EXHIBIT 2.7
REIMBURSEMENT AGREEMENT (this "Agreement"), dated as of [ ],
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between PRIMESTAR, INC., a Delaware corporation (the "Company") and
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[TIME WARNER ENTERTAINMENT COMPANY, L.P., a Delaware Limited partnership
("TWE")/ COMCAST CORPORATION, a Pennsylvania corporation ("Comcast")/XXX
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COMMUNICATIONS, INC., a Delaware corporation ("Cox")/ MEDIAONE OF
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DELAWARE, INC., a Delaware corporation ("MediaOne")] (the "Account
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Party").
WHEREAS, the parties hereto and certain other parties are parties to a
Merger and Contribution Agreement, dated as of February 6, 1998 (the
"Restructuring Agreement"), pursuant to which the Restructuring Transaction (as
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defined therein) will be consummated by the parties or their respective
affiliates.
WHEREAS, the Account Party has arranged for the issuance by [insert
bank] (the "Issuing Bank") of an Irrevocable Transferrable Letter of Credit No.
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[insert LC number], dated [ ], in the amount of [insert amount] (together
with any replacement or renewal thereof, the "Letter of Credit"). The
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beneficiary of the Letter of Credit is [GE/Loral]. The Letter of Credit was
issued pursuant to [an Addendum Regarding Letters of Credit dated as of October
18, 1996 (the "Addendum") among PRIMESTAR Partners L.P., a Delaware limited
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partnership ("PRIMESTAR"), [GE/Loral], and the other parties thereto] and
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provides collateral security for certain obligations of PRIMESTAR to the
beneficiary. The Account Party is obligated to reimburse the Issuing Bank for
any drawings made under the Letter of Credit pursuant to a reimbursement
agreement and/or other documentation between the Account Party and the Issuing
Bank (collectively, the "Reimbursement Agreement").
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WHEREAS, as a condition to the Restructuring Transaction, the Company
desires to assume all of the obligations of the Account Party under the
Reimbursement Agreement and to indemnify the Account Party for any and all
losses, claims, damages, liabilities, deficiencies, obligations, costs and
expenses (collectively, "Losses") of the Account Party relating thereto.
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NOW, THEREFORE, in consideration of the mutual promises contained herein
and other good and valuable
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consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
SECTION 1. Reimbursement Agreement. (a) The Company hereby assumes, and
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hereby convenants and agrees to satisfy and discharge in full when due, all
payment obligations of the Account Party under the Reimbursement Agreement and
the Letter of Credit, whether now existing or hereafter arising. As soon as
practicable after receipt of any demand by the Issuing Bank for payment under
the Reimbursement Agreement, or after receipt of notice of any drawing or demand
for payment under the Letter of Credit, the Account Party shall give written
notice thereof (or telephonic notice, promptly confirmed in writing) to the
Company (a "Payment Notice"), setting forth the amount of the payment due under
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the Reimbursement Agreement in respect of such event (the "Payment Amount"), the
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date and time such payment is due, and the applicable provisions of the
Reimbursement Agreement under which such payment obligation arises. Any failure
or delay by the Account Party in giving any Payment Notice hereunder shall not
excuse the Company from any obligation of the Company to the Account Party
hereunder, except to the extent that such failure or delay actually prejudices
the Company.
(b) Promptly upon receipt of any Payment Notice hereunder, the Company
shall confirm to the Account Party the Company's intention to pay the Payment
Amount in accordance with the Reimbursement Agreement. If the Company fails to
give such confirmation by (i) 5:00 p.m., New York time, on the same day that it
receives any Payment Notice, if such Payment Notice is received by 11:00 a.m.,
New York time, on a business day, or (ii) 5:00 p.m., New York time, on the next
business day, if such Payment Notice is received after 11:00 a.m., New York
time, or on a day that is not a business day, or if, having given such
confirmation, the Company fails to make such payment by the later of (x) the
date such payment was due under the Reimbursement Agreement and (y) the second
business day after the date of such confirmation, then the Account Party shall
have the right (but not the obligation) to pay the Payment Amount, (or any
portion thereof) in accordance with the Reimbursement Agreement, and, in such
event, the Company shall reimburse the Account Party for any amounts so paid,
plus interest thereon at an annual rate equal to the rate per annum from time to
time announced in New York City by The Bank of New York as its prime lending
rate, plus 2%. The Account Party shall not otherwise make any payment under the
Reimbursement Agreement without the consent of the Company, which shall not
unreasonably be withheld or delayed.
