Exhibit 1
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AMENDED AND RESTATED
COLLATERAL TRUST AGREEMENT
This AMENDED AND RESTATED COLLATERAL TRUST AGREEMENT
(this "Agreement"), dated as of June 13, 1997, is entered into
by and among PANAMSAT CORPORATION (formerly known as "Magellan
International, Inc."), a Delaware corporation ("Newco"), XXXXXX
COMMUNICATIONS, INC., a California corporation ("HCI," and
together with Newco, the "Newco Group"), SATELLITE COMPANY, LLC,
a Nevada limited liability company ("Contributor"), GRUPO
TELEVISA, S.A., a corporation (Sociedad Anonima) organized under
the laws of Mexico ("Parent"), and IBJ XXXXXXXX BANK & TRUST
COMPANY, a New York banking corporation with offices at Xxx Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as Collateral Trustee for Newco
Group (the "Trustee").
RECITALS
A. The parties hereto have entered into that certain
Collateral Trust Agreement, dated as of May 16, 1997 (the
"Original Trust Agreement") and Contributor, Parent and the
Trustee have entered into that certain Pledge and Security
Agreement, dated as of May 16, 1997 (the "Pledge and Security
Agreement").
B. The Original Trust Agreement was entered into in
connection with that certain Stock Contribution and Exchange
Agreement, dated as of September 20, 1996 by and among Newco
Group, Contributor and Parent (the "Stock Contribution and
Exchange Agreement"), which provides, among other things, for the
transfer by Contributor of all of the stock of Univisa, Inc.
("Univisa"), a Delaware corporation, to Newco.
C. The Stock Contribution and Exchange Agreement
provides that Contributor and Parent, jointly and severally,
shall indemnify, save and hold harmless Newco Group, its
affiliates and Subsidiaries, with respect to certain matters upon
the terms and subject to the conditions provided in the Stock
Contribution and Exchange Agreement and that as security therefor
(and not in lieu thereof) a trust estate shall be established for
the protection of Newco Group, its affiliates and Subsidiaries.
This trust estate was established pursuant to the Original Trust
Agreement, and is continued pursuant to this Agreement.
D. Contributor has requested that it be permitted to
substitute Approved Letters of Credit (as defined herein) for
cash deposited pursuant to the Original Trust Agreement. The
parties hereto are willing to amend and restate the Original
Trust Agreement in accordance with the terms and provisions
contained herein.
AGREEMENT
In consideration of the foregoing and the mutual
promises contained herein and for other good and valuable
consideration the receipt and adequacy of which are hereby
acknowledged, the parties, intending to be legally bound, hereby
agree as follows:
1. Defined Terms.
(a) For purposes of this Agreement:
"Affiliate" means any person or entity that is
certified by the Indemnitees' Agent, in a certificate delivered
to the Trustee, (i) to be the owner, directly or indirectly, of
at least 25% of the outstanding equity or ownership interests (on
a primary basis and not on a fully diluted basis) in the issuer
of any Letter of Credit or (ii) to be owned, directly or
indirectly, in whole or in any part constituting 25% or more of
its outstanding equity or ownership interests (on a primary basis
and not on a fully diluted basis), by any person or entity
described in clause (i) herein.
"Approved Letter of Credit" means (i) any Initial
Letter of Credit or (ii) any Letter of Credit that (A) conforms
to the requirements in Section 4(e)(i) hereof and (B) has been
approved in writing by the Indemnitees' Agent (which approval
shall not be unreasonably withheld).
"cash" means United States Dollars in such form as may,
at the time, be legal tender for the payment of debts in the
United States.
"Cash Equivalents" means Short-Term Treasuries or Joint
Approval Cash Equivalents.
"Event of Default" has the meaning assigned in the
Pledge and Security Agreement.
"Expiration Date" means the last day in the 91-day
period following the expiration of the statutes of limitations
applicable to the assessment of any tax against Univisa or USHI
(or any affiliate or Subsidiary of either of them) with respect
to all Pre-Closing Periods taking into account any waivers,
extensions or tollings of any such statutes of limitation;
provided, however, that if as of the last day of such 91-day
period there are any Tax Claims, then, notwithstanding the
foregoing, the Expiration Date shall not occur until the day
immediately following the day on which there are no Tax Claims.
"Fair Market Value" means, as of any date of
determination, the average of the Quoted Prices of Newco Common
Stock for the 20 consecutive trading days prior to such date of
determination.
"Final Tax Amount" means, as of any date of
determination, the amount, if any, of a Liability or Damages in
respect of taxes of Univisa or USHI (or any affiliate or
Subsidiary of either of them) for which Contributor and Parent
would be liable under Section 8.2(a)(ii) of the Stock
Contribution and Exchange Agreement, which taxes (a) are
determined to be due and payable as of such date pursuant to (i)
a final determination made by, or settlement concluded with, the
applicable taxing authority with respect to such taxes or (ii) a
final, binding and nonappealable judgment rendered with respect
to such taxes and (b) are unpaid as of such date.
"First Tier United States Bank" means (a) any
commercial bank which (i) is organized under the laws of the
United States or any state thereof, (ii) accepts deposits insured
by the Federal Deposit Insurance Corporation, (iii) has a
combined capital and surplus greater than $500 million and
(iv) has a long term senior debt rating of at least AA from
Standard & Poor's Corporation or Aa2 from Xxxxx'x Investors
Service, Inc.; provided that for purposes of satisfying the
requirement set forth in this clause (iv), such rating shall not
be less than A from Standard & Poor's Corporation or less than A
from Xxxxx'x Investors Service, Inc. (or, if at any time, either
of such rating services shall not be rating such obligations,
then equivalent ratings under this clause (iv) from such other
nationally recognized rating services as may be acceptable to
Newco); or (b) even if it does not meet the criteria set forth in
clause (a), from the date of this Agreement until the
Indemnitees' Agent delivers to the Trustee and the Representative
a notice to the effect that it is no longer acceptable as a First
Tier United States Bank, Citibank, N.A.
"Initial Letters of Credit" means letters of credit in
the form attached as Annex 2 hereto issued on the date hereof.
"Joint Approval Cash Equivalents" means United States
Dollar indebtedness in any of the following forms, if and to the
extent the Trustee has been directed to invest in such
indebtedness in a joint written investment direction signed both
by the Representative and by the Indemnitees' Agent: (i)
marketable direct obligations guaranteed by the United States
Government and backed by the full faith and credit of the United
States, issued after July 18, 1984 and maturing within 90 days
from the date of acquisition thereof, (ii) marketable direct
obligations issued by any state of the United States of America
or any political subdivision of any such state or any public
instrumentality thereof, issued after July 18, 1984 maturing
within 90 days from the date of acquisition thereof and, at the
time of acquisition, having a rating in one of the two highest
rating categories obtainable from either Standard & Poor's
Corporation or Xxxxx'x Investors Service, Inc. (or, if at any
time, neither of such rating services shall be rating such
obligations, then from such other nationally recognized rating
services as may be acceptable to Newco), (iii) certificates of
deposit maturing within 90 days from the date of acquisition
thereof and issued by any commercial bank which accepts deposits
insured by the Federal Deposit Insurance Corporation and which
has a combined capital and surplus greater than $500 million and
a long term certificate of deposit rating in one of the two
highest rating categories obtainable from either Standard &
Poor's Corporation or Xxxxx'x Investors Service, Inc. (or, if at
any time, neither of such rating services shall be rating such
obligations, then from such other nationally recognized rating
services as may be acceptable to Newco) (any such commercial
bank, an "Acceptable Bank"); (iv) repurchase agreements,
Eurodollar deposits and bankers acceptances maturing within 90
days from the date of acquisition thereof and issued by an
Acceptable Bank; (v) investments in money market funds that
invest solely in (x) Short-Term Treasuries or repurchase
agreements secured by Short-Term Treasuries or (y) Joint Approval
Cash Equivalents of the type described in clauses (i) and (ii)
above or repurchase agreements secured by such Joint Approval
Cash Equivalents; or (vi) any other instrument that is
specifically approved in writing by Contributor, Parent and Newco
Group, if the Trustee receives opinions of counsel reasonably
satisfactory to it stating that such writing has been duly
authorized, executed and delivered by each of them and is binding
upon and enforceable against each of them.
"Known Liabilities" means Liabilities or Damages which
are Indemnification Obligations that are now or hereafter
included as Scheduled Liabilities or are the subject of a
Liabilities Claim.
