Customer Loan Agreement Relating to Launch #1 - CD Radio Inc. and Arianespace Finance SA
EXECUTION COPY
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ARIANESPACE CUSTOMER LOAN AGREEMENT
Dated as of July 22, 1997
between
CD RADIO INC.
and
ARIANESPACE FINANCE S.A.
Relating to Launch # 1
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TABLE OF CONTENTS
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SECTION 1. DEFINITIONS...................................................... 1
1.01 Defined Terms.................................................... 1
1.02 Other Definitional Provisions..................................... 44
SECTION 2. LOAN PROVISIONS...................................................... 45
2.01 Amounts and Terms of Commitments.................................. 45
2.02 Manner of Borrowing Tranche A Loans............................... 46
2.03 Procedure for Conversion to a Tranche B Loan...................... 47
2.04 Deconversion and Reconversion..................................... 48
2.05 Prepayments....................................................... 49
2.06 Repayment......................................................... 52
2.07 Interest.......................................................... 53
2.08 Fees.............................................................. 54
2.09 Computation of Interest and Fees.................................. 54
2.10 Payments by the Customer.......................................... 54
2.11 Security.......................................................... 55
2.12 Note.............................................................. 56
2.13 ECA Enhancement................................................... 56
2.14 ECA Additional Terms and Conditions............................... 57
SECTION 3. TAXES AND YIELD PROTECTION........................................... 57
3.01 Taxes............................................................. 57
3.02 Increased Costs and Reduction of Return........................... 61
3.03 Funding Losses.................................................... 64
3.04 Inability to Determine Rates...................................... 64
SECTION 4. CONDITIONS PRECEDENT................................................ 65
4.01 Conditions to Initial Tranche A Loan.............................. 65
4.02 Conversion Conditions............................................. 68
4.03 Tranche B Conditions Precedent.................................... 70
4.04 Conditions to All Loans........................................... 76
SECTION 5. REPRESENTATIONS AND WARRANTIES....................................... 76
5.01 Existence and Power............................................... 76
5.02 Authorizations; No Contravention.................................. 77
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5.03 Government Approvals.............................................. 77
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............................................................. 80
5.10 Financial Condition............................................... 80
5.11 Environmental Matters............................................. 81
5.12 Subsidiaries...................................................... 82
5.13 Insurance......................................................... 82
5.14 Project Compliance................................................ 82
5.15 Collateral........................................................ 82
5.16 Collateral Documents.............................................. 83
5.17 Sufficiency of Loan Documents and Satellite Contracts............. 83
5.18 Disclosure........................................................ 84
5.19 Effectiveness of Loan Documents, Satellite Contracts and
Qualified Lease Agreements........................................ 84
5.20 Employee Benefit Liabilities...................................... 84
5.21 Investment Company Act............................................ 84
SECTION 6. AFFIRMATIVE COVENANTS................................................ 85
6.01 Financial Statements.............................................. 85
6.02 Certificates; Other Information................................... 86
6.03 Notices........................................................... 87
6.04 Preservation of Existence, Etc.................................... 88
6.05 Maintenance of Assets............................................. 89
6.06 Maintenance of Insurance.......................................... 89
6.07 Payment of Obligations............................................ 95
6.08 Compliance with Laws.............................................. 96
6.09 Inspection of Property and Books and Records...................... 96
6.10 Environmental Laws................................................ 96
6.11 Use of Proceeds................................................... 97
6.12 Project Maintenance............................................... 97
6.13 Telecommunications Approvals...................................... 97
6.14 Government Approvals.............................................. 98
6.15 Rate Contracts.................................................... 98
6.16 Operational Control and Re Export................................. 98
6.17 Performance of Loan Documents..................................... 99
6.18 Performance of Satellite Contracts............................... 100
6.19 Performance of Qualified Lease Agreements........................ 100
6.20 Orbital Position. .............................................. 100
6.21 Export License................................................... 100
6.22 In-Orbit Commissioning........................................... 100
6.23 Satellite Operational Reports.................................... 101
6.24 Transponder Lease Agreements..................................... 101
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6.25 Further Assurances............................................... 101
6.26 Priorities....................................................... 102
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...................... 104
7.04 Transactions with Affiliates..................................... 105
7.05 Notice of Indebtedness........................................... 105
7.06 Lease Obligations................................................ 105
7.07 Capital Expenditures............................................. 106
7.08 Change in Structure; Consolidations and Mergers.................. 106
7.09 Accounting Changes............................................... 107
7.10 Business......................................................... 107
7.11 Military Activities.............................................. 108
7.12 Loan Documents................................................... 108
7.13 Satellite Contracts; Qualified Lease Agreements.................. 108
7.14 Loans, Deposits and Investments.................................. 110
7.15 Subordinated Indebtedness........................................ 110
SECTION 8. EVENTS OF DEFAULT................................................... 111
8.01 Events of Default................................................ 111
8.02 Remedies......................................................... 118
8.03 Rights Not Exclusive............................................. 119
SECTION 9. ADDITIONAL LOAN PROVISIONS.......................................... 119
9.01 Category 3 Preview............................................... 119
9.02 Conversion Process ............................................. 123
9.03 Additional Collateral............................................ 129
9.04 Security Interest in Collateral.................................. 129
SECTION 10. MISCELLANEOUS...................................................... 133
10.01 Amendments and Waivers........................................... 133
10.02 Notices.......................................................... 133
10.03 No Waiver; Cumulative Remedies................................... 134
10.04 Costs and Expenses; Indemnification.............................. 134
10.05 Successors and Assigns........................................... 136
10.06 Assignment....................................................... 136
10.07 Currency Indemnity............................................... 137
10.08 Set-off.......................................................... 138
10.09 Counterparts..................................................... 139
10.10 Severability..................................................... 139
10.11 GOVERNING LAW AND JURISDICTION................................... 139
10.12 WAIVER OF JURY TRIAL............................................. 141
10.13 Entire Agreement................................................. 141
10.14 Confidentiality.................................................. 141
10.15 Headings......................................................... 142
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10.16 No Third Party Beneficiaries..................................... 142
10.17 Survival......................................................... 142
10.18 Language......................................................... 142
10.19 Determinations by AEF............................................ 142
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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
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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
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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
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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.
