PEGASUS MEDIA & COMMUNICATIONS, INC.
THIRD AMENDMENT TO CREDIT AGREEMENT AND CONSENT
This THIRD AMENDMENT TO CREDIT AGREEMENT AND CONSENT (this
"Amendment") is dated as of July 22, 2003, and entered into by and among Pegasus
Media & Communications, Inc., a Delaware corporation (the "Borrower"), the
financial institutions listed on the signature pages hereof and Deutsche Bank
Trust Company Americas (formerly known as Bankers Trust Company), as
administrative agent for the Lenders (in such capacity, the "Agent"), and is
made with reference to that certain First Amended and Restated Credit Agreement
dated as of January 14, 2000 (as amended, supplemented or otherwise modified to
the date hereof, the "Credit Agreement"), by and among the Borrower, the
Lenders, the Syndication Agent, the Agent, and the Documentation Agent.
Capitalized terms used herein without definition shall have the same meanings
herein as set forth in the Credit Agreement as amended by Section 1.12 of this
Amendment.
RECITALS
WHEREAS, the parties hereto desire to amend certain of the
terms and provisions of the Credit Agreement as set forth below;
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties hereto agree
as follows:
Section 1. AMENDMENTS TO THE CREDIT AGREEMENT
1.1 Amendments to Preamble
----------------------
The Preamble to the Credit Agreement is hereby amended by deleting the
reference to "Pegasus Communications Corporation" and substituting therefor
"Pegasus Satellite Communications, Inc.".
1.2 Amendments to Article I: General Terms
---------------------------------------
A. Section 1.01(e) of the Credit Agreement is hereby amended by
deleting it in its entirety and substituting therefor the following:
(e) The Commitments (i) shall be automatically permanently
reduced on March 31, 2001, and on each Quarterly Date and each other
date thereafter set forth in either of the two tables below, with a
final reduction on the Expiration Date, on each of which dates the
Borrower shall, subject to Section 1.15, repay such amount of the
aggregate Revolving Loans as shall cause the aggregate outstanding
principal balance thereunder to be less than or equal to the Available
Commitments, after giving effect to such reductions, and (ii) shall
expire on the Expiration Date, when all outstanding principal and
accrued interest on the Revolving Notes shall be due and payable in
full. Prior to the Third Amendment Effective Date, such reductions of
the Commitments shall be in the respective percentages of the original
amount of the Commitments set forth in the table immediately below,
without giving effect to any other mandatory or optional Commitment
reductions:
----------------------------- -----------------------------
Aggregate Percentage of
Automatic
Quarterly Dates Permanent Reduction
----------------------------- -----------------------------
----------------------------- -----------------------------
March 31, 2001 2.50%
----------------------------- -----------------------------
June 30, 2001 2.50%
----------------------------- -----------------------------
September 30, 2001 2.50%
----------------------------- -----------------------------
December 31, 2001 2.50%
----------------------------- -----------------------------
March 31, 2002 3.75%
----------------------------- -----------------------------
June 30, 2002 3.75%
----------------------------- -----------------------------
September 30, 2002 3.75%
----------------------------- -----------------------------
December 31, 2002 3.75%
----------------------------- -----------------------------
March 31, 2003 6.25%
----------------------------- -----------------------------
June 30, 2003 6.25%
----------------------------- -----------------------------
; and on and after the Third Amendment Effective Date, such reductions
of the Commitments shall occur on the dates and be in the respective
amounts set forth in the table immediately below, without giving effect
to any other mandatory or optional Commitment reductions occurring
after the Third Amendment Effective Date:
----------------------------- -----------------------------
Aggregate Automatic
Dates Permanent Reduction
----------------------------- -----------------------------
----------------------------- -----------------------------
Third Amendment Effective $59,999,000.00
Date
----------------------------- -----------------------------
September 30, 2003 $12,172,000.00
----------------------------- -----------------------------
December 31, 2003 $13,690,800.00
----------------------------- -----------------------------
March 31, 2004 $13,690,800.00
----------------------------- -----------------------------
June 30, 2004 $13,690,800.00
----------------------------- -----------------------------
September 30, 2004 $13,690,800.00
----------------------------- -----------------------------
October 31, 2004 $13,690,800.00
----------------------------- -----------------------------
B. Section 1.02 of the Credit Agreement is hereby amended by deleting
paragraph (a)(i) thereof and inserting the following text in lieu thereof:
"(i) On and after the Third Amendment Effective Date, the
Issuing Bank shall not issue any Letter of Credit if, after giving
effect to the issuance thereof, (A) the Aggregate Exposure would exceed
the aggregate Commitments then in effect or (B) the aggregate Letter of
Credit Exposure would exceed $10,000,000.".
2
C. Section 1.02 of the Credit Agreement is hereby amended by adding at
the end of paragraph (a) thereof the following:
"As of the Third Amendment Effective Date, all NRTC Letters of Credit
issued hereunder prior to such date shall cease to be "Letters of
Credit" hereunder.".
D. Section 1.08(c) of the Credit Agreement is hereby amended (i) by
deleting the text "in inverse order of maturity" in the first place where it
appears and inserting in lieu thereof the text "in the order in which such
reductions are scheduled to occur" and (ii) by deleting the text "in inverse
order of maturity" in the second place where it appears and inserting in lieu
thereof the text "in the order in which such installments are scheduled to be
paid".
E. Section 1.09(b) of the Credit Agreement is hereby amended by adding
at the end thereof the following new sentence:
"Until the Discharge of Parent Term Debt, in the event that Excess L/C
Cash Collateral shall exceed $1,000,000 at any time, or in the event
that the amount described in clause (b)(i) of the definition of "Excess
L/C Cash Collateral" shall be $0, the Borrower shall immediately repay
the Notes and/or the Commitments shall be automatically and permanently
reduced in an aggregate amount equal to the amount of such Excess L/C
Cash Collateral, as provided in Section 1.09(e). The Borrower shall
give written notice of each such reduction within three Business Days
after the date on which an Authorized Officer of the Parent or any of
the Companies first obtains knowledge of such reduction.".
F. Section 1.09(d)(i) of the Credit Agreement is hereby amended by
deleting such Section in its entirety and substituting therefor the following:
"(i) Prepayment of the Notes. Without limiting the obligation
of the Borrower under Section 7.03 to obtain the consent of the
Required Lenders to any Disposition not otherwise permitted hereunder,
the Borrower agrees (A) two (2) Business Days prior to the occurrence
of any Disposition other than a Disposition permitted under Section
7.03(f), to deliver to the Agent (in sufficient copies for each Lender)
a statement, certified by an Authorized Officer of the Borrower and in
reasonable detail, of the estimated amount of the Net Cash Proceeds of
such Disposition and (B) that in the event such Disposition (other than
a Disposition permitted under Section 7.03(f)) is completed, the
Commitments shall be automatically reduced and/or the Notes shall be
prepaid as follows and as provided in Section 1.09(e):
(1) on the date of such Disposition, in an aggregate
amount equal to 100% of the Net Cash Proceeds of such
Disposition received by the Borrower or any of the
Subsidiaries on the date of such Disposition; and
3
(2) thereafter, quarterly, on the date of the
delivery to the Agent pursuant to Section 6.05 hereof of the
financial statements for each fiscal quarter or (if earlier)
the date which is forty-five (45) days after the end of such
fiscal quarter, to the extent the Borrower or any Subsidiary
shall receive Net Cash Proceeds during such fiscal quarter
under deferred payment arrangements or investments entered
into or received in connection with any Disposition other than
a Disposition permitted under Section 7.03(f), an amount equal
to 100% of the aggregate amount of such Net Cash Proceeds,
provided that if, prior to the date upon which the Borrower
would otherwise be required to make a prepayment under this
paragraph (2) with respect to any fiscal quarter, all such Net
Cash Proceeds received in cash shall aggregate an amount that
will require a prepayment of $250,000 or more under this
paragraph (2) with respect to such fiscal quarter, then the
Borrower shall immediately make a prepayment under this
paragraph (2) in an amount equal to such required
prepayment.".
G. Section 1.09(d)(ii)(B) of the Credit Agreement is hereby amended by
deleting such Section in its entirety and substituting therefor the following:
"(B) Net Cash Proceeds in excess of $100,000,000 in
the aggregate are (1) held by the Agent in the Collateral
Account pending such reinvestment in replacement assets
pursuant to one or more Permitted Acquisitions or such
application to make Capital Expenditures, in either of which
events the Agent need not release such Net Cash Proceeds
except upon presentation of evidence satisfactory to it that
such Net Cash Proceeds are to be (or that an amount equal to
such Net Cash Proceeds to be released was, after the date of
the relevant Disposition) so reinvested or so applied to make
Capital Expenditures, in either case in compliance with the
provisions of this Agreement, (2) applied by the Borrower to
the prepayment of the Revolving Notes, with such prepayment to
be reflected in the Commitment Reserve, without permanent
reduction of the Commitments in such amount (in which event
the Borrower agrees to advise the Agent in writing at the time
of such prepayment of Notes that such prepayment is being made
from the proceeds of a Disposition) or (3) held and applied in
any combination of clauses (1) and (2) above; and".
H. Section 1.09(d)(ii)(C) of the Credit Agreement is hereby amended by
deleting such Section in its entirety and substituting therefor the following:
"(C) the Net Cash Proceeds from any such Disposition
referred to in subparagraph (ii)(B) above that occurred before
March 3, 2003, are in fact so reinvested or so applied to make
Capital Expenditures, in either case prior to the earlier to
occur of (1) 180 days following the date of such Disposition,
unless one or more definitive agreements with respect to such
Permitted Acquisition(s) utilizing Net Cash Proceeds shall
have been entered into within such period, or (2) in such
4
event, 360 days following such Disposition, it being
understood that, in the event Net Cash Proceeds from more than
one Disposition are paid into the Collateral Account or
applied to the prepayment of the Notes as provided in
subparagraph (i)(1) above, such Net Cash Proceeds shall be
deemed to be released in the same order in which such
Dispositions occurred; and the Net Cash Proceeds from any such
Disposition referred to in subparagraph (ii)(B) above that
occurred on or after March 3, 2003, are in fact so reinvested
or so applied to make Capital Expenditures at any time on or
after March 3, 2003.".
I. The last paragraph of Section 1.09(d) of the Credit Agreement is
hereby amended by deleting the text "such Net Available Proceeds" and
substituting therefor the text "Net Cash Proceeds from any such Disposition
referred to in subparagraph (ii)(B) above that occurred before March 3, 2003,".
J. Section 1.09 of the Credit Agreement is hereby amended by adding at
the end thereof the following new Sections 1.09(g), 1.09(h) and 1.09(i):
"(g) Application of DBS Rights Litigation Proceeds. On each
date on which the Borrower or any of its Affiliates receives any DBS
Rights Litigation Proceeds,
(i) an aggregate amount of DBS Rights Litigation
Proceeds equal to the amount of out-of-pocket legal fees and
expenses incurred by the Borrower and its Affiliates on or
prior to such date in connection with the DBS Rights
Litigation (the "DBS Rights Litigation Expenses"), may be
retained by the Borrower and its Subsidiaries (other than the
Finance Subsidiaries, the Special Purpose Subsidiary, and the
Letter-of-Credit Subsidiary) and used for general corporate
purposes;
(ii) the Borrower shall immediately repay the Term
Loans in an aggregate amount equal to the least of the amounts
described in the following clauses (x), (y) and (z):
(x) the excess of
(I) the aggregate amount of DBS
Rights Litigation Proceeds received
by the Borrower and its Affiliates
on or prior to such date over
(II) the sum of (A) the aggregate
amount of DBS Rights Litigation
Expenses and (B) the aggregate
amount of all repayments made prior
to such date under this Section
1.09(g)(ii),
(y) the excess of
5
(I) 50% of the excess of (A) the
aggregate amount of Net DBS Rights
Litigation Proceeds received by the
Borrower and its Affiliates on or
prior to such date over (B) the
aggregate amount of DBS Rights
Litigation Expenses paid after April
2, 2003, over
(II) the aggregate amount of all
repayments made prior to such date
under this Section 1.09(g)(ii), and
(z) the excess of
(I) $50,000,000 over
(II) the aggregate amount of all
repayments made prior to such date
under this Section 1.09(g)(ii); and
(iii) any portion of the DBS Rights Litigation
Proceeds that remains after giving effect to the application
of clauses (i) and (ii) above shall be retained by the
Borrower and its Subsidiaries and used (A) until the Discharge
of Parent Term Debt shall have occurred, by the Companies for
Permitted Acquisitions or the acquisition, within 180 days of
the receipt of such DBS Rights Litigation Proceeds (or, if one
or more definitive agreements with respect to Permitted
Acquisitions are entered into within such 180 day period,
within 360 days following the receipt of such DBS Rights
Litigation Proceeds), of tangible assets or the payment of
other capitalized costs used or useful in the DBS Business or
broadcast business of any Company and (B) after the Discharge
of Parent Term Debt, for general corporate purposes.
Notwithstanding clause (ii) above, in the event that the
Borrower or any of its Affiliates receives DBS Rights Litigation
Proceeds in excess of the aggregate amount of DBS Rights Litigation
Expenses at a time when a judgment shall not have been rendered or a
settlement reached with respect to the Seamless Litigation, the
Borrower may, at its election, deposit up to 10% of such excess DBS
Rights Litigation Proceeds in a restricted collateral account of the
Borrower (in which account the Agent shall have a first priority
security interest) in lieu of making any prepayment of the Loans
required under this Section 1.09(g), and shall be permitted, until the
date which is 90 days (or 180 days, if the Agent elects in its sole
discretion to extend such number of days) after receipt of such
proceeds, to apply such amounts on deposit solely to pay any amount
required to be paid by any Company to any person (other than the
Borrower or any of its Affiliates) as a result of (and upon the
occurrence of) a judgment with respect to, or settlement of, the
Seamless Litigation; provided, however, that the Borrower shall not be
permitted to elect to deposit amounts exceeding $4 million in the
aggregate into such collateral account; and provided further, that if
such amounts on deposit in such collateral account shall not have been
so applied during such 90-day (or 180-day, if applicable) period, then
such amounts shall thereupon immediately be required to be applied as
set forth in clause (ii) above. All documentation with respect to such
collateral account and any release of amounts therefrom shall be
reasonably satisfactory to the Agent.
6
All DBS Rights Litigation Proceeds applied to the repayment of
the Term Loans shall be allocated between the Initial Term Loans and
the Incremental Term Loans pro rata according to the outstanding
principal balance of such Term Loans at the time of such application
(determined before giving effect to such application), and shall be
applied to scheduled repayments of Term Loans within each such tranche
in the order in which such repayments are scheduled to occur.
(h) Application of Proceeds of Dispositions Under Section
7.03(f). Without limiting the obligation of the Borrower under Section
7.03 to obtain the consent of the Required Lenders to any Disposition
not otherwise permitted hereunder, the Borrower agrees (A) two (2)
Business Days prior to the occurrence of any Disposition permitted
under Section 7.03(f), to deliver to the Agent (with sufficient copies
for each Lender) a statement, certified by an Authorized Officer of the
Borrower and in reasonable detail, of the estimated amount of the Net
Cash Proceeds of such Disposition and (B) that in the event such
Disposition is completed, the Term Loans shall be repaid as follows:
(1) on the date of such Disposition, in an aggregate
amount equal to two-thirds of the Net Cash Proceeds of such
Disposition received by the Borrower or any of the
Subsidiaries on the date of such Disposition; and
(2) thereafter, quarterly, on the date of the
delivery to the Agent pursuant to Section 6.05 hereof of the
financial statements for each fiscal quarter or (if earlier)
the date which is forty-five (45) days after the end of such
fiscal quarter, to the extent the Borrower or any Subsidiary
shall receive Net Cash Proceeds during such fiscal quarter
under deferred payment arrangements or investments entered
into or received in connection with any Disposition permitted
under Section 7.03(f), an amount equal to two-thirds of the
aggregate amount of such Net Cash Proceeds, provided that if,
prior to the date upon which the Borrower would otherwise be
required to make a prepayment under this paragraph (2) with
respect to any fiscal quarter, all such Net Cash Proceeds
received in cash shall aggregate an amount that will require a
prepayment of $250,000 or more under this paragraph (2) with
respect to such fiscal quarter, then the Borrower shall
immediately make a prepayment under this paragraph (2) in an
amount equal to such required prepayment.
All such amounts applied to the repayment of the Term Loans
shall be allocated between the Initial Term Loans and the Incremental
Term Loans pro rata according to the outstanding principal balance of
such Term Loans at the time of such application (determined before
giving effect to such application), and shall be applied to scheduled
7
repayments of Term Loans within each such tranche in the order in which
such repayments are scheduled to occur. The portion of the Net Cash
Proceeds of Dispositions permitted under Section 7.03(f) that is not
required to be applied to the repayment of the Term Loans shall be
retained by the Borrower to be used by the Companies for general
corporate purposes of the Companies.
(i) Global Litigation Settlement. Upon the date on which any
Global Litigation Settlement becomes binding on one or more Affiliates
of the Borrower, the Borrower shall prepay in full all of the Loans and
other Obligations, and all of the Commitments shall terminate.".
1.3 Amendment to Article II: Security; Subordination; Use of Proceeds
------------------------------------------------------------------
A. Sections 2.01(a)(i) and 2.01(a)(ii) are hereby amended by inserting
the text ", the Letter-of-Credit Subsidiary and South Plains DBS (so long as
South Plains DBS is not a Material Subsidiary)" immediately following each
reference to "Special Purpose Subsidiary".
B. Section 2.01(a) of the Credit Agreement is hereby further amended
(i) by deleting the "and" at the end of clause (v) thereof, (ii) by deleting
the "." at the end of clause (vi) thereof and substituting therefor ";" and
(iii) by adding the following new clause (vii) and (viii):
"(vii) a first priority perfected security interest in the
Borrower Collateral Account (as defined in the Parent Term Loan
Documents as in effect on the Third Amendment Effective Date), which
account shall contain all dividends, distributions, and interest and
principal payments paid by the Borrower to the Parent at any time after
the Agent has notified the Parent of its election to exercise the
Agent's rights under Section 3(b) of the Pledge Agreement, and which
security interest shall rank prior to the second-priority security
interest in such Borrower Collateral Account in favor of the agent and
lenders under the Parent Term Loan Documents and any Replacement Parent
Term Debt; and
(viii) a second priority perfected security interest in all
other assets of the Parent (other than those assets in which the Agent
is required under this Agreement to have a first priority perfected
security interest) that are subject from time to time to any security
interest in favor of the agent and lenders under the Parent Term Loan
Documents and any Replacement Parent Term Debt, which security interest
(I) shall be junior to no liens other than the lien in favor of the
agent and lenders under the Permitted Parent Term Debt and (II) shall,
upon the release or termination of the lien in favor of such agent and
lenders, be terminated and released, except that if the foregoing
provision would otherwise cause the release of such security interest
to occur during the continuance of a Default, such security interest in
favor of the Agent for the benefit of the Lenders shall not terminate
or be released and shall remain continuously perfected and become a
first priority perfected security interest.".
8
C. Section 2.01(c) of the Credit Agreement is hereby amended by
deleting the first sentence thereof in its entirety and substituting therefor
the following:
"All agreements and instruments described or contemplated in this
Section 2.01, including but not limited to the Parent Guaranty, the
Parent Pledge Agreement, the Borrower Security Agreement, the
Subsidiary Agreement, the Collateral Assignments, the Affiliate
Subordination Agreement, the Intercreditor Agreement and the Collateral
Account Agreement, together with any and all other agreements and
instruments heretofore or hereafter securing the Notes, the Rate
Hedging Obligations and the other Obligations or otherwise executed in
connection with this Agreement, as such agreements or instruments are
amended, supplemented or otherwise modified from time to time in
accordance with the terms hereof, are sometimes hereinafter referred to
collectively as the "Security Documents" and each individually as a
"Security Document".".
D. Section 2.02 of the Credit Agreement is hereby amended by deleting
the second sentence thereof in its entirety and substituting therefor the
following:
"The proceeds of the Loans shall be used (a) to repay all existing
Indebtedness under the Original Agreement, including accrued interest
and fees; (b) for distributions to the Parent permitted under Sections
5.04(b)(v), (vi) and (vii); (c) to repay existing Indebtedness of DTS
under the DTS Credit Agreement; (d) solely with respect to periods
prior to the Third Amendment Effective Date, to repurchase or redeem
the Original Subordinated Notes; (e) to support the issuance of Letters
of Credit; (f) on the Third Amendment Effective Date, to the extent
permitted under Section 5.04(b)(vi)(C), to fund a portion (not
exceeding (x) $17,000,000, in the event $100,000,000 in principal
amount of the Parent Term Loans are borrowed on the Third Amendment
Effective Date, and (y) $10,000,000, otherwise) of the Initial L/C
Capitalization; (g) for working capital, Capital Expenditures and
general corporate purposes of the Borrower and its Subsidiaries (other
than the Special Purpose Subsidiary, the Letter-of-Credit Subsidiary
and South Plains DBS); and (h) subject to availability, to finance
Permitted Acquisitions, including Transaction Costs. In no event shall
any proceeds of the Loans be applied after the Third Amendment
Effective Date to make Restricted Payments that are used as cash
collateral for Indebtedness of the Parent or any of its Affiliates
(other than the Companies), other than cash collateral for Permitted
Parent Term Debt on the terms sets forth in the Parent Term Loan
Documents as in effect on the Third Amendment Effective Date.".
1.4 Amendment to Article III: Conditions of Making the Loans
---------------------------------------------------------
Section 3.03 of the Credit Agreement is hereby amended by adding at the
end thereof the following new Section 3.03(d):
"(d) For any requested Loan on or after the Third Amendment
Effective Date, prior to giving effect to such Loan and after giving
pro forma effect to such Loan, the aggregate amount of Unrestricted
Cash of the Borrower and its Subsidiaries shall not exceed $20,000,000
9
plus the NRTC Installment Amount as of such date. Each Loan Request
shall set forth (1) the aggregate amount of Unrestricted Cash as of the
end of the preceding Business Day, and (2) a schedule prepared by the
Borrower setting forth the Borrower's good faith estimate of the amount
of the next payment required to be made by the Companies to the NRTC
under the NRTC Member Agreements, together with a certificate of the
Borrower certifying that the estimate in such schedule is made in good
faith, based on assumptions believed by the Borrower to be
reasonable.".
1.5 Amendment to Article IV: Representations and Warranties
--------------------------------------------------------
A. Section 4.01 of the Credit Agreement is hereby amended by adding at
the end thereof the following new paragraphs:
"Since January 1, 2001, each of Pegasus Communications
Corporation, the Parent and the Borrower has duly filed all forms,
reports, schedules, proxy statements and documents required to be filed
by it with the SEC. True and correct copies of all filings made by
Pegasus Communications Corporation, the Parent or the Borrower with the
SEC since such date and prior to the date hereof (the "SEC Reports"),
whether or not required by law and including any registration statement
filed by Pegasus Communications Corporation, the Parent or the Borrower
under the Securities Act, have been either made available or are
publicly available to the Agent. As of their respective dates, the SEC
Reports (other than preliminary material) complied in all material
respects with the requirements of the Securities Act or the Exchange
Act, as applicable, and the rules and regulations of the SEC thereunder
applicable to such SEC Reports, and none of the SEC Reports, at the
time filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. No other
Person included in the Companies is subject to periodic reporting
requirements of the Exchange Act or is otherwise required to file
documents with the SEC or comparable Governmental Entity or any
national securities exchange or quotation service.
The audited consolidated financial statements of each of
Pegasus Communications Corporation, the Parent and the Borrower for the
year ended December 31, 2002, and the audited and unaudited
consolidated financial statements of Pegasus Communications
Corporation, the Parent and the Borrower included (or incorporated by
reference) in the SEC Reports (the "Financial Statements") comply when
filed as to form in all material respects with applicable accounting
requirements and with the rules and regulations of the SEC with respect
thereto and were prepared in accordance with GAAP (except as may be
indicated in the notes thereto) and fairly present in all material
respects the consolidated financial position of Pegasus Communications
Corporation and its Subsidiaries, the Parent and its Subsidiaries or
the Borrower and its Subsidiaries, as the case may be, as of their
respective dates, and the consolidated income, stockholders equity,
results of operations and changes in consolidated financial position or
10
cash flows for the periods presented therein, except that the unaudited
interim financial statements were or are subject to normal and
recurring year-end adjustments. The books and records of each of
Pegasus Communications Corporation, the Parent and the Borrower and
each of their respective Subsidiaries accurately reflect in all
material respects, the transactions and accounts of such Persons. As of
the Third Amendment Effective Date, Pegasus Communications Corporation
has no Indebtedness other than its Series D and Series E preferred
stock.".
B. Section 4.06 of the Credit Agreement is hereby amended by adding at
the end thereof the following:
"Each of the Companies, the Parent and Pegasus Communications
Corporation has devised and maintains systems of internal accounting
controls sufficient to provide reasonable assurances, that (i) all
material transactions are executed in accordance with management's
general or specific authorization, (ii) all material transactions are
recorded as necessary to permit the preparation of financial statements
in conformity with GAAP consistently applied or any other criteria
applicable to such statements, (iii) access to the property and assets
of any of the Companies, the Parent or Pegasus Communications
Corporation, as the case may be, is permitted only in accordance with
management's general or specific authorization and (iv) the recorded
amounts for items is compared with the actual levels at reasonable
intervals and appropriate action is taken with respect to any
differences.".
C. Section 4.15 of the Credit Agreement is hereby amended by adding at
the end thereof the following new Section 4.15(f):
"(f) All of the foregoing representations and warranties
contained in this Section 4.15 shall apply to the Parent and Pegasus
Communications Corporation as though they were "Companies" under this
Agreement.".
D. Section 4.16 of the Credit Agreement is hereby amended by adding at
the end thereof the following:
"Except (i) for liabilities incurred in connection with the Parent Term
Loan Agreement (as in effect on the Third Amendment Effective Date) or
the transactions contemplated thereby, (ii) as disclosed by the SEC
Reports or (iii) as set forth in Schedule 4.01, 4.02, 4.04, 4.05, 4.11,
4.13, 4.16, 4.17 or 4.20 to the Parent Term Loan Agreement (as in
effect on the Third Amendment Effective Date), since December 31, 2002,
(A) none of the Companies, the Parent or Pegasus Communications
Corporation has suffered any change, condition, event or development
that has had, or could reasonably be expected to have, a Material
Adverse Effect, (B) each of the Companies, the Parent and Pegasus
Communications Corporation has conducted in all material respects its
respective business only in the ordinary course consistent with past
practice, except for the negotiation and execution and delivery of the
Parent Term Loan Agreement and (C) no Company or the Parent has (i)
11
incurred any Indebtedness or Guarantee, (ii) granted any Lien to any
Person, (iii) made any Restricted Payment or Investment or (iv) entered
into any transaction (including any merger or consolidation) with any
Person, except, in each case, as would be permitted under this
Agreement and the Parent Term Loan Agreement.".
