Exhibit 10.1
AMENDED AND RESTATED CREDIT AGREEMENT
among
LORAL SPACECOM CORPORATION,
THE BANKS PARTIES HERETO,
BANK OF AMERICA, N.A.,
as Administrative Agent,
Dated as of December 21, 0000
XXXX XX XXXXXXX SECURITIES LLC
and
DEUTSCHE BANC ALEX. XXXXX INC.,
as Co-Lead Arrangers,
and
BANC OF AMERICA SECURITIES LLC,
DEUTSCHE BANC ALEX. XXXXX INC.,
and
CREDIT LYONNAIS,
as Joint Book Running Managers
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS............................................................................................1
1.1 Defined Terms...................................................................................1
1.2 Other Definitional Provisions..................................................................19
SECTION 2. AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENTS.....................................................20
2.1 Commitments....................................................................................20
2.2 Revolving Credit Notes.........................................................................20
2.3 Procedure for Borrowing........................................................................21
SECTION 3. AMOUNT AND TERMS OF TERM LOAN COMMITMENTS............................................................21
3.1 The Term Loans.................................................................................21
3.2 Procedure for Term Loan Borrowing..............................................................21
3.3 Repayment of Term Loans; Evidence of Debt......................................................22
SECTION 4. SYNDICATED LETTERS OF CREDIT.........................................................................23
4.1 Issuance of Syndicated Letters of Credit.......................................................23
4.2 Participating Interests in Syndicated Letters of Credit........................................24
4.3 Procedure for Opening Syndicated Letters of Credit.............................................24
4.4 Payments in Respect of Syndicated Letters of Credit............................................24
4.5 Syndicated Letter of Credit Fees...............................................................25
4.6 Syndicated Letter of Credit Reserves...........................................................26
4.7 [Intentionally Omitted]........................................................................27
4.8 [Intentionally Omitted]........................................................................27
4.9 [Intentionally Omitted]........................................................................27
4.10 [Intentionally Omitted]........................................................................27
4.11 Further Assurances.............................................................................27
4.12 Obligations Absolute...........................................................................27
4.13 Assignments....................................................................................28
4.14 Participations.................................................................................28
4.15 Determination of Dollar Equivalent.............................................................28
SECTION 5. GENERAL PROVISIONS..................................................................................28
5.1 Fees...........................................................................................28
5.2 Voluntary Termination or Reduction of Revolving Credit Commitments.............................29
5.3 Interest Rates and Payment Dates...............................................................29
5.4 Computation of Interest and Fees...............................................................29
5.5 Inability to Determine Interest Rate...........................................................30
5.6 Pro Rata Treatment and Payments................................................................30
5.7 Illegality.....................................................................................32
5.8 Requirements of Law............................................................................33
5.9 Taxes..........................................................................................34
5.10 Indemnity......................................................................................36
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5.11 Change in Lending Office.......................................................................36
5.12 Optional Prepayments...........................................................................36
5.13 Mandatory Prepayments..........................................................................37
5.14 Conversion and Continuation Options............................................................38
5.15 Minimum Amounts of Tranches....................................................................39
SECTION 6. REPRESENTATIONS AND WARRANTIES.......................................................................39
6.1 Financial Condition............................................................................39
6.2 No Change......................................................................................40
6.3 Corporate Existence; Compliance with Law.......................................................41
6.4 Corporate Power; Authorization; Enforceable Obligations........................................41
6.5 No Legal Bar...................................................................................41
6.6 No Material Litigation.........................................................................42
6.7 No Default.....................................................................................42
6.8 Ownership of Property; Liens...................................................................42
6.9 Intellectual Property..........................................................................42
6.10 Federal Regulations............................................................................42
6.11 Investment Company Act; Other Regulations......................................................43
6.12 Subsidiaries...................................................................................43
6.13 Purpose of Loans...............................................................................43
6.14 Environmental Matters..........................................................................43
6.15 Solvency.......................................................................................44
6.16 Collateral Documents...........................................................................44
6.17 Disclosure.....................................................................................45
SECTION 7. CONDITIONS PRECEDENT................................................................................45
7.1 Conditions to Effectiveness; Initial Extensions of Credit......................................45
7.2 Conditions to Each Extension of Credit.........................................................48
7.3 Conditions Subsequent to Closing...............................................................49
SECTION 8. AFFIRMATIVE COVENANTS................................................................................49
8.1 Financial Statements...........................................................................49
8.2 Certificates; Other Information................................................................50
8.3 Payment of Obligations.........................................................................51
8.4 Conduct of Business and Maintenance of Existence...............................................52
8.5 Maintenance of Property; Insurance.............................................................52
8.6 Inspection of Property; Books and Records; Discussions; Independent
Audits.........................................................................................52
8.7 Notices........................................................................................52
8.8 Environmental Laws.............................................................................53
8.9 Additional Subsidiaries........................................................................54
8.10 Collateral Interests...........................................................................55
SECTION 9. NEGATIVE COVENANTS...................................................................................55
9.1 Financial Condition Covenants..................................................................56
9.2 Limitation on Indebtedness.....................................................................56
9.3 Limitation on Liens............................................................................57
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9.4 [Intentionally Omitted]........................................................................59
9.5 Limitations on Fundamental Changes.............................................................59
9.6 Limitation on Sale of Assets...................................................................60
9.7 Limitation on Dividends........................................................................61
9.8 Limitation on Investments, Loans and Advances..................................................61
9.9 Transactions with Affiliates...................................................................62
9.10 Restrictions on Actions Relating to the Management Fee Note and LSCC
Secured Note and the CyberStar Receivable......................................................63
9.11 Restrictions on Indebtedness to Parent or Loral................................................63
SECTION 10. EVENTS OF DEFAULT...................................................................................63
SECTION 11. THE ADMINISTRATIVE AGENT............................................................................67
11.1 Appointment....................................................................................67
11.2 Delegation of Duties...........................................................................67
11.3 Exculpatory Provisions.........................................................................67
11.4 Reliance by Administrative Agent...............................................................67
11.5 Notice of Default..............................................................................68
11.6 Non-Reliance on Administrative Agent and Other Banks...........................................68
11.7 Indemnification................................................................................69
11.8 Administrative Agent in Its Individual Capacity................................................69
11.9 Successor Administrative Agent.................................................................69
11.10 Issuing Bank...................................................................................70
11.11 Intercreditor Agreement........................................................................70
SECTION 12. MISCELLANEOUS.......................................................................................70
12.1 Amendments and Waivers.........................................................................70
12.2 Notices........................................................................................71
12.3 No Waiver; Cumulative Remedies.................................................................72
12.4 Survival of Representations and Warranties.....................................................72
12.5 Payment of Expenses and Taxes..................................................................72
12.6 Successors and Assigns; Participations; Purchasing Banks.......................................73
12.7 Adjustments; Set-off...........................................................................76
12.8 Confidentiality................................................................................77
12.9 Counterparts...................................................................................77
12.10 Severability...................................................................................77
12.11 Integration....................................................................................77
12.12 GOVERNING LAW..................................................................................77
12.13 Submission To Jurisdiction; Waivers............................................................77
12.14 Acknowledgements...............................................................................78
12.15 WAIVERS OF JURY TRIAL..........................................................................78
12.16 Compliance with Department of Defense Regulations..............................................78
12.17 Consent to Amendment and Restatement...........................................................80
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SCHEDULES
1.1A - Addresses for Notice; Commitments
4.1 - Existing Letters of Credit
6.1 - Material Changes
6.6 - Litigation
6.8 - Indebtedness; Liens
6.9 - Intellectual Property
6.12 - Subsidiaries
6.14 - Environmental Matters
8.10 Palo Alto Property
9.1 Financial Covenants
9.8 - Loans and Investments
9.9 - Certain Agreements
EXHIBITS
A-1 - Revolving Credit Note
A-2 - Term Note
B - Commitment Transfer Supplement
C - L/C Participation Certificate
D - [Intentionally Omitted]
E - Form of Guarantee Agreement
F - Form of Intercreditor Agreement
G Form of Request for Extension of Credit
H Form of Management Fee Note
I Form of LSCC Secured Note
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AMENDED AND RESTATED CREDIT AGREEMENT, dated as of December 21, 2001
among LORAL SPACECOM CORPORATION, a Delaware corporation (the "Borrower"), the
several banks and other financial institutions from time to time parties to this
Agreement (the "Banks") and BANK OF AMERICA, N.A., as administrative agent for
the Banks (in such capacity, the "Administrative Agent") and as Issuing Bank.
W I T N E S S E T H :
WHEREAS, an $850 million credit facility was established in favor of
the Borrower pursuant to the terms of that Amended and Restated Credit and
Participation Agreement dated as of November 14, 1997 (as amended and modified,
the "Existing Credit Agreement") among the Borrower, Space Systems/Loral, Inc.,
as Delaware corporation, the banks and financial institutions identified
therein, and Bank of America National Trust and Savings Association, a national
banking association now known as Bank of America, N.A., as Administrative Agent;
WHEREAS, the Borrower has requested certain modifications to the
Existing Credit Agreement;
WHEREAS, the Banks have agreed to the requested modifications on the
terms and conditions set forth herein providing for, among other things, a $600
million credit facility consisting of a $200 million revolving credit facility
and a $400 million term loan facility;
WHEREAS, the parties intend for this Agreement to be given in amendment
to, restatement of, and replacement for the Existing Credit Agreement;
NOW, THEREFORE, IN CONSIDERATION of the premises and the mutual
covenants herein contained, the Borrower, the Banks and the Administrative Agent
hereby agree, effective as of the Closing Date, to amend and restate the
Existing Credit Agreement as follows:
SECTION 1.
DEFINITIONS
1.1 Defined Terms.
As used in this Agreement, the following terms shall have the following
meanings:
"Affiliate": with respect to any Person (a) any Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is controlled by,
or is under common control with such Person, or (b) any Person who is a director
or officer (i) of such Person, (ii) of any Subsidiary of such Person or (iii) of
any Person described in clause (a) above. For purposes of this definition,
control of a Person shall mean the power, direct or indirect, (i) to vote 15% or
more of the securities having ordinary voting power for the election of
directors of such Person, or (ii) to direct or cause the direction of the
management and policies of such Person whether by contract or otherwise.
"Agreement": this Amended and Restated Revolving Credit Agreement, as
amended, supplemented or otherwise modified from time to time.
"Applicable Level": as of any day, Xxxxx 0, Xxxxx 0, Xxxxx 0, Xxxxx 0,
Xxxxx 5 or Level 6 below, whichever is applicable on such day, with each new
Level to take effect on the day following the delivery to the Administrative
Agent by the Borrower of the financial statements referred to in subsections
8.1(a) or (b) and the related certificates of the chief financial officer of the
Borrower referred to in subsection 8.2 (or in the case of annual financial
statements, unaudited financial statements and certificates otherwise complying
with subsections 8.1(a) and 8.2 delivered solely for purposes of determining the
Applicable Level), indicating the ratio of Consolidated Funded Debt as of the
end of the period covered by such financial statements to Consolidated EBITDA
for the four consecutive fiscal quarters ending on the last day of the period
covered by such financial statements:
Ratio of Consolidated Funded Debt to
Consolidated EBITDA
Xxxxx 0 X/X
Xxxxx 0 Less than or equal to 2.50 to 1.00
Level 3 Greater than 2.50 to 1.00 but less than or equal to 3.00 to 1.00
Level 4 Greater than 3.00 to 1.00 but less than or equal to 3.50 to 1.00
Level 5 Greater than 3.50 to 1.00 but less than or equal to 4.00 to 1.00
Level 6 Greater than 4.00 to 1.00
provided, however, that, (x) in the event that the financial statements required
to be delivered pursuant to subsection 8.1(a) or 8.1(b) and the related
certificates of the chief financial officer of the Borrower referred to in
subsection 8.2(b) are not delivered when due, then during the period from the
date upon which such financial statements and certificate were required to be
delivered until the date upon which they actually are delivered, the Applicable
Level shall be Xxxxx 0, (y) from the Closing Date to and including September 30,
2002, the Applicable Level shall be Level 1 and (z) commencing October 1, 2002
the Applicable Level shall be determined based on the ratio of Consolidated
Funded Debt as of the end of the applicable fiscal quarter to Consolidated
EBITDA for the four consecutive fiscal quarters ending on June 30, 2002 and
thereafter the Applicable Level shall be determined at the time of delivery of
the quarterly and annual financial statements referred to above.
"Applicable Margin": with respect to each day per annum for the
relevant Type of Loan set forth below opposite the Applicable Level in effect on
such day:
Applicable Applicable Applicable
Applicable Eurodollar Rate Base Rate Non-Use
Level Margin Margin Margin
----- ------ ------ ------
Xxxxx 0 2.25% 1.25% 0.500%
Xxxxx 0 2.00% 1.00% 0.375%
Xxxxx 0 2.25% 1.25% 0.375%
Xxxxx 0 2.50% 1.50% 0.500%
Xxxxx 0 2.75% 1.75% 0.500%
Xxxxx 0 3.25% 2.25% 0.500%
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In the event the outstanding principal balance of the Term Loan on December 31,
2003 shall be $300 million or more, then thereafter the Applicable Eurodollar
Rate Margin and the Applicable Base Rate Margin hereunder for all Loans will be
increased by fifty basis points (0.50%) across all Applicable Levels.
"Appraised Value": as to any satellite, the value of such satellite as
determined from time to time by an Approved Appraiser. The Appraised Value of
any satellite determined after the Closing Date shall be determined using the
same valuation methods employed by an Approved Appraiser prior to the Closing
Date, unless otherwise agreed by the Administrative Agent.
"Approved Appraiser": Ascent, The Communications Center or any
qualified appraiser reasonably acceptable to the Administrative Agent.
"Approved Foreign Currencies": foreign currencies which are freely
convertible into Dollars and approved by the Issuing Bank in writing.
"Ascent": Ascent Communications, Inc.
"Available Revolving Credit Commitment": as to any Revolving Credit
Bank, at a particular time, an amount equal to such Bank's Revolving Credit
Commitment Percentage of the excess, if any, of (a) the aggregate Revolving
Credit Commitments at such time over (b) the aggregate outstanding principal
amount of the Revolving Credit Loans and Revolving Credit Letters of Credit
Obligations at such time; collectively, as to all the Banks, the "Available
Revolving Credit Commitments".
"Bank of America": Bank of America, N.A., it successors and assigns.
"Base Rate": for any day, the higher of:
(a) the rate of interest publicly announced from time to time
by Bank of America in Charlotte, North Carolina, as its "reference
rate." It is a rate set by Bank of America based upon various factors
including Bank of America's costs and desired return, general economic
conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below such
announced rate; or
(b) one-half percent per annum above the Federal Funds Rate
for such day.
Any change in the reference rate announced by Bank of America shall
take effect at the opening of business on the day specified in the public
announcement of such change.
"Base Rate Loans": Loans the rate of interest applicable to which is
based upon the Base Rate.
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"Business Day": a day other than a Saturday, Sunday or other day on
which commercial banks in Charlotte, North Carolina are authorized or required
by law to close.
"Capital Expenditure": any payment made directly or indirectly for the
purpose of acquiring or constructing fixed assets, real property or equipment,
which in accordance with GAAP would be added to the fixed asset account of the
Person making such expenditure.
"Capital Stock": any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person (other than a corporation) and any
and all warrants or options to purchase any of the foregoing.
"Cash Advances from Parent": cash advances made from Parent to Borrower
or any of its Subsidiaries that are not evidenced by a promissory note.
"Cash Equivalents": (i) securities issued or directly and fully
guaranteed or insured by the United States Government or any agency or
instrumentality thereof having maturities of not more than 12 months from the
date of acquisition, (ii) time deposits, banker's acceptances and certificates
of deposit having maturities of not more than 12 months from the date of
acquisition of (x) any Bank or (y) any domestic or foreign commercial bank
having capital and surplus in excess of $500,000,000, which has, or the holding
company of which has, a commercial paper rating meeting the requirements
specified in clause (iv) below, (iii) repurchase obligations with a term of not
more than 30 days for underlying securities of the types described in clauses
(i) and (ii) entered into with any bank meeting the qualifications specified in
clause (ii)(x) or (ii)(y) above, (iv) commercial paper rated at least A-2 or the
equivalent thereof by Standard & Poor's Ratings Group ("S&P") or P-2 or the
equivalent thereof by Xxxxx'x Investors Service, Inc. ("Moody's") and in either
case maturing within 270 days after the date of acquisition, (v) senior
corporate obligations rated at least BBB or the equivalent thereof by S&P or Baa
or the equivalent thereof by Moody's and in either case maturing within 2 years
of the date of acquisition and (vi) any money market fund registered under the
Investment Company Act of 1940, as amended, which invests solely in underlying
securities of the types described in clauses (i) through (iv) above, provided
that no more than 25% of the aggregate amount of Cash Equivalents at any time
may be rated lower than A-1 or P-1 or A- or A3, as the case may be.
"Change in Control": an event or series of events as a result of which
(i) any "person" (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) is or becomes
the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange
Act) of shares entitling the holder thereof to cast more than 35% of the votes
for the election of directors of Loral, (ii) at any time, Continuing Directors
do not constitute a majority of the Board of Directors, or (iii) at any time,
Loral shall cease, directly or indirectly, to own all of the outstanding capital
stock of the Borrower.
"ChinaSat Contract": Space Systems/Loral, Inc. Contract Number
97QFKE/41D1901US by and among Space Systems/Loral, Inc. as Contractor, China
National Postal and
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Telecommunications Appliances Corporation as Purchaser and China
Telecommunications Broadcast Satellite Corporation as Customer dated 21 March
1997 as amended.
"Closing Date": the date on which the conditions precedent set forth in
subsection 7.1 shall be satisfied, provided the Closing Date shall not occur if
such conditions shall not have been satisfied on or before January 31, 2002.
"Code": the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral Agent": means Bank of America, N.A., and its successors and
assigns in such capacity.
"Collateral Documents": the collective reference to the Guarantee
Agreement, the Pledge Agreement, the Security Agreement, the Mortgages and each
other security document or similar agreement, in addition to any pledge
agreement delivered in accordance with Section 8.9, that may be delivered to the
Administrative Agent in connection with the attachment and perfection of
security interests to secure the obligations of the Loan Parties under the Loan
Documents, including UCC financing statements and patent and trademark filings,
in each case as amended, supplemented or otherwise modified from time to time.
"Commercial L/C": a commercial documentary Letter of Credit under which
the Issuing Bank agrees to make payments in Dollars or Approved Foreign
Currencies for the account of the Borrower, in respect of obligations of the
Borrower in connection with the purchase of goods in the ordinary course of
business.
"Commitment": as to any Bank, the reference to its Revolving Credit
Commitment and Term Loan Commitment.
"Commitment Percentage": as to any Bank at any time, the percentage of
the aggregate Commitments then constituted by such Bank's Commitments or, if the
Commitments have been terminated, the percentage of the aggregate outstanding
amount of all Extensions of Credit then constituted by such Bank's outstanding
Extensions of Credit. For purposes of this definition, the aggregate outstanding
amount of Extensions of Credit of the Issuing Bank with respect to any
Syndicated Letter of Credit shall be the amount of the Issuing Bank's L/C
Participating Interest in such Syndicated Letter of Credit.
"Commitment Transfer Supplement": a commitment transfer supplement
substantially in the form of Exhibit B.
"Commonly Controlled Entity": an entity, whether or not incorporated,
which is under common control with the Borrower within the meaning of Section
4001 of ERISA or is part of a group which includes the Borrower and which is
treated as a single employer under Section 414 of the Code.
"Consolidated EBITDA": for any period, the revenues minus associated
expenses (excluding interest expense, the implied interest expense component of
rent incurred under
5
Synthetic Leases, income taxes, depreciation and amortization) of the Borrower
and its Subsidiaries from continuing operations for such period, determined in
each case in accordance with GAAP on a consolidated basis. For the purposes of
determining compliance with this Agreement, including pricing (i.e. determining
the Applicable Level) and calculation of financial covenants (i.e. subsections
9.1, 9.7, 9.8, 9.11), Consolidated EBITDA shall include orbital income that
would otherwise have been included in financial statements of interest income
prepared in accordance with GAAP, but shall exclude (i) any management fee
income from the Parent or Loral, (ii) any management fee income from other
Affiliates not paid in cash included in such financial statements, (iii) any
costs, penalties or charges related to (X) the settlement of the Department of
Justice or State Department investigation and/or proceedings involving alleged
export control violations by Space Systems/Loral, Inc., a Delaware corporation,
as described in Loral's Annual Report on Form 10K for the year ended December
31, 2000 or (Y) the settlement of claims against the Borrower for liabilities
with respect to electrical power losses on the PanamSat 7 satellite program;
provided that any exclusions to Consolidated EBITDA with respect to clause (iii)
above shall not exceed $40 million in the aggregate over the life of the Term
Loans, (iv) gains and losses resulting from the sale or disposition (other than
pursuant to a satellite construction contract) of those assets identified on
Schedule 9.1 at a price above or below the amount set on such schedule for any
such asset, and (v) any reduction in Consolidated EBITDA occurring as a result
of (X) any revaluation of the ChinaSat program inventory in connection with the
termination of the ChinaSat Contract or (Y) any penalty in connection with the
termination of the ChinaSat Contract; provided that, with respect to the
Globalstar Receivables Sale, any charges or write-offs associated with the
Globalstar Receivables or any gains resulting from the Globalstar Receivables
Sale in each case that are recorded or taken after October 1, 2000, shall be
disregarded for the purpose of calculating Consolidated EBITDA.
"Consolidated Funded Debt": means Funded Debt of the Borrower and its
Subsidiaries determined in accordance with GAAP on a consolidated basis.
"Consolidated Interest Expense": for any period, cash interest expense
(net of Consolidated Interest Income) of the Borrower and its Subsidiaries for
such period plus, without duplication, all fees payable hereunder in respect of
Letters of Credit for such period, all as determined on a consolidated basis in
accordance with GAAP, and the implied interest expense component of rent
incurred under Synthetic Leases, and provided that, with respect to the
Globalstar Receivables Sale, any charges or write-offs associated with the
Globalstar Receivables or any gains resulting from the Globalstar Receivables
Sale in each case that are recorded or taken after October 1, 2000, shall be
disregarded for the purpose of calculating Consolidated Interest Expense.
"Consolidated Interest Income": Interest Income for the Borrower and
its Subsidiaries determined in accordance with GAAP on a consolidated basis.
"Consolidated Net Income": for any period, the amount which, in
conformity with GAAP, would be set forth opposite the caption "net income or
loss" (or any like caption) on a consolidated income statement of the Borrower
and its Subsidiaries for such period; provided that there shall be excluded from
Consolidated Net Income (i) any management fee income from the Parent or Loral,
(ii) any management fee income from other Affiliates not paid in cash
6
included in such financial statements, (iii) any costs, penalties or charges
related to (X) the settlement of the Department of Justice or State Department
investigation and/or proceedings involving alleged export control violations by
Space Systems/Loral, Inc., a Delaware corporation, as described in Loral's
Annual Report on Form 10K for the year ended December 31, 2000 or (Y) the
settlement of claims against the Borrower for liabilities with respect to
electrical power losses on the PanamSat 7 satellite program; provided that any
exclusions to Consolidated Net Income with respect to clause (iii) above shall
not exceed $40 million in the aggregate over the life of the Term Loans, (iv)
gains and losses resulting from the sale or disposition (other than pursuant to
a satellite construction contract) of those assets identified on Schedule 9.1 at
a price above or below the amount set on such schedule for any such asset, (v)
any reduction in Consolidated Net Income occurring as a result of (X) any
revaluation of the ChinaSat program inventory in connection with the termination
of the ChinaSat Contract or (Y) any penalty in connection with the termination
of the ChinaSat Contract, and (vi) without duplication, all items that would be
classified under GAAP as "extraordinary gains or losses".
"Consolidated Net Worth": at a particular date, all amounts which would
be included under shareholders' equity on a consolidated balance sheet of the
Borrower and its Subsidiaries determined on a consolidated basis in accordance
with GAAP as at such date; provided that there shall be excluded from the
calculation of Consolidated Net Worth (i) any management fee income from the
Parent or Loral paid or accrued after December 31, 2001, (ii) any management fee
income from other Affiliates not paid in cash and accrued after December 31,
2001, (iii) any costs, penalties or charges related to (X) the settlement of the
Department of Justice or State Department investigation and/or proceedings
involving alleged export control violations by Space Systems/Loral, Inc., a
Delaware corporation, as described in Loral's Annual Report on Form 10K for the
year ended December 31, 2000 or (Y) the settlement of claims against the
Borrower for liabilities with respect to electrical power losses on the PanamSat
7 satellite program; provided that any exclusions with respect to clause (iii)
above shall not exceed $40 million in the aggregate over the life of the Term
Loans, (iv) gains and losses resulting from the sale or disposition (other than
pursuant to a satellite construction contract) of those assets identified on
Schedule 9.1 at a price above or below the amount set on such schedule for any
such asset, (v) any reduction in Consolidated Net Worth occurring as a result of
(X) any revaluation of the ChinaSat program inventory in connection with the
termination of the ChinaSat Contract or (Y) any penalty in connection with the
termination of the ChinaSat Contract, and (vi) without duplication, all items
that would be classified under GAAP as "extraordinary gains or losses".
"Continuing Director": the directors of Loral on the Closing Date and
each other director, if, in each case, such other director's nomination for
election to the Board of Directors is recommended by at least a majority of the
then Continuing Directors.