"Letter of Credit Expiry Date means the date set forth
in any Letter of Credit as the day on which such letter of credit
will expire.
"Letters of Credit" means the Initial Letters of Credit
and any and all Approved Letters of Credit at any time delivered
to the Trustee pursuant to Sections 5(d) or 8(a) hereof, any and
all Approved Letters of Credit issued in extension thereof or
replacement or substitution therefor, and any and all other
Approved Letters of Credit at any time delivered to and accepted
by the Trustee.
"Liabilities Claim" means a claim (other than a Tax
Claim) by any party that a Liability or Damages which are
Indemnification Obligations exist, but only to the extent that
such claimed Liability or Damages are not included as Scheduled
Liabilities.
"Maintenance Level" means (i) prior to the third
anniversary of the date hereof, $5 million, (ii) on and after the
third and prior to the tenth anniversary of the date hereof, $2
million, and (iii) -0- thereafter.
"Newco Common Stock" means Common Stock, $.01 par
value, of Newco.
"Pending Amounts" means, at any time, the aggregate
amount of all Liabilities Claims, except Liabilities Claims in
respect of a Liability or Damages for which both (i) it has been
and remains agreed or determined, in accordance with Section 6
hereof, that a reserve should or should not be maintained as part
of the Scheduled Liabilities and (ii) no claim, dispute,
arbitration or proceeding is pending as to the amount of any such
reserve.
"Quoted Price" means the last reported sale price of
Newco Common Stock as reported by NASDAQ or, if Newco Common
Stock is listed on a national securities exchange, the last
reported sale price on such exchange (which shall be for
consolidated trading if applicable to such exchange), or if
neither so reported or listed, the last reported bid price of
Newco Common Stock.
"Scheduled Liabilities" means Known Liabilities listed
on the Schedule of Liabilities to be maintained pursuant to
Section 6 hereof.
"Short-Term Treasuries" means United States Dollar
indebtedness consisting of marketable direct obligations issued
by the United States Government or any agency thereof and backed
by the full faith and credit of the United States, in the form of
Book-entry Securities maintained by the Trustee or any nominee
acting for it, solely in its name, in an account at the Federal
Reserve Bank of New York under the Treasury/Reserve Automated
Debt Entry System, issued after July 18, 1984 and maturing within
90 days from the date of acquisition thereof.
"Tax Claim" means, as of any date of determination, a
claim asserted or assessed in any (i) revenue agent's report,
(ii) notice of proposed adjustment, (iii) notice of deficiency,
(iv) notice of assessment, (v) judicial pleading, (vi) other
written document of similar import received from a taxing
authority or (vii) potential claim relating to an applicable
requirement or obligation to notify a state or local taxing
authority with respect to a federal income tax adjustment
involving a claim described in clauses (i) - (vi), involving, in
any case, a Liability or Damages in respect of taxes of Univisa
or USHI (or any affiliate or Subsidiary of either of them) for
which Contributor and Parent would be liable under Section
8.2(a)(ii) of the Stock Contribution and Exchange Agreement but
only to the extent that such claim has not been resolved pursuant
to either (a) a final determination made by, or settlement
concluded with, the applicable taxing authority with respect to
such claim, or (b) a final, binding and nonappealable judgment
rendered with respect to such claim.
"Tax Reserve" means 100% of the amount of any Tax Claim
or Final Tax Amount, as applicable.
"Unknown Liabilities" means Liabilities or Damages
which are Indemnification Obligations but are not Known
Liabilities.
(b) Capitalized terms used herein without
definition shall have the meanings ascribed to them in the
Stock Contribution and Exchange Agreement.
2. Declaration of Trust. To secure the payment,
observance and performance by Contributor and Parent of each and
all of their present and future indemnities, liabilities and
obligations at any time arising under, pursuant to or in respect
of Article VIII of the Stock Contribution and Exchange Agreement
(collectively, the "Indemnification Obligations"), and the
covenants and conditions of this Agreement and the Pledge and
Security Agreement (collectively, including the Indemnification
Obligations, the "Secured Obligations"), Newco grants and
transfers to the Trustee to hold, and the Trustee is hereby
authorized and directed by the Contributor and Parent to accept,
and the Trustee hereby accepts, in trust under this Agreement,
for the benefit of Newco Group, its affiliates, Subsidiaries and
all other present and future holders of any of the Secured
Obligations and each and all of their members, successors and
assigns, all right, title and interest in the following property:
(a) an amount equal to the aggregate amount of
the Scheduled Liabilities set forth on the Statement of
Liabilities attached hereto as Annex 1, in cash or Short-
Term Treasuries or Initial Letters of Credit (as such amount
may be increased or decreased hereafter pursuant to the
provisions hereof, "Fund A"); and
(b) $25 million in cash or Short-Term Treasuries
or Initial Letters of Credit (the "Liquid Collateral") plus
5,000,000 shares of Newco Common Stock, represented by
certificate number TP00018 issued for such number of shares
in the name of Contributor, accompanied by an assignment
thereof duly executed in blank by Contributor (as such
Liquid Collateral amount or number of shares may be
increased or decreased hereafter pursuant to the provisions
hereof, "Fund B")
(collectively, the "Initial Trust Estate," and together with (i)
all rights and interests of the Trustee under the Pledge and
Security Agreement, (ii) any and all Letters of Credit at any
time hereafter delivered to the Trustee, (iii) any and all other
property at any time hereafter transferred to the Trustee in
trust under this Agreement, and (iv) any and all present and
future income, distributions, substitutions, replacements and
proceeds of or from the Initial Trust Estate and any other such
property, the "Trust Estate"). The Trustee, its successors in
trust under this Agreement and its assigns and the assigns of its
successors and assigns in trust shall have and hold the foregoing
Trust Estate until released to Newco Group or Contributor in
accordance with the terms hereof, in trust under and subject to
the terms and conditions set forth herein for the benefit of
Newco Group and as security for and for the enforcement of the
payment, observance and performance of all Secured Obligations
(it being understood that, while all of the Trust Estate secures
all Secured Obligations, Fund A shall be allocated for
administrative purposes to Scheduled Liabilities and Fund B shall
be allocated for administrative purposes to Unknown Liabilities,
Liabilities Claims, Final Tax Amounts and Tax Claims). Newco
Group, Contributor and Parent hereby consent to the foregoing
declaration of trust and agree that the Trust Estate is to be
held and applied by the Trustee subject to the further covenants,
conditions and trust set forth herein.
3. Appointment of Representative and Indemnitees'
Agent.
(a) Contributor and Parent hereby designate Xxxxx
Xxxxxx, Xxxxxxxx X. Dam, Xxxxxxx Xxxxxxxxx, Xxxxxxxxx Xxxxxx
White, Xxxxxx Xxxxxxxxx, Xxxx Xxxxx Xxxxxxxx, and Xxxxxx
Xxxxxx, each of whom shall be authorized to act alone, as
their duly appointed agents and attorneys-in-fact, with full
power of substitution, in any and all capacities, for all
purposes of this Agreement (each, the "Representative").
Actions and inactions by such Representatives under this
Agreement shall be binding and conclusive on Contributor and
Parent and may be conclusively relied upon by the other
parties hereto. Contributor and/or Parent, upon 10 days'
written notice to the other parties, may remove any person
appointed as Representative or appoint another person as
Representative. No Representative shall be liable for any
action taken or omitted by it, or any action suffered by it
to be taken or omitted, in good faith, and in the exercise
of its own best judgment.
(b) Newco and HCI hereby appoint Xxxxxxx X.
Xxxxxx and Xxxxx X. Xxxxxxxx, each of whom shall be
authorized to act alone, as their duly appointed agents and
attorneys-in-fact, with full power of substitution, in any
and all capacities, for all purposes of this Agreement
(each, the "Indemnitees' Agent"). Actions and inactions by
the Indemnitees' Agent under this Agreement shall be binding
and conclusive on Newco Group and may be conclusively relied
upon by the other parties hereto. HCI or Newco, upon 10
days' written notice to the other parties, may remove any
person appointed as Indemnitees' Agent or appoint another
person as Indemnitees' Agent. No Indemnitees' Agent shall
be liable for any action taken or omitted by it, or any
action suffered by it to be taken or omitted, in good faith,
and in the exercise of its own best judgment.
4. Investment and Valuation of Trust Estate; Letters
of Credit.
(a) The Trustee hereby acknowledges receipt of
the Initial Trust Estate.
