebtedness
(and any agent or trustee acting on their behalf) may not exercise or
enforce any rights or remedies against the Customer in respect of such
Indebtedness and (ii) the holders of such indebtedness (and any agent
or trustee acting on their behalf) may not file or join in any
application, complaint or petition to cause the Customer or any of its
assets or revenues to become the subject of any Insolvency Proceeding,
and upon other terms and conditions satisfactory to AEF in form and
substance.
"SUBSIDIARY" of a Person means any corporation, association,
partnership, joint venture or other business entity of which more than
fifty percent (50%) of the voting securities or other ownership
interests is, or other equity interests are, owned or controlled
directly or indirectly by such Person, or one or more of the
Subsidiaries of such Person, or a combination thereof.
-35-
<PAGE> 41
"TAXES" has the meaning specified in Section 3.01(a).
"TELECOMMUNICATIONS APPROVAL" means an order, instrument or approval
of any applicable Telecommunications Authority granting the Customer
authority to construct, launch, operate and maintain each of the
Satellite, the TTC&M Facilities and the Project in general, including
national and local telecommunications licenses and compliance with ITU
procedures and requirements.
"TELECOMMUNICATIONS AUTHORITY" means, with respect to national and
local telecommunications authorities, the Federal Communications
Commission, or any successor thereto, and, with respect to any
international telecommunications authority, the ITU, including the
RCB.
"TEST DATE" means a Measuring Date or a date on which (a) the Customer
takes an action referred to in Section 7.08, (b) any member of the
Customer Group creates, incurs, assumes or otherwise becomes directly
or indirectly liable with respect to any Indebtedness or (c) any
member of the Customer Group makes a Restricted Payment.
"TOTAL ADVANCE RATE" means the Total Senior Debt Commitment expressed
as a percentage of the lesser of (a) the Equipment Cost and (b) the
Fair Market Value of the Collateral as set forth in the Appraisal.
"TOTAL CASH FLOW" means, for any period, for the Customer Group the
excess (if greater than zero (0)) of (a) the sum of (i) EBITDA for
such period and (ii) the decrease, if any, in Non-Cash Working Capital
during such period, over (b) the sum of (i) income taxes paid in cash
during such period and (ii) the increase, if any, in Non-Cash Working
Capital during such period.
"TOTAL DEBT TO CAPITALIZATION" means, the sum for the Customer Group
on the last day of the Relevant Period, determined without duplication
in accordance with Generally Accepted Accounting Principles, of (a)
the aggregate amount of all Indebtedness (other than Contingent
Obligations) PLUS (b) the aggregate amount of all Disqualified Capital
Stock (excluding, for purposes of this definition, any portion thereof
that has been irrevocably and unconditionally defeased by the deposit
of cash or securities with the holder or holders, or an agent or
trustee for the holder or holders, of such Disqualified Capital Stock
in accordance with the instrument governing the terms and conditions
of such Disqualified Capital Stock), such sum to be expressed as a
percentage of the sum on such date for the Customer Group of (i) the
aggregate amount of Funded Debt (other than Contingent Obligations)
PLUS (ii) the aggregate amount of all Disqualified Capital Stock
(excluding, for purposes of this definition, any portion thereof that
has been irrevocably and unconditionally defeased by the deposit of
cash or securities with the holder or holders, or an agent or trustee
for the holder or holders, of such Disqualified Capital Stock in
accordance with the instrument governing the terms and conditions of
such Disqualified Capital Stock) PLUS (iii) Consolidated Net Worth.
-36-
<PAGE> 42
"TOTAL FAILURE" has the meaning ascribed to that term or a term
substantially similar to such term in the launch and initial
operations insurance the Customer is required to obtain pursuant to
Section 6.06(b) or in the in-orbit insurance the Customer is required
to obtain pursuant to Section 6.06(b), whichever is then in effect.
"TOTAL INTEREST" shall mean, for any period, the sum (without
duplication), for the Customer Group, determined in accordance with
Generally Accepted Accounting Principles, of the following: (a) all
interest in respect of Indebtedness accrued or capitalized during such
period (whether or not actually paid during such period) PLUS (b) the
net amounts payable (or MINUS the net amounts receivable) under Rate
Contracts relating to interest rates accrued during such period
(whether or not actually paid or received during such period).
"TOTAL SENIOR DEBT COMMITMENT" means, at any time, the aggregate of
commitments under this Agreement and the Project Financing Agreements.
"TOTAL SENIOR DEBT OUTSTANDING" means, at any time, the aggregate of
amounts outstanding under this Agreement and the Project Financing
Agreements.
"TRANCHE A COMMITMENT" means the obligation of AEF to make Loans in an
aggregate principal amount not to exceed the Tranche A Commitment
Amount.
"TRANCHE A COMMITMENT AMOUNT" means an amount equal to the lesser of
(a) the sum of (i) sixty percent (60%) of the Launch Costs and (ii)
the aggregate amount of Finance Costs capitalized hereunder and (b)
sixty million Dollars ($60,000,000).
"TRANCHE A LOAN" means any amount advanced by AEF pursuant to Section
2.01(a).
"TRANCHE A OUTSTANDINGS" means the aggregate Tranche A Loans to the
Customer outstanding at any time (including Tranche A Loans the
proceeds of which have been applied to the payment of Finance Costs),
PLUS accrued and unpaid interest thereon as provided in Section
2.07(a).
"TRANCHE A PERIOD" means the period commencing on the Closing Date and
ending on April 12, 2002.
"TRANCHE A TERM" means, subject to the terms and conditions of
Sections 2.04 and 2.05(b), the period commencing on the Closing Date
and ending on the earlier of the Conversion Date or the last day of
the Tranche A Period.
"TRANCHE B ADVANCE RATE" means sixty percent (60%) of Launch Costs.
"TRANCHE B AMORTIZATION DATE" means the date that is six (6) months
after the In-Orbit Commissioning Date.
"TRANCHE B CONDITIONS PRECEDENT" means the conditions set forth in
Section 4.03.
-37-
<PAGE> 43
"TRANCHE B LOAN" means the Tranche A Loans converted by AEF pursuant
to Section 2.01(b) and outstanding at any time.
"TRANCHE B PRINCIPAL PAYMENT DATE" means the Tranche B Amortization
Date, the last day of each three (3) month or six (6) month period
thereafter, as set forth in the Conversion Commitment Letter, until
the Maturity Date, and the Maturity Date.
"TRANCHE B REQUIRED INSTALLMENT AMOUNT" means the amount of each of
the repayment installments of principal of the Tranche B Loan, as
determined by AEF on the Conversion Commitment Date and as set forth
in the Conversion Commitment Letter, each such installment being equal
to the percentage value of the Tranche B Loan as set forth in the
Conversion Commitment Letter.
"TRANCHE B TERM" means, subject to the terms and conditions of
Sections 2.04 and 2.05(b), the period commencing on the Conversion
Date and ending on the Maturity Date, such period not to exceed the
Maximum Tranche B Term.
"TRANSPONDER LEASE AGREEMENTS" means all agreements entered into by
the Customer for the lease of transponders or use of communications
capacity on the Satellite, except for such agreements (a) having a
term of less than one (1) year or an aggregate lease value of less
than five hundred thousand Dollars ($500,000) or (b) with Affiliates
of the Customer that are primarily intended to guarantee
unconditionally the Customer's performance of its obligations under
the Project Financing where (i) such agreements (A) are subject and
subordinate to the rights of AEF, the Lenders and the Security Agent,
on terms and conditions satisfactory to them, (B) contain no rights of
quiet enjoyment with respect thereto (which for purposes of this
definition shall mean that, notwithstanding the lessee's continued
compliance with its obligations under such agreement, no assignee
having a Lien on such agreement shall be bound to retain such lessee
as a lessee thereunder and shall be free to terminate such agreement
despite such continued compliance by such lessee) and (C) are subject
to termination by AEF or the Lenders upon the exercise of remedies
pursuant to Section 8.02 and (ii) such agreements are in the nature of
contingent agreements for the lease of transponders or use of
communications capacity on the Satellite.
"TTC&M CONTRACT" means that certain agreement, or those certain
agreements,to be entered into between the TTC&M Provider and the TTC&M
Party, and any attachments related thereto, relating to the
construction and supply of certain antenna and tracking, telemetry,
control and monitoring equipment relating to the Satellite, together
with the servicing and operation thereof, which agreement or
agreements (as the case may be) shall be in form and substance
satisfactory to AEF as determined on the Conversion Commitment Date.
"TTC&M FACILITIES" means the facilities and other ground equipment
necessary for the tracking, telemetry, control and monitoring of the
Satellite.
-38-
<PAGE> 44
"TTC&M MORTGAGE" means, if the TTC&M Facilities constitute Collateral,
that certain Mortgage to be granted by the Customer in favor of the
Security Agent over the TTC&M Facilities and the real property on
which such facilities are located, in form and substance satisfactory
to AEF, and to the extent available under applicable law.
"TTC&M PARTY" means the party (other than the TTC&M Provider) to the
TTC&M Contract which may be the Customer or any Affiliate thereof
provided, if such party is an Affiliate of the Customer, the Customer
shall have unconditionally guaranteed the performance by such
Affiliate of its obligations pursuant to the TTC&M Contract on terms
satisfactory to AEF as determined on the Conversion Commitment Date.
"TTC&M PROVIDER" means the manufacturer and supplier of the TTC&M
Facilities that is a party to the TTC&M Contract.
"UNRESTRICTED EXCESS CASH FLOW" means, at any time, Excess Cash Flow
at such time LESS the amount of Excess Cash Flow required to be
applied to the prepayment of the Tranche B Loan pursuant to Section
11.05 or 13.04, as the case may be.
"UPFRONT FEE" means the fee payable by the Customer to AEF on the
Closing Date calculated as a percentage of the Tranche A Commitment
Amount as set forth in the Fee Letter.
1.012 OTHER DEFINITIONAL PROVISIONS
(a) Unless otherwise specified herein or therein, all capitalized
terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made
or delivered pursuant hereto.
(b) Unless otherwise specified herein, all accounting
determinations hereunder and all computations utilized by the
Customer in complying with the covenants contained herein
shall be made, all accounting terms used herein shall be
interpreted, and all financial statements required to be
delivered hereunder shall be prepared, in accordance with
Generally Accepted Accounting Principles (except for
departures therefrom approved by AEF).
(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.
The meaning of defined terms shall be equally applicable to
the singular and plural forms of the defined terms. The term
"including" and "to include" are not limiting and mean
"including without limitation" and "to include without
limitation" respectively.
(d) In the computation of periods of time from a specified date
to a later specified date, the word "from" means "from and
including", the words "to" and "until"
-39-
<PAGE> 45
each mean "to but excluding" and the word "through" means "to
and including".
(e) References to agreements and other contractual instruments
shall be deemed to include all subsequent amendments and
other modifications thereto, but only to the extent such
amendments and other modifications are not prohibited by the
terms of any Loan Document. Unless otherwise stated, any
reference to a Person shall include its successors and
permitted assigns.
(f) References to statutes or regulations are to be construed as
including all statutory and regulatory provisions
consolidating, amending or replacing the statute or
regulation.
(g) Matters disclosed on any schedule to this Agreement shall be
deemed disclosed for all purposes of this Agreement.
SECTION 2. LOAN PROVISIONS
1.021 AMOUNTS AND TERMS OF COMMITMENTS
(a) TRANCHE A LOANS. AEF agrees, upon the terms and subject to
the conditions set forth herein, to make, from time to time
during the Tranche A Term, one or more Tranche A Loans to the
Customer in an aggregate principal amount (i) not to exceed
the Tranche A Commitment Amount at any time prior to the
Conversion Commitment Date and (ii) not to exceed the
Conversion Commitment Amount on and after the Conversion
Commitment Date. The Tranche A Loans shall be made to fund
scheduled, pre-launch progress payments due and payable under
the Launch Services Agreement (other than the initial down
payment amount referred to in Section 4.01(c)) and Finance
Costs, subject to and as set forth in the Fee Letter.
(b) TRANCHE B LOAN. AEF agrees, upon the terms and subject to
the conditions set forth herein and in the Conversion
Commitment Letter, to convert (herein referred to as
"CONVERSION") Tranche A Loans (in an aggregate amount not
exceeding the Conversion Commitment Amount) into the Tranche
B Loan by furnishing a Notice of Conversion to the Customer
on or after the date of Launch (or Reflight, as the case may
be), PROVIDED that (i) the Satellite is not destroyed or lost
during the period extending from the instant when the Launch
(or Reflight, as the case may be) occurs and the instant when
the Satellite has separated from the Launch Vehicle and (ii)
the Satellite does separate from the Launch Vehicle. Subject
to Section 2.04, the Conversion shall be effective for the
period commencing on the date of Launch (or Reflight, as the
case may be) and terminating on the Maturity Date. The
Tranche B Loan to the extent that it is repaid or prepaid may
not be reborrowed.
-40-
<PAGE> 46
(c) COMMITMENTS. The Tranche A Commitment shall be automatically
reduced to the Conversion Commitment Amount on the Conversion
Commitment Date and shall be automatically reduced to zero on
the Conversion Date. If the Tranche A Outstandings of the
Customer are not converted to a Tranche B Loan, the
Conversion Commitment shall be automatically reduced to zero
on the earlier of the date of Launch or the last day of the
Tranche A Period. The Tranche A Commitment and the
Conversion Commitment, once terminated or reduced pursuant to
this Section 2.01(c), may not be reinstated or increased,
except that the Tranche A Commitment may be reinstated in an
amount equal to the Conversion Commitment Amount in the event
of a Launch Failure as described in Section 2.04, PROVIDED
that no new Tranche A Loans shall be made after such Launch
Failure other than for the purposes of paying Finance Costs.
1.022 MANNER OF BORROWING TRANCHE A LOANS
(a) Each Tranche A Loan shall be made upon the Customer's
irrevocable Notice of Drawdown received by AEF prior to 11:00
a.m. (Paris time) no earlier than nine (9) Business Days and
no later than seven (7) Business Days prior to the requested
date for the making of such Loan (provided that no Notice of
Drawdown shall be required in connection with a Tranche A
Loan the proceeds of which will be used entirely to
capitalize interest as permitted hereby). Each such notice
shall specify (i) the amount of such Loan, which shall be not
less than the lesser of (A) one million Dollars ($1,000,000),
(B) the amount of the final scheduled pre-launch progress
payment due and payable by the LSA Party pursuant to the
Launch Services Agreement with respect to the Satellite and
(C) the amount of any Finance Costs to be capitalized at the
time of the making of such Loan and shall not exceed the
maximum amount of the next scheduled, pre-launch progress
payment due and payable by the LSA Party pursuant to the
Launch Services Agreement with respect to the Satellite plus
the amount of any Finance Costs to be capitalized at the time
of the making of such Loan, (ii) the requested date for the
making of such Loan, which shall be a Business Day and (iii)
whether such Loan shall be made for the purpose of paying any
amount of Finance Costs as provided in Section 2.07(d).
(b) Each Notice of Drawdown issued during the Tranche A Term
shall be deemed a certification (as of the date stated
thereon and delivery thereof) by the Customer that (i) the
representations and warranties made by the Customer contained
in Section 5 and any other Loan Document shall be true and
correct on and as of the date of the making of such Loan with
the same effect as if made on and updated as of such date,
(except as to representations and warranties expressly stated
to be made only at or as of a specified time or times), (ii)
each of the conditions required to be complied with on the
Closing Date as set forth in Section 4.01 have been satisfied
as of the Closing Date and remain so satisfied, and (iii) no
Default or Event of Default exists as of the
-41-
<PAGE> 47
date thereof or shall exist as of the date of the making of
such Loan or would result from the making of such Loan.
(c) Unless any applicable condition specified in Section 4 has
not been satisfied, the proceeds of all such Tranche A Loans
shall be made available by AEF on the requested borrowing
date (i) as provided in Section 2.07(d), in the case of
application to the payment of any capitalized interest, or
(ii) by deposit of such amounts in Dollars into the AE
Account.
1.023 PROCEDURE FOR CONVERSION TO A TRANCHE B LOAN
(a) CONVERSION PROCESS. Conversion of the Tranche A Loans to a
Tranche B Loan shall take place subject to and in accordance
with the terms and conditions set forth in Section 9.02.
(b) CONVERSION. If (i) in accordance with Section 9.02 AEF
determines, on the dates set forth in said Section, that the
conditions to Conversion set forth and referred to therein
(including both the conditions required to be satisfied on
the date of Launch (or Reflight, as the case may be) and the
conditions required to be satisfied prior to such date) have
been satisfied at the respective times they are required by
said Section to be so satisfied, and (ii) such other
determinations as may be required pursuant to Section 9.03
have been made, the Tranche A Loans shall convert to a
Tranche B Loan upon the delivery of a Notice of Conversion in
the manner described in Section 2.01(b) above on the
Conversion Date. Upon Conversion or Reconversion, as the
case may be, and for the duration of the Tranche B Term, the
additional terms set forth in ANNEX 1, 2 OR 3, as may be
applicable to the Customer in relation to the designation by
AEF of the Customer into a Customer Category, shall apply.
(c) NON-CONVERSION. If on the Conversion Commitment Date AEF
determines that the Customer has not satisfied all applicable
Conversion Conditions and Tranche B Conditions Precedent, the
Tranche A Outstandings shall not convert to a Tranche B Loan
and shall become due and payable by the Customer in
accordance with Section 2.05(b).
(d) TRANCHE A EXTENSION. If, (i) prior to the delivery by AEF to
the Customer of a Notice of Conversion, a Launch Failure is
determined to have occurred, and (ii) the Customer has
otherwise satisfied the Conversion Conditions, the Tranche B
Conditions Precedent and all other conditions to Conversion
in this Agreement, the Tranche A Loans shall continue on the
terms and conditions hereof applicable to Tranche A Loans,
and shall not be Converted to the Tranche B Loan, and the
Tranche A Term shall not be terminated by reason of such
Launch Failure, PROVIDED that no new Tranche A Loans shall be
made other than Loans for the purposes of paying Finance
Costs.
-42-
<PAGE> 48
1.024 DECONVERSION AND RECONVERSION
(a) DECONVERSION. In the event that the LSA Party is entitled to
a Reflight under the Launch Services Agreement due to the
occurrence of a Launch Failure that has been recognized in
accordance with the Launch Services Agreement after
Conversion has occurred, the Tranche B Loan shall be
reclassified as a Tranche A Loan ("DECONVERSION"). On any
such Deconversion, all terms and conditions hereof that apply
to Tranche A Loans (including, without limitation, the
Applicable Margin (which shall be equal to the interest rate
margin applicable to the Tranche A Term as described in the
Fee Letter)) shall apply to such Tranche A Loan, and the
Tranche A Term shall be reinstated, until the earlier of (i)
the date of mandatory prepayment, as provided in Section
2.05(b) and (ii) Reconversion, PROVIDED that no subsequent
Deconversion shall occur in the event any Reflight results in
a Launch Failure that is recognized after a Reconversion. A
Total Failure or Constructive Total Failure for which the LSA
Party is not entitled to a Reflight shall not result in
Deconversion or Reconversion, but shall instead cause a
mandatory prepayment, as provided in Section 2.05(b).
(b) RECONVERSION. The subsequent Conversion to a Tranche B Loan
of any Tranche A Loan that has been previously reclassified
pursuant to a Deconversion ("RECONVERSION") must be effected
no later than two (2) years after the date of initial Launch.
Reconversion of any Loan shall occur pursuant to the terms of
Sections 2.03 and 9.02. Any Tranche A Outstandings related
to a Launch Failure that have not reconverted to a Tranche B
Loan within two (2) years from the date of such Launch shall
become due and payable by the Customer to AEF in accordance
with Section 2.05(b).
1.025 PREPAYMENTS
(a) VOLUNTARY PREPAYMENTS. Subject to Section 3.03, the Customer
may, at any time, upon at least ten (10) Business Days prior
irrevocable written notice to AEF, prepay Loans, in whole or
in part, in amounts of at least the lesser of (i) three
million Dollars ($3,000,000) or any whole number multiple of
one million Dollars ($1,000,000) in excess thereof and (ii)
the amount of the Loans outstanding at such time, PROVIDED
that interest on the amount of such prepayment, accrued to
the date of prepayment, together with any Break Funding Costs
and any unpaid fees and other amounts due and payable under
this Agreement shall be paid in full on the date of
prepayment. Each such notice of prepayment shall specify the
date and amount of such prepayment and shall not thereafter
be revocable by the Customer. Any prepayment pursuant to
this Section 2.05(a) shall be applied to principal
outstanding in the inverse order of maturity of the
installments of principal.
(b) MANDATORY PREPAYMENTS.
(i) If:
-43-
<PAGE> 49
(A) this Agreement is terminated according to
the terms hereof, or
(B) the Launch Services Agreement is terminated
according to the terms thereof, or
(C) the Multiparty Agreement is terminated
according to the terms thereof, or
(D) following a Launch Failure, the LSA Party
does not request a Reflight within the
Request Period and in any event on or
before the date falling one hundred and
eighty (180) days after the original date
of Launch, or
(E) following a Launch Failure, a Reflight is
not accomplished within two (2) years
following the original date of Launch, or
(F) an initial Launch has not occurred by the
last day of the Tranche A Period, or
(G) a Reflight results in a Launch Failure, or
(H) the In-Orbit Commissioning Date shall not
have occurred on or prior to the date
occurring eight (8) months after Launch, or
(I) any ECA Country Risk Coverage shall cease
to be in full force and effect,
then (1) the Customer shall promptly notify AEF of
such event, (2) the Customer shall prepay, without
penalty, no later than five (5) Business Days after
the occurrence of the event giving rise to such
prepayment, the Loans in full, together with
interest thereon accrued to the date of prepayment,
any Break Funding Costs and any fees and other
amounts due and payable under this Agreement and (3)
if not earlier terminated, the Commitments shall
terminate on the date of such prepayment.
(ii) If the Customer shall, at any time on or after the
date of Launch, suffer an Event of Loss (excluding,
subject to Section 2.05(b)(iv), a Partial Failure)
of the Satellite for which the LSA Party shall not
be entitled to a Reflight, then, upon the earlier to
occur of (A) the date of receipt of insurance
proceeds (if applicable), (B) the date falling sixty
(60) days after the agreement of loss, if any, by
the applicable provider(s) of insurance as required
by Section 6.06 with respect to such Event of Loss
and (C) the date falling two hundred and ten (210)
days after the occurrence of such Event of Loss, the
Customer shall prepay, without penalty, the Loans in
full, together with interest thereon accrued to the
date of prepayment, any Break Funding Costs and any
fees and other amounts due and payable under this
Agreement.
-44-
<PAGE> 50
(iii) If, on the Conversion Commitment Date (unless
otherwise secured pursuant to Section 9.02(e)(iii))
or the Conversion Date, the Tranche A Outstandings
exceed the Conversion Commitment Amount, then the
Customer shall immediately prepay the amount by
which the Tranche A Outstandings exceed the
Conversion Commitment Amount, together with interest
thereon accrued to the date of prepayment and any
Break Funding Costs, or take such other action with
respect to such excess as is permitted by Section
9.02(e).
(iv) If the Customer shall, at any time on or after the
date of Launch, suffer a Partial Failure of the
Satellite, then (A) if the Customer shall have been
determined to be a Category 1A Customer or a
Category 1B Customer pursuant to the terms of this
Agreement, the Customer shall not be required to
prepay, as a result of the occurrence of such
Partial Failure, any portion of the Loans or any
other amounts outstanding under this Agreement and
(B) if the Customer shall have been determined to be
a Category 1C Customer, a Category 2 Customer or a
Category 3 Customer pursuant to the terms of this
Agreement, upon the earlier to occur of (1) the date
of receipt of insurance proceeds with respect to
such Partial Failure, (2) the date falling sixty
(60) days after the agreement of loss, if any, by
the provider(s) of insurance as required by Section
6.06 with respect to such Partial Failure and (3)
the date falling two hundred and ten (210) days
after the occurrence of such Partial Failure the
Customer shall prepay a portion of the Loans equal
to (x) the amount of the proceeds of insurance
received or receivable for such Partial Failure
together with interest thereon accrued to the date
of such prepayment and any Break Funding Costs
multiplied by (y) the fraction the numerator of
which is the aggregate principal amount of the Loans
then outstanding and the denominator of which is the
aggregate principal amount of all Indebtedness
secured by a Lien on the Satellite; PROVIDED that
if, at any time, insurance proceeds received or
receivable with respect to a Partial Failure and not
required to be prepaid as provided above, are
required to be prepaid with respect to any Project
Financing, then the Customer shall be required to
prepay a pro rata portion of the Loans outstanding
under this Agreement.
(v) If, on the Conversion Commitment Date or on the
Conversion Date, AEF determines in its discretion
that the Customer has not satisfied the applicable
Conversion Conditions and the Tranche B Conditions
Precedent, then (x) the Customer shall prepay,
without penalty, not later than the date falling
five (5) Business Days after notice by AEF to the
Customer of such determination, the Loans in full,
together with interest thereon accrued to the date
of prepayment, any Break Funding Costs and any fees
and other amounts due and payable under this
Agreement and (y) the Tranche A Commitments and the
Tranche A Term shall terminate on the date of such
notice.
-45-
<PAGE> 51
(vi) If, for AEF or any Lender, a country in which the
Customer is Domiciled or Conducting Business becomes
a Prohibited Country or the Customer is designated a
Prohibited Person, then (x) the Customer shall
immediately prepay, without penalty, the Loans in
full, together with interest thereon accrued to the
date of prepayment, any Break Funding Costs and any
fees and other amounts due and payable under this
Agreement and (y) if not earlier terminated the
Tranche A Commitment and the Tranche A Term shall
terminate on the date of such prepayment.
(vii) If, at any time, the aggregate amount of Tranche A
Outstandings exceeds the Tranche A Commitment Amount
at such time, the Customer shall prepay, without
penalty, not later than the date that is five (5)
Business Days after the date that the Tranche A
Outstandings first exceed the Tranche A Commitment
Amount such excess amount together with interest
thereon accrued to the date of prepayment and any
Break Funding Costs.
(viii) If the Customer shall, at any time, prepay, in whole
or in part, voluntarily or mandatorily, any Project
Loans, then (A) the Customer shall promptly notify
AEF of such prepayment within five (5) Business Days
of such prepayment, and (B) the Customer shall
immediately prepay a portion of the Loans
proportionally equal to the portion of the total
Project Loans that were prepaid, together with
interest thereon accrued to the date of such
prepayment and any Break Funding Costs.
(c) NO REBORROWINGS. Loans that are prepaid may not be reborrowed.
1.026 REPAYMENT. Commencing on the Tranche B Amortization Date, the
Customer shall repay to AEF the outstanding principal amount of the
Tranche B Loan in installments on each Tranche B Principal Payment
Date in an amount equal to the Tranche B Required Installment Amount.
Any remaining balance of the Tranche B Loan shall be due and payable
in full on the Maturity Date.
1.027 INTEREST
(a) RATE. Subject to Section 2.07(c), each Loan shall bear
interest for each Interest Period therefor on the outstanding
principal amount thereof from the date when made until it
becomes due at a rate per annum equal to the sum of the
Interest Basis for such Interest Period and the Applicable
Margin at such time.
(b) PAYMENT DATE. Accrued interest on each Loan shall, subject
to Section 2.07(d), be payable in arrears on the last day of
each Interest Period and on the date referred to in the
immediately following sentence (each such date an "INTEREST
PAYMENT DATE"). Interest shall also be payable on the date
of any prepayment of Loans pursuant to Section 2.05 for all
or the portion of the
-46-
<PAGE> 52
Loans so prepaid, as the case may be, and upon payment
(including prepayment) in full thereof.
(c) DEFAULT RATE.
(i) If any sum due and payable by the Customer hereunder
is not paid on the due date therefor in accordance
with Section 2.10; or if any sum due and payable by
the Customer under any judgment of any court in
connection herewith is not paid on the date of such
judgment, the period beginning on such due date or,
as the case may be, the date of such judgment and
ending on the date upon which the obligation of the
Customer to pay such sum (the balance thereof for
the time being unpaid being herein referred to as an
"unpaid sum") is discharged shall be divided into
successive periods, each of which (other than the
first) shall start on the last day of the preceding
such period and the duration of each of which shall
(except as otherwise provided in this Section 2.07)
be one month or such shorter period selected by AEF
in good faith as being the likely period of default.
(ii) During each such period relating thereto as is
mentioned in Section 2.07(c)(i) above, the unpaid
sum shall bear interest at the rate per annum (the
"DEFAULT RATE") that is the sum from time to time of
(A) two percent (2%); (B) the Interest Basis for
such sum for such period; and (C) the Applicable
Margin at such time.
(d) CAPITALIZED INTEREST. Except as otherwise provided in this
Section 2.07(d), and subject to satisfaction of the
applicable conditions to Loans set forth in Section 4.04, any
interest due on Tranche A Loans prior to the Conversion Date
shall be capitalized on the date such interest is due and
payable by entry on the books of AEF of such amount as a
Tranche A Loan to the Customer. Any such interest so
capitalized shall constitute a Tranche A Loan to the Customer
for such amount made on the date on which such interest shall
have been otherwise due and payable. Pursuant to a written
notice delivered to AEF not later than thirty (30) days prior
to the date that any interest shall become due and payable,
the Customer may elect to terminate the capitalization of
interest under this Section 2.07(d), in which case no such
capitalization of interest shall occur from and after the
first day of the next succeeding Interest Period.
1.028 FEES. The Customer shall pay to AEF the Commitment Fee, the Upfront
Fee, the Conversion Fee and the ECA Guaranty Fee on the terms and at
the times set forth in the Fee Letter and as provided in Section 2.09,
together with any other fees and other amounts payable thereunder and
hereunder.
1.029 COMPUTATION OF INTEREST AND FEES
-47-
<PAGE> 53
(a) All computations of interest on Loans and the Commitment Fee
shall be made on the basis of a 360-day year and actual days
elapsed. Interest and the Commitment Fee shall accrue during
each period during which interest or such Commitment Fee are
computed from the first day thereof to the last day thereof.
(b) AEF shall, on the day that the Interest Basis is determined
for any Interest Period, but in no event after the date of
the commencement of such Interest Period, notify the Customer
of the determination of such Interest Basis.
(c) Each determination of an interest rate by AEF pursuant to any
provision of this Agreement shall be conclusive and binding
on the Customer in the absence of manifest error or fraud.
2.10 PAYMENTS BY THE CUSTOMER
(a) All payments (including prepayments) to be made by the
Customer on account of principal, interest, fees and any
other amounts under this Agreement shall be made without
set-off or counterclaim and shall be made to AEF, in each
case in Dollars and in immediately available funds no later
than 10:00 a.m. (New York time) on the date on which such
payment shall become due to the Credit Lyonnais Luxembourg
S.A. account at Credit Lyonnais New York, No.
0-100-682-000-100 (ref IFAP/TEIC/AEF/036124-45). The
Customer shall direct the bank remitting any payments
hereunder to deliver an irrevocable notice with respect to
the remittance of funds no later than two (2) Business Days
prior to the date on which such payment shall become due.
Any payment which is received by AEF in said account later
than 10:00 a.m. (New York time) shall be deemed to have been
received on the next succeeding Business Day.
(b) Subject to the provisions set forth in the definition of
"INTEREST PERIOD", whenever any payment hereunder would
otherwise be due on a day other than a Business Day, such
payment shall be made on the immediately preceding Business
Day, and the computation of interest or fees shall be
calculated accordingly.
2.11 SECURITY. All obligations of the Customer under this Agreement, all
other Loan Documents and the Project Financing Agreements (if any)
shall be secured by the Collateral as set forth in the Collateral
Documents from and after the date of the execution and delivery of the
Collateral Documents as described below, subject to the condition that
neither AEF nor the Lenders shall be entitled to direct the Security
Agent to exercise rights with respect thereto before the Conversion
Date, whether or not the Project Lenders shall be entitled to exercise
such rights. The Customer shall, on the earlier to occur of (a) if
the Project Financing Agreements shall have been executed on or prior
to the Closing Date, the Closing Date, (b) if the Project Financing
Agreements shall have been executed during the period from the Closing
Date to but not including the Conversion Commitment Date, the date of
execution of
-48-
<PAGE> 54
the Project Financing Agreements, and (c) if the Project Financing
Agreements shall not have been executed prior to the Conversion
Commitment Date, the Conversion Commitment Date enter into:
(i) the Collateral Documents, granting to the Security Agent a
valid Lien on the Collateral having the perfection and
priority required by Section 9.04 and otherwise in accordance
with the terms hereof (and, as a condition of Conversion, AEF
shall be satisfied (by receipt of legal opinions (which may
be subject to qualifications and limitations that are
customary in the jurisdiction where the respective counsel is
located) and/or other evidence) that such grant is not void
or subject to avoidance if the Customer becomes the subject
of an Insolvency Proceeding); and
(ii) the Intercreditor Agreement, providing for, in the event that
there exists a Project Financing, the pari passu sharing of
the Collateral on a pro rata basis as among AEF, the Lenders,
the Project Lenders and the ECAs (to the extent of their
interests), each such document being in form and substance
acceptable to AEF, the Lenders, the applicable ECAs and the
Project Lenders. The Customer hereby consents and agrees to
the assignment and pledge of this Agreement and the Note by
AEF on the Conversion Date to the Lenders and shall execute
all such acknowledgments, confirmations and other documents
evidencing the same, as shall be reasonably requested by AEF.