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(c) The Account Party shall not consent to any modification or amendment of
the Reimbursement Agreement without the prior written consent of the Company,
which shall not unreasonably be withheld or delayed.
SECTION 2. Indemnification. (a) The Company hereby agrees to indemnify and
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hold harmless, to the fullest extent permitted by law, the Account Party and its
officers, directors, employees and agents, and each person who controls any of
the foregoing persons (each, an "Indemnified Party"), from and against any and
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all losses arising out of or relating to (i) any breach by the Company of its
obligations under Section 1 hereof, or (ii) any claim, action, suit or
proceeding by the Issuing Bank or any other third party (a "Claim") in
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connection with the Reimbursement Agreement or the Letter of Credit. The Company
will reimburse each such Indemnified Party for all legal or other expenses
reasonably incurred by such Indemnified Party in connection with investigating
or defending any Claims as they become due, including, subject to the last
sentence of Section 2(b), below, any amounts paid in settlement of a claim.
(b) Promptly after the receipt by any Indemnified Party of notice of any
Claim that is subject to indemnification hereunder, such Indemnified Party shall
give reasonable written notice to the Company. The Indemnified Party shall be
entitled, at the sole expense and liability of the Company, to exercise full
control of the defense, compromise or settlement of any such Claim unless the
Company, within a reasonable time after the giving of such notice by the
Indemnified Party, shall (i) acknowledge in writing to the Indemnified Party the
Company's liability to the Indemnified Party for such Claim under the terms of
this Section 2, (ii) notify the Indemnified Party in writing of the Company's
intention to assume the defense thereof, and (iii) retain legal counsel
reasonably satisfactory to the Indemnified Party to conduct the defense of such
Claim. The Indemnified Party shall cooperate with the Company in assuring the
defense, compromise or settlement of any such Claim in accordance herewith in
any manner that the Company may reasonably request. If the Company so assumes
the defense of any such Claim, the Indemnified Party shall have the right to
employ separate counsel and to participate in (but not control) the defense,
compromise, or settlement thereof, but the fees and expenses of such counsel
shall be the expense of the Indemnified Party unless (i) the Company has agreed
to pay such fees and expenses, (ii) any relief other than the payment of money
damages is sought against the Indemnified Party, or (iii) the Indemnified Party
shall
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have been advised by its counsel that there may be one or more legal defenses
available to it that are different from or additional to those available to the
Company, and in any such case the fees and expenses of such separate counsel
shall be borne by the Company. The Company shall not settle or compromise any
such claim in which any relief other than the payment of money damages is sought
against any Indemnified Party unless the Indemnified Party consents in writing
to such compromise or settlement. No Indemnified Party shall settle or
compromise any claim for which it is entitled to indemnification hereunder
without the prior written consent of the Company, unless the Company shall have
failed, after reasonable notice thereof, to undertake control of such Claim in
the manner provided above in this Section 2.
(c) As a condition to asserting any rights under this Section 2, each
Indemnified Party must appoint [TWE/ Comcast/ Cox/ MediaOne] as its sole agent
for all matters relating to any claim hereunder.
SECTION 3. No Offset. The due payment and performance in full of the
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Company's obligations to the Account Party hereunder shall be without regard to
any counterclaim, right of offset or any other claim whatsoever that the Company
may now or hereafter have against the Account Party or any other person, and no
such counterclaim or offset shall be asserted by the Company in any action, suit
or proceeding instituted by the Account Party or any other Indemnified Party for
payment of the Company's obligations under this Agreement or otherwise.
SECTION 4. Entire Agreement; No Third-Party Beneficiaries. This
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Agreement, the Restructuring Agreement, the Merger Agreements, the Asset
Transfer Agreements, the US West Guarantee, the Xxxxxx Letter, the Stockholders
Agreement, the Registration Rights Agreement, the Xxxxxxxx Voting Agreement, the
Voting Agreements, the Tax Sharing Agreement, the TSAT Merger Agreement, the
TSAT Stockholders Agreement, the Drop Down Agreement and the TSAT Tempo
Agreement (each as defined in the Restructuring Agreement) (a) constitute the
entire agreement and understanding between the parties relating to the subject
matter hereof and supersede all prior agreements and understandings between the
parties with respect thereto and (b) except for the provisions of Section 2, are
not intended to confer upon any person other than the parties hereto any rights
or remedies.
