Exhibit 10.13
CREDIT AGREEMENT
dated as of April 20, 2001
by and between
EARTHWATCH INCORPORATED
as Borrower
and
BALL AEROSPACE & TECHNOLOGIES CORP.
as Lender
$9,000,000 ADVANCING TERM LOAN FACILITY
TABLE OF CONTENTS
Page
RECITALS 1
ARTICLE 1 Definitions 2
Section 1.1 Definitions, etc 2
Section 1.2 Other Definitional Provisions 10
Section 1.3 Accounting Terms and Determinations 10
ARTICLE 2 Loans 11
Section 2.1 Commitments 11
Section 2.2 Intentionally Omitted 11
Section 2.3 Repayment of Term Loans 11
Section 2.4 Interest 11
Section 2.5 Borrowing Procedure 12
Section 2.6 Optional Prepayments of Term Loans 12
Section 2.7 Mandatory Prepayments 12
Section 2.8 Minimum Amounts 13
Section 2.9 Certain Notices 13
Section 2.10 Computations 13
Section 2.11 Termination or Reduction of Term Loans Commitment 13
ARTICLE 3 Payments 14
Section 3.1 Method of Payment 14
Section 3.2 Taxes 14
Section 3.3 Reinstatement of Obligations 15
Section 3.4 No Force Majeure, Disputes 15
ARTICLE 4 Yield Protection and Illegality 15
Section 4.1 [Intentionally Omitted] 15
Section 4.2 Capital Adequacy 15
ARTICLE 5 Security 16
Section 5.1 Collateral 16
Section 5.2 [Intentionally Omitted] 16
ARTICLE 6 Conditions Precedent 16
Section 6.1 Initial Extension of Credit 16
Section 6.2 All Extensions of Credit 17
Section 6.3 Closing Certificates 18
ARTICLE 7 Representations and Warranties 18
Section 7.1 Incorporation and Authority of the Borrower 18
Section 7.2 Capital Stock 19
Section 7.3 Subsidiaries 19
Section 7.4 Stockholder Approvals Required 20
Section 7.5 No Conflict 20
Section 7.6 Consents and Approvals 20
Section 7.7 Financial Statements 20
Section 7.8 Absence of Undisclosed Liabilities and Liens 20
Section 7.9 Absence of Certain Changes or Events 21
Section 7.10 Absence of Litigation 21
Section 7.11 Compliance with Laws 21
Section 7.12 Licenses and Permits 21
Section 7.13 Sufficiency and Condition of Assets 21
Section 7.14 Real Property 21
Section 7.15 Employee and Benefit and Labor Matters 22
Section 7.16 Labor Matters 23
Section 7.17 Taxes 24
Section 7.18 Environmental, Health and Safety 24
Section 7.19 Intellectual Property 25
Section 7.20 Material Contracts 27
Section 7.21 No Solicitation; Exemption from Registration 27
Section 7.22 Insurance 28
Section 7.23 Brokers 28
Section 7.24 Indenture 28
Section 7.25 Transactions with Affiliates 28
Section 7.26 Debt 28
Section 7.27 Margin Securities 28
Section 7.28 Disclosure 28
Section 7,29 Investment Company Act 28
Section 7.30 Public Utility Holding Company Act 29
Section 7.31 Security Interest Issues 29
ARTICLE 8 Affirmative Covenants 29
Section 8.1 Reporting Requirements 29
Section 8.2 Maintenance of Existence; Conduct of Business 30
Section 8.3 Maintenance of Properties and Permits 30
Section 8.4 Taxes and Claims 31
Section 8.5 Insurance 31
Section 8.6 Inspection Rights 31
Section 8.7 Keeping Books and Records 31
Section 8.8 Compliance with Laws 31
Section 8.9 Compliance with Agreements 31
Section 8.10 Further Assurances 31
Section 8.11 ERISA 31
Section 8.12 Charter Amendments 32
Section 8.13 Issuance of New Series C Preferred Stock 32
Section 8.14 Satellite Insurance 32
ARTICLE 9 Negative Covenants 33
Section 9.1 Limitation on Liens 33
Section 9.2 Mergers, Etc. 33
Section 9.3 Intercompany Transactions 33
Section 9.4 Security Interest Issues 33
Section 9.5 Transactions with Affiliates 33
Section 9.6 Limitation on Collateral Asset Dispositions 33
Section 9.7 Dividends and Distributions 34
ARTICLE 10 Default 34
Section 10.1 Events of Default 34
Section 10.2 Remedies 35
Section 10.3 Performance by the Lender, etc. 36
ARTICLE 11 Miscellaneous 36
Section 11.1 Expenses 36
Section 11.2 Indemnification 36
Section 11.3 Limitation of Liability 37
Section 11.4 No Duty 37
Section 11.5 No Fiduciary Relationship 37
Section 11.6 Equitable Relief 37
Section 11.7 No Waiver; Cumulative Remedies 37
Section 11.8 Successors and Assigns 38
Section 11.9 Survival 39
Section 11.10 Entire Agreement 39
Section 11.11 Amendments 40
Section 11.12 Maximum Interest Rate 40
Section 11.13 Notices 40
Section 11.14 Governing Law; Submission To Jurisdiction;
Service Of Process 41
Section 11.15 Counterparts 41
Section 11.16 Severability 41
Section 11.17 Headings 41
Section 11.18 Construction 41
Section 11.19 Independence of Covenants 41
Section 11.20 [Intentionally Omitted] 41
Section 11.21 WAIVER OF JURY TRIAL 41
Section 11.22 Approvals and Consent 41
Section 11.23 Agent for Services of Process 42
INDEX TO EXHIBITS
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Exhibit Description of Exhibit Section
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G. Charter Amendments
INDEX TO SCHEDULES
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Schedule
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Disclosure Schedule: Description of Schedule
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3.2
3.3
3.4
3.5
3.6
3.8
3.9
3.10
3.11
3.12
3.13
3.14
3.17
3.18
3.19
3.22
3.25
3.31
CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this "Agreement"), dated as of April 20, 2001, is by
and between EARTHWATCH INCORPORATED (the "Borrower"), a Delaware corporation,
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and BALL AEROSPACE & TECHNOLOGIES CORP., a Delaware corporation (the "Lender" or
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"Vendor").
RECITALS:
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A. On November 21, 2000, the Borrower announced the failure of its
QuickBird 1 remote sensing satellite ("QuickBird 1") to reach the proper orbit.
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B. As required under the terms of the Indenture, dated as of July 12,
1999 (the "13% Notes Indenture"), between the Borrower and The Bank of New York
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(the "Trustee"), for the Borrower's 13% Senior Discount Notes due 2007 (the "13%
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Notes") and the Amended and Restated Indenture, dated as of April 8, 1999 as
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supplemented by the Supplemental Indenture, dated as of July 7, 1999 (the "12
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1/2% Notes Indenture"), between the Borrower and The Bank of New York, for the
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Borrower's 12 1/2% Senior Notes due 2005 (the "12 1/2% Notes"), the Borrower,
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pursuant to an Offer to Purchase for Cash dated February 28, 2001 (the "Tender
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Offer") has purchased a portion of the outstanding 13% Notes and all outstanding
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12 1/2% Notes at their accreted value on the date of repurchase with the
approximately $265 million of proceeds from the insurance relating to the
QuickBird 1 launch. All 13% Notes and 12 1/2% Notes validly tendered were
repurchased on April 3, 2001.
C. Each of the Borrower and the Lender are party to Contract
SE.1M.PRJ.0004.A effective as of June 9, 1998 (as amended, the "Project
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Contract"), pursuant to which the Lender, in its capacity as the vendor under
the Project Contract (together with its affiliates or assigns, the "Vendor")
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agrees to construct and deliver to the Borrower the QuickBird 2 remote sensing
satellite ("QuickBird 2" or "Satellite").
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D. In order to finance the future operations of the Borrower, including
the construction, launch and operation of QuickBird 2, the Borrower has induced
certain holders of the 13% Notes (the "Noteholders") to refrain from tendering
their 13% Notes in the Tender Offer and has requested that the Lender provide
the Borrower with $9 million of financing for the construction and delivery of
QuickBird 2 in accordance with the terms set forth in the Amendment 40 to the
Project Contract and this Agreement.
E. The Borrower has agreed to obtain launch and on-orbit operations
insurance in respect of QuickBird 2 ("QuickBird 2 Launch Insurance") in
accordance with the terms of the First Supplemental Indenture to the Indenture,
dated as of April 16, 2001, between the Borrower and the Trustee (the "First
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Supplemental Indenture").
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F. The Borrower shall issue 903,608 shares of Series C Preferred Stock to
Ball Technologies Holdings Corp. ("BTHC"), the owner of Lender in accordance
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with Amendment 40 to the Project Contract, this Agreement and a Series C
Preferred Stock Registration Rights Agreement, dated as of April 3, 2001, among
the Borrower, BHTC and the Noteholders (the "Series C Registration Rights
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Agreement").
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G. The Borrower shall purchase or cause to be purchased (by paying the
initial deposit therefor), (i) as of the date identified in the Recapitalization
Transactions (as defined below), QuickBird 2 Launch Insurance in an amount no
less than $155 million, it being understood that the remaining insurance
premiums are to be paid in accordance with the payment schedule under the terms
of the QuickBird 2 Launch Insurance, and (ii) 30 days prior to Preliminary
Tender Date QuickBird 2 Prelaunch Insurance for the full repair or replacement
value of the QuickBird 2 satellite and all other deliverable Property in
accordance with the payment schedule under the terms of the QuickBird 2
Prelaunch Insurance.
H. The Borrower shall Pledge the QuickBird 2 Launch Insurance in favor of
Trustee, as collateral agent for (i) the Noteholders and for the Lender,
pursuant to a Senior Collateral Pledge and Security Agreement as defined in the
Recapitalization Agreement (the "Senior P&SA"), and (ii) the holders of the
Series A Preferred Stock
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and the Series B Preferred Stock, pursuant to a Junior Collateral Pledge and
Security Agreement (the "Junior P&SA") as defined in the Recapitalization
Agreement and Consent.
I. Pursuant to the provisions of the Loan Documents, the Indenture, the
Intercreditor Agreement and related documents, the Borrower is permitted to
grant, and shall grant, a first priority purchase money security interest in the
QuickBird 2 Satellite, the QuickBird 2 Prelaunch Insurance, and the proceeds of
the QuickBird 2 Satellite as defined by NY UCC (S)9-306(1). Except as otherwise
provided in this Agreement, proceeds of QuickBird 2 shall not include proceeds
from the QuickBird 2 Launch Insurance policy.
AGREEMENT:
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NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto hereby agree as follows:
ARTICLE 1
Definitions
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Section 1.1 Definitions, etc. As used in this Agreement, the following
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terms shall have the following meanings:
"Affiliate" of any Person means any other Person directly or indirectly
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controlling or controlled by or under direct or indirect common control with
such Person. For the purposes of this definition, "control" when used with
respect to any Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agreement" means this Agreement and any and all amendments, modifications,
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supplements, renewals, extensions or restatements hereof.
"Assignee" means as specified in Section 11.8(b).
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"Assignment and Acceptance" means an assignment and acceptance entered into
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by the Lender and its Assignee pursuant to Section 11.8(e).
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"Bankruptcy Code" means as specified in Section 10.1(e).
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"Board of Directors" means the board of directors of the Borrower.
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"Board Resolution" means a copy of a resolution certified by the Secretary
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or an Assistant Secretary of the Borrower to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification.
"Borrower" means Earth Watch Incorporated as specified in the initial
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paragraph of this Agreement.
"BTHC" means Ball Technologies Holdings Corp., the owner of Lender as
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specified in F. above.
"Business" means the business of commercial remote sensing as conducted and
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as currently intended to be conducted by the Borrower and its Subsidiaries.
"Business Day" means any day other than a Saturday, Sunday or other day on
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which commercial banks are authorized or required by law to close in Denver,
Colorado.
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"Capital Lease" means as to any Person, any lease of any Property of which
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the discounted present value of rental obligations thereunder are required to be
capitalized on the balance sheet of such Person in accordance with GAAP.
"Capital Lease Obligations" means, as to any Person, obligations under a
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Capital Lease, which obligations are required to be classified as a capital
lease obligations on a balance sheet of such Person under GAAP. For purposes of
this Agreement, the amount of such Capital Lease Obligations shall be the
capitalized amount thereof, determined in accordance with GAAP.
"Capital Stock" of any Person means corporate stock and any and all shares,
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partnership interests (whether general, limited, special or other), limited
partnership interests, limited liability company interests, membership
interests, equity interests, participations, rights or other equivalents
(however designated) of corporate stock or any of the foregoing issued by such
Person.
"Change of Control" means any transaction or series of transactions
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referred to as a Change of Control under the Notes Indenture, as amended.
"Charter Amendment" means a certificate of amendment to the Amended and
Restated Certificate of Incorporation of EarthWatch Incorporated, substantially
in the form attached as Exhibit G to and effected in accordance with the
Recapitalization Agreement.
"Closing Date" means the date of the initial advance under this Agreement.
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"Code" means the Internal Revenue Code of 1986, as amended through the date
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hereof.
"Collateral" means (a) the Satellite, all other property delivered by the
Vendor to the Borrower under the Project Contract and proceeds of the foregoing
other than proceeds from the QuickBird 2 Launch Insurance, upon which a Lien is
created or purported to be created in favor of the Lender by any Loan Document
as security for the Obligations or any portion thereof and (ii) the "Collateral"
as defined in the Senior P&SA, to the extent of the Lender's interest therein as
provided in the Senior P&SA.
"Collateral Asset Disposition" means the disposition of any or all of the
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Collateral, whether by sale, lease, transfer, conveyance, assignment,
condemnation or otherwise, but excluding any involuntary disposition resulting
from casualty damage to Property.
"Common Stock" means the Common Stock, par value $.001 per share, of the
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Borrower.
"Communications Act" means the Communications Act of 1934, as amended.
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"Controlled Group Liability" means any and all liabilities (i) under Title
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IV of ERISA, (ii) under section 302 of ERISA, (iii) under sections 412 and 4971
of the Code, (iv) as a result of a failure to comply with the continuation
coverage requirements of section 601 et seq. of ERISA and section 4980B of the
Code, and (v) under corresponding or similar provisions of foreign laws or
regulations, other than such liabilities that arise solely out of, or relate
solely to, the Employee Benefit Plans.
"Contract Rate" means as specified in Section 11.12(a).
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"Copyrights" has the meaning set forth in Section 7.19.
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"Debt" means (a) indebtedness for borrowed money, (b) obligations evidenced
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by bonds, notes, debentures or other similar instruments or by letters of
credit, including without limitation purchase money obligations or other
obligations relating to the deferred purchase price of Property (other than
trade payables incurred in the ordinary course of business consistent with past
practice), (c) obligations as lessee under leases which have been or should have
been, in accordance with GAAP, recorded as Capital Leases, (d) obligations under
direct or indirect guaranties in respect of indebtedness or obligations of
others of the kind referred to in clauses (a) through (c) above,
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(e) obligations in respect of outstanding or unpaid checks or drafts or
overdraft obligations and (f) accrued interest, if any, on any of the foregoing.
"Default" means an Event of Default or the occurrence of an event or
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condition which with notice or lapse of time or both would become an Event of
Default.
"Default Rate" means, in respect of any principal of or interest on any
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Term Loan at all times during which any Default has occurred and is continuing
or in respect of or any other amount payable by the Borrower under this
Agreement or any other Loan Document which is not paid when due (whether at
stated maturity, by acceleration or otherwise), a rate per annum during the
period of such Default or during the period commencing on such due date of such
other amount until such other amount is paid in full, respectively, equal to the
lesser of (a) fifteen percent (15%) per annum or (b) the Maximum Rate.
"DGCL" means the Delaware General Corporation Law.
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"Disclosure Schedule" means the Disclosure Schedule to the Recapitalization
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Agreement.
"Dollars" and "$" mean lawful money of the U.S.
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"Employee Benefit Plan" means any employee benefit plan, program, policy,
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practices, or other arrangement providing benefits to any current or former
employee, officer or director of the Borrower or any of its Subsidiaries or any
beneficiary or dependent thereof that is sponsored or maintained by the Borrower
or any of its Subsidiaries or to which the Borrower, or any of its Subsidiaries
is a party, contributes or is obligated to contribute, whether or not written,
including, without limitation, any employee welfare benefit plan within the
meaning of Section 3(1) of ERISA (whether or not such plan is subject to ERISA),
any employee pension benefit plan within the meaning of Section 3(2) of ERISA
(whether or not such plan is subject to ERISA) and any bonus, incentive,
deferred compensation, vacation, stock purchase, restricted stock, stock option,
severance, employment, change of control or fringe benefit plan, program or
agreement.
"Eligible Assignee" means (a) any Affiliate of the Lender, (b) any
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commercial bank, savings and loan association, savings bank, finance company,
insurance company, pension fund, mutual fund or other financial institution
(whether a corporation, partnership or other entity) approved by the Lender or
(c) any other entity approved by the Lender which is (or which is managed by a
manager which manages funds which are) primarily engaged in making, purchasing
or otherwise investing in commercial loans or extending, or investing in
extensions of, credit for its own account in the ordinary course of its
business; provided, however, that Eligible Assignee shall not include any
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Affiliate of the Borrower.
"Environmental Law" means any federal, state, provincial, local or foreign
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law, statute, code or ordinance, principle of common law, rule or regulation, as
well as any Permit, order, decree, judgment or injunction issued, promulgated,
approved or entered thereunder, relating to pollution or the protection, cleanup
or restoration of the environment or natural resources, or to the public health
or safety, or otherwise governing the generation, use, handling, collection,
treatment, storage, transportation, recovery, recycling, discharge or disposal
of Hazardous Materials, including, without limitation as to U.S. laws, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C. 9601 et seq., the Superfund Amendment and Reauthorization Act of 1986,
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99-499, 100 Stat. 1613, the Resource Conservation and Recovery Act of 1976, 42
U. S. C. 6901 et seq., the Occupational Safety and Health Act, 29 U S.C. 651 et
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seq., the Clean Air Act, 42 U.S.C. 7401 et seq., the Clean Water Act, 33 U.S.C.
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1251 et seq., the Emergency Planning and Community Right to Know Act, 42 U.S.C.
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C. 11001 et seq., the Federal Insecticide, Fungicide and Rodenticide Act, 7
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U.S.C. 136 et seq., and the Toxic Substances Control Act, 15 U.S.C. 2601 et
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seq., and any state or local counterparts.
"Environmental Liabilities" means, as to any Person, all liabilities,
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obligations, responsibilities, Remedial Actions, losses, damages, punitive
damages, consequential damages, treble damages, costs and expenses (including,
without limitation, all reasonable fees, disbursements and expenses of counsel,
expert and consulting fees and costs of investigation and feasibility studies),
fines, penalties, sanctions and interest incurred as a result of any claim or
demand, by any Person, whether based in contract, tort, implied or express
warranty, strict liability or criminal,
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penal or civil statute, including, without limitation, any Environmental Law,
Permit, order or agreement with any Governmental Authority or other Person,
arising from environmental, health or safety conditions or the Release or
threatened Release of a Hazardous Material into the environment.