2.12 NOTE. As additional evidence of the Customer's obligations to pay the
principal of and interest on the Loans as provided herein, the
Customer shall execute and deliver to AEF on the Conversion Date, a
promissory note in substantially the form of Exhibit C hereto, dated
the Conversion Date, payable to the order of AEF in a principal amount
equal to the Conversion Amount and otherwise duly completed and
executed on behalf of the Customer (such note being herein called a
"NOTE").
2.13 ECA ENHANCEMENT.
(a) APPLICABLE TERMS. Notwithstanding any provision to the
contrary herein, if ECA Enhancement is procured with respect
to the Customer, during the Tranche B Term and for so long as
such ECA Enhancement remains in full force and effect, the
Required Distress Recovery Value, maximum Total Advance
Rate, maximum Tranche B Term and Average Life of the Tranche
B Loan of the Customer shall be as set forth below for the
Customer Category listed below corresponding to the following
levels of ECA Enhancement procured:
-49-
<PAGE> 55
<TABLE>
<CAPTION>
=====================================================================
ECA PERCENTAGE CUSTOMER CATEGORY
---------------------------------------------------------------------
<S> <C> <C>
GREATER THAN = 85% 1A
GREATER THAN = 70% 1B
GREATER THAN = 50% 1C
=====================================================================
</TABLE>
If ECA Enhancement is procured with respect to the Customer,
the Applicable Margin during the Tranche B Term shall be as
set forth in ANNEX 1.
(b) TERMINATION. If any ECA Enhancement procured with respect to
the Customer is terminated or otherwise ceases to be in full
force and effect, then: (i) the Required Distress Recovery
Value, maximum Total Advance Rate, maximum Tranche B Term and
Average Life of the Tranche B Loan and the Applicable Margin
during the Tranche B Term of the Customer shall be
automatically re-adjusted, as from the date of such
termination or ineffectiveness, such readjustment shall
result from AEF's determination of the repayment profile that
would have been in effect from the Conversion Date if the
Customer had not benefitted from ECA Enhancement (using
information contained in the original Appraisal furnished
during the Conversion process and the Required Distress
Recovery Value, maximum Total Advance Rate, maximum Tranche B
Term and Average Life of the Tranche B Loan that would have
applied) (the "REVISED PROFILE"), and the Customer shall pay
or prepay the difference between the Tranche B Outstandings
then outstanding and the Tranche B Outstandings that would
have been outstanding on such date under the Revised Profile,
pursuant to the following clause (ii); and (ii) the Customer
shall pay or prepay, without penalty, no later than fifteen
(15) Business Days after the occurrence of the event giving
rise to such termination or ineffectiveness, the amount
referred to in clause (i) above, as determined by AEF upon
the adjustment of the Repayment Profile in connection with
the automatic re-adjustment in clause (i) above, together
with interest thereon accrued to the date of prepayment, any
Break Funding Costs and any fees and other amounts due and
payable under this Agreement. If the procurement of such ECA
Enhancement was a condition to Conversion, the Customer shall
pay or prepay, without penalty, no later than fifteen (15)
Business Days after the occurrence of the event giving rise
to such termination or ineffectiveness, the principal amount
of the Tranche B Loan, together with interest thereon accrued
to the date of such prepayment, any Break Funding Costs and
any fees and other amounts due and payable under this
Agreement.
2.14 ECA ADDITIONAL TERMS AND CONDITIONS. The Customer hereby agrees that,
if any ECA providing ECA Country Risk Coverage or ECA Enhancement
shall condition such coverage upon the imposition of additional terms
or conditions binding on the Customer, the Customer shall comply with
all such additional terms or conditions as if set forth fully herein,
and if it does not so comply, any terms applicable pursuant to Section
2.13 shall cease to apply.
-50-
<PAGE> 56
SECTION 3. TAXES AND YIELD PROTECTION
1.031 TAXES
(a) Except as required by law, any and all payments by the
Customer to AEF shall be made free and clear of, and without
deduction or withholding for, any and all present or future
taxes, levies, imposts, deductions, charges or withholdings
whatsoever imposed, assessed, levied or collected by any
jurisdiction or any political subdivision or taxing authority
in any thereof, if applicable, together with interest thereon
and penalties, fines and surcharges with respect thereto, if
any, on or in respect of this Agreement, any Loan, any other
Loan Document, the amounts made available to AEF by any
Lender for the purpose of funding the Loan or the obligations
of the Customer hereunder, and all liabilities with respect
thereto, including, without limitation, any taxes, levies,
imposts, deductions, charges, withholdings and liabilities
that are or would be deducted or withheld from any payments
by the Customer as a direct or indirect result of any Lender
making amounts available to AEF for the purpose of funding
the Loan (all such taxes, levies, imposts, deductions,
charges, withholdings and liabilities being herein referred
to as "TAXES").
(b) The Customer shall pay any present or future stamp or
documentary taxes, charges or similar levies that arise from
the execution, delivery, filing, recording, registration,
notarization or other formalization or enforcement of, or
otherwise with respect to, this Agreement, any Loan, any
other Loan Document or the obligations of the Customer
hereunder or thereunder (herein referred to as "OTHER
TAXES").
(c) Except as provided in Section 3.01(d), the Customer, from
time to time on demand by AEF, shall make a payment to AEF
equal to any of the following amounts that AEF may be
obligated to pay any Lender providing funds to AEF for the
purpose of funding the Loan, together with an additional
amount equal to any taxes incurred by AEF as a result of the
receipt or accrual of the payment made by the Customer
pursuant to this Section 3.01(c) (including in such payment
any such additional amount): any and all additional amounts
that AEF may be obligated to pay, on a basis consistent with
Section 3.01(d), to such Lender with respect to any taxes,
levies, imposts, deductions, charges or withholdings
(together with interest thereon and penalties, fines and
surcharges with respect thereto) that are or would be
deducted or withheld from payments made by AEF to such Lender
with respect to the funds made available by such Lenders
(herein referred to as "FUNDING-RELATED TAXES").
(d) If the Customer shall be required by law to deduct or
withhold any Taxes or Other Taxes ("COVERED TAXES") from or
in respect of any sum payable hereunder to AEF or to any
Lender then, subject to Section 3.01(f): (i) the Customer
shall make such deductions as are required by applicable law,
(ii) the Customer shall pay the full amount deducted by the
relevant taxation
-51-
<PAGE> 57
authority or other authority in accordance with applicable
law and (iii) except as provided in Section 3.01(f), the sum
payable shall be increased by such additional amounts as
shall be necessary so that after making all required
deductions or withholdings of Covered Taxes (including
deductions or withholdings applicable to such additional
amounts) AEF or such Lender, as the case may be, shall
receive an amount equal to the sum that it would have
received had no deduction or withholding of Covered Taxes
been made. For the avoidance of doubt, the Customer shall be
entitled to withhold or deduct Taxes or Other Taxes as
required by law, in whole or in part, subject to the claim of
an exemption or reduction by AEF or the relevant Lender, as
the case may be, as contemplated by Section 3.01(f) and
subject to the obligation to pay additional amounts in the
case of Covered Taxes pursuant to clause (iii) of this
Section 3.01(d). Within sixty (60) days after the date of
any payment by the Customer of Taxes or Other Taxes the
Customer shall furnish to AEF the original or a certified
copy of a receipt evidencing payment thereof, or other
evidence of payment satisfactory to AEF.
(e) Without prejudice to the provisions of Section 3.01(c), if
AEF or any Lender (whether on its own behalf or on behalf of
another Person) is required, directly or indirectly, to make
any payment, directly or indirectly, on account of Covered
Taxes (other than (i) a tax imposed on the net income of its
Lending Office by the jurisdiction in which it is
incorporated or in which its Lending Office is located and
(ii) Covered Taxes and Funding Related Taxes to the extent
that the Customer is not required to make any payment thereof
by reason of the last sentence of Section 3.01(f)) or any
liability in respect of any such payment is asserted, levied,
imposed or assessed against it (or such other Person), the
Customer shall, upon demand of AEF, promptly indemnify AEF or
such Lender, as the case may be, against such payment or
liability, together with any interest, penalties and expenses
payable or incurred in connection therewith.
(f) If any exemption from, or reduction in the rate of any
Covered Tax is reasonably available to AEF or a Lender, AEF
shall deliver, and shall request such Lender to use
reasonable efforts to deliver, to the Customer such form or
forms as the Customer may reasonably identify to AEF as being
required under applicable law as a condition to exemption
from, or reduction of, such Covered Tax. The Customer shall
not withhold or deduct, or shall reduce the rate of
withholding or deduction of, any Taxes or Other Taxes with
respect to which AEF or a Lender, as the case may be,
provides such duly executed form or forms together with such
other evidence of the eligibility of AEF or such Lender for
such exemption or reduction as the Customer may reasonably
require as may be required under applicable law as a
condition to exemption from, or reduction of, the withholding
of such Taxes or Other Taxes. AEF agrees to promptly notify
the Customer of any change in circumstances of which it
reasonably should be aware that would modify or render
invalid any claimed exemption or reduction of any Tax or
Other Tax. The Customer shall not be required to pay amounts
pursuant to Section 3.01(e) or to pay any
-52-
<PAGE> 58
additional amounts pursuant to clause (iii) of Section
3.01(d) if the Covered Taxes or Funding Related Taxes, as the
case may be, are imposed as a result of (A) a failure of AEF
to comply with its obligations under this Section 3.01(f) or
(B) a failure of any Lender providing funds to AEF for
purposes of making the Loans to comply with any obligations
to AEF that are analogous to the obligations of AEF contained
in this Section 3.01(f) or (C) a relocation by any Lender of
its Lending Office to a jurisdiction other than (x) the
jurisdiction in which such Lending Office was located at the
time such Loan was made or (y) a jurisdiction listed on ANNEX
4, PROVIDED that, if any Lender has relocated its Lending
Office to another jurisdiction and is not located in a
jurisdiction listed on ANNEX 4, the amount of the Covered
Taxes or Funding Related Taxes, as the case may be, for
purposes of clause (iii) of Section 3.01(d), shall be deemed
equal to the Taxes, if any, that would have constituted
Covered Taxes or Funding Related Taxes, as the case may be,
had such Lender not relocated its Lending Office.
(g) If AEF or any Lender providing funds to AEF to make Loans
hereunder shall determine in its sole discretion that either
AEF or such Lender has actually realized a tax benefit
(whether by way of deduction, credit, allocation or
apportionment of income or otherwise), as a result of any
Taxes, Other Taxes or Funding-Related Taxes paid or
indemnified by the Customer pursuant to this Section 3.01,
AEF or such Lender, as the case may be, shall so advise the
Customer and pay to the Customer an amount which AEF or such
Lender, as the case may be, shall determine in its sole
discretion is equal to the amount of such tax benefit.
(h) If the Customer is required to pay additional amounts to AEF
pursuant to Section 3.01(d), then AEF may, but shall not have
any obligation to, assign the Loans and the Commitments and
all other rights and obligations of AEF hereunder and under
the other Loan Documents to any Eligible Assignee. If the
Customer is required to pay any amounts to AEF pursuant to
Section 3.01(d) as Funding-Related Taxes, then AEF may
request that any Lender causing the imposition of such
Funding-Related Taxes change the jurisdiction of its Lending
Office.
(i) The agreements and obligations of the Customer contained in
this Section 3.01 shall survive the payment in full of all
other obligations of the Customer hereunder.
1.032 INCREASED COSTS AND REDUCTION OF RETURN
(a) If AEF or any Lender (each such Person a "RECOVERING PERSON")
shall determine that, due to either (i) the introduction of
or any change (including, without limitation, by way of
imposition or increase of reserve requirements, capital
adequacy, minimum capital or other requirements) in or in the
interpretation or application of any applicable law or
regulation by a Governmental Authority or any court having
jurisdiction over such Recovering
-53-
<PAGE> 59
Person or by an authority with which such Recovering Person
customarily complies or (ii) the introduction of or any
change in or in the interpretation or application of any
guideline or request from any central bank or other
Governmental Authority (which, if not having the force of
law, is generally complied with by banks in the relevant
jurisdiction), in each case occurring after the date hereof,
there shall be any increase in the cost to AEF of agreeing to
make or making, funding or maintaining Loans or the cost to
such Lender of agreeing to provide or providing funds to AEF
to make, fund or maintain Loans hereunder, then, so long as
the Loans hereunder are treated no less favorably than AEF's
other similarly situated loans, the Customer shall be liable
for, and shall from time to time, upon demand therefor by AEF
pay to AEF for its own account or for the account of such
Lender, as the case may be, additional amounts as are
sufficient in the reasonable determination of the Recovering
Person to compensate such Recovering Person for such
increased costs to the extent such increased costs result
from any of the foregoing in clause (i) or (ii) above; (A)
provided, however, that in the case of an increase referred
to above, AEF shall be entitled to make demand on the
Customer in respect thereof and the Customer shall be
obligated to pay AEF therefor only within ninety (90) days
after the date of such change or, if earlier, the date AEF
obtains actual knowledge of such interpretation or
application; provided, further, that if AEF fails to give
such notice within such ninety (90) day period, AEF shall,
with respect to compensation payable pursuant to this Section
3.02(a), be entitled to payment only for costs incurred from
and after the date that is ninety (90) days prior to the date
that AEF does give such notice; and (B) provided, however,
that in the case of an increase referred to above resulting
from the interpretation by a Governmental Authority affecting
any Lender, AEF shall be entitled to make demand on the
Customer in respect thereof and the Customer shall be
obligated to pay AEF therefor only within ninety (90) days
after AEF is notified by the Lender affected by such
interpretation; provided, further, that if AEF fails to give
such notice within such ninety (90) day period, the
Customer's obligation to pay AEF for the account of such
Lender with respect to compensation payable to the Lender
pursuant to this Section 3.02(a) shall accrue from and after
the date that is ninety (90) days prior to the date that such
Lender gives such notice to AEF.
(b) If any Recovering Person shall determine that the
introduction of any applicable law, rule, regulation or
guideline regarding capital adequacy, or any change therein
or any change in the interpretation by a Governmental
Authority having jurisdiction over such Recovering Person or
administration thereof by any central bank or other
Governmental Authority charged with the interpretation or
administration thereof, or compliance by such Recovering
Person (or, in respect of a Lender, its Lending Office) or
any corporation controlling such Recovering Person, with any
request, guideline or directive regarding capital adequacy
(whether or not having the force of law) of any such central
bank or other authority, whether implemented at the national
level or otherwise, except by application of the Basle Accord
as in effect on the date hereof, affects or would affect the
amount of capital required or expected to be
-54-
<PAGE> 60
maintained by AEF or such Lender (or its Lending Office) or
any Person controlling such Recovering Person and determines
that the amount of such capital is increased as a consequence
of its obligation under this Agreement, then, upon demand of
AEF (with a description thereof), the Customer shall
immediately pay to AEF for its own account or for the account
of such Recovering Person from time to time as specified by
AEF, additional amounts sufficient in the reasonable opinion
of the Recovering Person to compensate such Recovering Person
for such increase; (A) provided, however, that in the case of
an increase referred to above resulting from the
interpretation by a Governmental Authority affecting AEF, AEF
shall be entitled to make demand on the Customer in respect
thereof and the Customer shall be obligated to pay AEF
therefor only within ninety (90) days after the date of such
change or, if earlier, the date AEF obtains actual knowledge
of such interpretation; provided, further, that if AEF fails
to give such notice within such ninety (90) day period, AEF
shall, with respect to compensation payable pursuant to this
Section 3.02(b), be entitled to payment only for costs
incurred from and after the date that is ninety (90) days
prior to the date that AEF does give such notice; and (B)
provided, however, that in the case of an increase referred
to above resulting from the interpretation by a Governmental
Authority affecting any Lender, AEF shall be entitled to make
demand on the Customer in respect thereof only within ninety
(90) days after AEF is notified by the Lender affected by
such interpretation; provided, further, that if AEF fails to
give such notice within such ninety (90) day period, the
Customer's obligation to pay AEF for the account of such
Lender with respect to compensation payable to the Lender
pursuant to this Section 3.02(b) shall accrue from and after
the date that is sixty (60) days prior to the date such
Lender gives such notice to AEF.
(c) The Customer shall not be required to pay any compensation
payable pursuant to Section 3.02(a) or (b) above if such
compensation is imposed as a result of a relocation by any
Lender of its Lending Office to a jurisdiction other than (i)
the jurisdiction in which such Lending Office was located at
the time such Loan was made or (ii) a jurisdiction listed on
ANNEX 4; and if such Lender has relocated its Lending Office
to another jurisdiction that is not located in a jurisdiction
listed on ANNEX 4, the amount of any compensation for
purposes of Section 3.02(a) and (b) shall be deemed equal to
the compensation, if any, that would have been payable had
such Lender not relocated its Lending Office.
(d) AEF shall give notice of anticipated costs payable under
Section 3.02(a) or (b) above upon obtaining actual knowledge
thereof and shall use reasonable best efforts to cause the
Lenders, to the extent practicable, to give the Customer
notice of anticipated costs payable under Section 3.02(a) or
(b) above upon obtaining actual knowledge thereof, PROVIDED
that the failure to give such notice shall not affect the
Customer's obligations hereunder in any respect. A
certificate as to the amount of such increased costs (setting
forth in reasonable detail, subject to any confidentiality
requirements of AEF's or such Lender's
-55-
<PAGE> 61
policies applied in the same manner and to the same degree as
to other information released to similarly situated Persons,
and to applicable bank regulations) the event by reason of
which AEF or such Lender claims such increase and the basis
for the determination of the amount of such increased cost,
submitted to the Customer by AEF, shall be conclusive and
binding for all purposes, absent manifest error or fraud.
(e) If the Customer shall be required to pay any amount to AEF
pursuant to this Section 3.02 based solely on the obligations
of AEF under this Agreement, then AEF shall use reasonable
efforts (consistent with legal and regulatory restrictions)
to transfer its rights and obligations hereunder to an
Affiliate of AEF so as to eliminate any such payment by the
Customer that may thereafter accrue if such change, in the
sole opinion of AEF, shall not otherwise adversely affect
AEF.
(f) AEF shall use reasonable efforts to seek to avoid or
minimize, including by changing the jurisdiction of its
Lending Office, any additional amounts the Customer may be
required to pay to AEF pursuant to this Section 3.02,
PROVIDED that this provision shall not obligate AEF to take
any action that would, in its reasonable judgment, adversely
affect AEF.
1.033 FUNDING LOSSES. The Customer agrees to reimburse AEF and to hold it
harmless from any loss, cost or expense which AEF may sustain or
incur, including any loss, cost or expense that AEF may sustain or
incur in relation to the facility provided to AEF by the Lenders as a
consequence of: (a) the failure of the Customer to make any required
payment or prepayment of principal of any Loan (including, without
limitation, payments made after any acceleration thereof), (b) the
failure of the Customer (including, without limitation, as a result of
the failure of any condition precedent specified in Section 4 to be
satisfied) to borrow a Loan after the Customer has given a Notice of
Drawdown, (c) the failure of the Customer (including, without
limitation, as a result of the failure of any condition precedent
specified in Section 4 to be satisfied) to convert the Tranche A Loans
to a Tranche B Loan on the scheduled Conversion Date, (d) the failure
of the Customer to make any prepayment after the Customer has given a
notice of prepayment in accordance with Section 2.05, (e) the
prepayment or repayment of a Loan (including, without limitation,
payments made after any acceleration thereof) on a day which is not
the last day of the Interest Period with respect thereto, including
any Break Funding Costs or (f) the failure of the Customer to make
payment of interest on any Loan on the Interest Payment Date for such
Loan, including, in each case, any Break Funding Costs. Any unpaid
sum shall (for the purposes of this Section 3.03 or Section 3.02)
accrue interest at the Default Rate as provided in Section 2.07(c).
This covenant shall survive the payment in full of all obligations of
the Customer hereunder.
1.034 INABILITY TO DETERMINE RATES. If, in relation to any Loan and any
Interest Period relating thereto, for any reason AEF determines that
the Interest Basis for such Loan for such Interest Period cannot be
determined at or about 11:00 a.m. (London time) on the Quotation Date
for such Interest Period after taking into account clauses (b)
-56-
<PAGE> 62
and (c) of the definition of "INTEREST BASIS" in Section 1.01, then,
notwithstanding the provisions of Section 2.07, AEF shall give notice
of such fact to the Customer. Upon receipt of such notice, the
Customer may revoke any Notice of Drawdown then submitted by it. If
the Customer does not revoke such notice, AEF shall, in accordance
with the terms hereof, make the Loans requested by the Customer in
such notice. The duration of the Interest Period applicable to each
Loan that commences after receipt by the Customer of such Notice of
Drawdown shall be one month and the rate of interest applicable
thereto from time to time during each such Interest Period shall be
the rate per annum which is the sum of the Applicable Margin and the
arithmetic mean (rounded upwards, if not already such a multiple, to
the nearest whole multiple of one-sixteenth of one percent (1/16th of
1%)) of the rates notified by AEF to be the cost (expressed as a
percentage rate per annum) to AEF of funding, from whatever source it
may choose, such Loan during such Interest Period. Such interest rate
shall apply to each Interest Period succeeding the first Interest
Period to which it was applied unless and until AEF shall determine
that the Interest Basis for such Loan can once again be determined and
so notifies the Customer, whereupon interest on the affected Loans
shall again be determined in accordance with Section 2.07(a),
effective commencing on the first day of the Interest Period next
succeeding the date of such notice.
1.035 ILLEGALITY. Notwithstanding any other provision of this Agreement, in
the event that, after the date of this Agreement, it becomes unlawful
for AEF to honor its obligation to make or maintain Loans hereunder,
or AEF is notified by any Lender that it has become illegal for such
Lender to honor its obligation to make or maintain loans to AEF, then
AEF shall promptly notify the Customer thereof whereupon (a) AEF's
Commitments shall automatically be reduced to zero or suspended to the
extent required by applicable law and (b) the Customer shall, on such
date as AEF shall specify in such notice (which date shall not be
earlier than the last Business Day before AEF's or such Lender's
obligations shall become unlawful) prepay such Loans in full or the
part thereof required by applicable law, together with all interest
and other amounts owing by the Customer to AEF hereunder with respect
to the portion prepaid, PROVIDED that before giving the notice
referred to above, AEF will consult with the Customer for a period of
not more than forty-five (45) days for the purpose of identifying, and
shall take all reasonable actions available to AEF (including the
assignment of AEF's rights and obligations hereunder to an Eligible
Assignee) if such actions will avoid or mitigate the effect of such
illegality and will not, in the sole opinion of AEF, be
disadvantageous to AEF.
SECTION 4. CONDITIONS PRECEDENT
1.041 CONDITIONS TO INITIAL TRANCHE A LOAN. The obligation of AEF to make
its initial Tranche A Loan hereunder is subject to the determination
by AEF, in its discretion, that each of the following conditions has
been satisfied:
(a) CLOSING DOCUMENTS. AEF shall have received each of the
following, in form and substance satisfactory to, and, in the
case of the materials referred to in
-57-
<PAGE> 63
clauses (vii), (viii) and (ix), certified as a true copy as
of the Closing Date in a manner satisfactory to, AEF:
(i) CUSTOMER LOAN AGREEMENT. This Agreement, duly
executed and delivered by the Customer and AEF.
(ii) MULTIPARTY AGREEMENT. The Multiparty Agreement, duly
executed and delivered by the Customer, the LSA
Party, AEF and AE.
(iii) FEE LETTER. The Fee Letter, duly executed and
delivered by the Customer and AEF.
(iv) ACKNOWLEDGMENT. If applicable, any acknowledgment by
an Affiliate of the Customer, as referred to in
Section 6.25.
(v) COLLATERAL DOCUMENTS. If the Collateral Documents
shall be required, pursuant to Section 2.11 of this
Agreement, to have been executed on or prior to the
Closing Date, the Assignment and Security Agreement,
the TTC&M Mortgage, the Consents to Assignment and
all other Collateral Documents, duly executed and
delivered by the Customer and all other parties
thereto.
(vi) INTERCREDITOR AGREEMENT. If the Intercreditor
Agreement shall be required, pursuant to Section
2.11 of this Agreement, to have been executed on or
prior to the Closing Date, the Intercreditor
Agreement, duly executed and delivered by AEF, the
Security Agent, the Lenders (or an agent acting on
their behalf), the applicable ECAs and the Project
Agent.
(vii) CONSTRUCTION AND PAYMENT SCHEDULE. A true, complete
and correct copy of the Construction and Payment
Schedule.
(viii) CONSTITUTIONAL DOCUMENTS; RESOLUTIONS; INCUMBENCY. A
Certificate of the secretary or other appropriate
Responsible Officer of the Customer certifying as a
true copy:
(A) The constitutional documents of the
Customer, as in effect on the Closing Date;
(B) Copies of the resolutions of the board of
directors (or other Persons having similar
functions) of the Customer approving and
authorizing the execution, delivery and
performance by the Customer of this
Agreement and the other Loan Documents to
be executed and delivered by the Customer
as contemplated hereby and authorizing the
borrowing of the Loans, together with, as
applicable, any agreements for the lease of
transponders
-58-
<PAGE> 64
or use of communications capacity on the
Satellite that constitute Collateral; and
(C) The names and true signatures of
Responsible Officers of the Customer
authorized to execute, deliver and perform,
as applicable, this Agreement and all other
Loan Documents to be delivered by it
hereunder, together with, if applicable,
any agreements for the lease of
transponders or use of communications
capacity on the Satellite that constitute
Collateral.
(ix) FINANCIAL STATEMENTS. The Base Financial Statements
of the Customer.
(x) PROCESS AGENT. A letter from CT Corporation System,
accepting its appointment as process agent in New
York for the Customer.
(xi) LEGAL OPINIONS. An opinion of (A) Paul, Weiss,
Rifkind, Wharton & Garrison, special New York
counsel to the Customer, dated the Closing Date and
addressed to AEF, (B) Wiley, Rein & Fielding,
special Federal Communications Commission counsel to
the Customer, dated the Closing Date and addressed
to AEF and (C) such other opinions as requested by
AEF, each in form and substance acceptable to AEF.
(xii) OTHER DOCUMENTS. Such other statements,
certificates, documents, information, approvals or
opinions with respect to the Project or matters
referred to or contemplated by this Agreement or the
other Loan Documents as AEF may reasonably request.
(b) PAYMENT OF FEES. All costs, accrued and unpaid fees and
expenses hereunder and under any of the other Loan Documents
(including, without limitation, legal fees and expenses) to
the extent then due and payable by the Customer, including,
without limitation, any arising under or contemplated by
Section 2.08, 3.01 or 10.04, shall have been paid in full or
capitalized as permitted hereunder or arrangements
satisfactory to AEF shall have been made to cause them to be
paid in full concurrently with the disbursement of the
proceeds of the Loan to be made on such date.
(c) DOWN PAYMENT. AE shall have confirmed that the LSA Party has
paid to AE an amount equal to at least four million four
hundred thousand Dollars ($4,400,000) and said amount shall
not have been financed or guaranteed by AEF or an Affiliate
of AEF.
1.042 CONVERSION CONDITIONS. The obligation of AEF to convert the Tranche A
Loans to the Tranche B Loan hereunder is subject to the determination
by AEF, on each of the Conversion Commitment Date and the Conversion
Date, in its discretion, that each of the following conditions has
been satisfied:
-59-
<PAGE> 65
(a) APPRAISAL. AEF shall have received a true, complete and
correct copy of the Appraisal, prepared and delivered by the
Appraiser at the Customer's sole cost and expense, as set
forth in Sections 9.02(a)(i) and (c)(i), which Appraisal
shall (i) conclude that, taking into account all applicable
restrictions on resale, the Fair Market Value is equal to or
greater than the Equipment Cost as of the In-Orbit
Commissioning Date, (ii) state that, taking into account all
applicable restrictions on resale, the Assumed Distress Value
as of the In-Orbit Commissioning Date shall be in an amount
sufficient so as to permit the Distress Recovery Value to be
equal to no less than the applicable Required Distress
Recovery Value and (iii) specify the estimated economic and
warranted life of the Satellite which shall be equal to or
longer than the Tranche B Term.
(b) CUSTOMER CATEGORY. AEF shall, in its discretion, have
determined the Customer Category for the Customer in
accordance with the criteria set forth in ANNEXES 1, 2 AND 3.
(c) TRANCHE B CONDITIONS PRECEDENT. AEF shall, in its
discretion, have determined that each of the Tranche B
Conditions Precedent has been satisfied or shall have
received evidence as to the satisfaction of the Tranche B
Conditions Precedent on the date that is L minus (-) fifteen
(15) days and shall have received a certificate from a
Responsible Officer of the Customer to the effect that each
of the Conversion Conditions and the Tranche B Conditions
Precedent has been satisfied, setting forth in reasonable
detail any calculations necessary to demonstrate such
satisfaction.
(d) INTEREST PAYMENTS. Any interest due and payable by the
Customer hereunder shall have been paid or capitalized as
permitted hereunder as of the Conversion Commitment Date, and
the Customer shall not have been in default during the
Tranche A Term with respect to payments of interest or other
amounts, due and payable hereunder or under the Fee Letter
prior to the Conversion Commitment Date, PROVIDED that for
the purpose of determining satisfaction of this condition a
default shall be defined as a failure to make a payment of
interest or other amounts due and payable by the Customer
hereunder or under the Fee Letter within five (5) Business
Days of the date when due.
(e) PROJECT FINANCING. If the Customer shall have been
determined to be a Category 2 Customer or a Category 3
Customer, then AEF shall have received evidence that the
Customer has obtained a firm and binding (subject to no
conditions precedent that, in AEF's reasonable opinion, are
unlikely to be timely satisfied) commitment for the Project
Financing, together with evidence as to the application of
the Project Loans to the Equipment Cost as described in the
Business Plan.
(f) FINANCIAL PRO FORMA; CONVERSION BASE CASE. If the Customer
shall have been determined to be a Category 1C Customer, a
Category 2 Customer or a Category 3 Customer, then AEF shall,
in its discretion, have determined that
-60-
<PAGE> 66
the financial pro forma referred to in Section 9.02(c)(i) (if
the Customer shall have been determined to be a Category 1C
Customer) or the Conversion Base Case (if the Customer shall
have been determined to be a Category 2 Customer or a
Category 3 Customer) complies with the required financial
tests as set forth in ANNEXES 1, 2 OR 3, respectively.
(g) OPERATIONAL CONTROL OF THE SATELLITE. If AEF or the Security
Agent shall have theretofore requested the Customer to
deliver evidence pursuant to Sections 6.16(b) and (c), AEF or
the Security Agent (whichever has made the request) shall
have received such evidence, which is satisfactory to such
Person for such purpose.
(h) LOCATION OF DOMICILE, LICENSING AND RECEIPT OF REVENUES.
Each country in which the Customer is Domiciled, Licensed or
receiving a substantial portion of its Project revenues is a
Permitted Location.
(i) LOCATION OF GROUND FACILITIES. Each of the items described
in clause (g) of the definition of Collateral (other than
those items the absence of which could not reasonably be
expected to cause a Material Adverse Effect) necessary to
operate and maintain the Satellite that cannot, in the
judgment of AEF, be substituted in a Permitted Location
before the inability to operate the Satellite could
reasonably be expected to have a Material Adverse Effect is
located in a Permitted Location.
1.043 TRANCHE B CONDITIONS PRECEDENT. The obligation of AEF to convert the
Tranche A Loans to the Tranche B Loan hereunder is subject to the
determination by AEF, on each of the Conversion Commitment Date (other
than in the cases of the items referred to in Sections 4.03(a)(vii)
and 4.03(a)(xv)) and the Conversion Date, in its discretion, that each
of the following conditions has been or continues to be satisfied:
(a) CONVERSION DOCUMENTS. AEF shall have received each of the
following, in form and substance satisfactory to, and, in the
case of the materials referred to in clauses (i), (v), (vi),
(vii), (viii), (ix), (x), (xi), (xii), (xiii), (xiv), (xv)
and (xvii), certified as a true copy as of the Conversion
Commitment Date and the Conversion Date in a manner
satisfactory to, AEF (provided that, in lieu of redelivering
any previously delivered items on the Conversion Date, the
Customer may deliver or cause to be delivered to AEF on the
Conversion Date "reaffirmations" satisfactory to AEF of such
items signed by the appropriate Person to the effect that
such items have not been modified since they were previously
delivered and that they remain in full force and effect on as
of the Conversion Date as fully as if dated and delivered on
the Conversion Date):
(i) CONSTITUTIONAL DOCUMENTS; RESOLUTIONS; INCUMBENCY.