"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"CyberStar Receivables": all amounts of Indebtedness owing by Loral
CyberStar, Inc. to the Borrower, including amounts due under the 10%
Subordinated Note due 2006 in the
7
principal amount of $29,700,000 to be issued by Loral CyberStar, Inc. to the
Borrower in connection with the Exchange Offer.
"Default": any of the events specified in Section 10, whether or not
any requirement for the giving of notice, the lapse of time, or both, or any
other condition, has been satisfied.
"Determination Date": as defined in subsection 4.15.
"Dollar Equivalent": as of any Determination Date, the equivalent in
Dollars which the amount available to be drawn under any Syndicated Letter of
Credit issued in an Approved Foreign Currency or the amount of any drawing
thereunder would be converted into at such time at the relevant Exchange Rate,
as determined by the Administrative Agent pursuant to subsection 4.15.
"Dollars" and "$": dollars in lawful currency of the United States of
America.
"Domestic Subsidiary": any Subsidiary that is incorporated or organized
under the laws of any State of the United States of America or the District of
Columbia.
"Environmental Laws": any and all Federal, state, local or municipal
laws, rules, orders, regulations, statutes, ordinances, codes, decrees or
requirements of any Governmental Authority regulating, relating to or imposing
liability or standards of conduct concerning environmental protection, including
without limitation, Hazardous Materials, as now or may at any time hereafter be
in effect.
"Equity Transaction": means, with respect to the Borrower and its
Subsidiaries, any issuance or sale of shares of its capital stock or other
equity interest, other than an issuance (i) by the Borrower to the Parent or by
a Subsidiary of the Borrower to the Borrower or to another Subsidiary of the
Borrower, (ii) in connection with a conversion of debt securities to equity, or
(iii) in connection with exercise by a present or former employee, officer or
director under a stock incentive plan, stock option plan or other equity-based
compensation plan or arrangement.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurodollar Loans": Loans the rate of interest applicable to which is
based upon the Eurodollar Rate.
"Eurodollar Rate": for any Interest Period for each Eurodollar Loan, an
interest rate per annum equal to the rate per annum at which deposits in Dollars
are offered by the principal office of the Reference Bank in London to prime
banks in the London interbank market at 11:00 A.M. (London time) two Working
Days before the first day of such Interest Period in an amount substantially
equal to the amount of the Eurodollar Loan of the Reference Bank to be
outstanding during such Interest Period and for a period equal to such Interest
Period.
8
"Eurodollar Reserve Requirements": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the rates (expressed as
a decimal fraction) of reserve requirements, if any, in effect on such day
(including, without limitation, basic, supplemental, marginal and emergency
reserves under any regulations of the Board of Governors of the Federal Reserve
System or other Governmental Authority having jurisdiction with respect thereto)
dealing with reserve requirements prescribed for Eurocurrency funding (currently
referred to as "Eurocurrency Liabilities" in Regulation D of such Board)
maintained by a member bank of such System.
"Event of Default": any of the events specified in Section 10, provided
that any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
"Excess Cash Flow": of a Person for any period, cash from operating
activities as determined in accordance with GAAP as disclosed in the statement
of cash flows less the sum of gross Capital Expenditures and net Investments
(other than Cash Equivalents), in each case, for such period; provided that,
with respect to the Globalstar Receivables Sale, any cash received in connection
with the Globalstar Receivables Sale, any charges or write-offs associated with
the Globalstar Receivables or any gains resulting from the Globalstar
Receivables Sale in each case that are recorded or taken after October 1, 2000,
shall be disregarded for the purpose of calculating Excess Cash Flow.
"Exchange Offer": the offer by Loral CyberStar, Inc. to holders of its
outstanding Senior Notes due 2007 and its Senior Discount Notes due 2007 to
exchange such notes for other securities.
"Exchange Rate": with respect to any Approved Foreign Currency, the
arithmetic mean of the spot exchange rates for the purchase of such Approved
Foreign Currency with Dollars as listed on the WRLD screen of Reuters News
Service, and if the Reuters spot exchange rates are unavailable, the Telerate
equivalent shall be used.
"Exposure": as defined in subsection 12.7(a).
"Extension of Credit": the making of any Loan by any Bank, the issuance
of, or participation in, any Letter of Credit by the Issuing Bank or any Bank;
the "aggregate outstanding amount of all Extensions of Credit" means, at any
time of determination thereof, the sum of (a) the unpaid principal amount of all
Loans at such time, (b) the aggregate amount available to be drawn under all
Letters of Credit outstanding at such time (or, in the case of any Syndicated
Letter of Credit issued in an Approved Foreign Currency, the Dollar Equivalent
thereof), and (c) the aggregate unreimbursed amount at such time of all drawings
under Letters of Credit.
"Federal Funds Rate": for any day, the rate per annum (rounded upward,
if necessary, to the nearest 1/100th of 1%) equal to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next
9
succeeding such day, provided that (i) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (ii) if no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average rate quoted to Bank of
America on such day on such transactions as determined by the Administrative
Agent.
"Financing Lease": any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance with
GAAP to be capitalized on a balance sheet of the lessee.
"Foreign Subsidiary": a Subsidiary that is not a Domestic Subsidiary.
"Funded Debt": of any person at any date (without duplication), (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services (other than current trade liabilities incurred in
the ordinary course of business) which is evidenced by a note, bond, debenture
or similar instrument, but excluding interest rate hedging agreements and
foreign exchange hedging agreements incurred to protect such person against
interest rate fluctuations or foreign exchange rate fluctuations, (b) the
portion of Financing Leases that is included on such person's balance sheet as
Indebtedness, (c) the principal portion of obligations owing under Synthetic
Leases, and (d) all Guarantee Obligations in respect of Funded Debt of another
Person. Funded Debt shall not include any indebtedness relating to vendor
financing.
"GAAP": generally accepted accounting principles in the United States
of America in effect from time to time.
"Globalstar Receivables Sale": the sale, after the declaration and
payment of the $70,000,000 dividend by the Borrower allowed under Section 9.7 of
the Existing Credit Agreement, by the Borrower to Parent of receivables having a
historical cost of at least $180,000,000 owed by Globalstar L.P. to the Borrower
for a purchase price equal to such historical cost of such receivables (provided
that at least $130,000,000 of the purchase price is payable in cash and the
remainder, if any, of such purchase price is payable in the form of a promissory
note issued by Parent to the Borrower). The Borrower shall provide notice of the
completion of the Globalstar Receivables Sale (which such notice shall evidence
the occurrence thereof for purposes hereof) to the Administrative Agent and the
Administrative Agent shall, upon request by the Borrower, acknowledge the
receipt of such notice and forward such notice to the Banks.
"Governmental Authority": any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"Ground Services": shall have the meaning given such term in Section
8.10(a).
10
"Guarantee Agreement": the Guarantee Agreement, substantially in the
form of Exhibit E, to be executed and delivered as of the Closing Date by the
Borrower and its material Domestic Subsidiaries, as the same may be amended,
supplemented or otherwise modified.
"Guarantee Obligation": as to any Person (the "guaranteeing person"),
any obligation of (a) the guaranteeing person or (b) another Person (including,
without limitation, any bank under any letter of credit) to induce the creation
of which the guaranteeing person has issued a reimbursement, counterindemnity or
similar obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness (the "primary obligations") of any other third Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, any obligation of the guaranteeing person, whether or not
contingent, (i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance or supply
funds (1) for the purchase or payment of any such primary obligation or (2) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation or (iv) otherwise to assure or hold harmless
the owner of any such primary obligation against loss in respect thereof;
provided, however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business.
"Guarantors": means the parties identified as "guarantors" under the
Guarantee Agreement, including parties which may subsequently join as
"guarantors" thereunder.
"Hazardous Materials": any hazardous materials, hazardous wastes,
hazardous constituents, hazardous or toxic substances, asbestos, petroleum
products (including crude oil or any fraction thereof), defined or regulated as
such in or under any Environmental Law.
"Indebtedness": of a Person at any date (without duplication), (a)
Funded Debt, (b) all liabilities secured by any consensual lien on any property
owned by such Person even though such Person has not assumed or otherwise become
liable for the payment thereof (but only to the extent of the value of such
property), but excluding such liabilities arising as a result of progress
payments, milestones, customer advances or similar arrangements related to
contracts incurred in the ordinary course of business, (c) reimbursement
obligations owing in respect of letters of credit and bankers' acceptances that
are not paid within three Business Days of the date such obligations are
incurred, (d) the undrawn face amount of all stand-by letters of credit and
bankers' acceptances issued or created on behalf of such Person in connection
with obligations not reflected on the balance sheet of such Person, but
excluding letters of credit and bankers' acceptances issued or created in
connection with such Person's performance under contracts in the ordinary course
of business and (e) all Guarantee Obligations in respect of Indebtedness of
another Person. Indebtedness shall not include any indebtedness relating to
vendor financing.
"Insolvency": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
11
"Intercompany Debt": as defined in subsection 6.13.
"Intercreditor Agreement": the Intercreditor and Subordination
Agreement to be dated as of the Closing Date, as amended and modified, among the
Administrative Agent, the administrative agent under the Junior Credit Agreement
(as defined therein), Bank of America, N.A., as Collateral Agent, the Borrower
and the Subsidiaries of the Borrower parties thereto, a form of which is
attached as Exhibit F.
"Interest Income": as to a Person at any date, cash interest income on
investments in the normal course of business, excluding orbital income which may
be included in such Person's financial statements prepared in accordance with
GAAP.
"Interest Payment Date": (a) as to any Base Rate Loan, the last
Business Day of each March, June, September and December to occur while such
Base Rate Loan is outstanding, (b) as to any Eurodollar Loan having an Interest
Period of three months or less, the last day of such Interest Period, and (c) as
to any Eurodollar Loan having an Interest Period longer than three months (i)
each day which is three months or a whole multiple thereof, after the first day
of such Interest Period and (ii) the last day of such Interest Period.
"Interest Period": with respect to any Eurodollar Loan:
(i) initially, the period commencing on the borrowing or
conversion date, as the case may be, with respect to such Eurodollar
Loan and ending one, two, three or six months thereafter, as selected
by the Borrower in its notice of borrowing or notice of conversion, as
the case may be, given with respect thereto; and
(ii) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such Eurodollar Loan and
ending one, two, three or six months thereafter, as selected by the
Borrower by irrevocable notice to the Administrative Agent not less
than three Working Days prior to the last day of the then current
Interest Period with respect thereto;
provided that all of the foregoing provisions relating to Interest Periods are
subject to the following:
(1) if any Interest Period pertaining to a Eurodollar Loan
would otherwise end on a day that is not a Working Day, such Interest
Period shall be extended to the next succeeding Working Day unless the
result of such extension would be to carry such Interest Period into
another calendar month in which event such Interest Period shall end on
the immediately preceding Working Day;
(2) any Interest Period that would otherwise extend beyond the
Revolving Credit Termination Date shall end on the Revolving Credit
Termination Date;
12
(3) any Interest Period pertaining to a Eurodollar Loan that
begins on the last Working Day of a calendar month shall end on the
numerically corresponding day of a calendar month unless the Interest
Period begins on a day for which there is no numerically corresponding
day in the calendar month in which the Interest Period is supposed to
end, in which case such Interest Period shall end on the last Working
Day of such calendar month; and
(4) the Borrower shall select Interest Periods so as not to
require a payment or prepayment of any Eurodollar Loan during an
Interest Period for such Loan.
"Interest Rate Agreement": any interest rate swap agreement, interest
rate cap agreement, interest rate collar agreement or other similar agreement or
arrangement designed to protect the Borrower against fluctuations in interest
rates.
"Investment": any advance, loan, extension of credit or capital
contribution to, or purchase of any stock, bonds, notes, debentures or other
securities of, or any assets constituting a business unit of, or any other
investment in, any Person or in any commodities futures or other speculation.
"Investment Grade Vendor": any vendor whose senior long term debt is
rated at least BBB or the equivalent thereof by S&P or Baa or the equivalent
thereof by Xxxxx'x.
"Issuing Bank": Bank of America.
"L/C Application": as defined in subsection 4.1.
"L/C Obligations": the obligations (whether contingent or matured) of
the Borrower to reimburse the Issuing Bank for any payments made by the Issuing
Bank under any Syndicated Letter of Credit.
"L/C Participating Interest": an undivided participating interest in
the face amount of each issued and outstanding Syndicated Letter of Credit and
the L/C Application relating thereto.
"L/C Participation Certificate": a certificate in substantially the
form of Exhibit C.
"LSCC Secured Note": that certain promissory note in the form attached
hereto as Exhibit I payable to the Borrower by the Parent and secured by the
capital stock of Loral CyberStar Data Services Corporation (and certain related
assets) as referred to therein.
"Letters of Credit": the collective reference to the Syndicated Letters
of Credit and; individually, a "Letter of Credit".
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), or preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement, any Financing Lease having substantially the
13
same economic effect as any of the foregoing, and the filing of any financing
statement under the Uniform Commercial Code or comparable law of any
jurisdiction in respect of any of the foregoing).
"Loan Documents": this Agreement, the Notes, the Guarantee Agreement,
any L/C Applications, the Intercreditor Agreement, and the Collateral Documents.
"Loan Party": the Borrower, the Parent and each Subsidiary of the
Borrower which is a party to a Loan Document.
"Loans": the collective reference to the Revolving Credit Loans and the
Term Loans.
"Loral": Loral Space & Communications Ltd., a Bermuda company, and its
successors, provided any such successor is organized in Bermuda, any State of
the United States of America or the District of Columbia, of which the Borrower
is a wholly owned indirect subsidiary.
"Loral Ecuador": shall have the meaning given such term in Section
8.10(a).
"Management Fee Note": that certain promissory note in the form
attached hereto as Exhibit H evidencing accrued management fees owing to the
Borrower by Loral through September 30, 2001.
"Material Adverse Effect": a material adverse effect on (a) the
business, operations, property, condition (financial or otherwise) or prospects
of the Borrower and its Subsidiaries taken as a whole which effect has a
material adverse effect on the ability of the Borrower to perform its
obligations under the Loan Documents, or (b) the validity or enforceability of
any of the Loan Documents or the rights or remedies of the Administrative Agent
or the Banks thereunder.
"Material Subsidiary": any Subsidiary of the Borrower which has assets
in excess of $1 million.
"Xxxxx'x": shall have the meaning provided in the definition of "Cash
Equivalents".
"Mortgaged Property": the real property which is the subject of a
Mortgage as referenced therein.
"Mortgages": those mortgages, deeds of trust, security deeds or like
instruments, as amended and modified, given to the Collateral Agent to secure
the loans and obligations hereunder and under the other Loan Documents.
"Multiemployer Plan": a Plan which is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"Notes": the collective reference to Term Notes and Revolving Credit
Notes.
14
"Obligations": the unpaid principal of and interest on the Loans, all
unpaid drawings under the Letters of Credit and all interest thereon and all
other obligations and liabilities of the Borrower to the Administrative Agent,
the Issuing Bank or the Banks, whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter incurred, which may
arise under, out of, or in connection with, any Loan Document, or any other
documents made, delivered or given in connection therewith, whether on account
of principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses (including without limitation, all reasonable fees and disbursements of
counsel to the Administrative Agent, the Issuing Bank or any Bank) or otherwise.
"Palo Alto Property": as described in Schedule 8.10.
"Parent": Loral Space & Communications Corporation, a Delaware
corporation.
"Participant": as defined in subsection 12.6(b).
"Participating Bank": with respect to any Syndicated Letter of Credit,
any Bank (other than the Issuing Bank of such Syndicated Letter of Credit) with
respect to its L/C Participating Interest in such Letter of Credit.
"Payment Sharing Notice": a written notice from any Bank informing the
Administrative Agent that an Event of Default has occurred and is continuing and
directing the Administrative Agent to allocate payments thereafter received from
the Borrower in accordance with subsection 5.6(d).
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA.
"Performance Letters of Credit": any Letter of Credit issued to support
performance of Contractual Obligations not constituting Indebtedness of the
Borrower or its Subsidiaries.
"Person": an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan which is
covered by ERISA and in respect of which the Borrower or a Commonly Controlled
Entity is (or, if such plan were terminated at such time, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Pledge Agreement": the Pledge Agreement to be executed and delivered
as of the Closing Date by the Borrower and each of the Pledgors identified
therein, as the same may be amended, supplemented or otherwise modified.
"Purchasing Banks": as defined in subsection 12.6(c).
15
"Reference Bank": Bank of America.
"Register": as defined in subsection 12.6(d).
"Regulation U": Regulation U of the Board of Governors of the Federal
Reserve System.
"Reorganization": with respect to any Multiemployer Plan, the condition
that such plan is in reorganization within the meaning of Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section 4043(b) of
ERISA, other than those events as to which the thirty day notice period is
waived under Sections .13, .14, .16, .18, .19 or .20 of PBGC Reg. 2615.
"Required Banks": at any time, (i) other than a release expressly
permitted by this Agreement, in the case of a release of a Guarantor where any
such release would not constitute a release of all or substantially all of the
Guarantors (in which case the provisions of Section 12.1(c) would apply), or a
release of collateral securing the Loans and obligations hereunder where any
such release would not constitute a release of all or substantially all of the
collateral securing the Loans and obligations hereunder (in which case the
provisions of Section 12.1(c) would apply), then Banks whose Commitment
Percentages aggregate at least 60%, and (ii) in all other cases, Banks whose
Commitment Percentages aggregate at least 51%.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Responsible Officer": with respect to any matter, each of the chief
executive officer, the president, the chief financial officer and any other
officer of the Borrower specifically designated pursuant to a resolution of the
Board of Directors or Executive Committee thereof of the Borrower or, with
respect to financial matters only, the chief financial officer of the Borrower.
"Revolving Credit Bank": each Bank having an amount greater than zero
set forth under the heading "Revolving Credit Commitment" opposite such Bank's
name on Schedule 1.1A, as amended or supplemented.
"Revolving Credit Commitment": as to any Revolving Credit Bank, the
obligation of such Bank to make Loans to, and to participate in Letters of
Credit for the account of, the Borrower hereunder in an aggregate outstanding
amount at any one time not to exceed the amount set forth opposite such Bank's
name under the heading "Revolving Credit Commitment" on Schedule 1.1A, as
amended or supplemented.
"Revolving Credit Commitment Percentage": as to any Revolving Credit
Bank at any time, the percentage of the aggregate Revolving Credit Commitments
then constituted by such Bank's Revolving Credit Commitment.
16
"Revolving Credit Commitment Period": the period from and including the
Closing Date to but not including the Revolving Credit Termination Date or such
earlier date on which the Revolving Credit Commitments shall terminate as
provided herein.
"Revolving Credit Letters of Credit": any Syndicated Letter of Credit
issued under the Revolving Credit Commitments.
"Revolving Credit Letters of Credit Obligations": the obligations
(whether contingent or matured) of the Borrower to reimburse the Issuing Bank
for any payments made by the Issuing Bank under any Letter of Credit issued
under the Revolving Credit Commitments.
"Revolving Credit Loans": as defined in subsection 2.1.
"Revolving Credit Note": as defined in subsection 2.2.
"Revolving Credit Termination Date": January 7, 2005, or such earlier
date as the Revolving Credit Commitments shall terminate as provided herein.
"Rolling Four Quarter Period": each consecutive period consisting of
four consecutive fiscal quarters of the Borrower.
"S&P": shall have the meaning provided in the definition of "Cash
Equivalents".
"Satellite Credit Facility": means the senior bank credit facility of
Loral Satellite, Inc., dated as of November 17, 2000, as amended, modified
and/or restated from time to time thereafter.
"Security Agreement": the Security Agreement to be executed and
delivered as of the Closing Date by the Borrower and each of the Grantors
identified therein, as the same may be amended, supplemented or otherwise
modified.
"Single Employer Plan": any Plan which is covered by Title IV of ERISA,
but which is not a Multiemployer Plan.
"Solvent" and "Solvency": with respect to any Person on a particular
date, that on such date, (a) the fair value of the property of such Person is
greater than the total amount of liabilities, including, without limitation,
contingent liabilities, of such Person, (b) the present fair salable value of
the assets of such Person is not less than the amount that will be required to
pay the probable liability of such Person on its debts as they become absolute
and matured, (c) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person's ability to pay as such
debts and liabilities mature, and (d) such Person is not engaged in business or
a transaction, and is not about to engage in business or a transaction, for
which such Person's property would constitute an unreasonably small capital.
17
"Special Purpose Holding Subsidiary": a Wholly Owned Subsidiary of the
Borrower formed to hold an equity interest in one or more joint ventures or
other business related to the Borrower's current business and engaging in no
other business activities.
"Standby L/C": an irrevocable letter of credit under which the Issuing
Bank agrees to make payments in Dollars or Approved Foreign Currencies for the
account of the Borrower, in respect of obligations of the Borrower incurred
pursuant to contracts made or performances undertaken or to be undertaken or
like matters relating to contracts to which the Borrower is or proposes to
become a party in the ordinary course of the Borrower's business, including,
without limiting the foregoing, for insurance purposes or in respect of advance
payments or as bid or performance bonds or for any other purpose for which a
standby letter of credit might customarily be issued.
"Subsidiary": as to any Person, a corporation, partnership or other
entity a majority of the equity ownership of which is owned, directly or
indirectly, by such Person or by one or more other Subsidiaries or by such
Person and one or more other Subsidiaries. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Borrower.
"Syndicated Letters of Credit": the collective reference to Commercial
L/Cs, Standby L/Cs and Performance Letters of Credit issued pursuant to
subsection 4.1; individually, a "Syndicated Letter of Credit".
"Synthetic Lease": any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product where such
transaction is considered borrowed money indebtedness for tax purposes but is
classified as an operating lease under GAAP.
"Term Loan": as defined in subsection 3.1.
"Term Loan Bank": each Bank having an amount greater than zero set
forth under the heading "Term Loan Commitment" opposite such Bank's name on
Schedule 1.1A, as amended or supplemented.
"Term Loan Commitment": as to any Term Loan Bank at any time, its
portion of the Term Loan to the Borrower on the Closing Date in an aggregate
amount set forth opposite such Bank's name in Schedule 1.1A, as amended or
supplemented, under the heading "Term Loan Commitment".
"Term Loan Commitment Percentage": as to any Term Loan Bank at any
time, the percentage which such Term Loan Bank's Term Loan Commitment then
constitutes of the aggregate Term Loan Commitments of all Term Loan Banks.
"Term Note": as defined in subsection 3.3(e).
00
"Xxx Xxxxxxxxxxxxxx Xxxxxx": The Communications Center with offices
located at 0000 Xxxxx Xxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000.
"Tranche": the collective reference to Eurodollar Loans the Interest
Periods with respect to all of which begin on the same date and end on the same
later date (whether or not such Loans shall originally have been made on the
same day).
"Transferee": as defined in subsection 12.6(f).
"Type": as to any Loan, its nature as a Base Rate Loan or a Eurodollar
Loan.
"Wholly Owned Subsidiary": any Subsidiary of the Borrower, the stock of
which is 100% owned, directly or indirectly, by the Borrower.
"Working Day": any Business Day on which dealings in foreign currencies
and exchange between banks may be carried on in London, England.
1.2 Other Definitional Provisions.
(a) Unless otherwise specified therein, all terms defined in this
Agreement shall have the defined meanings when used in the Notes or any
certificate or other document made or delivered pursuant hereto.
(b) Except as otherwise expressly provided herein, all accounting terms
used herein shall be interpreted, and all financial statements and certificates
and reports as to financial matters required to be delivered hereunder shall be
prepared, in accordance with GAAP applied on a consistent basis. All
calculations made for the purposes of determining compliance with this Credit
Agreement shall (except as otherwise expressly provided herein) be made by
application of GAAP applied on a basis consistent with the most recent annual or
quarterly financial statements delivered pursuant to Section 8.1 (or, prior to
the delivery of the first financial statements pursuant to Section 8.1,
consistent with the annual audited financial statements referenced in Section
6.1(a)); provided, however, if (a) the Borrower shall object to determining such
compliance on such basis at the time of delivery of such financial statements
due to any change in GAAP or the rules promulgated with respect thereto or (b)
the Administrative Agent or the Required Banks shall so object in writing within
sixty days after delivery of such financial statements, then such calculations
shall be made on a basis consistent with the most recent financial statements
delivered by the Loan Parties to the Banks as to which no such objection shall
have been made.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, Schedule and
Exhibit references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
19
SECTION 2.
AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENTS
2.1 Commitments.
(a) Subject to the terms and conditions hereof, each Revolving Credit
Bank severally agrees to make revolving credit loans ("Revolving Credit Loans")
to the Borrower and to participate in Syndicated Letters of Credit from time to
time during the Revolving Credit Commitment Period in an aggregate principal
amount at any one time outstanding not to exceed the amount of such Bank's
Revolving Credit Commitment. During the Revolving Credit Commitment Period the
Borrower may use the Revolving Credit Commitments by borrowing, prepaying the
Revolving Credit Loans in whole or in part, and reborrowing, all in accordance
with the terms and conditions hereof; provided that, after giving effect to any
Revolving Credit Loans, in no event shall the aggregate outstanding amount of
the Available Revolving Credit Commitments be less than zero.
(b) The Revolving Credit Loans may from time to time be (i) Eurodollar
Loans, (ii) Base Rate Loans or (iii) a combination thereof, as determined by the
Borrower and notified to the Administrative Agent in accordance with subsections
2.3 and 5.14; provided that no Loan shall be made as a Eurodollar Loan after the
day that is one month prior to the Revolving Credit Termination Date.