E. Article IV of the Credit Agreement is hereby amended by adding at
the end thereof the following new Sections 4.29 and 4.30:
"Section 4.29. Parent Term Loans.
--------------------------------
The execution, delivery and performance of the Parent
Transaction Documents (including, without limitation, the Intercreditor
Agreement) and the definitive documentation (the "L/C Facility
Documents") for the Indebtedness of the Letter of Credit Subsidiary
permitted pursuant to Section 7.01(o) have been duly authorized by all
necessary corporate action on the part of, and are within the
respective corporate power of, the Parent and each Affiliate of the
Borrower that is a party thereto and (subject to obtaining the consents
specified in Schedule 4.04 to the Parent Term Loan Agreement (as in
effect on the Third Amendment Effective Date)) will not violate any
provision of law (including without limitation the Communications Act
of 1934, as amended, and all other rules, regulations, administrative
orders and policies of the FCC, the FAA, the Copyright Office and the
rules and regulations of NASDAQ), any order, judgment or decree of any
court or other agency of government, the Organizational Documents of
Pegasus Communications Corporation, the Parent or any Company or any
indenture, agreement or other instrument to which any Company, the
Parent or Pegasus Communications Corporation is a party, or by which
any Company, the Parent or Pegasus Communications Corporation is bound
(including without limitation the PCC Exchange Indenture, the PCC
Exchange Notes, the PCC 1997 Indenture, the PCC 1997 Senior Notes, the
PCC 1998 Indenture, the PCC 1998 Senior Notes, the PSC 2001 Indenture,
the PSC 2001 Senior Notes, the Golden Sky Exchange Indentures, the
Golden Sky Exchange Notes, the Subordinated Debt Documents, the PCC
Preferred Stock Designation, the PSC Subordinated Notes Indenture, the
PSC Subordinated Notes and any DBS Agreement), or be in conflict with,
result in a breach of, or constitute (with due notice or lapse of time
or both) a default under, or except as may be permitted under this
Agreement, result in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever upon any of the property or assets
of any Company, the Parent or Pegasus Communications Corporation
pursuant to, any such indenture, agreement or instrument. Each of the
Parent Transaction Documents constitutes the valid and binding
obligation of each of the Parent and Pegasus Communications Corporation
party thereto, and each of the L/C Facility Documents constitutes the
valid and binding obligation of the Letter-of-Credit Subsidiary, in
each case enforceable against such party in accordance with its terms,
subject, however to bankruptcy, insolvency, reorganization, moratorium
and similar laws affecting the rights and remedies of creditors
generally or the application of principles of equity, whether in any
action in law or proceeding in equity, and subject to the availability
of the remedy of specific performance or of any other equitable remedy
or relief to enforce any right under any such agreement.
12
Section 4.30. Immaterial Affiliates.
------------ ---------------------
Except for management services provided by the Manager to the
Parent and the Companies and assets owned and activities incidental or
related thereto, no Immaterial Affiliate owns any material assets,
conducts any material business or is the obligor under any other
material Indebtedness. Notwithstanding anything to the contrary
contained in this Agreement, the Borrower shall not be deemed to make
any of the representations contained in this Section 4.30 on any date
after the Discharge of Parent Term Debt.".
1.6 Amendments to Article V: Financial Covenants
---------------------------------------------
A. Section 5.01(b) is hereby amended by deleting the first sentence of
such Section (up to but not including the table contained therein) and
substituting therefor the following:
"(b) Borrower Leverage. At all times during each of the
periods set forth below, maintain a ratio of (i) prior to September 30,
2003, Total Funded Debt to Annualized EBITDA (for the most recently
ended fiscal quarter) and (ii) on or after September 30, 2003, Total
Funded Debt to LTM EBITDA (for the most recently ended fiscal quarter)
(the applicable ratio referred to in clause (i) or (ii) being the
"Borrower Leverage Ratio"), of not more than the following:".
B. Section 5.01(b) is hereby further amended by replacing the portion
of the table contained therein applying to periods ending on or after June 30,
2003, with the following:
"June 30, 2003 through September 29, 2004 2.00:1.00
September 30, 2004 and thereafter 1.50:1.00".
C. Section 5.01(b) is hereby further amended by deleting the last
sentence of such Section and substituting therefor the following:
"For purposes of this covenant, Annualized EBITDA and LTM EBITDA shall
each be determined on a pro forma basis after giving effect to all
Acquisitions and Dispositions made by the Companies at any time during
the applicable fiscal periods, in each case as if such Acquisitions and
Dispositions had occurred at the beginning of such fiscal period and
calculated in a manner reasonably satisfactory to the Agent.".
D. Section 5.01(c) is hereby amended by adding at the end thereof the
following:
"Notwithstanding the foregoing, the covenant contained in this Section
5.01(c) shall not apply to periods ending after June 30, 2003.".
13
E. Section 5.02 is hereby amended by deleting such Section (up to but
not including the table contained therein) and substituting therefor the
following:
"Section 5.02. Interest Coverage. Maintain a ratio of (i) for
each fiscal quarter ending prior to September 30, 2003, and set forth
in the table below, EBITDA to Total Interest Expense, and (ii) for each
fiscal quarter ending on or after September 30, 2003, and set forth in
the table below, LTM EBITDA to Total Interest Expense (for the period
of four (4) fiscal quarters ending at the end of such fiscal quarter)
(the applicable ratio referred to in clause (i) or (ii) being the
"Interest Coverage Ratio"), not less than the correlative ratio
indicated below:".
F. Section 5.03 is hereby amended by deleting such Section (up to but
not including the table contained therein) and substituting therefor the
following:
"Section 5.03 Fixed Charge Coverage. Maintain a ratio of (i)
for each fiscal quarter indicated below ending prior to September 30,
2003, Annualized EBITDA to Fixed Charges (for the period of four (4)
fiscal quarters ending at the end of such fiscal quarter, with "Fixed
Charges" solely for purposes of this clause (i) being used as defined
in this Agreement prior to the Third Amendment Effective Date), and
(ii) for each fiscal quarter indicated below ending on or after
September 30, 2003, LTM EBITDA to Fixed Charges (for the period of four
(4) fiscal quarters ending at the end of such fiscal quarter) (the
applicable ratio referred to in clause (i) or (ii) being the "Fixed
Charge Coverage Ratio"), of at least the following:".
G. Section 5.04(a) of the Credit Agreement is hereby amended by adding
immediately prior to the "." at the end thereof the following new proviso:
"provided further, however, that from the Third Amendment Effective
Date until the Discharge of Parent Term Debt, such payments shall not
exceed, during any period of twelve (12) consecutive months, the lesser
of (x) the actual cost of providing management and administrative
support services to the Companies (other than the Special Purpose
Subsidiary) for such period and (y) 120% of the Management Fees paid to
the Manager for the 12 month period immediately preceding such period".
H. Section 5.04(b) of the Credit Agreement is hereby amended by
deleting subdivisions (iv), (vi) and (vii) thereof in their entirety and
substituting therefor the following new subdivisions (iv), (vi) and (vii),
respectively:
"(iv) The Borrower may (A) prior to the Third Amendment
Effective Date, make Restricted Payments permitted under this Agreement
as in effect on the date of the relevant Restricted Payment, and (B)
after the Third Amendment Effective Date, but no later than 33 days
after the Third Amendment Effective Date, redeem the entire outstanding
principal amount of Original Subordinated Notes (and repay all other
amounts owed thereon) solely with the proceeds of the Parent Term Loans
and/or cash on hand of the Parent, in each case contributed by the
14
Parent on the Third Amendment Effective Date to the equity of the
Borrower, provided that no Default shall exist as of the date of any
such payment or redemption or after giving effect thereto (calculated
both as of such date and on a pro forma basis as of the end of and for
the fiscal period(s) most recently ended prior thereto for which
financial statements are required to be provided under Section 6.05).".
"(vi) The Borrower may (A) on or after the Third Amendment
Effective Date, pay annual, semi-annual or quarterly dividends or
distributions to the Parent solely for the purpose of financing
regularly scheduled payments of interest (but not prepayments) due and
payable in cash within two Business Days of the date of such dividend
or distribution under the Permitted Parent High-Yield Debt and the
Permitted Parent Term Debt, (B) after the Third Amendment Effective
Date, make payments of accrued interest on Indebtedness referenced in
clause (A) at the time such Indebtedness is refinanced or replaced by
Replacement Parent High-Yield Debt or Replacement Parent Term Debt, as
the case may be, to the extent such accrued interest would otherwise
have been payable in cash on a date prior to the maturity of such debt
as a regularly scheduled payment of interest pursuant to clause (A),
and (C) on the Third Amendment Effective Date, make the Initial L/C
Capitalization; in each case provided that no Default shall exist as of
the date of the proposed payment or after giving effect thereto
(calculated both as of such date and on a pro forma basis as of the end
of and for the fiscal period(s) most recently ended prior thereto for
which financial statements are required to be provided under Section
6.05); and provided further, that the Borrower shall cause the
Letter-of-Credit Subsidiary to use all of the proceeds of the Initial
L/C Capitalization as cash collateral to secure Indebtedness permitted
under Section 7.01(o).".
"(vii) In addition to the foregoing, the Borrower may pay
further dividends or distributions to the Parent from time to time, and
make no more than $20,000,000 of advances or capital contributions to
the Letter-of-Credit Subsidiary from time to time in addition to the
Initial L/C Capitalization from sources other than proceeds of
Revolving Loans, provided that in any such case (i) no Default shall
exist as of the date of the proposed payment or after giving effect
thereto (calculated both as of such date and on a pro forma basis as of
the end of and for the fiscal period(s) most recently ended prior
thereto for which financial statements are required to be provided
under Section 6.05), (ii) the aggregate amount of such advances or
capital contributions to the Letter-of-Credit Subsidiary in addition to
the Initial L/C Capitalization shall in no event exceed the sum of (x)
the aggregate amount of all cash equity contributions made to the
Borrower (other than from DBS Rights Litigation Proceeds, from Patent
Litigation Proceeds to the extent such proceeds are required to be
reimbursed to the Borrower pursuant to clause (s)(ii)(A) of Article
VIII, from proceeds of a Disposition of assets of the Borrower or any
of its Subsidiaries or from equity contributions made as provided under
Section 5.04(b)(iv) above or, without duplication, from proceeds of the
Parent Term Loans) after the Third Amendment Effective Date and
identified concurrently with the making thereof in writing by the
Borrower as equity contributions to the Letter-of-Credit Subsidiary to
provide cash collateral for letters of credit and (y) $10,000,000, and
(iii) the aggregate amount of all such dividends or distributions paid
to the Parent, all payments to the Parent to finance PCC Preferred
Stock Dividends and all such advances or capital contributions made to
the Letter-of-Credit Subsidiary, in each case from and after the Third
Amendment Effective Date, minus the aggregate amount of all cash equity
contributions made to the Borrower (other than from DBS Rights
Litigation Proceeds, from Patent Litigation Proceeds to the extent such
proceeds are required to be reimbursed to the Borrower pursuant to
clause (s)(ii)(A) of Article VIII, from proceeds of a Disposition of
assets of the Borrower or any of its Subsidiaries or from equity
contributions made as provided under Section 5.04(b)(iv) above or,
without duplication, from proceeds of the Parent Term Loans) after the
Third Amendment Effective Date shall not exceed $50,000,000; provided,
15
further, that so long as the Discharge of Parent Term Debt shall not
have occurred, the aggregate amount of all Restricted Payments
consisting of dividends or distributions to the Parent from and after
April 2, 2003 pursuant to this Section 5.04(b)(vii) for the purpose of
(x) purchasing, redeeming or making principal or any other payments to
or on account of any Indebtedness or Equity Securities of the Parent or
Pegasus Communications Corporation or (y) making accrued or current
dividend payments on any Equity Securities of the Parent or Pegasus
Communications Corporation shall not exceed $50,000,000 in the
aggregate.".
I. Section 5.04(b)(v) of the Credit Agreement is hereby amended by
adding immediately after the "." at the end thereof the following sentence:
"Notwithstanding anything to the contrary contained in this Section
5.04(b)(v), after the Third Amendment Effective Date, no Restricted
Payments shall be made pursuant to this Section 5.04(b)(v) to the
extent the making of such Restricted Payment would constitute an "Event
of Default" under the documentation for Permitted Parent Term Debt.".
J. Section 5.04(b) of the Credit Agreement is hereby further amended by
inserting at the end thereof the following new subdivision (ix):
"(ix) The Borrower may pay dividends or distributions to the
Parent from time to time solely for the purpose of funding
out-of-pocket legal fees and expenses incurred in connection with (1)
the litigation encaptioned Pegasus Development Corporation et al. v.
DirecTV Inc. et al., pending in the United States District Court for
the District of Delaware, and any appeals thereof (the "Patent
Litigation") and (2) the litigations involving the NRTC or DirecTV as
named parties that are reasonably related to the enforcement or
interpretation of the Companies' DBS Rights, including the consolidated
cases encaptioned Pegasus Satellite Television Inc. et. al. v. DirecTV
Inc., et al. pending in the United States District Court for the
Central District of California, any and all other arbitral or judicial
proceedings involving DirecTV and/or any of its Affiliates, on the one
16
hand, and the Borrower and/or any of its Affiliates and/or the NRTC, on
the other hand, that are reasonably related to the foregoing, and any
appeals thereof (collectively, the "DBS Rights Litigation," and,
collectively with the Patent Litigation, the "Litigation"), in an
aggregate amount after the Third Amendment Effective Date not to exceed
the lesser of (x) the actual out-of-pocket legal fees and expenses
incurred by the Companies, Pegasus Communications Corporation or any of
its Subsidiaries other than the Companies in connection with the
Litigation after the Third Amendment Effective Date and (y)
$22,000,000; provided that no Default shall exist as of the date of the
proposed payment or after giving effect thereto (calculated both as of
such date and on a pro forma basis as of the end of and for the fiscal
period(s) most recently ended prior thereto for which financial
statements are required to be provided under Section 6.05).".
K. Section 5.04(b) of the Credit Agreement is hereby further amended by
adding at the end thereof (after the new subdivision (ix)) the following new
sentence:
"Notwithstanding anything in this Section 5.04(b) to the
contrary, the Restricted Payments described in clauses (iv), (v), (vi),
(vii), (viii) and (ix) of this Section 5.04(b) shall be permitted to be
made under this Section 5.04 only to the extent the entire amount of
each such Restricted Payment is applied as promptly as possible (and in
any event no later than two Business Days after such Restricted Payment
is made by the Borrower) to the purpose specified in the relevant
clause.".
L. Article V of the Credit Agreement is hereby amended by adding at the
end thereof the following new Section 5.05:
"Section 5.05. Maximum Average Monthly Churn. As of the last
day of each fiscal quarter commencing with the fiscal quarter ending
September 30, 2003, maintain an Average Monthly Churn for the period of
twelve months ending on such date not exceeding 2.25%.".
1.7 Amendments to Article VI: Affirmative Covenants
------------------------------------------------
A. Section 6.02 of the Credit Agreement is hereby amended by adding at
the end thereof the following new paragraph (j):
"(j) Maintain at all times during the period from the Third
Amendment Effective Date until the Discharge of Parent Term Debt, an
aggregate of at least $25,000,000 in key man life insurance insuring
Xxxxxxxx X. Xxxxx by a financially sound and reputable insurer and
include such insurance in the certification and Compliance Report
referred to in Section 6.02(a).".
B. Section 6.04(b)(ii) of the Credit Agreement is hereby amended by
deleting such Section 6.04(b)(ii) in its entirety and substituting therefor the
following:
"(ii) any alleged default with respect to, or redemption or
acceleration or other action under, the Parent Term Loan Documents, the
PCC Preferred Stock Designation, the PSC Subordinated Notes Indenture,
17
the PSC Subordinated Notes, the Subordinated Debt Documents, the PCC
Exchange Indenture, the PCC Exchange Notes, the PCC 1997 Senior Notes,
the PCC 1998 Indenture, the PCC 1998 Senior Notes, the PSC 2001
Indenture, the PSC 2001 Senior Notes, the Golden Sky Exchange
Indentures, the Golden Sky Exchange Notes, any Replacement Parent
High-Yield Debt, any Replacement Parent Term Debt, any material
Acquisition Agreement, any Indebtedness of the Letter-of-Credit
Subsidiary or any evidence of material Indebtedness of the Parent or
any Company or any mortgage, indenture or other agreement relating
thereto; ".
C. Section 6.04 of the Credit Agreement is hereby further amended (i)
by deleting the "or" at the end of clause (d) thereof and (ii) by inserting
immediately before the "." at the end of such Section 6.04 the following:
"; or (f) any transaction with any Affiliate other than (i)
transactions solely among the Companies otherwise permitted under this
Agreement, (ii) in the case of the Companies only, transactions for the
payment of permitted Management Fees and the License Agreements as in
effect on the Third Amendment Effective Date and (iii) transactions for
Restricted Payments permitted under Section 5.04".
D. Section 6.05(b) of the Credit Agreement is hereby amended by adding
immediately prior to the ";" at the end thereof the following:
", and to include, in the case of both the Companies' and PCC's
financial statements delivered after the Third Amendment Effective
Date, a narrative report describing the operations of the Companies and
PCC, as the case may be, similar in scope and detail to the
"management's narrative analysis of results of operation" required
under General Instruction I to SEC Form 10-K and General Instruction H
to SEC Form 10-Q, for such fiscal quarter and for the period from the
beginning of the then current fiscal year to the end of such fiscal
quarter".
E. Section 6.05 of the Credit Agreement is hereby amended by (i)
deleting the "and" at the end of Section 6.05(l), (ii) renumbering Section
6.05(m) as Section 6.05(o) and (iii) adding immediately after Section 6.05(l)
the following new Sections 6.05(m) and 6.05(n):
"(m) To be delivered to the Agent, no later than the fifth
Business Day of each fiscal quarter after the Third Amendment Effective
Date, a report setting forth (1) the aggregate amount of the letters of
credit issued in favor of the NRTC on behalf of the Borrower and each
of its Affiliates (including, without limitation, the Letter-of-Credit
Subsidiary) and (2) the amount of each of the "Wholesale Invoices" (as
defined in the relevant NRTC Member Agreement) delivered to the
Borrower or such Subsidiary during the six months most recently ended
prior to the date when such report is required to be delivered;
(n) Promptly upon their becoming available, and in any event
within 45 days after the end of each month, copies of the monthly
executive package materials substantially in the form delivered to the
agent under the Parent Term Loan Agreement on or prior to the effective
date of such agreement delivered by the Parent or any Company to its
management; and".
18
F. Section 6.08 of the Credit Agreement is hereby amended by adding at
the end thereof the following new sentence:
"Without limiting the generality of the foregoing, not more than 30
days after the Third Amendment Effective Date, the Borrower shall
deliver to the Agent (i) a report setting forth a list of all real
property assets (including leasehold interests) acquired or disposed of
since the Closing Date, in detail reasonably satisfactory to the Agent,
and (ii) all information, documents and instruments with respect to
existing real property collateral for the Loans as the Agent may
reasonably request to the Borrower on or prior to the date that is 5
Business Days after the Third Amendment Effective Date."
G. Article VI of the Credit Agreement is hereby amended by adding at
the end thereof the following new Sections 6.12, 6.13 and 6.14:
"Section 6.12. Security Document Supplements.
------------ -----------------------------
(a) Commercial Tort Claims. Upon the request of the Agent, the
Borrower shall, and shall cause its relevant Subsidiaries to, execute,
deliver and/or file or record such additional Security Documents as the
Agent shall deem necessary or advisable from time to time to maintain,
create and perfect a first priority security interest in favor of the
Agent in any "commercial tort claims" (as defined in the Uniform
Commercial Code) arising out of the Litigation.
(b) Deposit Accounts. Upon the request of the Agent, the
Borrower shall, and shall cause its relevant Subsidiaries and the
relevant depository financial institutions, to execute, deliver and/or
file or record such additional Security Documents as the Agent shall
deem necessary or advisable from time to time to maintain, create and
perfect a first priority security interest in favor of the Agent in all
"deposit accounts" (as defined in the Uniform Commercial Code) of the
Borrower and its Subsidiaries (other than the Special Purpose
Subsidiary and the Letter-of-Credit Subsidiary) in existence on the
Third Amendment Effective Date and all after-acquired deposit accounts
in which the Borrower or any of its Subsidiaries (other than the
Special Purpose Subsidiary and the Letter-of-Credit Subsidiary)
maintains a balance in excess of $50,000.00; provided, however, that no
mandatory cash sweeps shall be required at any time when no Event of
Default has occurred and is continuing; and provided further that the
Borrower and its Subsidiaries shall, within 45 days after the Third
Amendment Effective Date, deliver control agreements in form and
substance satisfactory to the Agent and the relevant depository
financial institutions and signed by the respective account holder and
depository financial institution with respect to all deposit accounts
of the Borrower and its Subsidiaries (other than the Special Purpose
Subsidiary and the Letter-of-Credit Subsidiary) in existence on the
Third Amendment Effective Date. After the Third Amendment Effective
Date, the Borrower and its Subsidiaries shall not open any deposit
19
account (other than any account relating to the operation of a Station
in which the balance does not exceed $50,000.00) unless the Borrower
shall have delivered to the Agent a control agreement in form and
substance satisfactory to the Agent and the relevant depository
financial institutions and signed by the respective account holder and
depository financial institution with respect to such deposit account.
Section 6.13. Maintenance of Corporate Identity.
------------ ---------------------------------
Operate its businesses, and will cause its Subsidiaries to
operate their respective businesses, and maintain their records,
independently from any Person (a "Control Entity") that, directly or
indirectly, is in control (as defined in Rule 12b-2 under the
Securities Exchange Act of 1934, as amended) of any Company and
independently from any Subsidiary of such Company; and each Company
will maintain bank accounts separate from the bank accounts of each
Control Entity or Subsidiary of such Company and act solely in its own
corporate name and through its own authorized officers and agents.
Without limiting the generality of the foregoing, the Borrower shall
also:
(A) maintain its own separate books and records and
bank accounts and not permit any Affiliate independent access
to such bank accounts;
(B) at all times hold itself out to the public and
all other Persons as a legal entity separate from Pegasus
Communications Corporation, the Parent, any other Company and
any other Person;
(C) have a Board of Directors separate from (but
which may include members in common with) that of Pegasus
Communications Corporation, the Parent, any other Company and
any other Person;
(D) file its own tax returns, if any, as may be
required under applicable law, to the extent that it is (1)
not part of a consolidated group filing a consolidated return
or returns or (2) not treated as a division for tax purposes
of another taxpayer, and pay any taxes so required to be paid
under applicable law;
(E) not commingle its assets with assets of any other
Person and hold all of its assets in its own name;
(F) conduct its business in its own name and strictly
comply with all organizational formalities to maintain its
separate existence;
(G) maintain separate financial statements;
(H) pay its own liabilities and expenses only out of
its own funds;
20
(I) allocate fairly and reasonably any overhead for
shared office space;
(J) use separate invoices and checks;
(K) correct any known misunderstanding regarding its
separate identity;
(L) maintain adequate capital in light of its
contemplated business purposes, transactions and liabilities;
(M) cause its Board of Directors to act pursuant to
written consent and keep minutes of such actions and observe
all other general corporation formalities; and
(N) cause the officers, agents and other
representatives of the Borrower to act at all times with
respect to the Borrower consistently with, and in furtherance
of, the foregoing and in the best interests of the Borrower.
Section 6.14. Immaterial Affiliates.
------------ ---------------------
Except for management services provided by the Manager to the
Parent and the Companies and assets owned and activities incidental or
related thereto, ensure that, during the period from the Third
Amendment Effective Date until the Discharge of Parent Term Debt, none
of the Immaterial Affiliates acquires any material assets, conducts any
material business or incurs any material Indebtedness or other
liabilities.".
1.8 Amendments to Article VII: Negative Covenants
----------------------------------------------
A. Section 7.01(f) of the Credit Agreement is hereby amended by
inserting the phrase "(other than the Letter-of-Credit Subsidiary and South
Plains DBS)" immediately following the reference to "Subsidiaries".
B. Section 7.01 of the Credit Agreement is hereby amended (i) by
deleting the word "and" at the end of Section 7.01(m), (ii) by deleting the "."
at the end of Section 7.01(n) and substituting therefor "; and", and (iii) by
adding at the end thereof the following new Section 7.01(o) and the following
additional paragraph:
"(o) Indebtedness of the Letter-of-Credit Subsidiary in the
form of its reimbursement obligations with respect to, and its
obligations to pay fees and expenses and make indemnity payments (to
the extent required) with respect to, letters of credit issued on or
after the Third Amendment Effective Date by one or more Persons in
favor of the NRTC as beneficiary, and under agreements, documents, and
instruments entered into between the Letter-of-Credit Subsidiary and
such Persons in connection with such letters of credit, all of which
must be satisfactory in form and substance to the Agent in its
reasonable discretion; provided that the aggregate amount of such
Indebtedness outstanding at any time shall not exceed the value at such
time of the cash collateral pledged by the Letter-of-Credit Subsidiary
to such Persons in accordance with Section 7.02(j).
21
Notwithstanding anything in this Section 7.01 to the contrary,
in no event shall the Borrower become or remain liable with respect to
intercompany Indebtedness to the Parent.".
C. Section 7.02 of the Credit Agreement is hereby amended by (i)
deleting the "and" at the end of Section 7.02(g), (ii) deleting the "." at the
end of Section 7.02(h) and substituting therefor ";" and (iii) adding
immediately after Section 7.02(h) the following new Sections 7.02(i) and
7.02(j):
"(i) liens in favor of the agent and lenders under the
Permitted Parent Term Debt on the capital stock of the Borrower and the
other collateral pledged under the Parent Term Loan Documents and any
documents evidencing Permitted Parent Term Debt, in each case so long
as such liens are subject to the terms of the Intercreditor Agreement;
and
(j) liens on the assets of the Letter-of-Credit Subsidiary,
including L/C Subrogation Rights, securing Indebtedness permitted under
Section 7.01(o); provided, that the value of the collateral securing
such Indebtedness (exclusive of L/C Subrogation Rights) may not at any
time exceed 105% of the amount of such Indebtedness.".