A certificate of the secretary or other appropriate
Responsible Officer of the Customer certifying:
-61-
<PAGE> 67
(A) The constitutional documents of the
Customer, as in effect on the Conversion
Commitment Date;
(B) Copies of the resolutions of the board of
directors (or Persons having similar
functions) of the Customer approving and
authorizing the execution, delivery and
performance by the Customer of the Loan
Documents, the Satellite Contracts and any
agreements for the lease of transponders or
use of communications capacity on the
Satellite that constitute Collateral not
previously approved and authorized as of
the Closing Date; and
(C) The names and true signatures of
Responsible Officers of the Customer
authorized to execute, deliver and perform,
as applicable, the Loan Documents, the
Satellite Contracts and any agreements for
the lease of transponders or use of
communications capacity on the Satellite
that constitute Collateral not previously
approved and authorized as of the Closing
Date.
(ii) COLLATERAL DOCUMENTS. Unless already executed and
delivered pursuant to Sections 2.11 and 4.01, the
Assignment and Security Agreement, the TTC&M
Mortgage, the Consents to Assignment and all other
Collateral Documents, together with certificates,
opinions of counsel and other documentation
(including, without limitation, a consent by the
Customer to the assignment and pledge by AEF to the
Lenders of its rights under this Agreement and the
Collateral Documents), duly executed and delivered
by the Customer and all other parties thereto.
(iii) INTERCREDITOR AGREEMENT. Unless already executed and
delivered pursuant to Sections 2.11 and 4.01, the
Intercreditor Agreement, together with certificates,
opinions of counsel and other documentation, duly
executed and delivered by AEF, the Security Agent,
the Lenders (or an agent acting on their behalf),
the applicable ECAs and the Project Agent.
(iv) LEGAL OPINIONS. An opinion of (A) special New York
counsel to the Customer, addressed to AEF, (B)
special Federal Communications Commission counsel to
the Customer, addressed to AEF, and (C) such other
opinions as may be requested by AEF, in each case in
form and substance acceptable to AEF, and rendered
by counsel acceptable to AEF, and accompanied in
each case referred to in clauses (A) through (C)
above by letters from such counsel addressed to
Persons designated by AEF stating that such Persons
are entitled to rely on the respective opinions of
such counsel.
-62-
<PAGE> 68
(v) FINANCIAL STATEMENTS. Audited financial statements
of the Customer covering its preceding three (3)
fiscal years (or such shorter period as it shall
have had operations), and its most recent unaudited
interim financial statements, in form and substance
satisfactory to AEF.
(vi) DOMESTIC TELECOMMUNICATIONS APPROVALS. A certificate
of a Responsible Officer of the Customer to the
effect that all national and local
Telecommunications Approvals that are necessary or,
in the opinion of AEF, desirable for the
construction and launch of the Satellite, the
provision of services to the transponders, if
applicable, and the construction of the TTC&M
Facilities and the Project in general have been
obtained and are in full force and effect and
unrestricted and unconditional, together with
certified copies of all such approvals.
(vii) COLLATERAL CONTRACTS. A true, complete and correct
copy of each Contract referred to in the definition
of "COLLATERAL" in Section 1.01 as currently in
effect (including all exhibits, schedules and
documents referred to therein or delivered pursuant
thereto, if any), together with any amendments
thereto, and any payment schedules in respect
thereof, each duly executed and delivered by each
party thereto.
(viii) INSURANCE. Not later than L minus (-) thirty (30)
days, evidence satisfactory to AEF that the
insurance required by Sections 6.06(a) and (b)
(excluding clause (ii) thereof) is in effect by the
delivery of certified copies of the insurance
policies, broker's undertakings and certificates of
insurance with respect thereto in form and
substance, and issued by companies, satisfactory to
AEF (provided that such evidence for the insurance
required by Section 6.06(b)(iii) may consist solely
of a certificate of insurance) and certificates of
an internationally recognized insurance broker
satisfactory to AEF certifying that such insurance
complies with Sections 6.06(a), (b) (excluding
clause (ii) thereof) and (c) covering the risks
referred to therein and that all insurance deposits
and premiums then due and payable have been paid and
that any unpaid balance for the insurance required
by Section 6.06(b) (excluding clause (ii) thereof)
is due and payable no later than L minus (-) fifteen
(15) days. Not later than the Conversion Date, AEF
shall have received a certificate from such
insurance broker certifying that any such unpaid
balance for the insurance required by Section
6.06(b) (excluding clauses (ii) and (iii) thereof)
has been paid in full.
(ix) EXPORT LICENSES. A true, complete and correct copy
of each Export License.
(x) FOREIGN EXCHANGE CONTROL APPROVALS. A true, complete
and correct copy of any applicable foreign exchange
control approvals.
-63-
<PAGE> 69
(xi) ENVIRONMENTAL PERMITS. A true, complete and correct
copy of any applicable Environmental Permits.
(xii) GOVERNMENT APPROVALS. Except as may be already
provided in this Section 4.03, true, complete and
correct copies of all Government Approvals.
(xiii) INTELLECTUAL PROPERTY. A true, complete and correct
copy of any trademarks, patents or agreements
necessary with respect to the usage of technology
for the Project.
(xiv) PROCESS AGENT. A letter from CT Corporation System
(or any successor thereto), confirming its
acceptance of appointment as process agent in New
York for the Customer.
(xv) ECA COVERAGE. Evidence satisfactory to AEF that any
ECA Country Risk Coverage and ECA Enhancement shall
be in full force and effect in accordance with the
terms thereof under documentation in form and
substance satisfactory to AEF and that all
conditions precedent to the availability of support
thereunder shall have been satisfied.
(xvi) CONFIRMATION OF RELEVANT LOCATIONS. A certificate of
a Responsible Officer of the Customer confirming the
continuing accuracy of the information contained in
the list provided under Section 9.02(d)(ii) or, if
any such information is no longer correct,
correcting such information.
(xvii) SATELLITE CONTRACT AND TTC&M CONTRACT. A true,
complete and correct copy of each of the Satellite
Contract and the TTC&M Contract as currently in
effect (including all exhibits, schedules and
documents referred to therein or delivered pursuant
thereto, if any), together with any amendments
thereto.
(xviii) OTHER DOCUMENTS. Such other statements,
certificates, documents, information, approvals or
opinions with respect to the Project or matters
contemplated by this Agreement or the other Loan
Documents as AEF may reasonably request.
(b) INTERNATIONAL TELECOMMUNICATIONS APPROVALS. Not later than L
minus (-) fifteen (15) days, the Customer shall have duly
obtained, or caused to have been duly obtained, all
international Telecommunications Approvals that are necessary
or, in the reasonable opinion of AEF, desirable for the
construction, launch, maintenance and operation of the
Project as contemplated by the Loan Documents, the Satellite
Contracts and any other agreement or instrument entered into
from time to time relating to the Project and, if applicable,
the Business Plan, including, without limitation, the use of
the radio-frequencies and the orbital position of the
Satellite, properly coordinated and notified to
-64-
<PAGE> 70
the RCB and entered into the Master Register of the RCB, and
such international Telecommunications Approvals shall be in
full force and effect and unrestricted and unconditional, and
the Customer shall have delivered a certificate of a
Responsible Officer to that effect.
(c) PAYMENT OF FINANCE COSTS AND EXPENSES. All costs, accrued
and unpaid fees and expenses hereunder and under any of the
other Loan Documents (including, without limitation, legal
fees and expenses) to the extent then due and payable by the
Customer, including, without limitation, any arising under or
contemplated by Section 2.08, 3.01 or 10.04, shall have been
paid in full or capitalized as permitted hereunder or
arrangements satisfactory to AEF shall have been made to
cause them to be paid in full concurrently with the
Conversion of such Loans.
(d) TITLE AND LIENS. AEF shall be satisfied that, concurrently
with the execution and delivery of the Collateral Documents,
(i) there will be (and, as of the Conversion Date, there has
been) delivered to AEF such Lien, judgment, title and
registry searches as AEF shall have requested of the
Customer, (ii) there will be (and, as of the Conversion Date,
there has been) delivered to AEF applications to remove any
Lien in favor of any third party not otherwise permitted by
Section 7.01, together with copies of the relevant document
releasing such Lien and (iii) all such filings, registrations
or recordations as may be necessary or appropriate under
applicable laws, rules, regulations or orders, or that AEF
may reasonably request, shall have been accomplished in order
to create, preserve, protect, validate or satisfy the
security interest in the Collateral created by the Collateral
Documents, as described in Sections 5.03, 5.15 and 5.16 and
having the perfection and priority as required by Section
9.04, PROVIDED that with respect to the Satellite or any
other Collateral, if the Customer shall not have sole and
unencumbered title thereto on the Conversion Date, other
arrangements satisfactory to AEF shall have been agreed and
effected to provide equivalent security to AEF and the
Lenders and assurance that such Lien thereon will be created
and perfected on or prior to the In-Orbit Commissioning Date.
(e) CONTRACT PAYMENTS. The SPA Party, the LSA Party and the
TTC&M Party shall have made the required payments then due
under the Satellite Contracts, and (unless the Customer has
been determined to be a Category 1A Customer or a Category 1B
Customer) the Customer shall have made arrangements
satisfactory to AEF to procure financing for, or equity
contributions (in compliance with the terms and conditions
hereof) in an amount sufficient to fund, the payment of (i)
amounts that are required to be paid under the Satellite
Contracts with respect to the Project on or after the
Conversion Commitment Date and (ii) interest payable on the
Total Senior Debt Outstanding for the period of six (6)
months following the Conversion Date.
(f) EFFECTIVENESS. This Agreement, the other Loan Documents, the
Satellite Contracts and all other consents, approvals or
other documents set forth in this
-65-
<PAGE> 71
Section 4.03, shall have been duly executed and delivered by
the parties thereto and shall be in full force and effect and
no section of any Satellite Contract relating to payment
terms or any performance guarantees or warranties shall have
been amended, modified, revoked, terminated or waived except,
in each case, as approved by AEF. Each of the Satellite
Contracts shall contain terms related to guarantees and
warranties thereunder acceptable to AEF and the TTC&M
Contract shall contain provisions satisfactory to AEF with
respect to the performance obligations of the TTC&M Party
thereunder and the termination of the TTC&M Party's
obligations thereunder.
(g) ILLEGALITY. Making loans into a country in which the
Customer is Domiciled, Licensed or receiving a substantial
portion of its revenues shall not be an illegal activity for
AEF or any of the Lenders and the Customer shall not have
become a Prohibited Person.
(h) MILITARY ACTIVITIES. The use and operation of the Satellite
shall not be substantially for or on behalf of any
governmental or inter-governmental defense or military
agency, or any defense or military agency of any political
group, or substantially for non-commercial communications in
support of the operations or activities of the military,
national security or armed forces of any country or political
group.
(i) RATE CONTRACTS. If the Customer has been determined to be a
Category 2 Customer or a Category 3 Customer, it shall have
obtained binding commitments from one or more banks or other
financial institutions for Rate Contracts required by Section
6.15 to be in effect on the Conversion Date.
(j) NOTE. AEF shall have received the Note duly executed and
delivered by the Customer.
1.044 CONDITIONS TO ALL LOANS. The obligation of AEF to make or Convert any
Loan to be made or Converted or deemed made by it hereunder (including
its initial Loan) is subject to the satisfaction of the following
conditions precedent on the relevant date:
(a) NOTICE OF DRAWDOWN. For purposes of making a Tranche A Loan
only, AEF shall have received a Notice of Drawdown. The
Notice of Drawdown delivered by the Customer shall constitute
a representation and warranty by the Customer on and as of
the date of the Notice of Drawdown that the conditions in
Sections 4.04(b), (c) and (d) have been satisfied.
(b) CONTINUATION OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties made by the Customer contained
in Section 5 of this Agreement and any other Loan Document
shall be true, complete and correct on and as of the date of
such borrowing or Conversion with the same effect as if made
on and as of the date of such borrowing or Conversion (except
as to representations and warranties expressly stated to be
made only at or as of a specified time or times).
-66-
<PAGE> 72
(c) NO EXISTING DEFAULT. No Default or Event of Default exists
as of the date hereof or shall exist as of the date of the
making or Conversion of such Loan or shall result from the
making or Conversion of such Loan and no default or event of
default under the Project Financing Agreements shall exist as
of the date of any such Loan.
(d) NO MATERIAL ADVERSE EFFECT. No event or circumstance that
could reasonably be expected to have a Material Adverse
Effect shall have occurred since (i) with respect to the
making of the initial Tranche A Loan, the date hereof, (ii)
with respect to the making of any subsequent Tranche A Loan,
the date of the immediately preceding notice of drawdown and
(iii) with respect to Conversion, the Conversion Commitment
Date.
SECTION 5. REPRESENTATIONS AND WARRANTIES
The Customer hereby represents and warrants to AEF as follows as of the date
hereof (or, in the case of any of the following representations that is
expressly limited to being made on a certain date as of such certain date) and
any other date that this Agreement requires the Customer to make the following
representations and warranties:
1.051 EXISTENCE AND POWER. Each Relevant Company (a) is duly organized,
validly existing and properly registered and in good standing, as
applicable, under the laws of the jurisdiction of its organization,
(b) has the power and authority and all governmental licenses,
authorizations, consents and approvals required to be held by it as of
the date hereof to own its properties and assets, carry on its
business and to execute, deliver and perform its obligations under the
Loan Documents and the Satellite Contracts, (c) is duly qualified as a
foreign organization, licensed and registered to do business under the
laws of each jurisdiction where its ownership, lease or operation of
property or the conduct of its business requires such qualification
and (d) is in compliance with all Requirements of Law the
non-compliance with which could reasonably be expected to have a
Material Adverse Effect.
1.052 AUTHORIZATIONS; NO CONTRAVENTION. The execution, delivery and
performance by the Customer of each of the Loan Documents and each of
the Satellite Contracts to which it is a party, have been duly
authorized by all necessary action and do not and will not: (a)
contravene the terms of that Person's certificate of incorporation,
memorandum and articles of incorporation or other organization or
constitutive documents, (b) conflict with or result in any breach or
contravention of, or the creation or imposition of any Lien under, any
Contract, injunction, order, decree or undertaking to which such
Person is a party or is bound (other than the Liens on Collateral to
be created under the Collateral Documents), (c) violate any
Requirement of Law, the non-compliance with which could reasonably be
expected to have a Material Adverse Effect or (d) require any consent
or approval of the board of directors (or other Persons having similar
functions) of the Customer or any other Person that has not been
obtained, and each such consent and approval that has been obtained is
adequate for its intended purpose and is in full force and effect.
-67-
<PAGE> 73
1.053 GOVERNMENT APPROVALS. Except as may be otherwise set forth on
SCHEDULE 5.03 (as may be amended from time to time by the parties
hereto), all Government Approvals have been obtained and all acts,
conditions and filings required to be done, fulfilled and performed
(such Government Approvals, acts, conditions and filing being referred
to herein as "NECESSARY ACTIONS") in order (a) to enable the Customer
to enter into, exercise its rights under and perform and comply with
the obligations expressed to be assumed by it in each Loan Document
and each Satellite Contract, (b) to ensure that the obligations
expressed to be assumed by the Customer in each Loan Document and each
Satellite Contract are legal, valid and binding, (c) to enable it to
create the Liens contemplated by each of the Collateral Documents and
to ensure that such Liens are valid, legally binding and enforceable
and are or will be perfected as required by Section 9.04, and have or
will have the priority, as required by Section 9.04, and (d) to make
each Loan Document and each Satellite Contract admissible in evidence
in each of New York, Luxembourg, The District of Columbia and
Delaware, have been done, fulfilled and performed; except that (x) in
the case of the foregoing clause (a), Necessary Actions that can be
obtained, done, fulfilled and performed without undue cost, burden or
delay and that are not now required to enable the Customer to exercise
its rights under and perform and comply with its obligations under the
Loan Documents and the Satellite Contracts will be obtained, done,
fulfilled and performed when so required and in any event, with
respect to any Satellite Contract executed on or before the Conversion
Date, no later than the Conversion Date, (y) in the case of the
foregoing clause (c) such Necessary Actions will be obtained, done,
fulfilled and performed no later than the respective dates that the
Liens referred to in said clause are required hereby or pursuant
hereto to be granted, to be perfected and to have the priority
referred to in said clause and (z) in the case of clause (d),
Necessary Actions consisting of routine procedural requirements for
the enforcement of the Loan Documents in a judicial forum that are not
now required can be obtained, done, fulfilled and performed by AEF
(without the assistance or cooperation of the Customer) without undue
cost, burden or delay when so required. All such Government Approvals
heretofore obtained or required to be obtained have been duly
obtained, were validly issued, are in full force and effect, are not
subject to appeal and are held in the name of, or for the benefit of,
the appropriate Persons. The Customer has no reason to believe that
any such Government Approval that will expire by its term or in
accordance with Requirements of Law prior to the Maturity Date will
not be renewed or extended on or prior to such expiration without
undue cost, delay or burden. There is no proceeding pending or, to
the actual knowledge of the Customer, threatened against the Customer
or any property of the Customer, which seeks, or may reasonably be
expected, to rescind, terminate, modify or suspend any
Telecommunications Approval or any other Government Approval. There
has not occurred any event that would make unlikely the delivery or
issuance as anticipated of, and when and as needed, all Government
Approvals listed on SCHEDULE 5.03. No such Government Approval
already obtained is subject to any restriction, condition, limitation
or other provision that could reasonably be expected to have a
Material Adverse Effect. The information set forth in each
application submitted by the Customer in connection with each such
Government Approval is accurate and complete in all material respects
taken as a whole, except for statements or omissions that could not
reasonably be expected to affect adversely the validity of such
-68-
<PAGE> 74
Government Approvals. Except as otherwise provided for in this
Agreement, no other material consent, approval or authorization of, or
declaration or filing with, any other Person is required in connection
with the execution, delivery, performance, validity or enforceability
of this Agreement, any other Loan Document or any of the Satellite
Contracts.
1.054 BINDING EFFECT. This Agreement, each of the other Loan Documents and
each of the Satellite Contracts to which the Customer or any of its
Affiliates is a party constitute the legal, valid and binding
obligations of such Person, enforceable against such Person in
accordance with their respective terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, or similar laws
affecting the enforcement of creditors' rights generally or by
equitable principles relating to enforceability.
1.055 LITIGATION. Except as set forth on SCHEDULE 5.05, and except for
matters arising after the date hereof which could not reasonably be
expected to have a Material Adverse Effect, (a) there are no actions,
suits, proceedings, claims or disputes pending, or to the knowledge of
the Customer, threatened or contemplated at law, in equity, in
arbitration or before any Governmental Authority, against or affecting
the Customer or any Subsidiary of the Customer, or any of their
respective properties, rights or assets or the Project that: (i)
purport to affect or pertain to this Agreement, any other Loan
Document or any of the Satellite Contracts, or any of the transactions
contemplated hereby or thereby, or (ii) if determined adversely to
such Person could reasonably be expected to have a Material Adverse
Effect and (b) to the knowledge of the Customer, there are no actions,
suits, proceedings, claims or disputes pending, or threatened or
contemplated at law, in equity, in arbitration or before any
Governmental Authority, against or affecting any Affiliate of the
Customer (other than a Subsidiary of the Customer), any LSA Party, any
SPA Party, any Affiliate of any LSA Party or SPA Party, or any of
their respective properties, rights or assets or the Project that: (i)
purport to affect or pertain to this Agreement, any other Loan
Document or any of the Satellite Contracts, or any of the transactions
contemplated hereby or thereby, or (ii) if determined adversely to
such Person could reasonably be expected to have a Material Adverse
Effect. No injunction, writ, temporary restraining order or any order
of any nature has been issued against the Customer or any of its
Subsidiaries or (to the knowledge of the Customer) any Affiliate of
the Customer (other than a Subsidiary of the Customer), any LSA Party,
any SPA Party or any Affiliate of any LSA Party or SPA Party, by any
court or other Governmental Authority purporting to enjoin or restrain
(excluding any restraint constituting the imposition of a condition
that the Customer reasonably determines can be satisfied without undue
cost, burden or delay) such Person from the execution, delivery and
performance of this Agreement, any other Loan Document or any of the
Satellite Contracts, or directing that the transactions provided for
herein or therein not be consummated by such Person as herein or
therein provided.
1.056 NO DEFAULT. No Default or Event of Default exists or would result
from the incurring of obligations by the Customer under any Loan
Document. No Relevant Company is in default under or with respect to
any Contract to which it is a party in any respect
-69-
<PAGE> 75
(nor would any such default result from the incurring of obligations
by the Customer under the Loan Documents) which, individually or
together with all such defaults, could reasonably be expected to have
a Material Adverse Effect.
1.057 USE OF PROCEEDS. The proceeds of the Loans are being used solely for
the purposes set forth in Section 6.11.
1.058 TITLE TO ASSETS. Each Relevant Company has good record and marketable
title in and to all of its properties, except for such defects in
title as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect or, if the Customer does
not have such title to the Satellite or any other Collateral, it will
have such title on or prior to the In-Orbit Commissioning Date
pursuant to the terms of the Satellite Purchase Agreement. Such
properties are free and clear of all Liens or rights of others, except
Permitted Liens.
1.059 TAXES. The Customer has filed all tax returns and reports required to
be filed and has paid all taxes, assessments, fees and other
governmental charges levied or imposed upon any Relevant Company or
any of their respective properties, income or assets or otherwise due
and payable, except those that are being contested in good faith by
appropriate proceedings and for which adequate reserves have been
provided in accordance with Generally Accepted Accounting Principles
and no Notice of Lien has been filed or recorded. There is no
proposed tax assessment against any Relevant Company that could, if
the assessment were made, reasonably be expected to have a Material
Adverse Effect.
5.10 FINANCIAL CONDITION
(a) SCHEDULE 5.10 sets forth a complete and correct list of the
audited financial statements submitted by the Customer and
any Guarantor to AEF in order to induce AEF to execute and
deliver this Agreement ("BASE FINANCIAL STATEMENTS"), which
financial statements shall be for such fiscal periods as AEF
shall have reasonably required and such financial statements:
(i) were prepared in accordance with Generally Accepted
Accounting Principles consistently applied throughout the
periods covered thereby, except as otherwise expressly noted
therein, (ii) are complete and correct and fairly present the
financial condition of the Customer as of the dates thereof
and results of operations for the periods covered thereby and
(iii) show all Indebtedness and other liabilities, direct or
contingent, of the Customer as of the date thereof (including
liabilities for taxes and material commitments) that would be
required under Generally Accepted Accounting Principles to be
disclosed. Except as referred to or reflected or otherwise
provided for in said financial statements as at said date,
the Customer had on said date no material contingent
liabilities, liabilities for taxes, unusual forward or
long-term commitments or unrealized or anticipated losses
from any unfavorable commitments of any type whatsoever that
would be required under Generally Accepted Accounting
Principles to be disclosed.
-70-
<PAGE> 76
(b) The financial statements of the Customer Group delivered to
AEF pursuant to Section 4.03(a)(v) (the "CONVERSION FINANCIAL
STATEMENTS") will, when furnished hereunder: (i) have been
prepared in accordance with Generally Accepted Accounting
Principles consistently applied throughout the periods
covered thereby, (ii) be complete and correct and fairly
present the financial condition of the Customer Group as of
the date thereof and results of operations for the periods
covered thereby, (iii) provide (together with the Related
Accounting Reconciliation) sufficient information to enable
AEF, in the opinion of AEF, to apply the tests set out in
ANNEX 1, 2 OR 3, as applicable, consistently to the Customer
Group and (iv) show all Indebtedness and other liabilities,
direct or contingent, of the Customer Group as of the date
thereof (including liabilities for taxes and material
commitments) that would be required under Generally Accepted
Accounting Principles to be disclosed. Except as referred to
or reflected or otherwise provided for in said financial
statements as at said date, the Customer Group had on said
date no material contingent liabilities, liabilities for
taxes, unusual forward or long-term commitments or unrealized
or anticipated losses from any unfavorable commitments of any
type whatsoever that would be required under Generally
Accepted Accounting Principles to be disclosed.
(c) Since the date of the most recent financial statements
delivered to AEF hereunder, there has occurred no event or
circumstance that has had or could reasonably be expected to
have a Material Adverse Effect.
5.11 ENVIRONMENTAL MATTERS. The operations of the Relevant Companies
comply in all material respects with all Environmental Laws. On the
date hereof, the Relevant Companies have obtained all licenses,
permits, authorizations and registrations required under any
Environmental Law ("ENVIRONMENTAL PERMITS") necessary for the
operation of the Project, all such Environmental Permits are valid and
in full force and effect on the date hereof and the Relevant Companies
are in compliance with all terms and conditions of such Environmental
Permits on the date hereof. Except as set forth on SCHEDULE 5.11,
none of the Relevant Companies nor any of their respective present
properties or operations is subject to any outstanding written order
from or agreement with any Governmental Authority or other Person, nor
subject to any judicial or docketed administrative proceeding,
respecting any Environmental Law or Environmental Claim, and there are
no conditions or circumstances which may give rise to any
Environmental Claim arising from the operations of any Relevant
Company, including Environmental Claims associated with any operations
of any Relevant Company, with a potential liability in excess of five
million Dollars ($5,000,000) (or its equivalent in another currency or
other currencies) in the aggregate.
5.12 SUBSIDIARIES. On the date hereof, the Customer does not have any
Subsidiaries other than as listed on SCHEDULE 5.12A, and has no equity
investments in any other corporation or entity other than as listed on
SCHEDULE 5.12B.
-71-
<PAGE> 77
5.13 INSURANCE. The properties of the Customer Group are insured with
financially sound and reputable insurance companies in such amounts,
with such deductibles and covering such risks as is customarily
carried by companies engaged in similar businesses and owning similar
properties in localities where the respective members of the Customer
Group operate and in any event, in such amounts and with such terms as
are required by Section 6.06. Compliance by the Customer with its
obligations pursuant to Section 6.06 shall constitute, with respect to
the insurance expressly referred to therein, compliance with its
obligations under this Section 5.13.
5.14 PROJECT COMPLIANCE. The Project complies in all material respects
with all covenants, conditions, restrictions and reservations in the
Government Approvals, if any, applicable at such time, the Loan
Documents and the Satellite Contracts applicable thereto, except for
any failure to comply that could not reasonably be expected to affect
adversely the validity of such Government Approvals or otherwise to
have a Material Adverse Effect.
5.15 COLLATERAL. From and after the Conversion Date, (a) except as may be
permitted pursuant to the proviso contained in Section 4.03(d), the
Customer or (in the case of the items referred to in clause (g) of the
definition of "Collateral") an Affiliate of the Customer shall have
good, marketable and valid title in and to all of the Collateral free
and clear of all Liens other than Permitted Liens and (b) no mortgage
or financing statement or other instrument or recordation covering all
or any part of the Collateral shall be on file in any recording office
other than any such filing in connection with the Liens created by the
Collateral Documents.
5.16 COLLATERAL DOCUMENTS. From and after the date of the execution and
delivery of the Collateral Documents, except as may be permitted
pursuant to the proviso contained in Section 4.03(d), the Collateral
Documents shall create in favor of the Security Agent legal, valid and
enforceable Liens on or in all of the Collateral. All filings,
recordations, registrations and other actions necessary or desirable
to perfect such Liens shall have been duly performed on or before the
Conversion Date and at all times thereafter and each Lien created by
the Collateral Documents shall, except as permitted by Section 9.04,
constitute a perfected Lien on or before the Conversion Date and at
all times thereafter on or in all right, title, estate and interest of
the Customer or any Affiliate thereof party to the Assignment and
Security Agreement, as applicable, in the Collateral covered thereby,
having the perfection and priority required by Section 9.04, and all
necessary and appropriate consents to such creation and perfection of
such Liens of each of the parties to the Loan Documents shall have
been obtained on or before the Conversion Date and at all times
thereafter.
5.17 SUFFICIENCY OF LOAN DOCUMENTS AND SATELLITE CONTRACTS. The Loan
Documents and the Satellite Contracts (and any exhibits or documents
referred to therein) that have been executed and delivered constitute,
or will constitute when executed and delivered, all agreements
required for the acquisition, construction and completion of the
Project when and as contemplated by the Loan Documents, the Satellite
Contracts and, if applicable, the Business Plan and all arrangements
to which the Customer (and, to the best knowledge of the Customer, any
other obligor) is a party that may
-72-
<PAGE> 78
affect the security provided to the Security Agent under the
Collateral Documents, the financial condition, business or operations
of the Customer or the Project or the ability of the Customer and any
obligor to observe and perform its obligations under the Loan
Documents and the Satellite Contracts to which it is a party. All
permits, licenses, trademarks, patents or agreements with respect to
the usage of technology or other property (other than those
constituting Government Approvals referred to in Section 5.03) that
are necessary for the acquisition, construction, ownership and
operation of the Project substantially as contemplated by the Loan
Documents, the Satellite Contracts and, if applicable, the Business
Plan (except for those that are not required to be obtained on or
prior to the date hereof, as to which the Customer has no reason to
believe they will not obtained by the date required) have been
obtained, are final and are in full force and effect. The services to
be performed, the materials to be supplied and the property interests
and other rights granted pursuant to the Loan Documents and the
Satellite Contracts comprise all of the property interests necessary
to secure any such right material to the acquisition, construction and
ownership of the Project as contemplated by the Loan Documents, the
Satellite Contracts and, if applicable, the Business Plan in
accordance with all applicable laws and as contemplated by the Loan
Documents and the Satellite Contracts. There are no material
services, materials or contractual rights required for the
acquisition, construction and ownership of the Project other than
those granted by, or to be provided to the Customer pursuant to, the
Loan Documents and the Satellite Contracts.
5.18 DISCLOSURE. The information furnished in writing at or prior to the
Closing Date by the Customer to AEF in connection with this Agreement
and the transactions contemplated hereby is and will be, as of the
Closing Date, true, complete and accurate in every material respect or
based on reasonable estimates on the date as of which such information
is stated or certified and is not incomplete by omitting to state any
material fact necessary to make such information (taken as a whole)
not misleading in light of the circumstances under which such
information was made. The financial projections contained in such
material and in the Business Plan (if applicable) were made in good
faith and the assumptions on the basis of which such projections were
made (when made) are (as of the date of this Agreement) reasonable.
There is no fact known to the Customer on the date as of which this
representation and warranty is made that has not been disclosed in
writing to AEF that could reasonably be expected to have a Material
Adverse Effect.
5.19 EFFECTIVENESS OF LOAN DOCUMENTS, SATELLITE CONTRACTS AND QUALIFIED
LEASE AGREEMENTS. Except as otherwise permitted from time to time
pursuant to this Agreement, none of the Loan Documents, Satellite
Contracts or, if applicable, Qualified Lease Agreements that have been
executed as of the date hereof has been amended, modified or
terminated at any time, and all of the Loan Documents, Satellite
Contracts and, if applicable, Qualified Lease Agreements are in full
force and effect.
5.20 EMPLOYEE BENEFIT LIABILITIES. Neither the Customer nor any ERISA
Affiliate sponsors or maintains, or makes contributions to (or has
sponsored or maintained, or
-73-
<PAGE> 79
made contributions within the last six (6) years to) any employee
pension benefit plan subject to ERISA and any regulation promulgated
thereunder.
5.21 INVESTMENT COMPANY ACT. If the Customer is subject to the
jurisdiction of the Investment Company Act of 1940 of the United
States of America, the Customer is not an "investment company" or a
Person "controlled" by an "investment company", within the meaning of
such Act.
SECTION 6. AFFIRMATIVE COVENANTS
The Customer covenants and agrees that, from and after the date hereof and so
long as AEF shall have any Commitment hereunder or any Loan or other amount
shall remain unpaid, unless AEF waives compliance in writing:
1.061 FINANCIAL STATEMENTS. The Customer shall deliver to AEF in form and
detail satisfactory to AEF:
(a) as soon as available, but not later than one hundred and
eighty (180) days after the end of each fiscal year of the
Customer, commencing with the fiscal year ending December 31,
1997, (i) a copy of the audited consolidated balance sheets
of the Customer Group as at the end of such year and the
related audited consolidated statements of income,
stockholders' equity and cash flows for such fiscal year (or
such other audited statements as provide equivalent measures
of the Customer Group's financial condition), setting forth
in each case in comparative form the figures for the previous
year, and accompanied by the unqualified opinion of an
internationally-recognized independent public accounting
firm, which report shall state that such consolidated
financial statements are complete and present fairly the
financial position for the periods indicated in conformity
with Generally Accepted Accounting Principles applied on a
basis consistent with prior years, and (ii) all such
additional financial information (including, without
limitation, the Related Accounting Reconciliation) in respect
of such financial statements as AEF may require for the
purposes of determining whether the financial covenants and
ratios to be complied with by the Customer Group hereunder
have been complied with; together with, if applicable, the
operating results projected for such period as set forth in
the Business Plan, if any, for such period; and
(b) as soon as available, but not later than sixty (60) days
after (i) prior to the Conversion Date, each fiscal quarter
of the Customer and (ii) on and after the Conversion Date,
(A) so long as the Customer shall have been determined to be
a Category 1 Customer, the end of each semi-annual period of
each fiscal year of the Customer, (B) so long as the Customer
shall have been determined to be a Category 2 Customer, and
the Customer does not routinely prepare quarterly financial
statements, the end of each semi-annual period of each fiscal
year of the Customer and (C) so long as the Customer shall
have been
-74-
<PAGE> 80
determined to be a Category 2 Customer and the Customer does
routinely prepare quarterly financial statements, or a
Category 3 Customer, the end of each of the first three (3)
fiscal quarters of each fiscal year of the Customer,
commencing with the first such fiscal quarter (or semi-annual
period, as the case may be) to end after the date hereof, a
copy of the unaudited consolidated balance sheets of the
Customer Group as of the end of such quarter (or semi- annual
period, as the case may be) and the related consolidated
statements of income, stockholders' equity and cash flows for
the period commencing on the first day and ending on the last
day of such quarter (or semi-annual period, as the case may
be) (or such other statements as prepared by the Customer
that provide comparable measures of the Customer Group's
financial condition), and certified by an appropriate
Responsible Officer as being complete and fairly presenting,
in accordance with Generally Accepted Accounting Principles,
the financial position and the results of operations of the
Customer Group along with all such additional financial
information (including, without limitation, the Related
Accounting Reconciliation) in respect of such financial
statements as AEF may require for the purposes of determining
whether the financial covenants and ratios to be complied
with by the Customer Group hereunder have been complied with;
together with, if applicable, the operating results projected
for such period as set forth in the Business Plan, if any,
for such period.
