Exhibit 10.31
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.
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"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
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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
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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
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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
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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
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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,
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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;
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(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
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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.
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(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.
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(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
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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
14
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) object 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.
15
(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.
16
(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.
17
(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
18
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 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.
19
(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.
20
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 an 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
21
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
22
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
23
(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 00000-0000
Attention: Xxxxxx Xxxxxxx, President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
24
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 and 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
25
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
26
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 to
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
27
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]
28
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:_____________________________
Name:
Title:
XXXXXX COMMUNICATIONS, INC., a
California corporation
By:_____________________________
Name:
Title:
SATELLITE COMPANY, LLC, a Nevada
limited liability company
By:_____________________________
Name:
Title:
GRUPO TELEVISA, S.A., a corporation
(Sociedad Anonima) organized under
the laws of Mexico
By:_____________________________
Name:
Title:
IBJ XXXXXXXX BANK & TRUST COMPANY,
a New York banking corporation
By:_____________________________
Name:
Title:
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