D. Section 7.03(e) of the Credit Agreement is hereby amended by
inserting the phrase "prior to the Third Amendment Effective Date" immediately
following the reference to "The Disposition".
E. Section 7.03 of the Credit Agreement is hereby further amended by
adding at the end thereof the following new paragraph (f):
"(f) The Disposition of any broadcast properties listed on
Schedule 7.03(f); provided, however, that (i) the selling Subsidiaries
shall have received payment in cash or cash equivalents of at least
eighty-five percent (85%) of gross proceeds from any such disposition
of assets, (ii) all rights of the Companies under any escrow or similar
agreements entered into in connection with like-kind exchanges under
Section 1031 of the Code shall have been collaterally assigned to the
Agent pursuant to documentation satisfactory to the Agent and (iii) the
Borrower shall have complied with the provisions of Section 1.09(h).".
F. Section 7.04(a) of the Credit Agreement is hereby amended (i) by
deleting the "and" immediately following the reference to "Section 7.09" and
substituting therefor "," and (ii) by inserting immediately following the
reference to "Permitted Acquisition" the following:
"and (iv) the formation of a new Subsidiary (the "Letter-of-Credit
Subsidiary") that shall engage in no business or activity, and shall
have no assets or liabilities, at any time other than (x) cash and Cash
22
Equivalents from Restricted Payments permitted under Section
5.04(b)(vi) or Section 5.04(b)(vii) and L/C Subrogation Rights, (y)
Indebtedness permitted under Section 7.01(o) secured by liens on its
assets permitted under Section 7.02(j), and (z) related obligations
under agreements, documents and instruments that are incidental to and
required for the foregoing and are satisfactory in form and substance
to the Agent in its reasonable discretion".
G. Section 7.12 of the Credit Agreement is hereby amended by adding
immediately prior to the "." at the end thereof the following:
"; and, during the period from the Third Amendment Effective Date until
the Discharge of Parent Term Debt, except (a) for transactions solely
among the Companies, (b) for the payment of permitted Management Fees
and the License Agreements as in effect on the Third Amendment
Effective Date, (c) for Restricted Payments permitted under Section
5.04 and (d) for Permitted Cost Sharing Transactions (as defined in the
Parent Term Loan Agreement), enter into any transaction, including,
without limitation, the purchase, sale or exchange of property or
assets or the rendering or accepting of any service, with or to any
Affiliate of any Company unless the Borrower delivers to the Agent an
acceptable appraisal or an opinion as to the fairness to such Company
from a financial point of view issued by an unaffiliated third party
investment banking firm or appraisal firm of national standing with
respect to any such transaction or series of related transactions
involving aggregate consideration in excess of $5,000,000".
H. Section 7.13 of the Credit Agreement is hereby amended by adding at
the end thereof the following new paragraphs (g), (h), (i) and (j):
"(g) Amend, modify, reform or terminate or permit the
amendment, modification, reform or termination of, or waive compliance
with any provision of or consent to any variance from the requirements
of any of the Parent Term Loan Documents or any documents governing any
Replacement Parent Term Debt, or issue any Indebtedness in exchange
for, or issue any Indebtedness the net proceeds of which are used to
extend, refinance, renew, replace, defease, repurchase or refund, any
portion of the Parent Term Loans or any Replacement Parent Term Loan
Debt, in each case, if the effect thereof would be to (i) change to
earlier dates the dates on which any payments of principal or interest
are due thereon, (ii) cause the PCC/PSC Weighted Interest Rate to
exceed 11.4% per annum, (iii) change any event of default with respect
thereto (other than to eliminate or waive any such event of default or
to increase any grace period with respect thereto), (iv) change the
redemption, prepayment or defeasance provisions thereof, (v) change the
subordination provisions thereof (or of any guaranty thereof or
intercreditor arrangement with respect thereto), (vi) change any
collateral therefor (other than to release such collateral), or (vii)
change any other term or provision thereof, if the effect of such
change, together with all other changes made, is to increase the
obligations of the obligor thereunder or to confer any additional
rights on the holders of the Parent Term Loans, the Replacement Parent
23
Term Debt or such other Indebtedness that would be adverse to the
Company, the Agent or the Lenders, in either case in a manner that is
deemed material by the Agent or the Required Lenders (in either case,
in its or their sole discretion), without the prior written consent of
the Required Lenders.
(h) Amend, modify, reform or terminate or permit the
amendment, modification, reform or termination of, or waive compliance
with any provision of or consent to any variance from the requirements
of, or issue any Indebtedness in exchange for, or issue any
Indebtedness the net proceeds of which are used to extend, refinance,
renew, replace, defease, repurchase or refund, any portion of, the
Existing Parent High Yield Debt or any Replacement Parent High-Yield
Debt, in each case, if the effect thereof would be to (i) shorten the
average weighted life to maturity of such debt to prior to June 19,
2007, (ii) change any scheduled installment of principal (including the
final maturity date) to a date earlier than the date that is one year
after the last maturity date of any of the Obligations, (iii) cause the
PCC/PSC Weighted Interest Rate to exceed 11.4% per annum, or (iv) make
any other changes or modifications that are prohibited under any other
provision of this Agreement, without the prior written consent of the
Required Lenders.
(i) During the period from the Third Amendment Effective Date
until the Discharge of Parent Term Debt, amend, modify, reform or
terminate or permit the amendment, modification, reform or termination
of, or waive compliance with any provision of or consent to any
variance from the requirements of, or issue any Indebtedness in
exchange for, or issue any Indebtedness the net proceeds of which are
used to extend, refinance, renew, replace, defease, repurchase or
refund, any portion of, the Existing Parent High Yield Debt or any
Replacement Parent High-Yield Debt, in each case, if the effect thereof
would be to (i) increase the weighted average cash interest rate
(including in the determination of the cash interest rate, without
limitation, all fees (other than customary amendment or consent fees)
and other cash payments paid or payable to the holders of the Existing
Parent High-Yield Debt and the Replacement Parent High-Yield Debt)
payable in respect of such debt to greater than 11.737%, or (ii) make
any other changes or modifications that are prohibited under any other
provision of the Parent Term Loan Agreement, without the prior written
consent of the Required Lenders.
(j) During the period from the Third Amendment Effective Date
until the Discharge of Parent Term Debt, enter into any agreement to
effect a transaction that is prohibited under the Parent Term Loan
Agreement or any other Parent Term Loan Document, unless such agreement
is expressly subject to the written consent of the Required Lenders
hereunder.".
I. Article VII of the Credit Agreement is hereby amended by adding at
the end thereof the following new Section 7.16:
24
"Section 7.16. Excess L/C Cash Collateral. At all times on or
after the Discharge of Parent Term Debt, in the event that Excess L/C
Cash Collateral shall exceed $1,000,000 at any time, or in the event
that the amount described in clause (b)(i) of the definition of "Excess
L/C Cash Collateral" shall be $0, fail, within three Business Days
after the occurrence of the foregoing, to cause the entire amount of
Excess L/C Cash Collateral to be paid as a cash dividend to the
Borrower.".
1.9 Amendments to Article VIII: Defaults
-------------------------------------
A. Article VIII of the Credit Agreement is hereby amended by deleting
paragraph (f) thereof in its entirety and substituting therefor the following:
"(f) (i) any Subordinated Indenture Default; or
(ii) any Parent Term Loan Default; or
(iii) any default on any Indebtedness of the
Letter-of-Credit Subsidiary; or
(iv) any default with respect to any Indebtedness of
any Company (other than to the Lenders hereunder) for borrowed
money, or default under any agreement giving rise to monetary
remedies, in each case (under this clause (iv)) which, when
aggregated with all other such defaults of the Companies,
exceeds $2,000,000, if the effect of such default described in
this clause (iv) is to permit the holder of such Indebtedness
to accelerate the maturity of such Indebtedness, unless such
holder shall have permanently waived the right to accelerate
the maturity of such Indebtedness on account of such
default;".
B. Article VIII of the Credit Agreement is hereby further amended by
deleting paragraphs (m), (n), (o), (p) and (q) thereof in their entirety and
substituting therefor the following:
"(m) any Company or group of Companies generating in the
aggregate more than five percent (5%) of EBITDA for any period shall
discontinue its or their respective business(es) or Pegasus
Communications Corporation, the Parent, any Company or the Manager
shall (i) apply for or consent to the appointment of a receiver,
trustee, custodian or liquidator of it or any of its property, (ii) be
unable, or admit in writing its inability, to pay its debts as they
mature, (iii) make a general assignment for the benefit of creditors,
(iv) be adjudicated a bankrupt or insolvent or be the subject of an
order for relief under Title 11 of the United States Code or (v) file a
voluntary petition in bankruptcy, or a petition or an answer seeking
reorganization or an arrangement with creditors or to take advantage of
any bankruptcy, reorganization, insolvency, readjustment of debt,
dissolution or liquidation law or statute, or an answer admitting the
material allegations of a petition filed against it in any proceeding
under any such law or corporate action shall be taken for the purpose
of effecting any of the foregoing;
25
(n) there shall be filed against any Company, the Parent,
Pegasus Communications Corporation or the Manager an involuntary
petition seeking reorganization of such company or the appointment of a
receiver, trustee, custodian or liquidator of such company or a
substantial part of its assets, or an involuntary petition under any
bankruptcy, reorganization or insolvency law of any jurisdiction,
whether now or hereafter in effect and such involuntary petition shall
not have been dismissed within sixty (60) days thereof;
(o) final judgment for the payment of money which, when
aggregated with all other outstanding judgments against any of the
Companies, the Parent or Pegasus Communications Corporation, exceeds
$5,000,000 (exclusive of amounts covered by insurance or actually
contributed in cash by third party obligors with respect to such
judgments) shall be rendered against any Company, the Parent or Pegasus
Communications Corporation, and the same shall remain undischarged
(unless fully bonded upon terms satisfactory to the Required Lenders)
for a period of thirty (30) consecutive days, during which execution
shall not be effectively stayed;
(p) the occurrence of any attachment of any deposits or other
property of any Company, the Parent or Pegasus Communications
Corporation in the hands or possession of the Agent or any of the
Lenders, or the occurrence of any attachment of any other property of
any Company, the Parent or Pegasus Communications Corporation in an
amount which, when aggregated with all other attachments against the
Companies, the Parent or Pegasus Communications Corporation, exceeds
$1,000,000 and which shall not be discharged within sixty (60) days of
the date of such attachment;
(q) for any reason, (i) the Borrower shall cease to own
directly or indirectly all of the issued and outstanding capital stock
of each of its Subsidiaries (other than the percentage of equity
interests in South Plains DBS held by Persons other than the Borrower
and its Subsidiaries on the Third Amendment Effective Date); (ii) the
Parent shall cease to own all of the issued and outstanding shares of
capital stock of the Borrower; (iii) Pegasus Communications Corporation
shall cease to own at least 51% (measured by voting power rather than
number of shares) of all of the issued and outstanding shares of common
stock (or other securities entitled to vote in ordinary circumstances
and without regard to the happening of any contingency in the election
of members of the board of directors) of the Parent; (iv) Pegasus
Communications Corporation shall cease to retain the voting power to
elect a majority of the board of directors of the Parent; or (v) a
"Change of Control" (as defined in the Subordinated Indenture, the PCC
Preferred Stock Designation, the PSC Subordinated Notes Indenture, the
PCC Exchange Indenture, the PCC 1997 Indenture, the PCC 1998 Indenture,
the Golden Sky Exchange Indentures, the PSC 2001 Indenture, the Parent
Term Loan Documents or the documentation for any Replacement Parent
Term Debt) shall occur;".
26
C. Article VIII of the Credit Agreement is hereby further amended by
inserting the following new paragraphs (s), (t) and (u):
"(s) for any reason, Pegasus Communications Corporation or any
of its Affiliates shall receive any (i) DBS Rights Litigation Proceeds
and, for any reason, the full amount of such DBS Rights Litigation
Proceeds shall not have been (A) paid directly to the Borrower or one
or more of its Subsidiaries (other than the Special Purpose Subsidiary,
the Letter-of-Credit Subsidiary or any Finance Subsidiary) by the
adverse party to such litigation or (B) contributed as equity to the
Borrower by the Parent immediately upon receipt by Pegasus
Communications Corporation or such Affiliate, or (ii) Patent Litigation
Proceeds and, for any reason, (A) such Patent Litigation Proceeds shall
not have contributed to the Borrower as an equity contribution
immediately upon receipt by Pegasus Communications Corporation or such
Affiliate, in an aggregate amount equal to the lesser of (1) the amount
of such Patent Litigation Proceeds received and (2) the amount of
out-of-pocket legal fees and expenses incurred by the Borrower and its
Subsidiaries or paid for by the Borrower and its Subsidiaries by means
of Restricted Payments on or prior to such date in connection with the
Patent Litigation, or (B) any portion of such Patent Litigation
Proceeds is applied to repay all or any portion of the Parent Term
Loans or any Replacement Parent Term Debt; or
(t) any borrowing of Parent Term Loans or Replacement Parent
Term Debt shall occur after the Third Amendment Effective Date unless
(i) no Revolving Loans are outstanding immediately prior to and after
giving effect to such borrowing or (y) the proceeds of such borrowing
are applied concurrently with such borrowing to the extent necessary to
repay all outstanding Revolving Loans, and (ii) no Default shall have
occurred and be continuing or would result from such borrowing or the
application of the proceeds thereof; or
(u) any Global Litigation Settlement shall have become binding
on one or more Affiliates of the Borrower and, for any reason, all
Obligations shall not have been paid in full or all Commitments shall
not have been terminated;".
D. Article VIII of the Credit Agreement is hereby further amended by
adding at the end thereof the following new sentence:
"Notwithstanding anything to the contrary contained in this Article
VIII, upon the occurrence of an Event of Default under paragraph (u) of
this Article VIII, the Commitments shall terminate and the Notes and
any and all other Indebtedness of the Borrower to the Lenders shall
immediately become due and payable in the same manner as set forth in
the preceding sentence."
1.10 Amendment to Article X: The Agent
----------------------------------
Section 10.01(a) of the Credit Agreement is hereby amended by adding at
the end thereof the following sentence:
27
"Each Lender hereby further authorizes Agent, on behalf of and for the
benefit of Lenders, to enter into the Intercreditor Agreement, the
Collateral Account Agreement and the Security Documents as secured
party and to be the agent and representative of Lenders thereunder, and
each Lender agrees to be bound by the terms of the Intercreditor
Agreement and the Security Documents.".
1.11 Amendment to Article XIII: Miscellaneous
-----------------------------------------
Section 13.11 of the Credit Agreement is hereby amended by (i) adding
", the Parent Term Loan Agreement, the Parent Term Loan Documents, the Parent
Transaction Documents" immediately after the reference to "the Subordinated Debt
Documents" and (ii) deleting the reference to "Section 7.12" and substituting
therefor "Section 7.13".
1.12 Amendments to Article XIV: Definitions
---------------------------------------
A. Article XIV of the Credit Agreement is hereby amended by adding at
the end of the definition of "Excess Cash Flow" the following sentence:
"Notwithstanding anything in this definition to the contrary, Excess
Cash Flow shall be calculated so as not to include any DBS Rights
Litigation Proceeds received by the Companies.".
B. Article XIV of the Credit Agreement is hereby further amended by
deleting the definitions of "Agreement", "Commitment Reserve", "EBITDA", Fixed
Charges", "General Purpose Letter of Credit Exposure", "Loan Documents", "PCC
Preferred Stock", "PCC Preferred Stock Designation", "Permitted Preferred
Stock", "Restricted Payment", "Seller Letter of Credit Exposure", and "Total
Funded Debt" contained therein and adding to such Article the following
definitions in proper alphabetical order:
Affiliate Subordination Agreement. That certain First Amended
and Restated Affiliate Subordination Agreement dated as of January 14,
2000, by and between Pegasus Communications Management Company, Pegasus
Towers, Inc., Pegasus Development Corporation, the Parent and the
Agent, as amended, supplemented or otherwise modified from time to
time.
Agreement. See the Preamble. The Agreement shall be deemed to
include any Amendment, supplement or other modification thereto from
time to time made in accordance with the terms hereof.
Average Monthly Churn. For any period of twelve months, the
quotient obtained by dividing (i) the sum of Monthly Churn for each of
the months of such period by (ii) twelve.
Borrower Security Agreement. That certain First Amended and
Restated Security and Pledge Agreement (Borrower) dated as of January
14, 2000, by and between the Borrower and the Agent, as amended,
supplemented or otherwise modified from time to time.
28
Capitalized SAC. For any fiscal period, the amount of expenses
incurred in the generation of Gross Subscriber Additions constituting
Capital Expenditures made during such fiscal period, determined in
accordance with GAAP applied in a manner consistent with the historical
accounting practices of the Borrower and its Affiliates prior to the
Third Amendment Effective Date.
Collateral Assignments. Each of the following:
(i) that certain First Amended and Restated
Collateral Assignment of Loan Documents dated as of January
14, 2000, by and between the Borrower and the Agent, as
amended, supplemented or otherwise modified from time to time,
(ii) that certain Collateral Assignment of Marketing
and Distribution Agreements and Product Retail Agreements
dated as of January 14, 2000, by and between the assignors
party thereto and the Agent, as amended, supplemented or
otherwise modified from time to time,
(iii) that certain First Amended and Restated
Conditional Assignment, dated as of January 14, 2000, by and
between B.T. Satellite, Inc., and the Agent, as amended,
supplemented or otherwise modified from time to time,
(iv) that certain First Amended and Restated
Conditional Assignment, dated as of January 14, 2000, by and
between the Parent and the Agent, as amended, supplemented or
otherwise modified from time to time,
(v) that certain First Amended and Restated
Conditional Assignment, dated as of January 14, 2000, by and
between Telecast of Florida, Inc., and the Agent, as amended,
supplemented or otherwise modified from time to time,
(vi) that certain First Amended and Restated
Conditional Assignment, dated as of January 14, 2000, by and
between Pegasus Broadcast Television, Inc., and the Agent, as
amended, supplemented or otherwise modified from time to time,
and
(vii) any other collateral assignment that may have
been or may in the future be entered into from time to time by
the Parent or one or more of the Companies to secure the
Obligations, as such collateral assignment may be amended,
supplemented or otherwise modified from time to time.
Collateral Account Agreement. That certain Collateral Account
Agreement, dated as of the Third Amendment Effective Date, among the
Agent, DBS Investors, Inc., as agent under the Parent Term Loan
Agreement, and the Parent, as such Collateral Account Agreement may be
amended, supplemented or otherwise modified after the execution thereof
to the extent permitted under Section 7.13(a).
29
Commitment Reserve. As of any date, the aggregate amount by
which the Revolving Notes shall have been temporarily prepaid from the
Net Cash Proceeds of any Disposition, as provided under Section
1.09(d)(ii) in anticipation of the redeployment of such funds for
purposes of financing Capital Expenditures and/or any Permitted
Acquisition. With respect to any such Disposition, the amount so
prepaid and deemed part of the Commitment Reserve shall be available
for borrowing under Sections 1.01 and 3.03 subject to the terms (and,
prior to the Third Amendment Effective Date, within the time periods)
provided in Section 1.09(d)(ii) and, prior to the Third Amendment
Effective Date, if not so borrowed for reinvestment in Permitted
Acquisitions or application to make Capital Expenditures, in each case
as contemplated therein, shall be applied to permanent reductions of
the Commitments under Section 1.09(e).
Control Entity. See Section 6.13.
DBS Business. The Companies' business of marketing of video
and audio programming and data information services that are provided
through transmission media consisting of space-based satellite
broadcasting services, excluding the terrestrial television
broadcasting business.
DBS Rights. Any rights to market, sell, deliver and retain
revenues from direct broadcast television programming initially
transmitted over satellite frequencies, and all rights to distribute
services of the type known as "DBS Services" under the NRTC Member
Agreements, including without limitation all such rights with respect
to DIRECTV and DBS under the DirecTV Agreements or the NRTC Member
Agreements.
DBS Rights Litigation. See Section 5.04(b)(ix).
DBS Rights Litigation Expenses. See Section 1.09(g)(i).
DBS Rights Litigation Proceeds. Any cash payments received by
the Borrower or any of its Affiliates in connection with a judgment
arising out of, or settlement or other disposition of, the DBS Rights
Litigation or any portion thereof.
Deferred SAC. For any fiscal period, the amount of expenses
incurred in the generation of Gross Subscriber Additions, such as
certain commissions and equipment and installation costs, that do not
constitute Capital Expenditures and are recorded on the balance sheet
of the Borrower as a deferred SAC asset in the period when such costs
are incurred, determined in accordance with GAAP applied in a manner
consistent with the historical accounting practices of the Borrower and
its Affiliates prior to the Third Amendment Effective Date.
Discharge of Parent Term Debt. With respect to any provision
of this Agreement, either (i) the repayment in full of the Parent Term
Loans and all Replacement Parent Term Debt, or (ii) the deletion of the
corresponding provision (and each provision of the same or
substantially similar effect, if any) in the Parent Term Loan Documents
and the definitive documentation for any relevant Replacement Parent
Term Debt.
30
EBITDA. For any period, Net Income for such period, plus, to
the extent deducted in the determination of Net Income and not
otherwise restored in accordance with the definition of such term, (a)
Total Interest Expense, (b) depreciation, (c) amortization (including,
without limitation, amortization of Deferred SAC), (d) taxes in respect
of income and profits expensed during such period, including without
limitation but without duplication payments paid under the Tax Sharing
Agreement as permitted in Section 5.04, (e) Transaction Costs, and (f)
other non-cash expenses (including the amortization of television
program license and rental fees), minus (g) television program license
and rental fees actually paid in cash; all determined on a Consolidated
basis in accordance with GAAP.
Excess L/C Cash Collateral. At any time, the amount by which
(a) the aggregate value of all cash and other property (if any) owned
by the Letter-of-Credit Subsidiary (excluding amounts earned on such
cash and property after the Third Amendment Effective Date but not yet
released to the Companies) exceeds (b) the lesser of (i) the aggregate
amount of cash collateral that all issuers of letters of credit
outstanding at such time and permitted under Section 7.01(o) require to
be held by the Letter-of-Credit Subsidiary as security for its
reimbursement obligations with respect to, and its obligations to pay
fees and expenses and make indemnity payments (to the extent required)
with respect to such letters of credit and (ii) 105% of the
Indebtedness of the Letter-of-Credit Subsidiary that is described in
clause (f) of the definition of "Indebtedness".
Existing Parent High-Yield Debt. The PCC 1997 Senior Notes,
the PCC 1998 Senior Notes, the PSC 2001 Senior Notes, the PCC Exchange
Notes and the Golden Sky Exchange Notes, in each case as in effect on
the Third Amendment Effective Date.
Fixed Charges. For any fiscal period, the sum of (a) Total
Debt Service for such fiscal period (excluding (i) payments of
principal in respect of Permitted Seller Debt and Permitted Seller
Subordinated Debt and (ii) repayments of Term Loans pursuant to Section
1.09(g)(ii) or Section 1.09(h)), (b) Capital Expenditures made by the
Companies during such fiscal period, (c) taxes paid or payable by the
Companies (other than the Special Purpose Subsidiary) during such
fiscal period in respect of income and profits, including without
limitation payments owed under the Tax Sharing Agreement, (d) without
duplication of amounts described in clause (b) above, Capitalized SAC
accrued during such fiscal period, (e) Deferred SAC accrued during such
fiscal period, and (f) the excess of the aggregate amount of Restricted
Payments made during such fiscal period under Section 5.04(b)(vii) over
the aggregate amount of cash capital contributions (other than cash
capital contributions made with DBS Rights Litigation Proceeds, Patent
Litigation Proceeds to the extent such proceeds are required to be
reimbursed to the Borrower pursuant to clause (s)(ii)(A) of Article
VIII, or proceeds of Dispositions of assets of the Borrower or any of
its Subsidiaries) made during such fiscal period to the equity of the
Borrower.
31
Global Litigation Settlement. Any settlement or other
consensual agreement by the Borrower or any of its Affiliates resolving
outstanding claims with respect to (i) both the Patent Litigation and
the DBS Rights Litigation or (ii) a portion of each such Litigation.
Immaterial Affiliates. Collectively, Pegasus Media &
Communications Finance Corporation, Pegasus Travel, Inc., Pegasus BTV
Sub, LLC, Pegasus Satellite Holdings, Inc., and the Manager.
Initial L/C Capitalization. The capital contribution by the
Borrower to the Letter-of-Credit Subsidiary of no more than $61,915,787
of cash from the following sources: (i) $29,520,000 in cash equity
contributions from the Parent to the Borrower, from the proceeds of the
Parent Term Loans and/or cash on hand of the Parent (before giving
effect to any Restricted Payments made on or after June 1, 2003), (ii)
not more than $17,300,000 of cash on hand, and (iii) not more than
$17,000,000 from the proceeds of Revolving Loans made on the Third
Amendment Effective Date; provided, however, that in the event less
than $100,000,000 in principal amount of the Parent Term Loans are
borrowed on the Third Amendment Effective Date, the amount referred to
in clause (i) above shall be $36,520,000, and the amount referred to in
clause (iii) above shall be $10,000,000.
Intercreditor Agreement. That certain Intercreditor Agreement,
dated as of the Third Amendment Effective Date, among the Agent, DBS
Investors, Inc., as agent under the Parent Term Loan Agreement, and the
Parent, as such Intercreditor Agreement may be amended, supplemented or
otherwise modified after the execution thereof to the extent permitted
under Section 7.13(a).
Jackson Station Sale. Disposition of the Station and
related assets in Jackson, Mississippi.
L/C Facility Documents. See Section 4.29.
L/C Subrogation Rights. Any right of subrogation of the
Letter-of-Credit Subsidiary for reimbursement of amounts paid by it to
the lenders pursuant to the L/C Facility Documents against any of the
other Companies for whose account any letter of credit under the L/C
Facility Documents was issued; provided, that any such rights shall be
subordinated in all circumstances to the payment in full of all
Obligations on terms satisfactory to the Agent, and no such rights
shall be exercisable by the lenders under the L/C Facility Documents
against any of the Companies until such lenders have realized on all
other collateral under the L/C Facility Documents.