1.062 CERTIFICATES; OTHER INFORMATION. The Customer shall furnish to AEF:
(a) concurrently with the delivery of the financial statements
referred to in Section 6.01(a) and (b) above, a certificate
of a Responsible Officer of the Customer stating that, to the
best of such officer's knowledge, the Customer, during such
period, has observed or performed all of its covenants and
other agreements, and satisfied every condition contained in
this Agreement to be observed, performed or satisfied by it,
and that such Responsible Officer has obtained no knowledge
of any Default or Event of Default except as specified in
such certificate;
(b) unless otherwise delivered pursuant to the terms of this
Agreement, promptly after the same are filed, copies of all
financial statements and regular, periodical or special
reports that the Customer may make to, or file with, the
national public securities commission and stock exchange
having authority over the Customer and any applicable
Telecommunications Authority, or any successor thereto or
similar Governmental Authorities or successors thereto;
(c) if the Customer shall have been determined to be a Category 2
Customer or a Category 3 Customer, (i) concurrently with the
delivery of the financial statements referred to in Section
6.01(a) above, a certificate of a Responsible Officer of the
Customer, certifying a true, complete and correct copy of the
then current Business Plan and (ii) the Customer shall update
the Business Plan, on an annual basis within thirty (30) days
before the end of each fiscal year of the Customer, in
accordance with the terms of this Agreement, for
-75-
<PAGE> 81
purposes of updating the financial projections (including the
current debt interest rate) made the previous fiscal year
relating to the construction, launch and operation of the
Project, such revised Business Plan to be in form and
substance satisfactory to AEF;
(d) promptly after the receipt by the Customer of the results of
the initial in-orbit tests, a description in reasonable
detail of any material deviations from the performance
specifications for the Satellite set forth in the Satellite
Purchase Agreement reflected by such results; and
(e) promptly, such additional information regarding the business,
affairs or financial condition of any member of the Customer
Group as AEF may from time to time reasonably request.
At any time following the occurrence of an Event of Default, the
Customer shall allow AEF and the Security Agent to meet directly with
its auditors and to discuss its business and affairs with such
auditors.
1.063 NOTICES. The Customer shall promptly notify (in writing) AEF of:
(a) the occurrence of any Default or Event of Default and of the
occurrence or existence of any event or circumstance that
foreseeably will become a Default or Event of Default, in
each case describing the same in reasonable detail and what
action the Customer has taken, or intends to take, to cure
such Default or Event of Default;
(b) the commencement of, or any material development in, any
litigation or proceeding against or affecting the Customer
(i) in which in respect of a Category 1A Customer or a
Category 1B Customer the amount of damages claimed is five
million Dollars ($5,000,000) (or its equivalent in another
currency or other currencies) or more, in respect of a
Category 1C Customer, a Category 2 Customer or a Category 3
Customer the amount of damages claimed is two million five
hundred thousand Dollars ($2,500,000) (or its equivalent in
another currency or other currencies) or more, (ii) in which
the revocation, termination, withdrawal, suspension,
modification or withholding of any Government Approval is
sought or threatened or (iii) that, if determined adversely
to the Customer, could reasonably be expected to have a
Material Adverse Effect;
(c) any change in accounting policies or financial reporting
practices of the Customer together with sufficient
information in order for AEF (in its discretion) to assess
any financial reports submitted to it;
(d) any revision of the Construction and Payment Schedule
relating to the Satellite Purchase Agreement and the TTC&M
Contract after submission thereof as provided in Section
9.01;
-76-
<PAGE> 82
(e) the date of L, upon the initial determination thereof and
each change in L thereafter; and
(f) the delivery of, or receipt of, any notice of (i) a reduction
in coverage of any insurance required to be maintained by
Sections 6.06(a) and (b) or otherwise procured by the
Customer covering loss of or damage to any of the Customer's
property (other than a reduction in coverage or amount
resulting from a payment thereunder) or (ii) the cancellation
or non-renewal of any insurance policy.
Each notice pursuant to this Section shall be delivered promptly after
a Responsible Officer becomes aware of the subject matter of such
notice and shall be accompanied by a written statement by a
Responsible Officer of the Customer setting forth the details and the
effective date of the occurrence referred to therein.
1.064 PRESERVATION OF EXISTENCE, ETC. The Customer shall, and shall cause
each other Relevant Company to: (a) preserve and maintain in full
force and effect its existence and good standing under the laws of its
jurisdiction of organization, (b) preserve and maintain in full force
and effect all rights, privileges, qualifications, permits, licenses
and franchises necessary or desirable in the normal conduct of its
business, (c) use its reasonable efforts, in the ordinary course and
consistent with past practices, to preserve its business organization
and preserve the goodwill and business of the customers, suppliers and
others having business relations with it and (d) preserve or renew all
of its registered trademarks, trade names and service marks, the non-
preservation of which could reasonably be expected to have a Material
Adverse Effect.
1.065 MAINTENANCE OF ASSETS. The Customer shall maintain and preserve all
of its property that is used or useful in connection with the Project
in good working order and condition, ordinary wear and tear excepted.
The Customer shall give AEF at least forty-five (45) days prior
written notice of any change in location of the principal office of
the Customer.
1.066 MAINTENANCE OF INSURANCE
(a) GENERAL COVERAGE. The Customer shall, at its own expense,
procure and maintain in full force and effect at all times on
or after the date of completion of the construction of the
tracking, telemetry, control and monitoring facilities with
recognized insurance carriers approved by AEF, the following
insurance:
(i) COMMERCIAL GENERAL LIABILITY INSURANCE: Commercial
general liability insurance against claims for
bodily injury (including death) and property damage
in such amounts and on such terms and conditions as
are reasonably acceptable to AEF and as are
customarily carried by companies of established
repute engaged in the same or a similar business as
the Customer in the places where such business is
conducted.
-77-
<PAGE> 83
(ii) PROPERTY DAMAGE INSURANCE: Property damage
insurance on an "all risk" basis (with customary
conditions and exclusions) including coverage
against damage or loss caused by earth movement and
flood and providing coverage for the Project other
than the Satellite (the "COVERED PROPERTY") in a
minimum aggregate amount equal to the "full
insurable value" of the Covered Property. For
purposes of this clause (ii), "full insurable value"
shall mean the full replacement value of the Covered
Property, including any improvements and equipment
and supplies, without deduction for physical
depreciation or obsolescence; all such policies may
have deductibles of not greater than one million
Dollars ($1,000,000) (or its equivalent in another
currency or other currencies) except for earth
movement insurance which shall have the lowest
deductible as shall (in the opinion of AEF) be
available on commercially reasonable terms in the
insurance market place. Such insurance shall
include an "agreed amount" clause.
(b) SATELLITE COVERAGE
(i) LAUNCH AND INITIAL OPERATIONS INSURANCE. Not later
than L minus (-) thirty (30) days, the Customer
shall procure, or cause to be procured, at its own
expense, binding commitments for the provision of
launch and initial operations insurance for a period
incepting no later than the time of Launch and
expiring no earlier than (A) if the Customer shall
have been determined to be a Category 1 Customer,
twelve (12) months, and (B) if the Customer shall
have been determined to be a Category 2 Customer or
a Category 3 Customer, twenty-four (24) months
thereafter for risks for which the LSA Party is not
entitled to a Reflight pursuant to the Launch
Services Agreement (including risks of Partial
Failure, Total Failure and Constructive Total
Failure), with internationally-recognized, reputable
space insurance and reinsurance carriers acceptable
to AEF, in a minimum amount equal to the Total
Senior Debt Outstanding plus interest on the Total
Senior Debt Outstanding (at a rate reasonably
determined by AEF) for a period of seven (7) months,
on terms and conditions and having such deductibles
as are acceptable to AEF. Without limiting the
generality of the foregoing requirement that such
insurance have terms and conditions acceptable to
AEF, (x) there shall be no gap between the time that
such launch and initial operations insurance
attaches and the time that "all risk" property
damage insurance maintained pursuant to Section
6.06(b)(iv) lapses and (y) such launch and initial
operations insurance shall provide "wrap-around"
cover for risks related to the Launch not covered by
the Launch Services Agreement. In the event that
the Customer has exercised a cash option with
respect to a Launch Services Agreement providing for
launch services by an Ariane 4 launch vehicle and
the proceeds therefrom are assigned to the Security
Agent, the Customer shall be entitled to apply the
right to the proceeds from such cash option in
substitution for such portion of the coverage
provided
-78-
<PAGE> 84
under the insurance required pursuant to this
Section 6.06(b)(i) for such launch services as is
covered by such cash option.
(ii) IN-ORBIT INSURANCE. On or prior to the date falling
six (6) months prior to the expiration of the launch
and initial operations insurance coverage, the
Customer shall procure at its own expense with
internationally-recognized, reputable space
insurance and reinsurance carriers acceptable to
AEF, in-orbit insurance for risks including Partial
Failure, Total Failure and Constructive Total
Failure, in a minimum amount equal to the Total
Senior Debt Outstanding plus interest on the Total
Senior Debt Outstanding (at a rate reasonably
determined by AEF) for a period of seven (7) months.
The Customer shall renew and maintain the in-orbit
insurance in full force and effect at all times
thereafter such that it always has a remaining term
of at least three (3) months. The terms and
conditions of the in-orbit insurance, including all
renewals thereof, shall be at least as beneficial to
the Insured Parties as the corresponding provisions
of the launch and initial operations insurance or
(in the case of renewals) the provisions of the
in-orbit insurance renewed thereby if such terms and
conditions are available on commercially reasonable
terms, with only such changes as AEF shall otherwise
agree.
(iii) THIRD-PARTY LIABILITY COVERAGE. The Customer shall
cause, or if the Customer is not the LSA Party, the
Customer shall cause the LSA Party to cause, AE to
procure and maintain launch and in orbit third party
liability insurance for property loss or damage and
bodily injury caused by the Launch Vehicle or the
Satellite in accordance with the terms and
conditions of the Launch Services Agreement, and
shall cause AEF and the Lenders to be named as
additional insureds thereunder. The Customer shall
cause AE to extend to AEF and the Lenders the
benefits of its indemnification obligation under the
Launch Services Agreement for claims in excess of
such third party liability insurance coverage.
Without limiting (but without duplication of) the
foregoing provisions of this Section 6.06(b)(iii),
the Customer shall, upon the expiration of the third
party liability insurance procured by AE, procure
and maintain third party liability insurance
coverage for property loss or damage and bodily
injury caused by the Satellite after Launch in an
amount on an annual basis of not less than one
hundred million Dollars ($100,000,000) in the
aggregate and per occurrence, naming AEF and the
Lenders as additional insureds thereunder, if such
insurance is then being customarily maintained (as
determined by AEF) by prudent satellite owners.
(iv) SATELLITE MANUFACTURER'S COVERAGE. The Customer
shall cause, or if the Customer is not the SPA
Party, the Customer shall cause the SPA Party to
cause, the Satellite Manufacturer to procure at its
own expense and maintain in full force and effect,
at all times prior to the time when risk of loss of
or damage to the Satellite is transferred to the
Customer, property damage insurance on an "all risk"
basis (with customary conditions and exclusions),
including coverage against damage or loss caused by
earth movement and flood, providing coverage for the
-79-
<PAGE> 85
Satellite. The Customer shall cause the Satellite
Manufacturer, promptly upon obtaining the insurance
required pursuant to the immediately preceding
sentence, to deliver to AEF suitable evidence of
such insurance.
(c) COMMON TERMS. The Security Agent shall be named as the sole
loss payee with respect to any insurance policies required to
be maintained pursuant to Sections 6.06(a)(ii) and (b)(i) and
(ii) to the extent that assets constituting Collateral are
covered thereby and each of the Insured Parties shall be
named as additional insureds in respect of the insurance
policies required to be maintained pursuant to Sections
6.06(a)(ii) and (b)(i) and (ii), as their interests may
appear. All policies of insurance required to be maintained
pursuant to said Sections or otherwise procured by the
Customer covering loss of or damage to any of the Customer's
property shall provide that (i) there shall be no recourse
against AEF any Lender or the Collateral for payment of
premiums or other amounts with respect thereto, (ii) the
insurers are required to provide AEF with at least thirty
(30) days (or ten (10) days in the case of nonpayment of
premiums) prior written notice of reduction in coverage or
amount (other than a reduction in coverage or amount
resulting from a payment thereunder), cancellation or
non-renewal of any policy, and (iii) the proceeds of all
policies shall be payable to the Insured Parties, pursuant to
a first mortgagee endorsement, without contribution, as their
interests may appear. In addition, the Customer shall ensure
that in all cases of policies of insurance in which the
insurer fronts for reinsurers and the ceding insurer is not
domiciled in Bermuda, Guernsey or a country listed in ANNEX
4, the Insured Parties shall have "cut-through" rights
providing direct recovery of claims to the reinsurers under
such policies of insurance. If the Customer fails or may
fail to timely file any proof of loss, AEF or any Lender
shall have the right to submit such proof of loss in the
place of the Customer. Each such policy shall (i) waive any
right of subrogation against the Insured Parties (and their
respective officers, employees, agents and insurers), (ii)
provide that the insurance be primary and not excess to or
contributory to any insurance or self-insurance maintained by
the Customer and (iii) waive any right of the insurers to any
set-off or counterclaim or any other deduction (other than
non-payment of premiums). If available on commercially
reasonable terms (as determined by AEF), the Customer shall
obtain a clause in or endorsement to the launch and initial
operations policy(ies) and the in-orbit policies ensuring the
availability of the benefits of such policies to the Lenders
notwithstanding any statements, misstatements or other
actions or omissions by the Customer or by Persons acting or
purporting to act for or on behalf of the Customer. If such
clause or endorsement is not so available, the Customer shall
obtain for the benefit of the Lenders such other protection,
if any, against such statements, misstatements or other
actions or omissions by the Customer or such Persons as is
then customarily provided to unaffiliated lenders in policies
of insurance, or otherwise in secured satellite financings.
-80-
<PAGE> 86
(d) PREVIEW. The Customer shall furnish to AEF from time to time
preliminary drafts of the launch and initial operations
insurance policy(ies) and each in- orbit insurance policy
required by this Section 6.06, together with the provisional
names of the companies issuing such policy(ies) and (if
requested by AEF) of the reinsurance carriers thereof, and
their respective shares of the insurance and (if requested by
AEF) reinsurance. Such drafts and information shall be
furnished not later than the Conversion Request Date, in the
case of the launch and initial operations insurance
policy(ies) and, not less than six (6) months prior to the
date that such insurance policy is required to be in effect,
in the case of in-orbit insurance policies. The Customer
shall furnish to AEF purportedly final copies of each such
insurance policy not later than L minus (-) ninety (90)
days, in the case of the launch and initial operations
insurance policy(ies), and not less than three (3) months
prior to the date it is required to be in effect, in the case
of in-orbit insurance policies, and notice of all changes
from such purported final copies promptly upon obtaining
knowledge thereof.
(e) BROKER AND ADVISOR UNDERTAKINGS
(i) The Customer shall cause an internationally
recognized insurance broker, approved by AEF, to
deliver to AEF not later than the Conversion Request
Date an undertaking by such insurance broker in
favor of AEF and the Lenders, and satisfactory in
form and substance to AEF, to the effect that such
insurance broker (A) shall immediately notify each
of AEF and the Lenders prior to Launch if any
changes are made to the launch and initial
operations insurance policy(ies) from the copy(ies)
thereof furnished under Section 6.06(d) and (B)
shall on the day after Launch confirm in writing to
each of AEF and the Lenders that no changes were
made to such insurance policy(ies) from such copy
through and including the time of Launch.
(ii) The Customer shall deliver to AEF on the Conversion
Request Date (in the case of the launch and initial
operations policy(ies)) or three (3) months before
the expiration of the launch and initial operations
insurance or any subsequent in-orbit insurance
operations (in the case of in-orbit insurance
policies) a certificate addressed to AEF and the
Lenders of such broker or (in the case of clause (D)
below) an internationally recognized insurance
adviser appointed by AEF (A) confirming that the
insurance policy(ies) in respect of such insurance
are in full force and effect and shall incept at the
time of Launch (in the case of the launch and
initial operations policy(ies)) or the moment the
launch and initial operations insurance policy or
the in-orbit insurance policy then in effect (in
the case of in-orbit insurance policies) is due to
expire, (B) confirming the names of the companies
issuing such policy(ies) and (if requested by AEF)
the reinsurance carriers thereof, and their
respective shares of the insurance and (if requested
by AEF) reinsurance, (C) confirming the amounts and
expiration dates of such policy(ies) and that the
premium for such
-81-
<PAGE> 87
policy(ies) shall be payable by the Customer in full
no later than L minus (-) fifteen (15) days (in the
case of the launch and initial operations
policy(ies)) or no later than thirty (30) days
before attachment of risk (in the case of in-orbit
insurance policies) and (D) stating that in the
opinion of such broker or advisor, as the case may
be, after due investigation, such policy(ies) (x)
comply in all material respects with the
requirements of this Section 6.06 and (y) are
comparable in all material respects with insurance
carried by prudent and responsible owners and
operators of similar properties.
(f) CLAIMS UNDER LAUNCH AND INITIAL OPERATIONS POLICIES AND UNDER
IN-ORBIT POLICIES. The Customer shall promptly and
simultaneously notify AEF and the Customer's insurance broker
in writing of any loss covered by any insurance referred to
in Section 6.06(b)(i) or (ii) and, upon obtaining knowledge
thereof, of any potential Event of Loss and shall file a
proof of loss with respect thereto with the insurers (with
copies thereof sent simultaneously to AEF) as early as
possible within the period allowed therefor in the related
insurance policy (and in any event not later than the last
date on which such proof of loss may be filed).
(g) FINAL POLICIES. Promptly upon receipt thereof, the Customer
shall deliver to AEF a duplicate, certified by an
internationally recognized insurance broker approved by AEF,
of each policy of insurance required to be in effect
hereunder.
(h) CURE. In the event the Customer fails to take out or
maintain, or fails to cause to be taken out or maintained,
the full insurance coverage required by this Section 6.06,
AEF or any Lender, as the case may be, upon thirty (30) days
prior notice (unless the aforementioned insurance would lapse
within such period, in which event notice shall be given as
soon as reasonably possible) to the Customer of any such
failure, may (but shall not be obligated to) take out the
required policies of insurance and pay the premiums on the
same. All amounts so advanced therefor by AEF or a Lender,
as the case may be, shall be immediately reimbursed by the
Customer to AEF or such Lender, as the case may be, and the
Customer shall forthwith pay such amounts to AEF or such
Lender, as the case may be, together with interest thereon at
the Default Rate from the date so advanced.
(i) COMMUNICATIONS. The Customer shall promptly furnish to AEF
(copies of which AEF may furnish to any Lender) copies of all
material communications between the Customer and any of its
insurers or insurance broker concerning the launch and
initial operations and the in-orbit insurance policies
required by this Section 6.06, including, without limitation,
all "letters of health" in respect of the Satellite.
1.067 PAYMENT OF OBLIGATIONS. The Customer shall, and shall cause each
other Relevant Company to, pay and discharge as the same shall become
due and payable, all their
-82-
<PAGE> 88
respective obligations and liabilities including: (a) all tax
liabilities, assessments and governmental charges or levies upon it or
its income or profits, or on any of its properties or assets, unless
the same are being contested in good faith by appropriate proceedings
and adequate reserves are being maintained by the Customer or such
other Relevant Company, as the case may be, in accordance with
Generally Accepted Accounting Principles in respect thereof, (b) all
lawful claims which, if unpaid, might by law become a Lien upon its
property unless the same are being contested in good faith by
appropriate proceedings and adequate reserves are being maintained by
the Customer or such other Relevant Company, as the case may be, in
accordance with Generally Accepted Accounting Principles in respect
thereof, and (c) all Indebtedness of the Customer or such other
Relevant Company, as the case may be, as and when due and payable but
subject to any subordination provisions contained in any instrument or
agreement evidencing such Indebtedness.
1.068 COMPLIANCE WITH LAWS. The Customer shall comply, and shall cause each
of its Subsidiaries and Affiliates party to any Satellite Contracts or
Loan Documents to comply, in all material respects with all
Requirements of Law applicable to it of any Governmental Authority
having jurisdiction over it or its business (including, without
limitation, laws and regulations relating to employment retirement
income security), except such as may be contested in good faith or as
to which a bona fide dispute may exist.
1.069 INSPECTION OF PROPERTY AND BOOKS AND RECORDS. The Customer shall
maintain proper books of record and account, in which full, true and
correct entries in conformity with Generally Accepted Accounting
Principles consistently applied shall be made of all financial
transactions and matters involving the assets and business of the
Customer and any consolidated Subsidiaries. The Customer shall,
following the Conversion Request Date, permit representatives of AEF
and its authorized agents to visit and inspect any of their respective
properties, to examine their respective organizational, financial and
operating records and make copies thereof or abstracts therefrom, to
discuss their respective affairs, finances and accounts with their
respective directors, officers and employees, and to inspect and
observe (subject to, and in accordance with, the Satellite Purchase
Agreement) the construction of the Project, at such reasonable times
during normal business hours and as often as may be reasonably
desired, upon reasonable advance notice to the Customer, PROVIDED that
when an Event of Default exists AEF and its authorized agents may
visit and inspect at the expense of the Customer such properties at
any time during normal business hours and without advance notice.
6.10 ENVIRONMENTAL LAWS
(a) The Customer shall, and shall cause each other Relevant
Company (if any) to, upon and after the Conversion Commitment
Date, conduct its operations and keep and maintain its
property in compliance with all Environmental Laws, obtain
and maintain in full force and effect all Environmental
Permits for so long as is necessary for the operation of the
Project and comply with all terms and conditions of such
Environmental Permits.
-83-
<PAGE> 89
(b) Upon written request of AEF upon and after the Conversion
Commitment Date, the Customer shall submit and cause each of
its Subsidiaries to submit, to AEF, at the Customer's sole
cost and expense at reasonable intervals, a report providing
an update of the status of any environmental, health or
safety compliance, hazard or liability issue identified in
any notice or prior report required pursuant to this Section
6.10 and any other environmental, health or safety compliance
obligation, remedial obligation or liability, that could,
individually or in the aggregate, result in liability in
excess of (i) if the Customer shall have been determined to
be a Category 1A Customer or a Category 1B Customer five
million Dollars ($5,000,000) (or its equivalent in another
currency or other currencies) or more or (ii) if the Customer
shall have been determined to be a Category 1C Customer, a
Category 2 Customer or a Category 3 Customer the amount of
damages claimed is two million five hundred thousand Dollars
($2,500,000) (or its equivalent in another currency or other
currencies) or more.
6.11 USE OF PROCEEDS
(a) The Customer shall use the proceeds of the Tranche A Loans to
fund scheduled, pre-launch progress payments due and payable
under the Launch Services Agreement (other than the initial
down payment referred to in Section 4.01(c)) and Finance
Costs due hereunder as specified in the applicable Notice of
Drawdown.
(b) The Customer shall use the proceeds of the Tranche B Loan
solely to refund the Tranche A Outstandings (including
Tranche A Loans the proceeds of which have been applied to
the payment of Finance Costs) on the Conversion Date,
together with any ECA Guaranty Fees payable in respect of the
Tranche B Loan.
(c) None of the proceeds of any of the Loans shall be used to
purchase or carry, or to reduce or retire or refinance any
credit incurred to purchase or carry, any margin stock
(within the meaning of Regulations U and X of the Board of
Governors of the Federal Reserve System) or to extend credit
to others for the purpose of purchasing or carrying any
margin stock.
6.12 PROJECT MAINTENANCE. The Customer shall maintain and preserve the
Project and all of its other properties necessary or useful in the
proper conduct of its business in relation to the Project in good
working order and condition and shall maintain, preserve and operate
the Project in accordance with generally accepted practices for
similar projects.
6.13 TELECOMMUNICATIONS APPROVALS. The Customer shall furnish to AEF, on
the In-Orbit Commissioning Date, a certificate of a Responsible
Officer of the Customer to the effect that all international, national
and local (if any) Telecommunications Approvals that are necessary or,
in the reasonable opinion of AEF, desirable for the maintenance and
operation of the Satellite and the TTC&M Facilities and the Project
-84-
<PAGE> 90
in general have been obtained and are in full force and effect and
unrestricted and unconditional, together with certified copies of all
such approvals.
6.14 GOVERNMENT APPROVALS. The Customer shall maintain in full force and
effect all Telecommunications Approvals, and all amendments thereto,
and shall maintain (or cause to be maintained) in full force and
effect all other Government Approvals that are necessary under
applicable laws and regulations in connection with (a) the due
execution, delivery and performance by the Customer, or any Affiliate
thereof of its obligations, and the exercise from time to time of its
rights, under the Loan Documents, the Satellite Contracts and any
other material Contract entered into from time to time relating to the
Project then in effect, (b) the construction of the Satellite, the
TTC&M Facilities and related equipment, (c) the Launch of the
Satellite and (d) the operation and maintenance of the Satellite, the
TTC&M Facilities and related equipment. No such Government Approval
shall be subject to any restriction, condition, limitation or other
provision that could reasonably be expected to have a Material Adverse
Effect.
6.15 RATE CONTRACTS. If the Customer shall have been determined to be a
Category 2 Customer or a Category 3 Customer, the Customer shall
obtain and maintain in full force and effect from a date not later
than the Conversion Date one or more Rate Contracts with one or more
counterparties acceptable to AEF which effectively enable the Customer
(in a manner reasonably satisfactory to AEF (with due consideration to
cost, availability and duration of such Rate Contracts), taking into
account the currency of denomination of all Qualified Lease
Agreements) to protect itself against fluctuations in interest rates
and foreign exchange rates relating to Loans hereunder and the Project
Financing.
6.16 OPERATIONAL CONTROL AND RE-EXPORT. The Customer shall, at the request
of AEF or the Security Agent, promptly deliver to AEF or the Security
Agent (whichever has made the request):
(a) all access codes and command codes to the Satellite, subject
to having obtained any requisite Government Approvals for
such delivery, necessary to facilitate access to, and the
command, control and operation of, the Satellite, and to
activate the transponders thereon;
(b) evidence in writing that the Satellite Manufacturer and, if
applicable, the Lessees have undertaken to
(i) deliver immediately to AEF or the Security Agent (as
the case may be), upon notification by AEF or the
Security Agent that an Event of Default has occurred
and is continuing, all access codes and command
codes to the Satellite, subject to having obtained
any requisite Government Approvals for such
delivery, necessary to facilitate access to, and the
command, control and operation of, the Satellite,
and to activate the transponders thereon;
-85-
<PAGE> 91
(ii) take all steps necessary, upon notification by AEF or the
Security Agent that an Event of Default has occurred and is
continuing, to obtain the Government Approvals required to
effect any transfer of operational control over the Satellite
and related technical data (including any license approving
the export or re-export of the Satellite to any Person as
designated by AEF or the Security Agent); and
(iii) deliver to AEF and the Security Agent written evidence of the
issuance of the Government Approvals once such Government
Approvals have been obtained.
The Customer hereby agrees, and shall cause the Satellite Manufacturer
(and, if applicable, the Lessees and other lessees of transponders on
the Satellite) to agree, not to change any access codes or command
codes to the Satellite, at any time that a Default or Event of Default
exists without promptly furnishing to AEF and the Security Agent the
new access codes and command codes, once such access codes or command
codes have been delivered to AEF or the Security Agent pursuant to
this Section 6.16.
6.17 PERFORMANCE OF LOAN DOCUMENTS. The Customer shall perform and observe
all of its covenants and agreements contained in the Loan Documents to
which it is a party, shall maintain each of the Loan Documents in full
force and effect and shall take all reasonable action to prevent the
termination of any such Loan Document in accordance with the terms
thereof (other than by reason of the stated expiration thereof or
default by any other party thereto) or otherwise and to enforce each
covenant or obligation of such Loan Document in accordance with its
terms (unless the failure to enforce any such covenant or obligation,
in the reasonable opinion of AEF, could not reasonably be expected to
have a Material Adverse Effect) and shall take all such action to that
end as from time to time may be reasonably requested by AEF.
6.18 PERFORMANCE OF SATELLITE CONTRACTS. The Customer shall, or if the
Customer is not the SPA Party, the LSA Party or the TTC&M Party, the
Customer shall cause the SPA Party, the LSA Party and the TTC&M Party
to: (a) cause the Project to be duly constructed and completed in
accordance with the Satellite Contracts to which it is a party, (b) on
and after the Conversion Commitment Date, perform and observe all of
its covenants and agreements contained in the Satellite Contracts to
which it is a party, (c) maintain each of the Satellite Contracts to
which it is a party in full force and effect and take all reasonable
action to prevent the termination of any such Satellite Contract in
accordance with the terms thereof (other than by reason of the stated
expiration thereof or default by any other party thereto) or otherwise
and (d) to enforce each covenant or obligation of such Satellite
Contract to which it is a party in accordance with its terms (unless
the failure to enforce any such covenant or obligation, in the
reasonable opinion of AEF, could not reasonably be expected to have a
Material Adverse Effect) and shall take all such action to that end as
from time to time on and after the Conversion Commitment Date may be
reasonably requested by AEF.
-86-
<PAGE> 92
6.19 PERFORMANCE OF QUALIFIED LEASE AGREEMENTS. The Customer shall (a) on
and after the Conversion Commitment Date, perform and observe all of
its covenants and agreements contained in the Qualified Lease
Agreements to which it is party; and (b) enforce each covenant or
obligation of such Qualified Lease Agreement to which it is a party in
accordance with its terms (unless the failure to enforce any such
covenant or obligation, in the reasonable opinion of AEF, could not
reasonably be expected to have a Material Adverse Effect) and shall
take all such action to that end as from time to time on and after the
Conversion Commitment Date may be reasonably requested by AEF.
6.20 ORBITAL POSITION. The Satellite shall be maintained in the orbital
position assigned to it by the Telecommunications Authority pursuant
to the relevant Telecommunications Approval at one hundred and ten
degrees West Longitude (110(degree) W.L.).
6.21 EXPORT LICENSE. The Customer shall cause, or if the Customer is not
the SPA Party the Customer shall cause the SPA Party to cause, the
Satellite Manufacturer to maintain in full force and effect all Export
Licenses, if required by applicable law, in accordance with the terms
of the Satellite Purchase Agreement.
6.22 IN-ORBIT COMMISSIONING. The Customer shall deliver to AEF the
certificate referred to in the definition of "In-Orbit Commissioning
Date" promptly upon completion of the initial in-orbit tests on the
Satellite in accordance with the Satellite Contract and entry of the
Satellite into commercial service.
6.23 SATELLITE OPERATIONAL REPORTS. The Customer shall provide or shall
cause the provider of tracking, telemetry, control and monitoring of
the Satellite to provide to AEF no less than annually, commencing
twelve (12) months after the date of Launch, and, in addition, at any
time upon the reasonable request of AEF, a certificate of a
Responsible Officer with regard to the operational status of the
Satellite, including such information as the projected solar array
life based on the total Satellite power requirements, projected
battery life based on total Satellite power requirements, projected
Satellite life, information concerning whether any transponder spares
or preemptible transponders on the Satellite have been employed and
such other information pertinent to the operation of the Satellite and
the transponders thereon as AEF may reasonably request.
6.24 TRANSPONDER LEASE AGREEMENTS. Except to the extent that the Customer
is required hereunder to enter into Qualified Lease Agreements, the
Customer may enter into any other agreement for the lease of, or
provision of communications services on, transponders or capacity on
the Satellite, PROVIDED that each such agreement (a) does not contain
provisions in the nature of indemnities or other provisions for the
payment by the Customer of termination fees, costs or damages (except
for customary credits or refunds for failure to provide services
according to minimum performance specifications not in excess of lease
or use payments received under such contracts), (b) except for those
agreements excluded from the definition of "Transponder Lease
Agreements", includes an express acknowledgment by the lessee that any
rights of quiet enjoyment and any other rights of the lessee shall be
in all respects subject and
-87-
<PAGE> 93
subordinate to the rights of the Security Agent in the Collateral on
terms and conditions satisfactory to the Security Agent and (c)
requires performance by the Customer that could not reasonably be
expected to have a Material Adverse Effect, and PROVIDED FURTHER that
the Customer shall not amend, supplement or modify any such agreement
if the result would be to contravene the provisions of clause (a), (b)
or (c) above.