"Environmental Permits" has the meaning set forth in Section 7.18.
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
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amended and any regulations promulgated or proposed thereunder.
"ERISA Affiliate" means, with respect to any entity, trade or business, any
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other entity, trade or business that is a member of a group described in Section
414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA that includes
the first entity, trade or business, or that is a member of the same "controlled
group" as the first entity, trade or business pursuant to Section 4001(a)(14) of
ERISA.
"Event of Default" has the meaning specified in Section 10.1.
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"Excess QuickBird 2 Prelaunch Insurance Proceeds" means any and all
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proceeds of any QuickBird 2 Prelaunch Insurance Recovery which the Borrower has
neither (i) elected to apply to the repair, restoration or replacement (with
other equipment) of the Satellite affected or to the purchase of other, similar
Property from the Vendor for use in lieu thereof in its business within 90 days
of the event giving rise to such insurance recovery nor (ii) actually applied to
such repair, restoration or purchase within 180 days after the date of such
insurance recovery.
"First Supplemental Indenture" has the meaning set forth in the Recitals.
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"GAAP" means generally accepted accounting principles in the United States
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applied on a consistent basis (subject to changes in accounting policies
permitted by such generally accepted accounting principles which have been
described in the most recent Report 10-K filed by Borrower with the SEC).
"Governmental Authority" means any nation or government, any state,
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provincial or political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Governmental Order" means any order, writ, judgment, injunction, decree,
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stipulation, determination or award entered by or with any Governmental
Authority.
"Governmental Requirement" means any law, statute, code, ordinance, order,
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rule, regulation, judgment, decree, injunction, franchise, Permit, certificate,
license, authorization or other directive or requirement of any federal, state,
county, municipal, parish, provincial or other Governmental Authority or any
department, commission, board, court, agency or any other instrumentality of any
of them.
"Hazardous Material" means any substance, product, liquid, waste,
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pollutant, chemical, contaminant, insecticide, pesticide, gaseous or solid
matter, organic or inorganic matter, fuel, micro-organisms, ray, odor,
radiation, energy, vector, plasma, constituent or material which (a) is or
becomes listed, regulated or addressed under any Environmental Law or (b) is, or
is deemed to be, alone or in any combination, hazardous, hazardous waste, toxic,
a pollutant, a deleterious substance, a contaminant or a source of pollution or
contamination under any Environmental Law, including, without limitation,
asbestos, petroleum, underground storage tanks (whether empty or containing any
substance) and polychlorinated biphenyls.
"Indenture" means the 13% Notes Indenture dated as of July 13, 1999 as
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amended by the First Supplemental Indenture dated as of April 16, 2001;
provided, however, that such term shall mean and refer to such Indenture as
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[contemplated to be] amended by the parties thereto as of April 25, 2001,
without giving effect to any subsequent amendment, modification or supplement
thereof or thereto except as may be expressly approved by the Lender in writing.
"Intellectual Property Assets" has the meaning set forth in Section 7.19.
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"Intercreditor Acknowledgement" means that certain Intercreditor
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Acknowledgement, dated as of April 2, 2001, among the Lender and the 13% Notes
Trustee.
"Interest Rate" means the rate of interest per annum equal to eleven
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percent (11.0%), except as otherwise provided in Section 2.7(d).
"Leased Real Property" means the real property leased by the Borrower or
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any of its Subsidiaries, as tenant, together with, to the extent leased by the
Borrower or any of its Subsidiaries, all buildings and other structures,
facilities or improvements currently or hereafter located thereon, all fixtures,
systems, equipment and items of personal property of the Borrower or any of its
Subsidiaries attached or appurtenant thereto, and all easements, licenses,
rights and appurtenances relating to the foregoing.
"Lender" means Ball Aerospace & Technologies Corp. as specified in the
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initial paragraph of this Agreement.
"Lien" means, with respect to any Property or assets, any mortgage or deed
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of trust, pledge, hypothecation, assignment, receivables sale, deposit
arrangement, security interest, lien, charge, easement (other than any easement
not materially impairing usefulness), encumbrance, preference, priority or other
loan document or preferential arrangement of any kind or nature whatsoever on or
with respect to such Property or assets (including, without limitation, any
conditional sale or other title retention agreement having substantially the
same economic effect as any of the foregoing).
"Loan Documents" means this Agreement, Amendment 40 to Contract SE
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1M.PRJ.0004.A for the QuickBird Spacecraft, the Senior P&SA, the Junior P&SA,
and all other agreements, documents, instruments and certificates now or
hereafter executed and/or delivered pursuant to or in connection with any of the
foregoing.
"Loans" means any of the Term Loans authorized to be issued pursuant hereto
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and "Loan" means any of such loans.
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"Loan Repayment Commencement Date" means the last day of the seven-month
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period following the launch of the satellite, or the next Business Day
thereafter.
"Marks" has the meaning set forth in Section 7.19.
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"Material Adverse Effect" means any material adverse effect on (a) the
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financial condition, results of operations, businesses, operations or Properties
of the Borrower and its Subsidiaries, taken as a whole, or of the Borrower on an
individual basis, (b) the ability of the Borrower to pay the Obligations when
due, (c) the validity or enforceability of any of the Loan Documents, (d) the
perfection or priority of any Lien granted for the benefit of the Lender under
any of the Loan Documents or (e) the Collateral.
"Material Contracts" has the meaning set forth in Section 7.20.
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"Maturity Date" means the earlier of (a) the date upon which the
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Obligations hereunder and under the Loan Documents are paid in full or (b) the
date that is the last day of the twelve-month period following the Loan
Repayment Commencement Date or the next Business Day thereafter.
"Maximum Rate" means the maximum non-usurious interest rate or an amount
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computed in reference to such rate (as applicable), if any, that any time or
from time to time may be contracted for, taken, reserved, charged or received
with respect to the particular Obligations as to which such rate is to be
determined, payable to the Lender pursuant to this Agreement or any other Loan
Document, under laws applicable to the Lender or the Borrower which are
presently in effect or, to the extent allowed by law, under such applicable laws
which may hereafter be in effect and which allow a higher maximum non-usurious
interest rate than applicable laws now allow. The Maximum Rate shall be
calculated in a manner that takes into account any and all fees, payments and
other charges in respect of the Loan Documents that constitute interest under
applicable law. Each change in any interest rate provided for herein
6
based upon the Maximum Rate resulting from a change in the Maximum Rate shall
take effect without notice to the Borrower at the time of such change in the
Maximum Rate.
"Net Proceeds" means, with respect to any Collateral Asset Disposition, (a)
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the gross amount of cash received by the Borrower or any of its Subsidiaries
from such Collateral Asset Disposition, minus (b) the amount, if any, of all
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taxes paid or payable by the Borrower or any of its Subsidiaries directly
resulting from such Collateral Asset Disposition (including the amount, if any,
estimated by the Borrower in good faith at the time of such Collateral Asset
Disposition for taxes payable by the Borrower or any of its Subsidiaries on or
measured by net income or gain resulting from such Collateral Asset
Disposition), minus (c) the reasonable out-of-pocket costs and expenses incurred
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by the Borrower or such Subsidiary in connection with such Collateral Asset
Disposition (including all legal, title and recording tax expenses, all
commissions and reasonable brokerage fees paid to a Person other than an
Affiliate of the Borrower). "Net Proceeds" with respect to any Collateral Asset
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Disposition shall also include proceeds (after deducting any amounts specified
in clauses (b) and (c) of the preceding sentence) of an agreed or compromised
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loss of Property or the taking of any Property under the power of eminent domain
and condemnation awards and awards in lieu of condemnation for the taking of
Property under the power of eminent domain.
"Obligations" means any and all indebtedness, liabilities and obligations
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of the Borrower to the Lender, or any of them, evidenced by and/or arising
pursuant to any of the Loan Documents (including, without limitation, this
Agreement), now existing or hereafter arising, whether direct, indirect,
related, unrelated, fixed, contingent, liquidated, unliquidated, joint, several
or joint and several, including, without limitation, (i) the obligations of the
Borrower to repay the Term Loans, to pay interest on the Term Loans (including,
without limitation, interest accruing after any, if any, bankruptcy, insolvency,
reorganization or other similar filing) and to pay all fees, indemnities, costs
and expenses (including attorneys' fees) provided for in the Loan Documents and
(ii) the indebtedness constituting the Term Loans and such interest, fees,
indemnities, costs and expenses.
"Owned Real Property" means the real property owned by the Borrower or any
-------------------
of its Subsidiaries, together with all buildings and other structures,
facilities or improvements currently or hereafter located thereon, all fixtures,
systems, equipment and items of personal property of the Borrower or any of its
Subsidiaries attached or appurtenant thereto and all easements, licenses, rights
and appurtenances relating to the foregoing.
"Patents" has the meaning set forth in Section 7.19.
------- ------------
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
----
succeeding to all or any of its functions under ERISA.
"Permit" means any permit, certificate, approval, order, license, right-of-
------
way (whether an easement, contract or other agreement in any form) or other
authorization.
"Permitted Liens" means "Permitted Liens" as defined in the Indenture.
---------------
"Person" means any individual, corporation, trust, association, company,
------
partnership, joint venture, limited liability company, joint stock company,
Governmental Authority or other entity.
"Plan" means any employee benefit plan as defined in Section 3(3) of ERISA
----
established or maintained or contributed to by any party hereto or any ERISA
Affiliate, including any Pension Plan.
"Preferred Stock" means the Series A Preferred Stock, the Series B
---------------
Preferred Stock and the Series C Preferred Stock.
"Preliminary Tender Date" means the date the QuickBird 2 Satellite is
-----------------------
tendered for acceptance by Vendor to Borrower under the Project Contract.
"Principal Office" means the office of the Lender in Broomfield, Colorado,
----------------
presently located at 00 Xxxxx Xxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000.
7
"Prohibited Transaction" means any transaction set forth in Section 406 of
----------------------
ERISA or Section 4975 of the Code.
"Project Contract" means as specified in the recitals hereto.
----------------
"Property" means property of all kinds, real, personal or mixed, tangible
--------
or intangible (including, without limitation, all rights relating thereto),
whether owned or acquired on or after the Closing Date.
"QuickBird 2 Launch Insurance" means launch and on-orbit operations
----------------------------
insurance in respect of QuickBird 2 having the terms and provisions described in
Section 4.10(b) of the Indenture (including, without limitation, terms naming
the 13% Notes Trustee, as collateral trustee under the Senior P&SA on behalf of
the holders of the 13% Notes and Lender, as sole loss payee thereon) in an
amount not less than $155,000,000, and being in form and substance reasonably
acceptable to the 13% Notes Trustee, as collateral trustee. The terms of the
QuickBird 2 Launch Insurance shall be substantially the same as the terms of the
First QuickBird Launch Insurance (as defined in the 13% Notes Indenture), except
(i) for such differences as may be required due to the differences in
construction, launch or in-orbit operation between QuickBird 1 and QuickBird 2,
(ii) that the QuickBird 2 Launch Insurance shall only be required to cover at
least one year of operations after launch of QuickBird 2, (iii) as is acceptable
to the Lender and the holders of a majority of the 13% Notes in their absolute
discretion and (iv) for such differences that do not adversely affect the Lender
and the holders of 13% Notes
"QuickBird 2 Prelaunch Insurance" means transit and prelaunch insurance in
-------------------------------
a form acceptable to the Lender covering full repair or replacement costs for
QuickBird 2 from the Preliminary Tender Date identified in the Project Contract
until lift off, with Lender being named as an additional insured and first
priority loss payee as its interests may appear up to an amount not less than
the Obligations owed by the Borrower to the Lender.
"QuickBird 2 Prelaunch Insurance Recovery" means, with respect to the
----------------------------------------
Satellite and any single occurrence or related occurrences with respect thereto,
the receipt or constructive receipt by the Borrower, or the payment by an
insurance company to the Lender, of proceeds of any such Property or casualty
insurance.
"Recapitalization Agreement" means the Recapitalization Agreement and
--------------------------
Consent dated as of April 2, 2001 among the Borrower and the Noteholders.
"Recapitalization Transactions" means "Transactions" as defined in the
-----------------------------
Recapitalization Agreement.
"Register" means as specified in Section 11.8(d).
-------- ---------------
"Related Transactions" means, collectively, (a) the purchase of the
--------------------
Satellite and related engineering and construction services from the Vendor
pursuant to the Project Contract, and (b) the payment of all fees, costs and
expenses associated with the foregoing.
"Release" means, as to any Person, any release, spill, emission, leaking,
-------
pumping, injection, deposit, discharge, disposal, disbursement, leaching or
migration of Hazardous Materials into the indoor or outdoor environment or into
or out of Property owned by such Person, including, without limitation, the
movement of Hazardous Materials through or in the air, soil, surface water or
ground water.
"Remedial Action" means all actions required to (a) cleanup, remove,
---------------
respond to, treat or otherwise address Hazardous Materials in the indoor or
outdoor environment, (b) prevent the Release or threat of Release or minimize
the further Release of Hazardous Materials so that they do not migrate or
endanger or threaten to endanger public health or welfare or the indoor or
outdoor environment, (c) perform studies and investigations on the extent and
nature of any actual or suspected contamination, the remedy or remedies to be
used or health effects or risks of such contamination, or (d) perform post-
remedial monitoring, care or remedy of a contaminated site.
8
"Responsible Officer" means, as to the Borrower, the chief executive
-------------------
officer, the president, any vice president, the chief financial officer, the
chief operating officer or the treasurer of such Person.
"Securities Act" means the Securities Act of 1933, as amended.
--------------
"Series A Preferred Stock" means the 7% Cumulative Convertible Redeemable
------------------------
Preferred Stock due 2009, Series A, par value $.001 per share, of the Borrower.
"Series B Preferred Stock" means the 7% Cumulative Convertible Redeemable
------------------------
Preferred Stock due 2009, Series B, par value $.001 per share, of the Borrower.
"Series C Preferred Stock" means the 8.5% Cumulative Convertible Redeemable
------------------------
Preferred Stock due 2009, Series C, par value $.001 per share, of the Borrower.
"Subordinated Debt" means Debt of the Borrower as to which the payment of
-----------------
principal of (and premium, if any) and interest and other payment obligations in
respect of such Debt shall be subordinate to the prior payment in full of the
Obligations to at least the following extent: (a) no payments of principal of
(or premium, if any) or interest on or otherwise due in respect of such Debt may
be permitted for so long as any Default in the payment of principal (or premium,
if any) or interest on the Obligations exists; and (b) such Debt may not (i)
provide for payments of principal of such Debt at the stated maturity thereof or
by way of a sinking fund applicable thereto or by way of any mandatory
redemption, defeasance, retirement or repurchase thereof by the Borrower
(including any redemption, retirement or repurchase which is contingent upon
events or circumstances but excluding any retirement required by virtue of
acceleration of such Debt upon any event of default thereunder), in each case
prior to the final stated maturity of the Term Loans or (ii) permit redemption
or other retirement (including pursuant to an offer to purchase made by the
Borrower or any Restricted Subsidiary) of such other Debt at the option of the
holder thereof prior to the final stated maturity of the Term Loans, other than
a redemption or other retirement at the option of the holder of such Debt
(including pursuant to an offer to purchase made by the Borrower or any
Restricted Subsidiary) which is conditioned upon a change of control of the
Borrower pursuant to provisions set forth in the instruments evidencing such
Debt.
"Subordinated Debt Documents" means any and all agreements, documents and
---------------------------
instruments now or hereafter evidencing or governing any Subordinated Debt.
"Subsidiary" of any Person means (a) a corporation more than 50% of the
----------
combined voting power of the outstanding Voting Stock of which is owned,
directly or indirectly, by such Person or by one or more other Subsidiaries of
such Person or by such Person and one or more Subsidiaries thereof or (b) any
other Person (other than a corporation) in which such Person, or one or more
other Subsidiaries of such Person or such Person and one or more other
Subsidiaries thereof, directly or indirectly, has at least a majority ownership
and power to direct the policies, management and affairs thereof.
"Tangible Property" has the meaning set forth in Section 7.14.
----------------- ------------
"Tax" or "Taxes" means any and all taxes, fees, assessments, levies,
--- -----
duties, tariffs, imposts, and other charges of any kind (together with any and
all interest, penalties, additions to tax and additional amounts imposed with
respect thereto) imposed by any governmental taxing authority including without
limitation: taxes or other charges on or with respect to income, franchises,
windfall or other profits, gross receipts, property, assets, sales, use, capital
stock, payroll, employment, social security, workers' compensation, unemployment
compensation, severance, occupation, or net worth; taxes or other charges in the
nature of excise, withholding, ad valorem, stamp, transfer, estimated, value
added, or gains taxes; license, registration and documentation fees; and
customs' duties, tariffs, and similar charges.
"Tax Return" means any return, declaration, report, claim for refund,
----------
information statement, schedule or other document (including any related or
supporting information and including any Form 1099 or other document or report
required to be provided by the Borrower or any of its Subsidiaries to third
parties) relating to Taxes, including any document required to be retained or
provided to any governmental authority relating to the Borrower or any of
9
its Subsidiaries or any consolidated group of which any such entity was a member
at the applicable time, and any amended Tax Returns.
"Taxing Authority" means any Governmental Authority having jurisdiction
----------------
over the assessment, determination, collection or other imposition of any Tax.
"Term Loans" means as such term is defined in Section 2.1(a).
---------- --------------
"Term Loans Commitment" means the obligation of the Lender to make or
---------------------
continue Term Loans hereunder in an aggregate principal amount up to but not
exceeding the aggregate principal amount of $9,000,000.
"Trade Secrets" has the meaning set forth in Section 7.19.
------------- ------------
"UCC" means the Uniform Commercial Code as in effect from time to time in
---
the State of Colorado or any other jurisdiction including New York, the laws of
which may be applicable to or in connection with the creation, perfection or
priority of any Lien on any Property created pursuant to any Loan Documents.
"U.S." means the United States of America.
----
"U.S. Person" means a citizen or resident of the U.S., a corporation,
-----------
partnership or other entity created or organized in or under any laws of the
U.S. or any estate or trust that is subject to U.S. Federal income taxation
regardless of the source of its income.
"U.S. Taxes" means any present or future tax, assessment or other charge or
----------
levy imposed by or on behalf of the U.S. or any taxing authority thereof.
"Vendor" means Ball Aerospace & Technologies Corp. as specified in the
------
recitals hereto.
"Voting Stock" of any Person means Capital Stock of such Person which
------------
ordinarily has voting power for the election of directors (or persons performing
similar functions) of such Person, whether at all times or only for so long as
no senior class of securities has such voting power by reason of any
contingency.
"2000 Balance Sheet" means the audited consolidated balance sheet of the
------------------
Borrower and its Subsidiaries, including the related schedules and notes
thereto, as of December 31, 2000.
"2000 Balance Sheet Date" means December 31, 2000.