(i) The Trustee shall keep all cash at
any time held by it as part of the Trust Estate, from
whatever source such cash may be derived, in a non-
interest-bearing account in United States Dollars
maintained by the Trustee solely in the name of the
Trustee, as Trustee hereunder, except that:
(1) Such cash shall be
invested and reinvested by the Trustee in Short-
Term Treasuries, (i) if the Trustee is so directed
in writing by the Indemnitees' Agent and if the
Indemnitees' Agent states in such writing that an
Event of Default has occurred and is continuing,
and (ii) after the Trustee receives written
directions from the Representative, stating that
any and all cash held by the Trustee as part of
the Trust Estate shall be kept invested in Short-
Term Treasuries, and
(2) Notwithstanding the
foregoing, such cash shall be invested by the
Trustee in Joint Approval Cash Equivalents if and
to the extent so directed by the Representative
and the Indemnitees' Agent, acting jointly, but
only if the Trustee has received an opinion of
counsel approved in writing by the Indemnitees'
Agent, confirming to the reasonable satisfaction
of the Indemnitees' Agent that on the date of such
investment, if such investment is made in the
manner directed by the Representative and the
Indemnitees' Agent, the Trustee will have a valid
and perfected security interest in such investment
and the proceeds thereof, free from any adverse
claim, if the Trustee makes such investment in
good faith and without notice of an adverse claim;
and
(ii) Such cash and Cash Equivalents
shall be invested and reinvested solely:
(1) at the risk of
Contributor and Parent; and
(2) in the name of the
Trustee or its nominee.
(b) The Trustee shall be entitled to sell or
redeem any such investment as necessary to make any
distributions required under this Agreement and shall not be
liable or responsible for any loss resulting from any such
sale or redemption or from any investment or failure to
invest made in accordance with this Agreement.
(c) Income, if any, resulting from the investment
of the Trust Estate shall be for the account of Contributor,
but shall be held as part of the Trust Estate, subject to
the provisions of this Agreement.
(d) For purposes of this Agreement, as of any
date of valuation, and unless otherwise expressly provided
herein, (i) Newco Common Stock shall be valued at Fair
Market Value, (ii) cash shall be valued at face value, (iii)
Cash Equivalents shall be valued at the principal amount
outstanding thereon and (iv) Letters of Credit shall be
valued at the amount available to be drawn thereunder,
except that:
(i) Any Cash Equivalent consisting of
an investment in a fund having a readily ascertainable
market value or surrender value shall be valued at such
value,
(ii) Any Cash Equivalent that has
matured and has not been paid shall be valued at zero,
(iii) Any Letter of Credit that is not
an Approved Letter of Credit shall be valued at zero,
(iv) Any Letter of Credit issued by a
bank which no longer is a First Tier United States Bank
shall be valued at zero effective on the 45th day after
the Indemnitees' Agent delivers to the Trustee and the
Representative a notice to such effect, requesting that
an Approved Letter of Credit issued by a First Tier
United States Bank for at least the same amount as such
Letter of Credit be substituted for such Letter of
Credit (and if such substitute Approved Letter of
Credit is delivered to and accepted by the Trustee
prior to such day, the Trustee is hereby authorized and
directed to surrender such Letter of Credit to
Contributor and Parent against delivery of such
substitute Approved Letter of Credit),
(v) Any Letter of Credit on which any
payment demand was made in conformity with such Letter
of Credit and was not honored by payment in full of the
amount demanded within one business day after demand,
and all other Letters of Credit issued by the issuer of
such Letter of Credit or by any Affiliate of such
Issuer, shall be valued at zero,
(vi) Any Cash Equivalent on which any
partial payment of principal or any interest payment is
more than three days past due shall be valued at zero,
and
(vii) Any Cash Equivalent or Letter of
Credit as to which the Indemnitees' Agent has notified
the Trustee, Contributor and Parent in writing that
Newco Group reasonably believes the obligor is (or more
probably than not is) unable to pay the Cash Equivalent
at maturity or to pay the full amount available under
such Letter of Credit upon demand in conformity with
the terms thereof shall be valued at such amount,
including zero, as the Indemnitees' Agent may set forth
in such notice. The valuation set forth in a notice
given pursuant to this Section 4(d)(vii) shall become
effective on the eleventh day after receipt of such
notice by the Trustee, unless prior to such eleventh
day the Representative gives the Trustee and the
Indemnitees' Agent written notice of objection to such
valuation, in which event the Cash Equivalent or Letter
of Credit subject to such valuation shall be valued at
face value until the Trustee receives notice reasonably
acceptable to the Trustee of any different value that
has been determined in accordance with Section 7 hereof
and shall thereafter be valued at the value so
determined; provided that during such interim period,
the Cash Equivalent or Letter of Credit may be given a
different value pursuant to any other subclause of this
Section 4(d).
(e) In the case of any and all Letters of Credit
at any time held by the Trustee as part of the Trust Estate:
(i) Each Letter of Credit shall:
(1) be issued by a First Tier
United States Bank through any foreign or domestic
branch and shall constitute the lawful commitment
and obligation of such issuer to pay United States
Dollars up to the amount set forth therein upon
one or more demands made in conformity with the
terms set forth therein prior to an expiry date
set forth therein;
(2) be issued for the benefit
of the Trustee and name the Trustee as the sole
beneficiary thereof;
(3) be available for payment
in United States Dollars on the first business day
after the business day of demand made upon the
issuer by presentation at the issuer's office
prior to 11:00 a.m. (local time in the
jurisdiction of the office of the issuer where
draws on such Letter of Credit are to be
presented) of a certificate, in the form set forth
in the Letter of Credit, demanding a drawing on
the Letter of Credit and presented in compliance
with the terms of the Letter of Credit (whether
made by manual delivery or by any form of
teletransmission), and on the second business day
after any such demand made after 11:00 a.m., as
follows:
A) the issuer will
pay to the Trustee the full amount of such
Letter of Credit at any time during the
period that commences on the 30th day prior
to the Expiry Date set forth in such Letter
of Credit, if demand for such payment is made
either (i) by the Trustee, acting alone
through any officer of the Trustee, or (ii)
by the Indemnitees' Agent;
B) subject to
Section 7 of this Agreement, the issuer will
pay to the Trustee the full amount of such
Letter of Credit on the first business day
after the 45th day after the Indemnitees'
Agent delivers to the Trustee and the
Representative a notice to the effect that
the issuer is no longer a First Tier United
States Bank, requesting that an Approved
Letter of Credit issued by a First Tier
United States Bank for at least the same
amount as such Letter of Credit be
substituted for such Letter of Credit, if a
substitute Approved Letter of Credit has not
been delivered to the Trustee and if demand
for such payment is made by the Trustee,
acting alone through any officer of the
Trustee; and
C) the issuer will
pay to the Trustee the amount set forth in
any demand at any time made by the Trustee,
acting alone through any officer of the
Trustee, up to the amount of such Letter of
Credit; provided that, prior to presentation
of such demand pursuant to this subclause
(C), all required notices have been given and
any objections have been resolved pursuant to
the terms of this Agreement;
provided that, for purposes of this subclause (3), a
"business day" shall mean, for any Letter of Credit,
any day other than a Saturday, Sunday or other day on
which banks in New York City or in the jurisdiction of
the office of the issuer where draws on such Letter of
Credit are to be presented are authorized to close;
(4) be transferable solely to
a successor Trustee which succeeds to the Trustee
pursuant to Section 13 hereof;
(5) be available for an
unlimited number of demands for payment,
specifically stating that the failure to make
demand for payment on any occasion shall not
affect, impair or limit the availability of the
credit or the right to make an unlimited number of
payment demands at any later time or on any other
occasion;
(6) not require presentation
of any draft, submission of any certificate, proof
of fact, proof of claim or any other document
whatsoever, as a condition to the honor of such
Letter of Credit or for any other purpose, except
as otherwise set forth in this Section;
(7) not require presentation
of such Letter of Credit as a condition to the
honor of such Letter of Credit or for any other
purpose, whether for exhibition, notation, or
surrender or otherwise; and
(8) either (a) be in the
form, in all material respects, of an Initial
Letter of Credit, (b) comply, in all material
respects, with the foregoing provisions of this
Section 4(e)(i), as determined by Newco and the
Trustee, or (c) be, in all respects, both as to
form and as to substance, satisfactory to Newco in
its reasonable discretion and to the Trustee in
its reasonable discretion, and the Trustee shall
have received notice from the Indemnitees' Agent
as to Newco's acceptance of a Letter of Credit
pursuant to subclauses (b) or (c) of this
subclause (8); provided that the parties hereto
agree without limitation that (I) any change in
the proposed substance of any proposed Letter of
Credit from that of the Initial Letters of Credit
or the substance of the requirements of this
Section 4(e)(i) shall be deemed to be "material"
for purposes of this subclause (8) and (II) any
change which could reasonably be expected to have
an adverse effect on the ability of the Trustee or
the Indemnitees' Agent, as the case may be, to
draw under a Letter of Credit, or that could
reasonably be expected to make any such draw more
difficult or time consuming, shall be deemed to be
"material" for purposes of this subclause (8).