6.25 FURTHER ASSURANCES
(a) The Customer shall ensure that all written information,
exhibits and reports furnished to AEF do not and will not
contain any untrue statement by the Customer or any Affiliate
thereof of a material fact and do not and will not omit, on
the part of the Customer or any such Affiliate, to state any
material fact or any fact necessary to make the statements
contained therein not misleading in light of the
circumstances in which made, and will promptly disclose to
AEF and correct any defect or error that may be discovered
therein or in any of the Loan Documents or any of the
Satellite Contracts or in the execution, acknowledgment or
recordation thereof.
(b) The Customer shall as of and at all times after the
Conversion Date take or cause to be taken all action required
or desirable to maintain and preserve the Liens of the
Collateral Documents and the perfection and priority thereof
required by the terms of this Agreement.
(c) Promptly upon written request by AEF, the Customer shall (and
shall cause each of its Subsidiaries to and use its
reasonable efforts to cause the LSA Party, the SPA Party, the
TTC&M Party or any Affiliate of any thereof to) do, execute,
acknowledge, deliver, record, re-record, file, re-file,
register and re-register, any and all such further acts,
deeds, conveyances, security agreements, mortgages,
assignments, estoppel certificates, legal opinions, consents,
financing statements and continuations thereof, termination
statements, notices of assignment, transfers, certificates,
assurances and other instruments as AEF may reasonably
require from time to time in order (i) to carry out more
effectively the purposes of this Agreement or any other Loan
Document, (ii) to subject to the Liens created by any of the
Collateral Documents any of the properties, rights or
interests covered by any of the Collateral Documents, (iii)
to perfect and maintain the validity, effectiveness and
priority of any of the Collateral Documents and the Liens
intended to be created thereby and (iv) to better assure,
convey, grant, assign, transfer, preserve, protect and
confirm to AEF the rights granted or now or hereafter
intended to be granted to AEF under any Loan Document or
under any other instrument executed in connection therewith.
6.26 PRIORITIES
(a) The Customer hereby agrees that (i) all Indebtedness owing by
it to any of its Affiliates shall be Subordinated
Indebtedness, (ii) all amounts in respect of
-88-
<PAGE> 94
Indebtedness owing by it to any of its Affiliates shall be
paid only out of Unrestricted Excess Cash Flow not
theretofore used for any other purpose permitted by any of
this Section 6.26 or Section 7.07, 7.14, 7.15, 11.05 or 13.04
and (iii) if a Default or Event of Default has occurred and
is continuing, any amounts whatsoever due and owing by the
Customer to any Affiliate shall be paid only out of
Unrestricted Excess Cash Flow not theretofore used for any
other purpose permitted by any of this Section 6.26 or
Section 7.07, 7.14, 7.15, 11.05 or 13.04.
(b) If the Customer has been determined to be a Category 1C
Customer, a Category 2 Customer or a Category 3 Customer, it
shall not, and shall not permit any of its Subsidiaries to,
make any Restricted Payment at any time if a Default or Event
of Default then exists or would immediately result therefrom.
SECTION 7. NEGATIVE COVENANTS
The Customer hereby covenants and agrees as follows, from and after the date
hereof and so long as AEF shall have any Commitment hereunder or any Loan or
other amount payable hereunder shall remain unpaid, unless AEF waives
compliance in writing:
1.071 LIMITATION ON LIENS. The Customer shall not, from and after the date
of execution of any Collateral Document, directly or indirectly, make,
create, incur, assume or suffer to exist any Lien upon or with respect
to any part of the Collateral, whether now owned or hereafter
acquired, or offer or agree to do so, other than the following
("PERMITTED LIENS"):
(a) any Lien in favor of AEF or the Security Agent created under
any Collateral Document, PROVIDED that, to the extent that
the Security Agent is acting on behalf of the Project Agent
or the Project Lenders, on and after the Conversion Date,
such Liens equally and ratably secure the obligations
described under the Collateral Documents on a pari passu
basis in accordance with the terms of the Intercreditor
Agreement;
(b) Liens for taxes, fees, assessments or other governmental
charges that are not delinquent or remain payable without
penalty, or to the extent that non- payment thereof is
permitted by Section 6.07, PROVIDED that no Notice of Lien
has been filed or recorded;
(c) carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's or other similar Liens arising in
the ordinary course of business that are not delinquent or
remain payable without penalty;
(d) Liens on the property of the Customer incurred, or pledges or
deposits required, in connection with workmen's compensation,
unemployment insurance and other social security legislation;
-89-
<PAGE> 95
(e) Liens on the property of the Customer securing (i) the
performance of bids, trade contracts (other than for borrowed
money), leases or statutory obligations, (ii) obligations on
surety and appeal bonds and (iii) other obligations of a like
nature, provided all such Liens and obligations referred to
in the foregoing clauses (i), (ii) and (iii) are incurred in
the ordinary course of business and, in the aggregate, could
not reasonably be expected to cause a Material Adverse
Effect; and
(f) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business
that, in the aggregate, are not substantial in amount, and
that do not in any case materially detract from the value of
the property subject thereto or interfere with the ordinary
conduct of the businesses of the Customer.
1.072 DISPOSITION OF COLLATERAL. The Customer shall not, from and after the
date that any Collateral Document is executed, directly or indirectly,
sell, assign, lease, convey, transfer or otherwise dispose of (whether
in one or a series of transactions) any Collateral or enter into any
agreement to do any of the foregoing except that (i) the Customer may
sell, transfer or otherwise dispose of Collateral having an aggregate
fair market value not exceeding one million Dollars ($1,000,000) in
any of its fiscal years and (ii) so long as the Customer has paid or
prepaid in full the principal of and interest on the Loans and all
other amounts owing by it under the Loan Documents, or has paid or
prepaid in part such principal and interest with respect to that
portion of the Satellite that has suffered a Partial Failure it may
transfer that portion of the Collateral for which such payment or
prepayment has been made to insurers pursuant to their salvage rights
and may authorize AE to negotiate such transfer pursuant to the Launch
Services Agreement.
1.073 DISPOSITION OF ASSETS OTHER THAN COLLATERAL. If the Customer shall
have been determined to be a Category 1C Customer, a Category 2
Customer or a Category 3 Customer, the Customer shall not, and shall
not permit any other member of the Customer Group to, from and after
the Conversion Commitment Date, directly or indirectly, sell, assign,
lease (as lessor), convey, transfer or otherwise dispose of (whether
in one or a series of transactions) its assets, business or property
(other than Collateral) (including (x) accounts and notes receivable
(with or without recourse) and (y) equipment sale and leaseback
transactions but excluding (i) any sale, assignment, transfer,
exchanges or other disposition of any inventory sold or disposed of in
the ordinary course of business and on ordinary business terms, (ii)
the trade-in or other disposition of machinery or equipment in
connection with the acquisition of other similar machinery or
equipment and (iii) the sale or other disposition of obsolete,
worn-out or other non-productive properties having a value not
exceeding one million five hundred thousand Dollars ($1,500,000) in
the aggregate in any fiscal year of the Customer) or enter into any
agreement to do any of the foregoing except with respect to sales,
transfers or other dispositions of assets in the ordinary course of
business or pursuant to bona fide sale and leaseback (and
substantially similar) financings ("PERMITTED DISPOSITIONS") that (A)
do not exceed in the aggregate two percent (2%) of the total assets of
the Customer Group in any fiscal year, (B) together with all such
-90-
<PAGE> 96
prior Permitted Dispositions, do not exceed in the aggregate five
percent (5%) of the total assets of the Customer Group at the time of
such action or (C) with respect to any Permitted Dispositions other
than sale and leaseback transactions, do not have a fair market value
in excess of one million Dollars ($1,000,000) per item; PROVIDED that,
in each case, immediately after giving effect to any such Permitted
Disposition, no Default or Event of Default would exist.
1.074 TRANSACTIONS WITH AFFILIATES. The Customer shall not transfer, sell,
assign or otherwise dispose of, directly or indirectly, any assets to
any Affiliate of the Customer or of any Subsidiary or enter into any
loan, guarantee or other transaction, directly or indirectly, with any
Affiliate of the Customer or of any Subsidiary except as contemplated
by this Agreement or in the ordinary course of business and pursuant
to the reasonable requirements of the business of the Customer and
upon fair and reasonable terms no less favorable to the Customer than
would obtain in a comparable arm's-length transaction with a Person
not an Affiliate of the Customer.
1.075 NOTICE OF INDEBTEDNESS. If the Customer shall have been determined to
be a Category 1C Customer, a Category 2 Customer or a Category 3
Customer, the Customer shall not, on or after the Conversion
Commitment Date, create, incur, assume, purchase, repurchase,
guaranty, suffer to exist, or otherwise become or remain directly or
indirectly liable with respect to, any Indebtedness if, as a result
thereof the aggregate principal amount of its Indebtedness increases
by ten million Dollars ($10,000,000) or more, unless the Customer
shall have provided to AEF (a) a certificate of a Responsible Officer
of the Customer stating that no Default or Event of Default shall
occur immediately as a result of the incurrence of such Indebtedness
and (b) if requested by AEF, a certificate of such Responsible Officer
with calculations in reasonable detail, and such other evidence as AEF
may request, demonstrating that no Default or Event of Default shall
occur immediately as a result of the incurrence of such Indebtedness.
1.076 LEASE OBLIGATIONS. If the Customer shall have been determined to be a
Category 2 Customer or a Category 3 Customer, the Customer shall not
create or suffer to exist any obligations for the payment of rent for
any property under lease or agreement to lease under which the
Customer is the lessee, except for:
(a) leases in existence on the Closing Date and any renewal,
extension or refinancing thereof;
(b) any leases entered into in the ordinary course of business of
the Customer in furtherance of the Project; and
(c) in the case that the Customer shall have been determined to
be a Category 2 Customer, leases to finance the acquisition
of fixed assets, PROVIDED that the aggregate annual rental
payments for all such leases shall not exceed four million
Dollars ($4,000,000) (or its equivalent in another currency
or other currencies).
-91-
<PAGE> 97
1.077 CAPITAL EXPENDITURES. If the Customer shall have been determined to
be a Category 1C Customer, Category 2 Customer or a Category 3
Customer, the Customer shall not purchase any assets other than the
purchase of (a) fixed assets and capital equipment that are expressly
contemplated by and budgeted for under the Business Plan of the
Customer then in effect in the case of a Category 2 Customer or a
Category 3 Customer or the Capex Budget, if any, then in effect in the
case of a Category 1C Customer, (b) Permitted Investments and (c)
assets other than those permitted under clauses (a) and (b) of this
Section 7.07 in an aggregate amount not to exceed (i) fifteen million
Dollars ($15,000,000) per annum (or its equivalent in another currency
or other currencies) in the case that the Customer shall have been
determined to be a Category 1C Customer or ten million Dollars
($10,000,000) per annum (or its equivalent in another currency or
other currencies) in the case that the Customer shall have been
determined to be a Category 2 Customer or seven million five hundred
thousand Dollars ($7,500,000) per annum (or its equivalent in another
currency or other currencies) in the case that the Customer shall have
been determined to be a Category 3 Customer PLUS (ii) Unrestricted
Excess Cash Flow not theretofore used for any other purpose permitted
by any of this Section 7.07 or Section 6.26, 7.14, 7.15, 11.05 or
13.04.
1.078 CHANGE IN STRUCTURE; CONSOLIDATIONS AND MERGERS. The Customer shall
not, (a) make any changes in its capital structure (including, without
limitation, in the terms of its outstanding stock or other equity
interests), and shall not permit any change in the composition of its
ownership, and shall not amend its certificate of incorporation,
memorandum and articles of association or other organizational
documents if, as a result, there could reasonably be expected to occur
a Material Adverse Effect or (b) directly or indirectly, merge or
consolidate with any other Person, or enter into any agreement to so
merge or consolidate, except, if the Customer has been determined to
be a Category 1 Customer, with respect to the following, so long as if
immediately after giving effect thereto no Default or Event of Default
would exist:
(i) any Subsidiary of the Customer may merge, consolidate or
combine with or into, or transfer assets to the Customer,
PROVIDED that the Customer shall be the continuing or
surviving organization;
(ii) the Customer may merge, consolidate or combine with another
entity if the Customer is the organization surviving the
merger; and
(iii) the Customer may merge, consolidate or combine with or into,
or transfer all or substantially all of its assets to,
another entity that, in the determination of AEF, has an
equivalent or better credit standing than the Customer,
PROVIDED that such other entity fully assumes all obligations
of the Customer hereunder and under the other Loan Documents
and the Satellite Contracts to which the Customer is a party
and agrees to fully comply with all covenants and obligations
of the customer hereunder and thereunder, to the satisfaction
of AEF.
1.079 ACCOUNTING CHANGES. The Customer shall not make any significant
change in accounting treatment and reporting practices, except as
permitted by Generally
-92-
<PAGE> 98
Accepted Accounting Principles, PROVIDED that the Customer shall
notify AEF of any such change in accounting treatment or reporting
practices pursuant to the terms of Section 6.03, and upon receipt of
such notice AEF may, in its discretion, but shall not be obligated to,
require the Customer to deliver the financial statements required to
be delivered pursuant to Section 6.01 calculated in accordance with
Generally Accepted Accounting Principles in effect before such change.
The Customer shall, at the time that it is required to deliver to AEF
any information relevant to the calculation of any amount hereunder to
be determined in accordance with Specified GAAP, notify AEF of any
change in Generally Accepted Accounting Principles after the date
hereof that is relevant to such calculation, and upon receipt of such
notice AEF may, in its discretion, but shall not be obligated to,
require the recalculation of the covenants contained herein and the
tests to be applied pursuant to the Annexes hereto.
7.10 BUSINESS. The Customer shall not engage in any activities contrary to
applicable laws or regulations and, if the Customer shall have been
determined to be a Category 2 Customer or a Category 3 Customer, or
any other Customer that has formed a special purpose vehicle pursuant
to Section 9.04, the Customer shall not engage in any business other
than a business described in its Business Plan.
7.11 MILITARY ACTIVITIES. The Customer shall ensure that the use and
operation of the Satellite are not substantially for or on behalf of
any governmental, inter-governmental or non-governmental defense or
military agency or substantially for non-commercial communications in
support of the operations or activities of the military, national
security or armed forces of any country or any inter-governmental or
non-governmental entity.
7.12 LOAN DOCUMENTS
The Customer shall not (i) cancel or terminate any of the Loan
Documents to which it is a party or consent to or accept any
cancellation or termination thereof (for convenience, default or
otherwise), (ii) sell, assign or otherwise transfer or dispose of (by
operation of law or otherwise) any part of its interest in any of the
Loan Documents or consent (or agree to consent) to any Person party to
the Loan Documents selling, assigning or otherwise transferring or
disposing of any part of its interest in any of the Loan Documents,
(iii) petition, request or take any other legal or administrative
action that seeks or may reasonably be expected to rescind, terminate
or suspend any of the Loan Documents or amend or modify any of the
Loan Documents or (iv) amend, supplement or modify any of the Loan
Documents.
7.13 SATELLITE CONTRACTS; QUALIFIED LEASE AGREEMENTS
(a) The Customer shall not, on or after the Conversion Commitment
Date, (i) cancel or terminate any of the Satellite Contracts
to which it is a party or consent to or accept any
cancellation or termination thereof (for convenience, default
or otherwise), (ii) sell, assign or otherwise transfer or
dispose of (by operation of law or otherwise) any part of its
interest in any of the Satellite
-93-
<PAGE> 99
Contracts or consent (or agree to consent) to any Person
party to the Satellite Contracts to sell, assign or otherwise
transfer or dispose of any part of its interest in any of the
Satellite Contracts, (iii) waive any default under or breach
of any of the Satellite Contracts or waive, fail to enforce,
forgive or release any right, interest or entitlement,
howsoever arising, under or in respect of any of the
Satellite Contracts or exercise any election thereunder, (iv)
petition, request or take any other legal or administrative
action that seeks to or may reasonably be expected to
rescind, terminate or suspend any of the Satellite Contracts
or amend or modify any of the Satellite Contracts, (v) amend,
supplement or modify the Satellite Purchase Agreement if the
result would be to affect adversely the guarantees or
warranties thereunder or otherwise to cause a Material
Adverse Effect or enter into any change order if the cost of
such change order exceeds five percent (5%) of the purchase
price of the Satellite, PROVIDED that such change order shall
not adversely affect the in-orbit performance of the
Satellite or performance warranties under the Satellite
Purchase Agreement and such change order could not reasonably
be expected to cause a Material Adverse Effect, or (vi)
amend, supplement or modify the Launch Services Agreement or
the TTC&M Contract if the result would be to adversely affect
the guarantees or warranties thereunder or otherwise to cause
a Material Adverse Effect.
(b) The Customer shall not, on or after the Conversion Commitment
Date, (i) cancel or terminate, or exercise any preemption
under, any of the Qualified Lease Agreements to which it is a
party or consent to or accept any cancellation or termination
thereof (for convenience, default or otherwise), (ii) sell,
assign or otherwise transfer or dispose of (by operation of
law or otherwise) any part of its interest in any of the
Qualified Lease Agreements or consent (or agree to consent)
to any Persons party to the Qualified Lease Agreements to
sell, assign or otherwise transfer or dispose of any part of
its interest in any of the Qualified Lease Agreements, (iii)
waive any default under or breach of any of the Qualified
Lease Agreements or waive, fail to enforce, forgive or
release any right, interest or entitlement, howsoever
arising, under or in respect of any of the Qualified Lease
Agreements or exercise any election thereunder, (iv)
petition, request or take any other legal or administrative
action that seeks to or may reasonably be expected to
rescind, terminate or suspend any of the Qualified Lease
Agreements or amend or modify any of the Qualified Lease
Agreements, or (v) amend, supplement or modify the Qualified
Lease Agreements if the result would be to cause a Material
Adverse Effect; provided that the Customer may take any
action described in this Section 7.13(b) with respect to any
Qualified Lease Agreement on any date if, after excluding
such Qualified Lease Agreement from the relevant
calculations, the Customer would satisfy the conditions and
covenants set forth in Sections 11.04 and 11.06 (if the
Customer shall have been determined to be a Category 1C
Customer) or Sections 12.01(b)(xii), 12.02 and 12.04(b) (if
the Customer shall have been determined to be a Category 2
Customer) on such date on a pro forma basis (and, after
taking any
-94-
<PAGE> 100
such action, such Qualified Lease Agreement shall cease to be
a Qualified Lease Agreement for all purposes hereof).
7.14 LOANS, DEPOSITS AND INVESTMENTS. If the Customer shall have been
determined to be a Category 1C Customer, a Category 2 Customer or a
Category 3 Customer, the Customer shall not, directly or indirectly,
purchase or acquire, or make any commitment for, any capital stock,
equity interest, obligations or other securities of or any interest
in, or make any advance, loan, extension of credit or capital
contribution to or any other investment in, any Person ("INVESTMENTS")
except for the following ("PERMITTED INVESTMENTS"): (a) investments
in Cash Equivalents; (b) extensions of credit for a period not
exceeding ninety (90) days in the nature of accounts receivable or
notes receivable arising from the sale or lease of goods or services
in the ordinary course of business, (c) if no Default or Event of
Default exists or would result therefrom, (i) loans or extensions of
credit to Affiliates of the Customer, which shall not exceed two
million five hundred thousand Dollars ($2,500,000) (or its equivalent
in another currency or other currencies) in an aggregate principal
amount at any one time outstanding, (ii) loans or extensions of credit
to key management employees of the Customer; which shall not exceed
one million two hundred and fifty thousand Dollars ($1,250,000) (or
its equivalent in another currency or other currencies) in an
aggregate principal amount at any one time outstanding and (iii) if
the Customer shall have been determined to be a Category 1C Customer,
Investments made out of Unrestricted Excess Cash Flow not theretofore
used for any other purpose permitted by any of this Section 7.14 or
Section 6.26, 7.07, 7.15 or 11.05.
7.15 SUBORDINATED INDEBTEDNESS. Neither the Customer nor any of its
Subsidiaries shall purchase, redeem, retire or otherwise acquire for
value, or set apart any money for a sinking, defeasance or other
analogous fund for, the purchase, redemption, retirement or other
acquisition of, or make any voluntary payment or prepayment of the
principal of or interest on, or any other amount owing in respect of,
any Subordinated Indebtedness, except for (a) regularly scheduled
payments of principal and interest in respect thereof required
pursuant to the instruments evidencing such Subordinated Indebtedness,
(b) if the Customer shall have been determined to be a Category 1
Customer, voluntary payments and prepayments of principal of, or
interest on, such Subordinated Indebtedness, PROVIDED that if the
Customer shall have been determined to be a Category 1C Customer, any
such voluntary payment or prepayment shall be paid only out of
Unrestricted Excess Cash Flow not theretofore used for any other
purpose permitted by any of this Section 7.15 or Section 6.26, 7.07,
7.14, 11.05 or 13.04. The Customer shall not amend, supplement or
modify any instrument or agreement evidencing or governing any
Subordinated Indebtedness.
SECTION 8. EVENTS OF DEFAULT
1.081 EVENTS OF DEFAULT. Any of the following events shall constitute an
"EVENT OF DEFAULT":
-95-
<PAGE> 101
(a) NON-PAYMENT. (i) The Customer fails to pay any principal of
or interest on any Loan within three (3) Business Days of the
date when due, (ii) the Customer fails to pay any fees or any
other amount payable by it to AEF hereunder, other than
pursuant to Section 2.05(b), or pursuant to any other Loan
Document within five (5) Business Days of the date when due
or (iii) the Customer fails to pay any amount payable by it
to AEF pursuant to Section 2.05(b) hereunder on the date when
due; or
(b) REPRESENTATION OR WARRANTY. Any representation or warranty
by the Customer in this Agreement shall prove to have been
incorrect in any material respect on or as of the date made
or deemed made, PROVIDED that, except in the case of the
representations or warranties contained in Sections 5.04,
5.06, 5.15 and 5.16 of this Agreement, if susceptible of cure
within such period and the Customer is diligently proceeding
with such cure, the fact, circumstance or condition giving
rise to such incorrect representation or warranty is not
cured within thirty (30) days after the Customer has
knowledge that such representation or warranty was incorrect;
or
(c) COVENANTS. (i) The Customer fails to perform any covenant
contained in this Agreement required to be performed by it,
PROVIDED that, except for the covenants contained in ANNEXES
1, 2 AND 3, as applicable, and any of Sections 6.03(a),
6.04(a), 7.01 (if and to the extent resulting from any
voluntary action or inaction by the Customer), 7.02, 7.06,
7.07, 7.08, 7.11, 7.12, 7.13 and 7.15, such failure shall
continue unremedied for a period of thirty (30) or more days
after the Customer has knowledge of such failure and such
covenant is capable of being cured within such period and the
Customer is diligently proceeding with such cure; or
(d) CROSS-ACCELERATION. If the Customer shall have been
determined to be a Category 1A Customer, the maturity of any
Indebtedness under any of the Project Financing Agreements,
or any other Indebtedness or Contingent Obligation having an
aggregate principal amount of more than thirty million
Dollars ($30,000,000) (or its equivalent in another currency
or other currencies) of a Relevant Company shall have been
accelerated, in whole or in part, or shall have been required
to be prepaid prior to the stated maturity thereof (other
than pursuant to a regularly scheduled prepayment or a
redemption or a mandatory prepayment provision that is not
comparable in effect to an acceleration resulting from an
event of default), in accordance with the provisions of any
agreement evidencing, providing for the creation of or
concerning the same, PROVIDED, subject to the further proviso
set forth herein, that this Section 8.01(d) shall not apply
to Indebtedness of any Relevant Company to AEF under any
other customer loan agreement if the Customer, pursuant to
the terms and conditions of such Indebtedness, shall have
been determined to be in any other Customer Category than
that applicable to the Customer pursuant to the terms of this
Agreement, and PROVIDED FURTHER that if the Customer shall
have been determined to be a Category 1A Customer and (x)
certifies to AEF, attaching certified copies of all relevant
documentation,
-96-
<PAGE> 102
that it is not subject to cross-acceleration provisions in
any Comparable Financing Transaction to which it is party,
this Section 8.01(d) shall not apply to any Relevant Company
or (y) certifies to AEF, attaching certified copies of
relevant provisions, that pursuant to any Comparable
Financing Transaction to which it is party the Customer is
subject to cross-acceleration provisions not substantially
similar to this Section 8.01(d), such other
cross-acceleration provisions shall be deemed to be set forth
in this Agreement in the place of this Section 8.01(d); or
(e) CROSS-DEFAULT.
(i) If the Customer shall have been determined to be in
any Customer Category other than a Category 1A
Customer and (A) any Relevant Company fails to make
any payment in respect of the Project Financing
Agreements, or any of its other Indebtedness or
Contingent Obligations having an aggregate principal
amount of more than:
(1) fifteen million Dollars ($15,000,000) (or
its equivalent in another currency or other
currencies) if the Customer shall have been
determined to be a Category 1B Customer; or
(2) five million Dollars ($5,000,000) (or its
equivalent in another currency or other
currencies) if the Customer shall have been
determined to be a Category 1C Customer,
Category 2 Customer or a Category 3
Customer;
when such principal amount is due (whether by
scheduled maturity, required prepayment,
acceleration, demand or otherwise) and, if the
Customer shall have been determined to be a Category
1B Customer or a Category 1C Customer, such failure
continues after the giving of any notice and/or the
lapse of any applicable grace or notice period, if
any, specified in the agreement relating thereto or
(B) any Relevant Company fails to perform or observe
any other condition or covenant or any other event
shall occur or condition exist under the Project
Financing Agreements or any other agreement or
instrument relating to any Indebtedness or
Contingent Obligations having an aggregate principal
amount of more than:
(1) fifteen million Dollars ($15,000,000) (or
its equivalent in another currency or other
currencies) if the Customer shall have been
determined to be a Category 1B Customer; or
(2) five million Dollars ($5,000,000) (or its
equivalent in another currency or other
currencies) if the Customer shall have been
determined to be a Category 1C Customer, a
Category 2 Customer or a Category 3
Customer;
if (x) the effect of such event or condition is to
cause such Indebtedness to be declared due and
payable, or to permit the holder or holders of
-97-
<PAGE> 103
such Indebtedness or beneficiary or beneficiaries of
such Indebtedness (or a trustee or agent on behalf
of such holder or holders or beneficiary or
beneficiaries) to declare such Indebtedness to be
due and payable, prior to its stated maturity, or to
cause such Contingent Obligations to become due and
payable, and (y) if the Customer shall have been
determined to be a Category 1B Customer or a
Category 1C Customer, such event or condition
continues after the giving of any notice and/or the
lapse of any applicable grace or notice period, if
any, specified in the agreement relating thereto,
PROVIDED that this Section 8.01(e)(i) shall not
apply to the Indebtedness of any Relevant Company
(or any Affiliate thereof) under any other customer
loan agreement entered into with AEF and PROVIDED
FURTHER that (x) if the Customer shall have been
determined to be a Category 1B Customer and (aa) is
not subject to cross-default provisions in any
Comparable Financing Transaction to which it is
party as evidenced by a certificate of the Customer
to that effect addressed to AEF, accompanied by
certified copies of the relevant documentation, this
Section 8.01(e)(i) shall not apply to any Relevant
Company or (bb) pursuant to any Comparable Financing
Transaction to which it is party the Customer is
subject to cross-default provisions not
substantially similar to this Section 8.01(e)(i) as
evidenced by a certificate of the Customer to that
effect addressed to AEF and accompanied by certified
copies of the relevant provisions, such other
cross-default provisions shall be deemed to be set
forth in this Agreement in the place of this Section
8.01(e)(i) and (y) if the Customer shall have been
determined to be a Category 2 Customer or a Category
3 Customer and is subject to cross-default
provisions in any Comparable Financing Transaction
that are materially more restrictive than this
Section 8.01(e)(i), such other cross-default
provisions shall be deemed to be set forth herein in
the place of this Section 8.01(e)(i); or
(ii) If the Customer or an Affiliate thereof (A) fails to
make any payment in respect of a loan of the
Customer or such Affiliate under a customer loan
agreement entered into with AEF, under which the
Customer or such Affiliate has the same customer
category as the Customer Category for the Customer
hereunder, when such amount is due (whether by
scheduled maturity, required prepayment,
acceleration, demand or otherwise) and, if the
Customer shall have been determined to be a Category
1B Customer or a Category 1C Customer, such failure
continues after the giving of any required notice
and the lapse of any applicable grace or notice
period, if any, specified in such customer loan
agreement or (B) fails to perform or observe any
other condition or covenant or any other event shall
occur or condition exist under any such customer
loan agreement if (x) the effect of such event or
condition is to cause such loan to be declared due
and payable, or to permit the holder or holders of
such loan or beneficiary or beneficiaries of such
loan (or a trustee or agent on behalf of such holder
or holders or beneficiary or beneficiaries) to
declare such loan to be due and
-98-
<PAGE> 104
payable, prior to its stated maturity, and (y) if
the Customer shall have been determined to be a
Category 1B Customer or a Category 1C Customer, such
event or condition continues after the giving of any
required notice and the lapse of any applicable
grace or notice period, if any, specified in such
customer loan agreement; or
(f) BANKRUPTCY OR INSOLVENCY. Any Relevant Company (i) becomes
insolvent or generally fails to pay, or admits in writing its
inability to pay, its debts as they become due, subject to
applicable grace periods, if any, whether at stated maturity
or otherwise, (ii) voluntarily ceases to conduct its business
in the ordinary course, (iii) commences any Insolvency
Proceeding or files any petition or answer in any Insolvency
Proceeding, (iv) acquiesces in the appointment of, or the
taking of possession by, a receiver, trustee, custodian or
liquidator for itself or a substantial portion of its
property, assets or business or effects a plan or other
arrangement with its creditors or (v) admits the material
allegations of a petition filed against it in any Insolvency
Proceeding; or
(g) INVOLUNTARY PROCEEDINGS. Any involuntary Insolvency
Proceeding is commenced or filed against any Relevant Company
or any writ, judgment, warrant of attachment, execution or
similar process is issued or levied against a substantial
part of any Relevant Company assets and any such proceedings
or petition shall not be dismissed, or such writ, judgment,
warrant of attachment, execution or similar process shall not
be released, vacated or fully bonded, within ninety (90) days
after commencement, filing or levy; or
(h) MONETARY JUDGMENTS. One or more final judgments, orders or
decrees shall be entered against any Relevant Company
involving in the aggregate a liability (not fully covered by
insurance) more than an amount equal to the greater of (A)
(1) prior to the Conversion Commitment Date, twenty-five
million Dollars ($25,000,000) (or its equivalent in another
currency or other currencies) and (2) on and after the
Conversion Commitment Date (aa) if the Customer shall have
been determined to be a Category 1 Customer, twenty five
million Dollars ($25,000,000), (bb) if the Customer shall
have been determined to be a Category 2 Customer, fifteen
million Dollars ($15,000,000) and (cc) if the Customer shall
have been determined to be a Category 3 Customer, five
million Dollars ($5,000,000) and (B) twenty percent (20%) of
Consolidated Net Worth as at the date of the financial
statements of the Customer most recently delivered hereunder
at the time of determination, and the same shall remain
unvacated, undischarged, unstayed or unbonded pending appeal
for a period of forty-five (45) days after the entry thereof,
PROVIDED that if the Customer shall have been determined to
be a Category 1 Customer and (x) is not subject to judgment
default provisions in any Comparable Financing Transaction to
which it is party as evidenced by a certificate of the
Customer to that effect addressed to AEF, accompanied by
certified copies of the relevant documentation, this Section
8.01(h) shall not apply to any Relevant Company or (y)
pursuant to any Comparable Financing Transaction to which it
-99-
<PAGE> 105
is party the Customer is subject to judgment default
provisions not substantially similar to this Section 8.01(h)
as evidenced by a certificate of the Customer to that effect
addressed to AEF and accompanied by certified copies of the
relevant provisions, such other judgment default provisions
shall be deemed to be set forth in this Agreement in the
place of this Section 8.01(h); or
(i) NON-MONETARY JUDGMENTS. Any non-monetary judgment, order or
decree shall be rendered against any Relevant Company that
could reasonably be expected, in the sole opinion of AEF, to
have a Material Adverse Effect, and enforcement proceedings
shall have been commenced by any Person upon such judgment or
order which shall remain unstayed for any period of
forty-five (45) consecutive days or more; or
(j) COLLATERAL
(i) Any provision of any Collateral Document shall for
any reason cease to be valid and binding on or
enforceable against the Customer or any Affiliate
thereof party thereto, if the effect thereof may
materially deprive AEF or the Security Agent of the
benefits of the Collateral taken as a whole, or the
Customer shall so state in writing or bring an
action to limit its obligations or liabilities
thereunder; or
(ii) Any Collateral Document shall for any reason (other
than pursuant to, or contemplated by, the terms
thereof) cease to create a valid Lien in any
Collateral that is significant in value, relative
value or fundamental to the operation of the Project
purported to be covered thereby that is not replaced
with other Collateral acceptable to AEF within five
(5) Business Days, or any such Lien that, pursuant
to the terms hereof, is intended to constitute a
perfected and first priority Lien in favor of AEF or
the Security Agent, as the case may be, shall for
any reason cease to be a perfected and first
priority Lien; or
(k) FAILURE TO OBTAIN, OR LOSS OF, APPROVALS. The Customer shall
fail to obtain, renew, maintain or comply in any material
respect with the Telecommunications Approvals or any other
Government Approvals; or the Telecommunications Authority or
any other Governmental Authority shall revoke, terminate,
withdraw, suspend, modify, withhold or fail to renew any
Telecommunications Approval or any other Government Approval;
or any Telecommunications Approval or any other Government
Approval shall for whatever reason cease to be in full force
and effect; or the Customer shall for any reason lose any
Telecommunications Approval or any other Government Approval;
or the use of the satellite frequencies and the orbital
position of the Satellite have not been coordinated and
notified with the RCB (or are not in the process of
coordination) in accordance with the requirements of this
Agreement or there exist prior advance publications or
requests for coordination or notification for systems that
may cause harmful interference to,
-100-
<PAGE> 106
or receive harmful interference from, the Satellite, which is
reasonably likely to prevent the Customer from fulfilling its
then current Business Plan (if a Business Plan is required to
be provided hereunder) in any material respect; or any Export
License, if required by applicable law, is revoked, rescinded
or terminated; or
(l) LOAN DOCUMENTS INEFFECTIVE. Any provision of any of this
Agreement, the Note, the Fee Letter, the Collateral Documents
or the Intercreditor Agreement (if any) shall at any time for
any reason cease to be valid and binding or in full force and
effect or any party thereto (other than AEF, the Security
Agent, the Lenders or the Project Lenders) shall, in good
faith, so assert in writing; or any provision of any of such
agreements shall, in good faith, be declared to be null and
void, or the validity or enforceability thereof shall be
contested by any party thereto (other than AEF, the Security
Agent, the Lenders or the Project Lenders) or any
Governmental Authority; or any party (other than AEF, the
Security Agent, the Lenders or the Project Lenders) to any of
such agreements shall deny that it has any further liability
or obligation under any such Loan Document; or any party
(other than AEF, the Security Agent, the Lenders or the
Project Lenders) to any of such agreements shall default in
the observance or performance of any of the covenants or
agreements contained in any of such agreements and such
default is not cured within the applicable grace period (if
any) contained in such agreements; and in each such case such
action, termination, cessation, declaration, contestation,
denial or default could reasonably be expected to have a
Material Adverse Effect; or
(m) MULTIPARTY AGREEMENT INEFFECTIVE. Any provision of the
Multiparty Agreement (other than Section 3(a) (excluding the
last paragraph thereof), 3(c), 6 or 10 thereof (each an
"EXCLUDED SECTION")) shall at any time for any reason cease
to be valid and binding or in full force and effect or any
party thereto (other than AE or AEF) shall, in good faith, so
assert in writing; or any provision of the Multiparty
Agreement, other than an Excluded Section, shall, in good
faith, be declared to be null and void, or the validity or
enforceability thereof shall be contested by any party
thereto (other than AE or AEF) or any Governmental Authority;
or any party thereto (other than AE or AEF) shall deny that
it has any further liability or obligation under any section
thereof other than under an Excluded Section; or any party
thereto (other than AE or AEF) shall default in the
observance or performance of any of the covenants or
agreements contained in any section thereof other than an
Excluded Section, and such default is not cured within the
applicable grace period (if any) contained in the Multiparty
Agreement; or
(n) SATELLITE CONTRACTS INEFFECTIVE. Any provision of any of the
Satellite Contracts shall at any time on or after the
Conversion Commitment Date for any reason cease to be valid
and binding or in full force and effect or any party thereto
shall so assert in writing; or any provision of any of the
Satellite Contracts shall be declared to be null and void, or
the validity or enforceability thereof shall be contested by
any party thereto or any Governmental Authority;
-101-
<PAGE> 107
or any party to any of the Satellite Contracts shall deny
that it has any further liability or obligation under any of
the Satellite Contracts; or any party to any of the Satellite
Contracts shall default in the observance or performance of
any of the covenants or agreements contained in any of the
Satellite Contracts and such default is not cured within the
applicable grace period (if any) contained in such Satellite
Contract; and in each such case such action, termination,
cessation, declaration, contestation, denial or default would
reasonably be expected to have a Material Adverse Effect; or
(o) INSURANCE. The Customer shall fail at any time to procure,
renew or maintain, or cause to be procured, renewed or
maintained, any insurance coverage required pursuant to
Section 6.06(b) of this Agreement or any insurer issues any
notice of avoidance or cancellation of any such coverage as a
result of a breach by the Customer of the terms of any of
such insurance.