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SECTION 5. No Waiver. No waiver by either party hereto of any term or
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condition of this Agreement, in any one or more instances, shall operate as a
waiver of such term or condition at any other time.
SECTION 6. Notices. Any notice or other communication that is
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required or that may be given in connection with this Agreement shall be in
writing and shall be delivered personally, telecopied or sent by Federal Express
or similar courier service, postage prepaid, and shall be deemed given when so
received if delivered personally or by telecopy or, if mailed, seven (7)
calendar days after the date of the mailing (three (3) calendar days in the case
of express mail, Federal Express, or similar courier service), as follows:
If to the Account Party:
[ ]
with a copy to:
[ ]
If to the Company:
Primestar, Inc.
0000 Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: President
with a copy to:
Xxxxx & Xxxxx, LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention of Xxxx X. Leaf, Esq.
A party may change its address for the purposes of this Agreement by
giving the other party written notice of its new address in the manner set forth
above. Notice of change of address shall be effective upon receipt thereof.
SECTION 7. Amendment. This Agreement may not be amended except by an
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instrument in writing signed on behalf of each of the parties.
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SECTION 8. Assignment. Neither this Agreement nor any of the
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rights, interests or obligations under this Agreement shall be assigned, in
whole or in part, by operation of law or otherwise by any of the parties without
the prior written consent of the other party. Any purported assignment without
such consent shall be void. Subject to the preceding sentences, this Agreement
will be binding upon, inure to the benefit of, and be enforceable by, the
parties and their respective successors and assigns.
SECTION 9. Governing Law. This Agreement and the legal relations
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between the parties hereto shall be governed by and construed in accordance with
the laws of the State of New York, regardless of the laws that might otherwise
govern under applicable principles of conflicts of laws thereof.
SECTION 10. Enforcement; Exclusive Jurisdiction. (a) The parties
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hereto agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions of this
Agreement in any court of the State of New York or the State of Delaware and any
court of the United States located in the Borough of Manhattan in New York City
or the State of Delaware.
(b) With respect to any suit, action or proceeding relating to this
Agreement (collectively, a "Proceeding"), each party to this Agreement
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irrevocably:
(i) consents to and submits to the exclusive jurisdiction of the
courts of the States of New York and Delaware and any court of the United
States located in the Borough of Manhattan in New York City or the State of
Delaware;
(ii) waives any objection which such party may have at any time to the
laying of venue of any Proceeding brought in any such court, waives any
claim that such Proceeding has been brought in an inconvenient forum and
further waives the right to object, with respect to such Proceeding, that
such court does not have jurisdiction over such party; and
(iii) consents to the service of process at the address set forth for
notices in Section 6 herein; provided that such manner of service of process
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shall
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not preclude the service of process in any other manner permitted under
applicable law.
SECTION 11. Severability. If any term or other provision of this
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Agreement is invalid, illegal or incapable of being enforced by any rule or law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that transactions contemplated hereby are fulfilled to the extent possible.
SECTION 12. Descriptive Headings. The headings in this Agreement are
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for reference purposes only and do not form part of this Agreement, nor shall
such headings in any way affect the meaning or interpretation of any provisions
herein.
SECTION 13. Counterparts. This Agreement may be executed in one or
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more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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SECTION 14. Subordination. Each of [TWE/ Comcast/ Cox/ MediaOne] and
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the Company, for itself, its successors and assigns, covenants and agrees that
all payment obligations of the Company to [TWE/ Comcast/ Cox/ MediaOne]
hereunder are and shall be subordinated in right of payment to the prior payment
in full of all indebtedness of the Company, whether now existing or hereafter
arising, to any financial institution (a "Senior Lender") to which the Company
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may from time to time be indebted for borrowed money, including principal,
accrued interest and any other amounts with respect thereto (the "Senior Debt").
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In that connection, [TWE/ Comcast/ Cox/ MediaOne] hereby agrees to execute and
deliver any and all agreements regarding the subordination of the Company's
payment obligations hereunder to the Senior Debt as may from time to time be
reasonably requested by the Senior Lender.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the day and year first above written.
PRIMESTAR, INC.
By:
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Name:
Title:
[_]
By:
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Name:
Title:
