EXHIBIT 4.3.4
[Xxxxxx Electronics Corporation Letterhead]
October 22, 1998
PanAmSat Corporation
Xxx Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
Executive Vice President and
Chief Financial Officer
Dear Xx. Xxxxxx:
Reference is hereby made to that certain Loan Agreement, dated as of
May 15, 1997 between PanAmSat Corporation ("PanAmSat") and Xxxxxx Electronics
Corporation ("Xxxxxx") (as from time to time amended, the "Xxxxxx Loan
Agreement") pursuant to which Xxxxxx has extended a credit facility in the
amount of $1,725,000,000 to PanAmSat evidenced by the promissory note dated May
15, 1997 (as from time to time amended, the "Xxxxxx Note").
Reference is also made to that certain Credit Agreement dated as of
February 20, 1998, with certain financial institutions, each of the
Co-Documentation Agents party thereto, and the Administrative Agent (as from
time to time amended, the "Senior Credit Agreement"), providing among other
things for the making of advances by the Lenders to PanAmSat in an aggregate
principal amount at any one time outstanding up to $500,000,000.
On January 16, 1998, PanAmSat completed a private placement pursuant to
Rule 144A of the Securities Act of 1933, as amended, for $750 million aggregate
principal amount of new debt securities (the "Notes"). The purpose of this
letter is to formalize Xxxxxx' agreement to subordinate its rights under the
Xxxxxx Note to the rights of the holders of the Notes (including any
replacements or exchanges thereof).
In consideration of the foregoing, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
Xxxxxx hereby confirms and agrees that the obligations represented by
the Xxxxxx Note are and shall be subordinated and subject in right of payment to
the prior payment in full of the Notes.
Notwithstanding the foregoing, PanAmSat may make regularly scheduled
payments of interest on the Xxxxxx Note and PanAmSat may make payments of
principal on the Xxxxxx Note on or after January 1, 2001, in an aggregate amount
not exceeding in any fiscal year of PanAmSat an amount equal to 50% of Excess
Cash Flow (as defined in the Senior Credit Agreement) for the preceding fiscal
year of PanAmSat, as set forth in the annual financial statements of PanAmSat.
In addition, so long as no Event of Default under the indenture has occurred,
PanAmSat may at any time make payments of principal of the Xxxxxx Note (a) out
of the proceeds of any issuance by PanAmSat of shares of capital stock, (b) out
of the proceeds of any issuance by PanAmSat of subordinated debt that is
subordinated on terms substantially the same as the Xxxxxx Note, (c) in exchange
for equity of PanAmSat, or (d) in connection with any refinancing of the Xxxxxx
Note. Xxxxxx agrees that if there shall occur an Event of Default (as such term
is defined in the indenture for the Notes), no payment shall be made on or in
respect of the Xxxxxx Note until such time as the trustee for the holders of the
Notes notifies PanAmSat that such Event of Default has been remedied, after
which PanAmSat may resume making required payments under the Xxxxxx Note.
If you are in agreement with the foregoing, kindly sign this letter on
the line provided below and return a copy to our attention.
XXXXXX ELECTRONICS CORPORATION
By: Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Assistant Treasurer
Xxxxxx and acknowledged as of January 16, 1998:
PANAMSAT CORPORATION
By: Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President and Chief Financial Officer