-----------------------
Section 1.2 Other Definitional Provisions. Other defined terms used in
-----------------------------
this Agreement will defined in the relevant sections of this Agreement. All
definitions contained in this Agreement are equally applicable to the singular
and plural forms of the terms defined. The words "hereof", "herein" and
"hereunder" and words of similar import referring to this Agreement refer to
this Agreement as a whole and not to any particular provision of this Agreement.
Unless otherwise specified, all Article and Section references pertain to this
Agreement. Terms used herein that are defined in the UCC, unless otherwise
defined herein, shall have the meanings specified in the UCC.
Section 1.3 Accounting Terms and Determinations.
(a) All accounting terms not specifically defined herein shall be
construed in accordance with GAAP (subject to year end adjustments, if
applicable) consistent with such accounting principles applied in the
preparation of the audited financial statements referred to in Section 7.7. All
-----------
financial information delivered to the Lender pursuant to Section 8.1 shall be
-----------
prepared in accordance with GAAP (subject to year end adjustments, if
applicable) applied on a basis consistent with such accounting principles
applied in the preparation of the audited financial statements referred to in
Section 7.7 or in accordance with Section 8.7.
----------- -----------
10
(b) Unless otherwise expressly provided herein to the contrary, all
references herein to the Closing Date shall be deemed to mean and refer to the
Closing Date after giving effect to all Related Transactions that occur on or
before such date.
ARTICLE 2
Loans
-----
Section 2.1 Commitments.
-----------
(a) Term Loans. Subject to the terms and conditions of this Agreement
----------
(including, without limitation, Section 2.11(a)), the Lender agrees to make one
---------------
or more Loans to the Borrower from time to time from and including the Closing
Date up to and including the Preliminary Tender Date in an aggregate principal
amount up to but not exceeding the amount of the Term Loans Commitment. (Such
Loans referred to in this Section 2.1(a) now or hereafter made by the Lender to
--------------
the Borrower which are outstanding at any given time, are herein collectively
referred to as the "Term Loans".) The Borrower may not re-borrow any principal
----------
amounts under the Term Loans that have been repaid.
(b) Limitation Regarding the Amount of each Borrowing. Notwithstanding
-------------------------------------------------
anything to the contrary contained in this Agreement, in no event shall the
aggregate amount of the Term Loans advanced to or for the account of the
Borrower on any date exceed the aggregate amount due and payable by the Borrower
to the Vendor on such date in accordance with the payment schedule set forth in
the Project Contract, which aggregate amount due and payable shall be exclusive
of sales taxes and other taxes and freight charges and other delivery charges.
(c) Limitation Regarding Number of Borrowings. Notwithstanding anything
-----------------------------------------
to the contrary contained in this Agreement, the Lender shall not be obligated
to make Loans except on the dates specified in the payment schedule set forth in
the Project Contract on or before the Preliminary Tender Date.
Section 2.2 Intentionally Omitted.
---------------------
Section 2.3 Repayment of Principal on Term Loans. In addition to the
------------------------------------
payment of accrued interest as set forth in Section 2.4 below, the Borrower
shall pay to the Lender the principal of each of the Term Loans outstanding as
of the launch date of the Satellite (and the principal of each of the Term Loans
outstanding as of such date shall be due and payable) in 11 equal monthly
installments, commencing one month after the Loan Repayment Commencement Date,
and on each monthly anniversary thereafter (each, a "Payment Date") through and
------------
including the Maturity Date, each of which installments shall be in an amount
equal to 1/11th of the principal amount of the Term Loans outstanding as of the
Loan Repayment Commencement Date. Notwithstanding anything herein to the
contrary, all outstanding principal of and interest on the Term Loans shall be
due and payable on the Maturity Date.
Section 2.4 Payment of Interest on Term Loans.
----------------------
(a) Payment of Interest. The Borrower shall pay to the Lender for its
-------------------
account interest on the unpaid principal amount of Term Loans made by the Lender
to the Borrower for the period commencing on the date of such Loan to but
excluding the date such Loan shall be paid in full, at the Interest Rate.
(b) Payment Dates. Accrued interest on the Term Loans shall be due and
-------------
payable as follows:
(i) On the Loan Repayment Commencement Date;
(ii) Upon the payment or prepayment (whether mandatory or optional)
of the Term Loans (but only on the principal amount so paid or
prepaid); and
(iii) On the Maturity Date.
11
(c) Default Interest. Notwithstanding the foregoing, the Borrower shall
----------------
pay to the Lender for its account interest at the applicable Default Rate to the
fullest extent permitted by law, on any amount payable by the Borrower under
this Agreement or any other Loan Document which is not paid in full when due
(whether at stated maturity, by acceleration or otherwise) for the period from
and including the due date thereof to but excluding the date the same is paid in
full. Interest payable at the Default Rate shall be payable from time to time on
demand by the Lender.
Section 2.5 Borrowing Procedure. The Borrower shall give the Lender
-------------------
notice of each borrowing hereunder in accordance with Section 2.9. Each Loan
shall be effectively disbursed on the date set forth in the borrowing notice for
such disbursement to the Borrower by virtue of a receivable in the amount of
such Loan from the Borrower to the Lender under the Project Contract.
Section 2.6 Optional Prepayments of Term Loans. Subject to Section 2.8,
----------------------------------
the Borrower shall have the right from time to time to prepay all or part of any
Term Loan without premium or penalty; provided that the Borrower shall give the
Lender notice of each such prepayment as provided in Section 2.9 and such
prepayments shall be applied to the then remaining installments of such Term
Loan in the inverse order of the maturities of such installments.
Section 2.7 Mandatory Prepayments.
---------------------
(a) Collateral Asset Dispositions. The Borrower shall, concurrently with
-----------------------------
any Collateral Asset Disposition (which is subject to the prior written consent
of the Lender in accordance with Section 9.6), pay to the Lender, as a
prepayment of the Term Loans and other outstanding Obligations, an aggregate
amount equal to the lesser of (A) all related Net Proceeds and (B) all then
outstanding amounts under the Term Loans.
(b) Insurance Recovery. (i) If any insurance proceeds are paid pursuant
------------------
to QuickBird 2 Launch Insurance policies, such insurance proceeds shall be
shared with the Lender and the holders of 13% Notes in accordance with the terms
of the Loan Documents and the Intercreditor Acknowledgement, and (ii) if the
Excess QuickBird 2 Prelaunch Insurance Proceeds are paid pursuant to QuickBird2
Prelaunch Insurance policies covering transit and prelaunch operations of the
Satellite, such Excess QuickBird 2 Prelaunch Insurance Proceeds shall be paid to
the Lender.
(c) Change of Control. The Borrower shall, within 30 days after the
-----------------
occurrence of any Change of Control, pay to the Lender, as a prepayment of the
Term Loans and all other Obligations then outstanding, an amount equal to the
sum of (i) the aggregate unpaid principal amount of the Term Loans and (ii) the
aggregate unpaid amount of all other Obligations (including, without limitation,
interest accrued on the Term Loans and fees and costs and expenses accrued or
payable in accordance with this Agreement or any other Loan Document) then
outstanding.
(d) Launch Failure. If either QuickBird 2 shall (i) fail to launch on or
--------------
before November 30, 2001, other than as a result of the failure of the Vendor to
deliver the Satellite in material compliance with the terms, conditions and
specifications set forth in the Project Contract, or (ii) fail to launch for any
reason on or before October 15, 2002, then the Borrower shall prepay all of the
Term Loans and all other Obligations then outstanding on the date specified by
the Lender. Further, if QuickBird 2 shall fail to launch on or before April 15,
2002, the Interest Rate after that date shall be equal to the lesser of (a)
fifteen percent (15%) per annum or (b) the Maximum Rate.
(e) Application of Mandatory Prepayments. All prepayments pursuant to
------------------------------------
Section 2.7(a), 2.7(b), 2.7(c) or 2.7(d) shall be applied to the Term Loans to
the then remaining installments of principal of the Term Loans in inverse order
of the maturities of such installments.
Section 2.8 Minimum Amounts. Except for prepayments pursuant to Section
--------------- -------
2.7, each optional prepayment of principal of the Term Loans shall be in an
---
amount at least equal to $200,000.00 or an integral multiple of $200,000.00 in
excess thereof.
12
Section 2.9 Certain Notices. Notices by the Borrower to the Lender of
---------------
borrowings per Section 2.5, and terminations or reductions of the Term Loans
Commitment, of borrowings, and prepayments of Term Loans shall be irrevocable
and shall be effective only if received by the Lender not later than 1:00 p.m.
Denver, Colorado on the Business Day prior to the date of the relevant
borrowing, termination, reduction, borrowing, or prepayment specified below:
Number of
Notice Business Days Prior
------ -------------------
Terminations or Reductions of Term Loans Commitments 1
Borrowings of Loans 2
Prepayments of Term Loans 2
Each such notice of termination or reduction shall specify the amount of
the Term Loans Commitment to be terminated or reduced. Each such notice of
borrowing or prepayment shall specify the Loans to be borrowed or prepaid and
the amount (subject to Section 2.8 hereof) to be borrowed or prepaid and the
-----------
date of borrowing or prepayment (which shall be a Business Day).
Section 2.10 Computations. Interest payable by the Borrower hereunder and
------------
under the other Loan Documents on all Term Loans shall be computed on the basis
of a year of 365 days and the actual number of days elapsed (including the first
day but excluding the last day) occurring in the period for which payable. With
respect to each Term Loan, interest accrued during the period from the making of
such Loan to the first interest payment date therefore provided in Section
2.4(b)(i) shall be compounded on a monthly basis.
Section 2.11 Termination or Reduction of Term Loans Commitment.
-------------------------------------------------
(a) Notwithstanding anything to the contrary contained in this Agreement,
the Term Loans Commitment shall automatically terminate upon the occurrence of
any Change of Control, and the Term Loans Commitment shall automatically
terminate if no Loans have been advanced under this Agreement on or before
August 28, 2001.
(b) The Borrower shall have the right to terminate or reduce in part the
unused portion of the Term Loans Commitment at any time and from time to time,
provided that (i) the Borrower shall give notice of each such termination or
--------
reduction as provided in Section 2.9, and (ii) each partial reduction shall be
-----------
in an aggregate amount at least equal to $200,000.00 or an integral multiple of
$200,000.00 in excess thereof.
(c) The Term Loans Commitment may not be reinstated after they have been
terminated or increased after they have been reduced.
ARTICLE 3
Payments
--------
Section 3.1 Method of Payment. Until further notice from Lender all
-----------------
payments of principal, interest, fees and other amounts to be made by the
Borrower under this Agreement and the other Loan Documents shall be made to the
Lender at the address specified in Section 4.4 of the Project Contract for its
account in Dollars and in immediately available funds, without setoff, deduction
or counterclaim, not later than 1:00 p.m. local time on the date on which such
payment shall become due (each such payment made after such time on such due
date to be deemed to have been made on the next succeeding Business Day). If an
Event of Default has occurred and is continuing, the Lender may apply such
payment to the Obligations in such order and manner as the Lender may elect,
subject to Section 3.2. Upon the occurrence and during the continuation of an
-----------
Event of Default, all proceeds of any Collateral, and all other funds of the
Borrower in the possession of the Lender, may be applied to the
13
Obligations in such order and manner as the Lender may elect. Each payment
received by the Lender under this Agreement or any other Loan Document for its
account shall be paid promptly, in immediately available funds. Whenever any
payment under this Agreement or any other Loan Document shall be stated to be
due on a day that is not a Business Day, such payment may be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of the payment of interest.
Section 3.2 Taxes.
-----
(a) All payments by the Borrower of principal of and interest on the Term
Loans and other amounts payable under the Loan Documents shall be made free and
clear of, and without deduction or withholding by reason of, any present or
future taxes, levies, duties, imposts, assessments or other charges levied or
imposed by any Governmental Authority (other than franchise taxes and taxes on
the overall net income of the Lender). If the Borrower shall be required by law
to deduct or withhold any such taxes, levies, duties, imposts, assessments or
other charges from or in respect of any sum payable hereunder to the Lender, the
Borrower will (i) make additional payments in such amounts so that every net
payment of principal of and interest on the Term Loans and of all other amounts
payable by it under the Loan Documents, after withholding or deduction for or on
account of any such present or future taxes, levies, duties, imposts,
assessments or other charges, will not be less than the amount provided for
herein or therein absent such withholding or deduction, (ii) make such
withholding or deduction and (iii) remit the full amount deducted or withheld to
the relevant Governmental Authority in accordance with applicable law.
(b) The Borrower will indemnify the Lender against, and reimburse the
Lender for, all present and future taxes, levies, duties, imposts, assessments
or other charges (including interest and penalties) levied or collected (whether
or not legally or correctly imposed, assessed, levied or collected), excluding,
however, any taxes imposed on the overall net income of the Lender or any
lending office of the Lender by any jurisdiction in which the Lender or any such
lending office is located, on or in respect of this Agreement, any of the Loan
Documents or the Obligations or any portion thereof (the "Reimbursable Taxes").
------------------
Any such indemnification shall be on an after-tax basis, taking into account any
such reimbursable taxes imposed on the amounts paid as indemnity.
(c) Without prejudice to the survival of any other term or provision of
this Agreement, the obligations of the Borrower under this Section 3.2 shall
-----------
survive the payment of the Term Loans and the other Obligations and termination
of the Term Loans Commitment.
Section 3.3 Reinstatement of Obligations. Notwithstanding anything to the
----------------------------
contrary contained in this Agreement or any other Loan Document, if the payment
of any amount of principal of or interest with respect to the Term Loans or any
other amount of the Obligations, or any portion thereof, is rescinded, voided or
must otherwise be refunded by the Lender upon the insolvency, bankruptcy or
reorganization of the Borrower or otherwise for any reason whatsoever, then each
of (a) the Obligations, (b) the Loan Documents (including, without limitation,
this Agreement and the Loan Documents), (c) the indebtedness, liabilities and
obligations of the Borrower and any other Persons under the Loan Documents and
(d) all Liens for the benefit of the Lender created under or evidenced by the
Loan Documents, will be automatically reinstated and become automatically
effective and in full force and effect, all to the extent that and as though
such payment so rescinded, voided or otherwise refunded had never been made.
Section 3.4 Additional Consideration. As additional consideration for
------------------------
this Agreement, the Borrower shall issue 903,608 shares of Series C Preferred
Stock to BHTC, the owner of the Lender, in accordance with the provisions of the
Series C Registration Rights Agreement.
Section 3.5 No Force Majeure, Disputes. The Borrower's obligation to pay
--------------------------
all amounts due under the Term Loans and the other Obligations shall not be
affected by (a) any set-off, counterclaim, recoupment, deduction, abatement,
suspension, diminution, reduction, defense or other right which the Borrower may
have against the Vendor for any reason whatsoever arising under or pursuant to
the Project Contract or otherwise relating to the purchase of goods or services
from the Vendor, (b) any defect in the condition, design, operation or fitness
for use of, or any damage to or loss or destruction of, any equipment or
material or service provided by the Vendor, (c) any insolvency, bankruptcy,
reorganization or similar proceedings by or against the Borrower or affecting
any of its Properties, (d) any action of any Governmental Authority or any
damage to or destruction of or any taking of the
14
Borrower's Property or any part thereof, (e) any change, waiver, extension,
indulgence or failure to perform or comply with, or other action or omission
herein or in the other Loan Documents (except for express written modifications
to this Agreement or other Loan Documents as and in the manner permitted under
this Agreement or the other Loan Documents), (f) any dissolution of the
Borrower, (g) any inability or illegality with respect to the use or ownership
of the Borrower's Property, (h) any failure to obtain, or expiration, suspension
or other termination of, or interruption to, any required licenses, permits,
consents, authorizations, approvals or other legal requirements, or (i) any lack
of power or authority of the Lender or the Borrower, or (j) any other event or
circumstance whatsoever, whether or not similar to any of the foregoing and
whether or not the Borrower shall have notice or knowledge of any of the
foregoing, it being the intention of the Lender and the Borrower that the
Obligations of the Borrower shall be absolute and unconditional and shall be
separate and independent covenants and agreements and shall continue unaffected
unless the requirements to pay or perform the same shall have been terminated
pursuant to an express provision thereof or of any of the other Loan Documents.
ARTICLE 4
Yield Protection and Illegality
Section 4.1 [Intentionally Omitted.]
Section 4.2 Capital Adequacy. This provision is only applicable in the event
----------------
that the Lender assigns or sells participations in all or a part of this
Agreement. If, after the date of the assignment or purchase of participations,
the assignee or purchaser of the participations shall have determined that the
adoption or implementation of any applicable law, rule or regulation regarding
capital adequacy, or any change therein, or any change in the interpretation or
administration thereof by any central bank or other Governmental Authority
charged with the interpretation or administration thereof, or compliance by the
assignee or purchaser (or its parent) with any guideline, request or directive
regarding capital adequacy (whether or not having the force of law) of any
central bank or other Governmental Authority affects or would affect the amount
of capital required or expected to be maintained by the assignee or purchaser or
any Person controlling the assignee or purchaser and (taking into consideration
the Lender's or such Person's policies with respect to capital adequacy and the
assignee's or purchaser's desired return on capital) and the Lender determines
that the amount of such capital is increased as a consequence of its obligations
under this Agreement, then, within ten Business Days after demand by the
assignee or purchaser, the Borrower shall pay to the assignee or purchaser,
additional amounts sufficient to compensate the assignee or purchaser for such
increase. A certificate of the assignee or purchaser claiming compensation
under this Section 4.2 and setting forth the additional amount or amounts to be
paid to it hereunder shall be conclusive absent manifest error, provided that
the determination thereof is made on a reasonable basis. In determining such
amount or amounts, the assignee or purchaser may use any reasonable averaging
and attribution methods.
ARTICLE 5
Security
--------
Section 5.1 Collateral. To secure the full and complete payment and
----------
performance of the Obligations, the Lender shall retain title to the QuickBird2
Satellite, and all the Deliverables in accordance with the provisions of the
Project Contract The Borrower hereby grants to the Lender a perfected, first
priority purchase money Lien on all of its right, title and interest in and to
the Satellite and the Deliverables, as defined by the Project Contract, and any
and all other Property associated with the Satellite previously sold or
concurrently therewith being sold by the Vendor pursuant to the Project Contract
(the purchase price for which Satellite, Deliverables and other Property is
intended to be partially financed by the Lender under this Agreement), and the
proceeds (as such term is defined by Section 9-306(1) of the New York UCC),
whether such Satellite, Deliverables or other Property is now owned or hereafter
acquired including but not limited to all QuickBird 2 Prelaunch Insurance
policies. The Borrower will further grant the Lender a security interest as set
forth in the Senior P&SA and the Launch Insurance Policies.
15
Section 5.2 Intentionally Omitted.