Letter -of-Credit Subsidiary. See Section 7.04.
Litigation. See Section 5.04(b)(ix).
Loan Documents. This Agreement, the Notes, the Security
Documents, the PCC Letter Agreement and all other agreements,
instruments and certificates contemplated hereby and thereby, including
without limitation any Rate Hedging Agreements entered into with any of
the Lenders or their Affiliates.
32
LTM EBITDA. For any fiscal quarter, the sum of EBITDA for such
fiscal quarter and for each of the three consecutive fiscal quarters
immediately preceding such fiscal quarter.
Material Subsidiary. Any Subsidiary of the Borrower that,
together with its direct and indirect Subsidiaries, accounts for more
than 5% of the assets, tangible assets, revenues or EBITDA of the
Companies.
Monthly Churn. For any month, the quotient, expressed as a
percentage, obtained by dividing (i) the number of Churned Subscribers
for such month by (ii) the sum of (a) the number of subscribers to the
DBS services offered by the DBS Subsidiaries as of the first day of
such month and (b) Gross Subscriber Additions during such month.
Net DBS Rights Litigation Proceeds. The aggregate amount of
cash awarded to any Company in connection with a judgment arising out
of, or settlement or other disposition of, the DBS Rights Litigation or
any portion thereof, whether at the time thereof or under any deferred
payment arrangement minus the aggregate amount of cash any Company is
obligated to pay to any Person (other than the Borrower or any of its
Affiliates) as a result of any judgment or settlement of the Seamless
Litigation.
NRTC Installment Amount. On any date, (i) if such date is ten
or fewer Business Days after the date of the regular monthly payment
made by the Borrower or any of its Subsidiaries to the NRTC, zero, or
(ii) otherwise, the total amount of the next such payment due from the
Borrower or any of its Subsidiaries to the NRTC under the NRTC Member
Agreements, as set forth in the certificate of the Borrower delivered
with respect to such payment pursuant to Section 6.05(m).
Parent Guaranty. That certain First Amended and Restated
Limited Recourse Guaranty (Parent) dated as of January 14, 2000, by and
between the Parent and the Agent, as amended, supplemented or otherwise
modified from time to time.
Parent Pledge Agreement. That certain First Amended and
Restated Securities Pledge Agreement (Parent) dated as of January 14,
2000, by and between the Parent and the Agent, as amended in connection
with the Third Amendment and as it may thereafter be amended,
supplemented or otherwise modified from time to time.
Parent Term Loan Agreement. That certain Amended and Restated
Term Loan Agreement, dated as of the Third Amendment Effective Date,
among the Parent, the several lenders from time to time party thereto
and DBS Investors Agent, Inc., as administrative agent for such
lenders, in the form delivered to the Agent and the Lenders prior to
the Third Amendment Effective Date, as amended, supplemented or
otherwise modified after the execution thereof to the extent permitted
under Section 7.13(g).
33
Parent Term Loan Default. Any "Event of Default" as defined in
the Parent Term Loan Agreement or the equivalent term in the documents
relating to any Replacement Parent Term Debt.
Parent Term Loan Documents. The Parent Term Loan Agreement and
the "Loan Documents" (as defined therein) and all other principal
documents executed by the Borrower and/or any of its Affiliates in
connection therewith, in the form delivered to the Agent and the
Lenders prior to the Third Amendment Effective Date, as such documents
may be amended, supplemented or otherwise modified after the execution
thereof to the extent permitted under Section 7.13(g).
Parent Term Loans. Parent's Indebtedness under the Parent Term
Loan Documents, in the original aggregate principal amount of up to
$100,000,000.
Parent Transaction Documents. The "Transaction Documents" as
defined in the Parent Term Loan Agreement, as such documents may be
amended, supplemented or otherwise modified after the execution thereof
to the extent permitted under Section 7.13(g).
Patent Litigation. See Section 5.04(b)(ix).
Patent Litigation Proceeds. Any cash payments received by
Pegasus Communications Corporation, the Parent or any of their
Affiliates in connection with a judgment arising out of, or settlement
or other disposition of, the Patent Litigation or any portion thereof.
PCC or PSC. Pegasus Satellite Communications, Inc., a
Delaware corporation, formerly known as "Pegasus Communications
Corporation".
PCC Letter Agreement. The letter agreement dated the Third
Amendment Effective Date between PCC and the Agent relating to the
prohibition from and after the Third Amendment Effective Date on the
sale, license, transfer, assignment or any other migration of
subscribers of DBS Services offered by the Companies to competing
services offered by any Affiliate of Pegasus Communications Corporation
other than the Companies, in form and substance reasonably satisfactory
to the Agent, as amended, supplemented or otherwise modified from time
to time.
PCC Preferred Stock. The Parent's 12.75% Series A Cumulative
Exchangeable Preferred Stock issued on February 22, 2001, on the terms
and conditions set forth in the PCC Preferred Stock Designation.
PCC Preferred Stock Designation. The Certificate of
Designation, Preferences and Relative, Participating, Optional and
Other Special Rights of Preferred Stock and Qualifications, Limitations
and Restrictions thereof of 12.75% Series A Cumulative Exchangeable
Preferred Stock of the Parent filed with the office of the Secretary of
State of the State of Delaware on February 22, 2001.
34
PCC/PSC Weighted Interest Rate. The weighted average of the
per annum interest rates payable in cash (as opposed to payable in
kind) in respect of the Existing Parent High-Yield Debt, the Parent
Term Loans, any Replacement Parent Term Debt and any Replacement Parent
High-Yield Debt, including in the determination of such interest rate,
without limitation, all fees and other cash payments paid or payable to
the holders thereof.
Pegasus Communications Corporation. Pegasus Communications
Corporation, a Delaware corporation that is the parent company of the
Parent.
Permitted Cost Sharing Transactions. Any transaction among any
Company and an Affiliate of such Company which involves exclusively the
arm's-length sharing of operational costs and expenses (and does not
involve the sale, license, transfer, assignment or any other migration
of any customers of the DBS Business (as defined in the Parent Term
Loan Agreement) or the payment of Management Fees) among the parties to
such transaction, provided that (i) all payments required to be made
under any Permitted Cost Sharing Transaction by any Company to any
Affiliate shall not exceed the actual cost of providing such services
to such Company and (ii) such Permitted Cost Sharing Transaction is in
the ordinary course of business, pursuant to the reasonable
requirements of such Company's business and upon terms not less
favorable to such Company than it could obtain in a comparable
arm's-length transaction with a third party other than such Affiliate.
Permitted Parent High-Yield Debt. The Existing Parent
High-Yield Debt and the Replacement Parent High-Yield Debt, in each
case so long as the terms of such Existing Parent High-Yield Debt and
Replacement Parent High-Yield Debt do not (i) shorten the average
weighted life to maturity of such debt to prior to June 19, 2007, (ii)
change any scheduled installment of principal (including, without
limitation, the final maturity date) to a date earlier than the date
that is one year after the last maturity date of any of the
Obligations, (iii) cause the PCC/PSC Weighted Interest Rate to exceed
11.4% per annum, or (iv) make any other changes or modifications that
are prohibited under any other provision of this Agreement, without the
prior written consent of the Required Lenders.
Permitted Parent Term Debt. The Parent Term Loans, as in
effect on the Third Amendment Effective Date, and any Replacement
Parent Term Debt, in each case so long as the terms of such Parent Term
Loans and Replacement Parent Term Debt do not (i) change to earlier
dates the dates on which any payments of principal or interest are due
thereon, (ii) cause the PCC/PSC Weighted Interest Rate to exceed 11.4%
per annum, (iii) change any event of default with respect thereto
(other than to eliminate or waive any such event of default or to
increase any grace period with respect thereto), (iv) change the
redemption, prepayment or defeasance provisions thereof, (v) change the
subordination provisions thereof (or of any guaranty thereof or
intercreditor arrangement with respect thereto), (vi) change any
collateral therefor (other than to release such collateral), or (vii)
change any other term or provision thereof, if the effect of such
change, together with all other changes made, is to increase the
obligations of the obligor thereunder or to confer any additional
rights on the holders of the Parent Term Loans or Replacement Parent
Term Debt that would be adverse to the Company, the Agent or the
Lenders, in either case in a manner that is deemed material by the
Agent or the Required Lenders (in either case, in its or their sole
discretion), without the prior written consent of the Required Lenders.
35
PSC Subordinated Notes. The Parent's 12.75% Senior
Subordinated Exchange Notes due 2007 issuable in exchange for PCC
Preferred Stock pursuant to the PCC Preferred Stock Designation under
the PSC Subordinated Notes Indenture.
PSC Subordinated Notes Indenture. The Indenture filed as an
exhibit to the PCC Preferred Stock Designation which would govern the
PSC Subordinated Notes if issued.
PSC 2001 Indenture. The Indenture dated as of December 19,
2001 between the Parent and X.X. Xxxxxx Trust Company, National
Association, as trustee, as originally executed and delivered.
PSC 2001 Senior Notes. The Parent's 11.25% Senior Notes due
2010 in an aggregate principal amount not to exceed (i) the initial
$175,000,000 thereof plus (ii) additional amounts thereof issued prior
to the Third Amendment Effective Date in exchange for other
Indebtedness of the Parent, issued pursuant to the PSC 2001 Indenture.
Replacement Parent High-Yield Debt. (a) Any modification or
amendment to any Existing Parent High-Yield Debt or to any Replacement
Parent High-Yield Debt, (b) any Indebtedness issued in exchange for all
or any portion of any Existing Parent High-Yield Debt or any
Replacement Parent High-Yield Debt and (c) any Indebtedness the net
proceeds of which are used to extend, refinance, renew, replace,
defease, repurchase or refund all or any portion of any Existing Parent
High-Yield Debt or any Replacement Parent High-Yield Debt.
Replacement Parent Term Debt. (a) Any modification or
amendment to the Parent Term Loans or to any Replacement Parent Term
Debt, (b) any Indebtedness issued in exchange for all or any portion of
the Parent Term Loans or any Replacement Parent Term Debt and (c) any
Indebtedness the net proceeds of which are used to extend, refinance,
renew, replace, defease, repurchase or refund all or any portion of the
Parent Term Loans or any Replacement Parent Term Debt.
Restricted Payment. (a) Any distribution or payment of cash or
property, or both, directly or indirectly (1) in respect of any
Subordinated Debt, or (2) to any partner, stockholder or other
equityholder of any of the Companies, any of the Parent Affiliates or
of any of their respective Affiliates for any reason whatsoever,
including without limitation, salaries, loans, debt repayment,
consulting fees, Management Fees, expense reimbursements and dividends,
distributions, put, call or redemption payments and any other payments
in respect of equity interests, or (b) any contribution, advance, or
other payment to the Letter-of-Credit Subsidiary; provided, however,
that Restricted Payments shall not include:
36
(i) reasonable Transaction Costs; and
(ii) Permitted Cost Sharing Transactions and other
transactions that comply with Section 7.12 and do not include or
involve any dividend, interest or other distribution (whether in cash,
securities or other property) with respect to any Equity Securities in,
or any Indebtedness of, any Company or any payment (whether in cash,
securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any Equity Securities in,
or any Indebtedness of, any Company or any option, warrant or other
right to acquire any such Equity Securities in, or Indebtedness of, any
Company.
Seamless Litigation. The litigation encaptioned DIRECTV, Inc.
v. Pegasus Satellite Television, Inc. and Golden Sky Systems, Inc.,
Case No. 01-06220, Central District of California (Xxx. Xxxxxxx X.
Xxxxx), consolidated with National Rural Telecommunications
Cooperative, et al. vs. DIRECTV, Inc., et al., Xxxx Xx. XX-00-0000,
Xxxxxxx Xxxxxxxx of California (Xxx. Xxxxxxx X. Xxxxx).
South Plains DBS. South Plains DBS, LP, a Texas limited
partnership.
Subsidiary Agreement. That certain First Amended and Restated
Subsidiary Guaranty, Security and Pledge Agreement dated as of January
14, 2000, by and among the various Subsidiaries party thereto and the
Agent, as amended, supplemented or otherwise modified from time to
time.
Third Amendment. That certain Third Amendment to Credit
Agreement and Consent dated as of July 22, 2003, by and among the
Borrower, the Agent and the Lenders party thereto.
Third Amendment Effective Date. As defined in the Third
Amendment.
Total Funded Debt. As of any date, (a) all Indebtedness of the
Companies (other than the Special Purpose Subsidiary) described in
paragraphs (a) through (f) of the definition of "Indebtedness" set
forth above and, without duplication, Guarantees by the Companies of
such Indebtedness plus the aggregate amount payable (whether or not
due) in respect of any and all LMA Purchase Options, determined on a
Consolidated basis, in accordance with GAAP; provided, however, that
during the 33-day period following the Third Amendment Effective Date,
the Indebtedness under the Original Subordinated Notes will not be
deemed to be "outstanding" and will be deemed to have been "paid in
full" if (i) the Borrower shall have given notice of redemption of all
of the Original Subordinated Notes to the Original Subordinated Note
holders pursuant to the Subordinated Indenture (or shall have
irrevocably instructed the trustee under the Subordinated Indenture to
give such notice of redemption with a redemption date to occur no later
than thirty-three (33) days after the Third Amendment Effective Date),
37
and (ii) the Borrower shall have irrevocably transferred to such
trustee cash in an amount equal to the aggregate outstanding amount of
the Original Subordinated Notes plus all interest accrued and to accrue
on the Original Subordinated Notes to the redemption date specified in
the notice of redemption (which shall be no later than thirty-three
(33) days after the Third Amendment Effective Date), and instructed
such trustee to apply such cash to the redemption of the Original
Subordinated Notes on such redemption date; and provided further,
however, that Indebtedness of the Letter-of-Credit Subsidiary shall not
be included in the calculation of Total Funded Debt to the extent that
(A) such Indebtedness is permitted under Section 7.01(o) of the Credit
Agreement to be outstanding and (B) the aggregate amount of such
Indebtedness outstanding at any time shall not exceed the value at such
time of the cash collateral pledged by the Letter-of-Credit Subsidiary
under the L/C Facility Documents in accordance with Section 7.02(j).
Unrestricted Cash. The dollar amount of all money, currency,
cash equivalents and credit balances held or carried in deposit
accounts, sweep accounts, concentration accounts, savings accounts or
investment accounts of the Borrower or any of its Subsidiaries
excluding cash, cash equivalents and other such balances that would be
reflected on the balance sheet of the Borrower and its Subsidiaries on
the date of determination as "restricted cash" in accordance with GAAP
(including but not limited to cash collateral permitted under this
Agreement to be pledged by the Letter-of-Credit Subsidiary to secure
its obligations with respect to letters of credit).
1.13 Amendment to Schedules to Credit Agreement.
------------------------------------------
The Credit Agreement is hereby amended by adding a new Schedule 7.03(f)
in the form of Exhibit A to this Amendment.
Section 2. CONSENT
-------
2.1 WBPG Repayment.
--------------
A. The undersigned hereby consent to the application of $2,392,389.13
(the "WBPG Repayment Amount"), to be paid to the Agent for the benefit of the
Lenders on the Third Amendment Effective Date from the amounts on deposit in the
Collateral Account, to the repayment of the Term Loans. The WBPG Repayment
Amount shall be applied between the Initial Term Loans and the Incremental Term
Loans pro rata according to the outstanding principal balance of such Term Loans
at the time of such application (determined before giving effect to such
application, but after giving effect to the reduction in the Commitments
occurring on the Third Amendment Effective Date as a result of Section 1.2A of
this Amendment), and shall be applied to scheduled repayments of Term Loans
within each such tranche in the order in which such payments are scheduled to
occur.
B. Simultaneously with the repayment of Term Loans under this Section
2.1 of this Amendment, the Borrower shall pay any indemnification payments due
in accordance with Section 1.14 of the Credit Agreement in respect of LIBOR
Loans so prepaid. For purposes of Section 1.09(d) of the Credit Agreement, the
WBPG Repayment Amount shall be treated as though it had been reinvested in
accordance with such Section.
2.2 Parent Term Loans
-----------------
A. The undersigned hereby consent (i) to the execution and delivery by
the Parent of the Parent Term Loan Agreement and the other Parent Term Loan
Documents, each in the form previously delivered to the Agent and the Lenders by
the Borrower pursuant to Section 3 of this Amendment, with such changes as the
Agent and the Borrower may mutually approve in writing, and (ii) to the
incurrence of the "Loans" as defined therein.
38
B. Notwithstanding anything to the contrary contained in Section 2(d)
of the Parent Pledge Agreement, or any other provision of the Loan Documents,
the undersigned hereby consent to the grant by the Parent of a second-priority
security interest in favor of DBS Investors Agent, Inc., as agent for the
lenders under the Parent Term Loan Agreement, in the "Borrower Collateral
Account" (as defined in the Parent Term Loan Documents as in effect on the Third
Amendment Effective Date) and all of its right, title, and interest in the stock
of, or other equity interests in, the Borrower, whether now owned or hereafter
acquired, and all proceeds thereof, pursuant to that certain Amended and
Restated Security and Pledge Agreement, dated as of the Third Amendment
Effective Date, between the Parent, as pledgor, and DBS Investors Agent, Inc.,
as agent for the lenders under the Parent Term Loan Agreement, as pledgee, in
the form previously delivered to the Agent and the Lenders by the Borrower, with
such changes as the Agent and the Borrower may mutually approve in writing,
which security interest shall at all times prior to the full repayment in cash
of the Obligations be subject and subordinate to the first-priority security
interest of the Agent, as agent for the "Secured Parties" (as defined in the
Parent Pledge Agreement), in such stock or other equity interests pursuant to
the Parent Pledge Agreement.
C. The undersigned hereby consent to the execution and delivery by the
Agent on behalf of the Lenders of the Intercreditor Agreement in the form of
Exhibit B to this Amendment, with such changes as the Agent and the Borrower may
mutually approve in writing.
Section 3. CONDITIONS TO EFFECTIVENESS
Sections 1 and 2 of this Amendment shall become effective upon
the prior or concurrent satisfaction of all of the following conditions
precedent (the date of satisfaction of such conditions being referred to herein
as the "Third Amendment Effective Date"):
A. On or before the Third Amendment Effective Date, each Credit Party
(as defined below) shall have delivered to the Lenders (or to the Agent for the
Lenders with sufficient originally executed copies, where appropriate, for each
Lender and its counsel) the following, each, unless otherwise noted, dated the
Third Amendment Effective Date:
(i) An Officer's Certificate of such Credit Party
certifying that (a) the Certificate or Articles of Incorporation or
other organizational document, as applicable, of such Credit Party,
and (b) the Bylaws or other organizational document, as applicable, of
such Credit Party, in each case, as delivered to the Agent on the
Closing Date, are in full force and effect and have not been amended
or modified in any respect since the Closing Date;
(ii) Resolutions of its Board of Directors or other
authorizing body or Person approving and authorizing the execution,
delivery and performance of this Amendment, certified as of the Third
Amendment Effective Date by its secretary or an assistant secretary as
being in full force and effect without modification or amendment;
39
(iii) Signature and incumbency certificates of the officers
of such Person executing this Amendment, the Intercreditor Agreement
and any amendments to Security Documents required to be delivered
under this Section 3 (collectively, the "Additional Documents"); and
(iv) Executed originals of this Amendment and the
amendments to the Security Documents executed in connection with this
Amendment from the Borrower and the other Credit Parties party
thereto.
B. Opinion of Counsel. The Lenders and their respective counsel shall
have received (i) copies of all opinions of counsel for the Parent, the
Companies and any Affiliates thereof to the extent such opinions are delivered
to the lenders in connection with the Parent Transaction Documents or the L/C
Facility Documents, together with a letter from each such counsel authorizing
the Agent and the Lenders to rely upon such opinion to the same extent as though
it were addressed to them, and (ii) originally executed copies of one or more
favorable written opinions of Drinker Xxxxxx & Xxxxx LLP, counsel for the Parent
and the Companies, in form and substance reasonably satisfactory to Agent and
its counsel, dated as of the Third Amendment Effective Date, with respect to the
enforceability of the Amended Agreement, the Intercreditor Agreement and the
Security Documents executed or amended in connection with this Amendment, and as
to such other matters as the Agent acting on behalf of the Lenders may
reasonably request.
C. Security Documents. The Borrower shall have delivered to Agent (i) a
fully executed amendment to the Borrower Security Agreement and the Subsidiary
Agreement, pursuant to which the Credit Parties shall grant a security interest
to the Agent in all commercial tort claims arising out of the Litigation, and
such amendments shall in each case be in form and substance satisfactory to
Agent, and (ii) a fully executed amendment to the Parent Pledge Agreement,
pursuant to which (A) all necessary amendments shall be made to permit the liens
granted to the agent and lenders under the Permitted Parent Term Debt as
contemplated by this Amendment, and (B) the Parent shall (x) grant a perfected
junior and subordinate security interest in all assets of the Parent that are
subject from time to time to a security interest in favor of the agent and
lenders under the Permitted Parent Term Debt and (y) covenant to make no
borrowing of Parent Term Loans or Replacement Parent Term Debt prohibited under
paragraph (t) of Article VIII of the Amended Agreement, and (iii) a fully
executed amendment to the Parent Guaranty to reflect the amendments to the
Parent Pledge Agreement. The Borrower and the Parent shall have taken all such
further actions as Agent may reasonably request to (a) maintain the perfected
first priority security interest of the Agent on behalf of the Lenders in the
capital stock of the Borrower and (b) create a perfected security interest in
favor of the Agent on behalf of the Lenders in the collateral under the Parent
Pledge Agreement as amended as described in the preceding sentence.
D. Transaction Documents. The closing under the Parent Term Loan
Documents and the L/C Facility Documents shall have occurred and the Agent shall
have received fully executed copies of (i) the Parent Transaction Documents and
the L/C Facility Documents and (ii) one or more written and fully executed
amendments to the Parent Term Loan Documents (as in effect on April 2, 2003)
that shall have the effect of, among other things, (a) transferring all rights
and obligations of Pegasus Media & Communications Finance Corporation under such
40
documents to the Parent, (b) allowing the incurrence of indebtedness under the
Credit Agreement (and any amendments, extensions, renewals or refinancings
(subject to certain specified restrictions) thereof) in an amount equal to the
sum of (1) the amount of Term Loans outstanding on the Third Amendment Effective
Date plus (2) the aggregate amount of the Commitments in effect on the Third
Amendment Effective Date plus (3) $25,000,000, minus the amount of any permanent
repayments or reductions of Commitments, without regard to the incurrence test
ratio or any default or event of default under the Parent Term Loan Documents,
(c) permitting the arrangements with respect to the security interests in assets
of the Parent, in favor of the Agent for the benefit of the Lenders, that are
contemplated by this Amendment, (d) permitting the Credit Agreement and the
other Loan Documents (as amended from time to time) to prohibit certain
amendments to the Parent Term Loan Documents, (e) removing all cross-defaults to
obligations of the Companies (but allowing cross-acceleration to Indebtedness
above a threshold amount satisfactory to the Agent), (f) providing a remedies
standstill period satisfactory to the Agent with respect to certain defaults and
events of default under the Parent Term Loan Documents, (g) providing for
automatic waiver of certain provisions in the Parent Term Loan Documents (which
provisions shall be satisfactory to the Agent) in the event that the
substantially identical provision in the Credit Agreement is waived to address a
specified breach or prospective breach thereof, and (h) modifying the
calculation of "Annualized EBITDA" to conform to the definition of "LTM EBITDA"
in this Amendment and resetting the "Required Leverage Ratio" amounts to levels
satisfactory to the Agent. The Parent Term Loan Agreement, the other Parent Term
Loan Documents and Parent Transaction Documents and the L/C Facility Documents
shall otherwise not conflict with the requirements of the Amended Agreement and
shall be in form and substance satisfactory to Agent, and the executed copies of
such amendments, the Parent Transaction Documents and the L/C Facility Documents
delivered to the Agent shall in each case be certified by the Borrower as being
true and correct copies thereof and in full force and effect. The PCC Letter
Agreement shall have become effective and binding upon the parties thereto.
E. Intercreditor Agreement. The Agent shall have received a fully
executed copy of the Intercreditor Agreement, which shall be in form and
substance satisfactory to the Agent and shall be certified by the Borrower as
being a true and correct copy thereof and in full force and effect.
F. Parent Term Loan Lender Representations. The Agent shall have
received fully executed letters from each lender of Parent Term Loans certifying
that none of such lender nor any of its affiliates nor any participant in its
portion of the Parent Term Loans is (i) a holder or participant, or an affiliate
of a holder or participant, in the Original Subordinated Notes or (ii) party to
any agreement or obligation pursuant to which it is entitled to receive proceeds
from the redemption of the Original Subordinated Notes.
G. Return of Existing Letters of Credit; Redemption. All outstanding
NRTC Letters of Credit issued prior to the Third Amendment Effective Date shall
have been returned undrawn to the Issuing Bank for cancellation, and the Agent
shall have received evidence satisfactory to it that upon the borrowing of the
Parent Term Loans on the Third Amendment Effective Date, (i) all amounts
necessary to repay in full the Original Subordinated Notes shall be irrevocably
committed to such repayment and cancellation by the Borrower on a date not later
than 33 days after the Third Amendment Effective Date, through deposit of such
amounts and other arrangements (including notice of redemption) with the trustee
for such indebtedness, and (ii) the amount described in clause (i) of the
definition of "Initial L/C Capitalization" shall be applied by the Parent and
its Affiliates as cash equity contributions to the Borrower.
41
H. Application of WBPG Repayment Amount. The WBPG Repayment Amount
shall have been applied as required by Section 2 of this Amendment.
I. Amendment Fee. The Agent shall have received from the Borrower for
the benefit of each Lender that shall have delivered an executed counterpart
hereof to the Agent on or prior to 3:00 p.m. (New York City time) on July 22,
2003, an amendment fee equal to 0.25% of the sum as of such date of (i) the
Commitment of such Lender and (ii) the aggregate outstanding principal amount of
Term Loans of such Lender, in each case calculated prior to giving effect to any
repayments of the Loans or reductions in the Commitments contemplated by this
Amendment.
J. Legal Fees and Other Amounts Owing to Agent. All amounts owing to
the Agent from the Borrower, including, without limitation, the fees and
expenses of O'Melveny & Xxxxx LLP, counsel for Agent, shall have been paid (to
the extent invoiced, in the case of fees and expenses of counsel).