1.082 REMEDIES. If any Event of Default occurs and is continuing, AEF may:
(a) declare, in whole or, from time to time, in part, any
Commitment of AEF to make or Convert Loans to be terminated,
whereupon such Commitments shall forthwith be terminated;
(b) declare, in whole or, from time to time, in part, the unpaid
principal amount of the outstanding Loans, the interest
accrued and unpaid thereon and all other amounts payable
hereunder and under the other Loan Documents to be
immediately due and payable, whereupon such amounts shall be
due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived
by the Customer; and/or
(c) exercise all rights, powers, privileges and remedies
available to AEF under the Loan Documents or any other
instrument, document or agreement or provided by law or in
equity, or instruct the Security Agent to exercise its rights
under the Collateral Documents or applicable law with respect
to the Collateral, cure such Event of Default or prosecute
the completion of the construction of the Project, either in
the name of and as agent for the Customer pursuant to one or
more existing contracts with the Customer or otherwise, and
any monies so expended in curing such Event of Default or
completing the construction of the Project shall, to the
extent advanced by AEF, be added to the principal amount of
the Loans hereunder and shall be repayable hereunder,
regardless of whether or not such principal amount, as thus
increased, exceeds the Commitments, and the amount of monies
thus advanced for completion of the construction of the
Project shall be deemed advanced under this Agreement as
Loans, and shall be secured by the Collateral Documents,
regardless of the principal amount thereof, and shall be
payable by the Customer on demand with interest thereon at
the Default Rate with respect to such Loans;
PROVIDED that upon the occurrence of any event specified in Section
8.01(f) or (g) above (in the case of Section 8.01(g), upon the
expiration of the ninety (90) day
-102-
<PAGE> 108
period mentioned therein), the obligation of AEF to make Loans shall
automatically terminate and the unpaid principal amount of all
outstanding Loans and all interest and other amounts as aforesaid
shall automatically become due and payable without notice to the
Customer or any further act of AEF.
1.083 RIGHTS NOT EXCLUSIVE. The rights provided for in this Agreement and
the other Loan Documents are cumulative and are not exclusive.
SECTION 9. ADDITIONAL LOAN PROVISIONS
1.091 CATEGORY 3 PREVIEW
(a) PURPOSE AND TIMING. If the Customer shall be determined,
during the Conversion process, to be a Category 3 Customer,
the Customer shall satisfy, at or prior to Conversion,
specific Conversion Conditions. Such conditions shall be
determined, in accordance with the terms hereof, based on a
review (as provided in this Section 9.01(a)) of the
Preliminary Business Plan, if any, or otherwise (as provided
in Section 9.02) on the basis of the Conversion Business
Plan. In order to provide the Customer with greater
certainty with respect to Conversion, the Customer shall have
the right to submit its Preliminary Business Plan (together
with a true, complete and correct copy of the Construction
and Payment Schedule) to AEF for preview by AEF and the
Lenders pursuant to Section 9.01(b) below at any time until L
minus (-) two hundred and ten (210) days.
(b) SUBMISSION; RESUBMISSION
(i) At the request of the Customer, AEF shall conduct an
initial review of the Preliminary Business Plan,
which review shall solely be to assess the adequacy
thereof for the purpose of this Section 9.01(b).
Upon completion of such review, AEF shall notify the
Customer whether, in the opinion of AEF and the
Lenders, the Preliminary Business Plan contains
insufficient information for AEF and the Lenders to
assess such Preliminary Business Plan hereunder, in
which event AEF shall suggest modifications,
revisions and sensitivities to the Preliminary
Business Plan that may allow it to satisfy the
requirements of this Agreement and suggest such
additional reports and other information as may
enable AEF and the Lenders to make the
determinations referred to in Section 9.01(c) below.
The Customer shall promptly submit to AEF (a
"SUBMISSION") either the Preliminary Business Plan
as initially delivered or the version that results
from the modifications, revisions and sensitivities
referred to in this Section 9.01(b)(i).
(ii) AEF shall notify the Customer within thirty (30)
days of receipt of a Submission or a Revised
Submission (as defined below) to the Lenders
whether:
-103-
<PAGE> 109
(A) such Submission or Revised Submission is
acceptable for the purposes of Section
9.01(c) below;
(B) such Submission or Revised Submission
contains insufficient information for AEF
and the Lenders to assess such Submission
or Revised Submission hereunder; or
(C) Conversion cannot occur for such Person as
a Category 3 Customer on the basis of such
Submission or Revised Submission.
(iii) If, following a Submission, AEF shall make the
notification referred to in Section 9.01(b)(ii)(B)
above with respect thereto, then AEF shall notify
the Customer of any modifications, revisions or
sensitivities requested by AEF or the Lenders. If
(A) the Customer shall deliver to AEF such
modifications, revisions or sensitivities
(collectively a "REVISED SUBMISSION") not later than
fifteen (15) days following the date of such request
and (B) such Revised Submission is (in the opinion
of AEF) of the customary, iterative nature
undertaken by AEF and the Lenders in reviewing
similar projects, the procedure set forth in Section
9.01(b)(ii) above shall apply with respect to such
Revised Submission, and such Revised Submission
shall not constitute a Resubmission (as defined
below).
(iv) If, following a Submission or a Revised Submission,
AEF shall make the notification referred to in
Section 9.01(b)(ii)(C) above, AEF may request that a
Lender act as modelling lender (in the capacity
contemplated by this Section 9.01(b)(iv), the
"MODELLING LENDER"). The Modelling Lender shall, for
a period of thirty (30) days, assist the Customer by
suggesting revisions to the Preliminary Business
Plan that may allow AEF and the Lenders to accept
the Preliminary Business Plan as so revised for the
purposes of Section 9.01(c) below and by assisting
in developing an appropriate financial model to
establish a revised Preliminary Business Plan for
Resubmission to AEF.
(v) If there shall occur any material modification of a
fundamental business assumption underlying the
Preliminary Business Plan, or any other fundamental
change in the nature of the business, as to which a
Submission has been made, the Customer may resubmit
to AEF for review by AEF and the Lenders (a
"RESUBMISSION") such revised Preliminary Business
Plan for re-consideration by AEF and the Lenders
pursuant to the terms of this Section 9.01.
(vi) No more than one Submission, one Revised Submission
and one Resubmission may be made by the Customer.
The Customer shall not be entitled to make a
Submission, Revised Submission or Resubmission
-104-
<PAGE> 110
on any day that is after L minus (-) one hundred and
sixty five (165) days.
(vii) Any review, suggestion or other undertaking by AEF
or the Modelling Lender pursuant to this Section
9.01(b) shall be without representation or warranty
to the Lenders as to the adequacy or accuracy of
such Preliminary Business Plan, or to the Customer
or any other Person of the likelihood that AEF and
the Lenders will accept such Preliminary Business
Plan for the purposes of Section 9.01(c) below or
that the Customer will on the Conversion Commitment
Date, the Conversion Date or at any other time
actually satisfy the applicable Conversion
Conditions.
(c) LENDER REVIEW AND DETERMINATION OF CONVERSION CONDITIONS.
If, following a Submission, Revised Submission or
Resubmission of any Preliminary Business Plan each of AEF and
the Lenders determine that the information set out in such
Preliminary Business Plan is acceptable for the purposes of
this Section 9.01(c), they shall, concurrently with the
acceptance of any such Preliminary Business Plan:
(i) develop a Preliminary Base Case derived from the
information set out in the Preliminary Business
Plan;
(ii) establish Conversion Conditions that would apply to
the Customer in the event the Customer is determined
to be a Category 3 Customer on the Conversion
Commitment Date, designed in each case to examine
the Customer's marketing, distribution and financial
strategies to reasonably confirm the ability of the
Customer to implement the Preliminary Base Case,
comprised of a set of objective tests (where
practicable) with criteria to be examined at the
Conversion Commitment Date and the Conversion Date
in the event that the Customer is determined to be a
Category 3 Customer, and each of which may be
subject to revision solely as provided in Sections
9.02(c)(iii) and 9.02(e)(v);
(iii) establish additional covenants to be applied to the
Customer in the event the Customer is determined to
be a Category 3 Customer on the Conversion
Commitment Date to be applicable during the Tranche
B Term;
(iv) if the Preliminary Business Plan includes the
information described in clause (f) of the
definition of "PRELIMINARY BUSINESS PLAN" in Section
1.01, notify the Customer of any additional
Collateral determined pursuant to Section 9.03(b) to
be necessary by AEF or the Lenders in the event that
such Person shall be determined to be a Category 3
Customer; and
(v) identify the Expert Studies that will be required.
-105-
<PAGE> 111
(d) APPLICABILITY. AEF shall notify the Customer of the results
of the preview pursuant to Section 9.01(c), and any terms and
conditions specified by AEF pursuant to this Section 9.01
shall, if accepted by the Customer, be incorporated by AEF
and the Customer in ANNEX 3. Such terms and conditions shall
be applicable in accordance with the terms hereof only in the
event the Customer is determined to be a Category 3 Customer
on the Conversion Commitment Date as set forth in Section
9.02(e), and shall be subject to revision solely in
accordance with Section 9.02(a)(iii) and 9.03. Rejection by
the Customer of the specified terms and conditions shall not
preclude the Customer from being authorized to submit itself
for consideration pursuant to Section 9.02(c)(iv). For the
avoidance of doubt, the establishment of such Conversion
Conditions shall not indicate or imply that the Customer will
on the Conversion Commitment Date, the Conversion Date or at
any other time actually satisfy such Customer Conversion
Conditions. Review by AEF and the Lenders and development of
a Preliminary Base Case pursuant to this Section 9.01 with
respect to the Customer shall not preclude the assignment of
the Customer to any other Customer Category for which it may
qualify on the Conversion Commitment Date.
1.092 CONVERSION PROCESS
(a) DRAFT DOCUMENTATION. On the date that is L minus (-) two
hundred and ten (210) days:
(i) In order for the Customer to be eligible for
consideration as a Category 1 Customer on the
Conversion Commitment Date, the Customer shall
submit a draft of the Appraisal to AEF.
(ii) In order for the Customer to be eligible for
consideration as a Category 2 Customer on the
Conversion Commitment Date, the Customer shall
submit to AEF drafts of (A) the Conversion Business
Plan and (B) the Appraisal.
(iii) In order for the Customer to be eligible for
consideration as a Category 3 Customer on the
Conversion Commitment Date, regardless of whether or
not a Preliminary Base Case exists, the Customer
shall submit to AEF drafts of (A) the Conversion
Business Plan, (B) the Appraisal and (C) the Expert
Studies supporting the Conversion Business Plan.
(b) AEF REVIEW. AEF shall review the draft documentation
submitted by the Customer to AEF and shall discuss with the
Customer any potential obstacles or any possible changes in
order to provide the Customer with greater certainty with
respect to Conversion.
(c) PRELIMINARY DOCUMENTATION. On the date that is L minus (-)
one hundred and eighty (180) days:
-106-
<PAGE> 112
(i) In order for the Customer to be eligible for
consideration as a Category 1 Customer on the
Conversion Commitment Date, the Customer shall
submit the Appraisal to AEF, and if the Customer
proposes to be designated as a Category 1C Customer,
the Customer shall also submit information
satisfactory to AEF to ascertain compliance with the
Category 1C QL Loan Life Cover Ratio and may submit
a proposed Capex Budget. AEF shall develop for the
Customer a financial pro forma which shall be
sufficient to ascertain compliance with such
Category 1C QL Loan Life Cover Ratio.
(ii) In order for the Customer to be eligible for
consideration as a Category 2 Customer on the
Conversion Commitment Date, the Customer shall
submit to AEF (A) the Conversion Business Plan and
(B) the Appraisal. AEF shall develop the Conversion
Base Case in accordance with ANNEX 2,
notwithstanding the existence of a Preliminary Base
Case as a Category 3 Customer for the Customer.
(iii) If a Preliminary Base Case exists, and if the other
matters referred to in Section 9.01(c) have been
established and accepted by the Customer before the
date that is L minus (-) one hundred and eighty
(180) days, then in order for the Customer to be
eligible for consideration as a Category 3 Customer
on the Conversion Commitment Date, the Customer
shall submit to AEF:
(A) the Conversion Business Plan;
(B) the Appraisal; and
(C) the Expert Studies supporting the
Conversion Business Plan.
If such Conversion Business Plan and the Expert
Studies contain no material modification of a
fundamental business assumption (as determined by
AEF) underlying the Preliminary Business Plan, and
no other material change in the business of the
Customer shall have occurred, then the Preliminary
Base Case shall become the Conversion Base Case. If
any such material modification shall have occurred,
then AEF shall modify the Preliminary Base Case and
develop the Conversion Base Case in accordance with
the Conversion Business Plan, the Appraisal and the
Expert Studies. If AEF determines that the
Conversion Business Plan or the Expert Studies
identify a material modification of a fundamental
business assumption (other than a modification
affecting solely the calculation of the relevant
ratios required to be determined in accordance with
ANNEX 3) or a material risk not identified in the
Preliminary Business Plan, AEF shall notify the
Customer of any modifications to the matters
referred to in clauses 9.01(c)(ii) through (v)
arising by reason thereof, whereupon the matters
referred to therein shall be revised in accordance
with such modifications.
-107-
<PAGE> 113
(iv) If a Preliminary Base Case does not exist, or if a
Preliminary Base Case exists and the other matters
referred to in Section 9.01(c) were established but
not accepted by the Customer before the date that is
L minus (-) one hundred and eighty (180) days, then
in order for the Customer to be eligible for
consideration as a Category 3 Customer on the
Conversion Commitment Date, the Customer shall
submit to AEF:
(A) the Conversion Business Plan;
(B) the Appraisal; and
(C) the Expert Studies supporting the
Conversion Business Plan.
AEF shall determine whether a Conversion Commitment
can be provided for the Customer and, if so, upon
what terms and conditions.
(d) CONVERSION REQUEST DATE. On the date that is L minus (-) one
hundred and fifty (150) days, the Customer shall deliver the
documents and other instruments required to be delivered
pursuant to Sections 4.02 and 4.03, together with (i) a copy
of the executed Launch Services Agreement (which Launch
Services Agreement may be disclosed to the Lenders), (ii) a
list showing (x) the country in which it intends to be
Licensed, on and after the Conversion Date, (y) each country
in which it intends to receive a substantial portion of its
Project revenues, on and after the Conversion Date, and (z)
each country in which any item described in Section 4.02(i)
is located, or is reasonably expected to be located on and
after the Conversion Date and (iii) such other information as
AEF may request for purposes of demonstrating the Customer's
compliance or prospective compliance with the conditions set
forth therein.
(e) CONVERSION COMMITMENT DATE. On the Conversion Commitment
Date, which date shall be L minus (-) eighty-five (85) days
with respect to the then scheduled Launch of the Satellite,
PROVIDED that such date shall not in any event be earlier
than sixty-five (65) days after the Conversion Request Date:
(i) AEF shall, in its discretion, determine which
Customer Category will be applicable to the Customer
in accordance with the criteria set forth in ANNEXES
1, 2 AND 3;
(ii) AEF shall, in its discretion, determine whether the
applicable Conversion Conditions have been and
continue to be satisfied and whether the Tranche B
Conditions Precedent are, have been and continue, or
are expected to be, satisfied by the Customer on or
before the date that is L minus (-) fifteen (15)
days;
(iii) the Customer shall either prepay all Tranche A
Outstandings exceeding the Conversion Commitment
Amount, if any, or, at the discretion of AEF, the
-108-
<PAGE> 114
Customer shall (on terms and conditions acceptable
to AEF) grant in favor of AEF a perfected first
priority Lien (in each case created and perfected on
terms satisfactory to AEF) in cash collateral
(denominated in Dollars and held in Cash
Equivalents) or provide a letter of credit issued by
a bank acceptable to AEF that maintains a senior
secured credit rating by S&P of not less than AA- or
equivalent by any other Major Rating Agency for the
benefit of AEF on terms acceptable to AEF and in an
amount equal to the amount of Tranche A Outstandings
exceeding the Conversion Commitment Amount, PROVIDED
that any such excess amounts so secured shall be
prepaid, in any event, on or prior to the Conversion
Date;
(iv) AEF shall have delivered to the Customer the
Repayment Profile; and
(v) unless previously determined pursuant to Section
9.01, or if the applicable information not found in
the Preliminary Business Plan shall have been
modified in a material respect in the Conversion H
Business Plan, AEF shall make any determinations
with respect to additional Customer Collateral as
shall be appropriate pursuant to Section 9.03.
Notwithstanding the requirements set forth in this Section
9.02(e) with respect to the timing of the Conversion
Commitment Date, AEF shall notify the Customer as soon as
reasonably practicable after the Conversion Request Date of
the result of any determination required to be made under
this Section 9.02(e), to the extent that any such
determinations are made.
(f) CONVERSION COMMITMENT. If, on the Conversion Commitment Date
with respect to any Customer:
(i) AEF determines, in its discretion, that the
Conversion Conditions have been satisfied and the
Tranche B Conditions Precedent have been or will be
satisfied as provided in Section 4.03; and
(ii) if the Customer shall have reduced the Tranche A
Outstandings so as not to exceed the Conversion
Commitment Amount (or the Customer has provided
additional security as provided for in Section
9.02(e)(iii), as the case may be),
AEF shall provide a Conversion Commitment to the Customer,
and AEF shall deliver to the Customer an executed Conversion
Commitment Letter as confirmation of such Conversion
Commitment on a date not earlier than sixty-five (65) days
after the Conversion Request Date and not later than L minus
(-) eighty-five days. Such Conversion Commitment shall be
valid and binding for a Launch or Reflight (as the case may
be) occurring up to ninety (90) days after the then-scheduled
date of Launch PROVIDED that AEF is satisfied, in its
discretion, on the date being L minus (-) thirty (30) days
for the rescheduled Launch, that:
-109-
<PAGE> 115
(A) the applicable Conversion Conditions and Tranche B
Conditions Precedent are, or continue to be,
satisfied by the Customer; and
(B) the Tranche A Outstandings do not exceed the
Conversion Commitment Amount (or that additional
security shall have been provided in the manner
described in this Section 9.02(e)). If the Customer
fails to satisfy the applicable Conversion
Conditions and Tranche B Conditions Precedent on the
Conversion Commitment Date, AEF may, in its
discretion, permit the Customer to again present
evidence to AEF demonstrating their satisfaction at
any time until L minus (-) fifteen (15) days and if
AEF determines on such date that such conditions
have not been satisfied by such date, Conversion
shall not occur.
(g) CONVERSION DATE. On the Conversion Date, AEF shall, in its
discretion, determine whether:
(i) the Conversion Conditions and the Tranche B
Conditions Precedent continue to be satisfied by the
Customer; and
(ii) the Tranche A Outstandings do not exceed the
Conversion Commitment Amount. If AEF determines
that such conditions continue to remain satisfied on
and as of the Conversion Date with the same effect
as if made on and as of such date, and if the
Tranche A Outstandings do not exceed the Conversion
Commitment Amount, the Tranche A Loans shall convert
to the Tranche B Loan in the manner described in
Section 9.02(e) above. If AEF shall determine that
either of the above conditions has not been
satisfied, Conversion shall not occur. Upon
Conversion and for the duration of the Tranche B
Term, the additional terms set forth in ANNEX 1, 2
OR 3 (as revised, if applicable pursuant to section
9.01(d)), as applicable, shall apply to the
Customer, and the Customer shall be required to
comply therewith if AEF determines pursuant to
Section 9.02(e) above that the Customer satisfies
the requirements to be a Category 1 Customer,
Category 2 Customer or Category 3 Customer, as the
case may be.
(h) REFERENCE DATES. All documents required to be delivered by
the Customer to AEF pursuant to this Section 9.02 shall be
delivered by the Customer not more than ten (10) days prior
to, nor more than five (5) days after, the delivery dates
specified herein. In the event that following the date on
which an Appraisal, Conversion Business Plan (if applicable)
or Expert Study (if applicable) is provided to AEF pursuant
to Section 9.02(a) there shall occur any delay in the then
scheduled date of Launch of ninety (90) days or more, AEF
shall be entitled to require as a condition to Conversion
confirmation from the Customer and the Person issuing any
such Appraisal, Conversion Business Plan or Expert Study that
any such information so provided remains accurate in all
respects.
-110-
<PAGE> 116
1.093 ADDITIONAL COLLATERAL. The Customer shall be required to grant a
first priority, perfected Lien on or in the Collateral in accordance
with the terms hereof. In addition thereto:
(a) CATEGORY 1C CUSTOMER AND CATEGORY 2 CUSTOMERS. If the
Customer shall have been determined to be a Category 1C
Customer or Category 2 Customer and (i) the Satellite is to
be placed into non-geostationary orbit pursuant to the Launch
Services Agreement or (ii) the Project shall be determined by
AEF, based on the decision of the Lenders, to involve a novel
application (whether or not using novel technologies), AEF
may require that assets in addition to those set forth in the
definition of "COLLATERAL" herein that are integral to the
operation of the Satellite be included in the Collateral and,
in order for the Customer to be entitled to Conversion, such
assets shall, thereupon, be deemed to form part of the
Collateral for all purposes of this Agreement and the other
Loan Documents. Any such determination shall be made by AEF
on or before the date of the earlier to occur of (A) the
completion of the review, if any, pursuant to Section 9.01 of
any Preliminary Business Plan submitted for the Customer, if
accepted by the Customer, that contains information
determined by AEF to be sufficient for the purpose of this
Section 9.03 and (B) the Conversion Commitment Date.
(b) CATEGORY 3 CUSTOMERS. If the Customer shall have been
determined to be a Category 3 Customer, AEF may require that
assets in addition to those set forth in the definition of
"COLLATERAL" in this Agreement and directly relating to the
operation of the Satellite and any revenues derived therefrom
be included in the Collateral (but AEF may not include in
such requirement any asset readily available in the
market-place for a value of less than one million Dollars
($1,000,000) unless the Project Financing is secured by a
Lien on any such asset), and in order for the Customer to be
entitled to Conversion, such assets shall, thereupon, be
deemed to form part of the Collateral for all purposes of
this Agreement and the other Loan Documents. Any such
determination shall be made by AEF on or before the date of
the earlier to occur of (A) the completion of the review, if
any, pursuant to Section 9.01 of any Preliminary Business
Plan submitted by the Customer, if accepted by the Customer,
that contains information determined by AEF to be sufficient
for the purpose of this Section 9.03, and (B) the Conversion
Commitment Date.
1.094 SECURITY INTEREST IN COLLATERAL. No later than, and at all times
after, the Conversion Date (but subject to Section 4.03(d)), the
Customer shall grant to the Security Agent, for the benefit of AEF,
the Lenders and the associated Project Lenders in accordance with the
terms of the Intercreditor Agreement, a valid Lien in or on all of the
Customer's Collateral (except, subject to the following provisions of
this Section 9.04 in the case of Government Approvals constituting
Collateral, where such Lien cannot be created under applicable law).
Such Liens shall be first priority and perfected at all such times,
PROVIDED that if the Liens with respect to the Satellite or any
Government Approval constituting Collateral (the "SUBJECT COLLATERAL")
shall not be capable of being so perfected (or, in the case of such
Government Approvals, created)
-111-
<PAGE> 117
under applicable law after the Customer shall have taken all
reasonable steps to perfect (or, in the case of such Government
Approvals, to create) such Lien, the Customer shall take the following
additional actions with respect to security interests:
(a) if the Customer shall have been determined to be a Category 1
Customer (other than a Category 1C Customer that is not rated
by a Major Rating Agency), the Customer shall provide
whatever means to perfect a Lien as is normally constituted
by the then-present practices (as determined by AEF) of
third-party creditors intending to create perfected Liens in
assets comparable to the Subject Collateral, (as determined
by AEF), under the applicable law as of such Conversion Date
of each relevant jurisdiction, in secured satellite or
transponder financings, PROVIDED that to the extent that the
law applicable to the perfection of a security interest in
the Satellite is the law of a State of the United States of
America (and without limitation on the application of the law
of any other jurisdiction to the extent applicable), the
parties hereto recognize that the Uniform Commercial Code in
effect in such jurisdiction does not as of the Closing Date
expressly address the perfection of Liens in satellites and
agree that the Customer shall (i) provide for whatever means
to perfect a Lien in orbiting satellites as is normally
constituted by the then-present practices of third-party
creditors conducting a material lending business in the
United States of America intending to create perfected
security interests in assets comparable to the Satellite in
orbit, (ii) in the absence of such present practices, assume
that the Satellite would be classified as either a "mobile
good" or an "ordinary good" under the applicable Uniform
Commercial Code and (iii) file financing statements and
amendments thereto in the following jurisdictions: (A) the
principal place of business of the Customer or the chief
executive office of the Customer if it has more than one
place of business, (B) the jurisdiction in which the
Satellite is manufactured, (C) any jurisdictions in which the
TTC&M Facilities are or will be located, and (D) any
jurisdiction with which the Satellite or the Customer has a
substantial connection, PROVIDED that, in the case of (A),
(B), (C) and (D), such jurisdiction is located within the
United States of America, and PROVIDED FURTHER that, in the
event there is a change in applicable law that provides for
the recognition of the perfection of security interests in
orbiting satellites, the Customer shall take all actions
required or reasonably advisable under such law to create a
perfected Lien in the Satellite;
(b) if the Customer shall have been determined to be a Category
1C Customer that is not rated by a Major Rating Agency, a
Category 2 Customer or a Category 3 Customer, so long as such
Customer is a special purpose vehicle providing a perfected,
first priority pledge of the equity interests therein as
Collateral, the Customer shall provide whatever means to
perfect a Lien as is normally constituted by the then-present
practices (as determined by AEF) of third-party creditors
intending to create perfected security interests in assets
comparable to the Subject Collateral, (as determined by AEF),
under the applicable law of each relevant jurisdiction as of
the Conversion Date, in secured, non-recourse satellite or
transponder financings for borrowers similar to the Customer,
-112-
<PAGE> 118
PROVIDED that, to the extent that the law applicable to the
perfection of a security interest in the Satellite is the law
of a State of the United States of America (and without
limitation on the application of the law of any other
jurisdiction to the extent applicable), the parties hereto
recognize that the Uniform Commercial Code in effect in such
jurisdiction does not as of the Closing Date expressly
address the perfection of Liens in satellites and agree that
the Customer shall (i) provide for whatever means to perfect
a Lien in orbiting satellites as is normally constituted by
the then-present practices (as determined by AEF) of
third-party creditors conducting a material lending business
in the United States of America intending to create perfected
security interests in assets comparable to the Satellite in
orbit in secured non-recourse satellite or transponder
financings for borrowers similar to the Customer (as
determined by AEF), (ii) in the absence of such present
practices, assume that the Satellite shall be treated as
either a "mobile good" or an "ordinary good" under the
applicable Uniform Commercial Code and (iii) file financing
statements and amendments thereto in the following
jurisdictions: (A) the principal place of business of the
Customer or the chief executive office of the Customer if it
has more than one place of business, (B) the jurisdiction in
which the Satellite is manufactured, (C) any jurisdiction in
which the TTC&M Facilities are located, and (D) any
jurisdiction with which the Satellite or the Customer has a
substantial connection, PROVIDED that, in the case of (A),
(B), (C) and (D), such jurisdiction is located within the
United States of America, and PROVIDED FURTHER that, in the
event there is a change in applicable law that provides for
the recognition of the perfection of Liens in orbiting
satellites, the Customer shall take all actions required or
reasonably advisable under such law to create a perfected
Lien in the Satellite; and
(c) if the Customer shall have been determined to be a Category
1C Customer that is not rated by a Major Rating Agency, a
Category 2 Customer or a Category 3 Customer and is not a
special purpose vehicle providing a pledge of equity
interests as provided in clause (b) above, the Customer shall
provide:
(i) for a pledge of all of the equity interests in an
affiliated special purpose vehicle possessing
ownership interests in the Subject Collateral,
unless AEF shall determine based on the decision of
the Lenders that business, legal, tax or accounting
considerations with respect to such pledge would be
unduly burdensome for the Customer,
(ii) whatever means to perfect a security interest as is
normally constituted by the then-present practices
(as determined by AEF) of third-party creditors
intending to create perfected security interests in
assets comparable to the Subject Collateral (as
determined by AEF), under the applicable law of each
relevant jurisdiction as of the Conversion Date, in
secured, non-recourse satellite or transponder
financings for borrowers similar to the Customer (as
determined by AEF), PROVIDED that, to the extent
that the law applicable to the perfection of a
security interest in the Subject Collateral is the
law of a State of the United
-113-
<PAGE> 119
States of America, the parties hereto recognize that
the Uniform Commercial Code in effect in such
jurisdiction does not as of the Closing Date
expressly address the perfection of security
interests in satellites and agree that the Customer
shall (A) provide for whatever means to perfect a
Lien in orbiting satellites as is normally
constituted by the then-present practices (as
determined by AEF) of third-party creditors
conducting a material lending business in the United
States of America intending to create perfected
Liens in assets comparable to the Satellite in orbit
in secured, non-recourse satellite or transponder
financings for borrowers similar to the Customer (as
determined by AEF), (B) in the absence of such
present practices, assume that the Satellite would
be treated as a "mobile good" or an "ordinary good"
under the applicable Uniform Commercial Code and (C)
file financing statements and amendments thereto in
the following jurisdictions: (1) the principal
place of business of the Customer or the chief
executive office of the Customer if it has more than
one place of business, (2) the jurisdiction in which
the Satellite is manufactured, (3) any jurisdiction
in which the TTC&M Facilities are located, and (4)
any jurisdiction with which the Satellite or the
Customer has a substantial connection; PROVIDED
that, in the case of (1), (2), (3) and (4), such
jurisdiction is located within the United States of
America, and PROVIDED FURTHER that, in the event
there is a change in applicable law that provides
for the recognition of the perfection of security
interests in orbiting satellites, the Customer shall
take all actions required or reasonably advisable
under such law to create a perfected Lien in the
Satellite; and
(iii) such other terms and conditions to supplement this
Agreement as shall be required by AEF based on the
decision of the Lenders to be necessary to address
any credit risk posed by the businesses of the
Customer other than the Project and any Indebtedness
incurred by the Customer in connection with such
other businesses.