Newco and the Trustee hereby confirm their
approval of the Initial Letters of Credit.
(ii) No later than the 20th day prior
to the Letter of Credit Expiry Date of each Letter of
Credit, the Trustee shall demand payment of the full
amount available under such Letter of Credit from the
issuer thereof in conformity with the terms of such
Letter of Credit unless an Approved Letter of Credit in
at least the same amount has been delivered to and
accepted by the Trustee in substitution for such Letter
of Credit no later than the 30th day prior to such
Letter of Credit Expiry Date (and if such substitute
Approved Letter of Credit is delivered to and accepted
by the Trustee prior to such day, the Trustee is hereby
authorized and directed to surrender such Letter of
Credit to Contributor and Parent against delivery of
such substitute Approved Letter of Credit).
(iii) The Trustee shall demand payment
of amounts available under Letters of Credit if, as,
when and to the extent required to fund any payment or
distribution required to be made by the Trustee from
the Trust Estate pursuant to this Agreement (including,
without limitation, after all required notices have
been given and any objections have been resolved
pursuant to the terms of this Agreement), but only to
the extent the cash and Cash Equivalents then held by
the Trustee as part of the Trust Estate are not
sufficient to fund such payment or distribution.
(iv) The Trustee shall demand payment
of all amounts available under any and all Letters of
Credit in conformity with the terms thereof, promptly
upon the Trustee's receipt of written directions to do
so from the Indemnitees' Agent, if either (i) a Make-
Whole Breach has occurred and is then continuing or
(ii) the Indemnities' Agent certifies in such written
directions that an Event of Default has occurred and is
continuing.
(v) The Trustee shall demand payment of
amounts available under Letters of Credit if, as, when
and to the extent the Trustee at any time receives
written directions to do so from the Representative.
(vi) The Trustee's obligations under
this Section 4(e) may be waived or modified only by
joint written directions signed by the Representative
and the Indemnitees' Agent, but such waiver or
modification shall be effective (i) only if and to the
extent specifically set forth in such joint written
directions, (ii) only on the specific occasion and for
the specific purpose for which such joint written
directions were given, without in any manner impairing
the rights and obligations of the parties (as set forth
herein) as to any other occasion, even if identical to
such occasion, or for any other purpose, and (iii) in
the case of any modification, only if the Trustee is
willing to consent thereto in its sole discretion.
(vii) Subject to subclause (vi) above,
the Trustee's obligations to demand such payment as set
forth in this Section 4(e) shall be absolute and
unconditional and shall not be affected or diminished
by any contrary notice or demand delivered to the
Trustee by or on behalf of Contributor or Parent or any
other person except as specifically provided for in
this Agreement.
(viii) All proceeds of any demand for
payment under any Letter of Credit shall be remitted to
the Trustee and shall be held by it as part of the
Trust Estate.
5. Required Trust Estate Values.
(a) The Trust Estate shall be valued by the
Trustee at the end of each calendar quarter (a "quarterly
valuation"). The Trustee shall send the other parties
hereto written notice of such quarterly valuation within 10
days after the end of such quarter.
(b) The value of Fund B shall be as follows:
(i) After the date hereof and prior to
the date which is 16 months after the date hereof, at
any quarterly valuation the value of Fund B shall be no
less than $175 million, of which no less than $25
million shall be cash or Cash Equivalents.
(ii) After the date which is 16 months
after the date hereof and prior to the termination of
this Agreement, at any such quarterly valuation, the
value of Fund B shall be no less than $100 million, of
which no less than $25 million shall be cash or Cash
Equivalents.
(iii) After the Expiration Date, the
value of Fund B may be reduced to the Maintenance
Level, all of which may be maintained in Newco Common
Stock.
Notwithstanding the foregoing, while there is any Tax Claim,
Final Tax Amount or pending Liabilities Claim, Fund B shall
be maintained in an amount equal to the sum of all Tax
Reserves for all Tax Claims, Final Tax Amounts, the
Maintenance Level, all Pending Amounts, and all other
amounts required to be paid out from or maintained in Fund
B.
(c) At any quarterly valuation, the value of Fund
A shall be no less than the then amount of Scheduled
Liabilities.
(d) If the values of Funds A and B as determined
by the Trustee in accordance with this Agreement in any
quarterly valuation are less than the values then required
to be maintained under Sections 5(b) and 5(c) hereof (a
"deficiency"), the Trustee shall notify the parties and,
within 15 days from the date such quarterly valuation is
sent by the Trustee to the other parties hereto, Contributor
and Parent shall cause to be deposited with the Trustee, as
part of the Trust Estate, (i) cash, Short-Term Treasuries or
Approved Letters of Credit in an aggregate amount equal to
the deficiency in Fund A and (ii) cash, Short-Term
Treasuries, Approved Letters of Credit or Newco Common Stock
in an aggregate amount equal to the deficiency in Fund B,
provided that no less than $25 million of Fund B shall at
all times consist of cash or Cash Equivalents or Approved
Letters of Credit (such deposits, a "Make-Whole Payment").
Notwithstanding the foregoing, if the deficiency in Fund B
would be eliminated if the value of the Newco Common Stock
increased 11.1% or less from the value used in the
quarterly valuation, the deficiency in Fund B need not be
deposited.
(e) If the values of Funds A and B as determined
by the Trustee in any quarterly valuation are more than the
values then required to be maintained under Sections 5(b)
and (c) hereof (a "surplus"), the Trustee shall notify the
parties and, within 15 days from the date such quarterly
valuation is sent by the Trustee to the other parties
hereto, the Trustee shall cause, at the request of
Contributor, either (i) the surplus of cash or Cash
Equivalents in Fund A to be released to Contributor or
(ii) at the request of Contributor, either (1) the amount
available to be drawn under a Letter of Credit in Fund A to
be reduced by an amount equal to the surplus or (2) a Letter
of Credit in Fund A with an amount available to be drawn
equal to the surplus released to Contributor, and shall
cause, at the request of Contributor, either (i) the surplus
of cash or Cash Equivalents or Newco Common Stock in Fund B
to be released to Contributor or (ii) at the request of
Contributor, either (1) the amount available to be drawn
under a Letter of Credit in Fund B to be reduced by an
amount equal to the surplus or (2) a Letter of Credit in
Fund B with an amount available to be drawn equal to the
surplus released to Contributor, provided that no less than
$25 million of Fund B shall at all times consist of cash or
Cash Equivalents or Approved Letters of Credit.
Notwithstanding the foregoing, if the surplus in Fund B
would be eliminated if the value of the Newco Common Stock
decreased by 10% or less from the value used in the
quarterly valuation, the surplus in Fund B shall not be
released. Further, no amount shall be released to
Contributor pursuant to this Section 5(e) while an Event of
Default is continuing.
(f) Contributor and Parent may deliver a Make-
Whole Payment consisting of cash or Cash Equivalents or
Approved Letters of Credit or (to the extent permitted under
Section 5(d) hereof) Newco Common Stock owned by Contributor
or Parent or by any Subsidiary of Parent, if, in the case of
Newco Common Stock owned by any such Subsidiary, (i) such
Subsidiary executes and delivers to the Trustee an agreement
reasonably satisfactory to the Trustee and Newco Group by
which such Subsidiary agrees to join in and be bound by this
Agreement and the Pledge and Security Agreement on the same
terms and conditions as those by which Parent is bound,
together with such financing statements, assignments and
transfer instruments requested as to such Subsidiary by the
Trustee or Newco Group, and (ii) Parent executes and
delivers to the Trustee an instrument reasonably
satisfactory to the Trustee warranting the due
authorization, execution, delivery, legality and
enforceability of such agreement, financing statements,
assignments and transfer instruments and guaranteeing due
and punctual payment and performance of all liabilities and
obligations of such Subsidiary thereunder.
6. Trust Estate Scheduled Liabilities - Determination
and Payment.
(a) The Trustee shall maintain on an ongoing
basis a schedule of Known Liabilities (the "Schedule of
Liabilities") determined as provided in this Section 6. The
initial Schedule of Liabilities is the Statement of
Liabilities attached hereto as Annex 1. Each Scheduled
Liability shall be stated at an amount equal to its
liquidated amount if it is a Known Liability which is
liquidated (i.e., in an amount certain) or at its related
reasonable reserve if it is a Known Liability which is
unliquidated (i.e., in an amount which is uncertain or
contingent). The liquidated amount or the reserve, as the
case may be, with respect to any Known Liability is its
"Scheduled Amount." Amounts claimed under Tax Claims and
Final Tax Amounts shall not be Scheduled Liabilities.
(b) The Schedule of Liabilities shall also
include for Known Liabilities which are liquidated their
respective discrete (one or more) or periodic due dates and
the names and addresses of the persons entitled to payment.
Unless the Representative or Indemnitees' Agent shall give
notice to the Trustee at least 10 days prior to the due date
of any Known Liability which is liquidated that payment
should not be made on such due date, the Trustee shall pay
from Fund A Known Liabilities which are liquidated when due,
and the related Known Liability shall be deemed satisfied
and removed (to the extent satisfied) from the Schedule of
Liabilities.
(c) If any party (other than the Trustee) becomes
aware that any Known Liabilities which are liquidated have
arisen after the date hereof, such party shall (through the
Representative or the Indemnitees' Agent, as the case may
be) give notice, and provide relevant documentation, if any,
to the other parties. The notice shall contain the
information called for by the first sentence of Section 6(b)
hereof. If no party (other than the trustee) objects to such
notice within 10 days of the notice, the subject Known
Liabilities shall be added to the Schedule of Liabilities.
(d) If any party (other than the Trustee) becomes
aware that any Known Liabilities which are unliquidated have
arisen after the date hereof, such party shall (through the
Representative or the Indemnitees' Agent, as the case may
be) give notice, and provide relevant documentation, if any,
to the other parties and shall propose a reasonable reserve
therefor. If no party (other than the Trustee) objects to
such notice within 10 days of the notice, the subject Known
Liabilities shall be added to the Schedule of Liabilities at
the amount of the proposed reserve.
(e) If there shall occur any developments or
events which cause any party (other than the Trustee)
reasonably to believe that the reserve for a Known Liability
which is unliquidated or the scheduled amount of a Known
Liability which is liquidated should be adjusted, such party
shall (through the Representative or the Indemnitees' Agent,
as the case may be) give notice to the other parties of the
proposed adjustment and the basis therefor. If no party
(other than the trustee) objects to such notice within 10
days of the notice, the reserve or Scheduled Amount for such
Known Liability shall be adjusted as proposed.
(f) If Known Liabilities which are unliquidated
become liquidated through final resolution or settlement,
the party responsible for the resolution shall give notice
to the other parties of the nature and amount of the
resolution and present evidence thereof in the form of a
release, receipt, or otherwise. If no party (other than the
trustee) objects to such notice within 10 days of the
notice, the subject Known Liability shall be deemed
liquidated at the amount of the resolution and, up to the
Scheduled Amount, shall be paid as provided in Section 6(b)
hereof.
(g) In addition, if the Representative shall give
notice to the other parties hereto at least 15 days prior to
a quarterly valuation that Parent or Contributor has
satisfied, or caused to be satisfied, any Known Liability
and shall present evidence thereof in the form of a receipt,
release or other proof of its claim, then if the
Indemnitees' Agent does not give notice of objection within
10 days of the Representative's notice, the Trustee shall,
at the request of Contributor, either (i) reimburse
Contributor or Parent (as the case may be) out of the Trust
Estate for the amount paid in satisfaction of the Known
Liability up to its Scheduled Amount or (ii) at the request
of Contributor, cause either (1) the amount available to be
drawn under a Letter of Credit in Fund A or Fund B, as the
case may be, to be reduced by an amount equal to the amount
paid in satisfaction of the Known Liability up to its
Scheduled Amount or (2) a Letter of Credit in Fund A or Fund
B, as the case may be, with an amount available to be drawn
equal to the amount paid in satisfaction of the Known
Liability up to its Scheduled Amount to be released to
Contributor. Such Known Liability shall thereafter be
deemed satisfied and removed (to the extent satisfied) from
the Schedule of Liabilities.
(h) In addition, if the Indemnitees' Agent shall
give notice to the other parties hereto at least 15 days
prior to a quarterly valuation that HCI or Newco has
incurred or has satisfied, or caused to be satisfied, any
Known Liability and shall present evidence thereof in the
form of a receipt, release or other proof of its claim, then
if the Representative does not give notice of objection
within 10 days of the Indemnitees' Agent's notice, the
Trustee shall reimburse HCI or Newco (as the case may be)
out of the Trust Estate for the amount paid in satisfaction
of the Known Liability up to its Scheduled Amount. Such
Known Liability shall thereafter be deemed satisfied and
removed (to the extent satisfied) from the Schedule of
Liabilities.
(i) When so directed in writing by the
Representative upon at least 10 days' prior written notice,
if (and only if) no Make-Whole Breach is then continuing
under Section 8(c) hereof, the Indemnitees' Agent shall
direct the Trustee (x) to sell or otherwise liquidate (in
any commercially reasonable manner set forth in the
Representative's notice) Cash Equivalents or Newco Common
Stock held by the Trustee in Fund B as necessary to pay and
discharge a Tax Claim or Final Tax Amount and (y) to pay
directly to the taxing authority certified in the
Representative's notice to be entitled to payment of such
Tax Claim or Final Tax Amount, on account and in
satisfaction of such Tax Claim or Final Tax Amount, such
amount as is set forth in the Representative's notice. The
Trustee shall not take any action under this Section 6(i)
unless it receives such notice from the Indemnitees' Agent,
regardless of the Trustee's receipt of any notice from the
Representative.
(j) The Trustee (i) shall not be obligated to
give any notice under any of the foregoing provisions in
this Section 6, (ii) shall not be entitled to object to any
notice given under any such provisions, (iii) shall not be
obligated to make any adjustment in the Schedule of
Liabilities, unless and until it receives notice thereof in
accordance with such provisions and either (x) the time for
objection thereto, as set forth in such provisions, has
expired or (y) any such objection that was timely given has
been resolved pursuant to Section 7 hereof, and (iv) shall
give notice to the other parties hereto if it believes in
good faith that any liquidated Known Liability has arisen,
but shall not have any liability for (or suffer any
diminution in its rights under Section 14 hereof on account
of) any such notice given or not given by it in good faith.
7. Certain Disputes. In the event that either the
Representative or the Indemnitees' Agent shall give notice of
objection to any notice given under any of the provisions of
Sections 4(d), 4(e) (other than Section 4(e)(i)(3)(A)), 6 or 9
hereof, the parties (other than the Trustee) shall promptly meet
and confer and attempt to resolve the objection. If they
succeed, they shall promptly and jointly notify the Trustee and
the Trustee shall act in accordance with the notice. If they
shall not succeed within 15 days or, in the case of an objection
with respect to Section 4(e)(i)(3)(B), 5 days of the notice of
objection, they shall, within an additional 45 days or, in the
case of an objection with respect to Section 4(e)(i)(3)(B), 15
days, commence and complete an arbitration proceeding in
accordance with the provisions of Section 24 hereof. Unless the
parties shall otherwise jointly instruct the Trustee, the Trustee
shall act with respect to the subject valuation (as to notice of
objection under Section 4(d) hereof) or the subject Known
Liability (as to notice of objection under Section 6 hereof) in
accordance with the arbitrator's award when received. A party
must have a reasonable basis in giving any such notice of
objection and shall set forth the basis of its objection in the
notice.
8. Certain Releases, Substitutions; Consequences of
Make-Whole Breach.
(a) When so directed in writing by the
Representative upon at least 10 days' prior written notice
(with a copy to the Trustee), the Indemnitees' Agent shall
instruct the Trustee to release from Fund A and/or Fund B
and deliver to Contributor, at the election of the
Representative, any or all cash, Cash Equivalents and Newco
Common Stock then held by the Trustee in Fund A and/or Fund
B, as the case may be, but only if prior to any such release
and delivery there is deposited with the Trustee, to be held
as part of the Trust Estate and as part of Fund B, an
Approved Letter of Credit in an amount at least equal to the
then value of the cash, Cash Equivalents and the Fair Market
Value of the Newco Common Stock so to be released. If any
Letter of Credit to be delivered pursuant to this Section
8(a) is not in the form of an Initial Letter of Credit, then
Newco shall be given at least 30 days' advance notice of the
proposed issuance of such Letter of Credit, with copies of
such Letter of Credit and all documents pertaining thereto.
The Trustee shall not take any action under this Section
8(a) unless it receives the notice herein required from the
Indemnitees' Agent (which notice shall not be unreasonably
withheld), regardless of the Trustee's receipt of any notice
from the Representative.
(b) When so directed in writing by the
Representative upon at least five days prior written notice,
the Indemnitees' Agent shall instruct the Trustee to release
from Fund B and deliver to Contributor the number of shares
of Newco Common Stock specified in such notice, but only if
Contributor transfers to the Trustee, to be held as part of
the Trust Estate, cash in an amount equal to the Fair Market
Value of such shares of Newco Common Stock, concurrently
with and in exchange for delivery of such shares of Newco
Common Stock. The Trustee shall not take any action under
this Section 8(b) unless it receives the notice herein
required from the Indemnitees' Agent (which notice shall not
be unreasonably withheld), regardless of the Trustee's
receipt of any notice from the Representative.
(c) If Contributor and Parent at any time fail to
deposit any Make-Whole Payment required to be deposited by
them pursuant to Section 5(d) hereof (a "Make-Whole
Breach"), then at all times thereafter until the full amount
of such Make-Whole Payment is received by the Trustee, in
cash and as part of the Trust Estate, (i) the Indemnitees'
Agent shall have the sole power to direct and control the
application of the Trust Estate to the settlement, payment
and satisfaction of any and all Scheduled Liabilities,
Liabilities Claims, Final Tax Amounts and Tax Claims
(whether or not disputed or liquidated), at such times and
in such amounts, manner and order and on such conditions as
the Indemnitees' Agent from time to time, in its sole
discretion, may determine and (ii) subject to applicable
laws, regulations, orders, judgments and decrees and the
provisions of Section 13 hereof, the Trustee shall honor all
instructions received by it in writing from the Indemnitees'
Agent to collect any or all Cash Equivalents, sell any or
all Newco Common Stock and otherwise liquidate any and all
property of the Trust Estate and pay, from cash in the Trust
Estate, any or all such Scheduled Liabilities, Liabilities
Claims, Final Tax Amounts and Tax Claims, in such amount,
manner and order as the Indemnitees' Agent in its sole
discretion may elect and direct, in each case (x) whether or
not any claim so paid has then been settled or liquidated or
is then binding upon Contributor or Parent under any
judgment or award, (y) whether or not Contributor or Parent
has participated in or approved any settlement or payment of
any claim, and (z) whether or not Parent or Contributor has
given the Trustee notice of objection to any such
instructions or notice of any demand for arbitration or
judicial relief in respect thereof. No such action by the
Indemnitees' Agent shall be determinative of any liability
of Parent or Contributor for or as to any Liability or
Damages pursuant to the provisions of the Stock Contribution
and Exchange Agreement.
9. Termination of Agreement.
(a) Ninety (90) days after the 10th anniversary
of the date hereof (the "Cut-off Date"), (i) the Trustee
shall determine, by a valuation in accordance with Sections
4 and 6 hereof, the excess, if any (the "Excess Amount"), of
(A) all property then held in the Trust Estate over (B) the
amount required to pay the sum of all Scheduled Liabilities,
all Tax Reserves for all Tax Claims and Final Tax Amounts,
all Pending Amounts, and all other amounts required to be
paid from Fund B, and (ii) the Trustee shall release such
Excess Amount to Contributor, unless at such time the
statute of limitations applicable to the assessment of
United States federal income tax against Univisa or USHI (or
any affiliate or Subsidiary of either of them) with respect
to any Pre-Closing Period shall not have expired, in which
event any Excess Amount shall be determined and released to
Contributor upon the day following the earliest to occur of
(x) the expiration of such statute of limitations, (y) a
final determination by the Internal Revenue Service to the
effect that neither Univisa nor USHI (nor any affiliate or
Subsidiary of either of them) has any unsatisfied liability
for taxes for which Parent and Contributor would be liable
pursuant to Section 8.2(a)(ii) of the Stock Contribution and
Exchange Agreement, and (z) the assertion of a Tax Claim by
the Internal Revenue Service.
(b) After the Cut-off Date, no Known Liabilities
shall be added to the Schedule of Liabilities other than as
a result of the determination of Pending Amounts.
(c) After satisfaction and discharge of all
remaining Scheduled Liabilities and Final Tax Amounts,
determination of all Pending Amounts, final, indefeasible
and nonappealable satisfaction and discharge of all Tax
Claims and Liabilities Claims, and payment or satisfaction
of all previously unpaid amounts to which the Trustee may be
entitled under Section 14 hereof, and after the Excess
Amount (if any) is released in accordance with Section 9(a)
hereof, all amounts remaining in the Trust Estate shall be
delivered to Contributor.
(d) Upon the final distribution of all of the
Trust Estate in accordance with the terms of this Agreement,
this Agreement shall terminate, except that the provisions
of Sections 13 and 14 hereof shall survive such termination.
(e) The Trustee shall not be obligated to release
or deliver any assets of the Trust Estate pursuant to this
Section 9 except if and to the extent (i) the Trustee
receives joint written instructions from the Representative
and the Indemnitees' Agent, directing such release or
delivery, (ii) the Trustee (x) receives notice from the
Representative directing that such release or delivery be
made on any date occurring after the Cut-Off Date, (y) has
given the Indemnitees' Agent notice of the Trustee's receipt
of such direction from the Representative, and at least 60
days have elapsed since such notice was given to the
Indemnitees' Agent, and (z) has not received notice of
objection to such release or delivery from the Indemnitees'
Agent, or (iii) in accordance with an arbitrator's award,
directing that such release or delivery be made on any date
occurring after the Cut-Off Date, delivered in an
arbitration proceeding conducted in accordance with the
provisions of Section 24 hereof.
10. Directions to Trustee. Both prior to and after
the occurrence of any Event of Default, the Trustee shall
(subject to Sections 12 and 13 hereof) exercise and enforce its
rights and remedies under the Pledge and Security Agreement in
accordance with such instructions as the Trustee from time to
time may receive from Newco Group, so long as such instructions
do not, in the good faith opinion of the Trustee, require it to
engage in any action which would violate any applicable law,
regulation, judgment, order or decree or expose it to liability
for which it has not received indemnification from Newco Group
pursuant to Section 14 hereof.
11. Tax Matters. Each party to this Agreement shall
provide a completed IRS Form W-8 or Form W-9 to the Trustee upon
request of the Trustee. Subject to Section 14, Contributor and
Parent, jointly and severally, covenant and agree to indemnify
and hold the Trustee harmless against all liability for tax
withholding and/or reporting for any payments made by the Trustee
pursuant to this Agreement.
12. Duties of the Trustee. The Trustee shall have no
duties or responsibilities other than those expressly set forth
in this Agreement and the Pledge and Security Agreement, and no
implied duties or obligations shall be read into this Agreement
or the Pledge and Security Agreement against the Trustee. The
Trustee shall have no duty to enforce any obligation of any
person, other than as provided herein. The Trustee shall be
under no liability to anyone by reason of any breach or failure
on the part of any party hereto or any maker, endorser or other
signatory of any document or any other person to perform such
person's obligations under any such document.
13. Liability of the Trustee; Withdrawal.
(a) The Trustee shall not be liable for any
action taken or omitted by it, or any action suffered by it
to be taken or omitted, in good faith (except as provided in
the immediately succeeding sentence), and may rely
conclusively and shall be protected in taking or omitting to
take any action based upon any order, notice, demand,
certificate, opinion or advice of counsel (including counsel
chosen by the Trustee), statement, instrument, report or
other paper or document (not only as to its due execution
and the validity and effectiveness of its provisions, but
also as to the truth and acceptability of any information
therein contained) which is believed by the Trustee to be
genuine and to be signed or presented by the proper
person(s). The Trustee shall not be held liable for any
error in judgment made in good faith by an officer of the
Trustee unless it shall be proved that the Trustee was
grossly negligent in ascertaining the pertinent facts or
acted intentionally in bad faith. The Trustee shall not be
bound by any notice of demand, or any waiver, modification,
termination or rescission of this Agreement or any of the
terms hereof, unless evidenced by a writing delivered to the
Trustee signed by the proper party or parties and, if the
duties or rights of the Trustee are affected, unless it
shall give its prior written consent thereto.
(b) Without limitation of any other provision of
this Agreement, the Trustee shall not be responsible for and
may conclusively rely upon and shall be protected,
indemnified and held harmless by Contributor and Parent,
acting jointly and severally, for the sufficiency or
accuracy of the form of, or the execution, validity, value
or genuineness of any document or property received (from
any party), held or delivered by it hereunder, or of the
signature or endorsement thereon, or for any description
therein; nor shall the Trustee be responsible or liable in
any respect on account of the identity, authority or rights
of the persons executing or delivering or purporting to
execute or deliver any document, property or this Agreement.
(c) No provision of this Agreement or the Pledge
and Security Agreement shall require the Trustee to expend
or risk its own funds or incur any liability. The Trustee
may refuse to perform any duty or exercise any right or
power hereunder or thereunder unless it receives indemnity
reasonably satisfactory to it against any loss, liability or
expense.
(d) The Trustee makes no statement, promise,
representation or warranty whatsoever, and shall have no
liability whatsoever, to Newco Group or its successors or
assigns as to the authorization, execution, delivery,
legality, enforceability or sufficiency of this Agreement or
the Pledge and Security Agreement or as to the creation,
perfection, priority or enforceability of any security
interest granted hereunder or thereunder or as to the
existence, ownership, quality, condition, value or
sufficiency of any of the Trust Estate or as to any other
matter whatsoever, except only that the Trustee represents
and warrants to the other parties hereto that (i) it has the
right, power and authority, and all required licenses and
consents, to execute, deliver and perform its duties under
this Agreement and the Pledge and Security Agreement, and
(ii) this Agreement and the Pledge and Security Agreement
have been duly executed and delivered by it, upon due
authorization, and (without representing as to the legality,
binding effect or sufficiency of any provision herein or
therein) are binding upon and legally enforceable against
it, subject to laws generally affecting the enforcement of
creditors' rights and the effect of equitable principles,
whether considered in a court of law or equity.
(e) In the event that the Trustee shall become
involved in any arbitration or litigation relating to the
Trust Estate, the Trustee is authorized to comply with any
final, binding and nonappealable decision reached through
such arbitration or litigation.
(f) The Trustee may resign at any time and be
discharged from its duties and obligations hereunder and
under the Pledge and Security Agreement, by giving notice to
the other parties. Such resignation shall not discharge or
otherwise affect the Trust Estate or any property comprising
part of the Trust Estate or any beneficial interest therein
or the rights, powers and liens created by or arising under
this Agreement and the Pledge and Security Agreement. Such
resignation shall take effect when a successor Trustee has
been appointed by Newco and has accepted the trusts herein
provided. If a successor Trustee does not take office
within 60 days after the retiring Trustee resigns, the
retiring Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(g) A successor Trustee shall deliver a written
acceptance of its appointment to the retiring Trustee and to
Newco Group. Thereupon, the resignation of the retiring
Trustee shall become effective, and the successor Trustee
shall have all the rights, powers and duties of the Trustee
under this Agreement and all of the rights, powers and liens
granted to the Trustee under the Pledge and Security
Agreement. The successor Trustee shall mail a notice of its
succession to Contributor and Parent. The retiring Trustee
shall promptly transfer all property held by it as Trustee
to the successor Trustee provided all sums owing to the
retiring Trustee have been paid.
(h) Notwithstanding the replacement of the
Trustee pursuant to this Section 13, the resigning Trustee
shall continue to be entitled to the rights, immunities and
benefits provided under Sections 12, 13, 14 and 24 hereof.
14. Trustee's Fees and Indemnification. All fees (as
may from time to time be agreed in writing by the Trustee,
Contributor and Parent) and reasonable expenses and disbursements
of the Trustee for its services hereunder and under the Pledge
and Security Agreement, shall be paid by Contributor and Parent.
Newco Group, Contributor and Parent, jointly and severally,
hereby agree to indemnify the Trustee for, and to hold it
harmless against, any loss, liability or expense incurred without
gross negligence or wilful misconduct on the part of the Trustee,
including legal or other fees arising out of or in connection
with its entering into this Agreement and the Pledge and Security
Agreement and carrying out its duties hereunder or thereunder,
including the costs and expenses of defending itself against any
claim of liability in the premises or any action for
interpleader. The Trustee shall be under no obligation to
institute or defend any action, suit, or legal proceeding in
connection with this Agreement or the Pledge and Security
Agreement, unless first indemnified and held harmless to its
satisfaction in accordance with the foregoing, except that the
Trustee shall not be indemnified against any loss, liability or
expense arising out of its bad faith, gross negligence or willful
misconduct. Such indemnity shall survive the termination or
discharge of this Agreement or resignation of the Trustee.
15. Inspection. All funds or other property held as
part of the Trust Estate shall at all times be clearly identified
on the Trustee's accounts as being held by the Trustee hereunder.
Any party hereto may at any time during the Trustee's business
hours (with reasonable notice) inspect any records or reports
relating to the Trust Estate.
16. Notices. All notices, requests, demands and other
communications which are required or may be given under this
Agreement shall be in writing and shall be deemed to have been
duly given (i) when received if personally delivered, (ii) when
receipt is automatically acknowledged if transmitted by telecopy,
electronic or digital transmission method, (iii) the day after it
is sent, if sent for next day delivery to an address within the
United States and Puerto Rico by recognized overnight delivery
service (e.g. Federal Express), (iv) the third day after it is
sent, if sent for next day delivery to any other address by
recognized international delivery service, and (v) and upon
receipt, if sent by certified or registered mail, return receipt
requested. In each case notice shall be sent to:
(a) If to Contributor or the Representative:
SATELLITE COMPANY, LLC
c/o Fonovisa Centroamerica,
X.X.
Xx Xxxx de Curridabat 25 Mts.
Este
Xxxxxxxx Xxxxxxxx xxx Xxxx
Xxxxx 0
Xxx Xxxx, Xxxxx Xxxx
with a copy to:
Fried, Frank, Harris, Xxxxxxx
& Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx,
Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(b) If to Parent:
GRUPO TELEVISA, S.A.
Xxxxxxx Xxxxx xx Xxxxxxx #
0000
Xxxxxxx Xxxxx Xx
Xxxxxx, QF 01210
Attention: Xxxxxx Xxxxxx
Telephone: 000-000-000-0000
Telecopy: 000-000-000-0000
with a copy to:
Fried, Frank, Harris, Xxxxxxx
& Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx,
Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(c) If to Newco or Indemnitees' Agent:
PANAMSAT CORPORATION
0 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx,
Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
Xxxxxxxxxx & Xxxxx LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(d) If to HCI:
XXXXXX COMMUNICATIONS, INC.
XX Xxx 0000
Xxxx Xxxxx, Xxxxxxxxxx 00000-
9928
Attention: Xxxxxx Xxxxxxx,
President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
Xxxxxx & Xxxxxxx
000 Xxxx Xxxxx Xxxxxx, Xxxxx
0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx,
Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(e) If to the Trustee:
IBJ Xxxxxxxx Bank & Trust
Company
Xxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust
Department
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
17. Non-Exclusive Remedy. Newco Group, Contributor
and Parent agree and acknowledge that the Trust Estate shall not
be Newco Group's exclusive method of receiving indemnification
from Contributor and Parent pursuant to Section 8.2 of the Stock
Contribution and Exchange Agreement and Contributor and Parent
shall be and remain in all respects personally liable for all
Indemnification Obligations and each liability may be enforced by
any lawful means.
18. Modification; Waiver. Subject to applicable law,
this Agreement may be amended, modified or supplemented, with
respect to any of the terms contained herein, only by written
agreement of the parties and the rights, remedies, immunities and
benefits created hereby or arising hereunder in favor of any
person may be waived by it only by an instrument in writing
signed by it. No such right, remedy, immunity or benefit shall
be deemed waived by reason of such person's failure to act, oral
statements or course of conduct, including any grant of a waiver
on a different or prior occasion.
19. Interpretation. When a reference is made in this
Agreement to Sections, such reference shall be to a Section of
this Agreement unless otherwise indicated. The headings
contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the word "include", "includes" or
"including" are used in this Agreement, they shall be deemed to
be followed by the words "without limitation". This Agreement
shall not be construed for or against either party by reason of
the authorship or alleged authorship of any provision hereof or
by reason of the status of the respective parties.
20. Assignment. Except for assignments by a member of
the Newco Group to any affiliate or Subsidiary of such member
with respect of some or all of its rights under this Agreement
(which assignment can be made without the written consent of
Contributor or Parent), neither this Agreement, nor any of the
rights, interests or obligations hereunder, shall be assigned by
any of the parties hereto (whether by operation of law or
otherwise) without the prior written consent of Contributor,
Parent and Newco Group. The Trustee shall not be bound by any
assignment, unless it receives written notice thereof. No other
party hereto may assign its obligations to the Trustee without
the Trustee's written consent. Subject to the foregoing
provisions of this Section 20, this Agreement will be binding
upon, inure to the benefit of and be enforceable by the parties
and their respective successors and assigns.
21. Governing Law. This Agreement shall be construed
and interpreted, and the rights of the parties shall be
determined, in accordance with the laws of the State of New York
(without reference to the choice of law provisions).
22. Interest in Trust Estate. Neither Contributor nor
Parent has any interest in the Trust Estate except only as to any
property which has been released from the Trust Estate and
delivered to Contributor or Parent as herein provided, effective
upon such release and delivery.
23. Severability. Each party agrees that, should any
court or other competent authority hold any provision of this
Agreement or part hereof to be null, void or unenforceable, or
order any party to take any action inconsistent herewith or not
to take an action consistent herewith or required hereby, the
validity, legality and enforceability of the remaining provisions
and obligations contained or set forth herein shall not in any
way be affected or impaired thereby. Upon any such holding that
any provision of this Agreement is null, void or unenforceable,
the parties will negotiate in good faith to modify this Agreement
so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that the transactions
contemplated by this Agreement are consummated to the extent
possible. The Trustee shall not be obligated to agree to any
amendment that adversely affects its rights or obligations
hereunder. Except as otherwise contemplated by this Agreement,
to the extent that a party hereto took an action inconsistent
herewith or failed to take action consistent herewith or required
hereby pursuant to an order or judgment of a court or other
competent authority, such party shall incur no liability unless
such party did not in good faith seek to resist or object to the
imposition or entering of such order or judgment; provided,
however, that nothing in this Section 23 shall be deemed to limit
or otherwise modify the Trustee's rights under Sections 13, 14
and 24 hereof, including Section 13(c).
24. Arbitration. Notwithstanding anything in any
other Section of this Agreement to the contrary, in the event
that there shall be a dispute among the parties arising out of or
relating to this Agreement, the parties agree that such dispute
shall be resolved by final and binding arbitration in Los
Angeles, California, administered by Judicial Arbitration &
Mediation Services, Inc. ("JAMS"), in accordance with JAMS' rules
of practice then in effect or such other procedures as the
parties may agree to prior to the Closing. Depositions may be
taken and other discovery may be obtained during such arbitration
proceedings to the same extent as authorized in civil judicial
proceedings. Any award issued as a result of such arbitration
shall be final and binding between the parties thereto, and shall
be enforceable by any court having jurisdiction over the party
against whom enforcement is sought. The fees and expenses of
such arbitration (including reasonable attorneys' fees) or any
action to enforce an arbitration award shall be paid by the party
that does not prevail in such arbitration.
Notwithstanding anything in the preceding paragraph of
this Section 24 to the contrary, the parties shall have the right
to submit to a court, in accordance with the following provisions
of this Section 24, (i) any claim asserted by the Trustee, in its
personal capacity, for the payment of fees, expenses,
disbursements or indemnification due to the Trustee under Section
14 hereof (or due under any indemnity given to the Trustee
pursuant to Section 14 hereof), (ii) any claim asserted against
the Trustee personally, seeking damages or other relief against
the Trustee (and not for purposes of binding the Trust Estate)
based on or relating to any alleged breach of any duty or other
actionable conduct of the Trustee, and (iii) any claim asserted
by or against the Trustee personally (and not for purposes of
binding the Trust Estate) otherwise relating in any manner to the
rights, immunities and benefits granted to the Trustee under
Sections 12, 13 and 14 hereof; and, with respect solely to
such claims:
(a) No party shall be obligated or entitled to
submit such claim to arbitration or be bound by any
arbitrator's award that might in any manner relate to such
claim;
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT
TO SUCH CLAIM MAY BE BROUGHT IN THE COURTS OF THE STATE OF
NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT
OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH PARTY HERETO CONSENTS, FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, TO THE JURISDICTION OF THOSE COURTS
FOR PURPOSES OF ADJUDICATION OF ANY SUCH CLAIM. EACH PARTY
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO
THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION
FOR PURPOSES OF ADJUDICATION OF ANY SUCH CLAIM. SERVICE OF
ANY SUMMONS, COMPLAINT OR OTHER PROCESS MAY BE MADE BY ANY
MEANS PERMITTED BY NEW YORK LAW.
(c) EACH PARTY HERETO WAIVES ALL RIGHTS TO A
TRIAL BY JURY OF ANY SUCH CLAIM AND AGREES THAT SUCH CLAIM
SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT
LIMITING THE FOREGOING, EACH PARTY FURTHER AGREES THAT ITS
RIGHT TO A TRIAL BY JURY IS HEREBY WAIVED AS TO ANY ACTION,
COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN
PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS
AGREEMENT OR THE PLEDGE AND SECURITY AGREEMENT OR ANY
PROVISION HEREOF OR THEREOF, INSOFAR AS IT MAY CREATE A
DEFENSE TO ANY SUCH CLAIM. THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT AND THE PLEDGE AND SECURITY
AGREEMENT.
25. Remedies Cumulative. All rights and remedies of
each party hereto are cumulative of each other and of every other
right or remedy such party may otherwise have at law or in
equity, and the exercise of one or more rights or remedies shall
not prejudice or impair the concurrent or subsequent exercise of
other rights or remedies.
26. Counterparts. This Agreement may be executed in
two or more counterparts, each of which will be considered one
and the same instrument and shall become effective when executed
and delivered by each of the parties.
27. Specimen Signature. Each person at any time
appointed as Representative or Indemnitees' Agent shall present a
specimen signature to the Trustee promptly upon appointment.
28. Release of Cash or Cash Equivalents in Connection
with Initial Letters of Credit. Upon receipt by the Trustee of
the Initial Letters of Credit, the Trustee shall release to the
Contributor (i) cash or Cash Equivalents from Fund A in an amount
equal to the amount available to be drawn under the Initial
Letter of Credit in Fund A and (ii) cash or Cash Equivalents from
Fund B in an amount equal to the amount available to be drawn
under the Initial Letter of Credit in Fund B; provided that any
such delivery of cash or Cash Equivalents shall be made against
delivery by Contributor of a receipt for such cash or Cash
Equivalents.
29. Contribution of Trust Estate. The parties hereto
acknowledge that the Trust Estate created pursuant to this
Agreement is a continuation of the "Trust Estate" as defined in
the Original Trust Agreement.
[intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have executed
this Collateral Trust Agreement as of the date first written
above.
PANAMSAT CORPORATION, a Delaware
corporation
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: General Counsel
XXXXXX COMMUNICATIONS, INC., a
California corporation
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
SATELLITE COMPANY, LLC, a Nevada
limited liability company
By: /s/ Xxxxx Xxxxxx Xxxxxxx
-------------------------------
Name: Xxxxx Xxxxxx Xxxxxxx
Title: General Manager
GRUPO TELEVISA, S.A., a corporation
(Sociedad Anonima) organized under
the laws of Mexico
By: /s/ Xxxx Xxxxx Xxxxxxxx
-------------------------------
Name: Xxxx Xxxxx Xxxxxxxx
Title: Vice President
GRUPO TELEVISA, S.A., a corporation
(Sociedad Anonima) organized under
the laws of Mexico
By: /s/ Xxxxxx Xxxxxxxxx Xxxxxxx
-------------------------------
Name: Xxxxxx Xxxxxxxxx Xxxxxxx
Title: Vice President
IBJ XXXXXXXX BANK & TRUST COMPANY,
a New York banking corporation
By: /s/ Xxxxxx Xxxxxxxxxx
-------------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: Assistant Vice President