Section 4. ACKNOWLEDGEMENT AND CONSENT
Each of the Borrower, the Parent, and each "Debtor" as defined
in the First Amended and Restated Subsidiary Guaranty, Security and Pledge
Agreement, dated as of January 14, 2000, and delivered pursuant to in Section
2.01 of the Credit Agreement (each of the Borrower, the Parent and such Debtors
individually a "Credit Party" and collectively, the "Credit Parties") hereby
acknowledges that it has reviewed the terms and provisions of the Credit
Agreement and this Amendment and consents to the amendments to the Credit
Agreement effected pursuant to this Amendment. Each Credit Party hereby confirms
that each Security Document to which it is a party or otherwise bound and all
Collateral encumbered thereby will continue to guaranty or secure, as the case
may be, to the fullest extent possible the payment and performance of all
"Obligations" (in each case as such term is defined in the applicable Security
Document), including without limitation the payment and performance of all such
"Obligations" in respect of the Obligations now or hereafter existing under or
in respect of the Amended Agreement and the Notes.
Section 5. BORROWER'S REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Amendment
and to amend the Credit Agreement in the manner provided herein, the Borrower
represents and warrants to each Lender that the following statements are true,
correct and complete:
A. Power and Authority. Each Credit Party is a corporation, limited
liability company, partnership or limited partnership validly existing and in
good standing under the laws of its state of organization. Each Credit Party has
all requisite corporate, partnership or limited partnership power and authority
to enter into this Amendment and the Additional Documents (in each case to the
extent it is a party thereto) and to carry out the transactions contemplated by,
and perform its obligations under, the Credit Agreement as amended by this
Amendment (as so amended, the "Amended Agreement") and the Additional Documents.
42
B. Authorization of Agreement. The execution and delivery of this
Amendment and the Additional Documents and the performance of the Amended
Agreement and the Additional Documents have been duly authorized by all
necessary corporate, partnership or limited partnership action on the part of
each Credit Party.
C. No Conflict. The execution and delivery by each Credit Party of this
Amendment and the Additional Documents (in each case to the extent it is a party
thereto) and the performance by the Borrower of the Amended Agreement and the
Additional Documents do not and will not (i) violate any provision of any law or
any governmental rule or regulation applicable to any Credit Party, the
Certificate or Articles of Incorporation, Certificate of Limited Partnership,
Partnership Agreement or Bylaws of any Credit Party or any order, judgment or
decree of any court or other agency of government binding on any Credit Party,
(ii) conflict with, result in a breach of or constitute (with due notice or
lapse of time or both) a default under any Contractual Obligation of any Credit
Party, (iii) result in or require the creation or imposition of any Lien upon
any of the properties or assets of any Credit Party (other than any Liens
created under any of the Loan Documents in favor of the Agent on behalf and for
the ratable benefit of the Lenders), or (iv) require any approval of
stockholders or any approval or consent of any Person under any Contractual
Obligation of any Credit Party.
D. Governmental Consents. The execution and delivery by each Credit
Party of this Amendment and the Additional Documents (in each case to the extent
it is a party thereto) and the performance by the Borrower of the Amended
Agreement and the Additional Documents do not and will not require any
registration with, consent or approval of, or notice to, or other action to,
with or by, any federal, state or other governmental authority or regulatory
body.
E. Binding Obligation. This Amendment, the Amended Agreement and the
Additional Documents have been duly executed and delivered by each Credit Party
which is a party thereto and are the legally valid and binding obligations of
each such Credit Party, enforceable against each such Credit Party in accordance
with their respective terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors'
rights generally or by equitable principles relating to enforceability.
F. Incorporation of Representations and Warranties From Credit
Agreement. The representations and warranties contained in Article IV of the
Credit Agreement as amended by this Amendment are and will be true, correct and
complete in all material respects on and as of the Third Amendment Effective
Date to the same extent as though made on and as of that date, except to the
extent such representations and warranties specifically relate to an earlier
date, in which case they were true, correct and complete in all material
respects on and as of such earlier date, and except to the extent that are
affected by transactions or events occurring after the Closing Date and
permitted or not prohibited under the Credit Agreement.
G. Absence of Default. No event has occurred and is continuing or will
result from the consummation of the transactions contemplated by this Amendment
and the Additional Documents that would constitute a Default under the Credit
Agreement as amended by this Amendment.
43
Section 6. MISCELLANEOUS
A. Reference to and Effect on the Credit Agreement and the Other Loan
Documents.
(i) On and after the Third Amendment Effective Date, each
reference in the Credit Agreement to "this Agreement", "hereunder",
"hereof'", "herein" or words of like import referring to the Credit
Agreement, and each reference in the other applicable Loan Documents
to the "Credit Agreement", "thereunder", "thereof" or words of like
import referring to the Credit Agreement shall mean and be a reference
to the Amended Agreement.
(ii) Except as specifically amended by this Amendment, the
Credit Agreement and the other Loan Documents shall remain in full
force and effect and are hereby ratified and confirmed.
(iii) The execution, delivery and performance of this
Amendment shall not, except as expressly provided herein or therein,
constitute a waiver of any provision of, or operate as a waiver of any
right, power or remedy of any Agent or any Lender under, the Credit
Agreement or any of the other Loan Documents.
B. Fees and Expenses. The Borrower acknowledges that all reasonable
costs, fees and expenses incurred by the Agent and its counsel with respect to
this Amendment and the documents and transactions contemplated hereby shall be
for the account of the Borrower.
C. Headings. Section and subsection headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
D. Applicable Law. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HERETO AND ALL OTHER ASPECTS HEREOF SHALL BE DEEMED TO BE MADE UNDER,
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES.
E. Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document. This Amendment (other than Sections 1 and 2 hereof) shall
become effective upon the execution of a counterpart hereof by the Agent,
Required Lenders and the Borrower and receipt by the Borrower and the Agent of
written or telephonic notification of such execution and authorization of
delivery thereof.
[Remainder of page intentionally left blank]
44
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
PEGASUS MEDIA & COMMUNICATIONS, INC.
By: /s/ Xxxxx X. Blank
------------------------------------
Name: Xxxxx X. Blank
Title: Sr. Vice President
DEUTSCHE BANK TRUST COMPANY AMERICAS,
individually and as Agent
By: /s/ Xxxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Director
CIBC, INC.
By: /s/ X. X. Xxxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Managing Director
FLEET NATIONAL BANK,
individually and as Documentation Agent
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Authorized Officer
AMMC CDO 1, LIMITED
By: American Money Management Corp.,
as Collateral Manager
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
AMMC CDO II, LIMITED
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
APEX (TRIMARAN) CDO I, LTD.
By Trimaran Advisors, L.L.C.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Managing Director
BALLYROCK CDO I LTD.
By: /s/ Xxxx Xxxxx
------------------------------------
Name: Xxxx Xxxxx
Title: Assistant Treasurer
BANK OF AMERICA ,N.A. CHICAGO
By: /s/ Xxxxxxx X. Xxxx
------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Managing Director
XXXXXXX CDO L.P.
By: /s/ Xxxxxxx Xxxxx
------------------------------------
Name: Xxxxxxx Xxxxx
Title: Fund Controller
CARAVELLE INVESTMENT FUND, L.L.C.
By Trimaran Advisors, L.L.C.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Managing Director
Sankaty Advisors, LLC as Collateral
Manager for Castle Hill I - INGOTS,
Ltd., as Term Lender
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Managing Director
Portfolio Manager
Sankaty Advisors, LLC as Collateral
Manager for Castle Hill II - INGOTS,
Ltd., as Term Lender
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Managing Director
Portfolio Manager
CENTURION CDO II Ltd.
By: American Express Asset Management
Group, Inc. as Collateral Manager
By: /s/ Xxxxxx Xxxxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Director - Operations
CENTURION CDO III Ltd.
By: American Express Asset Management
Group, Inc. as Collateral Manager
By: /s/ Xxxxxx Xxxxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Director - Operations
CENTURION CDO VI Ltd.
By: American Express Asset Management
Group, Inc. As Collateral Manager
By: /s/ Xxxxxx Xxxxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Director - Operations
CITIZENS BANK OF MASSACHUSETTS
By: /s/ Xxxxx X. Xxx
------------------------------------
Name: Xxxxx X. Xxx
Title: Vice President
EMERALD ORCHARD LIMITED
By: /s/ Xxxxxx Xxxxx
------------------------------------
Name: Xxxxxx Xxxxx
Title: Attorney in Fact
FIDELITY ADVISOR SERIES II: FIDELITY
ADVISOR FLOATING RATE HIGH INCOME
By: /s/ Xxxx X. Xxxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Assistant Treasurer
FRANKLIN CLO II LTD
By: /s/ Xxxxxxx X'Xxxxxxx
------------------------------------
Name: Xxxxxxx X'Xxxxxxx
Title: Senior Vice President
FRANKLIN FLOATING RATE TRUST
By: /s/ Xxxxxxx X'Xxxxxxx
------------------------------------
Name: Xxxxxxx X'Xxxxxxx
Title: Senior Vice President
GLENEAGLES TRADING LLC
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Assistant Vice President
Sankaty Advisors, LLC as Collateral
Manager for Great Point CLO 1999-1
LTD., as Term Lender
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Managing Director
Portfolio Manager
1888 FUND, LTD.
By: /s/ Xxxxxxx Xxxxx
------------------------------------
Name: Xxxxxxx Xxxxx
Title: Fund Controller
HIGHLAND - CALIFORNIA PUBLIC EMPLOYEES'
RETIREMENT SYSTEM
By: Highland Capital Management, L.P.
As Authorized Representatives of the
Board
By: /s/ Xxxx Xxxxx
------------------------------------
Name: Xxxx Xxxxx
Title: Chief Investment Officer
Highland Capital Management,
L.P.
HIGHLAND - RESTORATION FUNDING CLO,
LTD.
By: Highland Capital Management, L.P.
As Collateral Manager
By: /s/ Xxxx Xxxxx
------------------------------------
Name: Xxxx Xxxxx
Title: Chief Investment Officer
Highland Capital Management,
L.P.
HIGHLAND LEGACY LIMITED
By: Highland Capital Management. L.P.
As Collateral Manager
By: /s/ Xxxx Xxxxx
------------------------------------
Name: Xxxx Xxxxx
Title: Chief Investment Officer
Highland Capital Management,
L.P.
HIGHLAND OFFSHORE PARTNERS. L.P.
By: Highland Capital Management, L.P.
As General Partner
By: /s/ Xxxx Xxxxx
------------------------------------
Name: Xxxx Xxxxx
Title: Chief Investment Officer
Highland Capital Management,
L.P.
T. XXXX PRICE ASSOCIATES, INC. as
Collateral Manager for
XXXXX XXXXXX XXX 0000-0 LTD
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
KZH CYPRESSTREE-1 LLC
By: /s/ Hi Hua
------------------------------------
Name: Hi Hua
Title: Authorized Agent
KZH ING-2 LLC
By: /s/ Hi Hua
------------------------------------
Name: Hi Hua
Title: Authorized Agent
KZH PAMCO LLC
By: /s/ Hi Hua
------------------------------------
Name: Hi Hua
Title: Authorized Agent
KZH STERLING LLC
By: /s/ Hi Hua
------------------------------------
Name: Hi Hua
Title: Authorized Agent
MAGMA CDO LTD.
By: /s/ Xxxxxxx Xxxxx
------------------------------------
Name: Xxxxxxx Xxxxx
Title: Fund Controller
ML CBO IV (CAYMAN) LTD.
By: Highland Capital Management, L.P.
As Collateral Manager
By: /s/ Xxxx Xxxxx
------------------------------------
Name: Xxxx Xxxxx
Title: Chief Investment Officer
Highland Capital Management,
X.X.
XXXXXX XXXXXXX SENIOR FUNDING, INC.
By: /s/ Xxxxx Xxxxxx
------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
ORIX FINANCE CORP. I
By: /s/ X. X. Xxxxx
------------------------------------
Name: Xxxxxxxx X.X. Xxxxx, Xx.
Title: Authorized Representative
PAMCO CAYMAN LTD.
By: Highland Capital Management, L.P.
As Collateral Manager
By: /s/ Xxxx Xxxxx
------------------------------------
Name: Xxxx Xxxxx
Title: Chief Investment Officer
Highland Capital Management,
L.P.
SAWGRASS TRADING LLC
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Assistant Vice President
SEQUILS - CENTURION V, LTD.
By: American Express Asset
Management Group, Inc.
as Collateral Manager
By: /s/ Xxxxxx Xxxxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Director - Operations
STELLAR FUNDING, LTD.
By: /s/ Xxxxxxx Xxxxx
------------------------------------
Name: Xxxxxxx Xxxxx
Title: Fund Controller
TORONTO DOMINION (NEW YORK), INC.
By: /s/ Xxxxxx Xxxxx
------------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
UNION BANK OF CALIFORNIA, N.A.
By: /s/ Xxxx Xxxxxxx
------------------------------------
Name: Xxxx Xxxxxxx
Title: Vice President
Canyon Capital Advisors
0000 Xxxxxxxx Xxxx., #000
Xxxxxxx Xxxxx, XX 00000
PROPORTIONATE VOTING PROVISION
The undersigned, Canpartners Investments IV, LLC. ("Canyon"), is a Lender to
PEGASUS MEDIA & COMMUNICATION, INC., dated as of JANUARY 14, 2000 (the "Credit
Agreement".) Canyon's approval of a proposed THIRD AMENDMENT TO CREDIT AGREEMENT
AND CONSENT has been requested pursuant to the terms of the Credit Agreement.
The THIRD AMENDMENT TO CREDIT AGREEMENT AND CONSENT must be approved by the
Required Lenders under the Credit Agreement.
Canyon hereby votes its percentage interest as a Lender in favor of and/or
against the approval of the THIRD AMENDMENT TO CREDIT AGREEMENT AND CONSENT in
direct proportion to the votes of those other Lenders under the Credit Agreement
that have voted for or against the approval of the THIRD AMENDMENT TO CREDIT
AGREEMENT AND CONSENT (without counting failure to vote or abstentions.)
CANPARTNERS INVESTMENTS IV, LLC,
a California limited liability company
By: /s/ R.C. B. Xxxxxxx Date: 7/21/03
-------------------------------- ------------------------------
X. Xxxxxxxxx X. Xxxxxxx
Authorized Member
JOINDER BY GUARANTORS
---------------------
Each of the undersigned Parent and Subsidiaries of Pegasus Media &
Communications, Inc., (the "Guarantors") hereby (a) jointly and severally joins
in the execution of the foregoing Third Amendment to Credit Agreement and
Consent dated as of July 22, 2003 (the "Amendment"), to which this Joinder is
attached, to confirm its respective consent to all of the transactions
contemplated by the Amendment, all prior amendments, and all agreements and
instruments executed and delivered in connection therewith, and (b) in the case
of the Subsidiaries, jointly and severally reaffirms and ratifies its guaranty
of the Obligations and jointly and severally reaffirms and ratifies all
agreements set forth in such Security Documents securing such guaranty, all of
which shall in all respects remain in full force and effect and shall continue
to guarantee and secure any and all indebtedness, obligations and liabilities of
the Borrower to the Agent and the Lenders, whether now existing or hereafter
arising, on the same terms and conditions as are now set forth in such Security
Documents.
PEGASUS SATELLITE COMMUNICATIONS, INC.
PEGASUS BROADCAST TELEVISION, INC.
WOLF LICENSE CORP.
WDSI LICENSE CORP.
WDBD LICENSE CORP.
WILF, INC.
BRIDE COMMUNICATIONS, INC.
HMW, INC.
PORTLAND BROADCASTING, INC.
B.T. SATELLITE, INC.
TELECAST OF FLORIDA, INC.
WTLH LICENSE CORP.
PST HOLDINGS, INC.
PEGASUS SATELLITE TELEVISION, INC.
XXXX RURAL TV, INC.
PEGASUS SATELLITE TELEVISION OF ILLINOIS, INC.
GOLDEN SKY HOLDINGS, INC.
GOLDEN SKY DBS, INC.
GOLDEN SKY SYSTEMS, INC.
ARGOS SUPPORT SERVICES COMPANY
DBS TELE-VENTURE INC.
PRIMEWATCH, INC.
XXXXX COUNTY MRTV, INC.
By: /s/ Xxxxx X. Blank
-----------------------------------------------------
Name: Xxxxx X. Blank
Title: Senior Vice President
PEGASUS BROADCAST ASSOCIATES, L.P.
By: WILF, INC.,
as General Partner
By: /s/ Xxxxx X. Blank
-------------------------------------------------------
Name: Xxxxx X. Blank
Title: Senior Vice President
DTS MANAGEMENT, LLC
By: PEGASUS SATELLITE TELEVISION, INC.,
as sole member
By: /s/ Xxxxx X. Blank
-------------------------------------------------------
Name: Xxxxx X. Blank
Title: Senior Vice President
DIGITAL TELEVISION SERVICES OF INDIANA, LLC
By: DTS MANAGEMENT, LLC,
as sole member
By: PEGASUS SATELLITE TELEVISION, INC.,
as sole member
By: /s/ Xxxxx X. Blank
-------------------------------------------------------
Name: Xxxxx X. Blank
Title: Senior Vice President
DCE SATELLITE ENTERTAINMENT, LLC
By: GOLDEN SKY SYSTEMS, INC.,
as sole member
By: /s/ Xxxxx X. Blank
-------------------------------------------------------
Name: Xxxxx X. Blank
Title: Senior Vice President
Exhibit A
---------
[FORM OF SCHEDULE 7.03(f) TO CREDIT AGREEMENT]
SCHEDULE 7.03(f)
Owned Stations
--------------
City Call Letters Channel
---- ------------ -------
Chattanooga, TN WDSI 61
Cleveland, TN WPDP* 00
Xxxxxxxxxx, XX XXXX 00
Xxxxxxxx, XX WBVJ* 35
Quitman, GA WBFL*
Portland, ME XXXX 00
Xxxxxxxx, XX WOLF 56
Williamsport, PA WILF 53
Sayre, PA W52CE* 52
Xxxxx Summit W24CO* 24
PA
Tylertown, MS** W23CM 23
LMAs (licenses and assets owned by others)
------------------------------------------
City Call Letters Channel
---- ------------ -------
Lewiston, Maine WPME 38
Live Oak, FL WFXU 00
Xxxx Xxxxxxx, XX XXXX 00
Xxxx Xxxx, XX WLCF 11
Gainesville, FL XXXX 00
Xxxxxxxx, XX WSWB 38
Tallahassee, FL WTLF-DT 24
*-Each denotes a low-power television station and expands the coverage of,
and acts as a "repeator" for, another full-power station listed. WPDP
repeats WDSI; WBVJ and WBFL repeat WFXU; W52CE and W24CO repeat WOLF.
**-Construction permit granted June 13, 2002 and expires June 13 2005.
EXHIBIT B
---------
[FORM OF INTERCREDITOR AGREEMENT]
INTERCREDITOR AGREEMENT
This Intercreditor Agreement, dated as of August 1, 2003, is
entered into among DEUTSCHE BANK TRUST COMPANY AMERICAS (formerly known as
Bankers Trust Company), as Senior Credit Agreement Agent (as defined below), DBS
INVESTORS AGENT, INC., as administrative agent under the Term Loan Agreement
referred to below, and PEGASUS SATELLITE COMMUNICATIONS, INC., a Delaware
corporation (the "Company").
W I T N E S S E T H :
Whereas, Pegasus Media & Communications, Inc., a Delaware
corporation and a wholly-owned subsidiary of the Company ("PM&C"), the financial
institutions party to the Existing Credit Agreement referred to below as lenders
and issuing banks, CIBC World Markets Corp. and Deutsche Bank Securities, Inc.,
as co-arrangers, Canadian Imperial Bank of Commerce, as syndication agent,
Deutsche Bank Trust Company Americas (formerly known as Bankers Trust Company),
as administrative agent for such lenders and issuing banks (in such capacity,
the "Existing Credit Agreement Agent") and Fleet National Bank, as documentation
agent for such lenders and issuing banks, are parties to a First Amended and
Restated Credit Agreement, dated as of January 14, 2000, as amended by that
certain First Amendment to Credit Agreement, dated as of July 23, 2001, as
further amended by that certain Second Amendment to Credit Agreement dated as of
November 13, 2001 and as further amended by that certain Third Amendment to
Credit Agreement and Consent dated as of July 22, 2003 (the "Third Amendment")
(as such agreement may be amended, supplemented or otherwise modified from time
to time, the "Existing Credit Agreement"); and
WHEREAS, the Company has entered into the Existing Credit
Agreement Guaranty (as defined below) in favor of the Existing Credit Agreement
Agent in support of the obligations of PM&C under the Existing Credit Agreement;
and
Whereas, the Company, the financial institutions party to the
Amended and Restated Term Loan Agreement referred to below as lenders and DBS
Investors Agent, Inc., as administrative agent for such lenders (in such
capacity, the "Term Loan Agent") have entered into an Amended and Restated Term
Loan Agreement, dated as of August 1, 2003 (as such agreement may be amended,
supplemented or otherwise modified from time to time, the "Term Loan
Agreement"); and
Whereas, it is a condition precedent to the effectiveness of
the Third Amendment and to the obligation of the lenders under the Term Loan
Agreement to fund the initial borrowings thereunder that this Agreement be
entered into.
Now, Therefore, in consideration of the foregoing, the mutual
covenants and obligations herein set forth and for other good and valuable
consideration, the adequacy and receipt of which are hereby acknowledged, and in
reliance upon the representations, warranties and covenants herein contained,
the parties hereto, intending to be legally bound, hereby agree as follows:
EXHIBIT B
Page 2
Section 1. Definitions. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and the plural form of the terms indicated):
"Agreement" shall mean this Agreement, as amended,
supplemented or otherwise modified from time to time in accordance with the
terms hereof.
"Bankruptcy Code" shall mean title 11 of the United States
Code (11 U.S.C. 101 et seq.), as amended from time to time and any successor
statute.
"Business Day" shall mean any day other than Saturday, Sunday
and a day that is a legal holiday under the laws of the State of New York or on
which banking institutions in the State of New York are required or authorized
by law or other governmental action to close.
"Common Collateral" shall mean all of the assets of the
Company constituting both Senior Lender Collateral and Term Loan Lender
Collateral, other than the Other Common Collateral and the Pari Passu Common
Collateral.
"Common Collateral Recovery" shall have the meaning set forth
in Section 6.2(a) hereof.
"Default" shall mean an event or condition that, but for the
requirement that time elapse or notice be given, or both, would constitute an
Event of Default.
"Discharge of Senior Lender Claims" shall mean indefeasible
payment in full in cash of the principal of, interest and premium, if any, on
all indebtedness outstanding under the Senior Credit Agreement and, with respect
to letters of credit outstanding thereunder, delivery of cash collateral or
backstop letters of credit in respect thereof in compliance with the Senior
Credit Agreement, in each case after or concurrently with termination of all
commitments to extend credit thereunder, and indefeasible payment in full in
cash of any other Senior Lender Claims that are due and payable at or prior to
the time such principal and interest and other amounts are paid.
"Discharge of Term Loan Lender Claims" shall mean indefeasible
payment in full in cash of the principal of, interest and premium, if any, on
all indebtedness outstanding under the Term Loan Agreement and indefeasible
payment in full in cash of any other Term Loan Lender Claims that are due and
payable at or prior to the time such principal and interest and other amounts
are paid.
"Event of Default" shall mean, as the context shall require,
an "event of default" as defined in the Senior Credit Agreement or the Term Loan
Agreement, as the case may be.
"Existing Credit Agreement" shall have the meaning set forth
in the recitals hereto.
EXHIBIT B
Page 3
"Existing Credit Agreement Agent" shall have the meaning set
forth in the recitals hereto.
"Existing Credit Agreement Guaranty" shall mean the First
Amended and Restated Limited Recourse Guaranty dated as of January 14, 2000,
between the Company and the Existing Credit Agreement Agent, as amended by the
First Amendment to the First Amended and Restated Limited Recourse Guaranty
dated as of August 1, 2003, as the same may be amended, supplemented or
otherwise modified from time to time.
"Existing Credit Agreement Pledge" shall mean the First
Amended & Restated Securities Pledge Agreement dated as of January 14, 2000,
between the Company and the Existing Credit Agreement Agent, as amended by the
First Amendment to the First Amended and Restated Securities Pledge Agreement
dated as of August 1, 2003, as the same may be amended, supplemented or
otherwise modified from time to time.
"Insolvency or Liquidation Proceeding" shall mean (a) any
voluntary or involuntary case or proceeding under the Bankruptcy Code with
respect to the Company or PM&C, (b) any other voluntary or involuntary
insolvency, reorganization or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding
with respect to the Company or PM&C or with respect to any of their assets, (c)
any liquidation, dissolution, reorganization or winding up of the Company or
PM&C whether voluntary or involuntary and whether or not involving insolvency or
bankruptcy or (d) any assignment for the benefit of creditors or any other
marshalling of assets and liabilities of the Company or PM&C.
"Lien" shall mean any mortgage, pledge, hypothecation, deposit
arrangement, encumbrance, assignment, lien (statutory or other), charge, option
or other security interest, any restriction or any preference, priority or other
security agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement and any financing lease having substantially the same economic effect
as any of the foregoing).
"Other Common Collateral" shall mean all cash and other items
in the PSC Collateral Account (as defined in the Term Loan Lender Pledge),
including, without limitation, all payments (whether on account of principal,
interest or otherwise) received by the Company from PM&C in respect of
indebtedness of PM&C owed to the Company, all Tax Sharing Payments (as defined
in the Term Loan Agreement) received by the Company and all amounts received by
the Company from PM&C under intercompany loans made to the Company from PM&C
constituting both Senior Lender Collateral and Term Loan Lender Collateral.
"Other Common Collateral Recovery" shall have the meaning set
forth in Section 6.2(b) hereof.
"Pari Passu Common Collateral" shall mean all of the capital
stock of the L/C Subsidiary (as defined in the Term Loan Agreement) and any
other Person, other than an Immaterial Subsidiary (as defined in the Term Loan
Agreement) and PM&C, now or hereafter owned or acquired by the Company, all
dividends and distributions thereon and all proceeds thereof and all cash and
other items in the L/C Collateral Account (as defined in the Term Loan Lender
Pledge) constituting both Senior Lender Collateral and Term Loan Lender
Collateral.
EXHIBIT B
Page 4
"Pari Passu Common Collateral Recovery" shall have the meaning
set forth in Section 6.2(c) hereof.
"Person" shall mean any individual, corporation, partnership,
limited liability company, joint venture, trust, business unit, unincorporated
organization, or other organization, whether or not a legal entity, or any
government or any agency or political subdivision thereof.
"PM&C" shall have the meaning set forth in the recitals
hereto.
"Required Lenders" shall mean, with respect to any amendment
or modification of any Senior Loan Document, or any termination or waiver of any
provision of any Senior Loan Document, or any consent or departure by PM&C
therefrom, those Senior Lenders, the approval of which is required under the
Senior Credit Agreement to approve such amendment or modification, termination
or waiver or consent or departure.
"Senior Credit Agreement" shall mean the Existing Credit
Agreement and the credit agreement governing any Senior Credit Agreement
Refinancing.
"Senior Credit Agreement Agent" shall mean the Existing Credit
Agreement Agent or the then acting administrative agent for the Senior Lenders
under the Senior Lender Documents and any successor thereto exercising
substantially the same rights and powers, or if there is no acting Senior Credit
Agreement Agent under the Senior Credit Agreement, the Required Lenders.
"Senior Credit Agreement Guaranty" means the Existing Credit
Agreement Guaranty and any non-recourse guaranty entered into by the Company in
connection with a Senior Credit Agreement Refinancing guarantying the
obligations of PM&C under the Senior Credit Agreement which is secured only by
the Senior Lender Collateral, as the same may be amended, supplemented or
otherwise modified from time to time.
"Senior Credit Agreement Refinancing" shall mean any
indebtedness that is permitted to be incurred under Section 7.01(b)(ii) and/or
(c) of the Term Loan Agreement and qualifies as "Permitted Indebtedness" under
and as defined in the Term Loan Agreement; provided, that no such indebtedness
shall constitute a Senior Credit Agreement Refinancing until the Company
delivers to the Term Loan Agent a certificate of an Authorized Officer (as
defined in the Term Loan Agreement) demonstrating that such indebtedness is
permitted to be incurred under Section 7.01(b)(ii) and/or (c) of the Term Loan
Agreement and qualifies as "Permitted Indebtedness" under the Term Loan
Agreement, together with a copy of the principal Senior Lender Documents that
will evidence or govern such indebtedness.
"Standstill Period" shall have the meaning set forth in
Section 3.3(a) hereof.
"Senior Lender Claims" shall mean all indebtedness,
obligations and other liabilities (contingent or otherwise) arising under or
with respect to the Senior Lender Documents or any of them, the Indebtedness
EXHIBIT B
Page 5
under each of which is permitted by Section 7.01 of the Term Loan Agreement.
Senior Lender Claims shall include all interest accrued or accruing (or which
would, absent the commencement of an Insolvency or Liquidation Proceeding with
respect to PM&C, accrue) after the commencement of an Insolvency or Liquidation
Proceeding with respect to PM&C in accordance with and at the rate specified in
the Senior Credit Agreement whether or not the claim for such interest is
allowed as a claim in such Insolvency or Liquidation Proceeding with respect to
PM&C. To the extent any payment with respect to the Senior Lender Claims
(whether by or on behalf of the Company, as proceeds of security, enforcement of
any right of setoff or otherwise) is declared to be fraudulent or preferential
in any respect, set aside or required to be paid to a debtor in possession,
trustee, receiver or similar Person, then the obligation or part thereof
originally intended to be satisfied shall be deemed to be reinstated and
outstanding as if such payment had not occurred. Notwithstanding anything to the
contrary contained in the first sentence of this definition, any Indebtedness
under the Senior Lender Documents shall constitute a "Senior Lender Claim" if
the Senior Credit Agreement Agent shall have received a representation from the
Company in the Senior Lender Documents evidencing such Indebtedness (or a
certificate from an authorized officer of the Company delivered in connection
with such Senior Lender Documents) that such Indebtedness is then permitted by
Section 7.01 of the Term Loan Agreement (whether or not such Indebtedness was at
any time determined not to have been permitted to be incurred under the Term
Loan Agreement).
"Senior Lender Collateral" shall mean all of the capital stock
of PM&C now or hereafter owned or acquired by the Company, all dividends and
distributions thereon and all proceeds thereof and all cash and other items in
the Borrower Collateral Account (as defined in the Term Loan Agreement) and the
PSC Collateral Account (as defined in the Term Loan Agreement) of the Company,
and all other property and accounts of PM&C or the Company identified as
"Collateral" in which a Lien is purported to be granted in the Senior Lender
Collateral Documents.
"Senior Lender Collateral Documents" shall mean the Existing
Credit Agreement Pledge, the Senior Credit Agreement Guaranty and any other
document or instrument executed and delivered pursuant to any Senior Lender
Document or otherwise pursuant to which a Lien on the Senior Lender Collateral
is granted by the Company to secure the Senior Lender Claims or under which
rights or remedies with respect to any such Lien are governed, as the same may
be amended, supplemented or otherwise modified from time to time.
"Senior Lender Documents" shall mean the Senior Credit
Agreement, the Senior Credit Agreement Guaranty, the Senior Lender Collateral
Documents, all documents and instruments evidencing or governing any other
obligation under the Senior Credit Agreement and any other related document or
instrument executed or delivered pursuant to any Senior Lender Document at any
time or otherwise evidencing or governing any Senior Lender Claims, as the same
may be amended, supplemented or otherwise modified from time to time.
"Senior Lenders" shall mean the Persons holding Senior Lender
Claims, including, without limitation, the Senior Credit Agreement Agent.
"Term Loan Agent" shall include, in addition to the Term Loan
Agent referred to in the recitals hereto, the then acting administrative agent
under the Term Loan Agreement and any successor thereto exercising substantially
the same rights and powers, or if there is no acting administrative agent under
the Term Loan Agreement, the Term Loan Lenders holding a majority in principal
amount of Term Loan Lender Claims then outstanding.
EXHIBIT B
Page 6
"Term Loan Agreement" shall include, in addition to the Term
Loan Agreement referred to in the recitals hereto, any term loan agreement or
other agreement governing any Replacement Parent Term Debt (as defined in the
Third Amendment).
"Term Loan Lender Claims" shall mean all indebtedness,
obligations and other liabilities (contingent or otherwise) arising under or
with respect to the Term Loan Lender Documents or any of them, to the extent
permitted by Section 7.13(g) (or substantially similar successor provision) of
the Senior Credit Agreement. Term Loan Lender Claims shall include all interest
accrued or accruing (or which would, absent the commencement of an Insolvency or
Liquidation Proceeding with respect to the Company, accrue) after the
commencement of an Insolvency or Liquidation Proceeding with respect to the
Company in accordance with and at the rate specified in the Term Loan Agreement
whether or not the claim for such interest is allowed as a claim in such
Insolvency or Liquidation Proceeding with respect to the Company. To the extent
any payment with respect to the Term Loan Lender Claims (whether by or on behalf
of the Company, as proceeds of security, enforcement of any right of setoff or
otherwise) is declared to be fraudulent or preferential in any respect, set
aside or required to be paid to a debtor in possession, trustee, receiver or
similar Person, then the obligation or part thereof originally intended to be
satisfied shall be deemed to be reinstated and outstanding as if such payment
had not occurred.
"Term Loan Lender Collateral" shall mean all of the capital
stock of PM&C now or hereafter owned or acquired by the Company, all dividends
and distributions thereon and all proceeds thereof and all cash and other items
in the Borrower Collateral Account (as defined in the Term Loan Agreement) and
the PSC Collateral Account (as defined in the Term Loan Agreement) of the
Company, and all other property and accounts of the Company identified as
"Collateral" in which a Lien is purported to be granted in the Term Loan Lender
Collateral Documents.
"Term Loan Lender Collateral Documents" shall mean the Term
Loan Lender Pledge and any document or instrument executed and delivered
pursuant to any Term Loan Lender Document at any time or otherwise pursuant to
which a Lien on the Term Loan Lender Collateral is granted by the Company to
secure the Term Loan Lender Claims or under which rights or remedies with
respect to any such Lien are governed, as the same may be amended, supplemented
or otherwise modified from time to time.
"Term Loan Lender Documents" shall mean the Term Loan
Agreement, the Term Loan Lender Collateral Documents, all documents and
instruments evidencing or governing any other obligation under the Term Loan
Agreement and any other related document or instrument executed and delivered
pursuant to any Term Loan Lender Document at any time or otherwise evidencing or
governing any Term Loan Lender Claims, as the same may be amended, supplemented
or otherwise modified from time to time.
EXHIBIT B
Page 7
"Term Loan Lender Pledge" shall mean the Amended and Restated
Security and Pledge Agreement, dated as of August 1, 2003, between the Company
and the Term Loan Agent, as the same may be amended, supplemented or otherwise
modified from time to time.
"Term Loan Lenders" shall mean the Persons holding Term Loan
Lender Claims, including, without limitation, the Term Loan Agent.
"Third Amendment" shall have the meaning set forth in the
recitals hereto.
"Uniform Commercial Code" or "UCC" shall mean the Uniform
Commercial Code of the State of New York, as amended.
Section 2. Lien Priorities.
---------------
2.1 Subordination of Liens.
(a) Notwithstanding the date, manner or order of grant,
attachment or perfection of any Liens (or of the filing of any relevant
financing statement) granted to the Term Loan Agent or the Term Loan Lenders on
the Common Collateral or of any Liens granted to the Senior Credit Agreement
Agent or the Senior Lenders on the Common Collateral and notwithstanding any
provision of the UCC, or any applicable law or the Term Loan Lender Documents or
the Senior Lender Documents or any other circumstance whatsoever, the Term Loan
Agent, on behalf of itself and the Term Loan Lenders, hereby agrees that: (i)
any Lien on the Common Collateral securing the Senior Lender Claims now or
hereafter held by or on behalf of the Senior Credit Agreement Agent or the
Senior Lenders, regardless of how acquired, whether by grant, statute, operation
of law, subrogation or otherwise shall be senior in all respects and shall be
prior to any Lien on the Common Collateral securing the Term Loan Lender Claims;
and (ii) any Lien on the Common Collateral now or hereafter held by the Term
Loan Agent or the Term Loan Lenders regardless of how acquired, whether by
grant, statute, operation of law, subrogation or otherwise, shall be junior and
subordinate in all respects to all Liens on the Common Collateral securing the
Senior Lender Claims.
(b) Notwithstanding the date, manner or order of grant,
attachment or perfection of any Liens (or of the filing of any relevant
financing statement) granted to the Term Loan Agent or the Term Loan Lenders on
the Other Common Collateral or of any Liens granted to the Senior Credit
Agreement Agent or the Senior Lenders on the Other Common Collateral and
notwithstanding any provision of the UCC, or any applicable law or the Term Loan
Lender Documents or the Senior Lender Documents or any other circumstance
whatsoever, the Senior Credit Agreement Agent, on behalf of itself and the
Senior Lenders, hereby agrees that: (i) any Lien on the Other Common Collateral
securing the Term Loan Lender Claims now or hereafter held by or on behalf of
the Term Loan Agent or the Term Loan Lenders, regardless of how acquired,
whether by grant, statute, operation of law, subrogation or otherwise shall be
senior in all respects and shall be prior to any Lien on the Other Common
Collateral securing the Senior Lender Claims; and (ii) any Lien on the Other
Common Collateral now or hereafter held by the Senior Credit Agreement Agent or
the Senior Lenders regardless of how acquired, whether by grant, statute,
operation of law, subrogation or otherwise, shall be junior and subordinate in
all respects to all Liens on the Other Common Collateral securing the Term Loan
Lender Claims.
EXHIBIT B
Page 8
(c) Notwithstanding the date, manner or order of grant,
attachment or perfection of any Liens (or of the filing of any relevant
financing statement) granted to the Term Loan Agent or the Term Loan Lenders on
the Pari Passu Common Collateral or of any Liens granted to the Senior Credit
Agreement Agent or the Senior Lenders on the Pari Passu Common Collateral and
notwithstanding any provision of the UCC, or any applicable law or the Term Loan
Lender Documents or the Senior Lender Documents or any other circumstance
whatsoever, the Senior Credit Agreement Agent, on behalf of itself and the
Senior Lenders, and the Term Loan Agent, on behalf of itself and the Term Loan
Lenders, hereby agree that: (i) any Lien on the Pari Passu Common Collateral
securing the Term Loan Lender Claims now or hereafter held by or on behalf of
the Term Loan Agent or the Term Loan Lenders, regardless of how acquired,
whether by grant, statute, operation of law, subrogation or otherwise shall be
equal in all respects and shall be pari passu to any Lien on the Pari Passu
Common Collateral securing the Senior Lender Claims; and (ii) any Lien on the
Pari Passu Common Collateral now or hereafter held by the Senior Credit
Agreement Agent or the Senior Lenders, on the one hand, or the Term Loan Agent
or the Term Loan Lenders, on the other hand, regardless of how acquired, whether
by grant, statute, operation of law, subrogation or otherwise, shall be equal
and pari passu in all respects to all Liens on the Pari Passu Common Collateral
securing the Term Loan Lender Claims and the Senior Lender Claims.
2.2 Prohibition on Contesting Liens. Each of the Term Loan Agent, for
itself and on behalf of each Term Loan Lender, and the Senior Credit Agreement
Agent, for itself and on behalf of each Senior Lender, agrees that it shall not
(and hereby waives any right to) contest or support any other Person in
contesting, in any proceeding (including, without limitation, any Insolvency or
Liquidation Proceeding with respect to the Company or PM&C), the priority,
validity or enforceability of a Lien held by the Senior Lenders in the Senior
Lender Collateral or by the Term Loan Lenders in the Term Loan Lender
Collateral, as the case may be.
2.3 Acknowledgment. The Term Loan Agent, on behalf of itself and the
Term Loan Lenders, acknowledges that a portion of the Senior Lender Claims
represent Indebtedness that is revolving in nature and that the amount thereof
that may be outstanding at any time or from time to time may be increased or
reduced and subsequently reborrowed, and that the terms of the Senior Lender
Claims may be modified, extended or amended from time to time, and the aggregate
amount of the Senior Lender Claims may be increased, replaced or refinanced, all
without further notice to or consent by the Term Loan Lenders and without
affecting the provisions hereof. The Senior Credit Agreement Agent, on behalf of
itself and the Senior Lenders, acknowledges that the terms of the Term Loan
Lender Claims may be modified, extended or amended from time to time to the
extent permitted by the Senior Credit Agreement and this Agreement, and the
aggregate amount of the Term Loan Lender Claims may be increased, replaced or
refinanced to the extent permitted by the Senior Credit Agreement and this
Agreement, all without further notice to or consent by the Senior Lenders and
without affecting the provisions hereof. The priorities provided in Section 2
shall not be altered or otherwise affected by any amendment, modification,
supplement, extension, increase, replacement, renewal, restatement or
refinancing of either the Senior Lender Claims or the Term Loan Lender Claims
(or any portion thereof), nor by any action that the Senior Lenders or the Term
Loan Lenders may take or fail to take in respect of the Common Collateral, the
Other Common Collateral or the Pari Passu Common Collateral. Notwithstanding the
EXHIBIT B
Page 9
foregoing, the amount of indebtedness treated as (i) Senior Lender Claims shall
not exceed the amount of indebtedness permitted to be incurred under the Senior
Lender Documents under Section 7.01 of the Term Loan Agreement and (ii) Term
Loan Lender Claims shall not exceed the amount of indebtedness permitted to be
incurred under the Term Loan Lender Documents pursuant to restrictions contained
in the Senior Credit Agreement.
Section 3. Enforcement.
-----------
3.1 Exercise of Remedies Against Common Collateral.
(a) So long as the Discharge of Senior Lender Claims has not
occurred, whether or not any Insolvency or Liquidation Proceeding has been
commenced by or against the Company or PM&C , (i) the Term Loan Agent and the
Term Loan Lenders will not exercise or seek to exercise any rights or remedies
(including setoff) with respect to any Common Collateral, institute any action
or proceeding with respect to such rights or remedies, including, without
limitation, any action of foreclosure, contest, protest or object to any
foreclosure proceeding or action brought by the Senior Credit Agreement Agent or
any Senior Lender, or any other exercise by any such party, of any rights and
remedies relating to the Common Collateral under the Senior Lender Documents or
otherwise, or object to the forbearance by the Senior Lenders from bringing or
pursuing any foreclosure proceeding or action or any other exercise of any
rights or remedies relating to the Common Collateral and (ii) the Senior Credit
Agreement Agent and the Senior Lenders shall have the exclusive right to enforce
rights, exercise remedies (including, without limitation, setoff and the right
to credit bid their debt) and make determinations regarding release,
disposition, or restrictions with respect to the Common Collateral without any
consultation with or the consent of the Term Loan Agent or any Term Loan Lender;
provided, however, (A) that in any Insolvency or Liquidation Proceeding
commenced by or against the Company or PM&C, the Term Loan Agent may file a
claim or statement of interest with respect to the Term Loan Lender Claims, and
(B) the Term Loan Agent may take any action not adverse to the Liens on the
Common Collateral securing the Senior Lender Claims in order to preserve or
protect its rights in the Common Collateral. In exercising rights and remedies
with respect to the Common Collateral, the Senior Credit Agreement Agent and the
Senior Lenders may enforce the provisions of the Senior Lender Documents and
exercise remedies thereunder or refrain from exercising remedies thereunder, all
in such order and in such manner as they may determine in the exercise of their
sole discretion. Such exercise and enforcement shall include, without
limitation, the rights of an agent appointed by the Senior Credit Agreement
Agent to sell or otherwise dispose of Common Collateral upon foreclosure, to
incur expenses in connection with such sale or disposition, and to exercise all
the rights and remedies of a secured lender under the Uniform Commercial Code of
any applicable jurisdiction and of a secured creditor under bankruptcy or
similar laws of any applicable jurisdiction and all rights and remedies under
the Senior Lender Documents.
(b) The Term Loan Agent, on behalf of itself and the Term Loan
Lenders, agrees that the Term Loan Lenders will not take or receive any Common
Collateral or any proceeds of Common Collateral in connection with the exercise
of any right or remedy (including setoff) with respect to any Common Collateral,
unless and until the Discharge of Senior Lender Claims has occurred. Without
limiting the generality of the foregoing, unless and until the Discharge of
Senior Lender Claims has occurred, except as expressly provided in the proviso
in Section
EXHIBIT B
Page 10
3.1(a)(ii) above, the sole right of the Term Loan Agent and the Term Loan
Lenders with respect to the Common Collateral is to hold a Lien on the Common
Collateral pursuant to the Term Loan Lender Documents which is junior and
subordinate in all respects to all Liens on the Common Collateral securing the
Senior Lender Claims for the period and to the extent granted in the Term Loan
Lender Documents and to receive a share of the proceeds thereof, if any, after
the Discharge of the Senior Lender Claims has occurred.
(c) The Term Loan Agent, on behalf of itself and the Term Loan
Lenders, hereby (i) agrees that it and the Term Loan Lenders will not take any
action that would hinder any exercise of remedies undertaken by the Senior
Credit Agreement Agent under the Senior Lender Documents against the Common
Collateral, including any sale, lease, exchange, transfer or other disposition
of the Common Collateral, whether by foreclosure or otherwise, and (ii) waives
any and all rights it and such Term Loan Lenders may have as a junior lien
creditor or otherwise as a creditor to object to the manner in which the Senior
Credit Agreement Agent or the Senior Lenders seek to enforce or collect the
Senior Lender Claims or the Liens granted in any of the Common Collateral,
regardless of whether any action or failure to act by or on behalf of the Senior
Credit Agreement Agent or Senior Lenders is adverse to the interest of the Term
Loan Lenders.
(d) The Term Loan Agent, on behalf of itself and the Term Loan
Lenders, agrees that, prior to the Discharge of Senior Lender Claims, it and
each such Term Loan Lender will not commence, or join with any Person (other
than the Senior Lenders and the Senior Credit Agreement Agent upon the request
thereof) in commencing any enforcement, collection, execution, levy or
foreclosure action or proceeding with respect to any Lien on the Common
Collateral held by them.
(e) The Term Loan Agent, on behalf of itself and the Term Loan
Lenders, agrees that (i) it and each such Term Loan Lender will not take or
cause to be taken any action, the purpose or effect of which is, or could be, to
give any Term Loan Lender any preference or priority relative to the Senior
Lenders with respect to the Common Collateral or any part thereof, (ii) it and
each such Term Loan Lender will not exercise any right to vote against, withhold
consent to or otherwise object to, interfere, hinder or delay, in any manner,
whether by judicial proceedings or otherwise, any exercise of remedies against
the Common Collateral by the Senior Credit Agreement Agent or any other Senior
Lender or with the consent of Senior Credit Agreement Agent and (iii) it and
each such Term Loan Lender will not attempt, directly or indirectly, whether by
judicial proceedings or otherwise, (A) to contest the validity or enforceability
of the Senior Lender Claims (it being understood and agreed that the terms of
this Agreement shall govern even if part or all of the Senior Lender Claims are
avoided, disallowed, set aside or otherwise invalidated in any judicial
proceeding or otherwise) or (B) to challenge the enforceability of any provision
of this Agreement, and waives and relinquishes any right to contest the validity
or enforceability of the Senior Lender Claims or challenge such enforceability.
EXHIBIT B
Page 11
3.2 Exercise of Remedies Against Other Common Collateral and Pari
Passu Common Collateral.
(a) So long as the Discharge of Term Loan Lender Claims has
not occurred, whether or not any Insolvency or Liquidation Proceeding has been
commenced by or against the Company, (i) the Senior Credit Agreement Agent and
the Senior Lenders will not exercise or seek to exercise any rights or remedies
(including setoff) with respect to any Other Common Collateral or Pari Passu
Common Collateral, institute any action or proceeding with respect to such
rights or remedies, including, without limitation, any action of foreclosure,
contest, protest or object to any foreclosure proceeding or action brought by
the Term Loan Agent or any Term Loan Lender, or any other exercise by any such
party, of any rights and remedies relating to the Other Common Collateral or
Pari Passu Common Collateral under the Term Loan Lender Documents or otherwise,
or object to the forbearance by the Term Loan Lenders from bringing or pursuing
any foreclosure proceeding or action or any other exercise of any rights or
remedies relating to the Other Common Collateral or Pari Passu Common Collateral
and (ii) the Term Loan Agent and the Term Loan Lenders shall have the exclusive
right to enforce rights, exercise remedies (including, without limitation,
setoff and the right to credit bid their debt) and make determinations regarding
release, disposition, or restrictions with respect to the Other Common
Collateral and Pari Passu Common Collateral without any consultation with or the
consent of the Senior Credit Agreement Agent or any Senior Lender; provided,
however, (A) that in any Insolvency or Liquidation Proceeding commenced by or
against the Company, the Senior Credit Agreement Agent may file a claim or
statement of interest with respect to the Senior Lender Claims, and (B) the
Senior Credit Agreement Agent may take any action not adverse to the Liens on
the Other Common Collateral and Pari Passu Common Collateral securing the Term
Loan Lender Claims in order to preserve or protect its rights in the Other
Common Collateral and Pari Passu Common Collateral. In exercising rights and
remedies with respect to the Other Common Collateral and Pari Passu Common
Collateral, the Term Loan Agent and the Term Loan Lenders may enforce the
provisions of the Term Loan Lender Documents and exercise remedies thereunder or
refrain from exercising remedies thereunder, all in such order and in such
manner as they may determine in the exercise of their sole discretion. Such
exercise and enforcement shall include, without limitation, the rights of an
agent appointed by the Term Loan Agent to sell or otherwise dispose of Other
Common Collateral or Pari Passu Common Collateral upon foreclosure, to incur
expenses in connection with such sale or disposition, and to exercise all the
rights and remedies of a secured lender under the Uniform Commercial Code of any
applicable jurisdiction and of a secured creditor under bankruptcy or similar
laws of any applicable jurisdiction and all rights and remedies under the Term
Loan Lender Documents.
(b) The Senior Credit Agreement Agent, on behalf of itself and the
Senior Lenders, agrees that the Senior Lenders will not take or receive any
Other Common Collateral or Pari Passu Common Collateral or any proceeds of Other
Common Collateral or Pari Passu Common Collateral in connection with the
exercise of any right or remedy (including setoff) with respect to any Other
Common Collateral or Pari Passu Common Collateral, unless and until the
Discharge of Term Loan Lender Claims has occurred (except as provided in Section
4.1(c) of this Agreement with respect to Pari Passu Common Collateral). Without
limiting the generality of the foregoing, unless and until the Discharge of Term
Loan Lender Claims has occurred, except as expressly provided in the proviso in
Section 3.2(a)(ii) above, the sole right of the Senior Credit Agreement Agent
EXHIBIT B
Page 12
and the Senior Lenders with respect to the Other Common Collateral and Pari
Passu Common Collateral is to hold a Lien on the Other Common Collateral and
Pari Passu Common Collateral pursuant to the Senior Lender Documents which, (i)
in the case of the Other Common Collateral, is junior and subordinate in all
respects to all Liens on the Other Common Collateral securing the Term Loan
Lender Claims and (ii), in the case of the Pari Passu Common Collateral is equal
and pari passu in all respects to all Liens on the Pari Passu Common Collateral
securing the Term Loan Lender Claims, in each case for the period and to the
extent granted in the Senior Lender Documents and to receive a share of the
proceeds thereof, if any, after the Discharge of the Term Loan Lender Claims has
occurred (except as provided in Section 4.1(c) of this Agreement with respect to
Pari Passu Common Collateral).
(c) The Senior Credit Agreement Agent, on behalf of itself and
the Senior Lenders, hereby (i) agrees that it and the Senior Lenders will not
take any action that would hinder any exercise of remedies undertaken by the
Term Loan Agent under the Term Loan Lender Documents against the Other Common
Collateral or Pari Passu Common Collateral, including any sale, lease, exchange,
transfer or other disposition of the Other Common Collateral or Pari Passu
Common Collateral, whether by foreclosure or otherwise, and (ii) waives any and
all rights it and such Senior Lenders may have as a junior lien creditor or
otherwise as a creditor to object to the manner in which the Term Loan Agent or
the Term Loan Lenders seek to enforce or collect the Term Loan Lender Claims or
the Liens granted in any of the Other Common Collateral or Pari Passu Common
Collateral, regardless of whether any action or failure to act by or on behalf
of the Term Loan Agent or Term Loan Lenders is adverse to the interest of the
Senior Lenders.
(d) The Senior Credit Agreement Agent, on behalf of itself and
the Senior Lenders, agrees that, prior to the Discharge of Term Loan Lender
Claims, it and each such Senior Lender will not commence, or join with any
Person (other than the Term Loan Lenders and the Term Loan Agent upon the
request thereof) in commencing any enforcement, collection, execution, levy or
foreclosure action or proceeding with respect to any Lien on the Other Common
Collateral or Pari Passu Common Collateral held by them.
(e) The Senior Credit Agreement Agent, on behalf of itself and
the Senior Lenders, agrees that (i) it and each such Senior Lender will not take
or cause to be taken any action, the purpose or effect of which is, or could be,
to give any Senior Lender any preference or priority relative to the Term Loan
Lenders with respect to the Other Common Collateral or Pari Passu Common
Collateral or any part thereof, (ii) it and each such Senior Lender will not
exercise any right to vote against, withhold consent to or otherwise object to,
interfere, hinder or delay, in any manner, whether by judicial proceedings or
otherwise, any exercise of remedies against the Other Common Collateral or Pari
Passu Common Collateral by the Term Loan Agent or any other Term Loan Lender or
with the consent of Term Loan Agent and (iii) it and each such Senior Lender
will not attempt, directly or indirectly, whether by judicial proceedings or
otherwise, (A) to contest the validity or enforceability of the Term Loan Lender
Claims (it being understood and agreed that the terms of this Agreement shall
govern even if part or all of the Term Loan Lender Claims are avoided,
disallowed, set aside or otherwise invalidated in any judicial proceeding or
otherwise) or (B) to challenge the enforceability of any provision of this
Agreement, and waives and relinquishes any right to contest the validity or
enforceability of the Term Loan Lender Claims or challenge such enforceability.
EXHIBIT B
Page 13
3.3 Standstill.
(a) Notwithstanding anything to the contrary contained in this
Agreement or any Term Loan Lender Document, if a Default under the Term Loan
Agreement has occurred and is continuing and is not cured prior to the
applicable grace period (if any) set forth in Article VIII of the Term Loan
Agreement for any such Default, neither the Term Loan Agent nor any Term Loan
Lender may exercise any rights or remedies with respect to any such Default,
including, but not limited to, any action (i) to demand or xxx for collection of
amounts payable under the Term Loan Lender Documents, (ii) to declare, or join
in the declaration of, any Term Loan Lender Claims to be due and payable prior
to their stated maturity or otherwise accelerate the maturity of the principal
of the Term Loan Lender Claims, accrued interest thereon or any other
obligations on or related to the Term Loan Lender Claims, (iii) to commence, or
join in the commencement of, any administrative, legal or equitable action
(including, without limitation, any Insolvency or Liquidation Proceeding)
against the Company, (iv) to seek to attach, sequester or otherwise proceed
against any assets or property of the Company, or (v) to otherwise collect or
seek enforcement of payment of any Term Loan Lender Claims or otherwise attempt
to recover payment in respect of any Term Loan Lender Claims, prior to the end
of any period (a "Standstill Period") beginning with the date of such Default
under the Term Loan Agreement and ending on the earliest of (A) 180 days after
the date the Senior Credit Agreement Agent is notified in writing by the Term
Loan Agent that such Default has become or constitutes an Event of Default under
the Term Loan Agreement, (B) the date on which the Senior Credit Agreement Agent
notifies the Term Loan Agent that such Standstill Period has been terminated,
(C) the date on which the Senior Lender Claims are accelerated or otherwise
become due, (D) the date on which any default occurs with respect to any
Existing PSC Indebtedness (as defined in the Term Loan Agreement) or Replacement
PSC Indebtedness (as defined in the Term Loan Agreement) if the effect of such
default is to permit the holders of such indebtedness to accelerate the maturity
of such indebtedness, (E) the date on which any Event of Default in the payment
or mandatory prepayment of principal, interest or any other premium, or fee
occurs under the Term Loan Agreement or (F) the date upon which any payment of
interest or cash equity contribution contemplated by the third to last sentence
of this Section 3.3(a) is made if such payment of interest or cash equity
contribution is not permitted to be made at such time pursuant to such sentence.
Notwithstanding anything to the contrary contained in the Term Loan Lender
Documents, if a Default under the Term Loan Agreement has occurred and is
continuing, the Term Loan Agent and the Term Loan Lenders shall not block or
otherwise restrict any payments from the PSC Collateral Account or L/C
Collateral Account (each as defined in the Term Loan Lender Pledge) at the times
and for the purposes specified in the following clauses (i) and (ii) by reason
of such Default during any Standstill Period and will permit (i) amounts to be
released and withdrawn from the Borrower Collateral Account (as defined in the
Term Loan Lender Pledge) for scheduled payments of interest in respect of the
Existing PSC Indebtedness and any Replacement PSC Indebtedness (each as defined
in the Term Loan Agreement) during only the period beginning with the relevant
Default giving rise to a Standstill Period and ending on the earlier of (x) the
date upon which such Standstill Period ends in accordance with this Section
3.3(a) and (y) the date which is 90 days after delivery of the notice of the
Event of Default to which such Standstill Period relates (but not after such 90
day period), to the extent the Senior Credit Agreement Agent and the Senior
Lenders have consented to such payments of interest and (ii) at any and all
times during any Standstill Period, cash equity contributions by Pegasus
EXHIBIT B
Page 14
Communications Corporation into the Company which are promptly contributed as
capital contributions in cash to PM&C, so long as such contributions are applied
by PM&C for purposes other than dividends or other distributions on equity of
PM&C; and the Term Loan Agent, on behalf of itself and the Term Loan Lenders,
agrees that notwithstanding anything to the contrary contained in the Term Loan
Lender Documents, no Default or Event of Default under the Term Loan Agreement
shall result from any of the foregoing payments or contributions. In no event
shall the Standstill Period or Standstill Periods exceed 180 days in any 360 day
period. If the Term Loan Agent or any Term Loan Lender, in violation of the
provisions herein set forth, shall commence, prosecute or participate in any
suit, action, case or proceeding against the Company, the Company may interpose
as a defense or plea the applicable provisions of this Agreement, and the
holders of or representatives of the holders of, the relevant Senior Lender
Claims may intervene, and interpose such defense or plea in its or their own
name or in the name of the Company, and shall, in any event, have standing to
restrain in the enforcement of the Term Loan Lender Claims in its or their own
name or in the name of the Company in the same suit, action, case or proceeding
or in any independent suit, action, case or proceeding.
(b) Term Loan Agent and Senior Credit Agreement Agent hereby
acknowledge that corresponding and substantially identical provisions as the
following provisions in the Term Loan Agreement exist and may exist in the
future in the Senior Credit Agreement: Sections 5.02(a), 6.01, 6.02, 6.03, 6.04,
6.05, 6.06, 6.07, 6.08, 6.09, 6.10, 6.12, 6.13, 7.04, 7.06, 7.07, 7.11, 7.13(c),
7.14, 7.15, 7.17 and 8(g) (such provisions and the substantially identical
provisions in the Senior Credit Agreement, the "Common Provisions").
Notwithstanding anything to the contrary contained in the Term Loan Lender
Documents, if any waiver (including any waiver given on a prospective basis) of
a Common Provision in the Senior Credit Agreement shall become effective in
accordance with the terms of the applicable Senior Lender Documents with respect
to a specified event or condition then such waiver shall in each case be deemed
to have automatically and immediately, without any further action, concurrence,
consent or approval by the Term Loan Agent, any Term Loan Lender or the Company,
be effective (to the same extent and effect) and be binding on the Company, the
Term Loan Agent and the Term Loan Lenders as a waiver of the corresponding
Common Provision in the Term Loan Lender Document; provided that (A) with
respect to (i) Section 6.04 of the Term Loan Agreement, Senior Credit Agreement
Agent shall have given any notice required under such Section to the Term Loan
Agent and (ii) Section 6.05 of the Term Loan Agreement, Senior Credit Agreement
Agent shall have delivered copies of any financial statements or other
information received by it or the Senior Lenders to the Term Loan Agent and (B)
neither the Term Loan Agent nor the Term Loan Lenders shall be deemed to have
waived or otherwise cured any Default or Event of Default arising under the Term
Loan Lender Documents in the event the Senior Credit Agreement Agent or any
Senior Lender received any fee (whether in cash or other consideration) in
exchange for giving such waiver (other than reimbursement of reasonable
out-of-pocket expenses and payment of default interest) unless and until a
ratable fee is also received by the Term Loan Lenders on a pro rata basis.
Without limiting the effectiveness of the foregoing, the Company and the Senior
Credit Agreement Agent agree that promptly after the effectiveness of any such
waiver of the Senior Loan Documents, the Senior Credit Agreement Agent and the
Company shall provide the Term Loan Agent a written acknowledgement thereof
reasonably satisfactory to the Term Loan Agent.
EXHIBIT B
Page 15
Section 4. Payments.
--------
4.1 Application of Proceeds.
(a) As long as the Discharge of Senior Lender Claims has not
occurred, the cash or other proceeds of Common Collateral received in connection
with the sale of, or collection on, such Common Collateral upon the exercise of
remedies, shall be applied by the Senior Credit Agreement Agent to the Senior
Lender Claims in such order as specified in the Senior Credit Agreement until
Discharge of Senior Lender Claims has occurred (it being understood and agreed
that the terms of this Agreement shall govern even if part or all of the Senior
Lender Claims are avoided, disallowed, set aside or otherwise invalidated in any
judicial proceeding or otherwise). Upon the Discharge of Senior Lender Claims,
the Senior Credit Agreement Agent shall deliver to the Term Loan Agent any
remaining proceeds of Common Collateral held by it in the same form as received,
with any necessary endorsements or as a court of competent jurisdiction may
otherwise direct.
As long as the Discharge of Term Loan Lender Claims has not occurred, the cash
or other proceeds of Other Common Collateral received in connection with the
sale of, or collection on, such Other Common Collateral upon the exercise of
remedies, shall be applied by the Term Loan Agent to the Term Loan Lender
Claims in such order as specified in the Term Loan Agreement until Discharge
of Term Loan Lender Claims has occurred (it being understood and agreed that
the terms of this Agreement shall govern even if part or all of the Term Loan
Lender Claims are avoided, disallowed, set aside or otherwise invalidated in
any judicial proceeding or otherwise). Upon the Discharge of Term Loan Lender
Claims, the Term Loan Agent shall deliver to the Senior Credit Agreement
Agent any remaining proceeds of Other Common Collateral held by it in the
same form as received, with any necessary endorsements or as a court of
competent jurisdiction may otherwise direct.
(b) As long as the Discharge of Term Loan Lender Claims or the
Discharge of Senior Lender Claims has not occurred, the cash or other proceeds
of Pari Passu Common Collateral received in connection with the sale of, or
collection on, such Pari Passu Common Collateral upon the exercise of remedies,
shall be applied by the Term Loan Agent ratably to the Term Loan Lender Claims
and the Senior Lender Claims in such order as specified in the Term Loan
Agreement until Discharge of Term Loan Lender Claims has occurred and the Senior
Credit Agreement until the Discharge of Senior Lender Claims has occurred (it
being understood and agreed that the terms of this Agreement shall govern even
if part or all of the Term Loan Lender Claims or the Senior Lender Claims are
avoided, disallowed, set aside or otherwise invalidated in any judicial
proceeding or otherwise). Upon the Discharge of Term Loan Lender Claims, the
Term Loan Agent shall deliver to the Senior Credit Agreement Agent any remaining
proceeds of Pari Passu Common Collateral held by it in the same form as
received, with any necessary endorsements or as a court of competent
jurisdiction may otherwise direct.
4.2 Payments Over.
(a) The Term Loan Agent, on behalf of itself and the Term Loan
Lenders, hereby agrees that if it shall obtain possession of any Common
Collateral or proceeds thereof in connection with the exercise of any right or
remedy (including setoff) relating to the Common Collateral in contravention of
EXHIBIT B
Page 16
this Agreement or the Senior Lender Documents, then it shall hold such Common
Collateral or proceeds in trust for the Senior Credit Agreement Agent and the
Senior Lenders and transfer such Common Collateral and proceeds over to the
Senior Credit Agreement Agent for the benefit of the Senior Lenders in the same
form as received, with any necessary endorsements or as a court of competent
jurisdiction may otherwise direct. The Senior Credit Agreement Agent is hereby
authorized to make any such endorsements as agent for the Term Loan Agent or any
such Term Loan Lender. This authorization is coupled with an interest and is
irrevocable. If, at any time, all or part of any payment with respect to the
Senior Lender Claims previously made is rescinded for any reason whatsoever, the
Term Loan Lenders shall promptly pay over to the Senior Credit Agreement Agent
any payment received by any of them in respect of the Common Collateral and
shall promptly turn any Common Collateral then held by any of them over to the
Senior Credit Agreement Agent, and the provisions set forth in this Agreement
shall be reinstated as if such payment had not been made, until the Discharge of
Senior Lender Claims has occurred.
(b) The Senior Credit Agreement Agent, on behalf of itself and
the Senior Lenders, hereby agrees that if it shall obtain possession of any
Other Common Collateral or Pari Passu Common Collateral or proceeds thereof in
connection with the exercise of any right or remedy (including setoff) relating
to the Other Common Collateral or Pari Passu Common Collateral in contravention
of this Agreement or the Term Loan Lender Documents, then it shall hold such
Other Common Collateral or Pari Passu Common Collateral or proceeds in trust for
the Term Loan Agent and the Term Loan Lenders and transfer such Other Common
Collateral or Pari Passu Common Collateral and proceeds over to the Term Loan
Agent for the benefit of the Term Loan Lenders in the same form as received,
with any necessary endorsements or as a court of competent jurisdiction may
otherwise direct. The Term Loan Agent is hereby authorized to make any such
endorsements as agent for the Senior Credit Agreement Agent or any such Senior
Lender. This authorization is coupled with an interest and is irrevocable. If,
at any time, all or part of any payment with respect to the Term Loan Lender
Claims previously made is rescinded for any reason whatsoever, the Senior
Lenders shall promptly pay over to the Term Loan Agent any payment received by
any of them in respect of the Other Common Collateral or Pari Passu Common
Collateral and shall promptly turn any Other Common Collateral or Pari Passu
Common Collateral then held by any of them over to the Term Loan Agent, and the
provisions set forth in this Agreement shall be reinstated as if such payment
had not been made, until the Discharge of Term Loan Lender Claims has occurred.
Section 5. Other Agreements.
----------------
5.1 Releases Upon Exercise of Remedies.
(a) If in connection with the exercise of the Senior Credit
Agreement Agent's remedies in respect of the Common Collateral, including any
sale, lease, exchange, transfer or other disposition of such Common Collateral,
the Senior Credit Agreement Agent, for itself or on behalf of any of the Senior
Lenders, releases any of its Liens on all or any part of the Common Collateral,
the Liens, if any, of the Term Loan Agent, for itself or for the benefit of the
Term Loan Lenders, on the same part of such Common Collateral shall be
automatically, unconditionally and simultaneously released, such release shall
be binding on the Term Loan Agent and each Term Loan Lender and the Term Loan
Agent and each Term Loan Lender shall be deemed to have consented to such
EXHIBIT B
Page 17
release. The Term Loan Agent, for itself or on behalf of any such Term Loan
Lender, promptly shall execute and deliver to the Senior Credit Agreement Agent
such termination statements, releases and other documents as the Senior Credit
Agreement Agent may request to effectively confirm such release and the Senior
Credit Agreement Agent shall have no liability to any Term Loan Lender or Term
Loan Agent on account of such release.
(b) If in connection with the exercise of the Term Loan
Agent's remedies in respect of the Other Common Collateral or Pari Passu Common
Collateral, including any sale, lease, exchange, transfer or other disposition
of such Other Common Collateral or Pari Passu Common Collateral, the Term Loan
Agent, for itself or on behalf of any of the Term Loan Lenders, releases any of
its Liens on all or any part of the Other Common Collateral or Pari Passu Common
Collateral, the Liens, if any, of the Senior Credit Agreement Agent, for itself
or for the benefit of the Senior Lenders, on the same part of such Other Common
Collateral or Pari Passu Common Collateral shall be automatically,
unconditionally and simultaneously released, such release shall be binding on
the Senior Credit Agreement Agent and each Senior Lender and the Senior Credit
Agreement Agent and each Senior Lender shall be deemed to have consented to such
release. The Senior Credit Agreement Agent, for itself or on behalf of any such
Senior Lender, promptly shall execute and deliver to the Term Loan Agent such
termination statements, releases and other documents as the Term Loan Agent may
request to effectively confirm such release and the Term Loan Agent shall have
no liability to any Senior Lender or Senior Credit Agreement Agent on account of
such release.
5.2 Rights As Creditors.
(a) Notwithstanding anything to the contrary in this Agreement
but subject to Section 3.3 of this Agreement, the Term Loan Agent and the Term
Loan Lenders may accelerate the Term Loan Lender Claims and exercise rights and
remedies as an unsecured creditor against the Company in accordance with the
terms of the Term Loan Lender Documents and applicable law. Nothing in this
Agreement shall prohibit the receipt by the Term Loan Agent or any Term Loan
Lenders of the required payments of interest, principal, fees, expenses or other
amounts payable under the Term Loan Lender Documents so long as such receipt is
not the direct or indirect result of the exercise by the Term Loan Agent or any
Term Loan Lender of rights or remedies with respect to the Common Collateral or
enforcement of any Lien on the Common Collateral held by any of them in
contravention of this Agreement. In the event the Term Loan Agent or any Term
Loan Lender becomes a judgment lien creditor in respect of Common Collateral as
a result of its enforcement of its rights as a creditor, such judgment lien
shall be subordinated to the Liens securing Senior Lender Claims on the same
basis as the other Liens securing the Term Loan Lender Claims are so
subordinated to such Senior Lender Claims under this Agreement, and neither the
Term Loan Agent nor any Term Loan Lender shall execute on any such judgment
against any of the Common Collateral until the Discharge of Senior Lender Claims
has occurred. Nothing in this Agreement modifies any rights or remedies the
Senior Credit Agreement Agent or the Senior Lenders may have with respect to the
Senior Lender Collateral.
(b) Notwithstanding anything to the contrary in this
Agreement, the Senior Credit Agreement Agent and the Senior Lenders may
accelerate the Senior Lender Claims and exercise rights and remedies as an
unsecured creditor against the Company and PM&C and its subsidiaries in
EXHIBIT B
Page 18
accordance with the terms of the Senior Lender Documents and applicable law.
Nothing in this Agreement shall prohibit the receipt by the Senior Credit
Agreement Agent or any Senior Lenders of the required payments of interest,
principal, fees, expenses or other amounts payable under the Senior Lender
Documents so long as such receipt is not the direct or indirect result of the
exercise by the Senior Credit Agreement Agent or any Senior Lender of rights or
remedies with respect to the Other Common Collateral or Pari Passu Common
Collateral or enforcement of any Lien on the Other Common Collateral or Pari
Passu Common Collateral held by any of them in contravention of this Agreement.
In the event the Senior Credit Agreement Agent or any Senior Lender becomes a
judgment lien creditor in respect of Other Common Collateral or Pari Passu
Common Collateral as a result of its enforcement of its rights as a creditor,
such judgment lien shall be (i), with respect to any Other Common Collateral,
subordinated to the Liens securing Term Loan Lender Claims and (ii), with
respect to any Pari Passu Common Collateral, pari passu to the Liens securing
Xxx Loan under Claims, in each case on the same basis as the other Liens
securing the Senior Lender Claims are so subordinated or pari passu (as the case
may be) to such Term Loan Lender Claims under this Agreement, and neither the
Senior Credit Agreement Agent nor any Senior Lender shall execute on any such
judgment against any of the Other Common Collateral or Pari Passu Common
Collateral until the Discharge of Term Loan Lender Claims has occurred. Nothing
in this Agreement modifies any rights or remedies the Term Loan Agent or the
Term Loan Lenders may have with respect to the Term Loan Lender Collateral.
5.3 Bailee for Perfection; Collateral Account Controlling Party.
(a) The Senior Credit Agreement Agent agrees to hold the
Common Collateral in its possession (or in the possession of its agents or
bailees) as bailee for the Term Loan Agent and any assignee solely for the
purpose of perfecting the security interest granted in such Common Collateral
pursuant to the Term Loan Lender Collateral Documents, subject to the terms and
conditions of this Section 5.3, and the Term Loan Agent, on behalf of itself and
the Term Loan Lenders, hereby agrees that it shall have no right to hold any
such Common Collateral or proceeds thereof so long as the Senior Credit
Agreement Agent holds such collateral for such purpose. The Senior Credit
Agreement Agent represents and warrants to the Term Loan Agent and the Term Loan
Lenders on the date hereof that it has possession of the certificates
representing all of the capital stock of PM&C specified on Exhibit A to the Term
Loan Lender Pledge. The Term Loan Agent agrees to hold the Other Common
Collateral and Pari Passu Common Collateral in its possession (or in the
possession of its agents or bailees) as bailee for the Senior Credit Agreement
Agent and any assignee solely for the purpose of perfecting the security
interest granted in such Other Common Collateral and Pari Passu Common
Collateral pursuant to the Senior Lender Collateral Documents, subject to the
terms and conditions of this Section 5.3, and the Senior Credit Agreement Agent,
on behalf of itself and the Senior Lenders, hereby agrees that it shall have no
right to hold any such Other Common Collateral or Pari Passu Common Collateral
or proceeds thereof so long as the Term Loan Agent holds such collateral for
such purpose.
(b) Until the Discharge of Senior Lender Claims has occurred,
the Senior Credit Agreement Agent shall be entitled to deal with the Common
Collateral in accordance with the terms of the Senior Lender Documents. The
rights of the Term Loan Agent with respect to the Common Collateral shall at all
times be subject to the terms of this Agreement and to the Senior Credit
EXHIBIT B
Page 19
Agreement Agent's rights under the Senior Lender Documents. Until the Discharge
of Term Loan Lender Claims has occurred, the Term Loan Agent shall be entitled
to deal with the Other Common Collateral and Pari Passu Common Collateral in
accordance with the terms of the Term Loan Lender Documents. The rights of the
Senior Credit Agreement Agent with respect to the Other Common Collateral and
Pari Passu Common Collateral shall at all times be subject to the terms of this
Agreement and to the Term Loan Agent's rights under the Term Loan Lender
Documents.
(c) The Senior Credit Agreement Agent shall have no obligation
whatsoever to the Term Loan Agent or any Term Loan Lender to assure that the
Common Collateral is genuine or owned by the Company or to preserve rights or
benefits of any Person except as expressly set forth in this Section 5.3. The
duties or responsibilities of the Senior Credit Agreement Agent under this
Section 5.3 shall be limited solely to holding the Common Collateral in its
possession as bailee for the Term Loan Agent for purposes of perfecting the Lien
held by the Term Loan Agent until such time as the relevant collateral is sold
or otherwise disposed of in accordance with this Agreement, and the Term Loan
Agent and each Term Loan Lender waive all rights and remedies they may now or
hereafter have against or with respect to the Senior Credit Agreement Agent, as
bailee, to the extent such rights and remedies conflict with the terms of this
Agreement. Nothing in this Section 5.3 shall be construed to limit the Senior
Credit Agreement Agent's right to sell or dispose of Common Collateral without
the consent of the Term Loan Agent or the Term Loan Lenders in accordance with
this Agreement. The Term Loan Agent shall have no obligation whatsoever to the
Senior Credit Agreement Agent or any Senior Lender to assure that the Other
Common Collateral or Pari Passu Common Collateral is genuine or owned by the
Company or to preserve rights or benefits of any Person except as expressly set
forth in this Section 5.3. The duties or responsibilities of the Term Loan Agent
under this Section 5.3 shall be limited solely to holding the Other Common
Collateral and Pari Passu Common Collateral in its possession as bailee for the
Senior Credit Agreement Agent for purposes of perfecting the Lien held by the
Senior Credit Agreement Agent until such time as the relevant collateral is sold
or otherwise disposed of in accordance with this Agreement, and the Senior
Credit Agreement Agent and each Senior Lender waive all rights and remedies they
may now or hereafter have against or with respect to the Term Loan Agent, as
bailee, to the extent such rights and remedies conflict with the terms of this
Agreement. Nothing in this Section 5.3 shall be construed to limit the Term Loan
Agent's right to sell or dispose of Other Common Collateral or Pari Passu Common
Collateral without the consent of the Senior Credit Agreement Agent or the
Senior Lenders in accordance with this Agreement.
(d) The Senior Credit Agreement Agent shall not have by reason of the
Term Loan Lender Pledge or this Agreement or any other document a fiduciary
relationship or agency relationship in respect of the Term Loan Agent or any
Term Loan Lender. The Term Loan Agent shall not have by reason of the Senior
Lender Collateral Documents or this Agreement or any other document a fiduciary
relationship or agency relationship in respect of the Senior Credit Agreement
Agent or any Senior Lender.
(e) Upon the Discharge of Senior Lender Claims, the Senior Credit
Agreement Agent shall deliver to the Term Loan Agent any unsold Common
Collateral or remaining proceeds together with any necessary endorsements (or
otherwise allow such Term Loan Agent to obtain sole control of such Common
Collateral) or as a court of competent jurisdiction may otherwise direct, and
EXHIBIT B
Page 20
the Senior Credit Agreement Agent covenants to take no action to release
possession of any Common Collateral prior to the Discharge of Term Loan Lender
Claims except to the Term Loan Agent pursuant to this Section 5.3(e) or
otherwise prejudice the perfection or priority of the Term Loan Agent in such
Common Collateral if there is a Default or Event of Default under the Term Loan
Lender Documents and shall take all actions necessary to maintain the perfection
and priority of the security interests in the Common Collateral. Upon the
Discharge of Term Loan Lender Claims, the Term Loan Agent shall deliver to the
Senior Credit Agreement Agent any unsold Other Common Collateral or Pari Passu
Common Collateral or remaining proceeds together with any necessary endorsements
(or otherwise allow such Senior Credit Agreement Agent to obtain sole control of
such Other Common Collateral or Pari Passu Common Collateral) or as a court of
competent jurisdiction may otherwise direct, and the Term Loan Agent covenants
to take no action to release possession of any Other Common Collateral or Pari
Passu Common Collateral prior to the Discharge of Senior Lender Claims except to
the Senior Credit Agreement Agent pursuant to this Section 5.3(e) or otherwise
prejudice the perfection or priority of the Senior Credit Agreement Agent in
such Other Common Collateral or Pari Passu Common Collateral if there is a
Default or Event of Default under the Senior Lender Documents and shall take all
actions necessary to maintain the perfection and priority of the security
interests in the Other Common Collateral and Pari Passu Common Collateral.
(f) The Senior Credit Agreement Agent, on behalf of itself and
the Senior Lenders, hereby agrees that until the Discharge of Term Loan Lender
Claims has occurred, the Term Loan Agent shall have the sole and exclusive right
and authority to give entitlement orders to, and otherwise direct, the
securities intermediary under the PSC Collateral Account and the L/C Collateral
Account (each as defined in the Term Loan Agreement) pursuant to the PSC
Collateral Account Control Agreement (as defined in the Term Loan Agreement) or
any account control agreement with respect to the L/C Collateral Account (as the
case may be) and the Senior Credit Agreement Agent and the Senior Lenders will
not hinder, delay or interfere with the exercise of such rights by the Term Loan
Agent in any respect except where the exercise of such rights conflicts with the
provisions of this Agreement. The Term Loan Agent and the Senior Credit
Agreement Agent hereby acknowledge that both the Term Loan Agent and the Senior
Credit Agreement Agent have control over the PSC Collateral Account (as defined
in the Term Loan Agreement) pursuant to the PSC Collateral Account Control
Agreement (as defined in the Term Loan Agreement) in form and substance
reasonably satisfactory to the Senior Credit Agreement Agent and the Term Loan
Agent on the date of this Agreement. The Term Loan Agent, on behalf of itself
and the Term Loan Lenders, hereby agrees that until the Discharge of Senior
Lender Claims has occurred, the Senior Credit Agreement Agent shall have the
sole and exclusive right and authority to give entitlement orders to, and
otherwise direct, the securities intermediary under the Borrower Collateral
Account (as defined in the Term Loan Agreement) pursuant to the Borrower
Collateral Account Control Agreement (as defined in the Term Loan Agreement) and
the Term Loan Agent and the Term Loan Lenders will not hinder, delay or
interfere with the exercise of such rights by the Senior Credit Agreement Agent
in any respect except where the exercise of such rights conflicts with the
provisions of this Agreement. The Senior Credit Agreement Agent and the Term
Loan Agent hereby acknowledge that both such agents have control over the
Borrower Collateral Account (as defined in the Term Loan Agreement) pursuant to
the Borrower Collateral Account Control Agreement (as defined in the Term Loan
Agreement) in form and substance reasonably satisfactory to the Term Loan Agent
and the Senior Credit Agreement Agent on the date of this Agreement.
EXHIBIT B
Page 21
5.4 Expenses.
(a) PM&C acknowledges its obligation under the Senior Lender
Documents to reimburse the Senior Credit Agreement Agent and the Senior Lenders
for costs and expenses, and to indemnify and hold harmless the Senior Credit
Agreement Agent and the Senior Lenders in accordance with the provisions of the
Senior Lender Documents. PM&C hereby agrees and confirms that its obligations
hereunder shall constitute an additional Senior Lender Claim under the Senior
Lender Documents.
(b) The Company acknowledges its obligation under the Term
Loan Lender Documents to reimburse the Term Loan Agent and the Term Loan Lenders
for costs and expenses, and to indemnify and hold harmless the Term Loan Agent
and the Term Loan Lenders in accordance with the provisions of the Term Loan
Lender Documents. The Company hereby agrees and confirms that its obligations
hereunder shall constitute an additional Term Loan Lender Claim under the Term
Loan Lender Documents.
5.5 Amendment to Term Loan Lender Documents. Term Loan Agent, on behalf
of the Term Loan Lenders, agrees that neither of the Term Loan Agent nor any
Term Loan Lender will agree to any material amendment to (i) Section 7.01 of the
Term Loan Agreement to further limit the amount of indebtedness permitted to be
incurred under the Senior Credit Agreement thereunder or (ii) Section 10.01(a)
of the Term Loan Agreement on or after the date hereof without in each case
obtaining the prior written consent of the Senior Credit Agreement Agent to such
amendment.
5.6 Acknowledgment of Payment. The Company and Term Loan Agent hereby
acknowledge, for the benefit of PM&C and the Senior Credit Agreement Agent and
Senior Lenders, that any payment on account of any indebtedness owed by PM&C to
the Company made by PM&C into the PSC Collateral Account (as defined in the Term
Loan Agreement) shall be deemed to have been applied immediately to the payment
of such indebtedness.
5.7 Tax Sharing Payments. The Term Loan Agent, on behalf of itself and
the Term Loan Lenders, agrees that notwithstanding anything to the contrary
contained in this Agreement or the Term Loan Lender Documents, neither the Term
Loan Agent nor the Term Loan Lenders shall foreclose or realize upon or
otherwise set off or exercise remedies against any Tax Sharing Payments (as
defined in the Term Loan Agreement) held in the PSC Collateral Account (as
defined in the Term Loan Agreement) at any time after a Default or Event of
Default has occurred under the Term Loan Agreement until the Discharge of Senior
Lender Claims has occurred, and the Company at all times may withdraw amounts
from the PSC Collateral Account to make Tax Sharing Payments until the Discharge
of Senior Lender Claims has occurred.
EXHIBIT B
Page 22
Section 6. Insolvency or Liquidation Proceedings.
-------------------------------------
6.1 Bankruptcy Proceedings. The Term Loan Agent, on behalf of itself
and the Term Loan Lenders, agrees that in the event a proceeding under the
Bankruptcy Code or any other Federal, state or foreign bankruptcy, insolvency,
receivership or similar law shall be commenced by or against the Company or
PM&C, without the prior written consent of the Senior Credit Agreement Agent and
the Required Lenders, it shall not and hereby waives their right to (i) file any
objection or in any other manner attempt to prevent the court conducting such
proceeding from (and shall be deemed to have consented to such proceeding) (A)
authorizing the Company or PM&C under Section 364 of the Bankruptcy Code (or the
analogous provision of such other law) to incur secured indebtedness and
priority administrative indebtedness ("DIP Financing") to the Senior Lenders (or
any of them) or such lenders as are approved by Senior Credit Agreement Agent
and the requisite number of Senior Lenders (the "DIP Lenders") for loans that
may be made by the DIP Lenders to the Company or PM&C after the commencement
and/or termination of such proceedings, and to secure the repayment and
performance of such post-petition indebtedness (and interest thereon and costs
and expenses in connection therewith) by granting to the DIP Lenders a
first-priority security interest in and a first-priority lien on all or any part
of the Common Collateral, (B) pursuant to Section 363 of the Bankruptcy Code (or
the analogous provision of such other law), granting the DIP Lenders (or any of
them) a first-priority security interest in and a first-priority lien on all the
Common Collateral, (C) authorizing the Company or PM&C under the Bankruptcy Code
to grant the Senior Lenders (or any of them) adequate protection, whether in the
form of cash payments, accrued interest or otherwise, in connection with the
use, sale or disposition of cash collateral or in connection with the
transactions contemplated by clauses (A) and (B) hereof, (D) authorizing use of
cash collateral supported by the Senior Credit Agreement Agent or the requisite
number of Senior Lenders, or (E) authorizing sale of Common Collateral supported
by the Senior Credit Agreement Agent or the requisite number of Senior Lenders
or (ii)(x) seek in respect of any part of the Common Collateral or proceeds
thereof or any Lien which may exist therein, any relief from or modification of
the automatic stay as provided in Section 362 of the Bankruptcy Code or (y) seek
adequate protection as provided in Section 363 of the Bankruptcy Code or the
grant of a replacement Lien, to the extent that the granting of such adequate
protection or the grant of a replacement Lien would materially adversely affect
the rights of the Senior Lenders, including without limitation, the right to
receive post-petition interest. In any proceeding described in this Section 6.1
in which the Term Loan Lenders have asserted claims against PM&C, until the
Discharge of Senior Lender Claims has occurred, the Term Loan Lenders hereby (i)
agree that they will not propose, support or accept any resolution, arrangement,
plan or reorganization, compromise or settlement that provides for payment of
any amount in cash in respect of the Term Loan Lender Claims from Common
Collateral or proceeds therefrom unless the same provides for the Discharge of
Senior Lender Claims and (ii) notwithstanding Section 1122 of the Bankruptcy
Code, will not, without the prior written consent of Senior Credit Agreement
Agent, consent to any resolution, arrangement, plan of reorganization,
compromise or settlement that would place a claim or interest of the Term Loan
Lenders in the same class as the claims and interests of the Senior Credit
Agreement Agent and the Senior Lenders.
EXHIBIT B
Page 23
6.2 Preference Issues.
(a) If any Senior Lender is required in any Insolvency or
Liquidation Proceeding in respect of PM&C, the Company or otherwise to turn over
or otherwise pay to the estate of the Company any amount in respect of Common
Collateral or proceeds thereof (a "Common Collateral Recovery"), then the Senior
Lender Claims shall be reinstated to the extent of such Common Collateral
Recovery and the Senior Lenders shall be entitled to indefeasible payment in
full cash of such Senior Lender Claims with respect to all such recovered
amounts in respect of Common Collateral or proceeds thereof. If this Agreement
shall have been terminated prior to such Common Collateral Recovery, this
Agreement shall be reinstated in full force and effect, and such prior
termination shall not diminish, release, discharge, impair or otherwise affect
the obligations of the parties hereto from such date of reinstatement.
If any Term Loan Lender is required in any Insolvency or Liquidation Proceeding
in respect of the Company or otherwise to turn over or otherwise pay to the
estate of the Company any amount in respect of Other Common Collateral or
proceeds thereof (an "Other Common Collateral Recovery"), then the Term Loan
Lender Claims shall be reinstated to the extent of such Other Common
Collateral Recovery and the Term Loan Lenders shall be entitled to
indefeasible payment in full in cash of such Term Loan Lender Claims with
respect to all such recovered amounts in respect of Other Common Collateral
or proceeds thereof. If this Agreement shall have been terminated prior to
such Other Common Collateral Recovery, this Agreement shall be reinstated in
full force and effect, and such prior termination shall not diminish,
release, discharge, impair or otherwise affect the obligations of the parties
hereto from such date of reinstatement.
(b) If any Term Loan Lender or Senior Lender is required in
any Insolvency or Liquidation Proceeding in respect of the Company or otherwise
to turn over or otherwise pay to the estate of the Company any amount in respect
of Pari Passu Common Collateral or proceeds thereof (a "Pari Passu Common
Collateral Recovery"), then the Term Loan Lender Claims or Senior Lender Claims
(as the case may be) shall be reinstated to the extent of such Pari Passu Common
Collateral Recovery and the Term Loan Lenders or Senior Lenders (as the case may
be) shall be entitled to indefeasible prorata payment in full in cash of such
Term Loan Lender Claims or Senior Lender Claims (as the case may be) with
respect to all such recovered amounts in respect of Pari Passu Common Collateral
or proceeds thereof. If this Agreement shall have been terminated prior to such
Pari Passu Common Collateral Recovery, this Agreement shall be reinstated in
full force and effect, and such prior termination shall not diminish, release,
discharge, impair or otherwise affect the obligations of the parties hereto from
such date of reinstatement.
Section 7. Reliance; etc.
-------------
7.1 Reliance. The consent by the Senior Lenders to the grant to the
Term Loan Agent on behalf of the Term Loan Lenders of a Lien on the Common
Collateral and Pari Passu Common Collateral and all loans and other extensions
of credit made or deemed made on and after the date hereof by the Senior Lenders
to PM&C shall be deemed to have been given and made in reliance upon this
Agreement. The Term Loan Agent, on behalf of itself and the Term Loan Lenders,
acknowledges that it and the Term Loan Lenders have, independently and without
EXHIBIT B
Page 24
reliance on the Senior Credit Agreement Agent or any Senior Lender, and based on
documents and information deemed by them appropriate, made their own credit
analysis and decision to enter into the Term Loan Agreement, this Agreement and
the transactions contemplated hereby and thereby and they will continue to make
their own credit decision in taking or not taking any action under the Term Loan
Agreement or this Agreement. The consent by the Term Loan Lenders to the grant
to the Senior Credit Agreement Agent on behalf of the Senior Lenders of a Lien
on the Other Common Collateral and Pari Passu Common Collateral and all loans
and other extensions of credit made or deemed made on and after the date hereof
by the Term Loan Lenders to the Company shall be deemed to have been given and
made in reliance upon this Agreement. The Senior Credit Agreement Agent, on
behalf of itself and the Senior Lenders, acknowledges that it and the Senior
Lenders have, independently and without reliance on the Term Loan Agent or any
Term Loan Lender, and based on documents and information deemed by them
appropriate, made their own credit analysis and decision to enter into the
Senior Credit Agreement, this Agreement and the transactions contemplated hereby
and thereby and they will continue to make their own credit decision in taking
or not taking any action under the Senior Credit Agreement or this Agreement.
The Senior Lenders, on the one hand, and the Term Loan
Lenders, on the other hand, shall each be responsible for keeping themselves
informed of (a) the financial condition of the Company and PM&C and all
endorsers and/or guarantors of the Senior Lender Claims and Term Loan Lender
Claims and (b) all other circumstances bearing upon the risk of nonpayment of
the Senior Lender Claims and Term Loan Lender Claims. The Senior Credit
Agreement Agent and the Senior Lenders shall have no duty to advise the Term
Loan Lenders of information known to it or them regarding such condition or any
such circumstances or otherwise. The Term Loan Agent and the Term Loan Lenders
shall have no duty to advise the Senior Lenders of information known to it or
them regarding such condition or any such circumstances or otherwise. In the
event the Senior Credit Agreement Agent or any of the Senior Lenders, in its or
their sole discretion, undertakes at any time or from time to time to provide
any such information to the Term Loan Lenders, it or they shall be under no
obligation (w) to make, and the Senior Credit Agreement Agent, and the Senior
Lenders shall not make, any express or implied representation or warranty,
including with respect to the accuracy, completeness, truthfulness or validity
of any such information so provided, (x) to provide any additional information
or to provide any such information on any subsequent occasion, (y) to undertake
any investigation or (z) to disclose any information which, pursuant to accepted
or reasonable commercial finance practices, such party wishes to maintain
confidential or is otherwise required to maintain confidential. In the event the
Term Loan Agent or any of the Term Loan Lenders, in its or their sole
discretion, undertakes at any time or from time to time to provide any such
information to the Senior Lenders, it or they shall be under no obligation (w)
to make, and the Term Loan Agent, and the Term Loan Lenders shall not make, any
express or implied representation or warranty, including with respect to the
accuracy, completeness, truthfulness or validity of any such information so
provided, (x) to provide any additional information or to provide any such
information on any subsequent occasion, (y) to undertake any investigation or
(z) to disclose any information which, pursuant to accepted or reasonable
commercial finance practices, such party wishes to maintain confidential or its
otherwise required to maintain confidential.
EXHIBIT B
Page 25
7.2 No Warranties.
(a) The Term Loan Agent, on behalf of itself and the Term Loan
Lenders, acknowledges and agrees that each of the Senior Credit Agreement Agent
and the Senior Lenders have made no express or implied representation or
warranty, including, without limitation, with respect to the execution,
validity, legality, completeness, collectibility or enforceability of any of the
Senior Lender Documents, the ownership of any Common Collateral or the
perfection or priority of any Liens thereon. The Senior Lenders will be entitled
to manage and supervise their respective loans and extensions of credit under
the Senior Lender Documents in accordance with law and as they may otherwise, in
their sole discretion, deem appropriate, and the Senior Lenders may manage their
loans and extensions of credit without regard to any rights or interests that
the Term Loan Lenders have in the Common Collateral or otherwise, except as
expressly provided in this Agreement.
(b) The Senior Credit Agreement Agent, on behalf of itself and
the Senior Lenders, acknowledges and agrees that each of the Term Loan Agent and
the Term Loan Lenders have made no express or implied representation or
warranty, including, without limitation, with respect to the execution,
validity, legality, completeness, collectibility or enforceability of any of the
Term Loan Lender Documents, the ownership of any Other Common Collateral or Pari
Passu Common Collateral or the perfection or priority of any Liens thereon. The
Term Loan Lenders will be entitled to manage and supervise their respective
loans and extensions of credit under the Term Loan Lender Documents in
accordance with law and as they may otherwise, in their sole discretion, deem
appropriate, and the Term Loan Lenders may manage their loans and extensions of
credit without regard to any rights or interests that the Senior Lenders have in
the Other Common Collateral or Pari Passu Common Collateral or otherwise, except
as expressly provided in this Agreement.
7.3 Obligations Unconditional. All rights, interests, agreements and
obligations of the Senior Credit Agreement Agent, the Senior Lenders, the Term
Loan Agent and the Term Loan Lenders hereunder shall remain in full force and
effect irrespective of:
(a) any lack of validity or enforceability of any Senior
Lender Documents or any Term Loan Lender Documents;
(b) any change in the time, manner or place of payment of, or
in any other terms of, all or any of the Senior Lender Claims or the Term Loan
Lender Claims, or any amendment or waiver or other modification, including any
increase in the amount thereof, whether by course of conduct or otherwise, of
the terms of the Existing Credit Agreement or any other Senior Lender Document
or any Term Loan Lender Document;
(c) any exchange of any security interest in any Common
Collateral, Other Common Collateral, Pari Passu Common Collateral or any other
collateral, or any amendment, waiver or other modification, whether in writing
or by course of conduct or otherwise, of all or any of the Senior Lender Claims
or the Term Loan Lender Claims or any guarantee thereof;
(d) the commencement of any Insolvency or Liquidation
Proceeding in respect of the Company or PM&C; or
EXHIBIT B
Page 26
(e) any other circumstances which otherwise might constitute a
defense available to, or a discharge of, the Company or PM&C in respect of the
Senior Lender Claims or the Term Loan Lender Claims or of the Senior Credit
Agreement Agent, Senior Lenders, Term Loan Lenders or the Term Loan Agent in
respect of this Agreement.
Section 8. Miscellaneous.
-------------
8.1 Conflicts. In the event of any conflict between the provisions of
this Agreement and the provisions of the Senior Lender Documents or the Term
Loan Lender Documents, the provisions of this Agreement shall govern.
8.2 Continuing Nature of this Agreement. This Agreement shall continue
to be effective (i) with respect to the Common Collateral, until the Discharge
of Senior Lender Claims shall have occurred and (ii) with respect to the Other
Common Collateral and Pari Passu Common Collateral, until the Discharge of Term
Loan Lender Claims shall have occurred; provided, that (a) the obligations of
the Senior Credit Agreement Agent and the Senior Lenders arising under this
Agreement upon the Discharge of Senior Lenders Claims shall continue until such
obligations have been fully satisfied in accordance with the terms of this
Agreement and (b) the obligations of the Term Loan Agent and the Term Loan
Lenders arising under this Agreement upon the Discharge of Term Loan Lender
Claims shall continue until such obligations have been fully satisfied in
accordance with the terms of this Agreement. This is a continuing agreement of
lien subordination and the Senior Lenders may continue, at any time and without
notice to the Term Loan Agent or any Term Loan Lender, to extend credit and
other financial accommodations and lend monies to PM&C or for the benefit of the
Company constituting Senior Lender Claims on the faith hereof, subject to the
limitations contained in the Term Loan Agreement. The Term Loan Agent, on behalf
of itself and the Term Loan Lenders, hereby waives any right it may have under
applicable law to revoke this Agreement or any of the provisions of this
Agreement. This is a continuing agreement of lien subordination and the Term
Loan Lenders may continue, at any time and without notice to the Senior Credit
Agreement Agent or any Senior Lender, to extend credit and other financial
accommodations and lend monies to the Company constituting Term Loan Lender
Claims on the faith hereof, subject to the limitations contained in the Senior
Credit Agreement. The Senior Credit Agreement Agent, on behalf of itself and the
Senior Lenders, hereby waives any right it may have under applicable law to
revoke this Agreement or any of the provisions of this Agreement. The terms of
this Agreement shall survive, and shall continue in full force and effect, in
any Insolvency or Liquidation Proceeding in respect of the Company or PM&C.
8.3 Amendments; Waivers. No amendment, modification or waiver of any of
the provisions of this Agreement shall be deemed to be made unless the same
shall be in writing signed on behalf of the Term Loan Agent and the Senior
Credit Agreement Agent and each waiver, if any, shall be a waiver only with
respect to the specific instance involved and shall in no way impair the rights
of the parties making such waiver or the obligations of the other parties to
such party in any other respect or at any other time. The Company shall not have
any right to amend, modify or waive any provision of this Agreement without the
consent of the Term Loan Agent and the Senior Credit Agreement Agent nor shall
any consent or signed writing be required of the Company to effect any
amendment, modification or waiver of any provision of this Agreement, except
that no amendment, modification or waiver affecting any obligation or right of
the Company hereunder shall be made without the consent of the Company.
EXHIBIT B
Page 27
8.4 Consent to Jurisdiction; Waivers. The parties hereto consent to the
jurisdiction of any state or federal court located in New York, New York, and
consent that all service of process may be made by registered mail directed to
such party as provided in Section 8.7 below for such party. Service so made
shall be deemed to be completed four Business Days after the same shall be
posted as aforesaid. The parties hereto waive any objection to any action
instituted hereunder based on forum non conveniens, and any objection to the
venue of any action instituted hereunder. Each of the parties hereto waives any
right it may have to trial by jury in respect of any litigation based on, or
arising out of, under or in connection with this Agreement, or any course of
conduct, course of dealing, verbal or written statement or action of any party
hereto.
8.5 Notices. All notices to the Term Loan Lenders and the Senior
Lenders permitted or required under this Agreement may be sent to the Term Loan
Agent and the Senior Credit Agreement Agent, respectively. Unless otherwise
specifically provided herein, any notice or other communication herein required
or permitted to be given shall be in writing and may be personally served,
telecopied or sent by courier service or U.S. mail and shall be deemed to have
been given when delivered in person or by courier service, upon receipt of a
telecopy or four (4) Business Days after deposit in the U.S. mail (registered or
certified, with postage prepaid and properly addressed). For the purposes
hereof, the addresses of the parties hereto shall be as set forth below each
party's name on the signature pages hereto, or, as to each party, at such other
address as may be designated by such party in a written notice to all of the
other parties.
8.6 Further Assurances. Each of the parties hereto agrees to take such
further action and to execute and deliver such additional documents and
instruments (in recordable form, if requested) as the Senior Credit Agreement
Agent or the Term Loan Agent may reasonably request to effectuate the terms of
and the lien priorities contemplated by this Agreement.
8.7 Governing Law. This Agreement shall be governed and interpreted,
and the rights and liabilities of the parties bound hereby determined, in
accordance with the laws of the State of New York.
8.8 Successors and Assigns. This Agreement shall be binding upon the
Senior Credit Agreement Agent, the Senior Lenders, the Term Loan Agent, the Term
Loan Lenders, the Company and their respective successors and assigns. This
Agreement and the rights and benefits hereof shall inure to the benefit of the
Senior Credit Agreement Agent and the Senior Lenders and their respective
successors and assigns and, to the extent applicable, the Company, the Term Loan
Agent and the Term Loan Lenders and their respective successors and assigns. No
other Person, shall have or be entitled to assert rights or benefits hereunder.
Each Term Loan Lender, by accepting the benefits of the Term Loan Lender
Documents, shall be deemed to have agreed to (i) be bound by the provisions of
this Agreement and (ii) refrain from taking any action which the Term Loan Agent
has agreed not to take, in its individual capacity or on any Term Loan Lender's
behalf, in this Agreement. Each Senior Lender, by accepting the benefits of the
Senior Lender Documents, shall be deemed to have agreed to (i) be bound by the
provisions of this Agreement and (ii) refrain from taking any action which the
Senior Credit Agreement Agent has agreed not to take, in its individual capacity
or on any Senior Lender's behalf, in this Agreement.
EXHIBIT B
Page 28
8.9 Section Titles; Time Periods. The section titles contained in this
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of this Agreement. In the computation of time
periods, unless otherwise specified, the word "from" means "from and including"
and each of the words "to" and "until" means "to but excluding" and the word
"through" means "to and including".
8.10 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be an original and all of which shall together
constitute one and the same document.
8.11 Authorization. By its signature, each Person executing this
Agreement on behalf of a party hereto represents and warrants to the other
parties hereto that it is duly authorized to execute this Agreement.
8.12 Effectiveness. This Agreement shall become effective when executed
and delivered by the parties hereto. This Agreement shall be effective both
before and after the commencement of any Insolvency or Liquidation Proceeding.
All references to the Company shall include the Company as debtor and
debtor-in-possession and any receiver or trustee for the Company in any
Insolvency or Liquidation Proceeding. All references to PM&C and its
subsidiaries shall include PM&C and its subsidiaries as debtor and
debtor-in-possession and any receiver or trustee for PM&C and its subsidiaries
in any Insolvency or Liquidation Proceeding.
[Remainder of page intentionally left blank.]
EXHIBIT B
Page 29
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
DEUTSCHE BANK TRUST COMPANY AMERICAS, as
Senior Credit Agreement Agent, on behalf
of itself and the Senior Lenders
By:_____________________________________
Name:
Title:
Address:
00 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
Telecopy no.: (000) 000-0000
DBS INVESTORS AGENT, INC., as Term Loan Agent, on
behalf of itself and the Term
Loan Lenders
By:_____________________________________
Name: Xxxxxxxx X. Xxxxxx
Title: President and Secretary
Address:
c/o Pegasus Partners II, L.P.
00 Xxxxx Xxxx
Xxx Xxx, XX 00000-0000
Attention: Xxxxxxxx Xxxxxx
Telecopy no.: (000) 000-0000
Company:
PEGASUS SATELLITE COMMUNICATIONS, INC.
By:_____________________________________
Name:
Title:
Address:
c/o Pegasus Communications Management Company
000 Xxxx Xxxx Xxxxxx
Xxxx Xxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxx
Telecopy no: (000) 000-0000
EXHIBIT B
Page 30
PM&C:
PEGASUS MEDIA & COMMUNICATIONS, INC.
By:_________________________________
Name:
Title:
Address:
c/o Pegasus Communications Management Company
000 Xxxx Xxxx Xxxxxx
Xxxx Xxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxx
Telecopy no: (000) 000-0000