SECTION 10. MISCELLANEOUS
1.101 AMENDMENTS AND WAIVERS. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent with
respect to any departure by the Customer therefrom, shall be
effective unless the same shall be in writing and signed by the
Customer and AEF, and then such waiver shall be effective only in
the specific instance and for the specific purpose for which given.
1.102 NOTICES. All notices, demands, requests, waivers and other
communications provided for hereunder, whether or not specified to
be in writing, shall be in writing (including facsimile
transmission) and mailed, telecopied or delivered, if to the
Customer, to its address specified on SCHEDULE 10.02, and if to AEF,
to its address specified on SCHEDULE 10.02, or to such other address
as shall be designated by any party in a written notice to the other
party. All such notices and communications
-114-
<PAGE> 120
shall, when telecopied or mailed by overnight delivery, be effective
when transmitted (any facsimile transmission to be promptly
confirmed by the sender by telephone), delivered for overnight
delivery or transmitted by telecopier, or if delivered, upon
delivery, except that notices pursuant to Section 2 shall not be
effective until received by AEF, PROVIDED that any such notices or
communications delivered to AEF hereunder or under any other Loan
Document shall be effective only if a copy thereof shall be
delivered to AE at the address therefor determined in accordance
with the terms of the Multiparty Agreement.
1.103 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no delay
in exercising, on the part of AEF, and no course of dealing with
respect to, any right, remedy, power or privilege hereunder, shall
operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights and remedies herein
are cumulative and not exclusive of any rights or remedies provided
by law. All covenants of the Customer in this Agreement, and all
Events of Default in Section 8.01, shall be given independent
effect, even if the subject matter thereof is covered by another
clause of this Agreement.
1.104 COSTS AND EXPENSES; INDEMNIFICATION
(a) The Customer shall, whether or not the transactions
contemplated hereby shall be consummated:
(i) pay to or reimburse AEF, the Security Agent and each
Lender on demand for all reasonable costs and
expenses incurred in connection with the
negotiation, development, preparation, delivery,
administration and execution of, and any amendment,
supplement, waiver or modification to, this
Agreement, any Loan Document and any other documents
prepared in connection herewith or therewith, and
the consummation of the transactions contemplated
hereby and thereby, including (without limitation)
(A) the fees, costs and expenses of all special
counsel to AEF and all special counsel to the
Lenders, plus disbursements and travel costs and
expenses and (B) all other communication, travel and
out-of-pocket costs and expenses in connection with
the foregoing;
(ii) pay to or reimburse AEF, the Security Agent and each
Lender on demand for all costs and expenses incurred
by them in connection with (A) any Default or Event
of Default or (B) the enforcement, protection or
preservation of any rights or claims (including in
connection with any "workout" or restructuring
regarding the Loans) under this Agreement, any Loan
Document, and any such other documents, including
all fees and out-of-pocket expenses of counsel (and
the allocated cost of internal counsel) to AEF, the
Security Agent and each Lender;
-115-
<PAGE> 121
(iii) pay to or reimburse AEF on demand for all appraisal
(including the fees and disbursements of the
Appraiser), audit, search, filing and other fees
incurred or sustained by AEF in connection with the
matters referred to under subsection (i) above; and
(iv) pay to or reimburse AEF, the Security Agent and each
Lender on demand for all appraisal, audit, search
and filing fees incurred or sustained by any of them
in connection with the matters referred to under
subsection (ii) above.
(b) The Customer hereby agrees to indemnify AEF, each Lender
(including any such Lender acting in its capacity as
Modelling Lender) and the Security Agent and their respective
directors, officers, employees and agents (each such Person,
a "COVERED PERSON") from, and hold each of them harmless
against, on a net after-tax basis, any and all losses,
liabilities, claims (including, without limitation, claims
involving strict or absolute liability in tort, warranty
claims or claims based on negligence, product liability or
statutory liability, claims for libel, slander, infringement
of copyright, patent, trade secret or trademark
infringement), actions, suits, penalties, damages or expenses
(collectively, "LOSSES") incurred by any of them arising out
of or by reason of any investigation or litigation or other
proceedings (including any threatened investigation or
litigation or other proceedings) relating to any actual or
proposed use by the Customer of the proceeds of any of the
Loans or otherwise directly or indirectly arising out of or
in connection with the Project or any of the Loan Documents
or the transactions contemplated thereby or the launch of any
part of the Satellite, including the fees and disbursements
of counsel incurred in connection with any such investigation
or litigation or other proceedings, except:
(i) Losses to the extent caused by the gross negligence
or willful misconduct of such Covered Person or any
director, officer, employee, servant or agent of
such Covered Person;
(ii) Losses to the extent attributable to actions (other
than those of, or attributable to, the Customer, any
customer or Affiliate of the Customer or any
director, officer, employee, servant or agent of the
Customer) occurring after full and final compliance
by the Customer with all of the terms of the
Agreement and the other Loan Documents and the
repayment in full of the Loans; and
(iii) Losses to the extent caused by any misrepresentation
or breach of, or failure to comply with or perform,
any obligation on the part of such Covered Person
pursuant to this Agreement or any other Loan
Document.
Amounts becoming due to a Covered Person pursuant to this
Section 10.04(b) shall bear interest thereon at the Default
Rate from the date on which the same
-116-
<PAGE> 122
were due and payable until the date of payment. The
foregoing obligations on the part of the Customer shall
survive the expiration or termination of this Agreement for
any reason whatsoever.
1.105 SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns, except that the Customer
may not assign or transfer any of its rights or obligations under
this Agreement.
1.106 ASSIGNMENT
(a) AEF may, at any time, assign and delegate to one or more
Eligible Assignees all or any part of this Agreement, the
Loans or the Commitments, or any other rights or obligations
of AEF hereunder, PROVIDED that the Customer may continue to
deal solely and directly with AEF in connection with the
interests so assigned to an Eligible Assignee until (i)
written notice of such assignment, together with payment
instructions, addresses and related information with respect
to the Eligible Assignee, shall have been given to the
Customer by AEF and the Eligible Assignee and (ii) AEF and
its Eligible Assignee shall have delivered to the Customer a
commitment assignment notice and acceptance substantially in
the form of EXHIBIT B (the "ASSIGNMENT AND ACCEPTANCE").
(b) From and after the date of any such assignment, (i) the
Eligible Assignee thereunder shall be a party hereto and, to
the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance,
shall have the rights and obligations of AEF under the Loan
Documents, including all rights to indemnification and (ii)
AEF shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be
released from its obligations thereafter arising under the
Loan Documents.
(c) Immediately upon each Eligible Assignee's making its payment
under the Assignment and Acceptance, this Agreement shall be
deemed to be amended to the extent, but only to the extent,
necessary to reflect the addition of the Eligible Assignee
and the resulting adjustment of the Commitments arising
therefrom. The Commitments allocated in part to an Eligible
Assignee or to more than one Eligible Assignee shall reduce
the Commitments of AEF pro tanto.
(d) AEF may disclose from time to time any financial or other
information concerning the Customer or any of its Affiliates
or the Project that AEF has received from the Customer
pursuant to this Agreement or in connection with AEF's credit
evaluation of the Customer prior to entering into this
Agreement on a confidential basis to any Eligible Assignee or
any prospective Eligible Assignee, PROVIDED that such
Eligible Assignee or prospective Eligible
-117-
<PAGE> 123
Assignee agrees in writing with AEF to keep such information
confidential to the same extent required of AEF hereunder.
1.107 CURRENCY INDEMNITY
(a) Any amount received or recovered by AEF hereunder or under
any other Loan Document in respect of any moneys or
liabilities due, arising or incurred by the Customer to AEF
(whether as a result of any judgment or order of any court or
in the bankruptcy, reorganization, liquidation or dissolution
of the Customer or by way of damages for any breach of any
obligation to make any payment to such Person) in a currency
(the "CURRENCY OF PAYMENT") other than the currency in which
the payment should have been made pursuant to this Agreement
or such other Loan Document (the "CURRENCY OF OBLIGATION") in
whatever circumstances and for whatever reason shall only
constitute a discharge to the Customer to the extent of the
Currency of Obligation amount that such Person is able or
would have been able, on the date or dates of receipt by it
of such payment or payments in the Currency of Payment (or,
in the case of any such date that is not a Business Day, on
the next succeeding Business Day), to purchase in the foreign
exchange market of its choice with the amount or amounts so
received.
(b) If the amount of the Currency of Obligation that the Person
referred to above is so able to purchase falls short of the
amount originally due to such Person hereunder or under any
other Loan Document, the Customer shall indemnify and hold
the Person referred to above harmless against any loss or
damage arising as a result of such shortfall by paying to
such Person that amount in the Currency of Obligation
certified by such Person as necessary to so indemnify and
hold such Person harmless. This indemnity shall constitute a
separate and independent obligation from the other
obligations contained in this Agreement or any other Loan
Document, shall give rise to a separate and independent cause
of action against the Customer for the additional amount
necessary to yield the amount to make such Person whole in
terms of the Currency of Obligation, shall apply irrespective
of any indulgence granted hereunder or thereunder from time
to time, and shall continue in full force and effect
notwithstanding any judgment or order for a liquidated amount
or amounts in respect of amounts due hereunder or thereunder
or under any such judgment or order.
1.108 SET-OFF. The Customer authorizes each of AEF, the Lenders and the
Security Agent at any time and from time to time, without prior
notice to the Customer, any such notice being waived by the Customer
to the fullest extent permitted by law, (a) if an Event of Default
shall have occurred and be continuing, to set-off and apply any and
all deposits (general or special, provisional or final) at any time
held by AEF, such Lender or, as the case may be, the Security Agent
to or for the credit or the account of the Customer and other
Indebtedness at any time owing by AEF, such Lender or, as the case
may be, the Security Agent to the Customer, in each case regardless
of the currency in which such deposit or other Indebtedness is
denominated, the office
-118-
<PAGE> 124
or branch where such deposit or other Indebtedness is held or owing
and whether or not such deposit or other Indebtedness is then due,
against any and all obligations of the Customer now or hereafter
existing under this Agreement or any other Loan Document and any
Loan held by AEF, such Lender or, as the case may be, the Security
Agent to the extent that such obligations of the Customer or such
Loan is then due but irrespective of whether or not AEF shall have
made demand under this Agreement or any Loan Document and (b) if a
Default shall have occurred and be continuing, to suspend the
payment and performance of its obligations with respect to any
Indebtedness at any time owing by AEF, such Lender or the Security
Agent, as the case may be, to the Customer (including, without
limitation, the suspension of any payments with respect to any
deposits (general or special, provisional or final) at such time
held by AEF, such Lender or the Security Agent to or for the credit
or the account of the Customer). AEF agrees promptly to notify the
Customer after any such set-off and application made by AEF,
PROVIDED that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of AEF, such
Lender or, as the case may be, the Security Agent under this Section
10.08 are in addition to the other rights and remedies (including
without limitation, other rights of set-off) that AEF, such Lender
or, as the case may be, the Security Agent may have.
1.109 COUNTERPARTS. This Agreement may be executed by one or more of the
parties to this Agreement in any number of separate counterparts,
each of which, when so executed, shall be deemed an original, and
all of said counterparts taken together shall be deemed to
constitute but one and the same instrument.
10.10 SEVERABILITY. Any provision hereof that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof and without
affecting the validity or enforceability of any provision in any
other jurisdiction.
10.11 GOVERNING LAW AND JURISDICTION
(a) THE RIGHTS AND DUTIES OF THE CUSTOMER AND AEF UNDER THIS
AGREEMENT (INCLUDING MATTERS RELATING TO THE MAXIMUM INTEREST
RATE CHARGEABLE HEREUNDER) SHALL, PURSUANT TO NEW YORK
GENERAL OBLIGATIONS LAW SECTION 5-1401, BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
(b) SUBJECT TO CLAUSE (c) BELOW, ANY LEGAL ACTION OR PROCEEDING
WITH RESPECT TO THIS AGREEMENT OR THE LOAN DOCUMENTS MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE
UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW
YORK SITTING IN MANHATTAN, AND BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, EACH OF THE CUSTOMER AND AEF CONSENTS,
-119-
<PAGE> 125
FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-
EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE CUSTOMER
AND AEF IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS, THAT IT MAY NOW OR HEREAFTER HAVE TO
THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION
IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO.
THE CUSTOMER AND AEF EACH WAIVE PERSONAL SERVICE OF ANY
SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY
OTHER MEANS PERMITTED BY NEW YORK LAW OR ANY OTHER APPLICABLE
LAW. THE CUSTOMER IRREVOCABLY APPOINTS CT CORPORATION SYSTEM
AND ITS SUCCESSORS, SITUATED AT 1633 BROADWAY, NEW YORK, NEW
YORK 10019, AS ITS AGENT TO RECEIVE SERVICE OF PROCESS OR
OTHER LEGAL SUMMONS FOR PURPOSES OF ANY PROCEEDING. THE
CUSTOMER AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW.
(c) IF AND FOR SO LONG AS THERE SHALL BE ANY ECA ENHANCEMENT OR
ECA COUNTRY RISK COVERAGE PROVIDED WITH RESPECT TO THE
TRANSACTIONS CONTEMPLATED IN THIS AGREEMENT, AT THE ELECTION
OF AEF, ANY AND ALL DISPUTES ARISING OUT OF OR IN CONNECTION
WITH THIS AGREEMENT MAY BE FINALLY SETTLED UNDER THE RULES OF
ARBITRATION AND CONCILIATION OF THE INTERNATIONAL CHAMBER OF
COMMERCE (THE "RULES") BY THREE (3) ARBITRATORS APPOINTED IN
ACCORDANCE WITH THE RULES. THE PLACE OF ARBITRATION SHALL BE
AT THE INTERNATIONAL CHAMBER OF COMMERCE IN PARIS, FRANCE.
THE LANGUAGE OF ARBITRATION SHALL BE ENGLISH. NO
CONSEQUENTIAL OR PUNITIVE DAMAGES SHALL BE AWARDED IN
CONNECTION WITH ANY SUCH ARBITRATION. TO THE FULLEST EXTENT
PERMITTED BY LAW, THE CUSTOMER HEREBY IRREVOCABLY AND
GENERALLY CONSENTS IN RESPECT OF ANY SUCH ARBITRAL
PROCEEDINGS TO THE GIVING OF ANY RELIEF OR THE ISSUE OF ANY
PROCESS IN CONNECTION WITH THOSE PROCEEDINGS, INCLUDING THE
MAKING, ENFORCEMENT OR EXECUTION AGAINST ANY ASSETS
WHATSOEVER (IRRESPECTIVE OF THEIR USE OR INTENDED USE) OF ANY
ORDER OR JUDGMENT WHICH MAY BE MADE OR GIVEN IN THOSE
PROCEEDINGS. THE CUSTOMER AGREES THAT ANY FINAL AWARD
AGAINST IT IN ANY ARBITRAL PROCEEDINGS SHALL BE CONCLUSIVE
AND BINDING UPON IT
-120-
<PAGE> 126
AND MAY BE ENFORCED IN THE COURTS OF LUXEMBOURG, FRANCE OR
ANY OTHER COURTS TO THE JURISDICTION OF THE CUSTOMER AEF IS
OR MAY BE SUBJECT, BY SUIT ON THE AWARD, A CERTIFIED OR
EXEMPLIFIED COPY OF WHICH AWARD SHALL BE CONCLUSIVE EVIDENCE
THEREOF AND OF THE AMOUNT OF ITS LIABILITY, OR BY ANY OTHER
MEANS PROVIDED BY LAW.
(d) NOTHING IN THIS SECTION 10.11 SHALL AFFECT THE RIGHT OF AEF
TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW
OR AFFECT THE RIGHT OF AEF TO BRING ANY SUIT, ACTION OR
PROCEEDING AGAINST THE CUSTOMER OR THE PROPERTY OF THE
CUSTOMER IN THE COURTS OF ANY OTHER JURISDICTION.
(e) To the extent that the Customer may in any jurisdiction claim
for itself or its assets immunity from suit, execution,
attachment (whether in aid of execution, before judgment or
otherwise) or other legal process and, to the extent that in
any such jurisdiction there may be attributed to itself or
its assets such immunity whether or not claimed, the Customer
hereby irrevocably agrees not to claim, and irrevocably
waives, such immunity to the fullest extent permitted by the
laws of such jurisdiction.
10.12 WAIVER OF JURY TRIAL. THE CUSTOMER AND AEF WAIVE THEIR RESPECTIVE
RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY IN ANY
ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF
THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT
TO CONTRACT CLAIMS, TORT CLAIMS OR OTHERWISE. THE CUSTOMER AND AEF
AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A
COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE
PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY
IS WAIVED BY OPERATION OF THIS SECTION 10.12. AS TO ANY ACTION,
COUNTERCLAIM OR OTHER PROCEEDING THAT SEEKS, IN WHOLE OR IN PART, TO
CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE
OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS
WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
10.13 ENTIRE AGREEMENT. This Agreement, together with the other Loan
Documents, embodies the entire agreement and understanding between
the Customer and AEF
-121-
<PAGE> 127
and supersedes all prior or contemporaneous agreements and
understandings of such persons, verbal or written, relating to the
subject matter hereof and thereof.
10.14 CONFIDENTIALITY. AEF agrees to take normal and reasonable
precautions and exercise due care to maintain the confidentiality of
all non-public information provided to it by the Customer or any of
its Subsidiaries in connection with this Agreement, any other Loan
Document or any of the Satellite Contracts, and neither it nor any
of its Affiliates shall use any such information for any purpose or
in any manner other than pursuant to the terms contemplated by this
Agreement, except to the extent such information (a) was or becomes
generally available to the public other than as a result of a
disclosure by AEF or (b) was or becomes available on a
non-confidential basis from a source other than the Customer,
PROVIDED that such source is not bound by a confidentiality
agreement with the Customer known to AEF, and PROVIDED that AEF may
disclose such information (i) at the request of any bank regulatory
authority or in connection with an examination of AEF by any such
authority, (ii) pursuant to subpoena or other court process, (iii)
when required to do so in accordance with the provisions of any
applicable law, (iv) at the express direction of any agency of any
jurisdiction in which AEF conducts its business, (v) to AEF's
independent auditors and legal counsel, (vi) to the Security Agent,
the Lenders and the Project Lenders, (vii) to any Eligible Assignee
or prospective Eligible Assignee as provided in Section 10.06(d),
(viii) to the Lenders or any prospective assignee or participant
thereof, PROVIDED that such parties agree to keep such information
confidential to the same extent required of AEF hereunder and (ix)
to AE, to the extent AE is providing services to AEF.
10.15 HEADINGS. The headings of the various sections and subsections of
this Agreement are for convenience of reference only, do not
constitute a part hereof and shall not affect the meaning or
construction of any provision hereof.
10.16 NO THIRD PARTY BENEFICIARIES. The agreement of AEF to make the
Loans to the Customer on the terms and conditions set forth herein
are solely for the benefit of the Customer, and no other Person
(including, without limitation, any other obligor or any contractor,
subcontractor, supplier or materialman furnishing supplies, goods or
services to or for the benefit of the Project) shall have any rights
hereunder or, as against AEF, under any other Loan Document or with
respect to the Loans or the proceeds thereof.
10.17 SURVIVAL. All representations, warranties, covenants and agreements
of the Customer contained herein or made in writing in connection
herewith shall survive the making of Loans hereunder and shall
continue in full force and effect so long as any of the obligations
of the Customer hereunder are outstanding. Without limiting the
foregoing, the obligations of the Customer under Sections 2.08,
3.01, 3.02, 3.03 and 10.04 shall survive the prepayment or repayment
of the Loans and the termination of the Commitments.
10.18 LANGUAGE. Each communication and document made or delivered to AEF
pursuant to this Agreement and the other Loan Documents shall be in
the English language.
-122-
<PAGE> 128
In the event that any such communication or document is translated
into English from another language, then, in the event of any
conflict or inconsistency between the English text and the text of
such other language, the English text shall prevail.
10.19 DETERMINATIONS BY AEF. To the extent that the terms and conditions
of this Agreement provide for or contemplate determinations,
decisions, approvals or consents or any other exercise of discretion
(collectively, "DETERMINATIONS") to be made or granted by AEF (and
whether or not any such term or condition expressly so provides),
AEF shall have the right to make such Determinations in its
discretion taking into account the interests of the Lenders and may
agree with the Lenders that such Determinations may be made among
some or all of AEF, the Lenders and the Security Agent (in which
case the Customer shall be bound by such Determinations as fully as
if such Determinations were made by AEF hereunder).
-123-
<PAGE> 129
IN WITNESS WHEREOF, the parties hereto have caused this Customer Loan Agreement
to be duly executed and delivered by their proper and duly authorized
Responsible Officers as of the day and year first above written.
CD RADIO INC.
By: /s/ David Margolese
-----------------------------
Name: David Margolese
Title: Chairman and CEO
ARIANESPACE FINANCE S.A.
By: /s/ B. Vienne
-----------------------------
Name: Brigitte Vienne
Title: Le Directeur-General
-124-
<PAGE> 130
ANNEX 1
CATEGORY 1 CUSTOMER
1.111 CATEGORY 1 CUSTOMER REQUIREMENTS. In order for the Customer to be
eligible for consideration as a Category 1 Customer pursuant to
Section 9.02(e), AEF shall have determined on the Conversion
Commitment Date and the Conversion Date, in its discretion, that
each of the following conditions has been satisfied:
(a) GENERAL CRITERIA. The Customer shall have an existing
business or businesses that satisfies or that satisfy the
criteria set forth in Section 11.02 or 11.03, as determined
by AEF based on audited financial statements of the relevant
Person for the Relevant Period.
(b) CONTINUATION OF GENERAL CRITERIA. Unless the Customer shall
have been determined to be a Category 1A Customer or a
Category 1B Customer on the basis of a Credit Rating in
accordance with Section 11.02 and is not on "creditwatch" for
downgrading by a Major Rating Agency, AEF shall determine
that it knows of no event or circumstance that would prevent
such business or businesses from continuing to satisfy such
criteria through the end of the Tranche B Term.
(c) OTHER CATEGORY CRITERIA. The Customer shall satisfy, as
determined by AEF, all other criteria set forth in this ANNEX
1.
For the purposes of determining whether a Customer satisfies the
terms and criteria to be determined to be a Category 1C Customer,
AEF shall disregard any revenues earned or derived by the Customer
in any country that is not a Permitted Location therefor.
1.112 CREDITWORTHINESS. The creditworthiness of the Customer shall be
determined by AEF based on the Customer's Credit Rating by S&P (or
any local affiliate or associated agency thereof) on the Conversion
Commitment Date as set forth in the table in this Section 11.02 (or
an equivalent Credit Rating by another Major Rating Agency) (as
evidenced, in the case of any Credit Rating that is not published
and publicly available, by a certified copy of a letter from S&P (or
any local affiliate or associated agency thereof) (or such other
Major Rating Agency) notifying the Customer of such Credit Rating)
PROVIDED that, if the Customer has a Credit Rating from more than
one Major Rating Agency, the lowest such Credit Rating shall apply),
or, if not so rated by a Major Rating Agency, the Customer may be
assigned to one of the three subcategories applicable to a Category
1 Customer based on the satisfaction of each of the criteria set
forth under "Non-Rated Customer Criteria" in the table in this
Section 11.02, as determined by AEF, on the Conversion Commitment
Date PROVIDED that, if the Customer does not have a Credit Rating,
the Customer shall not be assigned to a Customer Category higher
than that applicable
<PAGE> 131
to the credit rating of the sovereign of the jurisdiction in which
the business of the Customer is primarily conducted or to which such
business is primarily related (as determined by AEF):
<TABLE>
<CAPTION>
======================================================================================================================
NON-RATED CUSTOMER CRITERIA
---------------------------------------------------------------------------------
MINIMUM MINIMUM
PRE-TAX MAXIMUM MAXIMUM CONSOLIDATED
CASH TOTAL LONG TERM NET WORTH
CUSTOMER CREDIT INTEREST DEBT TO DEBT TO (US$, IN
CATEGORY RATING COVERAGE CAPITALIZATION CAPITALIZATION MILLIONS)
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1A A- or 5 to 1 40% 30% $200
higher
1B BBB+, 3 to 1 50% 40% $175
BBB or
BBB-
1C BB+ or BB 2 to 1 60% 50% $150
=====================================================================================================================
</TABLE>
1.113 GUARANTOR. In the event that the Customer does not meet the
criteria for a Category 1 Customer set forth in Section 11.02, it
shall be deemed to be a Category 1 Customer if and so long as (a)
the obligations of the Customer hereunder are guaranteed by a Person
or Persons that meet such criteria (each, a "GUARANTOR" and,
collectively, the "GUARANTORS"), (b) such Person or Persons shall
have entered into a legal, valid, binding and enforceable,
irrevocable and unconditional written guaranty of payment in favor
of AEF, on terms and conditions satisfactory (including, without
limitation, containing reasonable representations and warranties and
covenants) to AEF, guaranteeing, so as to be primarily liable for,
all of the Customer's obligations under this Agreement and the other
Loan Documents, (c) this Agreement shall have been amended to
include reasonable conditions precedent, events of default and other
appropriate provisions relating to the Guarantor and such guaranty,
all in a manner satisfactory to AEF and (d) AEF shall have received
such corporate documentation, legal opinions and other items as it
shall have requested in connection with the foregoing.
-2-
<PAGE> 132
1.114 TERMS AND CONDITIONS. The economic terms applicable to a Category 1
Customer shall include:
<TABLE>
<CAPTION>
======================================================================================================
REQUIRED MAXIMUM TRANCHE
CUSTOMER DISTRESS MAXIMUM B TERM/AVERAGE
CUSTOMER TRANCHE B RECOVERY TOTAL LIFE
CATEGORY MARGIN VALUE ADVANCE RATE (IN YEARS)
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1A 1.00% 50% 100% 10/7
1B 1.20% 50% 85% 10/7
1C 1.50% 60% 70% 5/3
======================================================================================================
</TABLE>
If the Customer shall have been determined to be a Category 1C
Customer, a financial pro forma shall have been derived as provided
in Section 9.02(c)(i) and AEF shall have received commitments to
enter into, and drafts and copies of executed Qualified Lease
Agreements at the times and having the features referred to in
Sections 12.01(b) and 12.01(c), which Qualified Lease Agreements
shall result in a Category 1C QL Loan Life Cover Ratio of not less
than 0.65 to 1.
Notwithstanding the Customer Tranche B Margins stated above, if the
economic terms set forth in the table above in this Section 11.04
(other than the Customer Tranche B Margins) shall be applicable to
the Customer solely as a result of ECA Enhancement being procured
with respect to the Customer, as set forth in Section 2.13, the
Customer Tranche B Margin for the Customer shall be as set forth
below corresponding to the following levels of ECA Enhancement
procured:
<TABLE>
<CAPTION>
===============================================================================
ECA PERCENTAGE CUSTOMER TRANCHE B MARGIN
-------------------------------------------------------------------------------
<S> <C> <C>
GREATER THAN OR EQUAL TO 85% 1.70%
GREATER THAN OR EQUAL TO 70% 2.15%
GREATER THAN OR EQUAL TO 50% 2.60%
===============================================================================
</TABLE>
1.115 MANDATORY PREPAYMENTS FROM EXCESS CASH FLOW. If the Customer shall
have been determined to be a Category 1C Customer, the Customer
shall, on each Excess Cash Flow Prepayment Date (as defined below)
falling after the Conversion Date, prepay the Tranche B Loan in an
amount equal to the Applicable Percentage (as defined below) of
Excess Cash Flow for the Applicable Period (as defined below) ending
on or most recently ended prior to such Excess Cash Flow Prepayment
Date MINUS an amount (not less than zero) equal to the aggregate
principal amount of prepayments made pursuant to this Section 11.05
calculated by reference to Excess Cash Flow for any period falling
during such Applicable Period.
For purposes of this Section 11.05: (a) the "EXCESS CASH FLOW
PREPAYMENT DATES" means (i) the date falling 180 days after the end
of each fiscal year of the Customer
-3-
<PAGE> 133
(or, if earlier, the date that the Customer delivers year-end
financial statements pursuant to Section 6.01(a) for such fiscal
year) and (ii) each date that a Restricted Payment is made; (b)
"APPLICABLE PERIOD" means, with respect to any Excess Cash Flow
Prepayment Date, the period commencing on the first day of the
fiscal year in which such Excess Cash Flow Prepayment Date falls and
ending on the last day of the fiscal quarter of the Customer ended
on or most recently ended prior to such Excess Cash Flow Prepayment
Date, or, if such Excess Cash Flow Prepayment Date is the date
referred to in clause (i) of the definition of such term, the
fiscal year of the Customer most recently ended prior to such date;
and (c) the "APPLICABLE PERCENTAGE" for any period means the
percentage set forth below opposite the percentage of the Conversion
Amount remaining outstanding at the close of business in Paris on
the last day of such period:
Percentage of
<TABLE>
<CAPTION>
Applicable Percentage Conversion Amount
of Excess Cash Flow Outstanding
------------------- -----------
<S> <C>
100% Greater than 90%
75% Less than or equal to 90%
and greater than 80%
50% Less than or equal to 80%
and greater than 60%
25% Less than or equal to 60%
</TABLE>
If the Customer shall have been determined to be a Category 1C
Customer: (a) the Customer shall not, and shall not permit any of
its Subsidiaries to, make any Restricted Payment on any Excess Cash
Flow Prepayment Date falling on or after the Conversion Date unless
(i) the aggregate amount of all Restricted Payments by the Customer
and all of its Subsidiaries for the Applicable Period is less than
or equal to Unrestricted Excess Cash Flow for such Applicable Period
not theretofore used for any other purpose permitted by any of this
Section 11.05, or Section 6.26, 7.07, 7.14, 7.15 or 13.04 and (ii)
such Restricted Payment is not made until after the prepayment
required by the first sentence of this Section 11.05 is made in
respect of such Applicable Period and (b) the Customer shall not,
and shall not permit any of its Subsidiaries to, make Restricted
Payments in respect of any Applicable Period consisting of a full
fiscal year unless the aggregate amount of all Restricted Payments
by the Customer and all of its Subsidiaries for such fiscal year is
less than or equal to Unrestricted Excess Cash Flow for such fiscal
year not theretofore used for any other purpose permitted by any of
this Section 11.05 or Section 6.26, 7.07, 7.14, 7.15 or 13.04.
-4-
<PAGE> 134
1.116 FINANCIAL COVENANTS. If the Customer shall have been determined to
be a Category 1 Customer, then the Customer covenants and agrees
that, from and after the Conversion Date and for so long as AEF
shall have any Commitment hereunder, or any Loan or other amount
shall remain unpaid, unless AEF waives compliance in writing, the
Customer shall not:
(a) INTEREST COVERAGE RATIO. Permit its ratio of EBITDA to Total
Interest for any period of four (4) fiscal quarters of the
Customer ending on a Measuring Date to be less than:
<TABLE>
<CAPTION>
Interest
Customer Coverage
Category Ratio
-------- -----
<S> <C>
1A 4.5 to 1
1B 2.75 to 1
1C 2 to 1
</TABLE>
(b) DEBT SERVICE COVERAGE RATIO. Permit its ratio of EBITDA to
P&I Debt Service, for any period of four (4) fiscal quarters
of the Customer ending on a Measuring Date to be less than:
<TABLE>
<CAPTION>
Customer Debt Service
Category Coverage Ratio
-------- --------------
<S> <C>
1A 2.5 to 1
1B 2 to 1
1C 1.25 to 1
</TABLE>
(c) MAXIMUM LEVERAGE. Permit its Indebtedness, expressed as a
percentage of Consolidated Net Worth, to exceed on any Test
Date the percentage value set forth below opposite the
applicable Customer Category:
<TABLE>
<CAPTION>
Customer Maximum
Category Leverage
-------- --------
<S> <C>
1A 50%
1B 75%
1C 100%
</TABLE>
1.117 NO LIMITATIONS ON SUBSIDIARIES. If the Customer shall have been
determined to be a Category 1C Customer, the Customer will not
permit any of its Subsidiaries to enter into, after the date of this
Agreement, any indenture, agreement, instrument or other arrangement
that, directly or indirectly, prohibits or restrains, or has the
effect of prohibiting or restraining, or imposes materially adverse
conditions upon, the incurrence or payment of Indebtedness, the
granting of Liens, the declaration or
-5-
<PAGE> 135
payment of dividends, the making of loans, advances or other
investments or the sale, assignment, transfer or other disposition
of assets, except for any prohibition or restraint as to the
granting of Liens on, or sales, assignments, transfers or other
dispositions of, property that is (a) subject to a Lien in favor of
any other Person (except for the Customer or any of its Subsidiaries
or Affiliates) not otherwise prohibited by this Agreement or (b)
subject to a lease with any Person (except for the Customer or any
of its Subsidiaries or Affiliates) not otherwise prohibited by this
Agreement.