---------------------
ARTICLE 6
Conditions Precedent
--------------------
Section 6.1 Initial Extension of Credit. The obligation of Lender to make
---------------------------
its initial Loan under this Agreement is subject to the conditions precedent
that Lender shall have received, on or before the Closing Date, all of the
following in form and substance satisfactory to Lender and, in the case of
actions to be taken, evidence that the following required actions have been
taken to the satisfaction of Lender:
(a) Board Resolutions. Board Resolutions which authorize the execution,
-----------------
delivery and performance by the Borrower of the Loan Documents to which it is or
is to be a party;
(b) Incumbency Certificate. A certificate of incumbency certified by the
----------------------
Secretary or an Assistant Secretary of the Borrower certifying as to the name of
each officer or other representative of the Borrower (i) who is authorized to
sign the Loan Documents to which it is or is to be a party (including any
certificates contemplated therein), together with specimen signatures of each
such officer or other representative, and (ii) who will, until replaced by other
officers or representatives duly authorized for that purpose, act as its
representative for the purposes of signing documents and giving notices and
other communications in connection with the Loan Documents and the transactions
contemplated thereby;
(c) Articles or Certificates of Incorporation. The certificate of
-----------------------------------------
incorporation of the Borrower certified by the Secretary of State of Delaware
and dated as of a recent date;
(d) Bylaws. The bylaws of the Borrower certified by its Secretary or an
------
Assistant Secretary;
(e) Governmental Certificates. (i) A certificate of appropriate officials
-------------------------
as to the existence and good standing of the Borrower in Delaware and (ii) due
qualification to transact business in Colorado;
(f) Financing Statements. Financing Statements requested by Lender;
--------------------
(g) Senior P&SA. The Senior P&SA executed by Borrower.
-----------
(h) Lien Searches. Lien searches in the name of the Borrower (and in all
-------------
names under which the Borrower has done business within the last five years) in
the States of Colorado, Delaware and California, showing no financing statements
or other Lien instruments of record except for Permitted Liens;
(i) Project Contract. Certificate of an officer of Borrower that the
----------------
Project Contract, as amended, remains in full force, including, but not limited
to Amendments 39 and 40 thereto.
(j) First Supplemental Indenture. The First Supplemental Indenture to the
----------------------------
Indenture shall have been executed and delivered by all parties thereto, and the
Lender shall have received a photocopy of the First Supplemental Indenture as so
executed and delivered, certified by a Responsible Officer of the Borrower as
being a true and correct copy of such document as of the Closing Date;
(k) Compliance with Laws. As of the Closing Date, the Borrower shall have
--------------------
complied in all material respects with all Governmental Requirements necessary
to consummate the transactions contemplated by this Agreement and the other Loan
Documents;
(l) No Prohibitions. No Governmental Requirement shall prohibit the
---------------
consummation of the transactions contemplated by this Agreement or any other
Loan Document, and no order, judgment or decree of any Governmental Authority or
arbitrator shall, and no litigation or other proceeding shall be pending or to
the Borrower's knowledge, threatened which would, enjoin, prohibit, restrain or
otherwise adversely affect in any
16
material manner the consummation of the transactions contemplated by this
Agreement or the other Loan Documents or otherwise have a Material Adverse
Effect;
(m) Legal Matters and Loan Documents. All matters of a legal nature
--------------------------------
material to the Borrower, the Loan Documents and the Related Transactions shall
be reasonably satisfactory to the Lender and its counsel, and the Lender shall
have received all such other agreements, documents and instruments, each in form
and substance and executed and delivered by all parties, as the Lender may have
reasonably requested to receive; and
(n) The Trustee shall have executed the Intercreditor Acknowledgement.
Section 6.2 All Extensions of Credit. The obligation of Lender to make
------------------------
any Loan (including the initial Loan for all conditions except 6.2(i)) under
this Agreement is subject to the satisfaction of each of the following
additional conditions precedent:
(a) No Default or Material Adverse Effect. No Default or Material Adverse
-------------------------------------
Effect shall have occurred and be continuing, or would result from such Loan;
(b) Representations and Warranties. All of the representations and
------------------------------
warranties of the Borrower contained in this Agreement and in the other Loan
Documents shall be true and correct on and as of the date of such Loan with the
same force and effect as if such representations and warranties had been made on
and as of such date unless they relate solely to an earlier date;
(c) Current and Other Amount Due. The Borrower shall have no past due
----------------------------
amounts due Lender for products or services provided to Borrower and its
subsidiaries other than amounts legitimately disputed by Borrower.
(d) Consents. All consents necessary for the execution, delivery and
--------
performance by the Borrower of the Loan Documents to which it is a party,
including, without limitation, any consents or waivers in connection with the
Project Contract and the First Supplemental Indenture, shall have been received
by the Borrower and shall be in full force and effect;
(e) Permits. All material Permits affecting the Borrower or any of its
-------
Subsidiaries necessary in connection with its businesses or any of the
Properties then owned or leased by it and in connection with its businesses to
be conducted and Properties to be owned or leased shall have been received by
the Borrower and shall be in full force and effect, and the Lender shall have
received evidence satisfactory to it that the Borrower and its Subsidiaries are
able to conduct their businesses conducted and to be conducted with the use of
such Permits in full force and effect; and the Lender shall be satisfied that
(i) the Borrower holds such Permits and such Permits are in form and substance
reasonably satisfactory to the Lender and (ii) the Borrower has complied with
all initial and on-going conditions of the issuance and use of all such Permits;
(f) Regulatory Approvals. Evidence satisfactory to the Lender that all
--------------------
filings, consents or approvals with or of Governmental Authorities necessary to
consummate the transactions contemplated by the Loan Documents and to operate
have been made and obtained, as applicable;
(g) Financing Statements. Financing Statements and all other requisite
--------------------
filing documents executed by the Borrower as may be necessary to perfect, and
ensure the required priority of, the Liens created pursuant to the Loan
Documents with respect to the Collateral which has been sold, and is to be sold
after giving effect to the requested Loan, to the Borrower, which financing
statements, other filing documents and waivers and consents shall have been
filed;
(h) Additional Documentation. The Lender shall have received such
------------------------
additional approvals, agreements, documents and instruments as the Lender may
reasonably request;
(i) Insurance Proof. Borrower shall provide Lender with appropriate
---------------
evidence of (i) the QuickBird 2 Launch Insurance naming the 13% Note Trustee as
an additional insured and the sole loss payee, and (ii) 30 days
17
prior to the Preliminary Tender Date appropriate evidence of the QuickBird 2
Prelaunch Insurance naming the Lender as an additional insured and first
priority loss payee as its interests may appear up to an amount not less than
the Obligations owed by the Borrower to the Creditor.
Each notice of borrowing by the Borrower hereunder shall constitute a
representation and warranty by the Borrower that the conditions precedent set
forth in this Section 6.2, have been satisfied (both as of the date of such
-----------
notice and, unless the Borrower otherwise notifies the Lender prior to the date
of such borrowing, as of the date of such borrowing).
Section 6.3 Closing Certificates. The Borrower shall, concurrently with
--------------------
the Closing Date (with respect to the conditions precedent set forth in Section
6.1) and concurrently with the date of the making of each other Loan, execute
and deliver to the Lender a certificate in form and substance satisfactory to
the Lender certifying as to the satisfaction of each of the conditions precedent
set forth in this Article 6 which are required to be satisfied on or before the
such date.
ARTICLE 7
Representations and Warranties
------------------------------
The Borrower represents and warrants to the Lender that the following
statements are and, after giving effect to the Related Transactions and the
funding of the initial Loans on the Closing Date, will be true, correct and
complete:
Section 7.1 Incorporation and Authority of the Borrower. The Borrower is
-------------------------------------------
a corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware and has all necessary corporate power and
authority to conduct its business as it is now being conducted, to own or use
the properties and assets that it purports to own or use, to enter into this
Agreement and other Loan Documents, to carry out its obligations hereunder and
to consummate the transactions contemplated hereby. The Borrower is duly
qualified to do business as a foreign corporation and is in good standing under
the laws of each state or other jurisdiction in which either the ownership or
use of the properties owned or used by it, or the nature of the activities
conducted by it, requires such qualification, except for such failures which,
when taken together with all other such failures, would not have a Material
Adverse Effect. Except for the approval of the Charter Amendments by the
stockholders as described in Section 7.4, the execution and delivery of this
Agreement and the Loan Documents by the Borrower, the performance by the
Borrower of its obligations hereunder and thereunder and the consummation by the
Borrower of the transactions contemplated hereby and thereby have been duly
authorized by all requisite corporate action on the part of the Borrower. Each
of this Agreement and the Loan Document has been duly executed and delivered by
the Borrower and (assuming due authorization, execution and delivery by the
Lender) constitutes a legal, valid and binding obligation of the Borrower
enforceable against the Borrower in accordance with its respective terms. The
Borrower has made available to Lender correct and complete copies of the
Certificate of Incorporation and the Bylaws of the Borrower and each Subsidiary,
as currently in effect.
Section 7.2 Capital Stock.
-------------
(a) Except as set forth in Section 3.2 of the Disclosure Schedule, there
are no options, warrants, convertible securities or other rights, agreements or
arrangements relating to the capital stock of, or other equity interest in, the
Borrower obligating the Borrower to issue, sell, transfer or otherwise dispose
of or sell any shares of capital stock of, or other equity interest in, the
Borrower. As of April 2, 2001, the Borrower has issued and has outstanding (a)
213,696 shares of common stock, par value $.001 per share (100,000,000 shares
authorized) (the "Existing Common Stock"); (b) 8,051,273 shares of Series A
---------------------
Preferred Stock (10,000,000 shares authorized); (c) 8,051,273 shares of Series B
Preferred Stock (10,000,000 shares authorized); and (d) 25,022,561 shares of
Series C Preferred Stock (25,000,000 shares authorized) (together with the
series of preferred stock referred to in (b) through (c) above, the "Existing
--------
Preferred Stock"), which constitute all the issued and outstanding shares of
---------------
capital stock of the Borrower and are owned of record and beneficially solely by
the individuals and entities and in the amounts and proportions set forth in
Section 3.2 of such Disclosure Schedule. The shares of Existing Common
18
Stock and Existing Preferred Stock have been duly authorized and validly issued
and are fully paid and non-assessable and were not issued in violation of any
preemptive rights. Except as set forth in Section 3.2 of such Disclosure
Schedule, there are no voting trusts, stockholders' agreements, proxies or other
agreements or understandings in effect with respect to the voting or transfer of
any of the Existing Common Stock or the Existing Preferred Stock.
(b) The 903,608 shares of new Series C Preferred Stock which are being
issued to BTHC, when issued and delivered in accordance with the terms of this
Agreement and the Series C Registration Rights Agreement, will have been duly
and validly authorized and will be fully paid and non-assessable and will not
have been issued in violation of any preemptive rights.
Section 7.3 Subsidiaries. Section 3.3 of the Disclosure Schedule sets
------------
forth, with respect to each Subsidiary of the Borrower, its type of entity, the
jurisdiction of its incorporation or organization, its authorized capital stock,
partnership capital or equivalent, the number and type of its issued and
outstanding shares of capital stock, partnership interests or similar ownership
interests and the Borrower's current ownership of such shares, partnership
interests or similar ownership interests. Except as set forth in Section 3.3 of
such Disclosure Schedule, all of the outstanding equity securities and other
securities of each Subsidiary are owned by the Borrower or any of its
Subsidiaries, free and clear of all liens and encumbrances. Each such Subsidiary
is duly organized and validly existing under the laws of its respective
jurisdiction of incorporation and has the requisite power and authority to own,
operate or lease the properties and assets owned, operated or leased by such
Subsidiary and to carry on its business in all material respects as currently
conducted by such Subsidiary and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each state or other
jurisdiction in which either the ownership or use of the properties owned or
used by it, or the nature of the activities conducted by it, requires such
qualification, except for such failures which, when taken together with all
other such failures, would not have a Material Adverse Effect.
Section 7.4 Stockholder Approvals Required.
------------------------------
(a) Set forth in Section 3.2 of the Disclosure Schedule is a correct and
complete list of holders of each series of the Existing Preferred Stock as of
March 31, 2001. Set forth in Section 3.4(a) of the Disclosure Schedule is, as of
such date, the correct proportion of such holders by series of Existing
Preferred Stock whose approval is required to affect the Charter Amendments.
(b) Set forth in Section 3.2 of the Disclosure Schedule is a correct and
complete list of holders of the Existing Common Stock as of March 31, 2001. Set
forth in Section 3.4(b) of the Disclosure Schedule is, as of such date, the
correct proportion of such holders whose approval is required to effect the
Charter Amendments.
Section 7.5 No Conflict. Assuming that all consents, approvals,
-----------
authorizations and other actions described in Section 3.6 of the Disclosure
Schedule have been obtained and all filings and notifications listed in Section
3.6 of the Disclosure Schedule have been made, and except as described in
Section 3.5 of the Disclosure Schedule, the execution, delivery and performance
of this Agreement and the Loan Documents by the Borrower do not and shall not
(a) violate or conflict with the Certificate of Incorporation or the Bylaws of
the Borrower or any of its Subsidiaries, (b) conflict with or violate any law,
rule, regulation order, writ, judgment, injunction, decree, determination or
award or threaten any governmental authorization applicable to the Borrower, any
of its Subsidiaries or the Business, or (c) result in any breach of, constitute
a default (or event which with the giving of notice or lapse of time, or both,
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or, except for liens or other
encumbrances imposed in connection with the Loan Documents, result in the
creation of any lien or other encumbrance on any of the assets or properties of
the Borrower or any of its Subsidiaries pursuant to, any note, bond, mortgage,
indenture (other than the 12 1/2% Notes Indenture), contract, agreement, lease,
license, permit, franchise or other instrument relating to such assets or
properties to which the Borrower or any of its Subsidiaries is a party or by
which any of such assets or properties is bound or affected, except, in the case
of clause (b) or (c), as would not, in the aggregate, have a Material Adverse
Effect or prevent or materially delay the consummation by the Borrower of the
transactions contemplated hereby. The Borrower has obtained a waiver from
Section 5.18 of the Recapitalization Agreement, dated as of April 8, 1999,
19
among the Borrower and the other parties thereto with respect to the
negotiation, execution, delivery and performance of this Agreement and the
transactions contemplated hereby.
Section 7.6 Consents and Approvals. The execution, delivery and
----------------------
performance of this Agreement and the Loan Documents by the Borrower do not and
shall not require any consent, approval, authorization or other order of, action
by, filing with or notification to, any Governmental Authority, except (a) for
the consent of the Noteholders to approve the First Supplemental Indenture, (b)
as described in Section 3.6 of the Disclosure Schedule and (c) where failure to
obtain such consent, approval, authorization or action, or to make such filing
or notification, would not prevent or materially delay the consummation by the
Borrower of the transactions contemplated by this Agreement and would not, in
the aggregate, have a Material Adverse Effect.
Section 7.7 Financial Statements. The Borrower has delivered to the
--------------------
Lender a true, correct and complete copies of the 2000 Balance Sheets and the
related audited consolidated statements of income and cash flows (all such
financial statements, including without limitation any and all notes thereto,
referred to as the "Financial Statements"). The Financial Statements present
--------------------
fairly and accurately the consolidated financial condition and results of
operations of the Borrower and its Subsidiaries as of the 2000 Balance Sheet
Date or for the periods covered thereby and have been prepared in accordance
with GAAP applied on a basis consistent with the past practices of the Borrower
with only such deviations from GAAP as are referred to in the notes thereto.
Section 7.8 Absence of Undisclosed Liabilities and Liens.
--------------------------------------------
(a) There are no liabilities of the Borrower or any of its Subsidiaries,
other than liabilities (i) reflected or reserved against on the 2000 Balance
Sheet, or (ii) incurred since the 2000 Balance Sheet Date in the ordinary course
of business consistent with past practice and disclosed in the balance sheet
included with the Form 10K filed by Borrower with the SEC for the period ended
December 31, 2000.
(b) Except as set forth in Section 3.8 of the Disclosure Schedule, there
are no Liens, security interests or other encumbrances with respect to any
assets of the Borrower or any of its Subsidiaries, other than Permitted Liens.
Section 7.9 Absence of Certain Changes or Events. Since the 2000 Balance
------------------------------------
Sheet Date, except as disclosed in Section 3.9 of the Disclosure Schedule, the
Business has been conducted in the ordinary course consistent with past
practice, and there has not been any circumstance, development or event which
has had or would reasonably be expected to have, in the aggregate, a Material
Adverse Effect.
Section 7.10 Absence of Litigation. Except as set forth in Section 3.10
---------------------
of the Disclosure Schedule, (a) there are no claims, actions, proceedings or
investigations pending or, to the knowledge of the Borrower, threatened against
the Borrower or any of its Subsidiaries or any of the assets or properties of
the Borrower or any of its Subsidiaries, before any Governmental Authority that,
if determined adversely to the Borrower or any of its Subsidiaries, in the
aggregate, would have a Material Adverse Effect or would prevent, restrict or
materially delay the consummation by the Borrower of the transactions
contemplated hereby and (b) the Borrower, its Subsidiaries and their respective
assets and properties are not subject to any Governmental Order having a
Material Adverse Effect.
Section 7.11 Compliance with Laws.
--------------------
(a) None of the Borrower or any of its Subsidiaries is in violation of any
law, rule, regulation, order, judgment or decree applicable to the Borrower or
any of its Subsidiaries relating to the Business or by which any of the
properties of the Borrower or any of its Subsidiaries is bound, except (a) as
set forth in Section 3.11 of the Disclosure Schedule and (b) where such
violations, in the aggregate, would not have a Material Adverse Effect. Except
as set forth in Section 3.11 of the Disclosure Schedule, none of the Borrower or
any of its Subsidiaries has, in the last three years, received any written
communication from any Governmental Authority that alleges that the Borrower or
any of its Subsidiaries is not in compliance in any material respect with any
material law, rule, regulation, ordinance, order, judgment or decree that has
not been resolved.
20
(b) The Borrower and its Subsidiaries are in compliance with all
applicable provisions under the Communications Act and all applicable rules and
regulations promulgated thereunder.
Section 7.12 Licenses and Permits. Except as set forth in Section 3.12 of
--------------------
the Disclosure Schedule, the Borrower and its Subsidiaries have all governmental
licenses, permits and authorizations necessary to conduct the Business and to
perform the transactions contemplated hereby, including without limitation all
governmental licenses, permits and authorizations necessary to export and launch
QuickBird 2, except for such governmental licenses, permits and authorizations
the absence of which, in the aggregate, would not have a Material Adverse
Effect. None of the Borrower or any of its Subsidiaries has, within the last two
years, received written notice or otherwise has knowledge that any Governmental
Authority has the right or intends to suspend, modify, cancel or terminate any
material license, permit, certificate or other authorization relating to the
Business as currently conducted.
Section 7.13 Sufficiency and Condition of Assets. Except as set forth in
-----------------------------------
Section 3.13 of the Disclosure Schedule, the Borrower and its Subsidiaries own
or have valid rights to use all of the assets, rights and interests which are
used in, and are sufficient for, the operation of the Business as it is
currently being conducted. The tangible assets of the Borrower and its
Subsidiaries are in good working order, reasonable wear and tear excepted, and
are suitable for the use for which they are intended in all material respects.