(c) The Revolving Credit Loans shall mature and shall be due and
payable on the Revolving Credit Termination Date.
2.2 Revolving Credit Notes.
The Revolving Credit Loans made by each Bank shall be evidenced by a
promissory note executed and delivered by the Borrower, substantially in the
form of Exhibit A-1 with appropriate insertions as to payee, date and principal
amount (a "Revolving Credit Note"), payable to the order of such Revolving
Credit Bank and in a principal amount equal to the lesser of (a) the amount of
the initial Revolving Credit Commitment of such Revolving Credit Bank and (b)
the aggregate unpaid principal amount of all Revolving Credit Loans made by such
Revolving Credit Bank. Each Revolving Credit Bank is hereby authorized to record
the date, Type and amount of each Revolving Credit Loan made by such Revolving
Credit Bank, each continuation thereof, each conversion of all or a portion
thereof to another Type, the date and amount of each payment or prepayment of
principal thereof and, in the case of Eurodollar Loans, the length of each
Interest Period with respect thereto, on the schedule annexed to and
constituting a part of its Revolving Credit Note, and any such recordation shall
constitute prima facie evidence of the accuracy of the information so recorded.
Each Revolving Credit Note shall (x) be dated the Closing Date, (y) be stated to
mature on the Revolving Credit Termination Date and (z) provide for the payment
of interest in accordance with subsection 5.3.
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2.3 Procedure for Borrowing.
The Borrower may borrow under the Revolving Credit Commitments during
the Revolving Credit Commitment Period on any Working Day, if all or any part of
the requested Revolving Credit Loans are to be initially Eurodollar Loans, or on
any Business Day, otherwise, provided that the Borrower shall give the
Administrative Agent irrevocable notice in writing (which notice must be
received by the Administrative Agent prior to 11:00 A.M., New York City time),
(a) three Working Days prior to the requested Borrowing Date, if all or any part
of the requested Revolving Credit Loans are to be initially Eurodollar Loans, or
(b) on a Business Day for Base Rate Loans to made on that day, specifying (i)
the amount to be borrowed, (ii) the requested Borrowing Date, (iii) whether the
borrowing is to be of Eurodollar Loans, Base Rate Loans or a combination thereof
and (iv) if the borrowing is to be entirely or partly of Eurodollar Loans, the
lengths of the initial Interest Periods therefor signed by a Responsible
Officer. Each borrowing of Eurodollar Loans under the Commitments shall be in an
amount equal to $5,000,000 or a whole multiple of $250,000 in excess thereof.
Each borrowing of Base Rate Loans under the Commitments shall be in an amount
equal to $1,000,000 or a whole multiple of $1,000,000 in excess thereof. Upon
receipt of any such notice from the Borrower, the Administrative Agent shall
promptly notify each Bank thereof. Each Bank will make the amount of its pro
rata share of each borrowing available to the Administrative Agent for the
account of the Borrower at the office of the Administrative Agent specified in
subsection 12.2 prior to 1:00 P.M., New York City time, on the Borrowing Date
requested by the Borrower in funds immediately available to the Administrative
Agent. Such borrowing will then be made available to the Borrower by the
Administrative Agent crediting the account of the Borrower on the books of such
office with the aggregate of the amounts made available to the Administrative
Agent by the Banks and in like funds as received by the Administrative Agent.
SECTION 3.
AMOUNT AND TERMS OF TERM LOAN COMMITMENTS
3.1 The Term Loans.
As of the Closing Date, the remaining principal balance of the term
loan and a portion of the principal balance of the revolving loans outstanding
under the Existing Credit Agreement are being reconstituted as a term loan
deemed to have been made hereunder (the "Term Loan") in the aggregate principal
balance of FOUR HUNDRED MILLION DOLLARS ($400,000,000). The Term Loan has been
fully advanced and any remaining commitments relating thereto have expired or
been terminated. The portion of the Term Loan held by each Term Loan Bank is set
out on Schedule 1.1A, together with each Term Loan Bank's Term Loan Commitment
Percentage thereof. The Term Loans may be (a) Eurodollar Loans, (b) Base Rate
Loans, or (c) a combination thereof, as determined by the Borrower and notified
to the Administrative Agent in accordance with subsections 3.2 and 5.14.
3.2 Procedure for Term Loan Borrowing.
The Borrower shall give the Administrative Agent irrevocable notice in
writing (which notice must be received by the Administrative Agent prior to
11:00 A.M. (New York time) at
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least (a) three Business Days prior to the requested Closing Date, if all or any
part of the Term Loans are to be initially Eurodollar Loans, or (b) one Business
Day prior to the requested Closing Date, otherwise), specifying in each case (i)
the amount of the Term Loan, (ii) the requested Closing Date, (iii) whether the
Term Loan is to be comprised of Eurodollar Loans, Base Rate Loans or a
combination thereof and (iv) if the Term Loan is to be entirely or partly of
Eurodollar Loans, the amount of such Type of Loan and the length of the initial
Interest Periods therefor and shall be signed by a Responsible Officer. Upon
receipt of any such notice from the Borrower, the Administrative Agent shall
promptly notify each Bank. The Administrative Agent shall on such date credit
the account of the Borrower on the books of such office with the aggregate of
the amounts made available to the Administrative Agent by the Term Loan Banks
and in like funds as received by the Administrative Agent.
3.3 Repayment of Term Loans; Evidence of Debt.
(a) The Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of each Term Loan Bank the then unpaid
principal amount of the Term Loans of such Term Loan Bank in twelve consecutive
quarterly installments, payable (except for the twelfth and final installment)
on the last Business Day of each March, June, September and December, commencing
on March 31, 2002 each of which installments shall be in an aggregate amount for
all Term Loan Banks equal to the respective amounts set forth below:
Term Loan Quarterly
Installment Date Amount
---------------- ------
March 31, 2002 $5,000,000
June 30, 2002 $5,000,000
September 30, 2002 $5,000,000
December 31, 2002 $25,000,000
March 31, 2003 $5,000,000
June 30, 2003 $5,000,000
September 30, 2003 $5,000,000
December 31, 2003 $5,000,000
March 31, 2004 $20,000,000
June 30, 2004 $20,000,000
September 30, 2004 $20,000,000
January 7, 2005 $280,000,000
(b) Each Term Loan Bank (and each Revolving Credit Bank and Issuing
Bank, as applicable) shall maintain in accordance with its usual practice an
account or accounts evidencing indebtedness of the Borrower to such Term Loan
Bank (and each Revolving Credit Bank) resulting from each Term Loan (or
Revolving Credit Loan) made by such Term Loan Bank (and each Revolving Credit
Bank) from time to time, including the amounts of principal and interest payable
and paid to such Term Loan Bank (and each Revolving Credit Bank) from time to
time under this Agreement.
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(c) The Administrative Agent shall maintain the Register pursuant to
subsection 12.6(d), and a subaccount therein for each Term Loan Bank (and each
Revolving Credit Bank), in which Register and/or subaccounts shall be recorded
(i) the amount of each Term Loan (or Revolving Credit Loan) made hereunder, the
Type thereof and each Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Term Loan Bank (and each Revolving Credit Bank) hereunder and
(iii) both the amount of any sum received by the Administrative Agent hereunder
from the Borrower and each Bank's share thereof.
(d) The entries made in the Register and the accounts of each Term Loan
Bank (and each Revolving Credit Bank) maintained pursuant to subsection 3.3(b)
shall, to the extent permitted by applicable law, be prima facie evidence of the
existence and amounts of the obligations of the Borrower therein recorded;
provided, however, that the failure of any Term Loan Bank (and each Revolving
Credit Bank) or the Administrative Agent to maintain the Register or any such
account, or any error therein, shall not in any manner affect the obligation of
the Borrower to repay (with applicable interest) the Term Loans (or Revolving
Credit Loan) made to the Borrower by such Term Loan Bank (and each Revolving
Credit Bank) in accordance with the terms of this Agreement.
(e) The Borrower agrees that, upon the request to the Administrative
Agent by any Term Loan Bank, the Borrower will execute and deliver to such Term
Loan Bank a promissory note of the Borrower evidencing the Term Loan of such
Term Loan Bank, substantially in the form of Exhibit A-2 with appropriate
insertions as to date and principal amount (as amended, supplemented or
otherwise modified from time to time, a "Term Note").
SECTION 4.
SYNDICATED LETTERS OF CREDIT
4.1 Issuance of Syndicated Letters of Credit.
(a) The Borrower may from time to time request the Issuing Bank to
issue a Standby L/C, Performance Letter of Credit or a Commercial L/C for the
account of the Borrower on its behalf or on behalf of its Subsidiaries or
Affiliates by delivering to the Issuing Bank, with a copy to the Administrative
Agent at its address specified in subsection 12.2, a letter of credit
application in the Issuing Bank's then customary form (an "L/C Application")
completed to the satisfaction of the Issuing Bank signed by the Borrower and
also, where appropriate, the Subsidiary or Affiliate, together with the proposed
form of such Syndicated Letter of Credit (which shall comply with the applicable
requirements of paragraph (b) below) and such other certificates, documents and
other papers and information as the Issuing Bank may reasonably request.
(b) Each Standby L/C, Performance Letter of Credit and Commercial L/C
issued hereunder shall, among other things, (i) be in such form requested by the
Borrower from the Issuing Bank as shall be acceptable to the Issuing Bank in its
sole discretion and (ii) have an expiry date occurring not later than the fifth
Business Day preceding the Revolving Credit Termination Date.
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(c) Each letter of credit issued under the Existing Credit Agreement
outstanding on the Closing Date and listed on Schedule 4.1 shall be deemed a
Letter of Credit issued for the account of the Borrower under this Agreement
under the Revolving Credit Commitments.
(d) No Syndicated Letter of Credit shall be issued under the Revolving
Credit Commitments if, after giving effect thereto, the Available Revolving
Credit Commitments would be less than zero or the aggregate Revolving Credit
Letter of Credit Obligations would exceed $75,000,000 (of which amount the
Dollar Equivalent of Syndicated Letters of Credit issued in Approved Foreign
Currencies shall not exceed $35,000,000).
4.2 Participating Interests in Syndicated Letters of Credit.
On the date of the opening thereof (or in the case of subsection
4.1(c), the Closing Date), the Issuing Bank agrees to allot and does allot, to
itself and each other Bank, and each Bank severally and irrevocably agrees to
take and does take in each Syndicated Letter of Credit and the related L/C
Application, an L/C Participating Interest in a percentage equal to such Bank's
Revolving Credit Commitment Percentage.
4.3 Procedure for Opening Syndicated Letters of Credit.
The Borrower may from time to time request that the Issuing Bank issue
a Syndicated Letter of Credit on any Business Day by delivering concurrently to
each of the Administrative Agent and the Issuing Bank an L/C Application at
least four (4) Business Days prior to the proposed date of issuance. Upon
receipt of any L/C Application and the confirmation by the Administrative Agent
that subsection 4.1 will not be violated, the Issuing Bank will process such L/C
Application, and the other certificates, documents and other papers delivered to
it in connection therewith, in accordance with its customary procedures and,
subject to the terms and conditions hereof, promptly issue such Syndicated
Letter of Credit; provided that no such Syndicated Letter of Credit shall be
issued if subsection 4.1 would be violated thereby. The Issuing Bank shall
furnish a copy of each Syndicated Letter of Credit to the Borrower and the
Administrative Agent promptly following the issuance thereof. The Administrative
Agent shall promptly furnish to the Banks notice of the issuance of each such
Syndicated Letter of Credit.
4.4 Payments in Respect of Syndicated Letters of Credit.
(a) The Borrower agrees forthwith upon demand by the Issuing Bank and
otherwise in accordance with the terms of the L/C Application executed by the
Borrower relating thereto, (i) to reimburse the Issuing Bank for any payment
(or, in the case of any Syndicated Letter of Credit issued in an Approved
Foreign Currency, the Dollar Equivalent thereof on the second Business Day after
the drawing under the Syndicated Letter of Credit) made by the Issuing Bank
under any Syndicated Letter of Credit issued for such Borrower's account and
(ii) to pay interest on any unreimbursed portion of any such payment (or, if
applicable, the Dollar Equivalent thereof on the second Business Day after the
drawing under the Syndicated Letter of Credit) from the date of such payment
until reimbursement in full thereof at a rate per annum equal to (A) prior to
the date which is one Business Day after the day on which the Issuing Bank
demands
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reimbursement from the Borrower for such payment, the rate of interest that
would be in effect for Base Rate Loans at such time and (B) on such date and
thereafter, the rate of interest that would be in effect for overdue Base Rate
Loans at such time pursuant to subsection 5.3(c).
(b) In the event that the Issuing Bank makes a payment under any
Syndicated Letter of Credit and is not reimbursed in full therefor forthwith
upon demand of the Issuing Bank, and otherwise in accordance with the terms of
the L/C Application relating to such Syndicated Letter of Credit, the Issuing
Bank will promptly notify each other Bank through the Administrative Agent.
Forthwith upon its receipt of any such notice, each other Bank will transfer to
the Issuing Bank, in immediately available funds, an amount equal to such other
Bank's Revolving Credit Commitment Percentage of the L/C Obligation arising from
such unreimbursed payment. Upon its receipt from such other Bank of such amount,
the Issuing Bank will complete, execute and deliver to such other Bank an L/C
Participation Certificate dated the date of such receipt and in such amount.
(c) Whenever, at any time after the Issuing Bank has made a payment
under any Syndicated Letter of Credit and has received from any other Bank such
other Bank's Revolving Credit Commitment Percentage of the L/C Obligation
arising therefrom, the Issuing Bank receives any reimbursement on account of
such L/C Obligation or any payment of interest on account thereof, the Issuing
Bank will distribute to such other Bank its pro rata share thereof in like funds
as received; provided, however, that in the event that the receipt by the
Issuing Bank of such reimbursement or such payment of interest (as the case may
be) is required to be returned, such other Bank will return to the Issuing Bank
any portion thereof previously distributed by the Issuing Bank to it in like
funds as such reimbursement or payment is required to be returned by the Issuing
Bank.
4.5 Syndicated Letter of Credit Fees.
(a) In lieu of any letter of credit commissions and fees provided for
in any L/C Application relating to Syndicated Letters of Credit (other than
amendment and negotiation fees), the Borrower agrees to pay (i) to the
Administrative Agent, for the account of the Participating Banks and the Issuing
Bank (with respect to its own L/C Participating Interest in any Syndicated
Letter of Credit issued by it), with respect to each Syndicated Letter of
Credit, a fee based on a rate per annum equal to (x) for Letters of Credit
(other than Performance Letters of Credit) issued under the Revolving Credit
Commitments, the Applicable Margin then in effect for Eurodollar Loans and (y)
for any Performance Letters of Credit, 50% of the Applicable Margin then in
effect for Eurodollar Loans, in each case, calculated on the undrawn face amount
thereof (or, in the case of any Syndicated Letter of Credit issued in an
Approved Foreign Currency, the Dollar Equivalent thereof at the time of
issuance) from time to time and (ii) to the Issuing Bank in respect thereof, a
fee of 1/10 of 1% per annum based on the undrawn face amount thereof (or, in the
case of any Syndicated Letter of Credit issued in an Approved Foreign Currency,
the Dollar Equivalent thereof at the time of issuance) from time to time, each
such fee to be payable quarterly in arrears, on the last Business Day of March,
June, September and December.
25
(b) For purposes of any payment of fees required pursuant to this
subsection 4.5, the Administrative Agent agrees to provide to the Borrower a
statement of any such fees to be so paid by the Borrower; provided that the
failure by the Administrative Agent to provide the Borrower with any such
invoice shall not relieve the Borrower of its obligation to pay such fees.
4.6 Syndicated Letter of Credit Reserves.
(a) If any change in any law or regulation or in the interpretation or
application thereof by any court or other Governmental Authority charged with
the administration thereof shall either (i) impose, modify, deem or make
applicable any reserve, special deposit, assessment or similar requirement
against Syndicated Letters of Credit issued by the Issuing Bank or (ii) impose
on the Issuing Bank any other condition regarding this Agreement or any
Syndicated Letter of Credit, and the result of any event referred to in clause
(i) or (ii) above shall be to increase the cost to the Issuing Bank of issuing
or maintaining any Syndicated Letter of Credit (which increase in cost shall be
the result of the Issuing Bank's reasonable allocation of the aggregate of such
cost increases resulting from such events), then, upon demand by the Issuing
Bank, the Borrower shall immediately pay to the Issuing Bank, from time to time
as specified by the Issuing Bank, additional amounts which shall be sufficient
to compensate the Issuing Bank for such increased cost, together with interest
on each such amount from the date demanded until payment in full thereof at a
rate per annum equal to the Base Rate plus the Applicable Margin for Base Rate
Loans at such time. A certificate, setting forth in reasonable detail the
calculation of the amounts involved, submitted by the Issuing Bank to the
Borrower concurrently with any such demand by the Issuing Bank, shall be
conclusive, absent manifest error, as to the amount thereof.
(b) In the event that any change in any law or regulation or in the
interpretation or application thereof by any court or other Governmental
Authority charged with the administration thereof shall at any time, in the
reasonable opinion of the Issuing Bank, require that any obligation under any
Syndicated Letter of Credit issued by the Issuing Bank be treated as an asset or
otherwise be included for purposes of calculating the appropriate amount of
capital to be maintained by the Issuing Bank or any corporation controlling the
Issuing Bank, and such change in law shall have the effect of reducing the rate
of return on the Issuing Bank's or such corporation's capital, as the case may
be, as a consequence of the Issuing Bank's obligations under such Syndicated
Letter of Credit to a level below that which the Issuing Bank or such
corporation, as the case may be, could have achieved but for such change (taking
into account the Issuing Bank's or such corporation's policies, as the case may
be, with respect to capital adequacy) by an amount deemed by the Issuing Bank to
be material, then from time to time following notice by the Issuing Bank to the
Borrower of such change, within 15 days after demand by the Issuing Bank, the
Borrower shall pay to the Issuing Bank such additional amount or amounts as will
compensate the Issuing Bank or such corporation, as the case may be, for such
reduction. If the Issuing Bank becomes entitled to claim any additional amounts
pursuant to this subsection 4.6(b), it shall promptly notify the Borrower of the
event by reason of which it has become so entitled. A certificate, in reasonable
detail setting forth the calculation of the amounts involved, submitted by the
Issuing Bank to the Borrower concurrently with any such demand by the Issuing
Bank, shall be conclusive, absent manifest error, as to the amount thereof.
26
(c) The Borrower agrees that the provisions of the foregoing paragraphs
(a) and (b) and the provisions of each L/C Application providing for
reimbursement or payment to the Issuing Bank in the event of the imposition,
modification or implementation of, or increase in, any reserve, special deposit,
assessment, capital adequacy or similar requirement in respect of the Syndicated
Letter of Credit relating thereto shall apply equally to each Participating Bank
in respect of its L/C Participating Interest in such Syndicated Letter of
Credit, as if the references in such paragraphs and provisions referred to,
where applicable, such Participating Bank or any corporation controlling such
Participating Bank.
4.7 [Intentionally Omitted]
4.8 [Intentionally Omitted]
4.9 [Intentionally Omitted]
4.10 [Intentionally Omitted]
4.11 Further Assurances.
The Borrower hereby agrees from time to time to do and perform any and
all acts and to execute any and all further instruments reasonably requested by
the Issuing Bank more fully to effect the purposes of this Agreement and the
issuance of Syndicated Letters of Credit hereunder.
4.12 Obligations Absolute.
The payment obligations of the Borrower under this Agreement and the
other Loan Documents with respect to the Syndicated Letters of Credit shall be
unconditional and irrevocable and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances, including, without limitation,
the following circumstances:
(a) the existence of any claim, set-off, defense or other right which
the Borrower or any of its Subsidiaries may have at any time against any
beneficiary, or any transferee, of any Syndicated Letter of Credit (or any
Persons for whom any such beneficiary or any such transferee may be acting), the
Issuing Bank in respect thereof, the Administrative Agent, any Bank or any other
Person, whether in connection with this Agreement, the Loan Documents, the
transactions contemplated herein, or any unrelated transaction;
(b) any statement or any other document presented under any Syndicated
Letter of Credit proving to be forged, fraudulent or invalid or any statement
therein being untrue or inaccurate in any respect;
(c) payment by the Issuing Bank under any Syndicated Letter of Credit
against presentation of a draft or certificate which does not comply with the
terms of such Syndicated Letter of Credit or is insufficient in any respect,
except where such payment constitutes gross negligence or willful misconduct on
the part of the Issuing Bank; or
27
(d) any other circumstances or happening whatsoever, whether or not
similar to any of the foregoing, except for any such circumstances or happening
constituting gross negligence or willful misconduct on the part of the Issuing
Bank.
4.13 Assignments.
No Participating Bank's participation in any Syndicated Letter of
Credit or any of its rights or duties hereunder shall be subdivided, assigned or
transferred (other than in connection with a transfer of part or all of such
Participating Bank's Commitment in accordance with subsection 12.6(c)) without
the prior written consent of the Issuing Bank. Such consent may be given or
withheld without the consent or agreement of any other Participating Bank.
Notwithstanding the foregoing, a Participating Bank may subparticipate its L/C
Participating Interest pursuant to subsection 12.6(b) without obtaining the
prior written consent of the Issuing Bank.
4.14 Participations.
Each Bank's obligation to purchase participating interests pursuant to
subsections 4.2 shall be absolute and unconditional and shall not be affected by
any circumstance, including, without limitation, (i) any set-off, counterclaim,
recoupment, defense or other right which such Bank may have against the Issuing
Bank, the Borrower or any other Person for any reason whatsoever; (ii) the
occurrence or continuance of an Event of Default; (iii) any adverse change in
the condition (financial or otherwise) of the Borrower; (iv) any breach of this
Agreement by the Borrower or any other Bank; or (v) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.
4.15 Determination of Dollar Equivalent.
With respect to each Letter of Credit issued and outstanding in an
Approved Foreign Currency, on the date of issuance of such Letter of Credit, and
on any date deemed necessary by the Administrative Agent (each, a "Determination
Date") the Administrative Agent shall determine, and promptly notify each Bank
of, the Dollar Equivalent of the undrawn amount and drawn amount of such Letter
of Credit.
SECTION 5. GENERAL PROVISIONS
5.1 Fees.
(a) The Borrower agrees to pay to the Administrative Agent for the
account of the Banks a non-use fee, payable quarterly in arrears, on the last
Business Day of March, June, September and December, for the period from the
Closing Date to the Revolving Credit Termination Date equal to the Applicable
Non-Use Margin then in effect (as set forth in the definition of Applicable
Margin) per annum on the daily average difference between the aggregate
Revolving Credit Commitments and the aggregate outstanding amount of all
Extensions of Credit of the Banks under the Revolving Credit Commitments.
28
(b) The Borrower agrees to pay to the Administrative Agent for its own
account the administrative fees on the dates and in the amounts set forth in the
letter agreement between Bank of America and the Borrower dated as of October
23, 2001.
(c) All fees paid under or in connection with this Agreement are
non-refundable.
5.2 Voluntary Termination or Reduction of Revolving Credit Commitments.
The Borrower shall have the right, upon not less than three Business
Days' notice to the Administrative Agent, to terminate the Revolving Credit
Commitments or, from time to time, to reduce the amount of the Revolving Credit
Commitments, provided that no such termination or reduction shall be permitted
if, after giving effect thereto and to any payments or prepayments of the
Revolving Credit Loans made on the effective date thereof, the aggregate amount
of Extensions of Credit in respect of the Revolving Credit Commitments
outstanding would exceed the Revolving Credit Commitments then in effect. Any
such reduction shall be in an amount equal to $1,000,000 or a whole multiple
thereof and shall reduce permanently the Revolving Credit Commitments then in
effect.
5.3 Interest Rates and Payment Dates.
(a) Each Eurodollar Loan shall bear interest for each day during each
Interest Period with respect thereto at a rate per annum equal to the Eurodollar
Rate determined for such Loan for such Interest Period plus the Applicable
Margin in effect from time to time.
(b) Each Base Rate Loan shall bear interest for each day outstanding at
a rate per annum equal to the Base Rate plus the Applicable Margin.
(c) If all or a portion of (i) the principal amount of any Loan or (ii)
any interest payable thereon or other amount payable hereunder shall not be paid
when due (whether at the stated maturity, by acceleration or otherwise), such
overdue amount shall bear interest at a rate per annum which is (x) in the case
of overdue principal, the rate that would otherwise be applicable thereto
pursuant to the foregoing provisions of this subsection 5.3 plus 2% or (y) in
the case of overdue interest or other amounts, the rate described in paragraph
(b) of this subsection 5.3 plus 2%, in each case from the date of such
non-payment until such amount is paid in full (as well after as before
judgment).
(d) Interest shall be payable in arrears on each Interest Payment Date,
provided that interest accruing pursuant to paragraph (c) of this subsection 5.3
shall be payable on demand.
5.4 Computation of Interest and Fees.
(a) Interest on Base Rate Loans shall be calculated on the basis of a
365- (or 366-, as the case may be) day year for the actual days elapsed.
Interest on Eurodollar Loans and fees shall be calculated on the basis of a
360-day year for the actual days elapsed. The Administrative Agent shall as soon
as practicable notify the Borrower and the Banks of each determination of a
Eurodollar Rate. Any change in the interest rate on a Loan resulting from a
29
change in the Base Rate or the Applicable Margin shall become effective as of
the opening of business on the day on which such change in the Base Rate is
announced or such change in the Applicable Margin becomes effective, as the case
may be. The Administrative Agent shall as soon as practicable notify the
Borrower and the Banks of the effective date and the amount of each such change
in interest rate.
(b) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the Banks in the absence of manifest error. The Administrative
Agent shall, at the request of the Borrower, deliver to the Borrower a statement
showing the quotations used by the Administrative Agent in determining any
interest rate pursuant to subsection 5.3(a).
5.5 Inability to Determine Interest Rate.
In the event that prior to the first day of any Interest Period:
(a) the Administrative Agent shall have determined (which determination
shall be conclusive and binding upon the Borrower) that, by reason of
circumstances affecting the relevant market, adequate and reasonable means do
not exist for ascertaining the Eurodollar Rate for such Interest Period, or
(b) the Administrative Agent shall have received notice from the
Required Banks that the Eurodollar Rate determined or to be determined for such
Interest Period will not adequately and fairly reflect the cost to such Banks
(as conclusively certified by such Banks) of making or maintaining their
affected Loans during such Interest Period, or
(c) the Administrative Agent shall have received notice from the
Required Banks that they are unable or find it impracticable to obtain funding
with respect to any Eurodollar Loan requested or to be continued for such
Interest Period, the Administrative Agent shall give telex, telecopy or
telephonic notice thereof to the Borrower and the Banks as soon as practicable
thereafter. If such notice is given (x) any Eurodollar Loans requested to be
made on the first day of such Interest Period shall be made as Base Rate Loans
or bear interest at the Base Rate, (y) any Base Rate Loans that were to have
been converted on the first day of such Interest Period to Eurodollar Loans
shall be converted to or continued as Base Rate Loans and (z) any outstanding
Eurodollar Loans shall be converted, on the first day of such Interest Period,
to Base Rate Loans or shall bear interest at the Base Rate. Until such notice
has been withdrawn by the Administrative Agent, no further Eurodollar Loans
shall be made or continued as such, nor shall the Borrower have the right to
convert Base Rate Loans to Eurodollar Loans.
5.6 Pro Rata Treatment and Payments.
(a) Each borrowing of Loans from the Banks hereunder, each payment to
the Banks on account of any of the fees set forth in subsection 5.1(a) and any
reduction of the Commitments of the Banks shall be made pro rata according to
the respective Commitment Percentages of the Banks. Each payment (including each
prepayment) on account of principal of and interest on the Loans shall be made
pro rata according to the respective outstanding principal
30
amounts of the Loans then held by the Banks. All payments (including
prepayments) to be made by the Borrower hereunder and under the Notes, whether
on account of principal, interest, unpaid drawings under Letters of Credit, fees
or otherwise, shall be made without set off or counterclaim and shall be made
prior to 12:00 Noon, New York City time, on the due date thereof to the
Administrative Agent, for the account of the Bank(s) or Issuing Bank entitled
thereto, at the Administrative Agent's office specified in subsection 12.2, in
Dollars and in immediately available funds. The Administrative Agent shall
distribute such payments to the Bank(s) and Issuing Bank entitled thereto
promptly upon receipt in like funds as received. If any payment hereunder (other
than payments on any Eurodollar Loans) becomes due and payable on a day other
than a Business Day, such payment shall be extended to the next succeeding
Business Day, and, with respect to payments of principal, interest thereon shall
be payable at the then applicable rate during such extension. If any payment on
a Eurodollar Loan becomes due and payable on a day other than a Working Day, the
maturity thereof shall be extended to the next succeeding Working Day which is a
Business Day unless the result of such extension would be to extend such payment
into another calendar month, in which event such payment shall be made on the
immediately preceding Working Day which is a Business Day.
(b) Unless the Administrative Agent shall have been notified in writing
by any Bank prior to a borrowing date for Loans that such Bank will not make the
amount that would constitute its applicable Commitment Percentage of such
borrowing or drawdown available to the Administrative Agent, the Administrative
Agent may assume that such Bank has made such amount available to the
Administrative Agent on such borrowing or drawdown date, and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is made available to the Administrative
Agent on a date after such borrowing or drawdown date, such Bank shall pay to
the Administrative Agent on demand an amount equal to the product of (i) the
daily average Federal Funds Rate during such period, times (ii) the amount of
such Bank's applicable Commitment Percentage of such borrowing or drawdown,
times (iii) a fraction, the numerator of which is the number of days that elapse
from and including such borrowing or drawdown date to the date on which such
Bank's applicable Commitment Percentage of such borrowing or drawdown shall have
become immediately available to the Administrative Agent and the denominator of
which is 360. A certificate of the Administrative Agent submitted to any Bank
with respect to any amounts owing under this subsection 4.6 shall be conclusive
in the absence of manifest error. If such Bank's applicable Commitment
Percentage of such borrowing is not in fact made available to the Administrative
Agent by such Bank within three Business Days of such borrowing or drawdown
date, the Administrative Agent shall be entitled to recover such amount with
interest thereon at the rate per annum applicable to Base Rate Loans hereunder,
on demand, from the Borrower and the applicable Loan shall be reduced by the
amount of such payment (exclusive of interest). If the Borrower returns to the
Administrative Agent any amount with interest thereon as described in the
immediately preceding sentence, such Bank shall indemnify the Borrower for the
difference, if any, between (i) the aggregate interest paid by the Borrower to
the Administrative Agent in accordance with the immediately preceding sentence
less (ii) if less, the aggregate interest which actually accrued on such amount
in accordance with the provisions hereof prior to its return to the
Administrative Agent.
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(c) Whenever any payment received by the Administrative Agent under
this Agreement is insufficient to pay in full all amounts then due and payable
to the Administrative Agent, the Issuing Bank and the Banks under this Agreement
and the Notes, and the Administrative Agent has not received a Payment Sharing
Notice (or if the Administrative Agent has received a Payment Sharing Notice but
the Event of Default specified in such Payment Sharing Notice has been cured or
waived), such payment shall be distributed and applied by the Administrative
Agent and the Banks in the following order: first, to the payment of fees and
expenses due and payable to the Administrative Agent under and in connection
with this Agreement; second, to the payment of all expenses due and payable
under subsection 12.5, ratably among the Banks in accordance with the aggregate
amount of such payments owed to each such Bank and the Issuing Bank; third, to
the payment of fees due and payable to the Issuing Bank; fourth, to the payment
of fees due and payable under subsection 5.1 ratably among the Banks in
accordance with their Commitment Percentages; fifth, to the payment of interest
then due and payable on account of the Loans and the other Extensions of Credit,
ratably among the Banks in accordance with the aggregate amount of interest owed
to each such Bank; and sixth, to the payment of the principal amount of the
Loans and the other Extensions of Credit which is then due and payable, ratably
among the Banks in accordance with the aggregate principal amount owed to each
such Bank.
(d) After the Administrative Agent has received a Payment Sharing
Notice which remains in effect, all payments received by the Administrative
Agent under this Agreement or any Note shall be distributed and applied by the
Administrative Agent and the Banks in the following order: first, to the payment
of all amounts described in clauses first through fourth of the foregoing
paragraph (c), in the order set forth therein; and second, to the payment of the
interest accrued on and the principal amount of all of the Notes and other
Extensions of Credit, regardless of whether any such amount is then due and
payable, ratably among the Banks in accordance with the aggregate accrued
interest plus the aggregate principal amount owed to such Bank.
5.7 Illegality.
Notwithstanding any other provision herein, if any change in any
Requirement of Law or in the interpretation or application thereof shall make it
unlawful for any Bank to make or maintain Eurodollar Loans as contemplated by
this Agreement, (a) the commitment of such Bank hereunder to make Eurodollar
Loans, continue Eurodollar Loans as such and convert Base Rate Loans to
Eurodollar Loans shall forthwith be canceled and (b) such Bank's outstanding
Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans on
the respective last days of the then current Interest Periods with respect to
such Loans or within such earlier period as required by law. If any such
conversion or prepayment of a Eurodollar Loan occurs on a day which is not the
last day of the then current Interest Period with respect thereto, the Borrower
shall pay to such Bank such amounts, if any, as may be required pursuant to
subsection 5.10.
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5.8 Requirements of Law.
(a) In the event that any change in any Requirement of Law or in the
interpretation or application thereof or compliance by any Bank with any request
or directive (whether or not having the force of law) from any central bank or
other Governmental Authority made subsequent to the date hereof:
(i) shall subject any Bank to any tax of any kind whatsoever
with respect to this Agreement, any Note or any Eurodollar Loan made by
it, or change the basis of taxation of payments to such Bank in respect
thereof (except for taxes covered by subsection 5.9 and changes in the
rate of tax on the overall net income of such Bank);
(ii) shall impose, modify or hold applicable any reserve
(including without limitation any Eurodollar Reserve Requirement),
special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account of,
advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Bank which is not otherwise
included in the determination of the Eurodollar Rate hereunder; or
(iii) shall impose on such Bank any other condition; and the
result of any of the foregoing is to increase the cost to such Bank, by
an amount which such Bank deems to be material, of making, converting
into, continuing or maintaining Eurodollar Loans or to reduce any
amount receivable hereunder in respect thereof then, in any such case,
the Borrower shall promptly pay such Bank, upon its demand, any
additional amounts necessary to compensate such Bank for such increased
cost or reduced amount receivable. If any Bank becomes entitled to
claim any additional amounts pursuant to this subsection 5.8, it shall
promptly notify the Borrower, through the Administrative Agent, of the
event by reason of which it has become so entitled. A certificate as to
any additional amounts payable pursuant to this subsection 5.8
submitted by such Bank, through the Administrative Agent, to the
Borrower shall be conclusive in the absence of manifest error and the
amounts set forth therein shall be payable quarterly on each Interest
Payment Date for Base Rate Loans. This covenant shall survive the
termination of this Agreement and the payment of the Notes and all
other amounts payable hereunder.
(b) In the event that any Bank shall have determined that any change in
any Requirement of Law regarding capital adequacy or in the interpretation or
application thereof or compliance by such Bank or any corporation controlling
such Bank with any request or directive regarding capital adequacy (whether or
not having the force of law) from any Governmental Authority made subsequent to
the date hereof does or shall have the effect of reducing the rate of return on
such Bank's or such corporation's capital as a consequence of its obligations
hereunder to a level below that which such Bank or such corporation could have
achieved but for such change or compliance (taking into consideration such
Bank's or such corporation's policies with respect to capital adequacy) by an
amount deemed by such Bank to be material, then from time to time, after
submission by such Bank to the Borrower (with a copy to the Administrative
Agent) of a written request therefore, the Borrower shall pay to such Bank such
additional amount or amounts as will compensate such Bank for such reduction.
Any notice to be given by
33
a Bank under this subsection 5.8(b) shall be effective only if given within 120
days after such Bank becomes aware or should have become aware of the events
giving rise to such notice.
5.9 Taxes.
(a) All payments made by the Borrower under this Agreement and the
Notes shall be made free and clear of, and without deduction or withholding for
or on account of, any present or future income, stamp or other taxes, levies,
imposts, duties, charges, fees, deductions or withholdings, now or hereafter
imposed, levied, collected, withheld or assessed by any Governmental Authority,
excluding, in the case of the Administrative Agent, the Issuing Bank and each
Bank, net income taxes and franchise taxes (imposed in lieu of net income taxes)
imposed on the Administrative Agent, the Issuing Bank or such Bank, as the case
may be, as a result of a present, former or future connection between the
jurisdiction of the government or taxing authority imposing such tax and the
Administrative Agent, the Issuing Bank or such Bank (excluding a connection
arising solely from the Administrative Agent, the Issuing Bank or such Bank
having executed, delivered or performed its obligations or received a payment
under, or enforced, this Agreement or the Notes) or any political subdivision or
taxing authority thereof or therein (all such non-excluded taxes, levies,
imposts, duties, charges, fees, deductions and withholdings being hereinafter
called "Taxes"). If any Taxes are required to be withheld by the Borrower from
any amounts payable to the Administrative Agent, the Issuing Bank or any Bank
hereunder or under the Notes, the amounts so payable to the Administrative
Agent, the Issuing Bank or such Bank shall be increased to the extent necessary
to yield to the Administrative Agent, the Issuing Bank or such Bank (after
payment of all Taxes) interest or any such other amounts payable hereunder at
the rates or in the amounts specified in this Agreement and the Notes. Whenever
any Taxes are payable by the Borrower, as promptly as possible thereafter the
Borrower shall send to the Administrative Agent for its own account or for the
account of the Issuing Bank or such Bank, as the case may be, a certified copy
of an original official receipt received by the Borrower showing payment
thereof. If the Borrower fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to the Administrative Agent the required
receipts or other required documentary evidence, the Borrower shall indemnify
the Administrative Agent, the Issuing Bank and the Banks for any incremental
taxes, interest or penalties that may become payable by the Administrative
Agent, the Issuing Bank or any Bank as a result of any such failure. None of the
Banks, nor the Issuing Bank nor any transferee shall change its office which
makes or maintains Eurodollar Loans or Base Rate Loans, if the effect of such
action would cause, immediately following such change or in the reasonably
foreseeable future, any amount to become payable by the Borrower under this
subsection 5.9 unless such Bank, transferor Bank or transferee, as determined by
it in its sole discretion, could be disadvantaged in any financial, economic,
regulatory or other business way by the failure to make any such change. Solely
at the Borrower's expense, the Borrower shall be entitled to contest the payment
of any Taxes that the Borrower believes were not correctly or legally asserted
and the Administrative Agent, the Issuing Bank or any Bank with respect to which
such Taxes were imposed shall fully cooperate with the Borrower in connection
with such contest. If any Taxes constituting a withholding tax shall be or
become applicable, after the Closing Date, to payments by the Borrower to any
Bank, such Bank shall use its best efforts to make, fund and maintain its Loans
through another lending office of such Bank in another jurisdiction so as to
reduce, to the fullest extent possible, the Borrower's liability hereunder, if
the making, funding
34
or maintenance of such Loans through such other office does not otherwise
materially adversely affect such Loans or such Bank. In the event that the
Borrower is required to pay any Bank any additional amount pursuant to this
subsection 5.9(a) and no change of lending office is made in accordance with the
preceding sentence, after the Borrower makes such payment, such Bank shall at
the request and cost of the Borrower transfer for a purchase price equal to the
outstanding Loans of such Bank, accrued and unpaid interest thereon and accrued
and unpaid fees owing to such Bank under subsection 5.1 hereof and in accordance
with the procedures set forth in subsection 12.6(c), its rights and obligations
under this Agreement and the Notes or the other Loan Documents to a financial
institution selected by the Borrower (and which agrees to such transfer) with
the approval of such transferor and the Administrative Agent (not to be
unreasonably withheld). If the Administrative Agent, the Issuing Bank or any
Bank receives a refund in respect of any Taxes for which the Borrower has made
payment hereunder, the Administrative Agent, the Issuing Bank or such Bank (as
the case may be) shall repay such refund (together with any interest actually
received thereon) to the Borrower, provided that the Borrower, upon the request
of the Administrative Agent, the Issuing Bank or such Bank, agrees to return
such refund (together with any penalties, interest or other charges) to the
Administrative Agent, the Issuing Bank or such Bank (as the case may be) in the
event that the Administrative Agent, the Issuing Bank or such Bank is required
to repay such refund. The agreements in this subsection 5.9 shall survive the
termination of this Agreement and the payment of the Notes and all other amounts
payable hereunder.
(b) Each Bank that is not incorporated under the laws of the United
States of America or a state thereof agrees that it will deliver to the Borrower
and the Administrative Agent (i) two duly completed copies of United States
Internal Revenue Service Form W-8BEN or W-8ECI or successor applicable form, as
the case may be, and (ii) an Internal Revenue Service Form W-8 or W-9 or
successor applicable form, as the case may be. Each such Bank also agrees to
deliver to the Borrower and the Administrative Agent two further copies of the
said Form W-8BEN or W-8ECI and Form W-8 or W-9, or successor applicable forms or
other manner of certification, as the case may be, on or before the date that
any such form expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent form previously delivered by it to the
Borrower, and such extensions or renewals thereof as may reasonably be requested
by the Borrower or the Administrative Agent, unless in any such case an event
(including, without limitation, any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
Bank from duly completing and delivering any such form with respect to it and
such Bank so advises the Borrower and the Administrative Agent, in which case
such Bank will deliver copies of any such forms as such Bank is able to complete
and deliver. Each Bank shall certify and represent and warrant to the Borrower
(i) in the case of a Form W-8BEN or W-8ECI, that it is entitled to receive
payments under this Agreement without deduction or withholding of any United
States federal income taxes and (ii) in the case of a Form W-8 or W-9, that it
is entitled to an exemption from United States backup withholding tax. The
Borrower shall not be required to pay any increased amount on account of Taxes
pursuant to subsection 5.9(a) to the Administrative Agent or any Bank that fails
to furnish any form or statement that it is required to furnish in accordance
with this subsection 5.9(b) and, to the extent required by law, the Borrower
shall be entitled to deduct Taxes from the payments owed to such Bank.
35
5.10 Indemnity.
The Borrower agrees to indemnify each Bank and to hold each Bank
harmless from any loss or expense which such Bank may sustain or incur as a
consequence of (a) default by the Borrower in payment when due of the principal
amount of or interest on any Eurodollar Loan, (b) default by the Borrower in
making a borrowing of, conversion into or continuation of Eurodollar Loans after
the Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (c) default by the Borrower in making any
prepayment after the Borrower has given a notice thereof in accordance with the
provisions of this Agreement or (d) the making of a prepayment of Eurodollar
Loans on a day which is not the last day of an Interest Period with respect
thereto, including, without limitation, in each case, any such loss or expense
arising from the reemployment of funds (excluding loss of margin) obtained by it
or from fees payable to terminate the deposits from which such funds were
obtained. This covenant shall survive the termination of this Agreement and the
payment of the Notes and all other amounts payable hereunder.
5.11 Change in Lending Office.
Each Bank and the Issuing Bank agrees that, in the event that, at any
time, the provisions of subsections 4.6, 5.7, 5.8 or 5.9, as the case may be,
have become or are likely to become applicable to it, it will change its office
which makes or maintains Eurodollar Loans or Base Rate Loans or issues or
maintains Letters of Credit, as the case may be, to another of the offices
through which it or its Affiliates conducts business of the type in which it is
engaged hereunder, if by making such change it can avoid or mitigate any cost or
disadvantage to the Borrower arising out of the operation of such provisions, so
long as such Bank, as determined by it in its sole reasonable discretion, is not
disadvantaged in any financial, economic, regulatory or other business way.
5.12 Optional Prepayments.
The Borrower may at any time and from time to time prepay the Loans, in
whole or in part, without premium or penalty, upon at least three Business Days'
irrevocable notice to the Administrative Agent in the case of Eurodollar Loans
and prior to 10:00 A.M. on any Business Day in the case of Base Rate Loans,
specifying the date and amount of prepayment and whether the prepayment is of
Eurodollar Loans, Base Rate Loans or a combination thereof, and, if of a
combination thereof, the amount allocable to each. Upon receipt of any such
notice the Administrative Agent shall promptly notify each Bank thereof. If any
such notice is given, the amount specified in such notice shall be due and
payable on the date specified therein, together with, in the case of Eurodollar
Loans, accrued interest to such date on the amount prepaid. Partial prepayments
shall be in an aggregate principal amount of $1,000,000 (or, in the case of
Eurodollar Loans, $5,000,000) or a whole multiple of $1,000,000 in excess
thereof and may only be made if, after giving effect thereto, subsection 5.15 is
not contravened. All prepayments shall be accompanied by the amounts notified by
each Bank to the Administrative Agent as due and owing to it under subsection
5.10 as a result of such prepayment. Optional prepayments on the Term Loan shall
be applied pro rata to the remaining installments on the Term Loans.
36
5.13 Mandatory Prepayments.
(a) If, during the Revolving Credit Commitment Period, the aggregate
outstanding amount of the Available Revolving Credit Commitments is less than
zero (including, without limitation, any such occurrence resulting from the
reductions in the Revolving Credit Commitments pursuant to subsection 5.2 or
this subsection 5.13), the Borrower shall pay or prepay the Revolving Credit
Loans, without premium or penalty, on such date in an aggregate amount equal to
such excess, together with interest thereon accrued to the date of such payment
or prepayment and any amounts payable pursuant to subsection 5.10.
(b) One hundred percent (100%) of the net after-tax cash proceeds of
any Equity Transaction shall be used to prepay the Term Loans and reduce the
Revolving Credit Commitments in accordance with this subsection 5.13.
(c) (I) In the case of a sale and leaseback of the Palo Alto Property,
one hundred percent (100%) of the net after-tax cash proceeds from any
such sale shall be used to prepay the Term Loans and reduce the
Revolving Credit Commitments in accordance with this subsection 5.13;
and
(II) In the case of any payments or other amounts received on
or in connection with the LSCC Secured Note, one hundred percent (100%)
of the net after-tax cash proceeds of any payment or other amount shall
be used to prepay the Term Loans and reduce the Revolving Credit
Commitments in accordance with this subsection 5.13, no later than 365
days after the date of receipt thereof, except to the extent such
proceeds are reinvested in the business (including capital expenditures
and working capital) of the Borrower and its Subsidiaries within such
365 day period;
(III) Other than in the case of a sale and leaseback of the
Palo Alto Property, which is addressed in the preceding clause (I) or
payments or other amounts secured on or in connection with the LSCC
Secured Note which is addressed in the preceding clause (II), one
hundred percent (100%) of the net after-tax cash proceeds of the sale
or other disposition by the Borrower or any of its Subsidiaries of any
such other property or assets shall be used to prepay the Term Loans
and reduce the Revolving Credit Commitments in accordance with this
subsection 5.13; provided that such prepayment under this subclause
(III) shall not be required with respect to (i) sales of inventory in
the ordinary course of business, (ii) asset sales and dispositions
permitted pursuant to subsections 9.6(a) through 9.6(e) and subsection
9.6(i), or (iii) any other asset sales subsequent to the Closing Date
until the aggregate amount of the net after-tax cash proceeds of such
other asset sales equal $20,000,000.
(d) 75% of Excess Cash Flow, calculated annually at the end of each
fiscal year commencing on or after January 1, 2001 shall be used to prepay the
Term Loans and reduce the Revolving Credit Commitments in accordance with this
subsection 5.13 within 120 days after the end or each such fiscal year; provided
that such prepayment shall not be required under this subsection 5.13(d) if the
pro forma Funded Debt to Consolidated EBITDA ratio (for the fiscal
37
year then ended) of the Borrower and its consolidated Subsidiaries is less than
3.00 to 1.00, as of the last day of such fiscal year.
(e) One hundred percent (100%) of the net proceeds for any second
consecutive launch failure of any satellite financed and scheduled to be owned
and operated by the Borrower and the insurance proceeds from any in-orbit
failure of any satellite shall be used to prepay the Term Loans and the
Revolving Credit Commitments in accordance with this subsection 5.13; provided,
however, insurance proceeds from any in-orbit failure that occurs prior to
December 31, 2002 may be deposited with the Administrative Agent as cash
collateral for the Obligations until March 31, 2002 (or if such in-orbit failure
occurs after March 31, 2002, until the end of the next fiscal quarter following
such in-orbit failure) and shall be either (i) returned to the Borrower if the
Borrower is in pro forma compliance with all covenants (including the financial
covenants) as of March 31, 2002 (or such later fiscal quarter end as provided
above) or (ii) used by the Administrative Agent to prepay the Term Loans and the
Revolving Credit Commitments in accordance with this subsection 5.13 if the
Borrower is unable to show such pro forma compliance.
(f) One hundred percent (100%) of payments or proceeds received under
or in respect of the Management Fee Note shall be used to prepay the Term Loans
and the Revolving Credit Commitments in accordance with this subsection 5.13.
(g) Mandatory prepayments made pursuant to subsections 5.13(b), (c)(I),
(d) and (e) shall be applied first, to the Term Loans pro rata to the remaining
installments on the Term Loans until the Term Loans are paid in full, and
second, to the permanent reduction of the Revolving Credit Commitments (and to
the repayment of the Revolving Credit Loans). Mandatory prepayments made
pursuant to subsections 5.13(c)(II), (c)(III) and (f) shall be applied first, to
the Term Loans in direct order of remaining installments on the Term Loans until
the Term Loans are paid in full, and second to permanent reduction of the
Revolving Credit Commitments (and to repayment of the Revolving Credit Loans).
Payments made under this subsection 5.13 shall be applied first to Base Rate
Loans, then to the Eurodollar Loans with an Interest Period ending on such date
and then to other Eurodollar Loans. If, after giving effect to the foregoing
prepayments, the aggregate outstanding amount of all Extensions of Credit under
the Revolving Credit Commitments still exceeds the aggregate amount of the
Revolving Credit Commitments, then the Borrower shall cash collateralize the
Letters of Credit, in an aggregate amount equal to such excess. All prepayments
shall be accompanied by the amounts notified by each Bank to the Administrative
Agent as due and owing to it under subsection 5.10 as a result of such
prepayment.
5.14 Conversion and Continuation Options.
(a) The Borrower may elect from time to time to convert Eurodollar
Loans to Base Rate Loans, and/or to convert Base Rate Loans to Eurodollar Loans
by giving the Administrative Agent at least three Business Days' prior
irrevocable notice of such election, provided that any such conversion of
Eurodollar Loans may only be made on the last day of an Interest Period with
respect thereto. Any such notice of conversion to Eurodollar Loans shall specify
the length of the initial Interest Period or Interest Periods therefor. Upon
receipt of any such notice the
38
Administrative Agent shall promptly notify each Bank thereof. All or any part of
outstanding Eurodollar Loans and Base Rate Loans may be converted as provided
herein, provided that (i) no Loan may be converted into a Eurodollar Loan when
any Event of Default has occurred and is continuing and the Administrative Agent
or the Required Banks have determined that such a conversion is not appropriate,
(ii) any such conversion may only be made if, after giving effect thereto,
subsection 5.15 or the proviso to subsection 2.1(a) shall not have been
contravened and (iii) no Loan may be converted into a Eurodollar Loan after the
date that is one month prior to the Revolving Credit Termination Date.
(b) Any Eurodollar Loans may be continued as such upon the expiration
of the then current Interest Period with respect thereto by the Borrower giving
notice to the Administrative Agent, in accordance with the applicable provisions
of the term "Interest Period" set forth in subsection 1.1, of the length of the
next Interest Period to be applicable to such Loans, provided that no Eurodollar
Loan may be continued as such (i) when any Event of Default has occurred and is
continuing and the Administrative Agent or the Required Banks have determined
that such a continuation is not appropriate, (ii) if, after giving effect
thereto, subsection 5.15 or the proviso to subsection 2.1(a) would be
contravened or (iii) after the date that is one month prior to the Revolving
Credit Termination Date; provided, further, that if the Borrower shall fail to
give any required notice as described above in this paragraph or if such
continuation is not permitted pursuant to the preceding proviso such Loans shall
be automatically converted to Base Rate Loans on the last day of such then
expiring Interest Period.
(c) Any notice given by Borrower under this subsection 5.14 shall be
deemed given on any Business Day if received on or prior to 11:00 a.m. New York
City time on such date and otherwise on the next succeeding Business Day after
receipt.
5.15 Minimum Amounts of Tranches.
All conversions and continuations of Loans hereunder and all selections
of Interest Periods hereunder shall be in such amounts and be made pursuant to
such elections so that, after giving effect thereto, the aggregate principal
amount of the Loans comprising each Eurodollar Tranche shall be equal to
$5,000,000 or a whole multiple of $1,000,000 in excess thereof.
SECTION 6.
REPRESENTATIONS AND WARRANTIES
To induce the Banks, the Issuing Bank and the Administrative Agent to
enter into this Agreement and the Banks and the Issuing Bank to make their
Extensions of Credit hereunder the Borrower hereby represents and warrants to
the Administrative Agent, the Issuing Bank and each Bank that:
6.1 Financial Condition.
(a) The balance sheet of (i) Loral and (ii) the Borrower, in each case,
as at December 31, 2000 and the related statements of income and of cash flows
for the twelve months ended on such date, audited by Deloitte & Touche LLP,
copies of which have heretofore
39
been furnished to each Bank that requested the same, are complete and correct in
all material respects and present fairly the financial condition of Loral as at
such date, and the results of its operations and its cash flows for the twelve
months then ended. The unaudited balance sheet of the Borrower as at September
30, 2001 and the related unaudited statement of income for the nine month period
ended on such date, certified by a Responsible Officer, copies of which have
heretofore been furnished to each Bank that requested the same, are complete and
correct in all material respects and present fairly the financial condition of
the Borrower as at such date, and the results of its operations for the nine
month period then ended (subject to normal year-end audit adjustments). All such
financial statements, including any related schedules and notes thereto, have
been prepared in accordance with GAAP applied consistently throughout the
periods involved (except as approved by such accountants or Responsible Officer,
as the case may be, and as disclosed therein and, with respect to any unaudited
statements, except the notes with respect thereto). Except as disclosed in
Schedule 6.1, the Borrower did not have, at the date of the most recent balance
sheet referred to above, any material Guarantee Obligation, material contingent
liability or material liability for taxes, or any long-term lease or unusual
forward or long-term commitment, including, without limitation, any interest
rate or foreign currency swap or exchange transaction, which is not reflected in
the foregoing statements or in any notes thereto. Except as described in
Schedule 6.1, during the period from September 30, 2001 to and including the
date hereof there has been no sale, transfer or other disposition by the
Borrower of any material part of its business or property and no purchase or
other acquisition of any business or property (including any Capital Stock of
any other Person) material in relation to the financial condition of the
Borrower at September 30, 2001.
(b) The Borrower has furnished to each Bank projections of the
financial position and results of operations of the Borrower as at the end of
and for each of the fiscal years of the Borrower through December 31, 2004. The
projections and pro forma financial information contained in such materials are
based upon good faith estimates and assumptions believed by the Borrower to be
reasonable at the time made, it being recognized by the Administrative Agent and
the Banks that such projections as to future events are inherently subject to
significant economic and competitive uncertainties beyond the control of the
Borrower, that actual results of operations during the periods covered by such
projections may vary materially and adversely from the projected results of
operations contained in such projections and that there cannot be any assurance
that the projected results of operations contained in such projections will be
realized. No fact is known to the Borrower (other than general economic
conditions, which conditions are commonly known and affect business generally)
which has, or which would in the future, in the reasonable judgment of the
Borrower, have a Material Adverse Effect that has not been set forth in the
financial statements referred to in this subsection 6.1 or disclosed herein or
in the Schedules hereto.
6.2 No Change.
Except as disclosed in Schedule 6.1, (a) since December 31, 2000 there
has been no development or event, that has had or could reasonably be expected
to have a Material Adverse Effect and (b) since December 30, 2000, no dividends
or other distributions have been declared, paid or made upon the Capital Stock
of the Borrower nor has any of the Capital Stock of the
40
Borrower, Loral or the Parent been redeemed, retired, purchased or otherwise
acquired for value by the Borrower or any of its Subsidiaries, except as
permitted by this Agreement.
6.3 Corporate Existence; Compliance with Law.
Each of the Borrower and its Subsidiaries (a) is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, (b) has the corporate power and authority, and the legal right, to
own and operate its property, to lease the property it operates as lessee and to
conduct the business in which it is currently engaged, (c) is duly qualified as
a foreign corporation and in good standing under the laws of each jurisdiction
where its ownership, lease or operation of property or the conduct of its
business requires such qualification except where failure to so qualify could
not reasonably be expected to have a Material Adverse Effect, and (d) is in
compliance with all Requirements of Law except to the extent that the failure to
comply therewith could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.
6.4 Corporate Power; Authorization; Enforceable Obligations.
The Borrower has the corporate power and authority, and the legal
right, to execute, deliver and perform the Loan Documents and the Borrower has
the corporate power and authority, and the legal right, to issue, deliver and
perform the Notes and to borrow hereunder, and all necessary corporate action
has been taken by the Borrower to authorize the borrowings on the terms and
conditions of this Agreement and the Notes and the execution, delivery and
performance of the Loan Documents. No consent or authorization of, filing with
or other act by or in respect of, any Governmental Authority or any other Person
(other than the Banks) is required in connection with the consummation of the
transactions contemplated hereby, the borrowings hereunder or with the
execution, delivery, performance, validity or enforceability of any of the Loan
Documents other than those that have been obtained or made and are in full force
and effect and other than consents, authorizations, orders, notifications,
filings or registrations, individually or in the aggregate, the failure of which
to obtain or make could not reasonably be expected to have a Material Adverse
Effect. This Agreement has been, and the Notes and the L/C Applications will be,
duly executed and delivered on behalf of the Borrower. This Agreement
constitutes, and each Note and L/C Application, when executed and delivered will
constitute, a legal, valid and binding obligation of the Borrower, enforceable
against the Borrower in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles (whether enforcement is sought by proceedings in
equity or at law).
6.5 No Legal Bar.
The execution, delivery and performance of the Loan Documents, the
consummation of the transactions contemplated hereby and thereby, the borrowings
hereunder and the use of the proceeds thereof will not violate any Requirement
of Law applicable to, or Contractual Obligation of, the Borrower or of any of
its Subsidiaries and will not result in, or require, the creation or imposition
of any Lien on any of its or their respective properties or revenues
41
pursuant to any such Requirement of Law or Contractual Obligation except for
liens as provided herein.
6.6 No Material Litigation.
Except as set forth on Schedule 6.6, no litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Borrower, threatened by or against the Borrower or any
of its Subsidiaries or against any of its or their respective properties or
revenues (a) with respect to this Agreement, the Notes, any other Loan Document
or any of the transactions contemplated hereby or thereby, or (b) which has or
could reasonably be expected to have a Material Adverse Effect.
6.7 No Default.
Neither the Borrower nor any of its Subsidiaries is in default under or
with respect to any of its Contractual Obligations in any respect which could
reasonably be expected to have a Material Adverse Effect. No Default or Event of
Default has occurred and is continuing.
6.8 Ownership of Property; Liens.
Except as disclosed in Schedule 6.8, each of the Borrower and its
Subsidiaries has good record and marketable title in fee simple to, or a valid
leasehold interest in, all its real property, and good title to all its other
property, and none of such property is subject to any Lien except as permitted
by subsection 9.3.
6.9 Intellectual Property.
Except as set forth on Schedule 6.9, the Borrower and each of its
Subsidiaries owns, or is licensed to use, all trademarks, tradenames,
copyrights, technology, know-how and processes necessary for the conduct of its
business as currently conducted except for those which the failure to own or
license could not reasonably be expected to have a Material Adverse Effect (the
"Intellectual Property"). Except as disclosed in Schedule 6.9, no claim has been
asserted and is pending by any Person challenging or questioning the use of any
such Intellectual Property or the validity or effectiveness of any such
Intellectual Property, nor does the Borrower know of any valid basis for any
such claim, except for any such claim which could not reasonably be expected to
have a Material Adverse Effect. The use of such Intellectual Property by the
Borrower and its Subsidiaries does not infringe the rights of any Person, except
for such claims and infringements that, in the aggregate, do not have a Material
Adverse Effect.
6.10 Federal Regulations.
No part of the proceeds of any Loans will be used for "purchasing" or
"carrying" any "margin stock" within the respective meanings of each of the
quoted terms under Regulation U of the Board of Governors of the Federal Reserve
System as now and from time to time hereafter in effect or for any purpose which
violates the provisions of the Regulations of such Board of Governors.
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6.11 Investment Company Act; Other Regulations.
The Borrower is not an "investment company", or a company "controlled"
by an "investment company", within the meaning of the Investment Company Act of
1940, as amended. The Borrower is not subject to regulation under any Federal or
State statute or regulation which limits its ability to incur Indebtedness.
6.12 Subsidiaries.
The Borrower has no Subsidiaries other than (a) any Special Purpose
Holding Subsidiary, (b) existing Subsidiaries as set forth in Schedule 6.12 and
(c) any Subsidiary which is a Guarantor pursuant to the Guarantee Agreement.
6.13 Purpose of Loans.
The proceeds of the Term Loans and a portion of the Revolving Credit
Facility shall be used by the Borrower on the Closing Date to refinance
indebtedness under the Existing Credit Agreement Thereafter, the Revolving
Credit Facility shall be used to provide for working capital requirements and
for general corporate purposes, including acquisitions.
6.14 Environmental Matters.
Except as disclosed in Schedule 6.14, each of the representations and
warranties set forth in paragraphs (a) through (e) of this subsection is true
and correct with respect to each parcel of real property owned or operated
(within the meaning of any applicable Environmental Law) by the Borrower and its
Subsidiaries (the "Properties"), except to the extent that the facts and
circumstances giving rise to any such failure to be so true and correct could
not reasonably be expected to have a Material Adverse Effect:
(a) The Properties do not contain, and have not previously contained,
in, on, or under, including, without limitation, the soil and groundwater
thereunder, any Hazardous Materials in concentrations which violate
Environmental Laws.
(b) The Properties and all operations and facilities at the Properties
are in compliance with all Environmental Laws, and there is no Hazardous
Materials contamination or violation of any Environmental Law, which could
interfere with the continued operation of any of the Properties or impair the
fair saleable value of any thereof.
(c) Neither the Borrower nor any of its Subsidiaries has received any
complaint, notice of violation, alleged violation, investigation or advisory
action or of potential liability or of potential responsibility regarding
environmental protection matters or permit compliance with regard to the
Properties, nor is the Borrower aware that any Governmental Authority is
contemplating delivering to the Borrower or any of its Subsidiaries any such
notice.
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(d) Hazardous Materials have not been generated, treated, stored,
disposed of, in, on or under any of the Properties, nor have any Hazardous
Materials been transferred from the Properties to any other location, in
violation of any Environmental Law.
(e) There are no governmental or administrative actions or judicial
proceedings pending or, to Borrower's knowledge, contemplated under any
Environmental Laws to which the Borrower or any of its Subsidiaries is or, to
Borrower's knowledge, will be named as a party with respect to the Properties,
nor are there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or judicial
requirements, outstanding under any Environmental Law with respect to any of the
Properties.
6.15 Solvency.
The Borrower is, individually and together with its Subsidiaries,
Solvent.
6.16 Collateral Documents.
(a) Personal Property. The Security Agreement is effective to create in
favor of the Administrative Agent, for the benefit of the Banks, a legal, valid
and enforceable security interest in the Collateral described therein, and as
defined therein (and including, among other things, all personal property such
as accounts, inventory, equipment, contracts, intellectual property and general
intangibles to secure the loans and obligations hereunder) and proceeds thereof,
and the Security Agreement shall at all times constitute a fully perfected Lien
on, and security interest in, all right, title and interest of the Borrower and
its Subsidiaries in such Collateral and the proceeds thereof, as security for
the Secured Obligations (as defined in the Security Agreement), in each case
prior and superior in right to any other Person, other than with respect to
Liens expressly permitted by subsection 9.3.
(b) Pledged Shares. The Pledge Agreement is effective to create in
favor of the Administrative Agent, for the benefit of the Banks, a legal, valid
and enforceable security interest in the Pledged Shares described therein, and
as defined therein and proceeds thereof, and, the Pledge Agreement shall at all
times constitute a fully perfected Lien on, and security interest in, all right,
title and interest of the Borrower and its Subsidiaries in such Pledged Shares
and the proceeds thereof, as security for the Secured Obligations (as defined in
the Pledge Agreement), in each case prior and superior in right to any other
Person, other than with respect to Liens expressly permitted by subsection 9.3.
(c) Real Property. The Mortgages are effective to create in favor of
the Collateral Agent, for the benefit of the holders of the Secured Obligations
identified therein, a legal, valid and enforceable Lien on all of the respective
grantors' right, title and interest in and to the Mortgaged Properties
thereunder and the proceeds thereof, and when the Mortgages are recorded in the
appropriate offices and the proper amount of mortgage recording or similar taxes
(if any) are paid and when the financing statements are duly filed in the
appropriate public records, the Mortgages shall constitute a fully perfected
Lien on, and security interest in, all right, title and interest of the grantors
in the Mortgaged Properties and the proceeds thereof, in each case prior and
superior in right to any other Lien other than Liens expressly permitted
hereunder.
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6.17 Disclosure.
No representation or warranty made by the Borrower in this Agreement,
any other Loan Document or in any financial statement, report, certificate or
any other document furnished in connection herewith or therewith 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.
SECTION 7. CONDITIONS PRECEDENT
7.1 Conditions to Effectiveness; Initial Extensions of Credit.
The effectiveness of this Agreement and of each Bank to make its
initial Extension of Credit is subject to the satisfaction, immediately prior to
or concurrently with such effectiveness and the making of such Extension of
Credit on the Closing Date, of the following conditions precedent:
(a) Loan Documents. The Administrative Agent shall have received for
each Bank: (i) this Agreement, (ii) the Guarantee Agreement, (iii) a Revolving
Credit Note or Term Loan Note for each requesting Revolving Credit Bank and Term
Loan Bank, and (iv) the Collateral Documents, each executed and delivered by a
duly authorized officer of the Borrower and the other parties thereto and, in
the case of this Agreement, by the Administrative Agent and the Banks.
(b) Corporate Proceedings of the Borrower. The Administrative Agent
shall have received, with a counterpart for each Bank, a copy of the
resolutions, in form and substance reasonably satisfactory to the Administrative
Agent, of the Board of Directors of the Borrower authorizing the execution,
delivery and performance of the Loan Documents, certified by the Secretary or an
Assistant Secretary of the Borrower as of the Closing Date, which certificate
shall state that the resolutions thereby certified have not been amended,
modified, revoked or rescinded and shall be in form and substance reasonably
satisfactory to the Administrative Agent.
(c) Borrower Corporate Documents. The Administrative Agent shall have
received, with a counterpart for each Bank, true and complete copies of the
certificate of incorporation and by-laws of the Borrower, certified as of the
Closing Date as complete and correct copies thereof by the Secretary or an
Assistant Secretary of the Borrower.
(d) Borrower Incumbency Certificates. The Administrative Agent shall
have received, with a copy for each Bank, a certificate of the Borrower, dated
the Closing Date, as to the incumbency and signatures of the officers of the
Borrower executing any Loan Document, which certificate shall be reasonably
satisfactory in form and substance to the Administrative Agent and shall be
executed by the President or Vice President and the Secretary or any Assistant
Secretary of the Borrower.
45
(e) Corporate Proceedings of Subsidiaries. The Administrative Agent
shall have received, with a counterpart for each Bank, a copy of the
resolutions, in form and substance satisfactory to the Administrative Agent, of
the Board of Directors of each Subsidiary of the Borrower which is a party to a
Loan Document authorizing (i) the execution, delivery and performance of the
Loan Documents to which it is a party and (ii) the granting by it of the Liens
created pursuant to the Collateral Documents to which it is a party, certified
by the Secretary or an Assistant Secretary of each such Subsidiary as of the
Closing Date, which certificate shall be in form and substance satisfactory to
the Administrative Agent and shall state that the resolutions thereby certified
have not been amended, modified, revoked or rescinded.
(f) Subsidiary Incumbency Certificates. The Administrative Agent shall
have received, with a counterpart for each Bank, a certificate of each
Subsidiary of the Borrower which is a Loan Party, dated the Closing Date, as to
the incumbency and signature of the officers of such Subsidiaries executing any
Loan Document, satisfactory in form and substance to the Administrative Agent,
executed by the President or any Vice President and the Secretary or any
Assistant Secretary of each such Subsidiary.
(g) Subsidiary Corporate Documents. The Administrative Agent shall have
received, with a counterpart for each Bank, true and complete copies of the
certificate of incorporation and by-laws of each Loan Party, certified as of the
Closing Date as complete and correct copies thereof by the Secretary or an
Assistant Secretary of such Loan Party.
(h) Financial Statements. The Administrative Agent shall have received
unaudited consolidated financial statements of the Borrower and the consolidated
subsidiaries for and at September 30, 2001.
(i) No Violation. The consummation of the transactions contemplated
hereby shall not contravene, violate or conflict with, nor involve the
Administrative Agent, any Bank or the Issuing Bank in any violation of, any
Requirement of Law.
(j) Consents, Licenses and Approvals. The Administrative Agent shall
have received, with a copy for each Bank, a certificate of a Responsible Officer
of the Borrower (i) attaching copies of all consents, authorizations and filings
required by subsection 6.4, if any, and (ii) stating that except for such
consents, licenses and filings as are attached, no such consents, licenses and
filings are required, and each such consent, authorization and filing, if any,
shall be in form and substance reasonably satisfactory to the Administrative
Agent.
(k) Fees. The Administrative Agent shall have received the fees to be
received on the Closing Date referred to in subsection 5.1. Each Bank shall have
received a closing fee equal to 0.75% of its Commitment.
(l) Lien Searches. The Administrative Agent shall have received the
results of a recent lien search in each relevant jurisdiction with respect to
the Borrower and its Subsidiaries, which shall reveal no liens on any assets of
the Borrower or its Subsidiaries except for liens permitted under the Loan
Documents or liens to be discharged on or prior to the Closing Date pursuant to
documentation satisfactory to the Administrative Agent.
46
(m) Insurance. The terms, conditions and amounts of insurance coverage
of the Borrower and the Subsidiaries, including orbital (to the extent
available) and launch insurance, shall be in effect when applicable, and
substantially as previously described to the Administrative Agent by the
Borrower and providing, among other things that the Collateral Agent is loss
payee thereunder; provided that with respect to satellites that are not in
orbit, orbital insurance shall not be required as a condition precedent under
this Section.
(n) Legal Opinions. The Administrative Agent shall have received, with
a counterpart for each Bank, the executed legal opinion of Xxxxxxx Xxxx &
Xxxxxxxxx, counsel to the Borrower, in form and substance reasonably
satisfactory to the Administrative Agent and the Required Banks.
(o) Personal Property Collateral. Receipt by the Administrative Agent
of the following:
(i) Financing Statements. Duly executed UCC financing
statements, or their equivalent, for each jurisdiction as necessary or
appropriate, in the Administrative Agent's discretion, to perfect the
security interest in the collateral.
(ii) Certificated Interests. Original certificates evidencing
capital stock, membership interest or similar equity interest which is
the subject of the Pledge Agreement, together with undated stock
transfer powers executed in blank.
(iii) Intellectual Property. Such patent, trademark and
copyright notices and filings as necessary or appropriate, in the
Administrative Agent's discretion, to perfect the security interests in
intellectual property that constitutes a part of the collateral.
(iv) Landlord Consents. Landlord consents, estoppel letters or
consents and waivers in respect of collateral held on leased premises
as reasonably required by the Administrative Agent.
(v) Satellite Appraisals. Appraisals of Telstar 4, 5, 8 and
13, in form and content satisfactory to the Administrative Agent and
the Required Banks.
(iv) Management Fee Note, LSCC Secured Note and CyberStar
Receivable. The original Management Fee Note, LSCC Secured Note and
CyberStar Receivable, together with an allonge in form reasonably
acceptable to the Administrative Agent.
(p) Real Property Collateral. Receipt by the Administrative Agent of
the following:
(i) Surveys. Copies of recent ALTA surveys of each of the
Mortgaged Properties (other than those identified in Section 7.3(a)
hereof) by registered engineers or land surveyors, in form and detail
(including the location of special flood hazard areas) acceptable to
the Administrative Agent.
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(ii) Title Polices. Standard ALTA mortgagee policies insuring
the priority of the Mortgages in amounts and from companies acceptable
to the Administrative Agent and the Required Banks. The title policies
shall include only such exceptions as are acceptable to the
Administrative Agent. Copies of recorded documentation relating to all
such exceptions shall be provided to the Administrative Agent prior to
the Closing Date.
(iii) Local Counsel Opinions. Executed legal opinions from
local counsel regarding the enforceability of the Mortgages under local
law in form and substance acceptable to the Administrative Agent and
the Required Banks.
(iv) Environmental Reports. Copies of environmental reports
and other environmental documentation, if any, relating to the
Mortgaged Property and other real property leased by the Borrower and
its Subsidiaries, which reports and documentation shall be in form and
detail satisfactory to the Administrative Agent and the Required Banks.
(v) Flood Insurance. Copies of insurance certificates or
policies evidencing flood hazard insurance for improvements located in
areas having "special flood hazards," showing the Collateral Agent as
sole loss payee, together with evidence of payment of premiums thereon.
(vi) Appraisals. Appraisals of the real estate and equipment
at the Palo Alto facility, in form and content satisfactory to the
Administrative Agent and the Required Banks.
(q) Intercreditor Agreement. Receipt by the Administrative Agent of a
fully executed copy of the Intercreditor Agreement.
(r) Amendment of Satellite Credit Facility. Receipt by the
Administrative Agent of an executed and effective amendment to the Satellite
Credit Facility confirming, among other things, that the aggregate amount
thereof is not in excess of $494 million and has a maturity not sooner than
January 7, 2005.
The Administrative Agent will, on request, confirm to the Borrower that
the foregoing conditions have been met (or otherwise satisfied, whether by
waiver, post-closing agreement, or otherwise), the Closing Date has thereby
occurred and the credit facilities hereunder established.
7.2 Conditions to Each Extension of Credit.
The agreement of each Bank to make any Extension of Credit or of the
Issuing Bank to issue any Syndicated Letter of Credit on any date (including,
without limitation, the Closing Date) is subject to the satisfaction of the
following conditions precedent:
(a) Representations and Warranties. Each of the representations and
warranties made by the Borrower in or pursuant to the Loan Documents shall be
true and correct in all material respects on and as of such date as if made on
and as of such date, except where such
48
representations and warranties expressly relate to an earlier date, in which
case such representation and warranty shall be true and correct as of such
earlier date.
(b) No Default. No Default or Event of Default shall have occurred and
be continuing on such date or after giving effect to the Extensions of Credit
requested to be made on such date.
(c) Insurance Coverage. In orbit insurance is in full force and effect
for all satellites in orbit at the time of such Extension of Credit (except that
this condition shall not be applicable for renewals of then outstanding Letters
of Credit), such insurance to be in an amount equal to the original cost less
accumulated depreciation of each such satellite.
The acceptance by the Borrower of any Loan, any drawing under any
Syndicated Letter of Credit shall constitute a representation and warranty by
the Borrower as of the date of such effectiveness or Loan or Letter of Credit,
as the case may be, that the conditions contained in this subsection 7.2 have
been satisfied.
7.3 Conditions Subsequent to Closing.
The Borrower covenants and agrees to provide, or cause to be provided,
to the Administrative Agent each of the following items on or before the dates
identified:
(a) Survey. Within ninety (90) days of the Closing Date, an
ALTA survey of the Petaluma, California Mortgaged Property by
registered engineers or land surveyors, in form and detail (including
the location of special flood hazard areas) acceptable to the
Administrative Agent.
(b) Landlord's Estoppel. Borrower will use reasonable
commercial efforts absent the payment of any fees or the making of any
concessions to obtain a Landlord's Estoppel in respect of its property
in Richmond, California.
SECTION 8.
AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as any Commitments remain in
effect, any Loan remains outstanding and unpaid or any Letter of Credit remains
outstanding or any other amount is owing to any Bank, the Issuing Bank or the
Administrative Agent hereunder, the Borrower shall and (except in the case of
delivery of financial information, reports and notices) shall cause each of its
Subsidiaries to:
8.1 Financial Statements.
Furnish to the Administrative Agent and each Bank:
(a) as soon as available, but in any event within 120 days after the
end of each fiscal year of the Borrower, a copy of the consolidated balance
sheet of the Borrower and its
49
consolidated Subsidiaries as at the end of such year and the related
consolidated statements of operations and of cash flows for such year, setting
forth in each case, in comparative form the figures for the previous year,
reported on without a "going concern" or like qualification or exception, or
qualification arising out of the scope of the audit, by Deloitte & Touche LLP or
other independent certified public accountants of nationally recognized standing
not unacceptable to the Required Banks;
(b) as soon as available, but in any event not later than 60 days after
the end of each of the first three quarterly periods of each fiscal year of the
Borrower, the unaudited consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at the end of such quarter and the related
unaudited consolidated statements of operations and of cash flows of the
Borrower and its consolidated Subsidiaries for such quarter and the portion of
the fiscal year through the end of such quarter, setting forth in each case, in
comparative form the figures for the previous year, certified by a Responsible
Officer as being to the best of his knowledge fairly stated in all material
respects when considered in relation to the consolidated financial statements of
the Borrower and its consolidated Subsidiaries referred to in subsection 8.1(a)
or 5.1(a), as the case may be (subject to normal year-end audit adjustments);
all such financial statements to be complete and correct in all material
respects and to be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein and, with respect to any unaudited statements, except the
notes with respect thereto);
(c) as soon as available, but in any event within 60 days after the end
of each fiscal year of the Borrower, a pro forma income statement and selected
cash flow items for the Borrower and its Subsidiaries for the coming fiscal
year; and
(d) as soon as available, but in any event within 120 days after the
end of each fiscal year, and 60 days after the end of each of the first three
quarterly fiscal periods of each year, copies of the audited annual and company
prepared quarterly financial statements for Loral Satellite, Inc., including a
consolidated balance sheet and consolidated statements of operations and cash
flows and copies of the company prepared quarterly and annual statements of
Loral CyberStar Data Services Corporation, including a consolidated balance
sheet and consolidated statements of operations and cash flow.
8.2 Certificates; Other Information.
Furnish to each Bank:
(a) concurrently with the delivery of the financial statements referred
to in subsection 8.1(a), (i) a certificate of the independent certified public
accountants reporting on such financial statements stating that in making the
examination necessary therefor no knowledge was obtained of any Default or Event
of Default, except as specified in such certificate and (ii) a calculation
certified by a Responsible Officer of Excess Cash Flow for the prior fiscal
year;
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(b) concurrently with the delivery of the financial statements referred
to in subsections 8.1(a) and 8.1(b),
(i) a certificate of a Responsible Officer (x) stating that,
to the best of such Officer's knowledge, the Borrower and each of its
Subsidiaries during such period has observed or performed all of its
covenants and other agreements, and satisfied every condition,
contained in the Loan Documents to which it is a party to be observed,
performed or satisfied by it, and that such Responsible Officer has
obtained no knowledge of any Default or Event of Default except as
specified in such certificate and (y) showing calculations in respect
of subsection 9.1, and
(ii) a certificate of the chief financial officer stating
after making due inquiry in his corporate capacity that to the best of
such officer's knowledge, the Borrower and its Subsidiaries are in
compliance with the provisions of Section 9.9.
(c) within five days after the same are sent, copies of all financial
statements and material reports which Loral sends to its stockholders, and
within five days after the same are filed, copies of all financial statements
and reports which Loral or the Parent may make to, or file with, the Securities
and Exchange Commission or any successor or analogous Governmental Authority;
(d) concurrently with the delivery of the financial statements referred
to in subsection 8.1(a) and (b), (i) any discussion or analysis of the results
reflected in such financial statements prepared by management of the Borrower,
(ii) an updated copy of Schedule 9.1 hereto identifying any assets listed
thereon that have been sold since the delivery of the last updated schedule and
giving the sales price for such assets and showing any changes in the book value
of the assets listed thereon since the delivery of the last updated schedule,
and (iii) an aging report on accounts receivable;
(e) concurrently with the delivery of the annual audited financial
statements referred to in subsection 8.1(a), beginning with the annual audited
financial statements for the fiscal year ending December 31, 2002, an updated
appraisal demonstrating Appraised Value of Telstar 4, 5, 8 and 13 prepared by an
Approved Appraiser and reasonably satisfactory in form to the Administrative
Agent; and
(f) promptly, such additional financial and other information as any
Bank may from time to time reasonably request, subject to restrictions of any
Governmental Authority with respect to classified information.
8.3 Payment of Obligations.
Pay, discharge or otherwise satisfy at or before maturity or before
they become delinquent, as the case may be, all its obligations of whatever
nature, except where the amount or validity thereof is currently being contested
in good faith by appropriate proceedings and reserves in conformity with GAAP
with respect thereto have been provided on the books of the Borrower or its
Subsidiaries, as the case may be, and except where the failure to so pay is due
to
51
a good faith error or omission; provided that this covenant shall not require
the Borrower to pay any Indebtedness or Guarantee Obligation if such failure to
pay would not result in an Event of Default under Section 10(f).
8.4 Conduct of Business and Maintenance of Existence.
Continue to engage in business of the same general type as now
conducted by it and preserve, renew and keep in full force and effect its
corporate existence and take all reasonable action to maintain all rights,
privileges and franchises necessary or desirable in the normal conduct of its
business except as otherwise permitted pursuant to subsection 9.5; comply with
all Contractual Obligations and Requirements of Law except to the extent that
failure to comply therewith could not, in the aggregate, reasonably be expected
to have a Material Adverse Effect; provided that this covenant shall not prevent
the Borrower from terminating the ChinaSat Contract or require the Borrower to
pay any Indebtedness or Guarantee Obligation if such failure to pay would not
result in an Event of Default under Section 10(f).
8.5 Maintenance of Property; Insurance.
Keep all property useful and necessary in its business in good working
order and condition, normal wear and tear excepted; maintain with financially
sound and reputable insurance companies satisfactory to the Administrative Agent
in its reasonable discretion, insurance on all its property in at least such
amounts and against at least such risks (but including in any event public
liability, product liability and business interruption and showing the
Collateral Agent as loss payee or additional insured, as appropriate) as are
usually carried by the companies engaged in the same or a similar business in
the same general area, and if reasonably requested by the Required Banks any
additional property and/or liability insurance; and furnish to each Bank, upon
written request, full information as to the insurance carried. The Borrower and
its Subsidiaries shall maintain in-orbit insurance, if available, on each
satellite in orbit equal in value to at least the original cost less accumulated
depreciation of each such satellite in orbit.
8.6 Inspection of Property; Books and Records; Discussions; Independent
Audits.
Keep proper books of records and account in which full, true and
correct entries in conformity with GAAP and all Requirements of Law shall be
made of all dealings and transactions in relation to its business and
activities; and, subject to any restrictions imposed by any Governmental
Authority with respect to classified information and to contractual
confidentiality restrictions with customers, permit representatives of any Bank
to visit and inspect any of its properties and examine and make abstracts from
any of its books and records at any reasonable time and as often as may
reasonably be desired and to discuss the business, operations, properties and
financial and other condition of the Borrower and its Subsidiaries with officers
and employees of the Borrower and its Subsidiaries and with its independent
certified public accountants.
8.7 Notices.
Promptly give notice to the Administrative Agent and each Bank, of:
52
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries or (ii) litigation,
investigation or proceeding which may exist at any time between the Borrower or
any of its Subsidiaries and any Governmental Authority, which in either case, if
not cured or if adversely determined, as the case may be, would have a Material
Adverse Effect;
(c) any litigation or proceeding affecting the Borrower or any of its
Subsidiaries in which the amount involved is more than $15 million at any time
and not covered by insurance (other than normal deductibles) or in which
injunctive or similar relief which could reasonably be expected to have a
Material Adverse Effect is sought;
(d) the following events, as soon as possible and in any event within
30 days after the Borrower knows or has reason to know thereof: (i) the
occurrence or expected occurrence of any Reportable Event with respect to any
Plan, or any withdrawal from, or the termination, Reorganization or Insolvency
of any Multiemployer Plan or (ii) the institution of proceedings or the taking
of any other action by the PBGC or the Borrower or any Commonly Controlled
Entity or any Multiemployer Plan with respect to the withdrawal from, or the
terminating, Reorganization or Insolvency of, any Plan; and
(e) a development or event in the business, operations, property,
condition (financial or otherwise) or prospects of the Borrower and its
Subsidiaries taken as a whole which could reasonably be expected to have a
Material Adverse Effect. Each notice pursuant to this subsection shall be
accompanied by a statement of a Responsible Officer setting forth details of the
occurrence referred to therein and stating what action the Borrower or any of
its Subsidiaries proposes to take with respect thereto.
8.8 Environmental Laws.
(a) Comply with, and use best efforts to insure compliance by all
tenants and subtenants, if any, with, all Environmental Laws and obtain and
comply with and maintain, and use best efforts to insure that all tenants and
subtenants obtain and comply with and maintain, any and all licenses, approvals,
registrations or permits required by Environmental Laws except to the extent
that failure to do so could not have a Material Adverse Effect;
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws applicable to it and comply with all lawful orders and
directives of all Governmental Authorities within the time permitted by law
respecting Environmental Laws, except to the extent that the same are being
contested in good faith by appropriate proceedings and the pendency of such
proceedings could not have a Material Adverse Effect; and
(c) Defend, indemnify and hold harmless the Administrative Agent and
the Banks, and their respective employees, agents, officers and directors, from
and against any claims,
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demands, penalties, fines, liabilities, settlements, damages, costs and expenses
of whatever kind or nature known or unknown, contingent or otherwise, arising
out of, or in any way relating to the violation of or noncompliance with any
Environmental Laws applicable to the real property owned or operated (within the
meaning of any applicable Environmental Law) by the Borrower or any of its
Subsidiaries, or any orders, requirements or demands of Governmental Authorities
related thereto, including, without limitation, attorney's and consultant's
fees, investigation and laboratory fees, court costs and litigation expenses,
except to the extent that any of the foregoing arise out of the gross negligence
or willful misconduct of the party seeking indemnification therefor.
8.9 Additional Subsidiaries.
(a) Where Domestic Subsidiaries that are not Guarantors hereunder (the
"Non-Guarantor Subsidiaries") shall, as a group, at any time have assets that in
the aggregate exceed an amount equal to one percent (1%) of Consolidated Net
Worth as of the end of the most recent fiscal quarter, then the Borrower shall
promptly notify the Administrative Agent thereof and cause such Non-Guarantor
Subsidiaries to be joined as Guarantors, such that after giving effect to such
joinder the remaining Non-Guarantor Subsidiaries shall not, as a group, exceed
the foregoing threshold. In connection with any such joinder hereunder, the
Borrower shall cause there to be delivered to the Administrative Agent promptly,
but in any event within 45 days, (i) an amendment, supplement or joinder to the
Guarantee Agreement, to the Collateral Documents (including UCC financing
statements) and to the Intercreditor Agreement, in form and substance
satisfactory to the Administrative Agent, to join the applicable Domestic
Subsidiary as a Guarantor hereunder, and such other action necessary or
advisable to cause the Liens created by the Collateral Documents to be duly
perfected in accordance with all applicable Requirements of Law, including, the
filing of financing statements, (ii) if the such Domestic Subsidiary owns real
property interests, Mortgages and the other items referenced in Section 7.1(p)
in connection therewith, (iii) such supporting resolutions, incumbency
certificates, corporate formation and organizational documentation and opinions
of counsel as the Administrative Agent may reasonably request, and (iv) deliver
stock certificates and related pledge agreements and pledge joinder agreements
evidencing the pledge of 100% of the Capital Stock of each Domestic Subsidiary
(whether or not a Guarantor), together with undated stock transfer powers
executed in blank.
(b) Where there shall exist Foreign Subsidiaries with regard to which
the Capital Stock of its first-tier foreign parent company (or its Capital Stock
if such Foreign Subsidiary is a first-tier Foreign Subsidiary) is not pledged to
secure the loans and obligations hereunder and the aggregate amount of assets
for all such Foreign Subsidiaries shall exceed one percent (1%) of Consolidated
Net Worth as of the end of the most recent fiscal quarter, then the Borrower
shall promptly notify the Administrative Agent thereof and cause to be delivered
to the Administrative Agent promptly, but in any event within 90 days, (i) stock
certificates and related pledge agreements and pledge joinder agreements
evidencing the pledge of 65% of the voting Capital Stock of each first-tier
Foreign Subsidiary, together with undated stock transfer powers executed in
blank, and take or cause to taken all such other action under the law of the
jurisdiction of organization as may be necessary or advisable to perfect such
Lien on such Capital Stock, such that after giving effect thereto the foregoing
threshold shall not be exceeded,
54
and (ii) such supporting resolutions, incumbency certificates, corporate
formation and organizational documentation and opinions of counsel as the
Administrative Agent may reasonably request, in connection therewith.
8.10 Collateral Interests.
(a) Personal Property. The Borrower will, and will cause each of its
Domestic Subsidiaries to, pledge collateral interests in all of its personal
property as contemplated herein, in the Guarantee Agreement, in the Collateral
Documents and in the Intercreditor Agreement, and will cooperate with and assist
the Administrative Agent and the Collateral Agent to insure the establishment
and maintenance of a perfected first-priority security interest in such
collateral, subject only to Liens permitted hereunder and excepting only (i)
fixed or capital assets and associated intangible assets which are the subject
of financing and prior liens permitted hereunder and the terms of which
expressly prohibit the grant of a security interest in favor of any other party,
and (ii) rights under leases of personal property, contracts, licenses or other
agreements the terms of which expressly prohibit the grant of a security
interest in favor of any other party. Notwithstanding the foregoing, Loral
Ground Services, L.L.C., a Delaware limited liability company ("Ground
Services") is not required to pledge any of the issued and outstanding Capital
Stock owned by it in Loral del Ecuador CIA Ltda., an Ecuador company ("Loral
Ecuador"), so long as the shares are the subject of that Agreement of Sale dated
as of February 5, 1999 with CD Radio, Inc. (now known as Sirius Radio, Inc.).
(b) Real Property. The Borrower will, and will cause each of its
Domestic Subsidiaries to, mortgage and pledge collateral interests in all of its
real property (including leasehold interests) as contemplated herein, in the
Guarantee Agreement and in the Collateral Documents and will cooperate with and
assist the Administrative Agent and the Collateral Agent to insure the
establishment and maintenance of a perfected first-priority lien on and security
interest in such collateral, subject only to Liens permitted hereunder and
excepting only (i) real property interests which in the aggregate have a fair
value less than $1 million, in the case of owned properties, or annual rental
payments less than $100,000, in the case of leased properties, and (ii) fixed or
capital assets and associated intangible assets which are the subject of
financing and prior liens permitted hereunder and the terms of which expressly
prohibit the grant of a security interest in favor of any other party. In the
case of a mortgage or pledge of collateral interest in respect of a leasehold
interest, the obligation of the Borrower hereunder will be satisfied by the use
of commercially reasonable efforts to obtain a leasehold mortgage without
payment of a fee or other concession to the landlord in exchange therefor.
SECTION 9.
NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as any Commitments remain in
effect, any Loan remains outstanding and unpaid or any Letter of Credit remains
outstanding or any other amount is owing to any Bank, the Issuing Bank or the
Administrative Agent hereunder, the Borrower shall not, and (except with respect
to subsections 9.1 and 9.7) shall not permit any of its Subsidiaries to,
directly or indirectly:
55
9.1 Financial Condition Covenants.
(a) Interest Coverage. Permit the ratio of (x) Consolidated EBITDA for
any period of four consecutive fiscal quarters (the "Test Period") ending on a
fiscal quarter during any period set forth below to (y) Consolidated Interest
Expense for such Test Period to be less than the ratio set forth opposite the
last date of such Test Period shown on Schedule 9.1.
(b) Consolidated Leverage Ratio. Permit the ratio of (x) Consolidated
Funded Debt as of the end of the applicable fiscal quarter to (y) Consolidated
EBITDA for any period of four consecutive fiscal quarters (the "Test Period")
ending on a fiscal quarter during any period set forth below, to be greater than
the ratio set forth opposite the last date of such Test Period shown on Schedule
9.1.
(c) Consolidated Net Worth. As of the end of each fiscal quarter
commencing with the fiscal quarter ending March 31, 2002, the Consolidated Net
Worth shall be not less than the sum of (i) eighty-seven percent (87%) of
Consolidated Net Worth as of December 31, 2001, plus (ii) as of the end of each
fiscal quarter commencing with the fiscal quarter ending March 31, 2002, an
amount equal to fifty-percent (50%) of Consolidated Net Income (but not less
than zero) for such fiscal quarter, such increases to be cumulative, plus (iii)
an amount equal to one hundred percent (100%) of net proceeds from Equity
Transactions occurring after the Closing Date.
(d) Limitation on Capital Expenditures. The Borrower will not, nor will
it permit any of its Subsidiaries to, make Capital Expenditures that would be
prohibited by the limitations set forth on Schedule 9.1.
9.2 Limitation on Indebtedness.
Create, incur, assume or suffer to exist any Indebtedness of the
Borrower or any of its Subsidiaries, except:
(a) Indebtedness in respect of the Loans, the Notes, the Letters of
Credit and other obligations under this Agreement;
(b) Indebtedness of any Domestic Subsidiary to the Borrower or any
other Subsidiary;
(c) Indebtedness outstanding on the Closing Date and listed on Schedule
6.8 and extensions, renewals and refinancings thereof so long as the amount of
such Indebtedness is not thereby increased (except by an amount necessary to pay
the fees and expenses, including prepayment costs, incurred in connection with
the refinancing and by any amount representing accrued or deferred interest
accrued prior to or during the period of any extensions or renewals);
(d) Indebtedness comprised of liens permitted by subsection 9.3;
56
(e) Indebtedness in respect of Interest Rate Agreements and foreign
exchange hedging agreements incurred to protect the Borrower and its
Subsidiaries against interest rate fluctuations or foreign exchange rate
fluctuations;
(f) Indebtedness of the type described in clause (b) of the definition
of "Indebtedness" arising as a result of progress payments, milestones, advances
or similar arrangements made pursuant to government contracts or other
Contractual Obligations;
(g) Indebtedness incurred in connection with a sale and leaseback of
the Palo Alto Property under an arrangement with any Person providing for the
leasing of real or personal property which has been sold or is to be transferred
to such Person or to any other Person to whom funds have been or are to be
advanced by such Person on the security of such property or rental obligations,
provided that (i) the sale shall be for fair market value payable solely in cash
at closing yielding net cash proceeds of at least $50 million, and (ii) the
maturity of such Indebtedness shall be not earlier than September 30, 2005.
(h) Indebtedness incurred after the Closing Date by the Borrower or its
Subsidiaries not to exceed $25 million in the aggregate at any time for
Financing Lease obligations, for Synthetic Lease obligations and for the
deferred purchase price of newly acquired property of the Borrower and its
Subsidiaries, incurred to finance the acquisition of fixed or capital assets and
intangibles associated with such assets within 180 days of the acquisition or
construction of such fixed or capital assets, and extensions, renewals and
refinancings thereof so long as the amount of such Indebtedness is not increased
(except by an amount necessary to pay the fees and expenses, including
prepayment costs, incurred in connection with the refinancing);
(i) other unsecured Indebtedness of the Borrower and its Subsidiaries;
provided that the aggregate principal amount of Indebtedness outstanding under
the foregoing clause (h) and under this clause (i) shall not exceed $50 million
in the aggregate at any time;
(j) Indebtedness, if any, related to the ChinaSat Contract; and
(k) Guarantee Obligations of the Borrower and its Subsidiaries with
respect to Indebtedness permitted under this Section 9.2.
9.3 Limitation on Liens.
Create, incur, assume or suffer to exist any Lien upon any of its or
its Subsidiaries' property, assets or revenues, whether now owned or hereafter
acquired, except for:
(a) Liens for taxes not yet due or which are being contested in good
faith by appropriate proceedings, provided that adequate reserves with respect
thereto are maintained on the books of the Borrower or its Subsidiaries, as the
case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business which are not
overdue for a period of more than 60 days or which are being contested in good
faith by appropriate proceedings;
57
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation and deposits
securing liability to insurance carriers under insurance or self-insurance
arrangements;
(d) deposits to secure the performance of bids, trade contracts (other
than for borrowed money), leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature incurred in the
ordinary course of business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not in any case materially
detract from the value of the property subject thereto or materially interfere
with the ordinary conduct of the business of the Borrower or such Subsidiary;
(f) (i) Liens in existence on the Closing Date listed on Schedule 6.8,
securing Indebtedness permitted by subsection 9.2(c), and (ii) Liens securing
Indebtedness of the Borrower outstanding on the Closing Date and listed on
Schedule 6.8 and extensions, renewals, and refinancings thereof so long as the
amount of such Indebtedness is not thereby increased (except by an amount
necessary to pay the fees and expenses, including prepayment costs, incurred in
connection with the refinancing), provided in each case, that no such Lien is
spread to cover any additional property after the Closing Date;
(g) Liens securing Indebtedness permitted by subsection 9.2(h),
incurred to finance or refinance the acquisition, construction or improvement of
fixed or capital assets and the intangibles associated with such assets,
provided that (i) such Liens shall be created within 180 days of the acquisition
or construction of such fixed or capital assets or intangibles and accounts
associated with such assets, (ii) such Liens do not at any time encumber any
property other than the property financed by such Indebtedness, (iii) the amount
of Indebtedness secured thereby is not increased except in connection with
further improvements and additions to such assets and (iv) the principal amount
of Indebtedness secured by any such Lien shall not at the time of incurrence
exceed 100% of the fair value (as determined in good faith by the board of
directors of the Borrower) of such property, intangibles and accounts at the
time it was acquired or constructed;
(h) Liens in favor of the Administrative Agent, for the ratable benefit
of the Banks;
(i) Liens on materials and work-in-progress in favor of customers of
the Borrower and its Subsidiaries for amounts paid to the Borrower or any of its
Subsidiaries as progress payments, milestones, advances or similar arrangements
under Contractual Obligations entered into by the Borrower or such Subsidiary
with respect to such materials or work-in-progress;
(j) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods;
(k) Liens on the Palo Alto Property securing Indebtedness in respect of
the sale and leaseback of the Palo Alto Property permitted by subsection 9.2(g);
58
(l) Liens in connection with any judgement which is not the basis for
the existence of an Event of Default pursuant to Section 10(i);
(m) Liens on property in existence at the time of acquisition of such
property by the Borrower or any Subsidiary in an aggregate amount at any one
time outstanding not in excess of 1% of Consolidated Net Worth at such time;
provided that no such Lien is spread to cover any additional property and the
amount secured thereby is not increased;
(n) Liens in favor of a Bank or an affiliate of a Bank pursuant to (i)
an interest rate protection agreement, foreign currency exchange protection
agreement or commodities purchase protection agreement permitted hereunder or
(ii) cash management programs, but only where (A) the loans and obligations
hereunder are also secured by a Lien on the collateral that is the subject of
such Lien, and (B) the loans and obligations hereunder and the obligations under
such protection agreements and cash management programs will share pari passu in
the collateral; and
(o) a junior Lien on the assets covered by the Collateral Documents to
secure the Satellite Credit Facility, provided that the maturity date for the
Satellite Credit Facility is on or after January 7, 2005 and such junior lien is
subject to the terms of the Intercreditor Agreement.
9.4 [Intentionally Omitted].
9.5 Limitations on Fundamental Changes.
Enter into any merger, consolidation or amalgamation, or liquidate,
wind up or dissolve itself (or suffer any liquidation or dissolution), or
convey, sell, lease, assign, transfer or otherwise dispose of, all or
substantially all of its property, business or assets, or the Capital Stock of
any Subsidiary (other than a Special Purpose Holding Subsidiary), or make any
material change in its present method of conducting business, except:
(a) any Subsidiary of the Borrower may be merged or consolidated with
or into the Borrower (provided that the Borrower shall be the continuing or
surviving corporation) or with or into any one or more Wholly Owned Subsidiaries
which is a Guarantor (provided that such Wholly Owned Subsidiary or Subsidiaries
shall be the continuing or surviving corporation(s));
(b) any Subsidiary may sell, lease, transfer or otherwise dispose of
any or all of its assets (upon voluntary liquidation or otherwise) to the
Borrower or any domestic Subsidiary of the Borrower which is a Guarantor;
(c) any Wholly Owned Subsidiary may be liquidated, wound up or
dissolved, unless any such liquidation, winding up or dissolution would have a
Material Adverse Effect; and
(d) Ground Services may sell, transfer or otherwise dispose of 100% of
the issued and outstanding Capital Stock owned by it in Loral Ecuador pursuant
to the terms of that Agreement of Sale referenced in Section 8.10(a).
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9.6 Limitation on Sale of Assets.
Convey, sell, lease, assign, transfer or otherwise dispose of any of
its property, business or assets (including, without limitation, receivables and
leasehold interests), whether now owned or hereafter acquired, except:
(a) property (including inventory or notes received in connection with
the sale of inventory, but excluding orbiting satellites and Telstar 8 and
Telstar 13 which are provided for in subsection (k) below) disposed of in the
ordinary course of business;
(b) obsolete, replaced, worn out or discontinued property (including
inventory, but excluding orbiting satellites and Telstar 8 and Telstar 13 which
are provided for in subsection (k) below);
(c) equipment which is replaced with other equipment of comparable
value and quality within 90 days before or after such sale or disposition;
(d) the sale or discount without recourse of accounts receivable in the
ordinary course of business in connection with the compromise or collection
thereof;
(e) the sale, transfer or other disposition of cash and/or Cash
Equivalents in exchange for a comparable amount of cash and/or Cash Equivalents;
(f) a sale and leaseback of the Palo Alto Property in accordance with
the terms of Section 9.2(g);
(g) the Globalstar Receivables Sale;
(h) upon any termination of the lease agreement described in Item 2 on
Schedule 9.9, the Borrower may take any actions required in connection with such
termination to effectuate such termination, including transferring any of its
rights under transponder capacity contracts in connection with any such
termination;
(i) a sale of the LSCC Secured Note and the exchange of the LSCC
Secured Note described in the last sentence of Section 9.9;
(j) intercompany transfers of assets, whether by sale, transfer,
contribution or otherwise, between the Borrower and its Domestic Subsidiaries
that are Guarantors hereunder;
(k) other sales of assets, including orbiting satellites and Telstar 8
and Telstar 13, provided that (i) such sales are for fair market value, (ii) not
less than 80% of the sales proceeds shall be paid in cash on the date of sale
and (iii) if the aggregate net after-tax cash proceeds from such assets exceeds
$20,000,000 after the Closing Date, then the Term Loans and Revolving Credit
Commitments are permanently reduced by an amount equal to the aggregate net
after-tax cash proceeds of such sales in excess of $20,000,000 received by the
Borrower and its Subsidiaries, in accordance with subsection 5.13(c); or
60
(l) a sale of the Capital Stock of Loral Ecuador pursuant to the terms
of that Agreement of Sale referenced in Section 8.10(a).
The parties hereto agree that any disposition of assets to a Person
(other than to the Borrower or a Guarantor) permitted by this Section 9.6 shall
be free and clear of the Liens of the Collateral Agent. Upon a sale of assets or
the sale of capital stock of a Subsidiary permitted by this Section 9.6, the
Collateral Agent shall deliver to the Borrower, upon the Borrower's request and
at the Borrower's expense, such documentation as is reasonably necessary to
evidence the release of the Collateral Agent's security interest in such assets
or capital stock, including, without limitation, amendments or terminations of
UCC financing statements, the return of stock certificates and the release of a
Guarantor (as applicable) from its obligations under the Loan Documents.
9.7 Limitation on Dividends.
Declare or pay any dividend (other than dividends payable solely in
equity securities of the Borrower not redeemable at the option of the holder and
not entitled to any mandatory repurchase, dividend or distribution) on, or make
any payment on account of, or set apart assets for a sinking or other analogous
fund for, the purchase, redemption, defeasance, retirement or other acquisition
of, any shares of any class of Capital Stock of the Borrower (including Cash
Advances from Parent) or any warrants or options to purchase any such Stock,
whether now or hereafter outstanding, or make any other distribution in respect
thereof, either directly or indirectly, whether in cash or property or in
obligations of the Borrower or any Subsidiary; provided that, so long as no
Default or Event of Default has occurred and is continuing or would result from
the making of such dividend, the Borrower may make a dividend if (a) the sum of
(i) such dividend plus (ii) the dividends made from the Closing Date through any
date of determination, shall not exceed an amount equal to 50% of cumulative
Consolidated Net Income, and (b) the ratio of Consolidated Funded Debt to
Consolidated EBITDA of the Borrower and its consolidated Subsidiaries is less
than 3.00 to 1.00 at the end of the fiscal quarter prior to the date of the
declaration of such dividend.
9.8 Limitation on Investments, Loans and Advances.
Make any advance, loan, extension of credit or capital contribution to,
or purchase any stock, bonds, notes, debentures or other securities of, or any
assets constituting a business unit of, or make any other investment in, any
Person or in any commodities futures or other such speculations, except:
(a) extensions of trade credit in the ordinary course of business
(including without limitation, any vendor financing; provided, however, the
aggregate principal amount of vendor financing provided to vendors that are not
at the time such vendor financing is provided Investment Grade Vendors shall not
at any time exceed $150 million;
(b) investments in Cash Equivalents;
61
(c) loans and advances to employees of the Borrower or its Subsidiaries
in the ordinary course of business in an aggregate amount for the Borrower and
its Subsidiaries not to exceed $5,000,000 at any one time outstanding;
(d) investments by the Borrower in its Domestic Subsidiaries which are
Guarantors hereunder and investments by Subsidiaries in the Borrower and in
Domestic Subsidiaries which are Guarantors hereunder;
(e) Capital Expenditures;
(f) advances to (i) subcontractors in respect of projects for which the
Borrower has received advances from third parties in an amount not to exceed
such third party advances (ii) subcontractors in an amount not to exceed at any
time outstanding $25,000,000 and (iii) providers of launch vehicles in the
ordinary course of business;
(g) loans and investments existing as of the Closing Date and set forth
in Schedule 9.8;
(h) Investments consisting of Capital Stock, obligations, securities or
other property received in settlement of accounts receivable (created in the
ordinary course of business) from bankrupt or insolvent obligors;
(i) investments consisting of notes and assets received in exchange for
the CyberStar Receivables and investments pursuant to the exchange described in
the last sentence of Section 9.9;
(j) other investments; provided that the aggregate amount of all such
investments under this subsection 9.8(j) may not exceed $20 million; and
(k) the Promissory note issued by the Parent in connection with the
Globalstar Receivables Sale.
9.9 Transactions with Affiliates.
Enter into any transaction, directly or indirectly, including, without
limitation, any purchase, sale, lease or exchange of property or stock or the
rendering of any service, with any Affiliate (including the Parent and Loral)
except (a) for transactions which are otherwise permitted under this Agreement
and which are (i) in the ordinary course of the Borrower's or a Subsidiary's
business, and (ii) upon fair and reasonable terms no less favorable to the
Borrower or such Subsidiary than it would obtain in a hypothetical comparable
arm's length transaction with a Person not an Affiliate and do not adversely
affect the business of the Borrower or such Subsidiary in excess of the effect
which would occur in such arm's length transaction, (b) that the Borrower may
perform the agreements listed on Schedule 9.9 and (c) the Globalstar Receivables
Sale. Notwithstanding anything contained herein to the contrary and except as
set forth in (c) above, any transaction or series of related transactions with
one or more Affiliates which are in excess of $20 million shall be for cash
consideration only, except (A) for the accrual
62
of management fees from Loral or the Parent, (B) for receipt of Capital Stock,
promissory notes, obligations, securities or other property received under
Section 9.8(h) in respect of Globalstar L.P., (C) for transactions between the
Borrower and Domestic Subsidiaries which are Guarantors and (D) transactions set
forth on Schedule 9.9 that are identified thereon as not being subject to the
terms of this sentence. Furthermore, in the event the Exchange Offer does not
close by February 1, 2002, the Borrower covenants and agrees that it will cause
the LSCC Secured Note to be cancelled in exchange for a transfer to the Borrower
of the $50,000,000 obligation of Loral CyberStar, Inc. previously transferred by
the Borrower to the Parent.
9.10 Restrictions on Actions Relating to the Management Fee Note and
LSCC Secured Note and the CyberStar Receivables.
Make, agree to, or otherwise acquiesce in any amendment, modification,
extension, waiver or consent in respect of the Management Fee Note, the LSCC
Secured Note or the CyberStar Receivables, except as to ministerial matters in a
manner not adverse to the interests of the Banks and otherwise with the prior
written consent of the Administrative Agent and the Required Banks.
9.11 Restrictions on Indebtedness to Parent or Loral.
Incur any Indebtedness to Parent or Loral unless the same is not
mandatorily repayable or repayable until one year and a day following repayment
and termination of the Credit Facilities and is subordinated to the Credit
Facilities on a basis satisfactory to the Administrative Agent.
SECTION 10.
EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan or the
amount of any drawing under a Letter of Credit when due; or the Borrower shall
fail to pay any interest on any Loan or on the unpaid amount of any drawing
under any Letter of Credit, or the Borrower shall fail to pay any other amount
payable hereunder, within five days after any such interest or other amount
becomes due in accordance with the terms hereof; or
(b) Any representation or warranty made or deemed made by the Borrower
or any other Loan Party herein or in any other Loan Document or which is
contained in any certificate, document or financial or other statement furnished
at any time under or in connection with this Agreement shall prove to have been
incorrect in any material respect on or as of the date made or deemed made; or
(c) The Borrower (or any Subsidiary) shall default in the observance or
performance of any agreement contained in subsection 9.1, 9.5, 9.6, 9.7 or 9.11;
or
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(d) The Borrower (or any Subsidiary) shall default in the observance or
performance of any agreement contained in subsection 9.2, 9.3, 9.8 or 9.9 and
such default shall continue unremedied for a period of five days; or
(e) Any Loan Party shall default in the observance or performance of
any other agreement contained in this Agreement (other than as provided in
paragraphs (a) through (d) of this Section) or any of the other Loan Documents,
and such default shall continue unremedied for a period of 30 days; or
(f) The Borrower or any of its Material Subsidiaries shall (i) default
in any payment of principal of or interest of any Indebtedness (other than the
Loans or in respect of Letters of Credit) in an aggregate outstanding principal
amount of $15,000,000 or more or in the payment of any Guarantee Obligation in
an amount of $15,000,000 or more, beyond the period of grace (not to exceed 30
days), if any, provided in the instrument or agreement under which such
Indebtedness or Guarantee Obligation was created; or (ii) default in the
observance or performance of any other agreement or condition relating to any
such Indebtedness or Guarantee Obligation in an aggregate amount in excess of
$15,000,000 or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event shall occur or condition exist, the effect
of which default or other event or condition is to cause, or to permit the
holder or holders of such Indebtedness or beneficiary or beneficiaries of such
Guarantee Obligation (or a trustee or agent on behalf of such holder or holders
or beneficiary or beneficiaries) to cause, with the giving of notice if
required, such Indebtedness to become due prior to its stated maturity or such
Guarantee Obligation to become payable; or
(g) (i) The Borrower or any of its Material Subsidiaries shall commence
any case, proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian or other similar official
for it or for all or any substantial part of its assets, or the Borrower or any
of its Material Subsidiaries shall make a general assignment for the benefit of
its creditors; or (ii) there shall be commenced against the Borrower or any of
its Material Subsidiaries any case, proceeding or other action of a nature
referred to in clause (i) above which (A) results in the entry of an order for
relief or any such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 60 days; or (iii) there shall be
commenced against the Borrower or any of its Material Subsidiaries any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part of
its assets which results in the entry of an order for any such relief which
shall not have been vacated, discharged, or stayed or bonded pending appeal
within 60 days from the entry thereof; or (iv) the Borrower or any of its
Material Subsidiaries shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth in clause
(i), (ii), or (iii) above; or (v) the Borrower or any of its Material
Subsidiaries shall generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they become due; or
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(h) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan,
(ii) any "accumulated funding deficiency" (as defined in Section 302 of ERISA),
whether or not waived, shall exist with respect to any Plan, (iii) a Reportable
Event shall occur with respect to, or proceedings shall commence to have a
trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of the
Required Banks, likely to result in the termination of such Plan for purposes of
Title IV of ERISA, (iv) any Single Employer Plan shall terminate for purposes of
Title IV of ERISA, (v) the Borrower or any Commonly Controlled Entity shall, or
in the reasonable opinion of the Required Banks is likely to, incur any
liability in connection with a withdrawal from, or the Insolvency or
Reorganization of, a Multiemployer Plan or (vi) any other event or condition
shall occur or exist, with respect to a Plan; and in each case in clauses (i)
through (vi) above, such event or condition, together with all other such events
or conditions, if any, could subject the Borrower or any of its Subsidiaries to
any tax, penalty or other liabilities in the aggregate material in relation to
the business, operations, property or financial or other condition of the
Borrower and its Subsidiaries taken as a whole; or
(i) One or more judgments or decrees shall be entered against the
Borrower or any of its Material Subsidiaries involving in the aggregate a
liability (not paid or fully covered by insurance) of more than $15 million at
any time and all such judgments or decrees shall not have been vacated,
discharged, stayed or bonded pending appeal within 60 days from the entry
thereof; or
(j) If at any time the Borrower or any of its Subsidiaries shall become
liable (whether, directly, indirectly, by indemnity or contribution or
otherwise) for (w) environmental removal or remediation expenses, (x) costs of
response with respect to any Environmental Law, (y) damages for injury to,
destruction of or loss of natural resources, or (z) assessed environmental
fines, penalties or other such charges which, as to (w), (x), (y) and (z) above
in the aggregate, are in excess of $15,000,000 above such amounts which are
covered by insurance; or
(k) Any Change in Control shall occur; or
(l) (i) The Lien created by the Guarantee Agreement or any of the other
Loan Documents shall cease to be enforceable and of the same effect and priority
purported to be created thereby or (ii) the Guarantees created by the Guarantee
Agreement shall cease to be enforceable or any Guarantor shall so assert; or
(m) There shall exist (i) a default in any payment of principal,
interest or other amount owing under the LSCC Secured Note, (ii) a default in
the covenant under the LSCC Secured Note related to the payment of dividends or
distributions by Loral CyberStar Data Services Corporation or (iii) a default in
the observance or performance of any other agreement, covenant or condition
under the LSCC Secured Note and the default under such other agreement, covenant
or condition shall continue unremedied for a period of thirty (30) consecutive
days, then, and in any such event:
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(A) if such event is an Event of Default specified in clause
(i) or (ii) of paragraph (g) above automatically (i) the Commitments
shall immediately terminate and the Loans hereunder (with accrued
interest thereon) and all other amounts owing under this Agreement, and
the Notes shall immediately become due and payable and (ii) all
obligations of the Borrower in respect of the Letters of Credit
(including the obligation described below to deposit cash collateral to
cover any undrawn amounts), although contingent and unmatured, shall
become immediately due and payable and the obligations of the Issuing
Bank to issue Syndicated Letters of Credit shall immediately terminate,
and
(B) if such event is any other Event of Default, either or
both of the following actions may be taken: (i) with the consent of the
Required Banks, the Administrative Agent may, or upon the request of
the Required Banks, the Administrative Agent shall, by notice to the
Borrower declare the Commitments to be terminated forthwith and the
obligations of the Issuing Bank to issue Syndicated Letters of Credit
to be terminated, whereupon the Commitments and the obligations of the
Issuing Bank shall immediately terminate; and (ii) with the consent of
the Required Banks, the Administrative Agent may, or upon the request
of the Required Banks, the Administrative Agent shall, by notice of
default to the Borrower, (A) declare the Loans (with accrued interest
thereon) and all other amounts owing under this Agreement, and the
Notes to be due and payable forthwith, whereupon the same shall
immediately become due and payable and (B) declare all or a portion of
the obligations of the Borrower in respect of the Letters of Credit
(including the obligation described below to deposit cash collateral to
cover any undrawn amounts), although contingent and unmatured, to be
due and payable forthwith, whereupon the same shall immediately become
due and payable and/or demand that the Borrower discharge any or all of
the obligations supported by the Letters of Credit by paying or
prepaying any amount due or to become due in respect of such
obligations.
All payments under this Section 10 on account of undrawn Letters of
Credit shall be made by the Borrower directly to a cash collateral
account established by the Administrative Agent for such purpose for
application to the Borrower's reimbursement obligations with respect to
Letters of Credit as drafts are presented under the Letters of Credit,
with the balance, if any, to be applied to the Borrower's Obligations
under this Agreement and the Notes as the Administrative Agent shall
determine with the approval of the Required Banks. Amounts held in such
cash collateral account shall be invested in Cash Equivalents until any
such time as they shall be applied by the Administrative Agent as
aforesaid. The amount of such cash collateral required shall be
recomputed on each Determination Date. After all such Letters of Credit
shall have expired or been fully drawn upon and all other Obligations
shall have been paid in full, the balance, if any, in such cash
collateral account shall be returned to the Borrower. Except as
expressly provided above in this Section 10, presentment, demand,
protest and all other notices of any kind are hereby expressly waived.
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SECTION 11.
THE ADMINISTRATIVE AGENT
11.1 Appointment.
Each Bank hereby irrevocably designates and appoints Bank of America as
the Administrative Agent of such Bank under this Agreement and the other Loan
Documents, and each such Bank irrevocably authorizes Bank of America, as the
Administrative Agent for such Bank, to take such action on its behalf under the
provisions of this Agreement and the other Loan Documents and to exercise such
powers and perform such duties as are expressly delegated to the Administrative
Agent by the terms of this Agreement and the other Loan Documents (including
delivery of releases of collateral and lien interests in connection with sales
and dispositions permitted hereunder), together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Administrative Agent shall not have any duties
or responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.
11.2 Delegation of Duties.
The Administrative Agent may execute any of its duties under this
Agreement and the other Loan Documents by or through agents or attorneys-in-fact
and shall be entitled to advice of counsel concerning all matters pertaining to
such duties. The Administrative Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys in-fact selected by it with
reasonable care.
11.3 Exculpatory Provisions.
Neither the Administrative Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates shall be (i) liable for any
action lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement or any other Loan Document (except for its or
such Person's own gross negligence or willful misconduct) or (ii) responsible in
any manner to any of the Banks for any recitals, statements, representations or
warranties made by the Borrower or any officer thereof contained in this
Agreement or any other Loan Document or in any certificate, report, statement or
other document referred to or provided for in, or received by the Administrative
Agent under or in connection with, this Agreement or any other Loan Document or
for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or the Notes or any other Loan Document or for any
failure of the Borrower to perform its obligations hereunder or thereunder. The
Administrative Agent shall not be under any obligation to any Bank to ascertain
or to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Loan Document, or to
inspect the properties, books or records of the Borrower.
11.4 Reliance by Administrative Agent.
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The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any Note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Borrower), independent accountants and other experts
selected by the Administrative Agent. The Administrative Agent may deem and
treat the payee of any Note as the owner thereof for all purposes unless a
written notice of assignment, negotiation or transfer thereof shall have been
filed with the Administrative Agent. The Administrative Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or concurrence of
the Required Banks as it deems appropriate or it shall first be indemnified to
its satisfaction by the Banks against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
The Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the Notes and the other Loan
Documents in accordance with a request of the Required Banks, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Banks and all future holders of the Notes.
11.5 Notice of Default.
The Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless the
Administrative Agent has received notice from a Bank or the Borrower referring
to this Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default". In the event that the Administrative Agent
receives such a notice, the Administrative Agent shall promptly give notice
thereof to the Banks. The Administrative Agent shall take such action with
respect to such Default or Event of Default as shall be reasonably directed by
the Required Banks; provided that unless and until the Administrative Agent
shall have received such directions, the Administrative Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Banks.
11.6 Non-Reliance on Administrative Agent and Other Banks.
Each Bank expressly acknowledges that neither the Administrative Agent
nor any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates has made any representations or warranties to it and that no act by
the Administrative Agent hereafter taken, including any review of the affairs of
the Borrower, shall be deemed to constitute any representation or warranty by
the Administrative Agent to any Bank. Each Bank represents to the Administrative
Agent that it has, independently and without reliance upon the Administrative
Agent or any other Bank, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of the Borrower and made its own decision to make its Loans and
enter into this Agreement. Each Bank also represents that it will, independently
and without reliance upon the Administrative Agent or any other Bank, and based
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on such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Borrower. Except for notices, reports and other documents expressly required to
be furnished to the Banks by the Administrative Agent hereunder, the
Administrative Agent shall not have any duty or responsibility to provide any
Bank with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness of
the Borrower which may come into the possession of the Administrative Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
11.7 Indemnification.
The Banks agree to indemnify the Administrative Agent in its capacity
as such (to the extent not reimbursed by the Borrower and without limiting the
obligation of the Borrower to do so), ratably according to the respective
amounts of their original Commitments, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Notes)
be imposed on, incurred by or asserted against the Administrative Agent in any
way relating to or arising out of this Agreement, any of the other Loan
Documents or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted
by the Administrative Agent under or in connection with any of the foregoing;
provided that no Bank shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from the Administrative
Agent's gross negligence or willful misconduct. The agreements in this
subsection shall survive the payment of the Notes and all other amounts payable
hereunder.
11.8 Administrative Agent in Its Individual Capacity.
The Administrative Agent and its Affiliates may make loans to, accept
deposits from and generally engage in any kind of business with the Borrower as
though the Administrative Agent were not the Administrative Agent hereunder and
under the other Loan Documents. With respect to its Loans made or renewed by it
and any Note issued to it, the Administrative Agent shall have the same rights
and powers under this Agreement and the other Loan Documents as any Bank and may
exercise the same as though it were not the Administrative Agent, and the terms
"Bank" and "Banks" shall include the Administrative Agent in its individual
capacity.
11.9 Successor Administrative Agent.
The Administrative Agent may resign as Administrative Agent upon 30
days' notice to the Banks. If the Administrative Agent shall resign as
Administrative Agent under this Agreement and the other Loan Documents, then the
Required Banks shall appoint from among the Banks a successor agent for the
Banks, which successor agent shall, if no Default or Event of Default has
occurred and is continuing or if such appointment could cause the Borrower's
Facility Security Clearance to be invalidated, be approved by the Borrower (such
approval not to
69
be unreasonably withheld), whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall mean such successor agent effective upon its
appointment, and the former Administrative Agent's rights, powers and duties as
Administrative Agent shall be terminated, without any other or further act or
deed on the part of such former Administrative Agent or any of the parties to
this Agreement or any holders of the Notes. After any retiring Administrative
Agent's resignation as Administrative Agent, the provisions of this Section
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement and the other Loan
Documents. If the retiring Administrative Agent is also the Issuing Bank
hereunder and the successor Administrative Agent so requests in writing, the
retiring Administrative Agent shall resign as the Issuing Bank, effective for
all Syndicated Letters of Credit issued on or after the date the successor
Administrative Agent becomes the "Administrative Agent" hereunder. In the event
of a material breach by the Administrative Agent of its duties hereunder, the
Administrative Agent may be removed by the Required Banks for cause and the
provisions of this subsection 11.9 shall apply to the appointment of a successor
Administrative Agent.
11.10 Issuing Bank.
Each Bank hereby acknowledges that the provisions of this Section 11
shall apply to the Issuing Bank, in its capacity as such in the same manner as
such provisions are expressly stated to apply to the Administrative Agent.
11.11 Intercreditor Agreement.
By execution of this Agreement, each Bank acknowledges, and agrees to
be bound by, the terms of the Intercreditor Agreement, and further authorizes
and directs the Administrative Agent and Collateral Agent to enter into the
Intercreditor Agreement on its behalf.
SECTION 12.
MISCELLANEOUS
12.1 Amendments and Waivers.
All requests for any amendment, supplement or other modification of any
provision of this Agreement or any other Loan Document shall be made by the
Borrower to the Administrative Agent. The Administrative Agent will manage the
voting and execution process in connection with any such amendment, supplement
or other modification. Neither this Agreement, any Note, any other Loan
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this subsection. With the
written consent of the Required Banks and the written acknowledgement of the
Administrative Agent and the Borrower may, from time to time, enter into written
amendments, supplements or modifications hereto and to the Notes and the other
Loan Documents for the purpose of adding any provisions to this Agreement or the
Notes or the other Loan Documents or changing in any manner the rights of the
Banks or of the Borrower hereunder or thereunder or waiving, on such terms and
conditions as the Administrative Agent may specify in such
70
instrument, any of the requirements of this Agreement or the Notes or the other
Loan Documents or any Default or Event of Default and its consequences;
provided, however, that no such waiver and no such amendment, supplement or
modification shall (a) reduce the amount or extend the maturity of any Note or
Loan or any installment of principal thereof, or reduce the rate or extend the
time of payment of interest thereon, or reduce any fee or extend the time of
payment thereof payable to any Bank hereunder, increase the amount of any Bank's
Commitments, in each case without the consent of the Bank affected thereby, or
(b) amend, modify or waive any provision of this subsection or reduce the
percentage specified in the definition of Required Banks or consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement and the other Loan Documents, in each case without the
written consent of all the Banks, or (c) release all or substantially all of the
Guarantors or release all or substantially all of the collateral securing the
Loans and obligations hereunder, in each case without the written consent of all
the Banks, or (d) amend, modify or waive any provision of Section 11 without the
written consent of the then Administrative Agent and the Issuing Bank or (e)
amend, modify or waive any provision of Section 4 pertaining to Letters of
Credit without the written consent of the Issuing Bank. Any such waiver and any
such amendment, supplement or modification shall apply equally to each of the
Banks and shall be binding upon the Borrower, the Banks, the Issuing Bank, the
Administrative Agent, and all future holders of the Notes. In the case of any
waiver, the Borrower, the Banks and the Administrative Agent shall be restored
to their former position and rights hereunder and under the outstanding Notes
and any other Loan Documents, and any Default or Event of Default waived shall
be deemed to be cured and not continuing; but no such waiver shall extend to any
subsequent or other Default or Event of Default, or impair any right consequent
thereon.
12.2 Notices.
All notices, requests and demands to or upon the respective parties
hereto to be effective shall be in writing (including by telecopy, telegraph or
telex), and, unless otherwise expressly provided herein, shall be deemed to have
been duly given or made when delivered by hand, or three days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, or, in the case of telegraphic notice, when delivered to the telegraph
company, or, in the case of telex notice, when sent, answerback received,
addressed as follows in the case of the Borrower and the Administrative Agent,
and as set forth in Schedule 1.1A in the case of the other parties hereto, or to
such other address as may be hereafter notified by the respective parties hereto
and any future holders of the Notes:
The Borrower: Loral SpaceCom Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
The Administrative Agent: Bank of America, N.A.
Agency Management Services
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000 X. Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxx Xxxxxxxx
Telecopy: (000) 000-0000
provided that any notice, request or demand to or upon the Administrative Agent
pursuant to subsections 2.3, 3.2, 4.3, or 5.15 shall not be effective until
received. Electronic mail and internet and intranet websites may be used to
distribute routine communications, such as financial statements and other
information.
12.3 No Waiver; Cumulative Remedies.
No failure to exercise and no delay in exercising, on the part of the
Administrative Agent or any Bank, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
12.4 Survival of Representations and Warranties.
All representations and warranties made hereunder and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the Notes.
12.5 Payment of Expenses and Taxes.
The Borrower agrees (a) to pay or reimburse the Administrative Agent
and the Issuing Bank for all its reasonable out-of-pocket costs and expenses
incurred in connection with the development, preparation and execution of, and
any amendment, supplement or modification to, this Agreement and the Notes and
the other Loan Documents, and any other documents prepared in connection
herewith or therewith, the preparation and execution of any Syndicated Letters
of Credit, and the consummation of the transactions contemplated hereby and
thereby, including, without limitation, the reasonable fees and disbursements of
counsel (including those of outside counsel and, without duplication, allocated
costs of in-house counsel to the extent such counsel performs services that
would otherwise be performed by outside counsel) to the Administrative Agent or
the Issuing Bank, (b) to pay or reimburse each Bank, the Issuing Bank and the
Administrative Agent for all its reasonable out-of-pocket costs and expenses
incurred in connection with the enforcement or preservation of any rights under
or arising out of this Agreement, the Notes, the other Loan Documents and any
such other documents, or incurred with respect to any challenge to any Letter of
Credit, including, without limitation, reasonable fees and disbursements of
counsel (including those of outside counsel and, without duplication, allocated
costs of in-house counsel to the extent such counsel performs services that
would otherwise be performed by outside counsel) to the Administrative Agent,
the Issuing Bank, and to the several Banks, and (c) to pay, indemnify, and hold
each Bank, the Issuing Bank and the Administrative Agent harmless from, any and
all recording and filing fees and any and all
72
liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other taxes, if any (other than taxes excluded from the definition of
"Taxes" in subsection 5.9), which may be payable or determined to be payable in
connection with the execution and delivery of, or consummation of any of the
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, this Agreement, the Notes, the
Letters of Credit, the other Loan Documents and any such other documents, and
(d) to pay, indemnify, and hold each Bank, the Issuing Bank and the
Administrative Agent harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever incurred in
connection with, or arising out of, defending, prosecuting or complying with any
proceeding, action or investigation arising out of, or relating to the
execution, delivery, enforcement, performance and administration of this
Agreement, the Notes, the Letters of Credit, the other Loan Documents and any
such other documents (all the foregoing, collectively, the "indemnified
liabilities"), provided, that the Borrower shall have no obligation hereunder to
the Administrative Agent, the Issuing Bank or any Bank with respect to
indemnified liabilities arising from the gross negligence or willful misconduct
of the Administrative Agent, the Issuing Bank or any such Bank. The agreements
in this subsection shall survive repayment of the Obligations and all other
amounts payable hereunder.
12.6 Successors and Assigns; Participations; Purchasing Banks.
(a) This Agreement shall be binding upon and inure to the benefit of
the Borrower, the Issuing Bank, the Banks, the Administrative Agent, all future
holders of the Notes and their respective successors and assigns, except that
the Borrower may not assign or transfer any of its respective rights or
obligations under this Agreement without the prior written consent of each Bank.
No Bank may participate, assign or sell any of its rights or obligations
hereunder except as provided in this subsection 12.6 or in subsection 4.2.
(b) Any Bank may, in the ordinary course of its commercial lending
business and in accordance with applicable law and subject to subsection 12.16,
at any time sell to one or more banks or other entities ("Participants")
participating interests in any Loan owing to such Bank, any Note held by such
Bank, any Syndicated Letter of Credit participated in by such Bank, any
Commitment of such Bank or any other interest of such Bank hereunder and under
the other Loan Documents. In the event of any such sale by a Bank of
participating interests to a Participant, such Bank's obligations under this
Agreement to the other parties to this Agreement shall remain unchanged, such
Bank shall remain solely responsible for the performance thereof, such Bank
shall remain the holder of any such Note for all purposes under this Agreement
and the other Loan Documents, and the Borrower, the Issuing Bank and the
Administrative Agent shall continue to deal solely and directly with such Bank
in connection with such Bank's rights and obligations under this Agreement and
the other Loan Documents. The Borrower agrees that if amounts outstanding under
this Agreement and the Notes or the other Loan Documents are due or unpaid, or
shall have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall be deemed to have the
right of setoff in respect of its participating interest in amounts owing under
this Agreement and any Note or the other Loan Documents to the same extent as if
the amount of its participating interest were owing directly to it as a Bank
under this Agreement or any Note or any other Loan Document,
73
provided that such Participant shall only be entitled to such right of setoff if
it shall have agreed in the agreement pursuant to which it shall have acquired
its participating interest to share with the Banks the proceeds thereof as
provided in subsection 12.7. The Borrower also agrees that each Participant
shall be entitled to the benefits of subsections 4.6, 4.8, 5.7, 5.8, 5.9, 5.10
and 12.5 with respect to its participation in the Commitments and the Loans
outstanding from time to time; provided, that no Participant shall be entitled
to receive any greater amount pursuant to such subsections than the transferor
Bank would have been entitled to receive in respect of the amount of the
participation transferred by such transferor Bank to such Participant had no
such transfer occurred and that the Participants shall assume their respective
shares of any obligations imposed on the transferor Bank under such subsections.
Each Bank agrees that the participation agreement pursuant to which any
Participant acquires its participating interest (or any other document) may
afford voting rights to such Participant, or any right to instruct such Bank
with respect to voting hereunder, only with respect to matters requiring the
consent of all of the Banks hereunder.
(c) Any Bank may, in the ordinary course of its commercial lending
business and in accordance with applicable law, at any time sell to any Bank or
any Affiliate thereof or, to one or more additional banks or financial
institutions ("Purchasing Banks") all or any part of its rights and obligations
under this Agreement and the Notes or the other Loan Documents pursuant to a
Commitment Transfer Supplement, executed by such Purchasing Bank, such
transferor Bank (and, in the case of a Purchasing Bank that is not then a Bank
or an Affiliate thereof, consented to by the Borrower (provided that such
consent of the Borrower shall not be required if a Default or Event of Default
exists at the time of such sale) and the Administrative Agent and the Issuing
Bank (such consents not to be unreasonably withheld) and delivered to the
Administrative Agent for its acceptance and recording in the Register (as
defined below)); provided that (A) each such sale pursuant to this subsection
12.6(c) shall be in an amount of $5,000,000 or more ($2,500,000 in the case of a
sale to any Bank) and (B) in the event of a sale of less than all of such rights
and obligations, such Bank after any such sale shall retain a Commitment and/or
Loans and/or L/C Participating Interests aggregating at least $5,000,000. Upon
such execution, delivery, acceptance and recording, from and after the Transfer
Effective Date determined pursuant to such Commitment Transfer Supplement, (x)
the Purchasing Bank thereunder shall be a party hereto and, to the extent
provided in such Commitment Transfer Supplement, have the rights and obligations
of a Bank hereunder with a Commitment as set forth therein, and (y) the
transferor Bank thereunder shall, to the extent provided in such Commitment
Transfer Supplement, be released from its obligations under this Agreement (and,
in the case of a Commitment Transfer Supplement covering all or the remaining
portion of a transferor Bank's rights and obligations under this Agreement, such
transferor Bank shall cease to be a party hereto). Such Commitment Transfer
Supplement shall be deemed to amend this Agreement (including Schedule 1.1A) to
the extent, and only to the extent, necessary to reflect the addition of such
Purchasing Bank and the resulting adjustment of Commitment Percentages arising
from the purchase by such Purchasing Bank of all or a portion of the rights and
obligations of such transferor Bank under this Agreement and the Notes. On or
prior to the Transfer Effective Date determined pursuant to such Commitment
Transfer Supplement, the Borrower at its own expense, shall execute and deliver
to the Administrative Agent in exchange for the surrendered Note a new Note to
the order of such Purchasing Bank in an amount equal to the Commitment assumed
by it pursuant to such Commitment Transfer Supplement and, if the transferor
Bank has retained a Commitment
74
hereunder, a new Note to the order of the transferor Bank in an amount equal to
the Commitment retained by it hereunder. Such new Notes shall be dated the
Closing Date and shall otherwise be in the form of the Notes replaced thereby.
The Notes surrendered by the transferor Bank shall be returned by the
Administrative Agent to the relevant Borrower marked "canceled".
(d) The Administrative Agent shall maintain at its address referred to
in subsection 12.2 a copy of each Commitment Transfer Supplement delivered to it
and a register (the "Register") for the recordation of the names and addresses
of the Banks and the Commitments of, principal amount of the Loans owing to, and
the amount of the participating interest in L/C Participating Interests of, each
Bank from time to time. The entries in the Register shall be conclusive, in the
absence of manifest error, and the Borrower, the Administrative Agent, the
Issuing Bank and the Banks may treat each Person whose name is recorded in the
Register as the owner of the Loan recorded therein for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower, the
Issuing Bank or any Bank at any reasonable time and from time to time upon
reasonable prior notice.
(e) Upon its receipt of a Commitment Transfer Supplement executed by a
transferor Bank and Purchasing Bank (and, in the case of a Purchasing Bank that
is not then a Bank or an Affiliate thereof, by the Borrower, the Issuing Bank
and the Administrative Agent) together with payment to the Administrative Agent
of a registration and processing fee of $3,500, the Administrative Agent shall
(i) promptly accept such Commitment Transfer Supplement and (ii) on the Transfer
Effective Date determined pursuant thereto record the information contained
therein in the Register and give notice of such acceptance and recordation to
the Banks, the Issuing Bank and the Borrower.
(f) The Borrower authorizes each Bank to disclose to any Participant or
Purchasing Bank (each, a "Transferee") and any prospective Transferee any and
all financial information in such Bank's possession concerning the Borrower and
its Affiliates which has been delivered to such Bank by or on behalf of the
Borrower pursuant to this Agreement or which has been delivered to such Bank by
or on behalf of the Borrower in connection with such Bank's credit evaluation of
the Borrower and its Affiliates prior to becoming a party to this Agreement.
(g) If, pursuant to this subsection, any interest in this Agreement or
any Note or any other Loan Document is transferred to any Transferee which is
organized under the laws of any jurisdiction other than the United States or any
state thereof, the transferor Bank, shall cause such Transferee, concurrently
with the effectiveness of such transfer, (i) to represent to the transferor Bank
(for the benefit of the transferor Bank, the Administrative Agent, the Issuing
Bank and the Borrower), that under applicable law and treaties no taxes will be
required to be withheld by the Administrative Agent, the Issuing Bank, the
Borrower or the transferor Bank, with respect to any payments to be made to such
Transferee in respect of the Loans or the Letters of Credit or any other amount
payable hereunder, (ii) to furnish to the transferor Bank (and, in the case of
any Purchasing Bank registered in the Register, the Administrative Agent, the
Issuing Bank and the Borrower), either U.S. Internal Revenue Form W-8ECI or U.S.
Internal Revenue Service Form W-8BEN (wherein such Transferee claims entitlement
to complete exemption from U.S. federal withholding tax on all interest payments
hereunder), together with U.S. Internal Revenue Form W-8 or W-9, or any
successor form, and (iii) to agree (for the benefit of
75
the transferor Bank, the Administrative Agent, the Issuing Bank and the
Borrower) to provide the transferor Bank (and, in the case of any Purchasing
Bank registered in the Register, the Administrative Agent, the Issuing Bank and
the Borrower) a new Form W-8ECI or Form W-8BEN, together with U.S. Internal
Revenue Form W-8 or W-9, or any successor form, upon the expiration or
obsolescence of any previously delivered form and comparable statements in
accordance with applicable U.S. laws and regulations and amendments duly
executed and completed by such Transferee, and to comply from time to time with
all applicable U.S. laws and regulations with regard to such withholding tax
exemption.
(h) Nothing herein shall prohibit any Bank from transferring any of its
rights hereunder for purposes of pledging or assigning any Note to any Federal
Reserve Bank in accordance with applicable law.
12.7 Adjustments; Set-off.
(a) If any Bank (a "benefited Bank") shall at any time receive any
payment of all or part of its Loans or of all or part of its L/C Participating
Interest in any Syndicated Letter of Credit (as to each Bank, its "Exposure"),
or interest thereon, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, pursuant to events or proceedings of
the nature referred to in Section 10(g), or otherwise), in a greater proportion
than any such payment to or collateral received by any other Bank, if any, in
respect of such other Bank's Exposure or interest thereon, such benefited Bank
shall purchase for cash from the other Banks such portion of each such other
Bank's Exposure, or shall provide such other Banks with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to cause such
benefited Bank to share the excess payment or benefits of such collateral or
proceeds ratably with each of the Banks; provided, however, that if all or any
portion of such excess payment or benefits is thereafter recovered from such
benefited Bank, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest. The
Borrower agrees that each Bank so purchasing a portion of another Bank's
Exposure may exercise all rights of payment (including, without limitation,
rights of set-off) with respect to such portion as fully as if such Bank were
the direct holder of such portion.
(b) In addition to any rights and remedies of the Banks provided by
law, each Bank shall have the right, without prior notice to the Borrower, any
such notice being expressly waived by each Borrower to the extent permitted by
applicable law, upon any amount becoming due and payable by the Borrower
hereunder or under the Notes or under any other Loan Document (whether at the
stated maturity, by acceleration or otherwise) to set-off and appropriate and
apply against such amount any and all deposits (general or special, time or
demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Bank or any banking affiliate thereof to or for the credit or the
account of the Borrower, and each such affiliate is hereby irrevocably
authorized to permit such setoff and application. Each Bank agrees promptly to
notify the Borrower and the Administrative Agent after any such set-off and
application made by such Bank, provided that the failure to give such notice
shall not affect the validity of such set-off and application.
76
12.8 Confidentiality.
The Banks shall hold all non-public information obtained pursuant to
the requirements of this Agreement which has been identified as such in writing
by the Borrower in accordance with its customary procedures for handling
confidential information of this nature and in accordance with safe and sound
banking practices but in any event may make disclosure reasonably required by a
bona fide prospective Transferee in connection with the contemplated transfer of
any Note or participation therein or any other interest in the Loan Documents or
as required or requested by any Governmental Authority (including, for purposes
hereof, self-regulatory agencies) or representative thereof pursuant to legal
process.
12.9 Counterparts.
This Agreement may be executed by one or more of the parties to this
Agreement on any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. A set
of the copies of this Agreement signed by all the parties shall be lodged with
the Borrower and the Administrative Agent.
12.10 Severability.
Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
12.11 Integration.
This Agreement and the other Loan Documents represents the agreement of
the Borrower, the Administrative Agent and the Banks with respect to the subject
matter hereof, and there are no promises, undertakings, representations or
warranties by the Administrative Agent or any Bank relative to subject matter
hereof not expressly set forth or referred to herein or in the other Loan
Documents.
12.12 GOVERNING LAW.
THIS AGREEMENT AND THE NOTES AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
12.13 Submission To Jurisdiction; Waivers.
The Borrower hereby irrevocably and unconditionally:
77
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents, or for
recognition and enforcement of any judgement in respect thereof, to the
non-exclusive general jurisdiction of the Courts of the State of New York, the
courts of the United States of America for the Southern District of New York,
and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or proceeding may
be effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to the Borrower at its
address set forth in subsection 12.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto; and
(d) agrees that nothing herein shall affect the right to effect service
of process in any other manner permitted by law or shall limit the right to xxx
in any other jurisdiction.
12.14 Acknowledgements.
The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the Notes and the other Loan Documents;
(b) none of the Administrative Agent, the Issuing Bank, nor any Bank
has any fiduciary relationship to the Borrower, and the relationship between the
Administrative Agent, the Issuing Bank and the Banks, on one hand, and the
Borrower, on the other hand, is solely that of debtor and creditor; and
(c) no joint venture exists among the Administrative Agent, the Issuing
Bank and the Banks or any of them or among the Borrower and the Banks.
12.15 WAIVERS OF JURY TRIAL.
THE BORROWER, THE ADMINISTRATIVE AGENT, THE ISSUING BANK AND THE BANKS
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS AGREEMENT OR THE NOTES OR ANY OTHER LOAN DOCUMENT
AND FOR ANY COUNTERCLAIM THEREIN.
12.16 Compliance with Department of Defense Regulations.
(a) The Administrative Agent shall provide the Borrower with respect to
each potential Bank the following information: name, address, amount of
Commitments (in dollar
78
amount and as percentage of total), and country of domicile of ultimate
beneficial owner. Administrative Agent shall maintain a list of all Banks and
provide the Borrower with notice of any changes thereto; and in the case of any
potential Participants, Administrative Agent shall provide the Borrower with
respect to each potential Participant the following information: amount of
participation (in dollar amount and as percentage of total) and country of
domicile of ultimate beneficial owner.
(b) Borrower shall have the right to consent to each Bank or any
potential Bank that is foreign owned or foreign controlled (as defined by
Department of Defense regulations) and such consent shall be withheld only if
the nationality of such Bank is sufficient in the Borrower's reasonable judgment
to cause the Borrower's Facility Security Clearance to be invalidated.
(c) The Administrative Agent shall provide each potential Bank written
notice of the following conditions of participation or assignment:
(i) The Borrower will not under any circumstances be obligated
or required to release, disclose or otherwise make available any
classified information to any Bank.
(ii) The rights and claims of each Bank against the Borrower
will be limited to those set forth in and arising out of the various
Loan Documents.
(iii) No Bank will exert influence or control over the
business or the operations of the Borrower except as established by the
various Loan Documents; provided, however, that each Bank shall be
entitled to administer, consent to, waive and otherwise exercise the
rights provided to them under the various Loan Documents such as,
without limitation, requiring the Borrower to maintain property
insurance, pay taxes, comply with applicable laws, furnish financial
statements and reports, provide notice of litigation and defaults,
refrain from incurring other Indebtedness or Liens, disposing of assets
or merging or consolidating with other business entities.
(iv) No Bank may assign its rights or interest to any foreign
owned or foreign controlled bank without the consent of the Borrower as
under (b) above and unless such bank agrees prior to becoming a party
to the Loan Documents to be bound by the above conditions.
(d) All Banks will also be notified of Borrower's obligations to the
Department of Defense including: (i) notifying the Department of Defense of any
acceleration of any Loans or other Obligations or the commencement by the
Administrative Agent of any action to enforce the various Loan Documents, and
(ii) providing annual certification of the continuing effectiveness of its
security arrangements.
(e) All Banks shall be notified that the clearance held by the Borrower
is subject to revocation if these conditions are not met and maintained and that
such revocation would result in material harm to its business.
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12.17 Consent to Amendment and Restatement.
By executing this Agreement, each Bank which is an Existing Bank
consents and agrees to this amendment and restatement of the Existing Credit
Agreement and the transactions contemplated hereby and the parties hereto
acknowledge and agree that (i) this Agreement is given in amendment to,
restatement of and substitution for the Existing Credit Agreement and (ii) this
Agreement and the Notes hereunder evidence the same obligations as under the
Existing Credit Agreement and the Notes thereunder.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
BORROWER: LORAL SPACECOM CORPORATION,
a Delaware corporation
By: /s/ Xxxxxxx Xxxxxxxxx
Name: Xxxxxxx Xxxxxxxxx
Title: Vice President
[Signature Pages Continue]
LORAL SPACECOM CORPORATION
AMENDED AND RESTATED CREDIT AGREEMENT
AGENT: BANK OF AMERICA, N.A., in its capacity
as Administrative Agent
By: /s/ Xxxxx X. Xxxxxxxxx
Name: Xxxxx X. Xxxxxxxxx
Title: Managing Director
LENDERS: BANK OF AMERICA, N.A., individually in its
capacity as a Lender and Issuing Bank
By: /s/ Xxxxx X. Xxxxxxxxx
Name: Xxxxx X. Xxxxxxxxx
Title: Managing Director
BANK OF MONTREAL
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Director
BNP PARIBAS
By: /s/ Xxxxxxx Xxxx
Name: Xxxxxxx Xxxx
Title: Vice President, Corporate Banking Division
By: /s/ Xxxxxxx Xxxxxx
Name: Xxxxxxx Xxxxxx
Title: Vice President
BARCLAYS BANK PLC
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Director
BAYERISCHE LANDESBANK
By: /s/ Xxxxxxxx Xxxxxxxx
Name: Xxxxxxxx Xxxxxxxx
Title: Senior Vice President
By: /s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Vice President
CIBC INC.
By: /s/ Xxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxxx
LORAL SPACECOM CORPORATION
AMENDED AND RESTATED CREDIT AGREEMENT
Title: Executive Director
[Signature pages continue]
LORAL SPACECOM CORPORATION
AMENDED AND RESTATED CREDIT AGREEMENT
CITIBANK, N.A.
By: /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ Xxxxxxx XxXxxxxx
Name: Xxxxxxx XxXxxxxx
Title: Authorized Signatory
DEUTSCHE BANK AG, NEW YORK BRANCH
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Managing Director
By: /s/ Xxxx Xxxx
Name: Xxxx Xxxx
Title: Associate
BANKERS TRUST COMPANY
By: /s/ Xxxx Xxxxxxxxxx
Name: Xxxx Xxxxxxxxxx
Title: Managing Director
FUJI BANK, LIMITED
By: /s/ Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: Vice President & Manager
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ Xxxx Xxxxxxx
Name: Xxxx Xxxxxxx
Title: Authorized Signatory
SANPAOLO IMI SPA
By: /s/ Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx
Title: General Manager
By: /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: Vice President
MELLON BANK, N.A.
LORAL SPACECOM CORPORATION
AMENDED AND RESTATED CREDIT AGREEMENT
By: /s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
[Signature pages continue]
LORAL SPACECOM CORPORATION
AMENDED AND RESTATED CREDIT AGREEMENT
NATIONAL CITY BANK
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Vice President
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Vice President
SOCIETE GENERALE
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Director
THE BANK OF NEW YORK
By: /s/ Xxxxxxx Xxxxxxx
Name: Xxxxxxx Xxxxxxx
Title: Vice President
THE BANK OF NOVA SCOTIA
By: /s/ J. Xxxx Xxxxxxx
Name: J. Xxxx Xxxxxxx
Title: Managing Director
JPMORGAN CHASE BANK, FORMERLY KNOWN AS THE
CHASE MANHATTAN BANK
By: /s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
THE INDUSTRIAL BANK OF JAPAN, LTD.
By: /s/ Xxxxxx Xxxxxxxx
Name: Xxxxxx Xxxxxxxx
Title: Senior Vice President
THE MITSUBISHI TRUST AND
BANKING CORPORATION
By: /s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Executive Vice President
[Signature pages continue]
LORAL SPACECOM CORPORATION
AMENDED AND RESTATED CREDIT AGREEMENT
THE SANWA BANK, LIMITED
By: /s/ Xxxxxxx X. Small
Name: Xxxxxxx X. Small
Title: Senior Vice President
SUMITOMO MITSUI BANKING CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxx, Xx.
Name: Xxxxxx X. Xxxxxxxxx, Xx.
Title: Senior Vice President
THE TOKAI BANK, LIMITED
By: /s/ Xxxxxxxx Xxxxxxxx
Name: Xxxxxxxx Xxxxxxxx
Title: Deputy General Manager
UNICREDITO ITALIANO S.P.A.
By: /s/ Xxxxxxxxxxx X. Xxxxx
Name: Xxxxxxxxxxx X. Xxxxx
Title: First Vice President & Deputy Manager
By: /s/ Xxxxxxx Xxxxxxxx
Name: Xxxxxxx Xxxxxxxx
Title: First Vice President
LORAL SPACECOM CORPORATION
AMENDED AND RESTATED CREDIT AGREEMENT
AMENDED AND RESTATED CREDIT AGREEMENT
LORAL SPACECOM CORPORATION
SCHEDULE 9.1
Section 9.1(a): Interest Coverage
Test Period Ending Ratio
------------------ -----
March 31, 2002 1.25
June 30, 2002 1.25
September 30, 2002 1.25
December 31, 2002 1.5
March 31, 2003 1.5
June 30, 2003 1.75
September 30, 2003 1.75
December 31, 2003 1.75
March 31, 2004 2.0
June 30, 2004 2.25
September 30, 2004 2.5
December 30, 2004 2.5
Section 9.1(b): Consolidated Leverage Ratio
Test Period Ending Ratio
------------------ -----
March 31, 2002 11.5
June 30, 2002 10.75
September 30, 2002 8.75
December 31, 2002 6.75
March 31, 2003 6.5
June 30, 2003 6.25
September 30, 2003 5.75
December 31, 2003 5.75
March 31, 2004 5.0
June 30, 2004 4.5
September 30, 2004 4.0
December 31, 2004 4.0
Section 9.1(d): Capital Expenditures
The Borrower will not, nor will it permit any of its Subsidiaries to, make
Capital Expenditures in respect of any satellite or program to develop
satellites other than in respect of the T-8, T-13, Skynet Brazil (Xxxxxxxx do
Sul) and T-130 satellite programs already in progress.