1.118 COMPARABLE FINANCING TRANSACTION COVENANTS. If the Customer shall
have been determined to be a Category 1 Customer and (i) is not
subject to financial covenants in any Comparable Financing
Transaction to which it is party, the financial covenants set forth
in Section 11.06 shall not apply or (ii) pursuant to any Comparable
Financing Transaction to which it is party the Customer is subject
to financial covenants not substantially similar to the financial
covenants set forth in Section 11.06, such other financial covenants
shall be deemed to be set forth in this Agreement in the place of
the financial covenants set forth in Section 11.06.
1.119 AFFIRMATIVE COVENANTS. If the Customer shall have been determined
to be a Category 1C Customer, then the Customer covenants and agrees
that, from and after the Conversion Date and for so long as AEF
shall have any Commitment hereunder, or any Loan or other amount
shall remain unpaid, unless AEF waives compliance in writing:
(a) The Customer covenants and agrees that if any Qualified Lease
Agreement is terminated by the Lessee thereunder (or
terminated as a result of the Lessee's breach or default
thereunder) or otherwise ceases to be in full force and
effect and is not replaced within thirty (30) days of the
date of such termination or other event by a Qualified Lease
Agreement of equivalent value (meaning aggregate rent as
determined below), the Customer shall, until such time as
such Qualified Lease Agreement shall be replaced, pay into an
escrow account established on terms and conditions acceptable
to AEF, an amount equal to the present value (at a discount
rate equal to the debt interest rate used in the preparation
of the then-current Business Plan) of rent that would
otherwise be payable under the terminated Qualified Lease
Agreement for the remaining lease term if a termination had
not occurred. In the event that a Qualified Lease Agreement
of equivalent value is entered into by the Customer in
substitution for the terminated Qualified Lease Agreement
after the Customer shall have made the payment into an escrow
account pursuant to the terms of the immediately preceding
sentence, and PROVIDED that no Default or Event of Default
shall have occurred and be continuing, such amount held in
escrow shall be repaid to the Customer less all costs and
expenses incurred or paid by AEF in connection with the
foregoing (including, without limitation, fees, costs and
expenses payable to the escrow agent).
(b) CERTIFICATES. The Customer shall furnish to AEF,
concurrently with the delivery of the annual financial
statements referred to in Section 6.01(a) of this
-6-
<PAGE> 136
Agreement, a certificate of a Responsible Officer of the
Customer, certifying the names and number of the lessees of
transponders or communications capacity on the Satellite,
together with the percentage of capacity leased on the
Satellite for the current fiscal year and the lease payments
made to the Customer during the immediately preceding fiscal
year and the lease payments due and payable to the Customer
during the current fiscal year.
(c) NOTICES. The Customer shall promptly notify (in writing) AEF
of the execution of any amendment or modification to, or
termination of, any Qualified Lease Agreement or waiver of
any right or grant of any consent thereunder.
-7-
<PAGE> 137
ANNEX 2
CATEGORY 2 CUSTOMER
1.121 CATEGORY 2 CUSTOMER REQUIREMENTS. In order for the Customer to be
eligible for consideration as a Category 2 Customer pursuant to
Section 9.02(e), AEF shall have determined on the Conversion
Commitment Date (except in the case of Section 12.01(c)) and the
Conversion Date, in its discretion, that each of the following
conditions has been satisfied:
(a) CONVERSION BUSINESS PLAN AND CONVERSION BASE CASE. The
Conversion Business Plan of the Customer shall have been
determined by AEF to be acceptable pursuant to Section
9.02(e), and a Conversion Base Case shall have been derived.
(b) QUALIFIED LEASE AGREEMENTS. The Customer shall have executed
or procured binding commitments to enter into (and as of L
minus (-) thirty (30) days shall have executed) Qualified
Lease Agreements with a Lessee or Lessees sufficient to meet
the Category 2 QL Loan Life Cover Ratio (for each period
referred to in the definition of such term) set forth in the
table in Section 12.02 as of the Conversion Commitment Date,
which Qualified Lease Agreements shall have the following
features:
(i) either:
(A) provisions expressly permitting, without
the consent of the Lessee, the assignment
of the agreement by the Customer to the
Security Agent as security for the
Customer's obligations under the Loan
Documents;
(B) not precluding the assignment of the
agreement by the Customer to the Security
Agent as security for the Customer's
obligations under the Loan Documents; or
(C) provisions requiring the consent of the
Lessee or counterparty to the assignment of
the agreement by the Customer to the
Security Agent as security for the
Customer's obligations under the Loan
Documents, PROVIDED that such assignment
has been consented to expressly by the
Lessee or counterparty, as the case may be;
provided that, in the cases of the foregoing clauses
(A) and (B), the Customer shall provide to the
Security Agent an acknowledgment of the Lessee or
counterparty that it has notice of the assignment by
the Customer to the Security Agent as security for
the Customer's obligations under the Loan Documents;
<PAGE> 138
(ii) does not contain provisions in the nature of
indemnities or other provisions for the payment by
the Customer of termination fees, costs or damages
(except for customary credits or refunds, not in
excess of lease payments under such agreement, for
failure to provide services);
(iii) provisions precluding the Lessee from assigning the
agreement to any Person without the consent of the
Security Agent;
(iv) the agreement shall be governed by the laws of New
York, England or such other jurisdiction as may be
acceptable to AEF;
(v) the transponder being leased is not capable of being
preempted under any circumstances or, where the
transponder is capable of being preempted at any
time before the expiry of a specified period or the
occurrence of a specified event, that period has
expired or that event has occurred (as appropriate),
PROVIDED that the transponder being leased may be
capable of being preempted (A) by a Governmental
Authority for reasons of national security and (B)
under any circumstances with respect to any
Qualified Lease Agreement if, after excluding such
Qualified Lease Agreement from the relevant
calculations, the Customer would satisfy the
conditions and covenants set forth in Sections 11.04
and 11.06 (if the Customer shall have been
determined to be a Category 1C Customer) or Sections
12.01(b)(xii), 12.02 and 12.04(b) (if the Customer
shall have been determined to be a Category 2
Customer) on a pro forma basis;
(vi) provisions stating that the Lessee shall comply in
all material respects with all applicable laws and
regulations regarding the use of the transponder(s)
(including, without limitation, the content of
transmissions into the country in which service is
received);
(vii) provisions prohibiting termination of the lease by
the Lessee except for any of the following reasons:
(A) material breach or default by the Customer
of the agreement;
(B) the Lessee's use of the transponder(s) is
impaired by reason of force majeure
affecting the Satellite for a period of not
less than thirty (30) days;
(C) the Satellite is removed from its orbital
position;
(D) there occurs a Launch Failure or, after
Launch, a Total Failure or Constructive
Total Failure in-orbit with respect to that
Satellite;
-2-
<PAGE> 139
(E) the failure of the transponder(s) to meet
the performance specifications in the
agreement (which shall reflect the
performance specifications in the Satellite
Purchase Agreement); or
(F) there occurs a Partial Failure of the
transponder assigned to the Lessee, and the
Lessee is not entitled to service from
another transponder.
(viii) provisions that all rental and other payments are
denominated in and payable in an Acceptable
Currency;
(ix) provisions requiring the Lessee to pay all amounts
payable to the Customer under the agreement directly
into the Revenue Account;
(x) no provisions restricting the Customer from
disclosing copies of the agreement to the Lenders,
AEF or the Security Agent;
(xi) the QL Weighted Average Term at the time of
determination shall be at least as long as the
Average Life of the Tranche B Loan; and
(xii) the effectiveness of the leasing arrangements
thereunder shall be subject only to the following
conditions precedent: (A) the successful launch of
such satellite, (B) the successful placement of such
satellite in a specified orbital position, (C) the
successful activation and operation of a minimum
percentage of the transponders or communications
capacity on such satellite, (D) the satisfactory
completion of all in-orbit testing of the Satellite
and (E) other reasonable and customary conditions
(including as to the posting of a cash security
deposit) that, in the determination of AEF, can be
met without undue cost, burden or delay.
(c) AEF shall have received:
(i) not later than the Conversion Commitment Date,
binding commitments to enter into the Qualified
Lease Agreements required hereunder, or
confirmations that the Qualified Lease Agreements
required hereunder have been entered into, which
commitments or confirmations shall be in English or
accompanied by a certified translation in English;
(ii) not later than L minus (-) forty-five (45) days,
substantially final drafts of the Qualified Lease
Agreements required hereunder (which may be generic
"master" forms of Qualified Lease Agreements), which
shall be in English or accompanied by a certified
translation in English; and
(iii) not later than L minus (-) thirty (30) days, copies
of the executed Qualified Lease Agreements (in a
national language of any of the countries listed in
Annex 4 hereto), which (if not in English) shall be
-3-
<PAGE> 140
accompanied by a certified translation in English or
a written confirmation in English by local counsel
acceptable to AEF that such executed Qualified Lease
Agreements are identical to the drafts thereof
furnished pursuant to the preceding clause (ii) or,
if not identical, specifying in English the
deviations therefrom.
(d) NON-SUBORDINATED INDEBTEDNESS. If the Customer shall have
any Indebtedness outstanding as of the Conversion Date that
is not Subordinated Indebtedness, the Customer's Category 2
CF Loan Life Cover Ratio shall, on the Conversion Date only,
in addition to the other requirements set forth in this ANNEX
2, be equal to or greater than the ratio set forth in Section
12.02 for the Category 2 QL Loan Life Cover Ratio
corresponding to the applicable Customer Category, PROVIDED
that this Section 12.01(c) shall not apply so long as the
Customer shall covenant to limit its senior unsecured
Indebtedness on a case-by-case basis as agreed between the
Customer and AEF based on the decision of the Lenders.
(e) OTHER CATEGORY CRITERIA. The Customer shall satisfy, as
determined by AEF, all other criteria set forth in this ANNEX
2.
1.122 TERMS AND CONDITIONS. The economic terms applicable to a Category 2
Customer shall include:
<TABLE>
<CAPTION>
===================================================================================================================================
MAXIMUM
MINIMUM TRANCHE B MINIMUM
REQUIRED MAXIMUM TERM/ CATEGORY 2 QL
DISTRESS CUSTOMER TOTAL AVERAGE LOAN LIFE
CUSTOMER RECOVERY TRANCHE B ADVANCE LIFE COVER
CATEGORY VALUE MARGIN RATE (IN YEARS) RATIO
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
2A 60% 2.50% 80% 10/7 1.5 to 1
2B 60% 3.00% 75% 8/6 1.3 to 1
===================================================================================================================================
</TABLE>
If the Customer shall enter into any Qualified Lease Agreements for
a term that is shorter than the Average Life permitted hereunder,
the Average Life shall be deemed adjusted to equal such shorter
period.
1.123 AFFIRMATIVE COVENANTS. If the Customer shall have been determined
to be a Category 2 Customer, then the Customer covenants and agrees
that, from and after the Conversion Date and for so long as AEF
shall have any Commitment hereunder, or any Loan or other amount
shall remain unpaid, unless AEF waives compliance in writing:
(a) The Customer covenants and agrees that if any Qualified Lease
Agreement is terminated by the Lessee thereunder (or
terminated as a result of the Lessee's breach or default
thereunder) or otherwise ceases to be in full force and
effect and is not replaced within thirty (30) days of the
date of such termination or
-4-
<PAGE> 141
other event by a Qualified Lease Agreement of equivalent
value (meaning aggregate rent as determined below), the
Customer shall, until such time as such Qualified Lease
Agreement shall be replaced, pay into an escrow account
established on terms and conditions acceptable to AEF, an
amount equal to the present value (at a discount rate equal
to the debt interest rate used in the preparation of the
then-current Business Plan) of rent that would otherwise be
payable under the terminated Qualified Lease Agreement for
the remaining lease term if a termination had not occurred.
In the event that a Qualified Lease Agreement of equivalent
value is entered into by the Customer in substitution for the
terminated Qualified Lease Agreement after the Customer shall
have made the payment into an escrow account pursuant to the
terms of the immediately preceding sentence, and PROVIDED
that no Default or Event of Default shall have occurred and
be continuing, such amount held in escrow shall be repaid to
the Customer less all costs and expenses incurred or paid by
AEF in connection with the foregoing (including, without
limitation, fees, costs and expenses payable to the escrow
agent).
(b) CERTIFICATES. The Customer shall furnish to AEF,
concurrently with the delivery of the annual financial
statements referred to in Section 6.01(a) of this Agreement,
a certificate of a Responsible Officer of the Customer,
certifying the names and number of the lessees of
transponders or communications capacity on the Satellite,
together with the percentage of capacity leased on the
Satellite for the current fiscal year and the lease payments
made to the Customer during the immediately preceding fiscal
year and the lease payments due and payable to the Customer
during the current fiscal year.
(c) NOTICES. The Customer shall promptly notify (in writing) AEF
of the execution of any amendment or modification to, or
termination of, any Qualified Lease Agreement or waiver of
any right or grant of any consent thereunder.
1.124 NEGATIVE COVENANTS. If the Customer shall have been determined to
be a Category 2 Customer, then the Customer covenants and agrees
that, from and after the Conversion Date and for so long as AEF
shall have any Commitment hereunder, or any Loan or other amount
shall remain unpaid, unless AEF waives compliance in writing:
(a) AMENDMENTS. The Customer shall not amend, supplement or
modify any Qualified Lease Agreement if the result would be
to amend, supplement or modify any term set forth in the
definition of Qualified Lease Agreements and such amendment,
supplementation or modification could reasonably be expected
to have a Material Adverse Effect.
(b) FINANCIAL COVENANTS. The Customer shall not:
-5-
<PAGE> 142
(i) INTEREST COVERAGE RATIO. Permit its ratio of EBITDA
to Total Interest for any period of four (4) fiscal
quarters of the Customer ending on a Measuring Date
to be less than:
<TABLE>
<S> <C>
at any time on or prior to the first
anniversary of the Conversion Date, 1.2 to 1
at any time after the first anniversary and
on or prior to the second anniversary of the
Conversion Date, and 1.5 to 1
at any time thereafter 2 to 1
</TABLE>
(ii) DEBT SERVICE COVERAGE RATIO. Permit its ratio of
EBITDA to P&I Debt Service for any period of four
(4) fiscal quarters of the Customer ending on a
Measuring Date to be less than:
<TABLE>
<S> <C>
at any time on or prior to the second
anniversary of the Conversion Date, and 1.2 to 1
at any time thereafter 1.5 to 1
</TABLE>
(iii) LEVERAGE RATIO. Permit its ratio of Indebtedness on
any Test Date to EBITDA for the period of four (4)
fiscal quarters of the Customer ended on or most
recently ended prior to such Test Date, to exceed:
<TABLE>
<S> <C>
at any time after the first anniversary
and on or prior to the second
anniversary of the Conversion Date, 5 to 1
at any time after the second anniversary
and on or prior to the third anniversary
of the Conversion Date, and 4 to 1
at any time thereafter 3 to 1
</TABLE>
(iv) TOTAL CASH FLOW TO LOAN RATIO. Permit its Category
2 CF Loan Life Cover Ratio, as of each fiscal
year-end of the Customer, commencing with the first
fiscal year-end following the Conversion Date, to be
less than 1.3 to 1.
-6-
<PAGE> 143
ANNEX 3
CATEGORY 3 CUSTOMER
1.131 CATEGORY 3 CUSTOMER REQUIREMENTS. In order for the Customer to be
eligible for consideration as a Category 3 Customer pursuant to
Section 9.02(e), AEF shall have determined on the Conversion
Commitment Date and the Conversion Date, in its discretion, that
each of the conditions set forth in either ANNEX 1 for Category 1
Customers or ANNEX 2 for Category 2 Customers has not been
satisfied. For the purposes of determining whether a Customer
satisfies the terms and criteria to be determined to be a Category 3
Customer, AEF shall disregard any revenues earned or derived by the
Customer in any country that is not a Permitted Location therefor.
1.132 TERMS AND CONDITIONS. The economic terms applicable to a Category 3
Customer shall include:
<TABLE>
<CAPTION>
=======================================================================================================================
MAXIMUM
TRANCHE B CATEGORY 3
REQUIRED DISTRESS CUSTOMER MAXIMUM TERM/ LOAN LIFE
CUSTOMER RECOVERY TRANCHE B TOTAL AVERAGE LIFE COVER
CATEGORY VALUE MARGIN ADVANCE RATE (IN YEARS) RATIO
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
3 75% 3.50% 70% 7/5 1.75 to 1
=======================================================================================================================
</TABLE>
1.133 AFFIRMATIVE COVENANTS. If the Customer shall have been determined
to be a Category 3 Customer, then the Customer covenants and agrees
that, from and after the Conversion Date and for so long as AEF
shall have any Commitment hereunder, or any Loan or other amount
shall remain unpaid, unless AEF waives compliance in writing:
(a) CERTIFICATES. The Customer shall furnish to AEF:
(i) concurrently with the delivery of the annual
financial statements referred to in Section 6.01(a),
a certificate of a Responsible Officer of the
Customer, certifying the number of the Customer's
paying subscribers (as applicable), lessees of
transponder services or users of communications
capacity (as applicable), the nature of the services
provided and the obligations related thereto
together with the revenues generated therefrom
during the immediately preceding fiscal year and the
revenues due and payable to the Customer during the
current fiscal year.
<PAGE> 144
(ii) on a quarterly basis, a certificate of a Responsible
Officer of the Customer showing in detail the
calculations supporting each statement in respect of
Section 13.05 of this Agreement.
(b) NOTICES. The Customer shall promptly notify (in writing) AEF
of the incurrence or prepayment of any Other Indebtedness for
Borrowed Money.
(c) DEBT SERVICE RESERVE. If required by AEF and the Lenders
pursuant to Section 9.01(c), the Customer shall maintain on
deposit, in an account established for such purpose,
immediately available funds in an amount not to exceed the
aggregate total amount of scheduled payments of principal of
Indebtedness of the Customer for the next six (6) consecutive
months, together with the projected aggregate total amount of
interest due and payable on such Indebtedness for such
period.
1.134 MANDATORY PREPAYMENTS FROM EXCESS CASH FLOW. If the Customer shall
have been determined to be a Category 3 Customer, the Customer
shall, on each Excess Cash Flow Prepayment Date (as defined below)
falling after the Conversion Date, prepay the Tranche B Loan in an
amount equal to the Applicable Percentage (as defined below) of
Excess Cash Flow for Applicable Period (as defined below) ending on
or most recently ended prior to such Excess Cash Flow Prepayment
Date MINUS an amount (not less than zero) equal to the aggregate
principal amount of prepayments made pursuant to this Section 13.04
calculated by reference to Excess Cash Flow for any period falling
during Applicable Period.
For purposes of this Section 13.04: (a) the "EXCESS CASH FLOW
PREPAYMENT DATES" means (i) the date falling 180 days after the end
of each fiscal year of the Customer (or, if earlier, the date that
the Customer delivers year-end financial statements pursuant to
Section 6.01(a) for such fiscal year) and (ii) each date that a
Restricted Payment is made; (b) "APPLICABLE PERIOD" means, with
respect to any Excess Cash Flow Prepayment Date, the period
commencing on the first day of the fiscal year in which such Excess
Cash Flow Prepayment Date falls and ending on the last day of the
fiscal quarter of the Customer ended on or most recently ended prior
to such Excess Cash Flow Prepayment Date, or, if such Excess Cash
Flow Prepayment Date is the date referred to in clause (i) of the
definition of such term, the fiscal year of the Customer most
recently ended prior to such date; and (c) the "APPLICABLE
PERCENTAGE" of Excess Cash Flow for any period means the percentage
set forth below opposite the percentage of the Conversion Amount
remaining outstanding at the close of business on the last day of
such period:
<TABLE>
<CAPTION>
Applicable Percentage of
Percentage Conversion Amount
---------- -----------------
<S> <C>
100% Greater than 90%
75% Less than or equal to 90% and greater than
80%
</TABLE>
-2-
<PAGE> 145
<TABLE>
<S> <C>
50% Less than or equal to 80% and greater than
60%
25% Less than or equal to 60%
</TABLE>
If the Customer shall have been determined to be a Category 3
Customer: (i) the Customer shall not, and shall not permit any of its
Subsidiaries to, make any Restricted Payment on any Excess Cash Flow
Prepayment Date falling on or after the Conversion Date unless (a) the
aggregate amount of all Restricted Payments by the Customer and all of
its Subsidiaries for the Applicable Period is less than or equal to
Unrestricted Excess Cash Flow for such Applicable Period not
theretofore used for any other purpose permitted by any of this
Section 13.04 or Section 6.26, 7.07, 7.14, 7.15 or 11.05 and (b) such
Restricted Payment is not made until after the prepayment required by
the first sentence of this Section 11.05 is made in respect of such
Applicable Period and (ii) the Customer shall not, and shall not
permit any of its Subsidiaries to, make Restricted Payments in respect
of any Applicable Period consisting of a full fiscal year unless the
aggregate amount of all Restricted Payments by the Customer and all of
its Subsidiaries for such fiscal year is less than or equal to
Unrestricted Excess Cash Flow for such fiscal year not used for any
other purpose.
1.135 FINANCIAL COVENANTS. If the Customer shall have been determined to be
a Category 3 Customer, then the Customer covenants and agrees that,
from and after the Conversion Date and for so long as AEF shall have
any Commitment hereunder, or any Loan or other amount shall remain
unpaid, unless AEF waives compliance in writing, the Customer shall
not:
-3-
<PAGE> 146
(a) INTEREST COVERAGE RATIO. Permit its ratio of EBITDA to Total
Interest for any period of four (4) fiscal quarters of the
Customer ending on a Measuring Date to be less than:
<TABLE>
<S> <C>
at any time after the first anniversary and
on or prior to the second anniversary of
the Conversion Date, 1 to 1
at any time after the second anniversary
and on or prior to the third anniversary
of the Conversion Date, 1.5 to 1
at any time after the third anniversary
and on or prior to the fourth anniversary
of the Conversion Date, 2 to 1
at any time after the fourth anniversary
and on or prior to the fifth anniversary of
the Conversion Date, and 2.5 to 1
at any time thereafter 3 to 1
</TABLE>
(b) DEBT SERVICE COVERAGE RATIO. Permit its ratio of EBITDA to
P&I Debt Service for any period of four (4) fiscal quarters
of the Customer ending on a Measuring Date to be less than:
<TABLE>
<S> <C>
at any time after the first anniversary and
on or prior to the third anniversary of the
Conversion Date, 1 to 1
at any time after the third anniversary
and on or prior to the fourth anniversary
of the Conversion Date, 1.5 to 1
at any time after the fourth anniversary
and on or prior to the fifth anniversary of
the Conversion Date, and 2 to 1
at any time thereafter 2.5 to 1
</TABLE>
-4-
<PAGE> 147
(c) LEVERAGE RATIO. Permit its ratio of Indebtedness on any Test
Date to EBITDA for the period of four (4) fiscal quarters of
the Customer ended on or most recently ended prior to such
Test Date to exceed:
<TABLE>
<S> <C>
at any time after the first anniversary and
on or prior to the second anniversary of
the Conversion Date, 6 to 1
at any time after the second anniversary
and on or prior to the third anniversary
of the Conversion Date, 5.5 to 1
at any time after the third anniversary
and on or prior to the fourth anniversary
of the Conversion Date, 5 to 1
at any time after the fourth anniversary
and on or prior to the fifth anniversary of
the Conversion Date, and 4 to 1
at any time thereafter 3 to 1
</TABLE>
1.136 ADDITIONAL COVENANTS. If the Customer shall have been determined to
be a Category 3 Customer and the Loans to such Customer shall have
Converted on the basis of a covenant limiting the ratio of debt to
equity or any other covenants established by AEF and the Lenders
pursuant to Section 9.01(c) as a condition to Conversion, then the
Customer covenants and agrees to observe and comply with any and all
such covenants which shall be incorporated into this Section 13.06 as
provided in Section 9.01(d).
-5-
<PAGE> 148
ANNEX 4
LIST OF COUNTRIES
Australia
Austria
Belgium
Canada
Denmark
Finland
France
Germany
Ireland
Italy
Japan
Luxembourg
Netherlands
New Zealand
Norway
Portugal
Singapore
Spain
Sweden
Switzerland
United Kingdom
United States of
America
<PAGE> 149
ANNEX 5
ACCEPTABLE CURRENCIES
The currencies of the following countries:
Australia
Austria
Belgium
Canada
Denmark
Finland
France
Germany
Ireland
Italy
Japan
Luxembourg
Netherlands
New Zealand
Norway
Singapore
Spain
Sweden
Switzerland
United Kingdom
United States of
America
<PAGE> 150
ANNEX 6
LIST OF PERMITTED LOCATIONS
a) Permitted Locations for all purposes
Australia
Austria
Belgium
Canada
Denmark
Finland
France
Germany
Ireland
Italy
Japan
Luxembourg
Netherlands
New Zealand
Norway
Portugal
Singapore
Spain
Sweden
Switzerland
United Kingdom
United States of America
b) Permitted Locations for the purposes of Domicile
i) Permitted Locations for the purposes of
clauses (a) and (b) of the definition of
"Domiciled"
ii) Permitted Locations for the purposes of
clause (c) of the definition of "Domiciled"
c) Permitted Locations for the purposes of Licensing
d) Permitted Locations for the purposes of receiving
revenues pursuant to Sections 4.02(h) and 4.03(f)
e) Permitted Locations for the purposes of Ground
Facilities pursuant to Section 4.02(i)
<PAGE> 151
f) Permitted Locations for the purposes of earning or
deriving revenues pursuant to Section 11.01 or 13.01
-2-
<PAGE> 152
SCHEDULE 5.03
GOVERNMENT APPROVALS
<PAGE> 153
SCHEDULE 5.05
LITIGATION
<PAGE> 154
SCHEDULE 5.10
BASE FINANCIAL STATEMENTS
<PAGE> 155
SCHEDULE 5.11
ENVIRONMENTAL CLAIMS
<PAGE> 156
SCHEDULE 5.12A
SUBSIDIARIES
<PAGE> 157
SCHEDULE 5.12B
EQUITY INVESTMENTS
<PAGE> 158
SCHEDULE 10.02
ADDRESSES FOR NOTICES
CD Radio Inc.
1001 22nd Street, N.W.
Washington, DC 10037
USA
Attention: Mr. David Margolese
Telephone: (202) 296-6192
Facsimile: (202) 296-6265
Arianespace Finance S.A.
18, rue Dicks
L-1016 Luxembourg
Telephone: 33 (0)1 6087 6235
Facsimile: 33 (0)1 6087 6488
Attention: Directeur General
with a copy to:
Arianespace S.A.
Boulevard de l'Europe - B.P. 177
91006 Evry Cedex - France
Telephone: 33 (0)1 6087 6235
Facsimile: 33 (0)1 6087 6488
Attention: Head, Financing and Risk Management
<PAGE> 159
EXHIBIT A
FORM OF NOTICE OF DRAWDOWN
From: CD RADIO INC. (the "CUSTOMER")
To: ARIANESPACE FINANCE S.A. ("AEF")
Dated:
Dear Sirs,
1. We refer to the agreement (as from time to time amended, varied,
novated or supplemented, the "CUSTOMER LOAN AGREEMENT") dated July
22, 1997, and made between the Customer as borrower and AEF as lender,
relating to Launch # 2. Terms defined, construed or used in the
Customer Loan Agreement shall have the same meaning in this notice.
2. We hereby give you notice that, pursuant to the Customer Loan
Agreement and on [insert proposed date for making Loan which shall be
no earlier than nine (9) Business Days and no later than seven (7)
Business Days after the date of this Notice of Drawdown], we wish to
borrow an amount of ________________ Dollars ($[ ]) upon the
terms and subject to the conditions contained therein.
3. The proceeds of this drawdown:
(a) are to be utilized for the purposes of capitalizing interest
or Finance Costs; or
(b) should be credited into the AE Account.
--------------------
for and on behalf of
CD RADIO INC.
<PAGE> 160
EXHIBIT B
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Customer Loan Agreement dated as of
July 22, 1997 (as modified and supplemented and in effect from time to time,
the "CUSTOMER LOAN AGREEMENT"), among between CD Radio Inc., as borrower (the
"CUSTOMER") and Arianespace Finance S.A. ("AEF"), as lender, relating to Launch
# 2. Terms defined in the Customer Loan Agreement are used herein with the
same meanings.
The Assignor named on the reverse hereof hereby sells and
assigns, without recourse, to the Assignee named on the reverse hereof, and the
Assignee hereby purchases and assumes, without recourse, from the Assignor,
effective as of the Assignment Date set forth on the reverse hereof, the
interests set forth on the reverse hereof (the "ASSIGNED INTEREST") in the
Assignor's rights and obligations under the Customer Loan Agreement, including,
without limitation, the interests set forth on the reverse hereof in the
Commitments of the Assignor on the Assignment Date and Loans owing to the
Assignor which are outstanding on the Assignment Date, but excluding accrued
interest and fees to and excluding the Assignment Date. The Assignee hereby
acknowledges receipt of a copy of the Customer Loan Agreement. From and after
the Assignment Date (i) the Assignee shall be a party to and be bound by the
provisions of the Customer Loan Agreement and have the rights and obligations
thereunder to the extent of the Assigned Interest and (ii) the Assignor shall,
to the extent of the Assigned Interest, relinquish its rights and be released
from its obligations under the Customer Loan Agreement.
This Assignment and Acceptance shall be governed by and
construed in accordance with the laws of the State of New York.
<PAGE> 161
Date of Assignment:
Legal Name of Assignor:
Legal Name of Assignee:
Assignee's Address for Notices:
Effective Date of Assignment
("ASSIGNMENT DATE"):
Percentage Assigned of
Commitment/Loans
(set forth, to at
least 8 decimals, as a
percentage of the
Amount
facility)
Commitments: $ %
Loans:
The terms set forth above and on the reverse side hereof are hereby agreed to:
[NAME OF ASSIGNOR], as Assignor
[NAME OF ASSIGNEE], as Assignee
By:
---------------------------- By:
----------------------------
Name:
Name:
Title:
Title:
<PAGE> 162
EXHIBIT C
FORM OF NOTE
FOR VALUE RECEIVED, CD RADIO INC., a company incorporated in Delaware (the
"CUSTOMER") hereby promises to pay to the order of ARIANESPACE FINANCE S.A.
("AEF") pursuant to the terms of the Customer Loan Agreement referred to below,
the principal sum [INSERT CONVERSION AMOUNT] Dollars ($[INSERT CONVERSION
AMOUNT]) (or such lesser amount as shall equal the aggregate unpaid principal
amount of the Loans made by AEF under the Customer Loan Agreement referred to
below), in lawful money of the United States of America and in immediately
available funds, on the dates and in the principal amounts provided in the
Customer Loan Agreement, and to pay interest on the unpaid principal amount of
each such Loan, in like money and funds, for the period commencing on the date
of such Loan until such Loan shall be paid in full, at the rates per annum and
on the dates provided in the Customer Loan Agreement referred to below.
This Note is the Note referred to in the Customer Loan Agreement dated as of
July 22, 1997, by and among AEF and the Customer, relating to Launch # 2 (as
amended, modified and supplemented and in effect from time to time, the
"CUSTOMER LOAN AGREEMENT"), and evidences Loans made by AEF under the Customer
Loan Agreement, the principal of and interest on such Loans being secured by
certain Security Documents. Capitalized terms used in this Note have the
respective meanings assigned to them in the Customer Loan Agreement (whether
therein or by reference to another document).
The Customer Loan Agreement provides for the acceleration of the maturity of
this Note upon the occurrence of certain events and for prepayments of Loans
upon the terms and conditions specified therein.
Except as permitted by Section 10.06 of the Customer Loan Agreement, this Note
may not be assigned by AEF to any other Person.
<PAGE> 163
THE DUTIES OF THE CUSTOMER UNDER THIS NOTE (INCLUDING MATTERS
RELATING TO THE MAXIMUM INTEREST RATE CHARGEABLE HEREUNDER)
SHALL, PURSUANT TO NEW YORK GENERAL OBLIGATIONS LAW SECTION
5-1401, BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
CD RADIO INC.
By:
--------------------------------
Name:
Title: