EXHIBIT 4.3
LOAN AGREEMENT
THIS LOAN AGREEMENT ("Agreement") is entered into as of May 15, 1997
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between XXXXXX NETWORK SYSTEMS, INC., a corporation organized and existing under
the laws of Delaware ("Lender"), and MAGELLAN INTERNATIONAL, INC., a Delaware
corporation that will be renamed "PANAMSAT CORPORATION" upon consummation of the
Reorganization (as defined below)("Borrower").
WHEREAS, Borrower has requested Lender to extend a credit facility in the
amount of One Billion Seven Hundred Twenty Five Million Dollars
($1,725,000,000.00), to be used for Borrower's general corporate purposes
including, but not limited to, financing Borrower's acquisition of all of the
outstanding shares of Class A Common Stock, par value $.01 per share and Common
Stock, par value $.01 per share of PanAmSat Corporation ("PanAmSat") and all of
the outstanding shares of common stock, $.01 par value per share, of Univisa,
Inc. (the indirect holder of all outstanding shares of Class B common stock,
$.01 par value per share, of PanAmSat) in each case pursuant to the
Reorganization Agreement and the Univisa Contribution Agreement (as such terms
are defined below); and
WHEREAS, Lender is willing to extend such credit facility to Borrower,
subject to the terms and conditions of this Agreement;
NOW, THEREFORE, for good consideration, the receipt and sufficiency of
which is hereby acknowledged, Lender and Borrower agree as follows:
SECTION 1
DEFINITIONS
1.1 Definitions. As used in this Agreement, the following terms shall have
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the meanings given:
"Base LIBOR Rate" applicable to a particular Interest Period shall mean a
rate per annum equal to the rate of interest at which U.S. dollar deposits with
comparable maturities are offered in immediately available funds in the London
Interbank Market at 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as published by the British Banker's
Association (Bloomberg Screen BBAM).
"Borrower" has the meaning set forth in the preamble to this Agreement.
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"Business Day" means a day other than a Saturday or Sunday on which
banks are open for business in both San Francisco, California and New York, New
York.
"Certificate of Designation" means the certificate of designation for
the 12 3/4% Mandatorily Exchangeable Senior Redeemable Preferred Stock of
PanAmSat.
"Closing Date" means the closing date of the Merger.
"Consolidated Adjusted Net Worth" means, as of the date of
determination thereof, the consolidated stockholders equity of Borrower in
accordance with GAAP plus the principal balance of the Loan outstanding as of
such date.
"Adjusted Consolidated Tangible Net Worth" means, at any date of
determination, Consolidated Adjusted Net Worth less the consolidated goodwill
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of Borrower and its Subsidiaries, determined in accordance with GAAP.
"Debt Rating" means the rating by S&P or Moody's of senior unsecured
long-term debt issued by Borrower, as publicly announced and in effect from time
to time; provided, however, that if both S&P and Moody's announce a Debt Rating,
the lower rating shall be considered the Debt Rating.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
in effect from time to time.
"ERISA Affiliate" of any Person means any other Person that for
purposes of Title IV of ERISA is a member of such Person's controlled group, or
under common control with such Person, within the meaning of Section 414 of the
Internal Revenue Code of 1986, as amended from time to time.
"Event of Default" means any event specified in Section 8.1.
"GAAP" means generally accepted accounting principles set forth from
time to time in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the accounting
profession), or in such other statements by such other entity as may be in
general use by significant segments of the U.S. accounting profession, which are
applicable to the circumstances as of the date of determination.
"Guaranty" has the meaning set forth in Section 4.1(d).
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"Indentures" means, collectively (a) the Indenture dated as of
August 5, 1993 among PanAmSat, PanAmSat Capital Corporation and First Trust
National Association relating to the Senior Secured Notes, (b) the Indenture
dated as of August 5, 1993 among PanAmSat, PanAmSat Capital Corporation and
United States Trust Company of New York relating to the Senior Subordinated
Discount Notes and (c) the indenture to be entered into by PanAmSat Corporation
in connection with the exchange of its 12 3/4% Mandatorily Exchangeable Senior
Redeemable Preferred Stock as contemplated by the Certificate of Designation, as
each of the foregoing may be amended, supplemented or otherwise modified from
time to time.
"Interest Payment Date" means the last day of any Interest Period. If any
Interest Payment Date is not a Business Day, then the relevant Interest Payment
Date shall be the next succeeding Business Day.
"Interest Period" means the period of time during which a particular LIBOR
Rate will be applicable to the principal balance of the Loan, and shall be a
period of one, two, three or six months as selected by Borrower in accordance
with Section 2.2, subject to the following:
(a) If the term of an Interest Period is not designated, a period of one
month shall be deemed selected; and
(b) The first Interest Period for the Loan shall have a duration of six
months commencing on the Closing Date.
"Investment Grade" means a Debt Rating by S&P of BBB- or better or a Debt
Rating by Xxxxx'x of Baa3 or better.
"Lender" has the meaning set forth in the preamble to this Agreement.
"LIBOR Rate" means for each Interest Period a rate per annum equal to two
percent (2.00% or 200 basis points) plus the Base LIBOR Rate applicable to such
Interest Period.
"Lien" means any trust deed, mortgage, pledge, hypothecation, assignment,
security interest, lien, charge or encumbrance, or preference, priority or other
security agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, the lien of an attachment, judgment or
execution, or any conditional sale or other title retention agreement, any
capitalized lease, and the filing of, or agreement to give, any financing
statement under the Uniform Commercial Code or comparable law of any
jurisdiction, but excluding financing statements filed to give notice of
operating leases in the ordinary course of business and excluding financing
statements filed against the Borrower without the Borrower's consent or
knowledge).
"Loan" means the loan described in Section 2.
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"Material Change" means any adverse change in the Borrower's financial
condition, operations or prospects which could reasonably be expected to
materially impair Borrower's ability to timely and fully perform its obligations
under this Agreement.
"Maturity Date" means May 1, 2000.
"Merger" means the series of transactions resulting in Borrower's direct or
indirect ownership of all of the outstanding common shares of PanAmSat as
contemplated by the Reorganization Agreement.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" of any Person means a multiemployer plan, as defined
in Section 4001 (a) (3) of ERISA, which is subject to Title IV of ERISA, and to
which such Person or any of its ERISA Affiliates is making or accruing an
obligation to make contributions, or has within any of the preceding five plan
years made or accrued an obligation to make contributions.
"Net Cash Proceeds" means, with respect to any sale, lease, transfer or
other disposition of any asset or the sale or issuance by any Person of any
indebtedness or capital stock or other equity interest, any securities
convertible into or exchangeable for any capital stock or other equity interest
or any warrants, rights or options to acquire any capital stock or other equity
interest, the aggregate amount of cash received from time to time by or on
behalf of such Person in connection with such transaction after deducting
therefrom (a) brokerage commissions, underwriting fees and discounts, legal fees
and expenses, finder's fees, accountants' fees and expenses and other similar
fees, expenses and commissions, (b) the amount of taxes payable or estimated in
good faith to be payable in connection with or as a result of such transaction
and (c) the amount of any indebtedness that, by the terms of such transaction or
the terms of such indebtedness, is required to be repaid upon such disposition.
"Note" has the meaning set forth in Section 2.1.
"PanAmSat" has the meaning set forth in the recitals to this Agreement.
"Permitted Liens" means (a) Liens securing the Senior Secured Notes, (b)
Liens to secure the performance of statutory obligations, surety or appeal bonds
or performance bonds, or landlords', carriers', warehousemen's, mechanics',
suppliers', materialmen's or other like Liens, in any case incurred in the
ordinary course of business and with respect to amounts not yet delinquent or
being contested in good faith by appropriate process of law, if a reserve or
other appropriate provision, if any, as is required by GAAP shall have been made
therefore, (c) Liens against the assets of PanAmSat or the Galaxy Assets (as
defined in the Reorganization Agreement) existing on the date of this Agreement,
(d) Liens for taxes, assessments or governmental charges or claims that are not
yet delinquent or that are being contested in good faith by appropriate
proceedings promptly instituted and diligently concluded so long as reserves
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or other appropriate provision shall have been made in conformity with GAAP, (d)
Liens permitted under the Indentures and the Certificate of Designation, (e)
easements, rights-of-way, land marking and zoning restrictions, royalties,
leasehold and fee interest covenants and other similar encumbrances incurred or
imposed in the ordinary course of business, and (f) extensions, renewals or
refinancings of any Liens referred to in clauses (a) through (e) above, provided
that any such extension, renewal or refinancing does not extend to any assets or
secure any indebtedness not securing or secured by the Liens being extended,
renewed or refinanced.
"Person" means any individual, firm, company, corporation, joint venture,
joint-stock company, limited liability company, trust, unincorporated
organization, governmental or state entity, or any association or partnership
(whether or not having separate legal personality) of two or more of the
foregoing.
"Plan" means any employee benefit pension plan (other than a Multiemployer
Plan) which is subject to the provisions of Title IV of ERISA and which is
maintained for employees of Borrower or any Subsidiary.
"Principal Repayment Date" means August 1, 1998, and the first day of each
November, February, May and August thereafter, until the Maturity Date.
"Reorganization" means the transactions contemplated by the Reorganization
Agreement and the Univisa Contribution Agreement.
"Reorganization Agreement" means an Agreement and Plan of Reorganization
dated as of September 20, 1996, as amended on April 4, 1997 that relates to the
combination of PanAmSat and the existing commercial satellite business of Xxxxxx
Communications, Inc. and certain of its subsidiaries.
"Reportable Event" means any of the events set forth in Section 4043(b) of
ERISA or the regulations thereunder excluding those events for which the 30-day
notice requirement is waived, a withdrawal from a Plan described in Section 4063
of ERISA, or a cessation of operations described in Section 4062(e) of ERISA.
"Restricted Subsidiaries" means each Subsidiary having assets of Five
Million Dollars ($5,000,000.00) or more.
"S&P" means Standard & Poor's Ratings Group.
"Senior Secured Notes" means the 9 3/4% Senior Secured Notes Due 2003
issued by PanAmSat and PanAmSat Capital Corporation.
"Senior Subordinated Discounts Notes" means the 11 3/8% Senior Subordinated
Discount Notes Due 2003 issued by PanAmSat and PanAmSat Capital Corporation.
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"Subsidiaries" (individually a "Subsidiary") means those corporations or
entities of which Borrower or any Subsidiary owns more than fifty percent (50%)
of the voting securities. If Borrower or any Subsidiary (i) acquires similar
ownership of any other corporation or entity, such corporation or entity shall
thereupon be deemed a Subsidiary for all purposes hereof, or (ii) subject to the
terms hereof, permits its ownership to fall to fifty percent (50%) or below of
outstanding voting shares of any Subsidiary, such Subsidiary shall thereupon
cease to be a Subsidiary for all purposes hereof.
"Univisa Contribution Agreement" means the Stock Contribution and Exchange
Agreement dated as of September 20, 1996 among Grupo Televisa, S.A., a Mexican
corporation, Satellite Company, L.L.C., a Nevada limited liability company,
Borrower and Xxxxxx Communications, Inc.
"Unmatured Event of Default" means an event which the passage of time or
the giving of notice, or both, would become an Event of Default.
"Voting Stock" means capital stock of Borrower having voting power under
ordinary circumstances to elect directors of Borrower.
SECTION 2
THE LOAN
2.1 The Loan. Lender agrees to make and Borrower agrees to take on the
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Closing Date, subject to the terms and conditions of this Agreement, a loan in
the principal amount of ONE BILLION SEVEN HUNDRED TWENTY FIVE MILLION DOLLARS
($1,725,000,000) bearing interest at the rate specified in Section 2.2 below.
The Loan shall be evidenced by a promissory note (the "Note") duly executed by
Borrower in the form attached as Exhibit A, and delivered to Lender.
2.2 Interest. The principal balance of the Loan outstanding from time to
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time during each Interest Period shall bear interest at an annual rate equal to
the LIBOR Rate in effect for each such Interest Period. The length of each
Interest Period shall be determined by Borrower by providing to Lender written
notice of Borrower's selection thereof not less than three Business Days prior
to each Interest Payment Date. Each determination of the LIBOR Rate and the Base
LIBOR Rate applicable to a particular Interest Period shall be made by Lender
and shall be conclusive and binding upon Borrower absent manifest error.
Interest at the applicable LIBOR Rate from time to time shall be calculated for
the actual number of days elapsed on the basis of a 360 day year.
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2.3 Payments. Each payment of principal, interest and other sums payable
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under this Agreement shall be made in immediately available funds to Lender at
The Bank of America, Concord, California or such other location as Lender may
designate in writing. Each payment by Borrower shall be made without set off or
counterclaim and not later than 11:00 a.m. California time on the day such
payment is due and shall be made by wire transfer in immediately available
funds. All sums received after such time shall be deemed received on the next
Business Day.
(a) Interest Payments. Payments of interest determined in accordance with
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Section 2.2 above shall be due on each Interest Payment Date;
provided, however that during any six month Interest Period, an
additional interest payment shall be due on the last business day of
the third month of such Interest Period.
(b) Principal Repayments. Quarterly principal payments of Fifty Million
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Dollars ($50,000,000.00) each shall be paid on each Principal
Repayment Date.
(c) Maturity Date. All unpaid principal, interest and other amounts due
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hereunder shall be fully and finally due and payable on the Maturity
Date.
2.4 Default Rate. Upon the occurrence of an Event of Default and for the
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period during which any such Event of Default continues uncured, the outstanding
principal amount of the Loan shall bear interest at an annual rate equal to the
LIBOR Rate plus two percent (2.00% or 200 basis points).
2.5 Facility Fee. On the Closing Date, Borrower shall pay Lender a
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facility fee equal to one percent (1.00% or 100 basis points) of the principal
amount of the Loan.
2.6 Renegotiation of Interest Rate. In the event that (a) Borrower shall
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attain an Investment Grade Debt Rating; or (b) Borrower's Subsidiary, PanAmSat,
ceases to be subject to dividend payment restrictions and restrictions on
pledges of assets contained in the Indentures and the Certificate of
Designation, Lender and Borrower agree to negotiate in good faith regarding an
appropriate revision to the rate of interest charged under this Agreement.
Notwithstanding the foregoing, absent a written revision executed by Lender and
Borrower, no modification to the interest rate shall occur and no agreement to
do so is implied hereby.
2.7 Compliance with Law. All agreements between Lender and Borrower,
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whether now existing or hereafter arising and whether written or oral, are
hereby limited so that in no contingency, whether by reason of demand or
acceleration of the maturity hereof or otherwise, shall the interest contracted
for, charged, received, paid or agreed to be paid to Lender exceed the maximum
contractual rate permitted under applicable law; and if from any circumstance
Lender hereof shall ever receive anything of value deemed interest by applicable
law in excess of the maximum lawful amount, an amount equal to any excessive
interest shall be applied to the reduction of the principal of the Loan and if
said amount exceeds the unpaid balance of principal, such excess shall be
refunded to the Borrower. All interest paid or agreed to be paid to Lender
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shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread throughout the full period until payment in full of the
principal so that the interest hereon for such full period shall not exceed the
maximum amount permitted by applicable law.
SECTION 3
PREPAYMENT
3.1 Voluntary Prepayment. Borrower may prepay the Loan in full or in part
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but any such partial prepayment shall be in an amount of at least Fifty Million
Dollars ($50,000,000.00). Borrower shall provide Lender with a written notice of
prepayment at least three Business Days prior to prepayment. Notice of
prepayment shall specify the date of the prepayment and the amount of the
prepayment. Each such prepayment shall be made on the date specified and shall
be accompanied by the payment of accrued interest on the amount prepaid. Subject
to compliance with the foregoing procedures, the Loan may be prepaid at any time
without penalty of any kind; provided that if the Borrower prepays all or any
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portion of the principal amount of the Loan other than on an Interest Payment
Date, the Borrower shall, within ten (10) days after demand by Lender pay to the
Lender any amounts required to compensate the Lender for any additional losses,
costs or expenses which it reasonably incurred as a result of such prepayment,
including, without limitation, any loss, cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by the
Lender to fund the Loan; and, Lender's determination of such losses, costs or
expenses shall be binding and conclusive absent manifest error. Prepayments
shall be applied to scheduled principal payments in order of maturity.
3.2 Mandatory Prepayment. Except as restricted or as otherwise required
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by the Indentures or the Certificate of Designation, in addition to the
scheduled principal payments provided in Section 2.3 above, the following
amounts shall be paid to Lender and shall be applied to prepay outstanding
principal amount of the Loan:
(a) all Net Cash Proceeds of the sale or issuance of equity by the
Borrower or any Restricted Subsidiary (excepting any issuance of
equity pursuant to a Plan or any other employee benefit plan);
(b) all Net Cash Proceeds of any new borrowings by the Borrower or any
Restricted Subsidiary in excess of Five Million Dollars
($5,000,000.00);
(c) all Net Cash Proceeds of the sale or other disposition by Borrower or
any Restricted Subsidiary of any assets having an aggregate fair
market value in excess of Ten Million Dollars ($10,000,000.00) which
proceeds are not reinvested or committed to reinvestment by the
Borrower or any Restricted Subsidiary in productive assets used or
usable in the business of the Borrower or any Restricted Subsidiary
within 180 days after receipt thereof; or
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(d) all insurance proceeds including, without limitation, any in-orbit and
launch insurance proceeds in excess of Five Million Dollars
($5,000,000.00), which are not reinvested or committed to reinvestment
by the Borrower or any Restricted Subsidiary in productive assets used
or usable in the business of the Borrower or any Restricted Subsidiary
within 180 days after receipt thereof.
Any mandatory prepayment shall be applied to scheduled principal payments in
reverse order of maturity. Notwithstanding the foregoing, the provisions of
Section 3.2(c) above shall not apply to the sale or other disposition of assets
(i) by the Borrower to a Restricted Subsidiary, (ii) by a Restricted Subsidiary
to the Borrower or (iii) by a Restricted Subsidiary to another Restricted
Subsidiary. In addition to the foregoing, in the event that any sale, spin-off,
disposition or other transaction whereby Xxxxxx Electronics Corporation will no
longer beneficially own directly or indirectly at least fifty one percent (51%)
of the Voting Stock shall have occurred, then the Loan and all accrued interest
thereon and all other liabilities and obligations outstanding under this
Agreement shall, thereupon, without presentment, demand, protest, or notice of
any kind, all of which are hereby expressly waived, be forthwith due and
payable, if not otherwise then due and payable, together with all reasonable
costs and expenses (including breakage and funding costs and other costs in
connection with the relending, reborrowing, funding or other employing of funds)
incurred by the Lender as a result thereof, anything herein or in any other
agreement, contract, indenture, document or instrument contained to the contrary
notwithstanding. In the event that any such sale, spin-off, disposition or other
transaction occurs whereby Xxxxxx Electronics Corporation no longer beneficially
owns directly or indirectly at least fifty-one percent (51%) of the Voting
Stock, Borrower shall receive a refund of a portion of the facility fee paid in
accordance with Section 2.5 above, in an amount determined on a prorata basis as
of the date of such prepayment by dividing the remaining number of full months
in the original loan term by the number of full months in the original loan
term, and multiplying the quotient thereof by the amount
of said facility fee.
SECTION 4
CONDITIONS PRECEDENT
4.1 Conditions Precedent. The obligation of Lender to make the Loan
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hereunder is subject to the condition that there shall have been delivered to
Lender on or prior to the Closing Date, in form and substance reasonably
satisfactory to Lender:
(a) the Note, and such other documents as Lender may reasonably request,
duly executed by Borrower.
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(b) Certificate of the Secretary or an Assistant Secretary of Borrower
dated the date hereof as to (i) the Certificate of Incorporation
and the By-laws of Borrower, (ii) the resolution of the Board of
Directors of Borrower or its Executive Committee in connection
with this Agreement, and (iii) the incumbency and signatures of the
person(s) authorized to execute and deliver this Agreement and any
other instrument, document or other agreement required hereunder.
(c) Certificate of Good Standing in relation to Borrower issued by the
Secretary of the State of Delaware, dated not more than one month
prior to the Closing Date.
(d) Lender shall receive from each Restricted Subsidiary, an
unconditional guaranty of the Loan in the form attached as Exhibit
B (a "Guaranty"); provided, however, that in the event any
Restricted Subsidiary is precluded from executing such a Guaranty
on the Closing Date by the terms of the Indentures or the
Certificate of Designation or any other legally binding agreement,
receipt of an executed Guaranty from any such Restricted Subsidiary
shall not be required as a condition precedent to making the Loan.
At such time as any such restriction is eliminated, the affected
Restricted Subsidiary shall promptly execute and deliver a Guaranty
to Lender.
SECTION 5
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants that as of the Effective Date:
5.1 Authority of Borrower. Borrower (a) is a corporation duly organized
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and existing under the laws of the State of Delaware, with its principal place
of business in Greenwich, Connecticut, (b) has the corporate power to own its
property and carry on its business as now being conducted, (c) is duly qualified
and authorized to do business, and is in good standing in every state, country
or other jurisdiction except where the failure to be so qualified, authorized
and in good standing would not have a material adverse effect on Borrower's
financial condition, operations or prospects, (d) has full power and authority
to borrow the sums provided for in this Agreement, to execute, deliver and
perform this Agreement and any instrument or agreement required hereunder, and
to perform and observe the terms and provisions hereof and thereof, (e) has
taken all corporate action on the part of Borrower, its directors or
stockholders, necessary for the authorization, execution, delivery and
performance of this Agreement, and any instrument or agreement required
hereunder on the date hereof, (f) requires no consent or approval of any trustee
or holder of any indebtedness or obligation of Borrower to enter into, deliver
or perform its obligations under this Agreement and the Note, and (g) requires
no consent, permission, authorization, order or license of any governmental
authority in connection with the execution and delivery and performance of this
Agreement and any instrument or agreement required hereunder, or any transaction
contemplated hereby, except as may have been obtained and certified copies of
which have been delivered to Lender.
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5.2 Binding Obligations. This Agreement and the Note are the legal, valid
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and binding obligations of Borrower, enforceable against it in accordance with
its terms.
5.3 Incorporation of Restricted Subsidiaries. Each Restricted Subsidiary
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of Borrower is a corporation duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and, to the
best of Borrower's knowledge, is duly licensed or qualified as a foreign
corporation in all jurisdictions except where the failure to be so qualified,
authorized and in good standing would not have a material adverse effect on
Borrower's and its Restricted Subsidiaries' financial condition, operation and
prospects taken as a whole.
5.4 No Contravention. There is no charter, by-law, or capital stock
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provision of Borrower and no provision of any material indenture or agreement,
written or oral, to which Borrower is a party or under which Borrower is
obligated, nor is there any material statute, rule or regulation, or any
judgment, decree or order of any court or agency binding on Borrower which would
be contravened by the execution, delivery and performance of this Agreement, or
any instrument or agreement required hereunder, or by the performance of any
provision, condition, covenant or other term hereof or thereof.
5.5 Notices. No event has occurred which would require Borrower to notify
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Lender pursuant to Section 6.2 hereof.
5.6 Financial Statements. All financial statements furnished by Borrower
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to Lender present fairly the financial position and results of operation and
changes in financial position of Borrower and its Restricted Subsidiaries as at
the end of, and for the periods to which such statements relate, and such
financial statements have been prepared in accordance with GAAP.
5.7 ERISA. Based upon ERISA and the regulations and published
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interpretations thereunder, the Plans of Borrower and its Restricted
Subsidiaries are in material and substantial compliance in all material respects
with the applicable provisions of ERISA and Borrower and its Subsidiaries are in
compliance with such Plans in all material respects. No Reportable Event which
has or could be reasonably be expected to result in termination thereof by the
Pension Benefit Guaranty Corporation or for the appointment by the appropriate
United States District Court of a trustee to administer such Plan has occurred
and is continuing with respect to any Plan.
5.8 [Intentionally Deleted].
5.9 Insurance. Borrower and its Restricted Subsidiaries maintain insurance
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with responsible insurance companies, in such amounts and against such risks as
is customarily carried by owners of similar businesses and property in similar
locations, including protection against loss of use and occupancy, to the extent
such insurance is reasonably available at commercially reasonable rates, and it
will furnish Lender, within five Business Days after receipt of a written
request, with full information as to the insurance carrier.
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SECTION 6
AFFIRMATIVE COVENANTS OF BORROWER
Borrower covenants and agrees that until the full and final payment of all
indebtedness incurred hereunder, unless Lender waives compliance in writing:
6.1 Management of Business. It will manage its business and conduct its
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affairs such that the representations and warranties contained in Section 5
remain true and correct at all times.
6.2 Notice of Certain Events. It will, and it will cause each of its
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Restricted Subsidiaries to, give prompt written notice to Lender of:
(a) all Events of Default or Unmatured Events of Default;
(b) any event of default under the Indentures, the Certificate of
Designation and any other existing or future agreement, contract,
indenture, document or instrument entered into by it that could, if
settled unfavorably, result in a Material Change;
(c) all litigation, arbitration or administrative proceedings involving
Borrower or any of its Subsidiaries which could in the reasonable
opinion of Borrower be expected to result in a Material Change;
(d) any other matter which has resulted in, or might in the reasonable
opinion of Borrower result in, a Material Change.
6.3 Records. It will, and it will cause each of its Restricted
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Subsidiaries to, keep and maintain proper books of record and account, in which
full and accurate entries shall be made of all financial transactions and the
assets of the Borrower and each Restricted Subsidiary to the extent necessary to
permit preparation of the financial statements required to be delivered hereby.
Borrower will permit Lender, and its designated officers, employees, agents and
representatives, to have access thereto and to make examination thereof during
normal business hours and after reasonable notice, to make audits, and to
inspect and otherwise check its properties, real, personal and mixed.
6.4 Financial Information. It will furnish to Lender:
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(a) Within 30 days after the close of each quarter, except for the last
quarter of each fiscal year, its consolidated balance sheet as of the
close of such quarter and its consolidated profit and loss statement
and cash flow statement for that quarter and for that portion of the
fiscal year ending with such quarter, all prepared in accordance with
GAAP, and all certified by its Treasurer or an Assistant Treasurer as
presenting fairly the financial position and results of operation and
changes in financial position of Borrower and its consolidated
Subsidiaries as at the end of,
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and for the fiscal period to which such statements relate,
subject to normal year-end adjustments and the absence of
footnotes.
(b) Within 90 days after the close of each fiscal year, a complete
copy of its annual financial statements, which statements shall
include at least its consolidated balance sheet as of the close
of such fiscal year and its consolidated profit and loss
statement and cash flow statement for such fiscal year, prepared
in accordance with GAAP applied on a basis consistent with that
of the previous year, by such independent certified public
accountants of recognized national standing as may be selected
by Borrower and which statements shall include the opinion of
such accountants, such opinion not to be qualified or limited
because of any restricted or limited nature of examination made
by such accountants or because of a "going concern"
qualification.
(c) Such other information concerning its affairs as Lender may
reasonably request.
6.5 Execution of Other Documents. It will promptly, upon demand by
----------------------------
Lender, execute all such additional agreements, documents and instruments to
evidence Borrower's obligations hereunder as Lender may reasonably deem
necessary.
6.6 Compliance with Law. It will, and will cause each of its
-------------------
Subsidiaries to, comply with the requirements of all applicable laws, rules,
regulations, and orders of any governmental or regulatory authority, a breach of
which would result in a Material Change, except where contested in good faith by
appropriate proceedings diligently pursued.
6.7 Subsidiary Guaranties. It will, upon elimination of any
---------------------
restriction excusing the delivery of a Guaranty by a Restricted Subsidiary as a
condition precedent to Closing in accordance with Section 4.1(d) above, cause
the affected Restricted Subsidiary to promptly execute and delivery to Lender a
Guaranty.
6.8 Taxes. Borrower shall file (or caused to be filed) all federal
-----
and state tax returns which are required to be filed, and shall pay prior to
delinquency all taxes that become due pursuant to said returns or pursuant to
any assessment, except as are being contested in good faith by appropriate
proceedings and as to which adequate reserves are provided on the books of
Borrower in accordance with GAAP.
SECTION 7
NEGATIVE COVENANTS OF BORROWER
Borrower covenants and agrees that until the full and final payment of
all indebtedness incurred hereunder, unless Lender waives compliance in writing;
7.1 Liens. Borrower will not, nor will it permit any Restricted Subsidiary
-----
to, issue, incur, guaranty or assume any indebtedness for money borrowed
secured by a Lien upon any property or assets of Borrower or any Restricted
Subsidiary or upon any shares of stock or indebtedness of any Restricted
Subsidiary (whether such property, assets, shares of stock or indebtedness are
now owned or hereafter acquired) except for:
(a) Liens on property existing at the time of acquisition of such property
by Borrower or a Restricted Subsidiary, or Liens to secure the payment
of all or any part of the purchase price of property upon the
acquisition of such property by Borrower or a Restricted Subsidiary or
to secure any indebtedness incurred or guaranteed prior to, at the
time of, or within 180 days after, the later of the date of
acquisition of such property and the date such property is placed in
service, for the purpose of financing all or any part of the purchase
price thereof, or Liens to secure any indebtedness incurred or
guaranteed for the purpose of financing the cost to Borrower or a
Restricted Subsidiary of improvements to such acquired property;
(b) Liens on property of Borrower or a Restricted Subsidiary in favor of
the United States of America or any state thereof, or any department,
agency or instrumentality of political subdivision of the United
States of America or any state thereof, or in favor of any other
country, or any political subdivision thereof, to secure partial,
progress, advance or other payments pursuant to any contract or
statute or to secure any indebtedness incurred for the purpose of
financing all or any part of the purchase price or the cost of
construction of the property subject to such Liens;
(c) Permitted Liens
(d) any extension, renewal or replacement (or successive extensions,
renewals or replacements) in whole or in part of any Liens referred to
in the foregoing subsections (a) through (c), inclusively; provided,
however, that the principal amount of indebtedness secured thereby
shall not exceed the principal amount of indebtedness so secured at
the time of the incurrence or guarantee thereof and that such
extension, renewal or replacement shall be limited to all or a part of
the property which secured the Lien so extended, renewed or replaced
(plus improvements on such property).
7.2 Adjusted Consolidated Tangible Net Worth. Borrower shall not permit
----------------------------------------
its Adjusted Consolidated Tangible Net Worth at any time during any fiscal
quarter to be less than One Billion Two Hundred Seventy Five Million Dollars
($1,275,000,000.00) plus seventy five percent (75%) of each of the total for all
----
fiscal years during the terms of the Loan, fiscal year's consolidated net
income, commencing with the fiscal year beginning January 1, 1998.
14
7.3 Restrictions on Liens. Except for, and as permitted or contemplated
---------------------
by, any of the Indentures, the Certificate of Designation or any other
agreement to which the Borrower or any of its Restricted Subsidiaries is a party
as of the date hereof, including any renewal, extensions or refinancings
thereof, Borrower will not, nor will it permit any Restricted Subsidiary to,
enter into any agreement of any nature with any Person which agreement contains
any provisions which either:
(a) prohibits a Lien upon any property or assets of Borrower or any
Restricted Subsidiary or upon any shares of stock or indebtedness of
any Restricted Subsidiary (whether such property, assets, shares of
stock or indebtedness are now owned or hereafter acquired), provided
that this paragraph (a) shall not apply to Permitted Liens; or
(b) prohibits or restricts in any way the ability of Borrower or any
Restricted Subsidiary to declare and pay dividends or to otherwise
effect transfers of cash or assets to affiliates of such entities.
7.4 Restrictions on Borrowings. Except for, and as permitted or
--------------------------
contemplated by, any of the Indentures, the Certificate of Designation or any
other agreement to which the Borrower or any of its Restricted Subsidiaries is a
party as of the date hereof, including any renewal, extensions or refinancings
thereof, absent the prior written consent of Lender, Borrower will not, nor will
it permit any Restricted Subsidiary to, enter into any loan, credit agreement,
indenture or other form of debt instrument pursuant to which the principal
indebtedness would exceed Five Million Dollars (5,000,000.00) or which, if
consummated, would result in total outstanding principal indebtedness of
Borrower and its Restricted Subsidiaries (exclusive of the Loan) in excess of
Ten Million Dollars ($10,000,000.00).
SECTION 7A
NON-CONTRAVENTION OF INDENTURES
AND CERTIFICATE OF DESIGNATION
Notwithstanding anything herein to the contrary, the parties hereto agree
that (a) neither the Borrower nor any of its subsidiaries shall be obligated to
take any action or refrain from taking any action hereunder if the taking of
such action or the refraining from taking such action would be contrary to any
provision set forth in any of the Indentures or in the Certificate of
Designation and (b) neither the Borrower nor any of its Subsidiaries shall be
prohibited by the terms hereof from taking any action that it is permitted to
take under any of the Indentures or the Certificate of Designation. Any action
taken by the Borrower or any of its Subsidiaries which may be restricted
hereunder but is otherwise permitted under any of the Indentures or the
Certificate of Designation shall not constitute any Unmatured Event of Default
or an Event of Default.
15
SECTION 8
EVENTS OF DEFAULT
8.1 Events of Default. If one or more of the following described Events
-----------------
of Default shall occur:
(a) Borrower shall fail to pay any principal amount due on the Loan when
due;
(b) Borrower shall fail to pay any interest on the Loan or other amounts
due hereunder (other than principal on the Loan) within two Business
Days after such payment is due;
(c) Subject to Section 7A above, Borrower or any its Restricted
Subsidiaries shall fail to perform or observe any of the terms,
provisions, covenants, conditions, agreements or obligations
contained herein or in any other agreement or instrument contemplated
hereby and such failure shall continue for more than thirty days
after written notice from Lender of the existence and character of
such failure to perform or observe;
(d) (i) Borrower, or any of its Restricted Subsidiaries shall become
insolvent, or shall generally not pay its debts as such debts become
due, or shall admit in writing its inability to pay its debts
generally as they become due; or (ii) Borrower or any Restricted
Subsidiary shall make a general assignment for the benefit of
creditors or to an agent authorized to liquidate any substantial
amount of its properties or assets; or (iii) Borrower or any
Restricted Subsidiary shall file or have filed against it a petition
in bankruptcy or seeking reorganization or to effect a plan or other
arrangement with creditors or winding up or dissolution and such
filing against it shall not be dismissed within 60 days after the
date of such filing; or (iv) Borrower or any Restricted Subsidiary
shall apply for or consent to the appointment of or consent that an
order be made appointing any receiver or trustee shall be appointed
for all or a substantial part of its or their properties, assets or
business; or (v) an order for relief shall be entered against
Borrower or any Restricted Subsidiary under the United States federal
bankruptcy laws as now or hereafter in effect; or (vi) Borrower or
any Restricted Subsidiary shall take any action indicating its
consent to, approval of or acquiescence in, any of the foregoing; or
(e) Any final judgment, decrees, writs of execution, attachments or
garnishments or any Liens, or any other legal processes shall be
issued or levied against any of the assets or property of Borrower or
any of its Restricted Subsidiaries (and shall not have been vacated,
discharged or stayed for 30 consecutive days) in amounts which in the
aggregate would result in a Material Change; provided, however, that
16
such aggregate amount shall include only amounts in excess of (i)
insurance coverage therefor and (ii) reserves on the books of Borrower
or any of its Restricted Subsidiaries therefore; provided, further,
that such aggregate amount shall not include any amounts with respect
to matters subject to appeal conducted in good faith and diligently
pursued or other further legal process by Borrower or any of its
Restricted Subsidiaries or any amounts with respect to any such legal
process which Borrower or any of its Restricted Subsidiaries has
detached from such property by posting of a bond or equivalent
process; or
(f) All, or substantially all, of the assets and property of Borrower or
any of its Restricted Subsidiaries shall be condemned, seized or
otherwise appropriated; or
(g) Borrower or any of its Restricted Subsidiaries (i) fails to make any
payment (or otherwise satisfy) in respect of any indebtedness for
money borrowed when due (whether by scheduled maturity, required
prepayment, acceleration, demand, or otherwise) and such failure
continues after the applicable grace or notice period, if any,
specified in the document relating thereto; or (ii) any other event or
condition shall exist under the agreements or documents relating to
such indebtedness which continues beyond the applicable grace or
notice period, if any, and the occurrence thereof permits the
acceleration of such indebtedness which failure or event of default
has not been waived or cured; provided, however, that no Event of
Default shall exist hereunder if the total principal amount of the
individual obligation which is in default or which may be accelerated
does not exceed Ten Million Dollars ($10,000,000.00);
then in such event, Lender in its sole discretion and without notice to
Borrower, shall have the right to declare the entire principal balance of the
Loan immediately due and payable, together with all interest and other amounts
due under this Agreement; to make immediate demand for such payment; and to
exercise all of its rights and seek all remedies available to it pursuant to
this Agreement or provided by law.
8.2 Recovery of Amounts Due. If any amount payable hereunder is not paid
-----------------------
as and when due, Borrower hereby authorizes Lender the fullest extent permitted
by applicable law, without prior notice, by right of set-off or counterclaim,
against any moneys or other assets of Borrower in any currency that may at any
time be in the possession of Lender or any of its affiliates to the full extent
of all amounts payable to Lender hereunder.
8.3 Rights Cumulative. The rights of Lender provided for herein are
-----------------
cumulative and are not exclusive of any other rights, powers, privileges or
remedies provided by law or in equity.
17
SECTION 9
MISCELLANEOUS PROVISIONS
9.1 Amendments and Waivers. No amendment or waiver of any provision of
----------------------
this Agreement, and no consent with respect to any departure by Borrower
therefrom, shall be effective unless the same shall be in writing and signed by
Lender and Borrower and then any such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
9.2 Notices. All notices, payments, requests, reports, information,
-------
demands and other communications which any party hereto may desire, or may be
required, to give or make to any other party hereto, shall (unless otherwise
permitted as a telephonic notice or request hereunder) be given by mailing the
same, postage prepaid, or by telecopier transmission, or by hand delivery or
courier, to each party at its address set forth in Exhibit C attached hereto and
incorporated herein by reference, or to such other address as may, from time to
time, be specified in writing by Borrower or Lender. Such communications shall
be deemed to have been duly given and received in the case of a telecopy
transmission, when the telecopy transmission is sent, in the case of mail when
sent by pre-paid certified or registered mail correctly addressed to the
addressee, in the case of hand delivery or courier, when received. Each party
hereto shall promptly confirm by telecopy transmission any telephone
communication made by it to another pursuant to this Agreement but the absence
of such confirmation shall not affect the validity of such communication, which
shall be effective upon receipt. If there is any conflict between any telephonic
communication and a written confirmation, the written communication shall
govern, the recipient of such communication shall be held harmless by all
parties hereto with respect to any action taken in reliance on the telephonic
communication prior to the time such recipient receives and has had reasonable
time to review the subsequent written confirmation and initiate such corrective
action as the recipient deems reasonable under the circumstances.
9.3 Waiver. Neither the failure of, nor any delay on the part of, any
------
party hereto in exercising any right, power or privilege hereunder, or under any
agreement, contract, indenture, document or instrument mentioned herein, shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege hereunder, or under any agreement, contract,
indenture, document or instrument mentioned herein, preclude other or further
exercise thereof or the exercise of any other right, power or privilege; nor
shall any waiver of any right, power, privilege or default hereunder, or under
any agreement, contract, indenture, document or instrument mentioned herein,
constitute a waiver of any other right, power, privilege or default or
constitute a waiver of any other default of the same or of any other term or
provision. All rights and remedies herein provided are cumulative and not
exclusive of any rights or remedies otherwise provided by law.
18
9.4 California Law. The interpretation, enforcement and effect of this
--------------
Agreement, the Note and any agreements, contracts, indentures, documents or
instruments delivered in accordance herewith, shall be governed and controlled
in all respects by and construed according to the substantive laws of the State
of California, to the jurisdiction of whose courts the parties hereto hereby
agree to submit.
9.5 Headings. The headings set forth herein are solely for the purpose
--------
of identification and shall not be construed as a part of the sections or
subsections which they head.
9.6 Accounting Terms. All accounting terms not otherwise defined herein
----------------
have the meaning assigned to them in accordance with GAAP, provided, however,
any act or condition in accordance herewith and permitted hereunder when taken,
created or occurring, shall not become a violation of any section of this
Agreement as a result of a subsequent change in GAAP.
9.7 Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the different parties hereto on separate counterparts, and
all of said counterparts taken together shall constitute one and the same
instrument.
9.8 Singular: Plural. Whenever used herein, the singular number shall
----------------
include the plural, the plural the singular, and the use of any gender shall be
applicable to all genders.
9.9 Illegality. The illegality or unenforceability of any provision of
----------
this Agreement or any instrument or agreement required hereunder shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required hereunder.
9.10 Assignments. This Agreement shall bind and inure to the benefit
-----------
of the parties hereto and their respective successors and assigns. Lender may
assign or transfer all or any part of its rights and obligations hereunder
without Borrower's consent. Borrower may not assign or transfer all or any part
of its rights and obligations hereunder, except with the prior written consent
of Lender.
9.11 Fees and Expenses. Borrower agrees to pay on demand (a) to Lender
-----------------
all reasonable costs, expenses and attorneys' fees (including allocated costs
for in-house legal services) incurred by Lender in connection with the
preparation and administration of this Agreement and any documents including any
amendments, waivers, or other modifications and (b) all reasonable costs,
expenses and attorneys' fees (including allocated costs for in-house legal
services) incurred by Lender in connection with the enforcement of this
Agreement and any instrument or agreement required hereunder and in connection
with any refinancing or restructuring of the Loan in the nature of a "work-out".
19
9.12 Indemnity. Borrower agrees to indemnify Lender and its directors,
---------
officers, agents and employees from and hold each of them harmless against any
and all losses, liabilities, claims, damages or expenses reasonably incurred by
any of them arising out of or by reason of any investigation by governmental or
judicial authorities or being made a party to any litigation or other similar
proceeding related to any use made or proposed to be made by Borrower of the
proceeds of the Loan including, without limitation, the reasonable fees and
disbursements of counsel (including allocated costs for in-house legal services)
incurred in connection with any such investigation, litigation or other
proceeding. The obligations of Borrower under this Section shall survive the
termination of this Agreement.
Executed as of the date first hereinabove written.
XXXXXX NETWORK SYSTEMS, INC. MAGELLAN INTERNATIONAL, INC.
(to be renamed "PANAMSAT CORPORATION")
By: ____________________ By: __________________________________
Printed Name: __________ Printed Name: Xxxxxxx X. Xxxxx
-------------------------
Title: _________________ Title: President
-------------------------------
20
EXHIBIT "A"
-----------
PROMISSORY NOTE
---------------
$1,725,000,000.00 May ___, 1997
FOR VALUE RECEIVED, MAGELLAN INTERNATIONAL, INC., a Delaware corporation
("Maker") promises to pay to the order of XXXXXX NETWORK SYSTEMS, INC., a
Delaware corporation ("Lender") at such place as the holder hereof may from
time to time designate in writing, the principal sum of One Billion Seven
Hundred Twenty-five Million Dollars ($1,725,000,000.00), together with interest
as hereinafter provided, in lawful money of the United States, which shall be
legal tender in payment of all debts and dues, public and private, at the time
of payment, in the manner hereinafter provided.
The principal outstanding under this Note form time to time shall bear
interest at the rate specified in that certain Loan Agreement ("Loan Agreement")
of even date herewith between Lender and Maker. In the event of any conflict
between this Note and the terms of said Loan Agreement, the terms of the Loan
Agreement shall control.
Interest shall accrue on the outstanding principal balance from the date
hereof up to but excluding the date of repayment of this Note.
Principal and interest due and owing hereunder shall be paid in accordance
with the terms of the Loan Agreement and all payments on this Note shall be
applied first to the payment of accrued interest, and then to the payment of
principal.
On the happening and during the continuance of an Event of Default (as
defined in the Loan Agreement), the holder may, at its option, declare
immediately due and payable the entire principal balance of this Note, together
with all unpaid interest accrued thereon, plus any other sums payable at the
time of such declaration pursuant to this Note or the Loan Agreement.
The failure to exercise the foregoing option upon the happening of one or
more Events of Default shall not constitute a waiver of the right to exercise
the same or any other option at any subsequent time in respect of payment
hereunder which is less than payment in full of all amounts due and payable at
the time of such payments, and shall not constitute a waiver of the right to
exercise the foregoing option at that time or at any subsequent time or nullify
any prior consent of the holder hereof, except as and to the extent otherwise
provided by law. Upon the occurrence and during the continuance of an Event of a
Default, the holder hereof may exercise any and all rights and remedies
available under contract or applicable law.
All agreements between the undersigned and the holder hereof, whether now
existing or hereafter arising and whether written or oral, are hereby limited so
that in no event, whether by reason of demand or acceleration of the maturity
hereof or otherwise, shall the interest contracted for, charged, received, paid
or agreed to be paid to the holder hereof exceed the maximum
-1-
contractual rate permitted under applicable law; and if from any circumstance
the holder hereof shall ever receive anything of value deemed interest by
applicable law in excess of the maximum lawful amount, an amount equal to any
excessive interest shall be applied to the reduction of the principal hereof and
if said amount exceeds the unpaid balance of principal hereof, such excess shall
be refunded to the undersigned. All interest paid or agreed to be paid to the
holder hereof shall, to the extent permitted by applicable law, be amortized,
prorated, allocated and spread throughout the full period until payment in full
of the principal so that the interest hereon for such full period shall not
exceed the maximum amount permitted by applicable law. This paragraph shall
control all agreements between the undersigned and the holder hereof.
The undersigned waives diligence, presentment, protest and demand and also
notice of protest, demand, dishonor, acceleration, intent to accelerate, and
nonpayment of this Note, all without in any way affecting the liability of the
undersigned and any endorsers or guarantors hereof. No extension of time for the
payment of this Note, or any installment hereof, made by agreement by the
holder hereof with any person now or hereafter liable for the payment of this
Note, shall affect the original liability under this Note of the undersigned,
even if the undersigned is not a party to such agreement.
If this Note is not paid when due, whether at maturity or by acceleration,
or if it is collected through a bankruptcy, probate, or other court, whether
before or after maturity, Maker agrees to pay all costs of collection,
including, but not limited to, reasonable attorney's fees, incurred by the
holder hereof.
This Note shall be governed by and construed in accordance with the laws of
the State of New York.
MAGELLAN INTERNATIONAL, INC.
By:
------------------------------------
Printed Name:
--------------------------
Title:
---------------------------------
-2-
EXHIBIT "B"
-----------
GUARANTY
--------
THE UNDERSIGNED, FOR VALUE RECEIVED, unconditionally and absolutely
guarantees to XXXXXX NETWORK SYSTEMS, INC. (hereinafter called "Lender"), and to
the Lender's successors and assigns, as a primary obligation, the prompt and
complete payment and performance when due, whether by stated maturity, demand,
acceleration or otherwise, of all obligations to the Lender of MAGELLAN
INTERNATIONAL, INC., a Delaware corporation, and also of any debtor-in-
possession or trustee in bankruptcy which succeeds to the interests of said
party or persons (jointly and severally hereinafter called "Borrower"), pursuant
to a promissory note or notes made or to be made pursuant to that certain Loan
Agreement (hereafter called "Loan Agreement") between Lender and Borrower, said
note or notes being in the total principal amount of up to One Billion Seven
Hundred Twenty Five Million Dollars ($1,725,000,000.00), all of which is
hereinafter collectively called the "Indebtedness."
The undersigned waives notice of acceptance of this Guaranty and
presentment, demand, protest, notice of protest, dishonor, notice of dishonor,
notice of default and diligence in collecting any Indebtedness, and agrees that
the Lender may modify the terms of borrowing, compromise, extend, increase,
accelerate, renew or forbear to enforce payment of any part or all of any
Indebtedness, or permit the Borrower to incur additional Indebtedness, all
without notice to the undersigned and without affecting in any manner the
unconditional obligation of the undersigned under this Guaranty. The undersigned
further waives any and all other notices to which the undersigned might
otherwise be entitled. The undersigned acknowledges and agrees that the
liabilities created by this Guaranty are direct and are not conditioned upon
pursuit by the Lender of any remedy the Lender may have against the Borrower or
any other person or any security. No invalidity, irregularity or
unenforceability of any part or all of the Indebtedness or any documents
evidencing the same, by reason of any bankruptcy, insolvency or other law or
order of any kind or for any other reason, and no defense or setoff available at
any time to the Borrower, shall impair, affect or be a defense or setoff to the
obligations of the undersigned under this Guaranty.
The undersigned agrees that no security now or hereafter held by the Lender
for the payment of any Indebtedness, whether from the Borrower, any guarantor,
or otherwise, and whether in the nature of a security interest, pledge, lien,
assignment, setoff, suretyship, guaranty, indemnity, insurance or otherwise,
shall affect in any manner the unconditional obligation of the undersigned under
this Guaranty, and the Lender, in its sole discretion, without notice to the
undersigned, may release, exchange, enforce and otherwise deal with any such
security without affecting in any manner the unconditional obligation of the
undersigned under this Guaranty. The undersigned acknowledges and agrees that
the Lender has no obligation to acquire or perfect any lien on or security
interest in any asset or assets, whether realty or personalty, to secure payment
of the Indebtedness, and the undersigned is not relying upon assets in which the
Lender has or may have a lien or security interest for payment of the
Indebtedness.
Until the Indebtedness is irrevocably paid in full, the undersigned
hereby waives any and all rights to be subrogated to the position of the Lender
or to have the benefit of any lien, security interest or other guaranty now or
hereafter held by the Lender for the Indebtedness or to enforce any remedy which
the Lender now has or hereafter may have against the Borrower or any other
person. Until the Indebtedness is irrevocably paid in full, the undersigned
shall have no right of reimbursement, indemnity, contribution or other right of
recourse to or with respect to the Borrower. The Lender shall have no duty to
enforce or protect any rights which the undersigned may have against the
Borrower, and the undersigned assumes full responsibility for enforcing and
protecting any such rights.
If after receipt of any payment of all or any part of the Indebtedness,
the Lender is for any reason compelled to surrender such payment to any person
or entity because such payment is determined to be void or voidable as a
preference, impermissible setoff, or diversion of trust funds or for any other
reason, then to the extent of that payment, the Indebtedness shall be revived
and the obligations under this Guaranty shall be continued in effect without
reduction or discharge for that payment, and this Guaranty shall continue in
full force notwithstanding any contrary action which may have been taken by the
Lender in reliance upon such payment, and any such contrary action so taken
shall be without prejudice to the Lender's rights under this Guaranty and shall
be deemed to have been conditioned upon such payment having become final and
irrevocable.
The undersigned waives any right to require the Lender to: (a) proceed
against any person, including the Borrower; (b) proceed against or exhaust any
security held from the Borrower or any other person; (c) pursue any other remedy
in the Lender's power; or (d) make any presentments or demands for performance,
or give any notices of nonperformance, protests, notices of protest or notices
of dishonor in connection with any obligations or evidences of Indebtedness held
by the Lender as security, in connection with any other obligations or evidences
of Indebtedness which constitutes in whole or in part the Indebtedness
guaranteed hereunder, or in connection with the creation of new or additional
Indebtedness.
The undersigned authorizes the Lender, either before or after
termination hereof, without notice to or demand on the undersigned and without
affecting the undersigned's liability hereunder, from time to time to: (a) apply
any security and direct the order or manner of sale thereof, as the Lender in
its discretion may determine; (b) release or substitute any one or more of the
endorsers or any other guarantors of the Indebtedness; and (c) apply payments
received by the Lender from the Borrower to any Indebtedness of the Borrower to
the Lender, in such order as the Lender shall determine in its sole discretion,
whether or not any such Indebtedness is covered by this Guaranty, and the
undersigned hereby waives any provision of law regarding application of payments
which specifies otherwise. The Lender may, without notice, assign this Guaranty
in whole or in part.
The undersigned waives any defense based upon or arising by reason of
(a) any disability or other defense of the Borrower or any other person; (b) the
cessation or limitation from any cause whatsoever, other than final and
irrevocable payment in full, of the
-2-
Indebtedness; (c) any lack of authority of any officer, director, partner, agent
or any other person acting or purporting to act on behalf of the Borrower which
is a corporation, partnership or other type of entity, or any defect in the
formation of the Borrower; (d) the application by the Borrower of the proceeds
of any Indebtedness for purposes other than the purposes represented by the
Borrower to the Lender or intended or understood by the Lender or the
undersigned; (e) any act or omission by the Lender which directly or indirectly
results in or aids in the discharge of the Borrower or any Indebtedness by
operation of law or otherwise; or (f) any modification of the Indebtedness, in
any form whatsoever, including any modification made after effective
termination, and including without limitation the renewal, extension,
acceleration or other change in time for payment of the Indebtedness, or other
change in the terms of the Indebtedness or any part thereof, including
increase or decrease of the rate of interest thereon.
The total obligation under this Guaranty shall be One Billion Seven Hundred
Twenty Five Million Dollars ($1,725,000,000.00) plus all interest thereon and
all costs and expenses of any kind, including but not limited to reasonable
attorney fees, incurred by the Lender at any time for any reason in enforcing
any of the duties and obligations of the undersigned under this Guaranty or
otherwise incurred by the Lender in any way connected with this Guaranty, the
Indebtedness. All such costs and expenses shall be payable immediately by the
undersigned when incurred by the Lender, without demand, and until paid shall
bear interest at the hightest per annum rate applicable to any of the
Indebtedness, but not in excess of the maximum rate permitted by law. Any
reference in this Guaranty to attorney fees shall be deemed a reference to fees,
charges, costs and expenses of both in-house and outside counsel, whether or not
a suit or action is instituted, and to court costs if a suite or action is
instituted, and whether such attorney fees or court costs are incurred at the
trial court level, on appeal, in a bankruptcy or probate proceeding or
otherwise.
The undersigned unconditionally and irrevocably waives each and every
defense and setoff of any nature which, under principles of guaranty or
otherwise, would operate to impair or diminish in any way the obligation of the
undersigned under this Guaranty, and acknowledges that as of the date hereof no
such defense or setoff exits.
The undersigned warrants and agrees that each of the waivers set forth
above are made with the undersigned's full knowledge of its significance and
consequences, and that under the circumstances, the waivers are reasonable and
not contrary to public policy or law. If any of said waivers are determined to
be contrary to any applicable law or public policy, such waivers shall be
effective only to the extent permitted by law.
This Guaranty constitutes the entire agreement of the undersigned and the
Lender with respect to the subject matter hereof. No waiver, consent,
modification or change of the terms of this Guaranty shall bind the undersigned
or the Lender unless in writing and signed by the waiving party or an authorized
officer of the waiving party, and then such waiver, consent, modification or
change shall be effective only in the specific instance and for the specific
purpose given. This Guaranty shall inure to the benefit of the Lender and its
successors and
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assigns. This Guaranty shall be binding on the undersigned and the
undersigned's heirs, legal representatives, successors and assigns including,
without limiting the generality of the foregoing, any debtor-in-possession or
trustee in bankruptcy for the undersigned. The undersigned has entered into
this Guaranty in good faith for the purpose of inducing the Lender to extend
credit or make other financial accommodations to the Borrower, and the
undersigned acknowledges that the terms hereof are reasonable. If any provision
of this Guaranty is unenforceable in whole or in part for any reason, the
remaining provisions shall continue to be effective. THIS GUARANTY SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
As used herein, the singular shall be deemed to include plural, and vice
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versa, as the context requires.
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IN WITNESS WHEREOF the undersigned has signed this Guaranty on
____________________________.
XXXXXX COMMUNICATIONS SERVICES, INC.
By: ________________________________
Printed Name: ______________________
Title: _____________________________
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