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"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
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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
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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
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(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.
"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
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
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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;
(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;
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(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 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:
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(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).
"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")
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<PAGE> 16
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:
(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;
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<PAGE> 17
(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 equal to the lesser of (a) sixty
percent (60%) of the Launch Costs and (b) fifty-two million eight hundred
thousand Dollars ($52,800,000)).
"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.
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<PAGE> 18
"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 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.
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<PAGE> 19
"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;
(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
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<PAGE> 20
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 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;
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<PAGE> 21
(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.
"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
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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.
"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
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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 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
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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 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
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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;
(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;
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(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.
"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:
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(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 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;
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(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 # 1", 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.
"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.
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"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 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
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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:
(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
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<PAGE> 31
(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.
"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).
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"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).
"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
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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 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;
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(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 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
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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.
"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
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(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).
"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
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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 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;
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(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 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,
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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 # 1", 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.
"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.
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"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.
"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.
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"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.
"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).
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"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.
"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.
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"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.
"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.
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"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" 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.
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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.
(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
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(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 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
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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.
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).
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(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:
(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
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(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.
(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
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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.
(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.
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(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 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.
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(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
(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.
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(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/036123-44). 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 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
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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:
<TABLE>
<CAPTION>
====================================================
ECA PERCENTAGE CUSTOMER CATEGORY
----------------------------------------------------
<S> <C>
greater than or equal to 85% 1A
greater than or equal to 70% 1B
greater than or equal to 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
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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.
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
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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 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
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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 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.
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(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 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
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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 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
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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 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
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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) 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
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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 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,
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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 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
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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:
(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.
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(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 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
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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:
(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
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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.
(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
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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.
(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.
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(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 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
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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 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.
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(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).
(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
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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.
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
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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 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
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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 (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.
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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.
(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.
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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.
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.
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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 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
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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 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
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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 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:
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(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
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
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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;
(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
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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.
(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
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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 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
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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
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
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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.
(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
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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 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
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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 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.
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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.
(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
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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 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
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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;
(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
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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.
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 eighty degrees West Longitude
(80(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
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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 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
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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 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:
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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;
(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
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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 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
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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).
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
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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 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.
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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, intergovernmental 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 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.
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(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 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
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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":
(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
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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, 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
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(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 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
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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 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
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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 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
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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, 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
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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; 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;
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(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 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
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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:
(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
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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 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;
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(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.
(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:
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(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:
(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;
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(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.
(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
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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 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 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.
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(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:
(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
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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.
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
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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) 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
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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, 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
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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 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
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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 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.
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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;
(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
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(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 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
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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 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.
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(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 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.
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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, 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
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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 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
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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 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
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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. 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).
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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 & CEO
ARIANESPACE FINANCE S.A.
By: /s/B. Vienne
-----------------------
Name: Brigitte Vienne
Title: Le Directeur-General
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<PAGE> 129
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> 130
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.
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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>
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
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(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
Applicable Percentage Conversion Amount
of Excess Cash Flow Outstanding
---------------------- ---------------
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%
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.
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<PAGE> 133
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:
Interest
Customer Coverage
Category Ratio
---------- -----------
1A 4.5 to 1
1B 2.75 to 1
1C 2 to 1
(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:
Customer Debt Service
Category Coverage Ratio
---------- ----------------
1A 2.5 to 1
1B 2 to 1
1C 1.25 to 1
(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:
Customer Maximum
Category Leverage
---------- -----------
1A 50%
1B 75%
1C 100%
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
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<PAGE> 134
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
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<PAGE> 135
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.
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<PAGE> 136
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> 137
(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;
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(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
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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> 140
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> 141
(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:
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
(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:
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
(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:
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
(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> 142
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> 143
(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:
Applicable Percentage of
Percentage Conversion Amount
---------- -----------------
100% Greater than 90%
75% Less than or equal to 90% and
greater than 80%
-2-
<PAGE> 144
50% Less than or equal to 80% and greater than
60%
25% Less than or equal to 60%
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> 145
(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:
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
(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:
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
-4-
<PAGE> 146
(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:
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
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> 147
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> 148
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> 149
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> 150
f) Permitted Locations for the purposes of earning or deriving
revenues pursuant to Section 11.01 or 13.01
-2-
<PAGE> 151
SCHEDULE 5.03
GOVERNMENT APPROVALS
<PAGE> 152
SCHEDULE 5.05
LITIGATION
<PAGE> 153
SCHEDULE 5.10
BASE FINANCIAL STATEMENTS
<PAGE> 154
SCHEDULE 5.11
ENVIRONMENTAL CLAIMS
<PAGE> 155
SCHEDULE 5.12A
SUBSIDIARIES
<PAGE> 156
SCHEDULE 5.12B
EQUITY INVESTMENTS
<PAGE> 157
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> 158
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 # 1. 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> 159
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
# 1. 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> 160
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> 161
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 # 1 (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> 162
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: