EXHIBIT 4.1
THIS AMENDING AGREEMENT ("Agreement") is made on the 6th day of March, 2003
BETWEEN:
(1) GILAT SATELLITE NETWORKS LTD. (under a stay of proceedings), a limited
liability company organised and existing under the laws of the State of
Israel (the "BORROWER");
(2) BANK HAPOALIM B.M., a banking corporation incorporated in the State of
Israel (the "LENDER");
RECITALS
WHEREAS, On December 29, 2000 the Borrower borrowed $108,000,000 from the
Lender pursuant to the Facility Agreement as defined below;
WHEREAS, the Facility Agreement was subsequently revised as follows:
(1) On August 12, 2002 to amend the Interest Period as stated therein
(see EXHIBIT A).
(2) On February 24, 2002 to provide limitations on the creation of
security interests and certain commitments for financial
covenants (see EXHIBIT B).
(3) On July 8, 2002, to provide for the payment of periodical
interest of $1,524,312, the partial payment of $ 6,000,000 on
account of the principal and the additional partial repayment of
principal by a new short term loan in the sum of $12,000,000,
with a due date of September 15, 2002, that was later extended to
January 2, 2003 (see EXHIBIT C).
WHEREAS, on October 15 2002, the Borrower, having failed to meet an
interest payment of $7,437,500 to the Noteholders, commenced the
Section 350 Proceedings with the consent of the Creditors in the
District Court in Tel Aviv, which were followed by a Section 304
Proceeding in the U.S. Bankruptcy Court in the State of Delaware,
all culminating in a stay of proceedings against the Borrower in
the State of Israel and the United States of America;
WHEREAS, pursuant to and conditioned upon a court sanctioned arrangement
among certain creditors of the Borrower, as fully described in
the Proxy Solicitation, AS DEFINED BELOW, the Borrower and the
Lender have agreed to amend the Facility Agreement to state as
provided in this Agreement, starting the Effective Date as
defined below;
WHEREAS, the Borrower is expected to emerge from the Israeli Section 350
Proceedings with a reduction of and /or modifications to the
terms of its indebtedness to the Creditors, as set forth in the
Proxy Solicitation;
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WHEREAS, the Borrower is expected to receive the final order from the U.S.
Bankruptcy Court implementing and giving effect in the United
States, under section 304 of the U.S Bankruptcy Code, to the
Arrangement;
WHEREAS, on May 31, 2001 StarBand filed a voluntary petition under Chapter
11 with the US Bankruptcy Court in Delaware, and at the time of
execution of this Agreement, StarBand is still under the
protection of the court in the Chapter 11 proceedings with
unclear prospects of emerging from these proceedings;
WHEREAS, The Proxy Solicitation document fairly described the
capitalization, consolidated financial information, analysis of
results of operation and financial condition, recent business
development, risk factors, management and certain tax
considerations, - of the Borrower and its subsidiaries as of
January 6, 2003, excluding the financial information which is as
of September 30, 2002, and other than the description of other
events specifically stated in this Agreement, no material event
has come to the attention of the management of the Borrower as of
such date, which event has not been disclosed in writing to the
Lender; and
WHEREAS, the parties wish to amend the Facility Agreement as provided
herein;
IT IS AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
In this Agreement, the following terms shall have the following meanings:
ADVANCE The principal amount borrowed by the
Borrower under the Facility Agreement. The
parties acknowledge that the Advance in the
total amount of $108,000,000 was drawn on
the Drawdown Date.
ADDITIONAL COLLATERAL The PARI PASSU first priority (a) charge on
all issued and outstanding shares of
Spacenet and (b) floating charge on all the
assets of the Borrower.
ADDITIONAL PLEDGE The pledge agreement concerning the PARI
AGREEMENT PASSU first priority charge of all issued
and outstanding shares of Spacenet.
AGREEMENT This Agreement.
APPLICABLE LAW (a) any constitution, treaty, statute,
code, law, regulation, ordinance,
rule, judgement, rule of law,
official order, judicial order,
writ, decree, request, approval,
concession, grant, franchise,
licence, directive, guideline,
policy, standard, plan,
requirement, or other governmental
restriction; and
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(b) any similar form of decision of, or
determination by, or any
interpretation or administration of
any of the foregoing (whether or
not having the force of law) of any
Governmental Authority,
whether in effect as of the date hereof or
thereafter and in each case as amended,
re-enacted or replaced.
ARRANGEMENT The Means the arrangement among the
Creditors and the Borrower, as described in
the Proxy Solicitation and as approved by
the Creditors at the Creditors meetings
dated February 5, 2003.
BUSINESS DAY Means (i) any day that is not a Saturday, a
Sunday or a day on which commercial banks in
New York or Tel Aviv are required or
authorised to be closed and (ii) when used
in any respect relating to LIBOR, any day
described in clause (i) of this definition
that is also a day on which dealings may be
carried out in the London inter-bank market.
CAPITAL GUIDELINE any law, rule, regulation, policy, guideline
or directive (whether or not having the
force of law and whether or not the failure
to comply therewith would be unlawful) (i)
regarding capital adequacy, capital ratios,
capital requirements, the calculation of a
bank's capital or similar matters, or (ii)
affecting the amount of capital required to
be obtained or maintained by the Lender or
any Person controlling the Lender or the
manner in which the Lender or any Person
controlling the Lender allocate capital to
any of their contingent liabilities
(including letters of credit), advances,
acceptances, commitments, assets or
liabilities,
CAPITAL STOCK Means any and all shares, interests,
warrants, options or other equivalents
(however designated) of capital stock of a
corporation or any and all equivalent
ownership interests in a Person (other than
a corporation).
CHAPTER 11 Chapter 11 of Title 11 of the U.S Bankruptcy
Code.
COLLATERAL The Pledged Collateral, as defined in the
Pledge Agreement and the Additional
Collateral.
CONDITIONS PRECEDENT The conditions set forth in Section 3.1
below.
COURT The Tel Aviv District Court.
CREDITOR each of the following: the Noteholders, the
Lender, the Israeli Discount Bank Ltd., and
Bank Leumi Le-Israel B.M., collectively
called "Creditors".
DEBENTURE the document creating the first priority
PARI PASSU floating charge on all the assets
of the Borrower in favour of the Lender,
dated the date hereof.
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DRAWDOWN DATE December 29, 2000, the date on which the
Borrower drewdown the Advance.
DOLLAR, US DOLLAR OR $ Freely transferable lawful currency for the
time being of the United States or any
successor currency.
EFFECTIVE DATE three (3) business days following the day on
which all Conditions Precedent are fulfilled
but no later than March 31 2003, or any
later date mutually agreed upon in advance
and in writing by the Lender and the
Borrower.
ENVIRONMENTAL ACTION Any complaint, summons, citation, notice,
directive, order, claim, litigation,
investigation, judicial or administrative
proceeding, judgment, letter or other
written communication from any Governmental
Authority or any third party involving
violations of Environmental Laws or Releases
of Hazardous Materials:
(a) from any assets, properties or
businesses of the Borrower,
Spacenet or any predecessor in
interest;
(b) from or onto any adjoining
properties or businesses; or
(c) from or onto any facilities which
received Hazardous Materials
generated by the Borrower, Spacenet
or any predecessor in interest.
ENVIRONMENTAL LAWS All Applicable Laws concerning health,
safety, biodiversity, Hazardous Materials or
matters related to pollution or protection
of the environment.
EVENT OF DEFAULT Any of the events set out in Section 16
(Events of Default) of this Agreement.
FACILITY The Dollar term loan facility granted by the
Lender to the Borrower under the Facility
Agreement.
FACILITY AGREEMENT The agreement between the Lender and
Borrower dated December 28, 2000 creating a
US Dollar denominated loan facility of a
principal amount of up to $108,000,000
including all amendments thereto as set
forth in the Recitals above.
FINAL MATURITY DATE July 2, 2012, or such earlier date on which
all obligations of the Borrower shall become
due and payable (whether by acceleration or
otherwise) in accordance with the terms of
this Agreement.
GAAP Generally accepted accounting principles of
a designated country, consistently applied.
GOVERNMENTAL AUTHORITY Any government, governmental department,
ministry, cabinet, commission, board,
bureau, agency, tribunal, regulatory
authority, instrumentality, judicial,
legislative or administrative body or
entity, domestic or foreign, federal,
national, state, regional, provincial or
local, having or exercising jurisdiction
over the matter or matters in question.
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HAZARDOUS MATERIALS Any natural or artificial substance or
emission (whether in solid or liquid form or
in the form of a gas or vapour and whether
alone or in combination with any other
substance) which is:
(a) capable of causing harm to man or
any other living organism or
damaging the environment or public
health or welfare including but not
limited to any controlled, special,
hazardous, toxic, radioactive or
dangerous waste;
(b) defined as or included in the
definition of "hazardous
substances", "hazardous waste",
"restricted hazardous waste",
"toxic substance", "toxic
pollutant", "contaminant" or
"pollutant" or words of similar
import under any Applicable Law; or
(c) with respect to which any handling,
transportation, disposal or release
into the environment or any human
exposure is prohibited, limited or
otherwise regulated by any
Governmental Authority by reason of
its hazardous nature.
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INDEBTEDNESS Any indebtedness in respect of:
(a) moneys borrowed or debit balances
at banks and other financial
institutions;
(b) any charge, bond, note, loan stock
or other security;
(c) any acceptance or documentary
credit;
(d) receivables sold or discounted
(otherwise than on a non-recourse
basis);
(e) the acquisition cost of any asset
to the extent payable before or
after the time of acquisition or
possession by the party liable
where the advance or deferred
payment is arranged primarily as a
method of raising finance or
financing the acquisition of that
asset;
(f) any lease entered into primarily as
a method of raising finance or
converting fixed assets into liquid
assets;
(g) any currency swap or interest rate
swap, cap or collar arrangement or
any other derivative or hedging
instrument;
(h) any amount raised under any other
transaction having the commercial
effect of a borrowing or raising of
money;
(i) any guarantee, indemnity or similar
assurance against financial loss of
any Person; or
(j) the available amount of all letters
of credit issued for the account of
any Person, other than letters of
credit issued in connection with
trade transactions issued in the
ordinary course of business.
INDENTURE The indenture to be executed, prior to the
Effective Date, between the Trustee and the
Borrower governing the New Notes.
INTEREST PAYMENT The last day of each Interest Period.
DATES
INTEREST PERIOD As determined in accordance with
Section 6.3 (Interest Periods) or, with
respect to interest at the Post-Default
Rate, Section 6.4 (Default Interest).
LIBOR For any Interest Period the rate of interest
per six months loans equal to:
(a) the rate (rounded upwards, if
necessary, to the nearest 1/16th of
one percent) which is the offered
rate at or about 11:00am London
time two (2) Business Days prior to
the commencement of such Interest
Period for Dollar deposits
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for a period equal to such Interest
Period which appears on the page
"LIBOR 01" on the Reuters Monitor
Money Rates Service (or such other
page or service as may replace it)
and, in the absence of any such
replacement page or service, such
other page of such other service as
the Lender and the Borrower may
agree; or
(b) if no such rate appears on such
Reuters page or the Lender
determines that no rate for a
period of comparable duration to
the relevant Interest Period
appears on such Reuters page or the
Lender determines that no such
Reuters page or service is
available at the relevant time, the
arithmetic mean (rounded upwards,
if necessary, to the nearest 1/16th
of one percent) of the rates per
annum as supplied to the Lender at
its request, quoted by three
reference banks selected by the
Lender to leading banks in the
London interbank market in the
ordinary course of business, at or
about 11:00am London time two (2)
Business Days prior to the
commencement of such Interest
Period for the offering of Dollar
deposits to the Lender in an amount
comparable to the amount upon which
interest is accruing, and for a
period comparable to such Interest
Period for delivery on the first
day of that Interest Period.
LIBOR OVERNIGHT RATE as of any date, for any Interest Period in
respect of interest at the Post-Default Rate
pursuant to Section 6.4 (Default Interest),
the rate per annum, equal to:
(a) the rate (rounded upwards if
necessary, to 1/16th of one
percent) which is the offered rate
at or about 11.00 am London time
two (2) Business Days prior to the
commencement of such Interest
Period for Dollar deposits for a
period equal to one day which
appears on the page "RMEY" on the
Reuters Monitor Money Rates Service
(or such other page or service as
may replace it) and, in the absence
of any such replacement page or
service, such other page of such
other service as the Lender and the
Borrower may agree; or
(b) if no such rate appears on such
Reuters page or the Lender
determines that no rate for a
period of one day appears on such
Reuters page or the Lender
determines that no such Reuters
page or service is available at the
relevant time, the arithmetic mean
(rounded upwards, if necessary, to
the nearest 1/16th of one percent)
of the rates per annum as supplied
to the Lender at its request,
quoted by three reference banks
selected by the Lender to leading
banks in the London interbank
market in the ordinary course of
business, at or about 11:00am
London time two (2) Business Days
prior to the commencement of such
day for the offering of Dollar
deposits to the Lender in an amount
comparable to the amount upon which
interest is accruing, and for a
period equal to one day.
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MATERIAL ADVERSE Any effect or event, other than the events
EFFECT indicated in the Chapter 11 proceedings with
regard to Starband, the Section 350
Proceedings, the Section 304 Proceedings and
in the information set forth in EXHIBIT D,
which is materially adverse or materially
prejudicial to:
(a) the business, properties,
operations, prospects or condition
(financial or otherwise) of the
Borrower, Spacenet, or Starband;
(b) the ability of the Borrower,
Spacenet or Starband to perform its
obligations hereunder or under any
other Revised Transaction Document
to which it is a party;
(c) the validity, perfection or
priority of a Security Interest
arising under the Revised
Transaction Documents; or
(d) the rights, powers and remedies of
the Lender under this Agreement or
any other Revised Transaction
Document or the legality, validity
or enforceability of this Agreement
or any other Revised Transaction
Document.
NEW NOTES 4% Convertible Notes of the Borrower due
2012 to be issued to the Noteholders and the
Lender following the approval of the
Arrangement by the Court.
NEW NOTEHOLDERS The holders of New Notes.
NOTEHOLDERS The holders of the 4.25% Convertible
Subordinated Notes due 2005 that were
issued by the Borrower.
OBLIGATIONS Each of:
(a) the obligations of the Borrower to
pay, as and when due and payable
(by scheduled maturity or
otherwise), all amounts from time
to time owing by it in respect of
any Revised Transaction Document to
which it is a party, whether for
principal, interest (including,
without limitation, all interest
that accrues after the commencement
of any case, proceeding or other
action relating to bankruptcy,
insolvency or reorganization of the
Borrower, whether or not a claim
for post-filing interest is allowed
in such proceeding), fees,
commissions, expense
reimbursements, indemnifications or
otherwise, and
(b) the obligations of the Borrower to
perform or observe all of its other
obligations from time to time
existing under any Revised
Transaction Document to which it is
a party.
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OPTION The Stock Purchase Option granted by
Spacenet in favour of the Lender or any of
its wholly owned subsidiaries on December
28, 2000.
ORDINARY SHARES The ordinary shares, par value NIS 0.01 each
of the Borrower.
ORIGINAL LOAN AMOUNT The original $108,000,000 lent to the
Borrower on the Drawdown Date.
OTHER BANKS Bank Leumi Le-Israel B.M. and the Israel
Discount Bank Ltd.
OUTSTANDING BALANCE Means at any given time, the
Principal decreased by any Principal
Instalment Amounts paid to the Lender and
increased by any accrued and unpaid
interest.
PARTIAL PAYMENT (FIRST) The First Partial Repayment shall mean the
repayment of $6,000,000 on account of the
principal of the Original Loan Amount along
with $1,524,312 of interest as per the
amendment to the Facility Agreement dated
July 8, 2002.
PARTIAL PAYMENT (SECOND) The Second Partial Payment shall mean the
conversion of $30,600,000 of the Original
Loan Amount by the issuance to the Lender of
18,488,590 Ordinary Shares and $5,100,000
principal amount of New Notes, effected on
the date hereof.
PERMITTED SECURITY INTERESTS Any of the following:
(a) with respect to Spacenet, any
Security Interest created by
Spacenet over the Collateral
pursuant to the Pledge Agreement;
(b) with respect to the Borrower, any
Security Interests created by the
Borrower with regard to the
Additional Collateral pursuant to
the Additional Pledge Agreement;
(c) with respect to the Borrower, the
Debenture and the first priority
floating charge to be created in
favour of the Lender and the Other
Banks, pursuant to the Arrangement
and the second priority floating
charge to be created in favour of
the Noteholders pursuant to the
Arrangement;
(d) with respect to any other Person,
any Security Interest set forth in
EXHIBIT E.
(e) the Security Interests created by
the Borrower with respect to land
and building forming part of Parcel
No. 108 of Block 6640 and any
proceeds received from the sale
thereof, regardless to the date on
which such Security Interests will
be officially registered;
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(f) any Security Interests created by
the Borrower over future
uncollected book debts and
receivables up to an aggregate
amount of US$15,000,000 with
respect to goods and services to be
provided by the Borrower in the
ordinary course of business to bona
fide customers (i.e. - upon the
condition that such debts and
receivables are incurred after the
Effective Date); provided that (i)
provided that such Security
Interests are granted only to banks
or similar financial institutions
as security for credit facilities
(including then provision of
guarantees for the account of the
Borrower) the purpose of such
credit facilities being to
facilitate the same transaction on
account of which such uncollected
book debts and receivable are
payable, and (ii) such uncollected
book debts and receivables over
which Security Interests are
granted as aforesaid constitute no
more than 50% of the purchase price
which the Borrower, acting
reasonably and prudently, assesses
as being payable in respect of the
goods and services provided or to
be provided by the Borrower within
the framework of the aforesaid
transaction;
(g) any Security Interests created by
the Borrower over an asset which
secures Indebtedness incurred for
the purpose of financing the
acquisition of that asset, provided
that the amount of Indebtedness so
secured does not exceed the cost of
that acquisition and that any such
Security Interest shall attach to
the relevant asset
contemporaneously with the
acquisition of such asset;
(h) any Security Interests created by
the Borrower arising solely by
operating of law, in order to
secure the payment of Taxes,
provided that the liability for the
payment of such Taxes is incurred
in the normal course of business
and such Taxes are either not due
and payable or are being contested
in good faith and with respect to
which, in either case, adequate
reserves are being maintained;
(i) any Security Interests created by
the Borrower in favor of the
Lender; or
(j) any Security Interest to be created
by the Borrower with the prior
written consent of the Lender.
PERMITTED INDEBTEDNESS Any Indebtedness consented to
or to be consented to by the Lender pursuant
to this Agreement which ranks either PARI
PASSU with or after (such that it is
subordinated to) the Indebtedness created
hereunder.
PERSON an individual, corporation, limited
liability company, partnership, association,
joint-stock company, trust, unincorporated
organization, joint venture or Governmental
Authority.
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PLEDGE AGREEMENT The pledge agreement between Spacenet and
the Lender dated on December 28, 2000.
PLEDGED STOCK -- STARBAND The Pledged Stock as defined in the Pledge
Agreement.
PLEDGED SHARES - SPACENET The Pledged Shares as defined in the
Additional Pledge Agreement.
POST DEFAULT RATE LIBOR Overnight Rate plus 5% per annum.
POTENTIAL EVENT OF DEFAULT Any event which may become an Event of
Default, whether as a result of the passage
of time, the giving of notice or the
fulfilment of any other condition.
POWERS As defined in the Pledge Agreement and /or
in the Additional Pledge Agreement.
PRINCIPAL $71,400,000.
PRINCIPAL INSTALLMENT AMOUNT Each Principal Installment Amount, as set
forth in the Amortization Table attached as
EXHIBIT F to be paid in each Principal
payment date.
PRINCIPAL PAYMENT Each of the dates on which Principal shall
be repaid as set forth in the DATE
Amortization Table attached as EXHIBIT F.
PROXY SOLICITATION The proxy solicitation document dated
January 6, 2003 distributed by the Borrower
to its Creditors describing the proposed
Arrangement and setting up dates for
Noteholders meetings for the purpose of
approving the Arrangement.
REGISTRATION RIGHTS Means the Registration Rights Agreement
dated 15 February 2000 between AGREEMENT
Microsoft G-Holdings Inc., Microsoft
Corporation, StarBand and Spacenet.
RELEASE Any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting,
escaping, leaching, seeping, migrating,
dumping, or disposing of any Hazardous
Material (including the abandonment or
discarding of barrels, containers, and other
closed receptacles containing any Hazardous
Material) into the indoor or outdoor
environment, including ambient air, soil,
surface or ground water.
REMEDIAL ACTION All actions taken to:
(a) monitor, assess, evaluate,
investigate, clean up, remove,
treat, remediate or contain or in
any way address Hazardous Materials
in the indoor or outdoor
environment,
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(b) prevent, mitigate or minimize any
Release or threatened Release so
that the Release or threatened
Release does not mitigate or
endanger or threaten to endanger
public health or welfare or the
environment; or
(c) perform pre-remedial investigations
and studies, and post remedial
operation and maintenance
activities.
REPAYMENT INSTALMENT An amount of Principal, to be
repaid to the Lender on each Principal
Payment Date, in accordance with EXHIBIT F.
REVISED TRANSACTION DOCUMENTS Each of the following:
(a) This Agreement;
(b) The Pledge Agreement;
(c) The Additional Pledge Agreement;
(d) The Debenture;
(e) the Option; and
(f) The Registration Rights Agreement.
SECTION 350 PROCEEDINGS All legal proceedings under Section 350 of
the Israeli Companies Law, 1999 in
Bankruptcy Case No. 1994/02 at the Court.
SECTION 304 PROCEEDINGS All legal proceedings in the Bankruptcy
Court in Delaware that are ancillary to the
Section 350 Proceedings.
SECURITY INTEREST Any mortgage, deed, deposit arrangement,
pledge, claim, lien (statutory or other),
charge, encumbrance, conditional sale, title
retention, preferential right, priority,
trust arrangement, assignment, hypothecation
or security interest or any other agreement
or arrangement having the effect of
conferring security.
SECURITY INTEREST SHARING The agreement among the Lender and the Other
Banks with regard to the AGREEMENT
Additional Collateral.
SPACENET Spacenet Inc., a corporation duly organised
and existing under the laws of the State of
Delaware and a wholly-owned subsidiary of
the Borrower.
STARBAND Starband Communications Inc., a corporation
duly organised and existing under the laws
of the State of Delaware.
STOCKHOLDERS' AGREEMENT as defined in the Pledge Agreement.
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SUBSIDIARY as to any Person, any corporation of which
more than 50% of the outstanding Capital
Stock having (in the absence of
contingencies) ordinary voting power to
elect directors (or Persons performing
similar functions) of such corporation is,
at the time of determination, owned
directly, or indirectly through one or more
intermediaries, by such Person.
TAX Taxes, documentary taxes, stamp taxes, value
added taxes, transaction taxes, cash reserve
obligations, withholding taxes, registration
and other similar taxes), withholdings,
levies, imposts, duties, charges, compulsory
loans, fees, assessments, surcharges,
deductions, other compulsory payments and
similar charges of whatever nature and
howsoever arising that are now or at any
time hereinafter imposed, assessed, charged,
levied, collected, demanded, withheld or
claimed, by the State of Israel, the United
States of America, any other applicable
jurisdiction or any Governmental Authority
thereof or therein (including any penalty or
interest or other liabilities payable in
connection with any of the foregoing).
TRUSTEE The Bank of New York.
1.2 In this Agreement, words and defined terms denoting the singular
number include the plural and vice versa and the use of any gender
shall be applicable to all genders.
1.3 The recitals, schedules, appendices, annexes and exhibits to this
Agreement form an integral part hereof.
1.4 Section headings used in this Agreement are for the sake of
convenience only and shall not affect the interpretation hereof.
1.5 Unless otherwise indicated herein, all references to time of day
refer to Tel Aviv time on such day. For purposes of the
computation of a period of time from a specified date to a later
specified date, the word "from" means "from and including" and the
words "to" and "until" each means "to but excluding", provided,
however, that with respect to a computation of fees or interest
payable to the Lender, such period shall in any event consist of
at least one full day.
1.6 All accounting terms not specifically defined herein shall, in
relation to any Person, be construed in accordance with generally
accepted accounting principles and practices, consistently
applied, in conformity with those used in the preparation of such
Person's financial statements except as otherwise provided herein.
All financial calculations to be made hereunder shall be made in
accordance with generally accepted financial practices.
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1.7 All references in any Revised Transaction Document to clauses,
sections, articles, schedules, annexes and exhibits are to
clauses, sections, articles, schedules and exhibits in or to such
Revised Transaction Document unless otherwise specified therein.
The words "hereof," "herein" and "hereunder" and words of similar
import when used in a Revised Transaction Document shall refer to
such Revised Transaction Document as a whole and not to any
particular provision of such Revised Transaction Document.
1.8 References in any Revised Transaction Document to any statute,
decree or regulation shall be construed as a reference to such
statute, law, decree or regulation as re-enacted, redesignated,
amended or extended from time to time and references in any
Transaction Document to any document or agreement shall be deemed
to include references to such document or agreement as amended,
varied, supplemented or replaced from time to time.
1.9 References to any representation by any Person or by any officer
thereof being to the best of such Person's knowledge shall be
deemed to be the best of such Person's knowledge after due
inquiry.
1.10 If any amount to be determined or measured pursuant to any of the
Revised Transaction Documents relates to a transaction in a
currency other than Dollars, such determination shall be made by
converting such currency by reference to the buying spot market
rate of exchange on the date of such transaction.
1.11 Any reference in this Agreement to a "month" or a period of one or
more "months" means a period beginning in one calendar month and
ending in the following calendar month on the day numerically
corresponding to the day of the calendar month in which such
period started, provided that if such period started on the last
day in a calendar month, or if there is no such numerically
corresponding day, such period shall end on the last day in the
following calendar month (and "month" shall be construed
accordingly).
1.A. With effect from the Effective Date, the Facility Agreement shall
be amended and restated so it shall be replaced by this Agreement
(including its annexes, exhibits and schedules), and for avoidance
of doubt, this Agreement shall supersede the Facility Agreement
and shall constitute the definitive and binding version of the
Facility Agreement, as amended and revised by this Agreement.
2. FACILITY
2.1 FACILITY
Subject to the terms of the Facility Agreement, the Lender
advanced the Original Loan Amount to the Borrower on December 29,
2000. There is no further commitment to lend money to the
Borrower. As of the Effective Date, the parties agree and
acknowledge that the Principal is $71,400,000 (seventy one million
and four hundred thousands U.S. dollars), subject to Section 6.3
(a) below.
2.2 AVAILABILITY PERIOD
Not Applicable.
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2.3 DRAWDOWN
Not Applicable.
2.4 DRAWDOWN REQUEST
Not Applicable
2.5 PURPOSE
The Principal shall be used for general corporate purposes.
3. CONDITIONS PRECEDENT
3.1 CONDITIONS PRECEDENT
The entrance of this Agreement into effect, including the
agreement of the Lender to accept the Second Partial Payment is
subject to (A) the procurement of the approval by the Court of the
Arrangement as voted for by the Lender in the Creditors meeting
and subject to the terms thereof by no later than March 31, 2003,
and (B) the fulfilment, on or before the Effective Date, of each
of the following conditions precedent, to the satisfaction of the
Lender, unless waived in accordance with the provisions of Section
3.2 (Waiver):
(a) The Borrower shall have paid all fees, costs, expenses,
taxes and duties then payable by the Borrower pursuant to
this Agreement.
(b) The presentation for its approval PRIOR TO EXECUTION of the
Indenture and other pertinent agreements concerning the New
Notes.
(c) The representations and warranties of the Borrower
contained in Section 14 (Representations and Warranties) of
this Agreement and in any other Revised Transaction
Document, certificate or instrument delivered to the Lender
pursuant hereto shall be correct.
(d) The execution of this Agreement shall not contravene any
Applicable Law.
(e) The Lender shall have received the following, each in form
and substance reasonably satisfactory to the Lender and,
unless indicated otherwise:
(i) a copy of the Indenture, duly executed by Borrower;
(ii) the Additional Pledge Agreement and the Debenture,
duly executed by Borrower;
(iii) all certificates representing the Spacenet Pledged
Shares together with the Powers and, appropriate
pledge notice, duly executed by Borrower, for filing
with the Companies Registrar, or in such office or
offices as may be necessary or, in the reasonable
opinion of the Lender, desirable to perfect the
Security Interests purported to be created by the
additional Pledge Agreement;
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(iv) a copy of the resolutions adopted by the Board of
Directors of the Borrower, certified by authorised
officers thereof authorising (x) the transactions
contemplated hereby, and (y) the execution, delivery
and performance by the Borrower of each Revised
Transaction Document to which it is a party and the
execution and delivery of the other documents to be
delivered by the Borrower in connection herewith and
therewith, unless authorised previously;
(v) a certificate or resolution of an authorised officer
of the Borrower, certifying the names and true
signatures of the officers of the Borrower,
authorised to sign each Revised Transaction Document
to which the Borrower will be a party and the other
documents to be executed and delivered by the
Borrower in connection herewith, together with
evidence of the incumbency of such authorised
officers, unless certified previously;
(vi) a copy of the certificate of incorporation,
memorandum and articles of association or other
constitutional documents of the Borrower and
Spacenet certified by an authorised officer of the
Borrower and Spacenet, as appropriate;
(vii) an opinion of Gross, Kleinhendler, Hodak, Halevy,
Xxxxxxxxx & Co., special counsel to the Borrower, in
form and substance reasonably satisfactory to the
Lender;
(viii) an opinion of Xxxxxxx & Sterling, special counsel to
the Borrower on matters affecting U.S. law which are
relevant to the effectiveness of this Agreement;
(ix) a certificate of the chief executive officer or the
chief financial officer of the Borrower, certifying
that Borrower owns all the issued and outstanding
shares of Common Stock of Spacenet, together with
written confirmation from Ernst & Young or the
Borrower's legal counsel that such shares of
Spacenet constitute 100% of the issued and
outstanding Capital Stock of Spacenet.
(x) a certificate from the appropriate official of the
State of Delaware certifying as to the existence in
good standing of and the payment of taxes by,
Spacenet in such state; and
(xi) such other agreements, instruments, approvals,
opinions and other documents as the Lender may
reasonably request.
(f) All proceedings in connection with the transactions
contemplated by this Agreement, and all documents
incidental thereto, shall be satisfactory to the Lender and
its special counsel, and the Lender and such special
counsel shall have received all such information and such
counterpart originals or certified or other copies of such
documents as the Lender or such special counsel may
reasonably request.
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(g) All necessary permits, consents, approvals or licences
required from any Governmental Authority for the execution
of this Agreement or the consummation of the transactions
contemplated hereby shall have been received and shall be
in full force and effect.
(h) The Lender shall have determined, in its sole judgment,
that no event having a Material Adverse Effect shall have
occurred from the date of the Proxy Solicitation up to the
Effective Date.
(j) All necessary permits, consents, approvals or licences if
and to the extent required from the U.S. Securities and
Exchange Commission ("SEC") and NASDAQ would have been
received allowing for free tradability of the Ordinary
Shares and New Notes issued to the Lender under the
Arrangement, subject only to the limitations on sales of
securities imposed on "affiliates" of an issuer.
3.2 WAIVER
The Lender may, in its sole discretion, waive any of the
conditions precedent set out in Clause 3.1 (Conditions Precedent),
either with or without imposing any conditions thereto.
3.3 CLOSING
The closing of this Agreement shall take place at the offices of
Gross, Kleinhendler, Hodak, Halevy, Xxxxxxxxx & Co. Law Xxxxxxx, 0
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxxxxx at 10:00 a.m. Israel time, on the
Effective Date, or, if at such time any condition set forth in
Section 3.1 above has not been fulfilled or waived in accordance
with the provisions of Section 3.2 (Waiver), as soon as
practicable after all the conditions precedent set forth in
Section 3.1 above have been fulfilled or waived in accordance with
the provisions of Section 3.2 (Waiver), but not later than March
31, 2003 or on such later time as may be mutually agreed to in
advance and in writing by Lender and the Borrower.
At the closing, the following transactions shall take place
simultaneously:
(i) this Agreement will enter into effect;
(ii) the issuance by the Borrower, pursuant to the Arrangement,
of 202,083,908 Ordinary Shares to the Noteholders
(including the Lender) and additional 18,488,590 Ordinary
Shares to the Lender;
(iii) the entrance into effect of the Indenture and other
pertinent agreements concerning the New Notes;
(iv) the issuance by the Borrower of the New Notes to the
Trustee pursuant to the Arrangement; and
(v) the entrance into effect of the Debenture and the
Additional Pledge Agreement, in accordance with the terms
thereof.
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(vi) The cancellation of the 4.25% Convertible Subordinated
Notes due year 2005 of the Borrower, pursuant to the
Arrangement.
(vii) The Borrower shall deliver to the Lender: (a) appropriate
pledge notices concerning the Debenture and the Additional
Pledge Agreement, duly executed by Borrower, for filing, by
the Lender, with the Israeli Companies Registrar, within
the period provided for by Applicable Law; and (b) notice
of issuance to the Israeli Companies Registrar, with
regards to the issuance of the Ordinary Shares referred to
in sub-section 3.3 (ii) above, to be filed by the Borrower,
within the period provided for by Applicable Law, which
shall bear all applicable duties and expenses in relation
to said filing.
Provided that, none of the foregoing transactions in this Section
3.3, whether initiated by the Borrower or by any other party,
shall be deemed to have taken place, and no document or
certificate shall be deemed to have been delivered, until all such
transactions have been completed and all such documents have been
delivered.
4. REPAYMENT
The Borrower shall repay the Principal in full by equal consecutive
Repayment Instalments on Principal Payment Dates which shall coincide
starting July 2, 2005 with the Interest Payment Dates, all as set forth
in the Amortisation Table attached hereto as EXHIBIT F. Any amount of the
Principal which is repaid may not be re-borrowed.
5. PREPAYMENT
5.1 PREPAYMENT UPON EXECUTION OF THIS AGREEMENT
(a) The parties agree that the Second Partial Payment of the
Original Loan Amount shall be effective as of January 2,
2003, subject to the fulfilment of the conditions specified
above.
5.2 VOLUNTARY PREPAYMENT
(a) The Borrower may, at any time, by giving not less than 30
days' prior written notice to the Lender, prepay the
Principal, in whole or in part, without penalty or premium,
provided only that any such prepayment shall made upon an
Interest Payment Date, that it shall be made in multiples
of $500,000 each and provided further that all other sums
due and payable under this Agreement shall be paid
simultaneously with such prepayment.
(b) Any notice provided by the Borrower pursuant to this
Section 5.2 shall be irrevocable and shall specify the date
fixed for prepayment, and the aggregate of the portion of
the Principal and the interest thereon to be paid on the
prepayment date.
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5.3 MISCELLANEOUS PROVISIONS
(a) Any prepayments under this Agreement shall be made together
with accrued interest and all other amounts accrued and
payable under this Agreement and shall be applied to
instalments of Principal in the inverse order of maturity.
(b) No prepayment is permitted except in accordance with the
express terms of this Agreement.
(c) No amount prepaid under this Agreement may subsequently be
re-borrowed.
5.4 MANDATORY PREPAYMENT
All mandatory repayment shall be made upon Interest Payment Dates.
6. INTEREST
6.1 RATE OF INTEREST
The rate of interest applicable to the Outstanding Balance for
each Interest Period shall be LIBOR plus 2.5% per annum. Interest
shall accrue from and include the first day of an Interest Period,
but exclude the last day of such Interest Period.
6.2 PAYMENT OF INTEREST
(a) The Borrower shall pay interest on the Outstanding Balance
in arrears on each Interest Payment Date, and at maturity
(whether upon demand, by acceleration or otherwise).
(b) All interest shall be computed on the basis of a year of
360 days for the actual number of days, including the first
day but excluding the last day, elapsed.
6.3 INTEREST PERIODS
(a) The initial Interest Period in respect of the Outstanding
Balance shall commence on January 2, 2003 and shall end on
the numerically corresponding day (or, if there is no
numerically corresponding day, on the last day) in the
calendar month that is six (6) months thereafter.
(b) Each subsequent Interest Period shall commence on the last
day of the preceding Interest Period and ending on the
numerically corresponding day (or, if there is no
numerically corresponding day, on the last day) in the
calendar month that is six (6) months thereafter.
(c) If any Interest Period would end on a day other than a
Business Day, such Interest Period shall be extended to the
next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in
which case such Interest Period shall end on the preceding
Business Day.
(d) No Interest Period shall end on a date which is later than
the Final Maturity Date.
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(e) 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 a calendar month.
(f) The Lender, with the agreement of the Borrower, may make
such adjustments to the duration of Interest Periods.
6.4 DEFAULT INTEREST
(a) If the Borrower fails to pay any amount payable by it
hereunder, it shall forthwith on demand by the Lender pay
interest on the overdue amount from the due date up to the
date of actual payment (before and after judgement), at the
Post-Default Rate.
(b) For the purposes hereof, any amount payable by the Borrower
on demand shall be deemed overdue when a demand has been
made for the payment thereof and the amount has not been
paid.
(c) Upon the occurrence and during the continuance of an Event
of Default, the Outstanding Balance and (to the extent
permitted by law) interest and other amounts which are not
paid when due, shall bear interest until such amount is
paid in full at a fluctuating interest rate per annum equal
at all times to the Post-Default Rate.
(d) Interest at the Post-Default Rate shall be payable on
demand.
(e) Interest Periods in respect of interest at the Post-Default
Rate shall be of one (1) day's duration.
(f) Interest at the Post-Default Rate will be compounded on a
quarterly basis.
6.5 DETERMINATION BY LENDER
Each determination by the Lender of an interest rate or fees
hereunder shall be conclusive and binding for all purposes in the
absence of manifest error.
7. PAYMENTS
7.1 PLACE
All payments by the Borrower under this Agreement shall be made to
the Lender, by means of the Lender debiting the Borrower's account
with the Lender (bank account no. 156677, at branch no. 616), or
in such other manner as the Lender may notify the Borrower. The
Borrower hereby agrees and authorises the Lender to debit the said
account of all sums due and payable under this Agreement without
prior notice, provided only that the Lender shall notify the
Borrower of any such debit within 3 Business Days thereof.
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7.2 TIME OF SETTLEMENT
Payments under this Agreement to the Lender shall be made for
value by no later than 11.00 am on the due date or at such times
as the Lender may otherwise specify to the Borrower as being
customary at the time for the settlement of transactions in US
dollars.
7.3 CURRENCY OF ACCOUNT AND PAYMENT
(a) All amounts payable under this Agreement shall be paid in
Dollars and in immediately available funds.
(b) If in respect of any liability for any Obligation of the
Borrower under any of the Revised Transaction Documents the
Lender receives payment or that liability is converted into
a claim, proof, judgment or order, in either case in a
currency other than in the currency (the "CONTRACTUAL
CURRENCY") in which the amount is expressed in the relevant
document to be payable, then:
(i) the Borrower shall indemnify the Lender on demand by
the Lender against any loss or liability resulting
from the conversion;
(ii) if the amount received by the Lender, when converted
into the Contractual Currency by the Lender, is less
than the amount of the liability in the Contractual
Currency, then the Borrower shall on demand by the
Lender pay to the Lender an amount in the
Contractual Currency equal to the difference; and
(iii) the Borrower shall on demand by the Lender pay to
the Lender any exchange costs and taxes payable or
paid in connection with any conversion referred to
in this Section 7.3.
7.4 NO SET-OFF OR COUNTERCLAIM
All payments made by the Borrower under this Agreement shall be
made without defence, retention, set-off or counterclaim and free
and clear of any deductions or charges.
7.5 NON-BUSINESS DAYS
(a) If a payment under this Agreement is due on a day which is
not a Business Day, the due date for that payment shall
instead be the next Business Day in the same calendar month
(if there is one) or the preceding Business Day (if there
is not).
(b) During any extension of the due date for payment of any
Principal Instalment Amount under this Section 7.5
(Non-Business Days) interest is payable on that Principal
Instalment Amount at the rate payable on the original due
date.
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7.6 PARTIAL PAYMENTS
(a) If the Lender receives a payment insufficient to discharge
all the amounts then due and payable by the Borrower under
this Agreement, the Lender shall apply that payment towards
the Obligations of the Borrower under this Agreement in the
following order:
(i) FIRST, in or towards payment pro rata of any unpaid
fees and expenses, costs, and indemnities of the
Lender;
(ii) SECONDLY, except as set out in (iii), in payment of
all amounts of interest and, to the extent it has
not already been paid, default interest due and
payable;
(iii) THIRDLY, in payment of all amounts of Principal,
then outstanding due and payable;
(v) FOURTHLY, in or towards payment pro rata of any
other sums due but unpaid hereunder.
(b) Section 7.6 (a) above shall override any appropriation made
by the Borrower.
7.7 ACCOUNTS
The Lender shall maintain in accordance with its usual practice
accounts recording the amounts from time to time owing by the
Borrower to the Lender under this Agreement. In any legal
proceeding and otherwise for the purposes of this Agreement, the
entries made in such accounts shall, in the absence of manifest
error, constitute prima facie evidence as to the existence and
amount of the obligations of the Borrower recorded in such
accounts.
8. TAXES
8.1 GROSS-UP
All payments by the Borrower hereunder shall be made without any
deduction and free and clear of and without any deduction for or
on account of any Taxes, except to the extent that the Borrower is
required by law to make payment subject to any deduction or
withholding of any Taxes. If any Tax or amounts in respect of Tax
must be deducted, or any other deductions must be made, from any
amounts payable or paid by the Borrower, the Borrower shall pay
such additional amounts as may be necessary to ensure that the
Lender receives a net amount equal to the full amount which it
would have received had payment not been made subject to Tax
(other than Tax on the overall net income of the Lender or the
overall net income of a division or branch of the Lender) or other
deduction.
8.2 TAX RECEIPTS
All Taxes required by law to be deducted by the Borrower from any
amounts paid or payable hereunder shall be paid by the Borrower
when due and the Borrower shall, within fifteen (15) days of the
payment being made, deliver to the Lender evidence
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satisfactory to the Lender (including all relevant tax receipts)
that the payment has been duly remitted to the appropriate
authority.
8.3 TAX INDEMNITY
The Borrower will indemnify the Lender for the amount of Taxes
with respect to payments under this Agreement paid by the Lender
and any liability (including penalties, interest and expenses for
non-payment, late payment or otherwise) arising therefrom or with
respect thereto, whether or not such Taxes were correctly or
legally asserted. This indemnification shall be paid within thirty
(30) days from the date on which the Lender makes written demand,
which demand shall identify the nature and amount of Taxes for
which indemnification is being sought and the basis of the claim.
9. MARKET DISRUPTION
9.1 MARKET DISRUPTION
If by reason of changes affecting the Dollar market, the Lender is
unable, due to circumstances beyond its control, to determine the
interest rate applicable to the Outstanding Balance, or the Lender
otherwise determines that adequate and fair means do not exist for
ascertaining the applicable interest rate, then the Lender shall
promptly notify the Borrower of the fact that this Section 9
(Market Disruption) is in operation.
9.2 ALTERNATIVE BASIS FOR INTEREST
(a) If a notification under Section 9.1 (Market Disruption) is
made at any time under this Agreement, then,
notwithstanding any other provision of this Agreement,
within five (5) Business Days of receipt of the
notification, the Borrower and the Lender shall enter into
negotiations for a period of not more than thirty (30) days
with a view to agreeing on an alternative basis for
determining the rate of interest.
(b) If no alternative basis is agreed, the Lender shall certify
on or before the last day of the Interest Period to which
the notification relates, an alternative basis for
determining the rate of interest applicable to the
Principal, which shall reflect the cost to the Lender of
funding the Outstanding Balance from whatever sources the
Lender, acting in its good faith judgement, may select plus
2.5% per annum.
9.3 REVIEW
So long as any alternative basis for the ascertaining of the
interest rate or funding is in force, the Lender, in consultation
with the Borrower shall from time to time, but not less than
monthly, review whether or not the circumstances referred to in
Section 9.1 (Market Disruption) still prevail with a view to
returning to the original provisions of this Agreement. Upon any
return to the normal provisions of this Agreement, the Outstanding
Balance shall be continued for an Interest Period expiring on the
next Interest Payment Date which would have applied pursuant to
Section 6.3 (Interest Periods) if the provisions of this Section 9
(Market Disruption) had not been operating.
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10. INCREASED COSTS
10.1 INCREASED COSTS
If the Lender shall have determined that, after the date of this
Agreement, the adoption or implementation of or any change in, any
law, rule, treaty or regulation, or any policy, guideline or
directive of, or any change in the interpretation or
administration thereof by, any court, central bank or other
administrative or Governmental Authority (including relating to
taxation, or reserve asset, special deposit, cash ratio, liquidity
or capital adequacy requirements or any other form of banking or
monetary control), or compliance by the Lender or any Person
controlling the Lender with any directive of or guideline from any
central bank or other Governmental Authority or the introduction
of or change in any accounting principles applicable to the Lender
or any Person controlling the Lender (in each case, whether or not
having the force of law), shall:
(a) change the basis of taxation of payments to the Lender or
any Person controlling the Lender of any amounts payable
hereunder (except for taxes on the overall net income of
the Lender or any Person controlling the Lender);
(b) impose, modify or deem applicable any reserve, special
deposit or similar requirement against the Outstanding
Balance or against assets of or held by, or deposits with
or for the account of, or credit extended by the Lender or
any Person controlling the Lender; or
(c) impose on the Lender or any Person controlling the Lender
any other condition regarding this Agreement or the
Outstanding Balance,
and the result of any event referred to in clauses (a), (b) or (c)
above shall be: (i) to cause the Lender to incur an additional
cost as a result of its having entered into, or performing,
maintaining or funding its obligations hereunder or (ii) to reduce
any amount received or receivable by the Lender hereunder, then,
upon demand by the Lender, the Borrower shall pay to the Lender
such additional amounts as will compensate the Lender for such
increased costs or reductions in amount.
10.2 CHANGES IN CAPITAL GUIDELINES
If the Lender shall have determined that, after the date of this
Agreement, any Capital Guideline or adoption or implementation of,
or any change in, any Capital Guideline by the Governmental
Authority charged with the interpretation or administration
thereof, or compliance by the Lender or any Person controlling the
Lender with any Capital Guideline or with any request or directive
of any such Governmental Authority with respect to any Capital
Guideline, or the implementation of, or any change in, any
applicable accounting principles (in each case, whether or not
having the force of law), either:
(a) affects or would affect the amount of capital required or
expected to be maintained by the Lender or any Person
controlling the Lender, and the Lender determines that the
amount of such capital is increased as a direct or indirect
consequence of the Advance being made or maintained or
other obligations hereunder; or
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(b) has or would have the effect of reducing the rate of return
on the Lender or any such other controlling Person's
capital to a level below that which the Lender or such
controlling Person could have achieved but for such
circumstances as a consequence of the Advance made or
maintained, or the Lender's or such other controlling
Person's other obligations hereunder
(in each case, taking into consideration the Lender's or such
other controlling Person's policies with respect to capital
adequacy), then, upon demand by the Lender, the Borrower shall pay
to the Lender from time to time such additional amounts as will
compensate the Lender for such cost of maintaining such increased
capital or such reduction in the rate of return on the Lender's or
such other controlling Person's capital.
10.3 CERTIFICATE
A certificate of the Lender claiming compensation under this
Section 10 (Increased Costs) specifying the event herein above
described and the nature of such event shall be submitted by the
Lender to the Borrower, setting forth the additional amount due
and an explanation of the calculation thereof, the Lender's
reasons for invoking the provisions of this Section 10 (Increased
Costs), and shall be final and conclusive absent manifest error.
10.4 OPTIONAL PREPAYMENT
If increased costs have been and continue to be payable to the
Lender in accordance with Clause 10.1 (Increased Costs) for a
period in excess of thirty (30) days, the Borrower shall have the
right, and on last day of the current Interest Period, upon not
less than thirty (30) days' prior written notice to the Lender
(which notice shall be irrevocable and shall bind the Borrower to
make the prepayment specified below) and upon payment of all
accrued interest and amounts due under Section 5 (Prepayment) and
Section 10 (Increased Costs) on the amount to be prepaid, to
prepay all or, as the case may be, that portion of the Outstanding
Balance with respect to which the Lender informs the Borrower that
amounts are being charged under Section 10 (Increased Costs).
10.5 MITIGATION
If the Lender requests compensation under Section 10 (Increased
Costs), then the Lender shall use reasonable efforts to designate
a different lending office for booking the Outstanding Balance
hereunder or to assign its rights and obligations hereunder to
another of its offices, branches or affiliates, if in the
reasonable judgment of the Lender, such designation or assignment
(a) would eliminate or reduce amounts payable pursuant to Section
10 (Increased Costs), in the future and (b) would not subject the
Lender to an unreimbursed cost or expense and would not otherwise
be disadvantageous to the Lender. The Borrower hereby agrees to
pay all reasonable costs and expenses incurred by the Lender in
connection with any such designation or assignment.
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11. ILLEGALITY
11.1 ILLEGALITY
Notwithstanding any other provision of this Agreement, if,
subsequent to the date of this Agreement, a continuance of the
Outstanding Balance has been made:
(a) unlawful by any change made in any Applicable Law;
(b) impossible, by compliance by the Lender with any request of
a Governmental Authority (whether or not having force of
law); or
(c) impracticable as a result of a contingency occurring after
the date of this Agreement which materially and adversely
affects the London interbank dollar market,
the Borrower shall, upon notice by the Lender (but subject to the
approval of the appropriate Governmental Authorities, which the
Borrower agrees to take all reasonable steps to obtain as quickly
as possible, if such approval is then required), prepay in full
and on last day of the current Interest Period or the passage of
sixty (60) Business Days, whichever is later, unless the effect of
the Applicable Law, request or contingency requires earlier or
immediate repayment, in which case, on such earlier date or
immediately, as relevant, that portion of the Outstanding Balance
affected thereby together with all accrued interest and amounts
due under Section 10 (Increased Costs) (if any) thereon and all
amounts, if any, determined by the Lender to be payable to it
pursuant to Section 12 (Breakage) hereof.
11.2 NOTICE OF ILLEGALITY
If Section 11.1 (Illegality) is applicable, the Lender shall
forthwith so notify the Borrower, by means of a certificate which
specifies in reasonable detail the nature of such illegality or
impossibility. The Lender will use its best efforts, and will
discuss the same with the Borrower, in order to designate a
different lending office and transfer the Outstanding Balance (or
any portion thereof) thereto if such designation and transfer will
avoid the need for giving such notice and will not, in the
Lender's good faith judgment, be otherwise disadvantageous to the
Lender. If such best efforts do not result in the transfer of the
Outstanding Balance to a new lending office, then the Outstanding
Balance shall be repaid in full in accordance with Section 11.1
(Illegality).
12. BREAKAGE
12.1 INDEMNITY FOR BREAKAGE COSTS
The Borrower hereby agrees to indemnify the Lender against any
loss or expense that the Lender actually sustains or incurs as a
consequence of:
(a) any failure to make a voluntary prepayment after notice of
prepayment has been given by the Borrower;
(b) any prepayment of the Outstanding Balance required by any
provision of this Agreement;
27
(c) any payment made on a date other than the last day of the
Interest Period applicable thereto,
(d) any voluntary prepayment,
(e) any default in payment or prepayment of the Outstanding
Balance or any part thereof (including accrued interest),
as and when due and payable (at the due date thereof, by
notice of prepayment or otherwise), or
(f) the occurrence of any Event of Default.
including, in each such case, any loss or reasonable expense
sustained or incurred in liquidating or employing deposits from
third parties acquired to effect or maintain the Outstanding
Balance. Notwithstanding the above, the Borrower's liability to
indemnify the Lender pursuant to clause (d) above shall be limited
to interest differentials incurred by the Lender in liquidating or
employing deposits of or borrowings from third parties in
connection with such voluntary prepayment.
12.2 NOTIFICATION OF BREAKAGE COSTS
A certificate of the Lender setting forth in reasonable detail any
amount or amounts that the Lender is entitled to receive pursuant
to this Section 12 (Breakage) and the basis for the determination
of such amount or amounts shall be delivered to the Borrower and
shall be conclusive and binding absent manifest error.
13. FEES
The Borrower shall pay to the Lender all fees and other expenses incurred
by the Lender in connection with this Agreement. In the event the
Outstanding Balance is syndicated, pursuant to Section 25 (Assignment),
an agency fee of $10,000 per annum shall be paid from the date of
syndication and on each anniversary thereafter. All fees paid under this
Agreement are non-refundable under all circumstances.
14. REPRESENTATIONS AND WARRANTIES
The Borrower hereby represents and warrants to the Lender as follows, as
of the date of this Agreement, subject, where applicable, to the
Arrangement, the Section 350 Proceedings, the Section 304 Proceedings,
the stay of proceeding imposed thereunder and proceedings under Chapter
11 regarding StarBand:
14.1 ORGANISATION, ETC.
(a) The Borrower is a public company, duly organised, in and
validly existing under the Applicable Laws of the State of
Israel, possessing the capacity to xxx and be sued in its
own name.
(b) Spacenet is a limited liability corporation, duly
organised, in and validly existing under the Applicable
Laws of the State of Delaware possessing the capacity to
xxx and be sued in its own name.
28
(c) Each of the Borrower and Spacenet has all requisite
corporate power and authority to conduct its business as
now conducted and as presently contemplated and to
consummate the transactions contemplated by the Revised
Transaction Documents.
(d) Each of the Borrower and Spacenet is duly qualified to do
business and is in good standing in each jurisdiction in
which the character of the properties owned or leased by it
or in which the transaction of its business makes such
qualification necessary.
14.2 AUTHORISATION, ETC.
The execution, delivery and performance by the Borrower (and
Spacenet, to the extent that Spacenet is a party to such Revised
Transaction Documents) of each Revised Transaction Document (i)
has been duly authorised by all necessary corporate action, (ii)
does not contravene the memorandum or articles of association of
the Borrower or any Applicable Law or any contractual restriction
binding on or otherwise affecting it or any of its properties,
(iii) will not result in or require the creation of any Security
Interest (other than pursuant to any Revised Transaction Document)
upon or with respect to any of its properties, and (iv) will not
result in any suspension, revocation, impairment, forfeit or
nonrenewal of any material permit, license, authorisation or
approval applicable to its operations or any of its properties.
14.3 ENFORCEABILITY OF DOCUMENTS
(a) Each Revised Transaction Document constitutes the legal,
valid and binding obligation of the Borrower (and Spacenet,
to the extent that Spacenet is a party to such Revised
Transaction Documents) enforceable in accordance with its
respective terms except as the enforceability thereof may
be limited by (i) applicable bankruptcy, insolvency,
reorganisation, moratorium or other similar laws affecting
the enforcement of creditors' rights generally; and (ii)
general equitable principles (regardless of whether the
issue of enforceability is considered in a proceeding in
equity or at law).
(b) Each Revised Transaction Document is in proper legal form
under the Applicable Laws of the State of Israel, and under
the respective governing law selected in each respective
Revised Transaction Document (and the jurisdiction of
organisation of each party thereto) for the enforcement
thereof.
(c) The Revised Transaction Documents have been duly and
validly executed and delivered by the Borrower (and
Spacenet, to the extent that Spacenet is a party to such
Revised Transaction Documents) and have not been amended,
modified, supplemented, repudiated or terminated and are in
full force and effect.
14.4 GOVERNMENTAL APPROVALS; COMPLIANCE
(a) No authorisation or approval or other action by, and no
notice to any Governmental Authority or other regulatory
body is required in connection with the due execution,
delivery and performance by the Borrower or
29
Spacenet of any Revised Transaction Document, other than
the approval of the Arrangement by the Court.
(b) Each of the Borrower and Spacenet has all necessary
agreements, licenses, certificates and authorisations of
Governmental Authorities in order to own and operate its
business as currently conducted or contemplated to be
conducted. Other than specifically stated in the Proxy
Solicitation, neither the Borrower nor Spacenet are in
breach of or default under any such agreements, licenses,
certificates and authorisations.
(c) Neither the Borrower nor Spacenet is in violation of its
memorandum or articles of association, charter or by-laws,
any material Applicable Law or any term of any agreement or
instrument binding on or otherwise affecting it or any of
its properties, except as set forth in EXHIBIT D.
14.5 LITIGATION
Other than the matters disclosed on pages 46 and 47 of the Proxy
Solicitation, [2 pages attached at EXHIBIT G], the matters
affecting the Section 350 Proceedings and the Section 304
Proceedings and Proceedings under Chapter 11, with regard to the
Borrower, Spacenet and StarBand,
(a) no litigation, arbitration or administrative proceedings
are current, pending or, to the best of the Borrower's
knowledge, threatened against or affecting the Borrower,
Spacenet or StarBand, to the best of the Borrower's
knowledge, current, pending or threatened against any other
party to any Revised Transaction Document, or any of the
Borrower's, StarBand's or Spacenet's or their respective
properties, revenues or assets which have had or if
adversely determined, are reasonably likely to have a
Material Adverse Effect;
(b) there is no injunction, writ, preliminary restraining order
or any order of any nature issued by an arbitrator, court
or other Governmental Authority directing that any of the
material transactions provided for in any of the Revised
Transaction Documents not be consummated as herein or
therein provided; and
(c) the Borrower, Spacenet and StarBand, are not in default
with respect to any writ, order, decree, injunction or
other decision of any Governmental Authority except where
such default has not had and is not reasonably likely to
have a Material Adverse Effect.
14.6 ADVERSE AGREEMENTS
The Borrower and Spacenet are not parties to any agreement or
instrument, or subject to any charter or other corporate
restriction or any judgment, order, regulation, ruling or other
requirement of a court or other Governmental Authority or
regulatory body, which has caused, or in the future is reasonably
likely to result in, a Material Adverse Effect.
30
14.7 WINDING -UP
(a) Except for the Arrangement and the Chapter 11 filing by
StarBand, no proceedings for the bankruptcy, winding up,
insolvency, or reorganisation of or for any moratorium or
scheme of arrangement or any other similar proceedings
relating to the Borrower, Spacenet or StarBand, are
threatened, contemplated or outstanding.
(b) Except for the Arrangement and the Chapter 11 filing by
StarBand, no proceedings for the bankruptcy, winding up,
insolvency, or reorganisation of or for any moratorium or
scheme of arrangement or any other similar proceedings
relating to any other party to a Revised Transaction
Document (other than the Lender) are, to the Borrower's
knowledge, threatened, contemplated or outstanding which
have had or are reasonably likely to have a Material
Adverse Effect.
14.8 TAXES
(a) The Borrower, Spacenet and StarBand have filed or caused to
be filed all Tax returns which are required to be filed by
each, and, all Taxes, assessments and other governmental
charges imposed upon them or on any of their properties and
which have become due and payable on or prior to the date
hereof have been paid, except to the extent contested in
good faith by proper proceedings which stay the imposition
of any penalty, fine or Security Interest resulting from
the non-payment thereof and with respect to which adequate
reserves have been set aside for the payment thereof.
(b) The Borrower, Spacenet and StarBand have no knowledge of
any Tax in connection with the execution and delivery of
and performance of its Obligations under the Revised
Transaction Documents or the consummation of the
transactions contemplated thereby other than that which is
set forth in the Proxy Solicitation which is reasonably
likely to have a Material Adverse Effect.
14.9 ENVIRONMENT
(a) The operations of the Borrower and Spacenet are in
compliance with all Environmental Laws except where the
failure to be in compliance would not have a Material
Adverse Effect.
(b) There has been no Release at any of the properties owned or
operated by the Borrower or a predecessor in interest, or
at any disposal or treatment facility which received
Hazardous Materials generated by the Borrower or any
predecessor in interest except, in each case, where the
Release would not have a Material Adverse Effect.
(c) No Environmental Actions have been asserted against the
Borrower, Spacenet, StarBand or any predecessor in interest
nor does the Borrower have knowledge or notice of any
threatened or pending Environmental Action against the
Borrower or any predecessor in interest which will have a
Material Adverse Effect.
31
(d) No Environmental Actions have been asserted against any
facilities that may have received Hazardous Materials
generated by the Borrower, Spacenet, StarBand or any
predecessor in interest which will result in a Material
Adverse Effect.
14.10 INSURANCE
(a) The Borrower keeps its properties adequately insured and
maintains: (i) insurance to such extent and against such
risks, including fire, as is customary with companies in
the same or similar businesses, (ii) workmen's compensation
insurance in the amount required by Applicable Law, (iii)
public liability insurance, including product liability
insurance, in the amount customary with companies in the
same or similar business against claims for personal injury
or death on properties owned, occupied or controlled by
them, and (iv) such other insurance as may be required by
Applicable Law.
(b) All insurances referred to in paragraph (a) above are or,
at the time they are required to be maintained or effected,
will be, in full force and effect and to the best of the
Borrower's knowledge no event or circumstance has occurred,
nor has there been any omission to disclose a fact, which
would in either case entitle any insurer to avoid or
otherwise reduce its liability under any policy relating to
such insurances.
14.11 SECURITY
(a) The Pledge Agreement ,the Additional Pledge Agreement and
the Debenture confer the Security Interests they purport to
confer upon the Lender over all of the Collateral and such
Security Interests are first ranking, and except for the
shared Security Interests with the Other Banks with regard
to the Additional Collateral, are not subject to any PARI
PASSU Security Interests, and such agreements are not
liable to avoidance due to any act or circumstance of the
Borrower, Spacenet or StarBand, on the date of execution of
the Additional Pledge Agreement. Spacenet is not in the
process of any bankruptcy, winding-up, composition or any
other similar insolvency proceedings for the reorganisation
of its affairs.
(b) Other than the Security Interests created or purported to
be created by Spacenet under the Pledge Agreement, and
other than the Security Interests created or purported to
be created by the Borrower under the Additional Pledge
Agreement, the Debenture and the other Permitted Security
Interests, there are no other Security Interests covering
the Collateral and there are no obligations to create any
such Security Interests.
(d) The Pledge Agreement (including all relevant financing
statements and other filings under the UCC and any other
Applicable Law) and the Additional Pledge Agreement, were
duly filed, recorded and/or registered in each office and
in each jurisdiction where required to create, perfect and
maintain in full force and effect all Security Interests
under the Pledge Agreement and the Additional Pledge
Agreement.
32
(e) Spacenet is the sole legal and beneficial owner of the
StarBand Pledged Stock and there are no covenants,
agreements, stipulations, reservations, conditions,
interests, rights or other matters whatsoever which
adversely affect the StarBand Pledged Stock. Spacenet has
received no notice of any adverse claim by any Person in
respect of the ownership of the StarBand Pledged Stock or
any interest in it.
(f) The Borrower is the sole legal and beneficial owner of the
Additional Spacenet Pledged Shares and other than the PARI
PASSU Security Interest Sharing Agreement with the Other
Banks and the other Permitted Security Interests, there are
no covenants, agreements, stipulations, reservations,
conditions, interests, rights or other matters whatsoever
which adversely affect the Spacenet Pledged Shares. The
Borrower has received no notice of any adverse claim by any
Person in respect of the ownership of the Spacenet Pledged
Shares or any interest in it.
14.12 SPACENET
The Borrower is the sole legal and beneficial owner of all of the
issued and outstanding Capital Stock of Spacenet, free and clear
of all Security Interests. There are no pre-emptive or other
outstanding rights, options, warrants, conversion rights or
agreements or commitment to issue or sell any shares of capital
stock of Spacenet or any securities or obligations convertible
into, or exchangeable for, or giving any person the right to
subscribe for or acquire, any shares of Capital Stock of Spacenet
and no securities or obligations evidencing such rights are
outstanding.
14.13 FINANCIAL CONDITION
The Borrower has furnished to the Lender copies of the Selected
Consolidated Financial Information included in the Proxy
Solicitation (pages 36 through 46, attached hereto as EXHIBIT H)
including, but not limited to, the financial information of the
Borrower dated September 30, 2002, as well as financial
information of Spacenet as of September 30, 2002, attached hereto
as EXHIBIT I. Such financial information:
(a) has been prepared in accordance with U.S. GAAP.;
(b) has been (in the case of audited financial statements)
audited by the Borrower's and Spacenet's auditors;
(c) is true, correct, complete and accurate in all material
respects as of the dates specified therein; and
(d) fully and fairly represents the financial condition and
state of affairs of the Borrower and Spacenet as at the
date to which it was drawn up and for the periods specified
therein and the results of their respective financial
operations during such period,
and there has been no change in the financial condition of the
Borrower Spacenet , to the best knowledge of the Borrower and
Spacenet, that has had or could reasonably be expected to have a
Material Adverse Effect since the date to which those financial
statements mentioned above were drawn up.
33
The Borrower has furnished to the Lender a draft business plan,
which has as yet not been approved by the authorized organ of the
Borrower. Borrower is entitled to materially modify or amend said
draft business plan until June 30, 2003, and shall subsequently
update, amend or modify it on annual bases.
After giving effect to the transactions contemplated or required
to occur by the terms of this Agreement as of the Effective Date,
the Borrower is, individually and together with Spacenet and its
other Subsidiaries, solvent, i.e. is able to meet its financial
obligations when due.
14.14 OBLIGATIONS
The Obligations of the Borrower hereunder constitute direct,
unconditional, and general obligations of the Borrower and carry a
first ranking as to priority of payment to all other Indebtedness
of the Borrower except for the indebtedness to the Other Banks
covered by the Security Interest Sharing AGREEMENT, and
obligations mandatorily preferred by law applying to companies
generally. Except with respect to Permitted Security Interests,
the Borrower has not secured or agreed to secure any such other
Indebtedness by any Security Interest upon any of its present or
future revenues or assets or capital stock.
14.15 EVENT OF DEFAULT
No Event of Default or Potential Event of Default has occurred.
14.16 ACCURACY AND FULL DISCLOSURE
(a) No Revised Transaction Document or schedule or exhibit
thereto and no certificate, report, statement or other
document or information furnished in writing by or on
behalf of the Borrower to the Lender in connection herewith
or with the consummation of the transactions contemplated
hereby, contains any material misstatement of fact or omits
to state a material fact or any fact necessary to make the
statements contained herein or therein not misleading in
any material respect.
(b) The rights and remedies of the Lender in relation to any
misrepresentations or breach of warranty on the part of the
Borrower shall not be prejudiced by any investigation by or
on behalf of the Lender into the affairs of the Borrower,
by the execution, delivery or performance of any other
Revised Transaction Document or by any other act or thing
which may be done by or on behalf of the Lender or any of
them in connection with any Revised Transaction Document
and which might, apart from this paragraph, prejudice such
rights and remedies.
(c) All of the information which is required to be scheduled to
this Agreement on the date hereof is set forth in the
Schedules attached hereto, is correct and accurate in all
material respects and does not omit to state any
information material thereto.
34
15. COVENANTS OF THE BORROWER
The Borrower hereby undertakes, so long as any Outstanding Balance (or a
portion thereof) (whether or not due) shall remain unpaid, unless the
Lender shall otherwise consent in writing:
15.1 REPORTING REQUIREMENTS
The Borrower shall furnish to the Lender:
(a) as soon as available and in any event within sixty (60)
days after the end of each of the first three fiscal
quarters of each fiscal year of each of the Borrower,
Spacenet and StarBand, if available, internally prepared
consolidated balance sheets, quarterly profit and loss
statements of the Borrower, Spacenet and StarBand, as at
the end of such fiscal quarter; and for the period
commencing at the end of the immediately preceding fiscal
year and ending with the end of such fiscal quarter,
setting forth in each case in comparative form the figures
for the corresponding date or period of the immediately
preceding fiscal year, all in reasonable detail and
certified by the chief financial officer of the Borrower,
Spacenet or StarBand (or, with regard to StarBand, in the
absence of a chief finance officer, another officer), as
appropriate, as fairly presenting, in all material
respects, the financial position of the Borrower, Spacenet
or StarBand, as appropriate (and any consolidated
Subsidiaries) as of the end of such fiscal quarter and the
results of operations and changes in financial position of
the Borrower, Spacenet or StarBand, as appropriate, for
such fiscal quarter, in accordance with applicable GAAP
applied in a manner consistent with that of the most recent
audited financial statements furnished to the Lender,
subject to year end adjustments and the absence of
footnotes;
(b) as soon as available, and in any event within ninety (90)
days after the end of each fiscal year of each of the
Borrower, Spacenet and StarBand, consolidated balance
sheets, consolidated profit and loss statements and cash
flow of the Borrower, Spacenet and StarBand, as
appropriate, (and any consolidated Subsidiaries), as at the
end of such fiscal year, setting forth in comparative form
the corresponding figures for the immediately preceding
fiscal year, all in reasonable detail and prepared in
accordance with applicable GAAP, and with respect to the
consolidated financial statements accompanied by a report
and an unqualified opinion prepared in accordance with
generally accepted auditing standards, of independent
certified public accountants of recognised standing
selected by the Borrower, Spacenet or StarBand, as
appropriate, and reasonably satisfactory to the Lender.
(c) simultaneously with the delivery of the financial
statements required by clauses (a) and (b) of this Section
15.1, a certificate of the chief financial officer of the
Borrower, stating that such officer has reviewed the
provisions of this Agreement and the other Transaction
Documents and has made or caused to be made under such
officer's supervision a review of the condition and
operations of the Borrower and its Subsidiaries during the
period covered by such financial statements with a view to
determining whether the Borrower and its Subsidiaries were
in compliance with all of the provisions of such Revised
Transaction Documents at the times such compliance is
35
required by the Revised Transaction Documents, and that
such review has not disclosed, and such officer has no
knowledge of the existence during such period of an Event
of Default or Potential Event of Default or, if an Event of
Default or such Potential Event of Default existed,
describing the nature and period of existence thereof and
the action which the Borrower and its Subsidiaries propose
to take or took with respect thereto;
(d) promptly upon their becoming available and subject to any
legal prohibition, a copy of (i) all consultants' reports,
investment bankers' reports, accountants' management
letters, business plans and similar documents concerning
the Borrower and Spacenet (and to the extent available to
the Borrower or Spacenet, StarBand), (ii) all reports,
financial statements or other information delivered by the
Borrower and Spacenet and StarBand to their respective
shareholders generally, (iii) all reports, proxy
statements, financial statements and other information
generally distributed by the Borrower, and Spacenet (and to
the extent available to the Borrower or Spacenet, StarBand)
to their respective creditors or the financial community in
general, and (iv) any audit or other reports submitted to
the Borrower and Spacenet (and to the extent available to
the Borrower or Spacenet, StarBand) by their respective
independent accountants in connection with any annual,
interim or special audit, and (v) all reports submitted to
the SEC;
(e) promptly after submission to any Governmental Authority,
all documents and information furnished to such
Governmental Authority in connection with any investigation
of the Borrower, Spacenet or StarBand other than routine
inquiries by such Governmental Authority;
(g) as soon as possible, and in any event within three (3)
Business Days after the occurrence of an Event of Default,
Potential Event of Default or event having a Material
Adverse Effect, the written statement of the chief
executive officer or the chief financial officer of the
Borrower, setting forth the details of such Event of
Default, Potential Event of Default or event and the action
which the Borrower proposes to take with respect thereto;
(h) promptly after the commencement of thereof, but in any
event not later than three (3) Business Days after service
of process with respect thereto on, or the obtaining of
knowledge thereof by, the Borrower, written notice of each
action, suit or proceeding before any court or other
Governmental Authority or other regulatory body or any
arbitrator involving the Borrower, Spacenet or StarBand
which could have a Material Adverse Effect; and
(i) promptly after the execution of this Agreement, (1)
quarterly statements concerning the conditions of
operations and the Borrower's compliance with the financial
covenants of this Agreement as set forth in Section 15.20
(b) below and with the business plan referred to in Section
14.13. above, compliance with said financial covenants, to
be certified by the chief financial officer of the
Borrower, (2) quarterly statements of backlog (projected
and actually submitted to the Borrower and its
Subsidiaries), (3) quarterly statements listing the
outstanding balances of major creditors and debtors of the
Borrower, (4) monthly cash flow data, (5) quarterly reports
on capital expenditures exceeding $500,000, and (6) such
other financial information, of
36
the Borrower, Spacenet and StarBand that the Lender may
reasonably request once each calendar quarter.
15.2 KEEPING OF RECORDS AND BOOKS OF ACCOUNT
The Borrower shall keep, and cause Spacenet to keep, adequate
records and books of account, with complete entries made in
accordance with applicable GAAP.
15.3 INSPECTION RIGHTS
The Borrower shall permit, and cause Spacenet to permit, the
Lender, or any agents or representatives thereof at any time and
from time to time upon reasonable notice to the Borrower, during
normal business hours, to examine and make copies of and abstracts
from their records and books of account, to visit and inspect
their properties, to conduct audits, physical counts, valuations
or examinations and to discuss their affairs, finances and
accounts with any of the directors, officers, managerial
employees, independent accountants or other representatives
thereof provided that (i) the foregoing shall be in a manner so as
to not unduly disrupt the business of the Borrower and Spacenet
and (ii) such notice shall not be required if an Event of Default
has occurred and is continuing.
15.4 PRESERVATION OF EXISTENCE
The Borrower shall maintain and preserve, and cause each
Subsidiary to maintain and preserve, its existence, rights and
privileges, and become or remain duly qualified and in good
standing in each jurisdiction in which the character of the
properties owned or leased by them or in which the transaction of
their business makes such qualification necessary, except where
the failure to preserve its rights and privileges and to qualify
and be in good standing would not have a Material Adverse Effect.
15.5 COMPLIANCE WITH LAWS
(a) The Borrower shall comply, and cause Spacenet and each
other Subsidiary to comply, with all applicable material
laws, rules, regulations and orders, such compliance to
include, without limitation, (i) paying before the same
become delinquent all Taxes, assessments and governmental
charges or levies imposed upon it or upon its income or
profits or upon any of its properties, and (ii) paying all
lawful claims arising under such laws which if unpaid might
become a Security Interest upon any of its properties,
except to the extent contested in good faith by proper
proceedings which stay the imposition of any penalty, fine
or Security Interest resulting from the non-payment thereof
and with respect to which adequate reserves have been set
aside for the payment thereof and except, solely with
respect to Subsidiaries of the Borrower other than
Spacenet, to the extent that any such non-compliance
(singly or in the aggregate with other non-compliance)
would not have a Material Adverse Effect.
(b) The Borrower shall obtain, maintain and preserve, and cause
each of its Subsidiaries to obtain, maintain and preserve,
all permits licenses, authorisations, approvals,
entitlements and accreditations which are necessary in the
proper conduct of their business and if the failure to
obtain same could cause a Material Adverse Effect.
37
15.6 MAINTENANCE OF PROPERTIES
The Borrower shall maintain and preserve all of its properties
which are necessary or useful in the proper conduct of their
business in good working order and condition, ordinary wear and
tear and damage due to casualty excepted.
15.7 NO DISTRIBUTIONS
The Borrower shall not make any distributions, as the term is
defined in the Companies Law 1999, to its shareholders out of
earnings or reserves, without the prior consent of the Lender.
15.8 The Borrower undertakes to see to it that the Security Interest
granted to the Lender in the Additional Pledge Agreement over the
Additional Collateral shall be duly perfected, filed, recorded
and/or registered with the Companies Registrar and in each office
and in each jurisdiction where required to create, perfect and
maintain in full force and effect all Security Interest under the
Additional Pledge Agreement.
15.9 CREATION OF SECURITY INTERESTS
The Borrower shall not create or suffer to exist, or permit any of
its Subsidiaries to create or suffer to exist any Security
Interest upon or with respect to the Collateral other then the
Permitted Security Interests.
15.10 SECURITY
(a) The Borrower shall, and shall cause Spacenet to, defend the
Collateral or cause the Collateral to be defended against,
and shall take, at its expense, any action necessary to
remove any Security Interest (other than Permitted Security
Interests) over the Collateral, and shall defend the right,
title and interest of the Lender in and to the Collateral
against the claims and demands of all other Persons.
(b) The Borrower shall, and shall cause Spacenet to, maintain
all Security Interests created under the Pledge Agreement
in favour of the Lender and will effect all registrations
relating thereto.
15.11 MERGER
The Borrower shall not merge or consolidate with any Person, or
permit Spacenet to merge or consolidate with, any Person;
provided, however, that the Borrower or Spacenet may be merged
with or into another Person, or may consolidate with another
Person, so long as:
(a) to the extent permitted by Applicable Law, the Borrower or
Spacenet gives the Lender at least 30 days' prior written
notice of such merger or consolidation;
(b) the Borrower or Spacenet shall be the surviving entity in
such merger or consolidation;
38
(c) no Potential Event of Default or Event of Default shall
have occurred and be continuing either immediately before
or immediately after giving effect to such merger or
consolidation; or
(d) such merger or consolidation will not have a Material
Adverse Effect.
15.12 LIQUIDATION
Except with regard to Chapter 11 Proceedings concerning StarBand,
the Arrangement, the Section 350 Proceedings and the Section 304
Proceedings, the Borrower shall not and shall not permit Spacenet
or any of its other Subsidiaries to enter into any voluntary
liquidation, bankruptcy, winding up or dissolution except, solely
with respect to Subsidiaries of the Borrower other than Spacenet,
to the extent that any such voluntary liquidation, bankruptcy,
winding up or dissolution would not (singly or in the aggregate
with other such actions) have a Material Adverse Effect.
15.13 ASSETS
The Borrower shall not and shall not permit Spacenet and any of
the Borrower's Subsidiaries to sell, assign, lease or otherwise
transfer or dispose of, any of its properties, rights or other
assets whether now owned or hereafter acquired to any Person,
other than the sale or other disposition of assets either for fair
market value or where such sale or other disposition would not
(singly or in the aggregate with other sales or dispositions) have
a Material Adverse Effect.
15.14 SPACENET
(a) The Borrower shall not sell or grant any pre-emptive
rights, options, conversion rights or agreements or
commitment to sell any Capital Stock of Spacenet or any
other right in any Capital Stock of Spacenet.
(b) The Borrower shall procure that Spacenet shall not issue or
undertake to issue any Capital Stock of Spacenet or grant
any pre-emptive rights, options, conversion rights or
agreements or commitment to issue Capital Stock of Spacenet
or any securities or obligations convertible into, or
exchangeable for, or giving any person the right to
subscribe for or acquire, any shares of Capital Stock of
Spacenet.
(c) The Borrower shall grant the Lender an irrevocable Power of
Attorney to act to preserve the Lender's rights over the
Collateral, in the event that in the reasonable and sole
judgement of the Lender, the Borrower has not met its
obligations under Section 15.10 above .
15.15 MAINTENANCE OF INSURANCE
The Borrower shall maintain and shall cause Spacenet to maintain,
with responsible and reputable insurance companies or
associations, insurance (including, without limitation,
comprehensive general liability and property and casualty
insurance) with respect to its property and business, in such
amounts and covering such risks, as is required by any
Governmental Authority or other regulatory body having
jurisdiction
39
with respect thereto and as is carried generally in accordance
with sound business practice by companies in similar businesses
similarly situated.
15.16 ENVIRONMENTAL
The Borrower shall and shall procure that Spacenet shall:
(a) keep any property either owned or operated by it free of
any Security Interests arising under any Environmental
Laws;
(b) comply with Environmental Laws except where the failure to
comply would not have a Material Adverse Effect and provide
to the Lender documentation of such compliance which the
Lender reasonably requests;
(c) promptly notify the Lender of any Release of a Hazardous
Material in excess of any reportable quantity and take any
Remedial Actions required by Governmental Authorities to
xxxxx said Release; and
(d) promptly provide the Lender with written notice within ten
(10) days of the receipt of any Environmental Action or
notice that an Environmental Action will be filed against
the Borrower.
15.17 DEFAULT, MATERIAL ADVERSE EFFECT
The Borrower shall provide the Lender with prompt written notice
of any Event of Default, Potential Event of Default or Material
Adverse Effect.
15.18 CHANGE IN BUSINESS
Except with the prior written consent of the Lender, the Borrower
will not, and will procure that no Subsidiary of the Borrower
will, make, or agree or threaten to make any change in the nature
of its business activities as presently conducted, or carry on any
other business other than its business as presently conducted
except, solely with respect to Subsidiaries of the Borrower other
than Spacenet, to the extent that any such change would not
(singly or in the aggregate with any other such changes) have a
Material Adverse Effect.
15.19 FURTHER ASSURANCES
The Borrower shall, and shall procure that its Subsidiaries shall,
execute, acknowledge, and deliver, at the sole cost and expense of
the Borrower, all such further acts, deeds, conveyances,
mortgages, assignments, estoppel certificates, financing
statements, notices of assignment and assurances as the Lender may
reasonably require from time to time in order to:
(a) carry out more effectively the purposes of this Agreement
and the other Revised Transaction Documents,
(b) subject the Collateral to valid and perfected first
priority Security Interests or other Permitted Security
Interests;
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(c) better assure, convey, grant, assign, transfer and conform
unto the Lender the rights now or hereafter intended to be
granted to the Lender under this Agreement, any Revised
Transaction Document or any other instrument under which
the Borrower may be or may hereafter become bound for
carrying out the intention or facilitating the performance
of the terms of the Agreement.
15.20 OTHER ASSURANCES AND FINANCIAL COVENANTS
(a) The Borrower undertakes that it and any of its Subsidiaries
shall not create or permit to subsist any Security
Interests over all or any of the present or future
Indebtedness or any present or future liabilities for
taxes, of the Borrower or any other person, other than
Permitted Security Interests.
(b) Unless otherwise agreed to in advance and in writing by the
Lender, the Borrower undertakes that it shall maintain at
all times:
(i) a Shareholders' Equity to Total Assets ratio of no
less than 15%; and
(ii) a minimum level of cash and cash equivalents with a
value of US$30,000,000 (Thirty million United States
Dollars) as part of its Current Assets.
For the purposes of this sub-section (b):
"Shareholders' Equity" shall mean the Total Shareholders' Equity
according to its meaning consistent with the most recent
consolidated financial statements of the Borrower required to be
delivered to the Lender pursuant to Section 15.1 above.
"Total Assets", and "Current Assets" and "cash and cash
equivalents" shall be given their respective meanings consistent
with the most recent consolidated financial statements of the
Borrower required to be delivered to the Lender pursuant to
Section 15.1 above.
All of the above undertakings (and any undertakings or restrictions in
any other clause hereof) are cumulative, and accordingly none of them
shall (except to the extent expressly stated) be limited by any exception
to any other undertaking or by implication from the terms of any other
undertaking.
15.21 COVENANTS GRANTED TO OTHER PARTIES
The Borrower undertakes to amend this Agreement so as to grant the
Lender covenants of any type equal or identical to any covenants
agreed to with any lender to or creditor of the Borrower in any
agreement, to the extent the covenants at issue are superior to
the covenants contained in this Section 15. The Borrower shall
notify the Lender of such change no later than 7 working days
after the execution of the other agreement.
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15.22 REPURCHASE UPON CHANGE OF CONTROL
Upon the occurrence of a "change of control", as defined in the
Proxy Solicitation, no advance repayment of any funds owed at such
time to the New Noteholders (other than the payment of the
regularly scheduled payments), and no repurchase in cash of the
New Notes shall be permitted unless the Outstanding Balance, as
well as any other loan owed to the Lender and any of the Other
Banks, is paid in full, contemporaneously with any such repurchase
or repayment in cash.
16. EVENTS OF DEFAULT
Each of the following events occuring after the Effective Date shall
constitute an Event of Default:
16.1 NON-PAYMENT
The Borrower shall fail to pay:
(a) any Principal Instalment Amount or accrued interest when
due; or
(b) any Outstanding Balance when due (whether by scheduled
maturity, required prepayment, acceleration, demand or
otherwise); or
(c) any fee or other amount payable under the Revised
Transaction Documents within three (3) Business Days after
the due date thereof.
16.2 REPRESENTATIONS AND WARRANTIES
Any representation or warranty made by the Borrower, Spacenet or
any officer of the Borrower or Spacenet under or in connection
with any Revised Transaction Document shall have been incorrect in
any material respect when made.
16.3 NON-PERFORMANCE
The Borrower or Spacenet shall default in the performance or
observance of:
(a) the covenants contained in Section 15 of this Agreement;
(b) any other covenant contained in this Agreement and such
default shall continue unremedied for a period of ten (10)
days.
16.4 OTHER DEFAULT
The Borrower or Spacenet shall fail to perform or observe any
other term, covenant or agreement contained in any Revised
Transaction Document to be performed or observed by the Borrower
or Spacenet (other than under Section 16.3), as appropriate, and
such failure, if capable of being remedied, shall remain
unremedied for twenty (20) days.
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16.5 CROSS DEFAULT
The Borrower or Spacenet shall fail to pay any principal or
interest on any of its Indebtedness (excluding Indebtedness
created hereby) in excess of $2,000,000, or any interest or
premium thereon, when due (whether by scheduled maturity, required
payment, acceleration, demand or otherwise) and such failure shall
continue after the applicable grace period, if any, specified in
the agreement or instrument relating to such Indebtedness, or any
other default under any agreement or instrument relating to any
such Indebtedness, or any other event, shall occur and shall
continue after the applicable grace period, if any, specified in
such agreement or instrument, if the effect of such default or
event is to accelerate, or to permit the acceleration of the
maturity of such Indebtedness; or any such Indebtedness in excess
of such amount shall be declared to be due and payable, or
required to be prepaid (other than by a regularly scheduled
required prepayment), prior to the stated maturity thereof.
16.6 LIQUIDATION
(a) The Borrower or any other party to the Revised Transaction
Documents (other than the Lender and StarBand):
(i) commits an act of bankruptcy (provided that it shall
not be an Event of Default for the Borrower or
Spacenet to notify a creditor of its intention not
to pay a debt when due where such non-payment is not
due to the Borrower's or Spacenet's inability to pay
such debt);
(ii) is, or is deemed for the purposes of any law to be,
generally unable to pay its debts as they fall due
or to be insolvent; or
(iii) admits a general inability to pay its debts as they
fall due or notifies its creditors of a general
intention not to pay its debts when due.
(b) The Borrower or any other party to the Revised Transaction
Documents (other than the Lender or StarBand) suspends
making payments on all or any class of its debts or
announces an intention to do so, or a moratorium is
declared in respect of any of its indebtedness.
(c) Any step (including petition, proposal or convening a
meeting), other than the Arrangement, is taken with a view
to a composition, assignment or arrangement with any
creditors of the Borrower or any other party to the Revised
Transaction Documents (other than the Lender and StarBand).
(d) With the exception of the Arrangement, any order
(provisional or otherwise) is made or resolution passed
for, or any step (including petition, proposal or convening
a meeting) is taken by the Borrower or any other party to
the Revised Transaction Documents (other than the Lender
and StarBand) with a view to the liquidation,
administration, winding up, entry into receivership,
re-organisation, dissolution or any other insolvency
proceedings of the Borrower or any other party to the
Revised Transaction Documents (other than the Lender and
StarBand).
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(e) Any Person presents a petition which is not withdrawn or
set aside within forty-five (45) days for the winding-up,
liquidation, bankruptcy, receivership, reorganisation or
for the administration of the Borrower or any other party
to the Revised Transaction Documents (other than the Lender
and other than StarBand).
16.7 APPOINTMENT OF RECEIVERS AND MANAGERS
(a) Any permanent or interim liquidator, trustee in bankruptcy,
judicial custodian, compulsory manager, receiver,
administrator or the like is appointed in respect of the
Borrower or any other party to the Revised Transaction
Documents (other than the Lender and StarBand) over all or
any part of their respective assets.
(b) Any Person requests the appointment of a permanent or
interim liquidator, trustee in bankruptcy, judicial
custodian, compulsory manager, receiver, administrator or
the like for the Borrower or any other party to the
Transaction Documents (other than the Lender and StarBand).
16.8 CREDITORS' PROCESS
Any distress, execution, attachment, sequestration, or other
proceeding affecting any material asset (irrespective of the
actual value of such asset) of the Borrower or any other party to
the Revised Transaction Documents (other than the Lender and
StarBand) is initiated and, if such proceeding is being contested
in good faith by appropriate proceedings and is not removed,
discharged or paid out within thirty (30) days after the
initiation thereof or such shorter period as may render such asset
liable to forfeiture, seizure or sale.
16.9 ANALOGOUS PROCEEDINGS
There occurs, in relation to the Borrower or any other party to
the Revised Transaction Documents (other than the Lender and
StarBand), any event anywhere which, in the opinion of the Lender,
is similar or substantially equivalent to any of those mentioned
in Sections 16.6 through 16.8 of this Agreement (inclusive).
16.10 REVISED TRANSACTION DOCUMENTS
Any Revised Transaction Document, other than the Pledge Agreement
as a result of the proceedings under Chapter 11 and their outcome,
or any material provision thereof (as determined by the Lender):
(a) is terminated (other than by expiration of its stated
term), repudiated or cancelled other than in accordance
with the Revised transaction Documents;
(b) is or becomes invalid, illegal or unenforceable or any
party thereto (other than the Lender) or any Governmental
Authority shall so assert in writing; or
(c) ceases to be in full force and effect or is assigned or
otherwise transferred, amended or prematurely terminated
other than as permitted under the Revised Transaction
Documents, or shall cease to give the Lender the Security
44
Interests, rights, powers and privileges purported to be
created thereby or any party thereto (other than the
Lender) shall so assert in writing.
16.11 MATERIAL ADVERSE EFFECT AND FAILURE TO COMPLY WITH BUSINESS PLAN
Any event, condition or circumstance or series of events,
conditions or circumstances occurs which, in the reasonable
opinion of the Lender, has had or could reasonably be expected to
have a Material Adverse Effect, or if the Borrower were to fail to
meet the targets of its business plan referred to in Section 14.13
above in any material fashion.
16.12 EFFECTIVENESS OF SECURITY
The Debenture or the Additional Pledge Agreement do not create, or
at any time, any Security Interest created by the Debenture or the
Additional Pledge Agreement ceases to be, a valid and perfected
first priority Security Interest in the Collateral covered
thereby, or granting the PARI PASSU priority rights of the
Additional Collateral, other than in the Security Interest Sharing
Agreement or is otherwise ineffective or any party thereto (other
than the Lender) shall so assert in writing.
17. REMEDIES ON EVENT OF DEFAULT
17.1 REMEDIES
At any time when an Event of Default has occurred and is
continuing, the Lender may:
(a) declare (without presentment, demand, protest or notice of
any kind all of which are hereby expressly waived by the
Borrower) the Agreement terminated in whole or in part,
whereby the Agreement or any part thereof so terminated
shall be considered null and void;
(b) declare that all or part of the Outstanding Balance, and
all other amounts payable under this Agreement be payable
on demand, whereupon they shall immediately and without
presentment, demand, protest or notice of any kind all of
which are hereby expressly waived by the Borrower, become
payable on demand by the Lender;
(c) declare the Outstanding Balance, and all other amounts
payable under this Agreement to be forthwith due and
payable, whereupon the Outstanding Balance, and all such
amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of
any kind, all of which are hereby expressly waived by the
Borrower;
(d) proceed to enforce or exercise any Security Interest
created by the Borrower or Spacenet in favour of the
Lender; and
(f) exercise any and all of its other rights under Applicable
Law, hereunder and under the other Revised Transaction
Documents.
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17.2 AUTOMATIC ACCELERATION
Notwithstanding Section 17.1 above, upon the occurrence of any
Event of Default described in Sections 16.6, 16.7, 16.8, 16.9 or
16.11, the Outstanding Balance, and all other amounts payable
under this Agreement shall become and be forthwith due and
payable, without presentment, demand, protest or further notice of
any kind, all of which are expressly waived by the Borrower.
18. COSTS AND EXPENSES
18.1 INITIAL COSTS
The Borrower shall, whether or not the transactions contemplated
in the Revised Transaction Documents are consummated, forthwith on
demand pay the Lender, on a full indemnity basis, the legal fees,
including VAT, and expenses incurred by the Lender in connection
with:
(a) the preparation, review, registration, execution and
delivery of the revised Transaction Documents and any other
related documentation;
(b) any amendment, modification, waiver, consent or suspension
of rights (or any proposal for any of the foregoing) in
connection with or ongoing administration of any Revised
Transaction Document or any document referred to in any
Revised Transaction Document or related thereto;
(c) the filing and registration (where appropriate) and
delivery of evidence of the Indebtedness relating to the
Outstanding Balance, and
(d) All legal fees incurred by the Lender in connection with
the Arrangement.
18.2 ENFORCEMENT COSTS
The Borrower shall, whether or not the transactions contemplated
in the Revised Transaction Documents are consummated, forthwith on
demand pay to the Lender, on a full indemnity basis, the amount of
all costs and expenses (including any VAT thereon and including,
but not limited to, costs and expenses of the Lender's legal,
technical and other professional advisers and any other out of
pocket expenses) incurred by the Lender:
(a) in connection with the enforcement of, or the preservation
of any rights and remedies under, any of the Revised
Transaction Documents; and
(b) in investigating any possible Event of Default or Potential
Default; and
(c) in any attempt to collect from the Borrower amounts owed
hereunder or under any other Revised Transaction Document.
46
19. STAMP DUTIES
The Borrower shall pay, and forthwith on demand indemnify the Lender
against any liability that the Lender incurs in respect of, any stamp,
registration, filing and similar tax or fee which is or becomes payable
in connection with the entry into, registration, recording, performance
or enforcement of any Revised Transaction Document.
20. SET-OFF
The Lender may, and is hereby authorised to, at any time and from time to
time, without notice to the Borrower (any such notice being expressly
waived by the borrower) and to the fullest permitted by law, set off and
apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time
owing by the Lender to or for the credit or the account of the Borrower
against any and all Obligations of the Borrower now or hereafter existing
under any Revised Transaction Document, irrespective of whether or not
the Lender shall have made any demand hereunder or thereunder and
although such Obligations may be contingent or unmatured. Such set-off
shall be subject to the provisions of Section 7.6. The Lender agrees to
notify the Borrower promptly after any such set-off and application made
by the Lender provided that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of the
Lender under this Section 20 (Set-Off) are in addition to the other
rights and remedies (including, without limitation, other rights of
set-off) which the Lender may have.
21. SEVERABILITY
If a provision of a Revised Transaction Document is or becomes illegal,
invalid or unenforceable in any jurisdiction, that shall not affect:
(a) the validity or enforceability in that jurisdiction of any other
provision of the Revised Transaction Documents; or
(b) the validity or enforceability in other jurisdictions of that or
any other provision of the Revised Transaction Documents.
Where provisions of any Applicable Law resulting in such illegality,
invalidity or unenforceability may be waived, they are hereby waived by
Borrower and the Lender to the full extent permitted by Applicable Law so
that the Revised Transaction Documents shall be deemed valid and binding
agreements, in each case enforceable in accordance with their respective
terms.
22. WAIVERS AND REMEDIES CUMULATIVE
22.1 The rights, powers and remedies of the Lender under the Revised
Transaction Documents may be exercised as often as necessary, are
cumulative and not exclusive of its rights, powers and remedies
under the general law or which such Lender would otherwise have
and may be waived only in writing and specifically.
22.2 No course of dealing between the Borrower and the Lender, nor any
delay in exercising or non-exercise of any right, power or
privilege of the Lender shall operate as a waiver of any right,
power or privilege of the Lender, nor shall any single or partial
exercise of any right, power or privilege under any Revised
Transaction Document preclude any other
47
or further exercise thereof or the exercise of any other right,
power or privilege thereunder. No notice to or demand on the
Borrower in any case shall entitle the Borrower to any other or
further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Lender to any other or
further action in any circumstances without notice or demand.
22.3 The rights and remedies of the Lender under the Revised
Transaction Documents or at law or in equity, may be pursued
separately, successively or concurrently against Borrower or any
collateral, at the discretion of the Lender.
23. NOTICES
23.1 All notices, demands, requests, consents, approvals, designations
and other communications under or in connection with this
Agreement ("NOTICES") shall be given in writing and, unless
otherwise stated may be made by letter or facsimile. Any Notice
will be deemed to be given as follows:
(a) if mailed (by certified mail, postage prepaid and return
receipt requested) upon receipt or three Business Days
after mailing whichever occurred first;
(b) if sent by overnight courier, upon receipt or two Business
Days after delivered to such overnight courier, whichever
occurs first;
(c) if by facsimile, when transmitted and a confirmation is
received.
except that notices to the Lender pursuant to Section 2 (Facility)
hereof shall not be effective until received by the Lender.
However, a Notice given in accordance with the above but received
on a day which is not a Business Day or after business hours in
the place of receipt will only be deemed to be given on the next
Business Day in that place.
23.2 ADDRESSES FOR NOTICES
The address and facsimile number of the parties for all Notices,
and all other documents or instruments to be furnished, delivered
or provided under or in connection with this Agreement shall be as
follows:
If to the Borrower: Gilat Satellite Networks Ltd.
00 Xxxxx Xxxxxxx Xx.
Xxxxxx Xxxx, Xxxxx Xxxxx,
Xxxxxx 49130
Attention: Xx. Xxxxx Xxxxxx
Telephone: 000-0-0000000
Telecopy: 972-3- 9213321
With a copy to: Gross, Kleinhendler, Hodak, Halevy, Xxxxxxxxx & Co.
1 Azrieli Center
Xxx Xxxx 00000, Xxxxxx
Attention: Xxxx Xxxxxxxxxxxx, Esq.
48
Telephone: 000-0-0000000
Telecopier: 972-3-6074422
If to the Lender: Bank Hapoalim B.M.
Head Office
Corporate Banking Division
00-00 Xxxxxxxxxx Xxxxxxxxx
Xxx Xxxx 00000
Israel
Facsimile: 972-3-567-3849
Attention: Xx. Xxxxx Xxxxx
With a copy to: Xxxx Xxxx & Co.
4 Itamar Xxx Xxx Xxxxxx
Xxx Xxxx 00000 Xxxxxx
Attention: Xxxxxx Xxxxx, Advocate
Xxxxxxx Xxxxx, Esquire
Telephone: 000-0-0000000
Telecopier: 000-0-0000000
or, as to each party, at such other address as shall be designated
by such party in a written notice to the other party complying as
to delivery with the terms of this Section 23 (Notices).
23.3 RELIANCE
The Lender may act without liability upon the basis of a Notice
reasonably believed by the Lender in good faith to be from the
Borrower (or from any officer thereof designated in writing to the
Lender).
24. AMENDMENTS
No amendment or waiver of any provision of this Agreement or the other
Revised Transaction Documents, and no consent to any departure by the
Borrower therefrom, will in any event be effective unless the same shall
be in writing and signed by the Borrower, the Lender and any other
relevant party, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
25. ASSIGNMENT
25.1 ASSIGNMENT BY THE BORROWER
The Borrower may not assign, transfer, novate or dispose of any
of, or any interest in, its rights and/or Obligations under the
Revised Transaction Documents except with the prior written
consent of the Lender.
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25.2 ASSIGNMENT BY THE LENDER
The Lender may assign to one or more other lenders or other
entities all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of the
Principal); provided, however, that:
(a) such assignment is in an amount which is at least
$5,000,000 or a multiple of $1,000,000 in excess thereof;
(b) each such assignment shall be of a constant, and not a
varying percentage of all of the assigning Lender's rights
and obligations under this Agreement; and
(c) the parties to each such assignment shall execute and
deliver to the Lender, for its acceptance, an assignment
and acceptance agreement.
From and after the effective date of such assignment and
acceptance agreement (i) the assignee thereafter shall become a
"Lender" hereunder and, in addition to the rights and obligations
hereunder held by it immediately prior to such effective date,
have the rights and obligations hereunder that have been assigned
to it and (ii) the assigning Lender thereunder shall to the extent
that rights and obligations hereunder have been assigned by it,
relinquish its rights and be released from its obligations under
this Agreement. Any such assignment shall not adversely affect the
Borrower's rights under this Agreement except that the assigning
Lender shall not be responsible for the obligations assigned.
The Lender shall maintain at its address referred to in Section 23
(Notices) hereof a copy of each assignment and acceptance
delivered to and accepted by it. Such copies shall be available
for inspection by the Borrower at any reasonable time and from
time to time upon reasonable prior notice. Upon its receipt of an
assignment and acceptance notice executed by the Lender and an
assignee Lender, the Lender shall give prompt notice thereof to
the Borrower.
Notwithstanding anything to the contrary contained in this Section
25 (Assignment), the Lender may grant participations, in whole or
in part, in its rights and obligations under this Agreement and
the Outstanding Balance without notice to the Borrower and without
restriction; provided that (i) the Lender's obligations under this
Agreement shall remain unchanged, (ii) the Lender shall remain
solely responsible to the other parties hereto for the performance
of such obligations and (iii) the Borrower shall continue to deal
solely and directly with the Lender in connection with the
Lender's rights and obligations under this Agreement, and the
Lender shall retain the sole right to enforce the obligations of
the Borrower relating to the Principal.
26. COUNTERPARTS
This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which shall be
deemed to be an original but all of which taken together shall constitute
one and the same agreement.
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27. GOVERNING LAW, JURISDICTION
This Agreement is governed by and shall be construed in accordance with
the laws of the State of Israel and each Party hereby irrevocably submits
to the exclusive jurisdiction of the courts of Tel-Aviv-Jaffa in
connection with any dispute arising out of or in connection with this
Agreement.
28. REINSTATEMENT
If claim is ever made upon the Lender for repayment or recovery of any
amount or amounts received by the Lender in payment or on account of any
of the Obligations under this Agreement or the Revised Transaction
Documents, the Lender shall give prompt notice of such claim to the
Borrower, and if the Lender repays all or part of said amount by reason
of:
(a) any judgment, decree or order of any court or administrative body
having jurisdiction over the Lender or any of their property, or
(b) any good faith settlement or compromise of any such claim effected
by the Lender with any such claimant,
then and in such event the Borrower agrees that:
(A) any such judgment, decree, order, settlement or compromise shall
be binding upon the Borrower notwithstanding the cancellation of
any instrument evidencing the Obligations under this Agreement or
the other Revised Transaction Documents or the termination of this
Agreement or the other Revised Transaction Documents, and
(B) it shall be and remain liable to the Lender hereunder for the
amount so repaid or recovered to the same extent as if such amount
had never originally been received by the Lender.
29. INDEMNIFICATION
In addition to all of the Borrower's other Obligations under this
Agreement, the Borrower agrees to defend, protect, indemnify and hold
harmless the Lender and all of the respective officers, directors,
employees, attorneys, consultants and agents of the Lender (collectively
called the "INDEMNITEES") from and against any and all losses, damages,
liabilities, obligations, penalties, fees, costs and expenses (including,
without limitation, attorneys' fees, costs and expenses) imposed on or
incurred by such Indemnitees, whether prior to or from and after the date
of this Agreement, whether direct, indirect or consequential as a result
of or arising from or relating to or in connection with any of the
following:
(a) the negotiation, preparation, execution, performance or
enforcement of this Agreement, any Revised Transaction Document or
any other document in connection with the transactions
contemplated by this Agreement,
(b) any matter relating to the financing transactions contemplated by
this Agreement or by any document executed in connection with the
transactions contemplated by this Agreement; or
51
(c) any claim, litigation, investigation or proceeding relating to any
of the foregoing whether or not any indemnitee is a party thereto
(collectively, the "INDEMNIFIED MATTERS"); provided, however, that the
Borrower shall have no obligation to any Indemnitee hereunder for any
Indemnified Matter caused by or resulting from the gross negligence or
wilful misconduct of such Indemnitee, as determined by a final judgment
of a court of competent jurisdiction.
To the extent that the undertaking to indemnify, pay and hold harmless
set forth in this Section 29 (Indemnification) may be unenforceable
because it is in violation of any law or public policy, the Borrower
shall contribute the maximum portion which they are permitted to pay and
satisfy under Applicable Law, to the payment and satisfaction of all
Indemnified Matters incurred by the Indemnitees. The Indemnity shall
survive the repayment of the Obligations and the discharge of the
Security Interests granted under the Revised Transaction Documents.
30. CONFIDENTIALITY
Upon delivering to the Lender or permitting the Lender to inspect, any
written information pursuant to this Agreement or the other Revised
Transaction Documents, the Lender shall treat such information as
confidential to the extent such information is conspicuously marked
confidential. The Lender agrees to hold such information in confidence
from the date of disclosure thereof. Subject to the other provisions of
this Section 30 (Confidentiality), the Lender may disclose confidential
information to its officers, directors, employees, attorneys, accountants
or other professionals engaged by the Lender to the extent necessary for
the purposes of this Agreement and only after determining that such third
party has been instructed to hold such information in confidence to the
same extent as if it were the Lender. Notwithstanding the foregoing, the
provisions of this Section 30 (Confidentiality) shall not apply to
information within any one of the following categories or any combination
thereof:
(a) information the substance of which, at the time of disclosure by
the Lender, has been disclosed to or is known to any creditor
(other than information as to which neither creditor is then under
an obligation of nondisclosure), or any other Person other than
(A) a director, officer, employee or agent of the Borrower or a
professional engaged by the Borrower or (B) a Person who is then
under an obligation of nondisclosure (otherwise than as a
consequence of a wrongful act of the Lender),
(b) information that has been disclosed in the Proxy Solicitation.
(c) information which the Lender had in its possession prior to
receipt thereof from the disclosing party, or
(d) information received by the Lender from a third party having no
obligations of nondisclosure with respect thereto.
Nothing contained in this Section 30 (Confidentiality) shall
prevent any disclosure: (i) believed in good faith by the Lender
to be required by any law or guideline or interpretation or
application thereof by the Court, the U.S Bankruptcy Court in the
State of Delaware, any Governmental Authority, arbitrator or grand
jury charged with the interpretation or administration thereof or
compliance with any request or directive of any Governmental
Authority, arbitrator or grand jury (whether or not having the
force of law), (ii) determined by counsel for the Lender to be
necessary or advisable in
52
connection with enforcement or preservation of rights under or in
connection with this Agreement or any other Revised Transaction
Document or (iii) of any information which has been made public by
a Person other than the Lender. The Lender shall have the right to
disclose any confidential information described in this Section 30
(Confidentiality) to an assignee or prospective assignee or to a
participant or prospective participant in the Obligations
hereunder, provided that the assigning or selling Lender shall
have obtained from such assignee or prospective assignee or
participant or prospective participant an agreement to hold such
information in confidence to the same extent as if it were the
Lender. Furthermore, the Lender shall have the right to disclose
any confidential information described in this Section 30
(Confidentiality) to the Bank, any of its wholly owned
subsidiaries or registered assigns as holder of the Option,
provided that the Lender shall have obtained from the holder its
agreement to hold such information in confidence to the same
extent as if it were the Lender.
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[Signature Page of the Amending Agreement]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.
GILAT SATELLITE NETWORKS LTD. (under a stay of proceedings), BANK HAPOALIM B.M.,
as Lender as Borrower
By: _____________________ By: _____________________
Title: _____________________ Title: _____________________