Section 7.14 Real Property.
-------------
(a) The Borrower and its Subsidiaries have good, valid, marketable and
insurable title in fee simple to all the Owned Real Property, free and clear of
all Liens, security interests and other encumbrances, except (i) as disclosed in
Section 3.14(a) of the Disclosure Schedule and (ii) Permitted Liens.
(b) The Borrower and its Subsidiaries have good marketable and insurable
leasehold estates in the Leased Real Property, free and clear of all liens,
security interests and other encumbrances, except Permitted Liens. Except as
disclosed in Section 3.14(b) of the Disclosure Schedule or as would not have a
Material Adverse Effect, each such lease or sublease is legal, valid, binding
and enforceable and in full force and effect, and shall not cease to be legal,
valid, binding and enforceable and in full force and effect as a result of the
consummation of the transactions contemplated by this Agreement. To the
knowledge of the Borrower, no party to any such lease or sublease is in material
breach or default thereunder.
(c) Except as set forth on Section 3.14(c) of the Disclosure Schedule, (i)
none of the Borrower or any, of its Subsidiaries has, within the last two years,
received written notice of any pending or threatened condemnation or eminent
domain proceedings or their local equivalent that would materially affect the
Owned Real Property or the Leased Real Property, (ii) the Owned Real Property
and Leased Real Property, the use and occupancy thereof by the Borrower and its
Subsidiaries, and the conduct of the Business thereon and therein does not
violate in any material respect any deed restrictions, or applicable building
codes, zoning, subdivision or other land use or similar laws the violation of
which would materially adversely affect the use, value or occupancy of any such
property or the conduct of the Business thereon, (iii) none of the Borrower or
any, of its Subsidiaries has, within the last two years, received written notice
of a material violation of the restrictions or Laws described in the foregoing
clause (ii), and (iv) none of the structures or improvements on any of the
Leased Real Property or Owned Real Property encroaches upon real property of
another person, and no structure or improvement of another person encroaches
upon any of the Leased Real Property or Owned Real Property, except for any such
encroachment that would not materially adversely affect the use, value or
occupancy of any such property.
(d) Except as set forth in Section 3.14(d) of the Disclosure Schedule, the
buildings, facilities, machinery, equipment, furniture, leasehold and their
improvement, fixtures, vehicles, structures, and related capitalized items and
other tangible property relating to the Business (the "Tangible Property") are
in good operating condition and repair, free (in the case of buildings or
structures located on the Owned Real Property or Leased Real Property) of any
material structural or engineering defects, and, subject to normal wear and tear
and. continued repair and replacement in accordance with past practice, are
substantially suitable for their intended use. During the past five years there
has not been any significant interruption of the operations of the Business due
to inadequate maintenance of the Tangible Property.
21
Section 7.15 Employee Benefit and Labor Matters.
----------------------------------
(a) The Borrower has made available to the Lender a true, correct and
complete copy of each Employee Benefit Plan, other than Employee Benefit Plans
maintained solely to provide legally mandated benefits to employees located in
jurisdictions outside of the United States. Except as specifically provided in
the foregoing documents delivered to the Lender, there are no amendments to any
Employee Benefit Plan that have been adopted or approved nor has the Borrower or
any of its Subsidiaries undertaken to make any such amendments or to adopt or
approve any new Employee Benefit Plan.
(b) The Internal Revenue Service has issued a favorable determination
letter with respect to each Employee Benefit Plan that is intended to be a
"qualified plan" within the meaning of Section 401(a) of the Code ("Qualified
Plans") and the related trust that has not been revoked, and there are no
existing circumstances nor any events that have occurred that could adversely
affect the qualified status of any Qualified Plan or the related trust. No
Employee Benefit Plan is intended to meet the requirements of Code Section
501(c)(9).
(c) All contributions required to be made to any Employee Benefit Plan by
applicable law or regulation or by any plan document or other contractual
undertaking, and all premiums due or payable with respect to insurance policies
funding any Employee Benefit Plan, for any period through the date hereof have
been timely made or paid in full or, to the extent not required to be made or
paid on or before the date hereof, have been fully reflected on the financial
statements of the Company provided to Lender to the extent required by GAAP.
Each Employee Benefit Plan that is an employee welfare benefit plan under
Section 3(1) of ERISA is either (i) funded through an insurance Borrower
contract and is not a "welfare benefit fund" within the meaning of Section 419
of the Code or (ii) unfunded.
(d) With respect to each Employee Benefit Plan, the Borrower and its
Subsidiaries have complied, and are now in compliance, in all material respects
with all provisions of ERISA, the Code and all laws and regulations applicable
to such Employee Benefit Plans and each Employee Benefit Plan has been and is
now administered in all material respects in accordance with its terms. There is
not now, nor do any circumstances exist that could give rise to, any requirement
for the posting of security with respect to an Employee Benefit Plan or the
imposition of any lien on the assets of the Borrower or any of its Subsidiaries
under ERISA or the Code.
(e) No Employee Benefit Plan is subject to Title IV or Section 302 of
ERISA or Section 412 or 4971 of the Code.
(f) There never existed and does not now exist any Controlled Group
Liability that would be a liability of the Borrower. Without limiting the
generality of the foregoing, neither the Borrower nor any ERISA Affiliate of the
Borrower has engaged in any transaction described in Section 4069 or Section
4204 or 4212 of ERISA.
(g) The Borrower has no liability for life, health, medical or other
welfare benefits to former employees or beneficiaries or dependents thereof,
except for health continuation coverage as required by Section 4980B of the Code
or Part 6 of Title I of ERISA and at no expense to the Borrower. There has been
no communication to employees by the Borrower or any of its Subsidiaries that
could reasonably be interpreted to promise or guarantee such employees retiree
health or life insurance or other retiree death benefits on a permanent basis.
(h) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (either alone or in
conjunction with any other event) result in, cause the accelerated vesting or
delivery of, or increase the amount or value of, any payment or benefit to any
employee, officer or director of the Borrower or any of its Subsidiaries.
Without limiting the generality of the foregoing, no amount paid or payable by
the Borrower or any of its Subsidiaries in connection with the transactions
contemplated hereby (either solely as a result thereof or as a result of such
transactions in conjunction with any other event) will be an "excess parachute
payment" within the meaning of Section 280G of the Code.
22
(i) None of the Borrower or any of its Subsidiaries nor any other person,
including any fiduciary, has engaged in any "prohibited transaction" (as defined
in Section 4975 of the Code or Section 406 of ERISA), which could subject any of
the Employee Benefit Plans or their related trusts, the Borrower, any of its
Subsidiaries or any person that the Borrower or any of its Subsidiaries has an
obligation to indemnify, to any tax or penalty imposed under Section 4975 of the
Code or Section 502 of ERISA.
(j) There are no pending or threatened claims (other than claims for
benefits in the ordinary course), lawsuits or arbitrations which have been
asserted or instituted, or to Borrower's knowledge, no set of circumstances
exists which may reasonably give rise to a claim or lawsuit, against the
Employee Benefit Plans, any fiduciaries thereof with respect to their duties to
the Employee Benefit Plans or the assets of any of the trusts under any of the
Employee Benefit Plans which could reasonably be expected to result in any
material liability of the Borrower or any of its Subsidiaries to the Department
of Treasury, the Department of Labor, any Employee Benefit Plan or any
participant, beneficiary or dependent in an Employee Benefit Plan.
(k) The Borrower, its Subsidiaries and each member of their respective
business enterprise has complied with the Worker Adjustment and Retraining
Notification Act.
(l) All Employee Benefit Plans subject to the laws of any jurisdiction
outside of the United States (i)have been maintained in accordance with all
applicable requirements and are in good standing with applicable regulatory
authorities, (ii)if they are intended to qualify for special tax treatment meet
all requirements for such treatment, and (iii)if they are intended to be funded
and/or book-reserved are fully funded and/or book reserved, as appropriate,
based upon reasonable actuarial assumptions.
(m) For purposes of this Section 7.15, the term "employee" shall be
considered to include individuals rendering personal services to the Borrower or
any of its Subsidiaries as independent contractors.
Section 7.16 Labor Matters. Neither the Borrower nor any Subsidiary is a
-------------
party to a collective bargaining or union agreement. No labor organization or
group of employees of the Borrower or any of its Subsidiaries has made a pending
demand for recognition or certification, and there are no representation or
certification proceedings or petitions seeking a representation proceeding
presently pending or threatened to be brought or filed, with the National Labor
Relations Board or any other labor relations tribunal or authority. There are no
organizing activities, strikes, work stoppages, slowdowns, lockouts, material
arbitrations or material grievances, or other material labor disputes pending or
threatened against or involving the Borrower or any of its Subsidiaries. Each of
the Borrower and its Subsidiaries is in compliance with all applicable laws and
collective bargaining agreements respecting employment and employment practices,
terms and conditions of employment, wages and hours and occupational safety and
health.
Section 7.17 Taxes. Except as set forth in Disclosure Schedule 3.17: (i)
-----
all material Tax Returns required to be filed (taking into account extensions)
by, or with respect to any activities of, or property owned by, the Borrower,
its Subsidiaries, and each affiliated, consolidated, combined or unitary group
that included or includes the Borrower or any of its Subsidiaries (a "Tax
Group"), have been or will be timely filed in accordance with all applicable
laws, such Tax Returns are true, correct and complete in all material respects
as filed, all Taxes shown as due on such Tax Returns have been or will be timely
paid, and reserves reflected on the most recent balance sheet of the Borrower
are sufficient to cover all Taxes (whether or not shown as due on any Tax
Return) accrued as of such date and, adjusted for the passage of time, are
sufficient to cover all Taxes; (ii) all Taxes required to be withheld by the
Borrower or any of its Subsidiaries have been withheld, and such withheld Taxes
have either been duly and timely paid to the proper Government Authorities or
set aside in accounts for such purpose if not yet due; (iii) no Tax Return filed
by the Borrower or any of its Subsidiaries is currently under audit by any
Taxing Authority or is the subject of any judicial or administrative proceeding,
and to the knowledge of the Borrower, no Taxing Authority is threatening to
commence any such audit; (iv) no Taxing Authority is now asserting against the
Borrower or any of its Subsidiaries any deficiency or claim for Taxes or any
adjustment of Taxes; (v) other than any Tax sharing or indemnification agreement
between the Borrower, on the one hand, and any of its Subsidiaries, on the other
hand, neither the Borrower nor any of its Subsidiaries is subject to or bound by
any Tax sharing agreement (or other arrangement or practice for the sharing of
Taxes); (vi) neither the Borrower nor any of its Subsidiaries has waived any
statute of limitations with respect to any Tax or agreed to any extension of
time for filing any Tax Return that
23
has not been filed, and neither the Borrower nor any of its Subsidiaries has
consented to extend the period in which any Tax may be assessed or collected by
any Taxing Authority; (vii) there are no Liens for Taxes (other than Taxes not
yet due) upon any of the assets of the Borrower or any of its Subsidiaries;
(viii) the Borrower has no liability for the Taxes of any person other than the
Borrower and its Subsidiaries; (ix) there are no outstanding powers of attorney
enabling any party to represent the Borrower or any of its Subsidiaries with
respect to Tax matters; and (x) neither the Borrower nor any of its Subsidiaries
has been a "United States real property holding corporation" within the meaning
of Section 897(c)(2) of the Code during the applicable period specified in
Section 897(c)(1)(A)(ii) of the Code.
Section 7.18 Environmental, Health and Safety.
--------------------------------
(a) Except as set forth in Section 3.18 of the Disclosure Schedule or
except as would not have a Material Adverse Effect: (i) the Borrower and its
Subsidiaries currently hold all the environmental and health and safety permits,
licenses and approvals of Governmental Authorities and agencies necessary for
the current use, occupancy or operation of the Business and required by any
Environmental Law ("Environmental Permits") and are in compliance with all such
Environmental Permits; (ii) the Borrower and its Subsidiaries are in compliance
with all applicable Environmental Laws; (iii) neither the Borrower nor any of
its Subsidiaries is currently in receipt of any written claim, demand, notice or
complaint alleging violation of, or liability under, any Environmental Laws;
(iv) except as permitted by or as would not result in any liability under
applicable Environmental Laws, there are no underground or aboveground storage
tanks or any surface impoundments, septic tanks, pits, sumps or lagoons in which
Hazardous Materials are being treated, stored or disposed on any of the Owned
Real Property or Leased Real Property or, with respect to the period of the
Borrower's or any of its Subsidiaries' ownership, tenancy or operation of such
property, on any real property formerly owned, leased or operated by the
Borrower or any of its Subsidiaries; (v) there is no asbestos or asbestos-
containing material on any of the Owned Real Property or Leased Real Property,
except to the extent not prohibited by, or as would not result in any liability
under, applicable Environmental Laws; (vi) neither the Borrower nor any of its
Subsidiaries has released, discharged or disposed of Hazardous Materials on any
of the Owned Real Property or Leased Real Property or on any real property
formerly owned, leased or operated by the Borrower or any of its Subsidiaries;
(vii) neither the Borrower nor any of its Subsidiaries is undertaking any
investigation or assessment or remedial or response action relating to any
release, discharge or disposal of or contamination with Hazardous Materials at
any site, location or operation, either voluntarily or pursuant to the order of
any Governmental Authority or the requirements of any Environmental Law; and
(viii) there are no past, pending or threatened in writing Environmental Claims
against the Borrower, any of its Subsidiaries or any Real Property and, to the
Borrower's knowledge, there are no facts that are reasonably expected to form
the basis of any such Environmental Claim.
(b) For purposes of this Agreement, the following terms have the meanings
set forth below:
(i) "Environmental Claims" means any and all actions, suits, demands,
demand letters, claims, complaints, liens, written notices of noncompliance or
violation, written notices of liability or potential liability, investigations,
proceedings, consent orders or consent agreements relating in any way to any
Environmental Law, any Environmental Permit or any Hazardous Material or arising
from any actual or alleged injury or threat of injury to health, safety or the
environment.
Section 7.19 Intellectual Property.
---------------------
(a) Intellectual Property Assets. For purposes of this Agreement, the
term "Intellectual Property Assets" includes without limitation the following
tangible and intangible assets of the Borrower:
(i) the name "EarthWatch Incorporated," all fictional business names,
trading names, registered and unregistered trademarks, service marks, trade
dress and applications (collectively, "Marks");
(ii) all patents, patent applications, and inventions and discoveries that
may be patentable (collectively, "Patents");
(iii) all copyrights in both published works and unpublished works
(collectively, "Copyrights"); and
24
(iv) All know-how, trade secrets, confidential information, customer
lists, software, technical information, data, process technology, plans,
drawings, and blue prints (collectively, "Trade Secrets") owned, used, or
licensed by the Borrower or any of its Subsidiaries as licensee or licensor.
(b) Agreements. There are no outstanding and, to the Borrower's
knowledge, no threatened disputes or disagreements with respect to any material
contract relating to the Intellectual Property Assets to which the Borrower or
any of its Subsidiaries is a party or by which the Borrower or any of its
Subsidiaries is bound.
(c) Know-How Necessary for the Business.
(i) The Intellectual Property Assets are all those necessary for the
operation of the Borrower's and its Subsidiaries' businesses as they are
currently conducted. The Borrower and its Subsidiaries are the owners or
licensee, of all right, title, and interest in and to each of the Intellectual
Property Assets, free and clear of all liens, security interests, charges,
encumbrances, equities, and other adverse claims, and have the right to use
without payment to a third party all of the Intellectual Property Assets, except
as a license of Intellectual Property Assets.
(ii) Except as set forth in Section 3.19(c) of the Disclosure Schedule,
all former and current employees of the Borrower and its Subsidiaries have
executed written contracts with the Borrower or its Subsidiaries that assign to
the Borrower all rights to any inventions, improvements, discoveries, or
information relating to the business of the Borrower or any of its Subsidiaries.
No employee of the Borrower or any of its Subsidiaries has entered into any
contract that materially restricts or limits in any way the scope or type of
work for the Borrower in which the employee may be engaged or requires the
employee to transfer, assign, or disclose information concerning his work for
the Borrower to anyone other than the Borrower or its Subsidiaries.
(d) Patents.
(i) The Borrower and its Subsidiaries are the owners of all right, title,
and interest in and to each of the Patents, free and clear of all liens,
security interests, charges, encumbrances, entities, and other adverse claims.
(ii) All of the issued Patents are currently in compliance with formal
legal requirements (including without limitation payment of filing, examination,
and maintenance fees and proofs of working or use), are valid and enforceable,
and are not subject to any maintenance fees or taxes or actions falling due
within ninety days after the date of this Agreement.
(iii) No Patent has been or is now involved in any interference, reissue,
reexamination, or opposition proceeding. To the Borrower's knowledge, there is
no potentially interfering patent or patent application of any third party.
(iv) To the knowledge of the Borrower, no Patent is infringed or, to the
Borrower's knowledge, has been challenged or threatened in any way. To the
knowledge of the Borrower, none of the products manufactured and sold, nor any
process or know-how used, by the Borrower or any of its Subsidiaries infringes
or is alleged to infringe any patent or other proprietary right of any other
person.
(v) All products made, used, or sold under the Patents have been marked
with the proper patent notice.
(e) Trademarks.
(i) The Borrower and its Subsidiaries are the owners of all right, title,
and interest in and to each of the Marks, free and clear of all liens, security
interests, charges, encumbrances, equities, and other adverse claims.
(ii) All Marks that have been registered with the United States Patent and
Trademark Office are currently in compliance with all formal legal requirements
(including without limitation the timely post-registration filing of affidavits
of use and incontestability and renewal applications), are valid and
enforceable, and are not subject to any maintenance fees or taxes or actions
falling due within ninety days after the date of this Agreement.
25
(iii) No Xxxx has been or is now involved in any opposition, invalidation,
or cancellation and, to the Borrower's knowledge, no such action is threatened
with the respect to any of the Marks.
(iv) To the Borrower's knowledge, there is no potentially interfering
trademark or trademark application of any third party.
(v) To the Borrower's knowledge, no Xxxx is infringed or, to the
Borrower's knowledge, has been challenged or threatened in any way. To the
Borrower's knowledge, none of the Marks used by the Borrower or any of its
Subsidiaries infringes or is alleged to infringe any trade name, trademark, or
service xxxx of any third party.
(vi) All products and materials containing a Xxxx xxxx the proper federal
registration notice where permitted by law.
(f) Copyrights.
(i) The Borrower and its Subsidiaries are the owners of all right, title,
and interest in and to each of the Copyrights, free and clear of all liens,
security interests, charges, encumbrances, equities, and other adverse claims.
(ii) All the Copyrights have been registered and are currently in
compliance with formal legal requirements, are valid and enforceable, and are
not subject to any maintenance fees or taxes or actions falling due within
ninety days after the date of this Agreement.
(iii) To the Borrower's knowledge, no Copyright is infringed or, to the
Borrower's knowledge, has been challenged or threatened in any way. To the
Borrower's knowledge, none of the subject matter of any of the Copyrights
infringes or is alleged to infringe any copyright of any third party or is a
derivative work based on the work of a third party.
(iv) All works encompassed by the Copyrights have been marked with the
proper copyright notice.
(g) Trade Secrets.
(i) With respect to each Trade Secret, the documentation relating to such
Trade Secret is current, accurate, and sufficient in detail and content to
identify and explain it and to allow its full and proper use without material
reliance on the knowledge or memory of any individual.
(ii) The Borrower and its Subsidiaries have taken all reasonable
precautions to protect the secrecy, confidentiality, and value of its Trade
Secrets.
(iii) The Borrower and its Subsidiaries have good title and the right (not
necessarily exclusive) to use the Trade Secrets. The Trade Secrets are not part
of the public knowledge or literature, and, to the Borrower's knowledge, have
not been used, divulged, or appropriated either for the benefit of any person
(other than the Borrower and its Subsidiaries) or to the detriment of the
Borrower or any of its Subsidiaries. No Trade Secret is subject to any adverse
claim or has been challenged or threatened in any way.
Section 7.20 Material Contracts.
------------------
(a) None of the Borrower or any of its Subsidiaries is (and, to the
knowledge of the Borrower, no other party is) in breach or violation of, or
default under, any of the Material Contracts, where such breach or violation or
default would have a Material Adverse Effect. Each Material Contract is a valid
agreement, arrangement or Term Loans Commitment of the Borrower or any of its
Subsidiaries that is a party thereto, enforceable against the Borrower or any
such Subsidiary, as the case may be, in accordance with its terms and, to the
knowledge of the Borrower, is a valid agreement, arrangement or Term Loans
Commitment of each other party thereto, enforceable against such party in
accordance with its terms, except in each case as would not have a Material
Adverse Effect.
26
(b) For purposes of this Agreement, the term "Material Contracts" means
the following contracts in effect as of the date of this Agreement to which the
Borrower or any of its Subsidiaries is a party:
(i) Any commitment, contract, agreement or purchase order that the
Borrower reasonably anticipates shall, in accordance with its terms, involve
aggregate payments or receipts by the Borrower or any of its Subsidiaries of
more than $1,000,000 within the 12-month period following the date of this
Agreement;
(ii) Any lease of personal property involving any annual expense in excess
of $10,000 that is not cancelable without liability within 30 days;
(iii) Any contracts or agreements containing covenants limiting the freedom
of the Borrower or any of its Subsidiaries to engage in any line of business or
compete with any person;
(iv) Any material license agreement, assignment or contract (whether as
licensor or licensee, assignor or assignee) relating to any patents, trademarks,
copyrights or other intellectual property;
(v) Any contract that creates a joint venture or partnership or other
sharing of profits, losses, costs or liabilities;
(vi) Any contract or agreement relating to clean-up, abatement or other
actions in connection with the remediation of any liabilities relating to
Hazardous Substances;
(vii) Any contract with an Affiliate;
(viii) Any credit agreement, loan agreement, guarantee, note or other
evidence of Indebtedness or agreement providing for [Indebtedness]; and
(ix) Any amendment, supplement and modification (whether oral or written)
in respect of any of the foregoing.
(c) There are no material contracts as defined by the SEC rules that have
not been filed with the SEC.
Section 7.21 No Solicitation; Exemption from Registration.
--------------------------------------------
(a) The Borrower has not and will not solicit any offer for, or offer or
sell any securities subject to the Transactions (as defined in the [First
Supplemental Indenture]) by any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Securities Act)
or in any manner involving a public offering within the meaning of Section 4(2)
of the Securities Act and Rule 506 thereunder.
(b) The issuance of Series C Preferred Stock to BTHC and the issuance of
Common Stock upon conversion of such Series C Preferred Stock, individually and
in the aggregate, shall be exempt from registration under the Securities Act,
including the rules and regulations promulgated thereunder.
Section 7.22 Insurance. Except as set forth in Section 3.22 of the
---------
Disclosure Schedule, each of the Borrower and its Subsidiaries and all of their
assets are covered by valid and currently effective insurance policies issued in
favor or the Borrower and/or its Subsidiaries that are customary and appropriate
under the circumstances. All such policies are in full force and effect, all
premiums due thereon have been paid and the Borrower and its Subsidiaries have
complied with the provisions of such policies (except for failures in full force
and effect, to pay premiums and comply which, in the aggregate, would not have a
Material Adverse Effect).
Section 7.23 Brokers. Except for Xxxxxx Xxxxxxx (as financial advisor to
-------
the Borrower, the "Advisor"), no broker, finder or investment banker is entitled
-------
to any brokerage, finder's or other fee or commission in connection with the
transactions contemplated hereby or by the Loan Documents based upon
arrangements made
27
by or on behalf of the Borrower or any of its Subsidiaries. The Borrower is
solely responsible for the fees and expenses of the Advisor.
Section 7.24 Indenture. As of the date hereof, there exists no "Default"
---------
or "Event of Default" under and as defined in the Indenture.
Section 7.25 Transactions with Affiliates. (a) Except as set forth in
----------------------------
Section 3.25 of the Disclosure Schedule, none of the Borrower or any of its
Subsidiaries has any outstanding contract, agreement or other arrangement with
any of its Affiliates or provides or receives goods or services to or from any
of its Affiliates or (b) has engaged in any transaction outside the ordinary
course of business consistent with past practice with any of its Affiliates
(other than the Borrower or any of its Subsidiaries and Affiliates) since
January 1, 1998.
Section 7.26 Debt. As of the Closing Date (and after giving effect to the
----
Related Transactions which will occur on or before such date), the Borrower does
not have any Debt other than (a) the Obligations, and (b) the Debt disclosed on
Schedule 3.26 hereto.
Section 7.27 Margin Securities. Neither the Borrower nor any of its
-----------------
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of purchasing or carrying
margin stock (within the meaning of Regulations T, U or X of the Board of
Governors of the Federal Reserve System), and no part of the proceeds of any
Loan will be used to purchase or carry any margin stock or to extend credit to
others for the purpose of purchasing or carrying margin stock. The Loans will
not violate any of Regulations T, U or X.
Section 7.28 Disclosure. No written statement, information, report,
----------
representation or warranty made by the Borrower or any of its Subsidiaries in
any Loan Document or Related Transaction Document or furnished to the Lender by
or on behalf of the Borrower in connection with the Loan Documents or the
Related Transactions Documents or any transaction contemplated hereby or thereby
contains any untrue statement of a material fact or omits to state any material
fact necessary to make the statements herein or therein not misleading. There is
no fact known to the Borrower that has had a Material Adverse Effect, and there
is no fact known to the Borrower that might in the future have a Material
Adverse Effect, except as may have been disclosed in writing to the Lender.
Section 7.29 Investment Company Act. Neither the Borrower nor any of its
----------------------
Subsidiaries is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
Section 7.30 Public Utility Holding Company Act. Neither the Borrower nor
----------------------------------
any of its Subsidiaries is a "holding company" or a "subsidiary company" of a
"holding company" or an "affiliate" of a "holding company" or a "public utility"
within the meaning of the Public Utility Holding Company Act of 1935, as
amended.
Section 7.31 Security Interest Issues. Except as set forth in Section
------------------------
3.31 of the Disclosure Schedule, the Borrower is (or will be, as the case may
be) the legal and beneficial owner of the Collateral (or, in the case of
Collateral provided or to be provided by the Vendor pursuant to the Project
Contract, the Borrower is (or will be, as the case may be, the legal and
beneficial owner of whatever title to such Collateral was (or will have been, as
the case may be) passed to the Borrower by the Vendor) free and clear of any
Lien except for retention of title and the security interest created by the Loan
Documents and any other Permitted Liens. No effective financing statement or
other document similar in effect covering all or any part of the Collateral is
on file in any recording office, except such as may have been filed in favor of
the Lender related to the Loan Documents or in favor of holders of Permitted
Liens. The address of the chief place of business and chief executive office of
the Borrower, and of each other location where the Borrower maintains records
concerning accounts receivables or any other Collateral, are set forth in
Exhibit 7.31 hereof. All Collateral is located in the State(s) of Colorado and
California. The Borrower's exact full legal name is, and for the previous five
years was, as set forth in the first paragraph of this Agreement. Borrower has
not, during the past five (5) years, been known by or used any other corporate
or fictitious name, or been a party to any merger or consolidation, or acquired
all or substantially all of the assets of any Person, or acquired any of its
property outside of the ordinary course of business. Borrower has no trade names
or styles under which Borrower will create accounts receivable, or to which
instruments in payment of accounts receivable may be made payable.
28
ARTICLE 8
Affirmative Covenants
The Borrower covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or the Lender has any Term Loans Commitment
outstanding hereunder, it will perform and observe, or cause to be performed and
observed, the following covenants:
Section 8.1 Reporting Requirements. The Borrower will furnish to the
----------------------
Lender:
(a) Annual Financial Statements. As soon as available, and in any event
---------------------------
within 120 days after the end of each fiscal year of the Borrower, beginning
with the fiscal year ending December 31, 2001, a copy of the consolidated
balance sheet of the Borrower and its Subsidiaries as at the end of such year
and the related consolidated statements of income or operations, shareholders'
equity and cash flows for such fiscal year, together with unaudited
consolidating schedules for the Borrower with respect to each of such financial
statements, in each case setting forth in comparative form the figures for the
previous fiscal year, and accompanied by the opinion of PricewaterhouseCoopers
or other independent certified public accountants of recognized standing
reasonably acceptable to the Lender, which opinion shall state that such
consolidated financial statements present fairly the financial position and
results of operations for the periods indicated in conformity with GAAP applied
on a basis consistent with prior years;
(b) Quarterly Financial Statements. As soon as available, and in any event
------------------------------
within 45 days after the end of each of the first three quarters of each fiscal
year of the Borrower, beginning with the fiscal quarter ending March31 June 30
2001, a copy of the unaudited consolidated balance sheet of the Borrower and its
Subsidiaries as at the end of such quarter and the related consolidated
statements of income or operations, shareholders' equity and cash flows for the
period commencing on the first day and ending on the last day of such quarter,
together with unaudited consolidating schedules for the Borrower with respect to
each of such financial statements, in each case setting forth in comparative
form the figures for the corresponding period of the preceding fiscal year, and
certified by an appropriate Responsible Officer of the Borrower as fairly
presenting, in accordance with GAAP, the financial position and the results of
operations of the Borrower and its Subsidiaries (except for year-end adjustments
and financial statement footnotes required by GAAP);
(c) Compliance Certificate. Concurrently with the delivery of each of the
----------------------
financial statements referred to in Sections 8.1(a) and 8.1(b), a Compliance
Certificate of a Responsible Officer of the Borrower, appropriately completed,
stating that, to the best of such officer's knowledge, no Default has occurred
and is continuing or, if a Default has occurred and is continuing, stating the
nature thereof and the action that has been taken and is proposed to be taken
with respect thereto, and a description, in reasonable detail, of any material
variation between the application of GAAP employed in the preparation of the
next preceding annual or quarterly financial statements and reasonable estimates
of the difference between such statements arising as a consequence thereof;
(d) Notice of Litigation. Promptly after the commencement thereof, notice
--------------------
of all actions, suits and proceedings before any Governmental Authority or
arbitrator affecting the Borrower or any of its Subsidiaries in which there is a
reasonable likelihood of an adverse determination, which, if determined
adversely to the Borrower or any such Subsidiary, could reasonably be expected
to have a Material Adverse Effect;
(e) Notice of Default, etc. As soon as possible and in any event
-----------------------
immediately upon (i) the Borrower's knowledge of the occurrence of any Default,
a written notice setting forth the details of such Default and the action that
the Borrower has taken and, if and to the extent known, proposes to take with
respect thereto and (ii) the failure of the Borrower to make any required
payment of principal, premium (if any), interest or other payment of or with
respect to any 13% Notes or Subordinated Debt, a written notice setting forth
the details thereof and the action that the Borrower has taken or proposes to
take with respect thereto;
29
(f) Proxy Statements, Etc. Unless provided to BTHC as a shareholder or
----------------------
otherwise pursuant to this Section 8.1, as soon as available, one copy of each
(if any) financial statement, report, notice or proxy statement sent by Borrower
to its stockholders or other security holders generally and one copy of each (if
any) regular, periodic or special report (including, without limitation, reports
on forms 10-K, 10-Q and 8-K), registration statement or prospectus filed by
Borrower with any securities exchange or the SEC or any successor agency;
(g) Insurance. Within 60 days prior to the end of each fiscal year of the
---------
Borrower, a report in form and substance reasonably satisfactory to the Lender
summarizing all material insurance coverage with respect to the Collateral
maintained by the Borrower and its Subsidiaries as of the date of such report
and all material insurance coverage with respect to the Collateral planned to be
maintained by such Persons in the subsequent fiscal year;
(h) General Information. Promptly, such other business, financial,
-------------------
corporate affairs and other similar information concerning the Borrower and/or
the Collateral as the Lender may from time to time reasonably request.
Section 8.2 Maintenance of Existence; Conduct of Business. The Borrower
---------------------------------------------
will, and will cause its Subsidiaries to, preserve and maintain its corporate
existence and all of its leases, privileges, licenses, Permits, franchises,
qualifications, Intellectual Property Assets, intangible Property and rights
that are necessary in the ordinary conduct of its business except to the extent
that failure to so preserve and maintain such could not reasonably be expected
to have a Material Adverse Effect. The Borrower will, and will cause its
Subsidiaries to, conduct its business in an orderly and efficient manner in
accordance with good business practices.
Section 8.3 Maintenance of Properties and Permits. The Borrower will, and
-------------------------------------
will cause its Subsidiaries to, maintain, keep and preserve all of its
Properties and Permits (including, without limitation, rights-of-way) necessary
in the proper conduct of its businesses except to the extent that failure to so
maintain, keep and preserve could not reasonably be expected to have a Material
Adverse Effect, and in good repair, working order and condition (ordinary wear
and tear excepted) and make all necessary repairs, renewals and replacements and
improvements thereof. Without limiting the generality of the foregoing, the
Borrower will, at all times except as may result from any Collateral Asset
Disposition permitted in accordance with Section 9.6, possess good and
marketable title to the Collateral free and clear of any Lien (other than
Permitted Liens permitted to attach to the Collateral in accordance with Section
9.1).
Section 8.4 Taxes and Claims. The Borrower will, and will cause its
----------------
Subsidiaries to, pay or discharge before becoming delinquent (a) all taxes,
levies, assessments and governmental charges imposed on it or its income or
profits or any of its Property and (b) all lawful claims for labor, material and
supplies, which, if unpaid, might become a Lien upon any of its Property;
provided, however, that neither the Borrower nor any of its Subsidiaries shall
be required to pay or discharge any tax, levy, assessment or governmental
charge, or claim for labor, material or supplies, whose amount, applicability
or validity is being contested in good faith by appropriate proceedings being
diligently pursued and for which adequate reserves have been established under
GAAP.
Section 8.5 Insurance. In addition to any insurance requirements as set
---------
forth in the Loan Documents and in Section 8.14, the Borrower will, and will
cause its Subsidiaries to, maintain, with financially sound and reputable
independent insurers, insurance with respect to its Property and business
against loss or damage of the kinds customarily insured against by Persons
engaged in the same or similar business, of such types and in such amounts as
are customarily carried under similar circumstances by such other Persons,
including workers' compensation insurance, public liability, property and
casualty insurance and comprehensive general liability insurance. In addition,
the Borrower will maintain with financial sound and reputable independent
insurers, insurance with respect to all of the Collateral of such types and in
such amounts and otherwise as is necessary to comply with prudent business
practice. The Borrower will advise the Lender promptly of any material policy
cancellation, reduction or amendment.
Section 8.6 Inspection Rights. The Borrower will permit representatives
-----------------
and agents of the Lender, during normal business hours and upon reasonable
notice to the Borrower, to examine, copy and make extracts from its books and
records relating to its financial affairs, the Collateral and other matters
relevant to the Loan Documents, to visit and inspect its Properties and to
discuss its business, operations and financial condition with its officers.
30
Section 8.7 Keeping Books and Records. The Borrower will maintain
-------------------------
appropriate books of record and account in accordance with GAAP consistently
applied in which true, full and correct entries will be made of all their
respective dealings and business affairs.
Section 8.8 Compliance with Laws. The Borrower will, and will cause each
--------------------
of its Subsidiaries to, comply with all applicable Governmental Requirements,
except for instances of noncompliance that could not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
Section 8.9 Compliance with Agreements. The Borrower will, and will cause
--------------------------
each of its Subsidiaries to, comply with all agreements, documents and
instruments binding on it or affecting its Properties or business, except for
instances of noncompliance that could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
Section 8.10 Further Assurances. The Borrower will, and will cause each of
------------------
its Subsidiaries to, execute and deliver such further agreements, documents and
instruments and take such further action as may be requested by the Lender to
carry out the provisions and purposes of this Agreement and the other Loan
Documents, to evidence the Obligations and to create, preserve, maintain and
perfect the Liens of the Lender in and to the Collateral and the required
priority of such Liens. The parties hereto acknowledge that Article 9 of the
Model Uniform Commercial Code has been substantially revised in many states (the
"Revised Article 9") and that the Revised Article 9 will become law by July 1,
2001 in such states. In that event amendments to the Loan Documents and
additional filings may be required to continue, create, protect and perfect the
security interests intended to be created under the Loan Documents, without
limiting the generality of any of Borrower's obligations in any Loan Document,
Borrower (x) agrees to take all action and to execute, deliver and file all
documents and instruments as may be necessary in connection therewith and (y)
authorizes Lender to take all such action and to execute, deliver and file all
such documents and instruments (including financing statement) on the Borrower's
behalf to the fullest extent permitted by applicable law.
Section 8.11 ERISA. The Borrower will, and will cause each of its ERISA
-----
Affiliates to, comply with all minimum-funding requirements and all other
material requirements of ERISA so as not to give rise to any liability
thereunder.
Section 8.12 Charter Amendments. As soon as practicable following the
------------------
date of this Agreement, the Borrower shall do the following:
(a) Take all action in accordance with all federal and state securities
laws, the DGCL and the Certificate of Incorporation and Bylaws of the Borrower,
reasonably necessary to convene a special meeting (or obtain the written consent
in lieu thereof) of the holders of the Existing Common Stock and the Existing
Preferred Stock, any such special meeting to be held on the earliest practical
date determined by the Borrower pursuant to its obligations under subsections
(b) and (c) below;
(b) With respect to the Existing Preferred Stock, (i) prepare and
distribute to all holders of shares of each series of Existing Preferred Stock
all reasonably necessary documents for the purpose of soliciting and obtaining
the approval in writing of holders of shares of each series of Existing
Preferred Stock at least equal in number to the minimum number set forth for
each such series in Section 3.4(a) of the Disclosure Schedule to effect the
Charter Amendment, to the extent such approval is required by applicable law;
(ii) recommend to holders of shares of each series of Existing Preferred Stock
the approval of such Charter Amendments; (iii) use its reasonable best efforts
to solicit from holders of such minimum number of shares of each series of
Existing Preferred Stock, and take all other action reasonably necessary or
advisable to secure, the approval of such holders required to approve such
Charter Amendments; and (iv) as of or prior to the time of consummation of the
Recapitalization Transactions, file with the Secretary of State of the State of
Delaware all documents, and take any other action, reasonably necessary to
effect such Charter Amendments; and
(c) With respect to the Existing Common Stock, (i) prepare and distribute
to all holders of shares of Existing Common Stock all reasonably necessary
documents for the purpose of soliciting and obtaining the approval
31
in writing of holders of shares of Existing Common Stock at least equal in
number to the minimum number set forth in Section 3.4(b) of the Disclosure
Schedule to effect the Charter Amendments, all to the extent such approval is
required by applicable law; (ii) recommend to holders of shares of Existing
Common Stock the approval of such Charter Amendments; (iii) use its reasonable
best efforts to solicit from holders of such minimum number of shares of
Existing Common Stock, and take all other action reasonably necessary or
advisable to secure, the approval of such holders required to approve such
Charter Amendments; and (iv) as of or prior to the time of consummation of the
Recapitalization Transactions, file with the Secretary of State of the State of
Delaware all documents, and take any other action, reasonably necessary to
effect such Charter Amendments.
Section 8.13 Issuance of New Series C Preferred Stock. The Borrower
----------------------------------------
shall issue to BTHC or at the option of BTHC, one of its affiliates 903,608
shares of Series C Preferred Stock as of or promptly following the time of
consummation of the Recapitalization Transactions.
Section 8.14 Satellite Insurance.
-------------------
(a) The Borrower shall use its reasonable best efforts to obtain (by
paying the initial deposit therefor) the QuickBird 2 Prelaunch Insurance and the
QuickBird 2 Launch Insurance as required by this Agreement. The Borrower shall
pay, or shall cause to be paid, all premiums for the QuickBird 2 Prelaunch
Insurance and QuickBird 2 Launch Insurance in accordance with the payment
schedule under the terms of the respective insurance policies.
(b) Promptly following or contemporaneously with the purchase of QuickBird
2 Launch Insurance pursuant to Section 8.14 (a), the Borrower shall (i) execute,
and direct the Trustee, as collateral agent, to execute, (x) the Senior P&SA,
substantially in the form attached to the Recapitalization Agreement as Exhibit
H-1 and deliver, pledge and transfer to the Trustee, as collateral agent under
the Senior P&SA for the Noteholders and Lender, on a pro rata basis, the
QuickBird 2 Launch Insurance, (ii) execute, and cause the 13% Notes Trustee to
execute, the Intercreditor Acknowledgment, and (iii) deliver to the Trustee, as
collateral trustee under the Senior P&SA, (x) an opinion of Xxxxx & XxXxxxxx,
dated as of the date of the Senior P&SA, substantially in the form of Exhibit I-
1 to the Recapitalization Agreement and (y) an opinion of counsel reasonably
satisfactory to the Trustee, as collateral trustee, dated as of the date of the
Senior P&SA, substantially in the form of Exhibit I-2 to the Recapitalization
Agreement.
ARTICLE 9
Negative Covenants
The Borrower covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or Lender has any Term Loan, it will perform and
observe, or cause to be performed and observed, the following covenants
hereunder:
Section 9.1 Limitation on Liens. he Borrower shall not incur or suffer to
-------------------
exist any Lien on or with respect to any of the Collateral other than the
Permitted Liens, all of which Permitted Liens shall be junior, as to priority,
to the Liens on or with respect to the Collateral securing the Obligations.
Section 9.2 Mergers, Etc. The Borrower will not (a) become a party to a
-------------
merger or consolidation unless (i) the Borrower shall be the entity surviving
such merger or consolidation and (ii) no Default exists at the time of such
consolidation or merger, or would result therefrom, or (b) wind-up, dissolve or
liquidate itself.
Section 9.3 Intercompany Transactions. Except as may be expressly
-------------------------
permitted or required by the Loan Documents or the Indenture, the Borrower will
not, and will not permit any of its Subsidiaries to, create or otherwise cause
or permit to exist or become effective any consensual encumbrance or restriction
of any kind on the ability of any Subsidiary to pay dividends or make any other
distribution to the Borrower or any of its Subsidiaries in respect of such
Subsidiary's Capital Stock or with respect to any other interest or
participation in, or measured by, its profits.
32
Section 9.4 Security Interest Issues. The Borrower will not: (i) change
------------------------
its chief place of business, chief executive office or any location where the
Borrower maintains records concerning any Collateral from the location
identified in Exhibit 7.31 hereto, or (ii) change its legal name in any manner
whatsoever or use any other corporate or fictitious name, trade name or style,
without, in each case, providing to the Lender UCC amendments or other documents
sufficient to protect the Lender's first priority purchase money security
interests in the Collateral under the Loan Documents.
Section 9.5 Transactions with Affiliates. The Borrower shall not, and
----------------------------
shall not permit any of its Subsidiaries to, enter into any transaction (or
series of related transactions) with an Affiliate of the Borrower unless such
transaction (or series of related transactions) is on terms no less favorable to
the Borrower or such Subsidiary (as applicable) than those that could be
obtained in a comparable arm's-length transaction with an entity that is not an
Affiliate and is in the best interests of the Borrower or such Subsidiary (as
applicable); provided, however, that any such transactions between the Borrower
or any of its Subsidiaries may be on terms which are more favorable to the
Borrower and such transactions, other than transactions which involve the
purchase of goods or services by the Borrower or its Subsidiaries, may be
undertaken on any terms so long as (a) no Event of Default exists at the time of
such transaction or could reasonably be expected to occur as a result thereof
and (b)such transactions, individually and in the aggregate, could not
reasonably be expected to have a Material Adverse Effect. Notwithstanding the
foregoing, this Section 9.5 shall not prohibit (a) any of the Recapitalization
Transactions, or (b) any matters set forth in Section 3.25 of the Disclosure
Schedule.
Section 9.6 Limitation on Collateral Asset Dispositions. The Borrower
-------------------------------------------
shall not make any Collateral Asset Disposition (other than proceeds consisting
of earnings generated from the operation of any Collateral in the ordinary
course of business and other than as contemplated by any Loan Document, the
Indenture, the Intercreditor Acknowledgement and related documents, in
accordance with the provisions that were in effect as of June 15, 2001, without
giving effect to any subsequent amendment, modification or supplement thereof or
thereto except as may be expressly approved by the Lender in writing) to any
Person (including, without limitation, an Affiliate of the Borrower) without the
prior written consent of the Lender.
Section 9.7 Dividends and Distributions. The Borrower shall not pay
---------------------------
dividends or make any other distributions in respect of its Capital Stock that
could reasonably be expected to impair its ability to pay the Obligations as
they come due in the three-month period following such dividend or distribution.
ARTICLE 10
Default
Section 10.1 Events of Default. Each of the following shall be deemed an
"Event of Default":
----------------
(a) The Borrower shall fail to pay, repay or prepay any amount of
principal or interest of any Loan owing to the Lender pursuant to this
Agreement, or the Borrower shall fail to pay, within five Business Days after
the due date thereof, any fee, expense or other amount or any other Obligation
owing to the Lender pursuant to this Agreement or any other Loan Document.
(b) Any representation or warranty made or deemed made by or on behalf of
the Borrower in any Loan Document or in any certificate, report, notice or
financial statement furnished at any time in connection with this Agreement or
any other Loan Document shall be false, misleading or erroneous in any material
respect when made or deemed to have been made.
(c) The Borrower shall fail to perform, observe or comply with any
covenant, agreement or term contained in Article 8 or 9 of this Agreement or in
any Loan Documents; or the Borrower shall fail to perform, observe or comply
with any other covenant, agreement or term contained in this Agreement or any
other Loan Document (other than covenants to pay the Obligations) and such
failure is not remedied or waived within 30 days
33
(or, if a different grace period is expressly made applicable in such other Loan
Documents, such applicable grace period) after notice thereof from the Lender.
(d) The Borrower shall admit in writing its inability to, or be generally
unable to, pay its debts as such debts become due.
(e) The Borrower shall (i) apply for or consent to the appointment of, or
the taking of possession by, a receiver, custodian, trustee, liquidator or
administrator of itself or of all or a substantial part of its Property, (ii)
admit in writing its inability to, or be generally unable to, pay its debts as
such debts become due, subject to any applicable grace periods, (iii) make a
general assignment for the benefit of its creditors, (iv) commence a voluntary
case under the United States Bankruptcy Code (as now or hereafter in effect, the
"Bankruptcy Code"), (v) file a petition seeking to take advantage of any other
---------------
law providing for the relief of debtors or relating to bankruptcy, insolvency,
reorganization, liquidation, dissolution, arrangement or winding up, or
composition or readjustment of debts, (vi) fail to controvert in a timely or
appropriate manner, or acquiesce in writing to, any petition filed against it in
an involuntary case under the Bankruptcy Code or other applicable Governmental
Requirement, (vii) dissolve, or (viii) take any corporate action for the purpose
of effecting any of the foregoing.
(f) A proceeding or case shall be commenced, without the application or
consent of the Borrower, in any court of competent jurisdiction, seeking (i) the
liquidation, reorganization, dissolution, arrangement, winding up, or
composition or readjustment of its debts, (ii) the appointment of a trustee,
receiver, custodian, examiner, liquidator, administrator or the like of it or of
all or any substantial part of its Property, or (iii) similar relief in respect
of it, under any law providing for the relief of debtors or relating to
bankruptcy, insolvency, reorganization, liquidation, dissolution, arrangement or
winding up, or composition or readjustment of debts, and such proceeding or case
shall continue undismissed, or an order, judgment or decree approving or
ordering any of the foregoing shall be entered and continue unstayed and in
effect, for a period of 60 or more days; or an order for relief shall be entered
in an involuntary case under the Bankruptcy Code against the Borrower and shall
continue unstayed and in effect for any period of 60 consecutive days.
(g) A final judgment or judgments for the payment of money in excess of
$1,000,000.00 in the aggregate shall be rendered by a court or courts against
the Borrower on claims not covered by insurance and the same shall not be
discharged, bonded or a stay of execution thereof shall not be procured, within
30 days from the date of entry thereof and the Borrower shall not, within said
period of 30 days, or such longer period during which execution of the same
shall have been stayed, appeal therefrom and cause the execution thereof to be
stayed during such appeal.
(h) The Borrower shall fail to pay when due any principal of or interest
on any Debt of the Borrower (other than the Obligations) having (either
individually or in the aggregate) a principal amount of at least $750,000, or
the maturity of any such Debt shall have been accelerated, or any such Debt
shall have been required to be prepaid prior to the stated maturity thereof, or
any event shall have occurred (and shall not have been waived or otherwise
cured) that permits (or, with the giving of notice or lapse of time or both,
would permit) any holder or holders of such Debt or any Person acting on behalf
of such holder or holders to accelerate the maturity thereof or require any such
prepayment.
(i) This Agreement or any other Loan Document shall cease to be in full
force and effect otherwise than in accordance with their terms, or any Lien
created by the Loan Documents in favor of the Lender shall for any reason cease
to be or fail to be a valid, perfected Lien upon any of the Collateral purported
to be covered thereby, with the level of priority required by the Loan
Documents, otherwise than in accordance with the terms of the applicable Loan
Document.
(j) If, at any time, any payment or principal of or interest accrued or
other amount of or with respect to any Subordinated Debt (whether by virtue of
payment, redemption, purchase or otherwise) shall have been paid by the Borrower
or any Subsidiary of the Borrower on or 30 days prior to the date upon which
such Subordinated Debt is permitted to be paid in accordance with the
Subordinated Debt Documents governing such Subordinated Debt.
34
(k) The occurrence of any breach or default under the Project Contract, or
the Project Contract shall be terminated or cease to be in full force and effect
(other than due to the bankruptcy or material breach by the Vendor).
(l) The occurrence of an "Event of Default" as such term is defined in the
Indenture that results in or has the effect of the acceleration of the maturity
of the 13% Notes or any part thereof.
Section 10.2 Remedies. If any Event of Default shall occur and be
--------
continuing, the Lender may do any one or more of the following:
(a) Acceleration. Declare all outstanding principal of and accrued and
------------
unpaid interest on the Loans and all other amounts payable by the Borrower under
the Loan Documents immediately due and payable, and the same shall thereupon
become immediately due and payable, without notice, demand, presentment, notice
of dishonor, notice of acceleration, notice of intent to accelerate, protest or
other formalities of any kind, all of which are hereby expressly waived by the
Borrower;
(b) Termination of Term Loans Commitment. Terminate in whole or in part
------------------------------------
the Term Loans Commitment without notice to the Borrower;
(c) Judgment. Reduce any claim to judgment;
--------
(d) Foreclosure. Foreclose or otherwise enforce any Lien granted to the
-----------
Lender to secure payment and performance of the Obligations in accordance with
the terms of the Loan Documents; or
(e) Rights. Exercise any and all rights and remedies afforded by the laws
------
of the State of Colorado (including, without limitation, all rights and remedies
of a secured creditor under the UCC or any other jurisdiction, by any of the
Loan Documents, by equity or otherwise; provided, however, that upon (i) the
occurrence of an Event of Default under Section10.1(e) or Section 10.1(f), the
Term Loans Commitment shall immediately and automatically terminate, and the
outstanding principal of and accrued and unpaid interest on the Loans and all
other amounts payable by the Borrower under the Loan Documents shall thereupon
become immediately and automatically due and payable without notice, demand,
presentment, notice of dishonor, notice of acceleration, notice of intent to
accelerate, protest or other formalities of any kind, all of which are hereby
expressly waived by the Borrower.
Section 10.3 Performance by the Lender, etc.. If the Borrower shall fail
-------------------------------
to perform any covenant or agreement in accordance with the terms of the Loan
Documents, the Lender may perform or attempt to perform such covenant or
agreement on behalf of the Borrower. In such event, the Borrower shall, at the
request of the Lender, promptly pay any amount expended by the Lender in
connection with such performance or attempted performance to the Lender,
together with interest thereon at the applicable Default Rate from and including
the date of such expenditure to but excluding the date such expenditure is paid
in full. Notwithstanding the foregoing, it is expressly agreed that Lender
shall not have any liability or responsibility for the performance of any
obligation of the Borrower or any other Person under this Agreement or any of
the other Loan Documents.
ARTICLE 11
Miscellaneous
Section 11.1 Expenses. The Borrower hereby agrees, on demand, to pay or
--------
reimburse the Lender for paying: (a) all reasonable out-of-pocket costs and
expenses accrued in connection with the preparation, negotiation, execution and
delivery of this Agreement and the other Loan Documents, and any and all
waivers, amendments, modifications, renewals, extensions and supplements thereof
and thereto requested by the Borrower, including, without limitation, the
reasonable fees and expenses of legal counsel, (b) all out-of-pocket costs and
expenses of the Lender in connection with any Default, the exercise of any right
or remedy and the enforcement of this Agreement
35
or any other Loan Document or any term or provision hereof or thereof,
including, without limitation, the fees and expenses of all legal counsel for
the Lender, (c) all transfer, stamp, documentary or other similar taxes,
assessments or charges levied by any Governmental Authority in respect of this
Agreement or any of the other Loan Documents, (d) all costs, expenses,
assessments and other charges incurred in connection with any filing,
registration, recording or perfection of any Lien contemplated by this Agreement
or any other Loan Document, and (e) all reasonable out-of-pocket costs and
expenses incurred in connection with due diligence, computer services, copying,
appraisals, environmental audits, collateral audits, field exams, insurance,
consultants and search reports.
Section 11.2 Indemnification. THE BORROWER HEREBY AGREES TO INDEMNIFY THE
---------------
LENDER AND EACH AFFILIATE THEREOF AND THEIR RESPECTIVE OFFICERS, DIRECTORS,
EMPLOYEES, ATTORNEYS AND AGENTS FROM, AND HOLD EACH OF THEM HARMLESS AGAINST,
ANY AND ALL LOSSES, LIABILITIES (INCLUDING, WITHOUT LIMITATION, ENVIRONMENTAL
LIABILITIES), CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS AND
EXPENSES (INCLUDING REASONABLE ATTORNEYS' AND CONSULTANTS' FEES) TO WHICH ANY OF
THEM MAY BECOME SUBJECT WHICH DIRECTLY OR INDIRECTLY ARISE FROM OR RELATE TO (A)
THE NEGOTIATION, EXECUTION, DELIVERY, PERFORMANCE, ADMINISTRATION OR ENFORCEMENT
OF ANY OF THE LOAN DOCUMENTS, INCLUDING, WITHOUT LIMITATION, THE EXERCISE OF ANY
FORECLOSURE RIGHT OR OTHER RIGHT OR REMEDY WHETHER OR NOT SUCH EXERCISE IS IN
COMPLIANCE WITH LAWS AFFECTING OTHER PERSONS OR RESULTS IN DAMAGES PAYABLE TO
OTHER PERSONS, (B) ANY OF THE TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS,
(C) ANY BREACH BY THE BORROWER OF ANY REPRESENTATION, WARRANTY, COVENANT OR
OTHER AGREEMENT CONTAINED IN ANY OF THE LOAN DOCUMENTS, (D) THE USE OR PROPOSED
USE OF ANY LOAN, (E) THE PRESENCE, RELEASE, THREATENED RELEASE, DISPOSAL,
REMOVAL OR CLEANUP OF ANY HAZARDOUS MATERIAL LOCATED ON, ABOUT, WITHIN OR
AFFECTING ANY OF THE PROPERTIES OF THE BORROWER OR ANY OF ITS AFFILIATES, EXCEPT
TO THE EXTENT THAT THE LOSS, DAMAGE OR CLAIM IS THE DIRECT RESULT OF AN
INTENTIONAL AND AFFIRMATIVE ACT BY THE PERSON TO BE INDEMNIFIED THAT CONSTITUTES
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH PERSON, OR (F) ANY INVESTIGATION,
LITIGATION OR OTHER PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY THREATENED
INVESTIGATION, LITIGATION OR OTHER PROCEEDING RELATING TO ANY OF THE FOREGOING;
BUT EXCLUDING ANY OF THE FOREGOING TO THE EXTENT CAUSED BY THE GROSS NEGLIGENCE
OR WILLFUL MISCONDUCT OF THE PERSON TO BE INDEMNIFIED. WITHOUT LIMITING ANY
PROVISION OF THIS AGREEMENT OR OF ANY OTHER LOAN DOCUMENT, IT IS THE EXPRESS
INTENTION OF THE PARTIES HERETO THAT EACH PERSON TO BE INDEMNIFIED UNDER THIS
SECTION 11.2 SHALL BE INDEMNIFIED FROM AND HELD HARMLESS AGAINST ANY AND ALL
LOSSES, LIABILITIES (INCLUDING, WITHOUT LIMITATION, ENVIRONMENTAL LIABILITIES),
CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS AND EXPENSES
(INCLUDING REASONABLE ATTORNEYS' FEES) ARISING OUT OF OR RESULTING FROM THE SOLE
OR CONTRIBUTORY NEGLIGENCE OF SUCH PERSON. WITHOUT PREJUDICE TO THE SURVIVAL OF
ANY OTHER TERM OR PROVISION OF THIS AGREEMENT, THE OBLIGATIONS OF THE BORROWER
UNDER THIS SECTION 11.2 SHALL SURVIVE THE REPAYMENT OF THE LOANS AND OTHER
OBLIGATIONS AND TERMINATION OF THE TERM LOANS COMMITMENT.
Section 11.3 Limitation of Liability. Neither the Lender nor any
-----------------------
Affiliate, officer, director, employee, attorney or agent thereof shall be
liable for any error of judgment or act done in good faith in relation to this
Agreement or the other Loan Documents, or be otherwise liable or responsible
under any circumstances whatsoever (including such Person's negligence), except
for such Person's gross negligence or willful misconduct. Neither the Lender nor
any Affiliate, officer, director, employee, attorney or agent thereof shall have
any liability with respect to, and the Borrower hereby waives, releases and
agrees not to xxx any of them upon, any claim for any special, indirect,
incidental or consequential damages suffered or incurred by the Borrower or any
Affiliate of the Borrower in connection with, arising out of or in any way
related to this Agreement or any of the other Loan Documents, or any of the
transactions contemplated by this
36
Agreement or any of the other Loan Documents. The Borrower hereby waives,
releases and agrees not to xxx the Lender or any of its Affiliates, officers,
directors, employees, attorneys or agents for exemplary or punitive damages in
respect of any claim in connection with, arising out of or in any way related to
this Agreement or any of the other Loan Documents, or any of the transactions
contemplated by this Agreement or any of the other Loan Documents. For the
avoidance of doubt, the foregoing shall not operate to release the Lender in its
capacity as the Vendor from any of its obligations, liabilities, agreements,
indemnities and duties under the Project Contract.
Section 11.4 No Duty. All attorneys, accountants, appraisers and other
-------
professional Persons and consultants retained by the Lender shall have the right
to act exclusively in the interest of the Lender and shall have no duty of
disclosure, duty of loyalty, duty of care or other duty or obligation of any
type or nature whatsoever to the Borrower or any of its Affiliates or any other
Person.
Section 11.5 No Fiduciary Relationship. The relationship between the
-------------------------
Borrower and the Lender under this Agreement is solely that of debtor and
creditor, and the Lender has no fiduciary or other special relationship with the
Borrower or any of its Affiliates by virtue of this Agreement, and no term or
condition of this Agreement shall be construed so as to deem the relationship
between the Borrower and the Lender, or such Affiliate and the Lender, to be
other than that of debtor and creditor. No joint venture or partnership is
created by this Agreement or the Loan Documents between the Borrower or any of
its Affiliates and the Lender.
Section 11.6 Equitable Relief. The Borrower recognizes that, in the event
----------------
it fails to pay, perform, observe or discharge any or all of the Obligations,
any remedy at law may prove to be inadequate relief to the Lender. The Borrower
therefore agrees that the Lender, if the Lender so requests, shall be entitled
to temporary and permanent injunctive relief in any such case without the
necessity of proving actual damages.
Section 11.7 No Waiver; Cumulative Remedies. No failure on the part of
------------------------------
the Lender to exercise and no delay in exercising, and no course of dealing with
respect to, any right, power or privilege under this Agreement or any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege under this Agreement or any other Loan
Document preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies provided for in this
Agreement and the other Loan Documents are cumulative and not exclusive of any
rights and remedies provided by law.
Section 11.8 Successors and Assigns.
----------------------
(a) This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. Except to the
extent provided in Section 9.2, the Borrower may not assign or transfer any of
its rights or obligations under this Agreement or any other Loan Document
without the prior written consent of the Lender. The Lender may sell
participations in all or a portion of its rights and obligations under this
Agreement and the other Loan Documents (including, without limitation, all or a
portion of the Term Loans Commitment and the Term Loans owing to it); provided,
however, that (i) the Lender's obligations under this Agreement and the other
Loan Documents (including, without limitation, the Term Loans Commitment) shall
remain unchanged, (ii) the Lender shall remain solely responsible to the
Borrower for the performance of such obligations and (iii) the Borrower shall
continue to deal solely and directly with the Lender in connection with the
Lender's rights and obligations under this Agreement and the other Loan
Documents.
(b) The Borrower and the Lender agree that the Lender may at any time
assign to one or more Eligible Assignees all, or a proportionate part of all, of
its rights and/or obligations under this Agreement and the other Loan Documents
(including, without limitation, the Term Loans Commitment and/or Loans) (each an
"Assignee"); provided, however, that (i) each such assignment may be of a
--------
varying percentage of the Lender's rights and/or obligations under this
Agreement and the other Loan Documents and may relate to some but not all of
such rights and/or obligations, (ii) except in the case of an assignment of all
of the Lender's rights and obligations under this Agreement and the other Loan
Documents, the amount of the Term Loans Commitment and/or Loans being assigned
pursuant to each assignment (determined as of the date of the Assignment and
Acceptance with respect to such assignment) shall in no event be less than the
lesser of an amount equal to $750,000 calculated based upon the aggregate
amount of the Term Loans Commitment and/or Loans assigned, (iii) the parties to
each such assignment shall execute and record in the Register (as defined
below), an Assignment and Acceptance and (iv) no assignment shall result in the
Borrower having greater liabilities under the Loan Documents than would have
been the case had no such assignment occurred. Upon such execution and
recording, from and after the effective date specified in each Assignment and
Acceptance, which effective date shall be at least five Business Days after the
execution
37
thereof or such other date as the Lender may determine, (1) the Assignee
thereunder shall automatically become a party hereto and references herein to
the Lender, to the extent that rights and obligations hereunder have been
assigned to such Assignee pursuant to such Assignment and Acceptance, also refer
to such Assignee and such Assignee shall have the rights and obligations of the
Lender hereunder and under the Loan Documents, and (2) the Lender thereunder
shall, to the extent that rights and obligations hereunder have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement and the other Loan Documents
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of the Lender's rights and obligations under the Loan Documents, the
Lender shall cease to be a party thereto, provided that the Lender's rights
under Article 4, Section 11.1 and Section 11.2 accrued through the date of
assignment shall continue). Notwithstanding anything to the contrary contained
in this Section 11.8, the Lender will not assign any of the Term Loans
Commitment or Loans in accordance with this Section 11.8(b) until the earliest
to occur of (x) May 31, 2001, (y) the date upon which Term Loans aggregating at
least $1,000,000.00 in principal amount have been advanced to the Borrower or
(z) the occurrence of an Event of Default. The Borrower will provide full and
prompt assistance to the Lender as it may reasonably request from time to time
in connection with the Lender's efforts to assign the Term Loans Commitment
and/or Loans or sell any participation interest thereinwith each party bearing
its own expense in connection with the matter. Such assistance shall include,
without limitation, making senior officers of the Borrower available for
meetings with prospective Assignees and participants and providing (in a timely
manner) such assistance as may be reasonably requested by the Lender and/or its
advisors, including, without limitation, providing information to and responding
to inquiries from such prospective Assignees and participants with respect to
the businesses, operations, business plan, financial condition and results of
operations of the Borrower and its Subsidiaries.
(c) By executing and delivering an Assignment and Acceptance, the Lender
and the Assignee thereunder confirm to and agree with each other and the other
parties hereto as follows: (i) other than as provided in such Assignment and
Acceptance, the Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Loan Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Documents or any other instrument or document furnished pursuant thereto; (ii)
the Lender makes no representation or warranty and assumes no responsibility
with respect to the financial condition or results of operations of the Borrower
or any of its Affiliates or the performance or observance by the Borrower or any
of its Affiliates of its obligations under the Loan Documents; (iii) such
Assignee confirms that it has received a copy of the Loan Documents, together
with copies of the financial statements referred to in Section 7.7 and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance; (iv)
such Assignee will, independently and without reliance upon the Lender and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement and the other Loan Documents; (v) such Assignee confirms that it
is an Eligible Assignee; (vi) such Assignee appoints and authorizes the Lender
to take such action as agent on its behalf and exercise such powers under the
Loan Documents as are delegated to the Lender by the terms thereof, together
with such powers as are reasonably incidental thereto; and (vii) such Assignee
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be
performed by it as a lender hereunder, and without limiting the generality of
the foregoing, acknowledges and agrees to be bound by Section 10.8(b)(iv).
(d) The Lender shall maintain at the Principal Office a copy of each
Assignment and Acceptance and a register for the recordation of the names and
addresses of the Assignees and the principal amount of the Term Loans owing to
the Lender (the "Register"). The entries in the Register shall be conclusive
--------
and binding for all purposes, absent manifest error, and the Borrower, and each
Person whose name is recorded in the Register may be treated as a lender
hereunder for all purposes under the Loan Documents. The Register shall be
available for inspection by the Borrower or any lender at any reasonable time
and from time to time upon reasonable prior notice. For purposes of Section
11.08(c) and this Section 11.08(d), the term "lender" means any assignee
assuming any of the rights, privileges or obligations of the Lender hereunder.
(e) Upon due execution of an Assignment and Acceptance, executed by the
Lender and Assignee representing that it is an Eligible Assignee, and due
delivery of such Assignment and Acceptance, the Lender shall record the
information contained therein in the Register, and give prompt written notice
thereof to the Borrower.
38
(f) The Lender may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 11.8, disclose to
the Assignee or participant or proposed Assignee or participant any information
relating to the Borrower or any of its Affiliates furnished to the Lender by or
on behalf of the Borrower or any of its Affiliates; provided that each such
actual or proposed Assignee or participant shall agree to be bound by the
provisions of Section 11.20.
(g) The Lender may assign and pledge any Loan held by it to any Federal
Reserve Bank or the U.S. Treasury as collateral security pursuant to Regulation
A of the Board of Governors of the Federal Reserve System and any operating
circular issued by such Federal Reserve System and/or Federal Reserve Bank;
provided, however, that any payment made by the Borrower for the benefit of the
Lender in accordance with the terms of the Loan Documents shall satisfy the
Borrower's obligations under the Loan Documents in respect thereof to the extent
of such payment. No such assignment and/or pledge shall release the Lender from
its obligations hereunder.
Section 11.9 Survival. All representations and warranties made or deemed
--------
made in this Agreement or any other Loan Document or in any document, statement
or certificate furnished in connection with this Agreement shall survive the
execution and delivery of this Agreement and the other Loan Documents and the
making of the Loans, and no investigation by the Lender or any closing shall
affect the representations and warranties or the right of the Lender to rely
upon them. Without prejudice to the survival of any other obligation of the
Borrower hereunder, the obligations of the Borrower under Article 4 and Sections
11.1 and 11.2 shall survive repayment of the Term Loans and the Reimbursement
Obligations and the other Obligations.
Section 11.10 ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN
----------------
DOCUMENTS REFERRED TO HEREIN EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE
PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, TERM SHEETS,
AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL,
RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS
OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES
HERETO.
Section 11.11 Amendments. No amendment or waiver of any provision of this
----------
Agreement or any other Loan Document to which the Borrower is a party, nor any
consent to any departure by the Borrower therefrom, shall in any event be
effective unless the same shall be agreed or consented to by the Lender and the
Borrower in writing, and each such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.
Section 11.12 Maximum Interest Rate.
---------------------
(a) No interest rate specified in this Agreement or any other Loan
Document shall at any time exceed the Maximum Rate. If at any time the interest
rate for any Obligation (the "Contract Rate") shall exceed the Maximum Rate,
-------------
thereby causing the interest accruing on such Obligation to be limited to the
Maximum Rate, then any subsequent reduction in the Contract Rate for such
Obligation shall not reduce the rate of interest on such Obligation below the
Maximum Rate until the aggregate amount of interest accrued on such Obligation
equals the aggregate amount of interest which would have accrued on such
Obligation if the Contract Rate for such Obligation had at all times been in
effect.
(b) Notwithstanding anything to the contrary contained in this Agreement
or the other Loan Documents, none of the terms and provisions of this Agreement
or the other Loan Documents shall ever be construed to create a contract or
obligation to pay interest at a rate in excess of the Maximum Rate; and Lender
shall not charge, receive, take, collect, reserve or apply, as interest on the
Obligations, any amount in excess of the Maximum Rate. The parties hereto agree
that any interest, charge, fee, expense or other obligation provided for in this
Agreement or in the other Loan Documents which constitutes interest under
applicable law shall be, ipso facto and under any and all circumstances, limited
or reduced to an amount equal to the lesser of (i) the amount of such interest,
charge, fee, expense or other obligation that would be payable in the absence of
this Section 11.12(b) or
39
(ii) an amount, which when added to all other interest payable under this
Agreement and the other Loan Documents, equals the Maximum Rate. If,
notwithstanding the foregoing, the Lender ever contracts for, charges, receives,
takes, collects, reserves or applies as interest any amount in excess of the
Maximum Rate, such amount which would be deemed excessive interest shall be
deemed a partial payment or prepayment of principal of the Obligations and
treated hereunder as such; and if the Obligations, or applicable portions
thereof, are paid in full, any remaining excess shall promptly be paid to the
Borrower. In determining whether the interest paid or payable, under any
specific contingency, exceeds the Maximum Rate, the Borrower, and the Lender
shall, to the maximum extent permitted by applicable law, (i) characterize any
non-principal payment as an expense, fee or premium rather than as interest,
(ii) exclude voluntary prepayments and the effects thereof, and (iii) amortize,
prorate, allocate and spread in equal or unequal parts the total amount of
interest throughout the entire contemplated term of the Obligations, or
applicable portions thereof, so that the interest rate does not exceed the
Maximum Rate at any time during the term of the Obligations; provided that, if
the unpaid principal balance is paid and performed in full prior to the end of
the full contemplated term thereof, and if the interest received for the actual
period of existence thereof exceeds the Maximum Rate, the Lender, as
appropriate, shall refund to the Borrower the amount of such excess and, in such
event, the Lender shall not be subject to any penalties provided by any laws for
contracting for, charging, receiving, taking, collecting, reserving or applying
interest in excess of the Maximum Rate.
Section 11.13 Notices. All notices and other communications provided for
-------
in this Agreement and the other Loan Documents to which the Borrower is a party
shall be given or made by telecopy or in writing and telecopied, mailed by
certified mail return receipt requested or delivered to the intended recipient
at the "Address for Notices" specified in Schedule 11.3 (or, with respect to a
----
Lender that becomes a party to this Agreement pursuant to an assignment made in
accordance with Section 11.8, in the Assignment and Acceptance executed by it);
or, as to any party, at such other address as shall be designated by such party
in a notice to each other party given in accordance with this Section 11.13.
Except as otherwise provided in this Agreement, all such communications shall be
deemed to have been duly given when transmitted by telecopy or personally
delivered or, in the case of a mailed notice, upon receipt, in each case given
or addressed as aforesaid.
Section 11.14 GOVERNING LAW; SUBMISSION TO JURISDICTION; SERVICE OF
-----------------------------------------------------
PROCESS. EXCEPT AS MAY BE EXPRESSLY STATED TO THE CONTRARY IN CERTAIN LOAN
-------
DOCUMENTS, THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF COLORADO (WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES) AND APPLICABLE LAWS OF THE U.S. THE BORROWER
HEREBY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF EACH OF (1) THE U.S.
DISTRICT COURT FOR THE DISTRICT OF COLORADO, AND (2) ANY COLORADO STATE COURT
SITTING IN THE CITY AND COUNTY OF DENVER, COLORADO, FOR THE PURPOSES OF ALL
LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. THE BORROWER HEREBY
IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO SUCH PERSON AT ITS
ADDRESS SET FORTH IN SCHEDULE 11.3 HERETO. THE BORROWER HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN
SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORM.
Section 11.15 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 11.16 Severability. Any provision of this Agreement held by a
------------
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Agreement and the effect thereof shall be
confined to the provision held to be invalid or illegal.
Section 11.17 Headings. The headings, captions and arrangements used in
--------
this Agreement are for convenience only and shall not affect the interpretation
of this Agreement.
40
Section 11.18 Construction. The Borrower and the Lender each acknowledge
------------
that it has had the benefit of legal counsel of its own choice and has been
afforded an opportunity to review this Agreement and the other Loan Documents
with its legal counsel and that this Agreement and the other Loan Documents
shall be construed as if jointly drafted by the parties hereto.
Section 11.19 Independence of Covenants. All covenants hereunder shall be
-------------------------
given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or be otherwise within the limitations of, another covenant shall
not avoid the occurrence of a Default if such action is taken or such condition
exists.
Section 11.20 [Intentionally Omitted]
Section 11.21 WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY
--------------------
APPLICABLE LAW, EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND EXPRESSLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO
ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY OR THE
ACTIONS OF THE BORROWER, THE LENDER IN THE NEGOTIATION, ADMINISTRATION OR
ENFORCEMENT THEREOF.
Section 11.22 Approvals and Consent. Except as may be expressly provided
---------------------
to the contrary in this Agreement or in the other Loan Documents (as
applicable), in any instance under this Agreement of the other Loan Documents
where the approval, consent or exercise of judgment of the Lender is requested
or required, (a) the granting or denial of such approval or consent and the
exercise of such judgment shall be within the sole discretion of the Lender,
respectively, and the Lender shall not, for any reason or to any extent, be
required to grant such approval or consent or to exercise such judgment in any
particular manner, regardless of the reasonableness of the request or the action
or judgment of the Lender, and (b) no approval or consent of the Lender shall in
any event be effective unless the same shall be in writing and the same shall be
effective only in the specific instance and for the specific purpose for which
given.
Section 11.23 Agent for Services of Process. The Borrower irrevocably
-----------------------------
consents to the service of process by the mailing thereof by the Lender by
registered or certified mail, postage prepaid, to the Borrower at its address
listed on the address for notices in Schedule __ hereof. The Borrower further
agrees that the failure of the actual recipient of such service of process to
give any notice of any such service of process to the Borrower shall not impair
or affect the validity of such service or of any judgment based thereon.
Nothing in this Section 11.23 shall affect the right of the Lender to serve
legal process in any other manner permitted by law or affect the right of the
Lender to bring any action or proceeding against the Borrower or its Property in
the court of any jurisdiction.
Signature page follows
----------------------
41
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
BORROWER:
EARTHWATCH INCORPORATED
By: /s/ Xxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
LENDER:
BALL AEROSPACE & TECHNOLOGIES CORP.
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: SVP of Ball Aerospace & Technologies Corp.
42
Schedule 11.3
Address for Notices:
-------------------
Borrower:
EarthWatch Incorporated
0000 Xxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000-0000
Telecopy No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxx Xxxxxxxx
Lender:
Ball Aerospace & Technologies Corp.
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Telecopy No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: President
with a copy of such notice to:
Ball Aerospace & Technologies Corp.
Ball Corporate Headquarters - Law Department
00 Xxxxx Xxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Telecopy No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: General Counsel
43
