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Exhibit 10.1
GUARANTEE AND COLLATERAL AGREEMENT
GUARANTEE AND COLLATERAL AGREEMENT, dated as of August 5, 1999 (this
"Guarantee"), made by LORAL SATCOM LTD., a Bermuda company ("SatCom"), LORAL
SATELLITE, INC., a Delaware corporation ("Loral Satellite," and together with
SatCom and any Person that may become a party hereto as provided herein,
individually a "Guarantor"; collectively, the "Guarantors"), in favor of Bank of
America, National Association, as collateral agent (in such capacity, the
"Collateral Agent") under the Collateral Agency Agreement, dated as of August 5,
1999 (the "Collateral Agency Agreement") for the several lenders (the "Lenders")
from time to time parties to the Credit Agreement, dated as of August 5, 1999
(as amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among Globalstar, L.P., a Delaware limited partnership (the
"Borrower"), the Lenders and Bank of America, National Association, as
Administrative Agent for the Lenders (in such capacity, the "Administrative
Agent").
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have severally
agreed to make Loans to the Borrower upon the terms and subject to the
conditions set forth therein;
WHEREAS, it is a condition precedent to the obligation of the Lenders
to make their respective Loans to the Borrower under the Credit Agreement that
SatCom and Loral Satellite shall have executed and delivered this Guarantee to
the Collateral Agent for the ratable benefit of the Lenders; and
WHEREAS, SatCom and Loral Satellite are each controlled, directly or
indirectly, by Loral Space & Communication Ltd., a Bermuda company ("Loral"),
and, as a result of entering into this Guarantee, Loral, SatCom and Loral
Satellite will derive substantial direct and indirect benefit.
NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective Loans to the Borrower under the
Credit Agreement, each Guarantor hereby agrees with the Collateral Agent, for
the ratable benefit of the Lenders, as follows:
1. Defined Terms. (a) Unless otherwise defined herein, terms defined in
the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement and the following terms are used herein as defined in the
New York UCC: Accounts, Equipment and General Intangibles. As used herein, the
following terms shall have the following meanings:
"Acceptable Collateral": assets of the Guarantors which are acceptable
to the Administrative Agent and all the Lenders in their sole
discretion.
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"Appraised Value": as to any Satellite, the value of such Satellite as
determined, prior to the Closing Date, by Ascent, or, at any time thereafter, by
an Approved Appraiser pursuant to Section 11(l). The Appraised Value of any
Satellite determined after the Closing Date shall be determined using the same
valuation methods employed by Ascent prior to the Closing Date, unless otherwise
agreed by the Administrative Agent.
"Approved Appraiser": any qualified third party appraiser acceptable to
the Administrative Agent.
"Ascent": Ascent Communications, Inc.
"Attributable Debt": with respect to a Sale and Leaseback Transaction,
at the time of determination thereof, the present value of the obligation of the
lessee for net rental payments during the remaining term of the lease included
in such Sale and Leaseback Transaction including any period for which such lease
has been extended or may, at the option of the lessor, be extended. Such present
value shall be calculated using a discount rate equal to the rate of interest
implicit in such transaction, determined in accordance with GAAP.
"Availability Agreement": the Availability Agreement, dated as of
August 5, 1999, between SatCom, Loral Satellite and Loral SpaceCom with respect
to Telstar 6 (including the related FCC Licenses) and the Satellites, as the
same may be amended, supplemented or otherwise modified from time to time.
"Before Launch Appraised Value": with respect to Telstar 7, the
Appraised Value of Telstar 7 prior to the launch thereof as determined by Ascent
prior to the Closing Date.
"Board of Directors": the board of directors of Loral.
"Change of Control": an event or series of events as a result of which
(i) any "person" (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) is or becomes
the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange
Act) of shares entitling the holder thereof to cast more than 35% of the votes
for the election of directors of Loral, (ii) at any time, Continuing Directors
do not constitute a majority of the Board of Directors, or (iii) at any time,
Loral shall cease, directly or indirectly, to own all of the outstanding capital
stock of SatCom or Loral Satellite.
"Collateral Coverage Ratio": at any time, the ratio of (a) the
Collateral Pool Value at such time to (b) the difference between (i) the
aggregate principal amount of Loans then outstanding and (ii) the sum of (x) the
aggregate undrawn face amount of Acceptable Letters of Credit, (y) the aggregate
sum of Acceptable Letters of Credit and (z) the aggregate sum of balances
(consisting of cash and Collateral Cash Equivalents) on deposit in (A) the
Letter of Credit Cash Collateral Account and (B) the SatCom Collateral Account.
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"Collateral Pool": as defined in Section 3.
"Collateral Pool Value": at any time, the sum of, without duplication,
90% of (i) the Appraised Value of any Orbiting Satellites, (ii) in the event
that (A) a Replacement Satellite is then being constructed pursuant to Section
11(o) or 11(p) and (B) the Satellite Contract with respect thereto is still in
full force and effect, the Before Launch Appraised Value of Telstar 7 and (iii)
at any time prior to the earlier of (x) a Successful Launch of Telstar 7 or (y)
a Launch Failure of Telstar 7, the Before Launch Appraised Value of Telstar 7,
in each case at the time of such determination; provided that the Appraised
Value of any Orbiting Satellite shall be included in the Collateral Pool Value
only if all of the outstanding Equity Interests of the owner of the transponders
on such Orbiting Satellite are pledged to the Collateral Agent as security for
the Obligations pursuant to this Guarantee.
"Combined EBITDA": with respect to SatCom and Loral Satellite for any
period, the sum of the Combined Net Income for such period plus, to the extent
deducted in computing such Combined Net Income, the sum of (i) income tax
expense, (ii) interest expense (exclusive of interest income), (iii)
depreciation and amortization expense and any other non-cash charges, and (iv)
any extraordinary losses (minus extraordinary gains), all as determined on a
combined basis in accordance with GAAP.
"Combined Net Income": with respect to SatCom and Loral Satellite for
any period, the net income of SatCom and Loral Satellite and their respective
consolidated Subsidiaries, for such period, as determined on a combined basis in
accordance with GAAP for such period.
"Combined Net Worth": at any date, all amounts that would in conformity
with GAAP, be included on a combined balance sheet of SatCom, Loral Satellite
and their respective consolidated Subsidiaries under the stockholders' equity at
such date.
"Commonly Controlled Entity": an entity, whether or not incorporated,
which is under common control with SatCom within the meaning of Section 4001 of
ERISA or is part of a group which includes SatCom and which is treated as a
single employer under Section 414 of the Code.
"Constructive Failure": with respect to any Satellite, the occurrence
of any event or circumstance (other than a Launch Failure or a Total Failure)
which results in the payment of amounts under the insurance for such Satellite
as if a Total Failure had occurred.
"Continuing Director": the directors of Loral on the Closing Date and
each other director, if, in each case, such other director's nomination for
election to the Board of Directors is recommended by at least a majority of the
then Continuing Directors.
"Disqualified Stock": any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the
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option of the holder thereof), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof, in whole or in part, on or
prior to the date that is 91 days after the date on which the final installment
on the Term Loans is due.
"Excess Insurance Proceeds": as to any Satellite, the excess of the
amount of insurance proceeds received as a result of an In-Orbit Failure or
Launch Failure of such Satellite over the then replacement cost of such
Satellite, provided that such excess proceeds shall not constitute Excess
Insurance Proceeds unless the cost of the incremental increase in premiums for
insurance policies resulting in such excess proceeds shall have been financed by
equity proceeds contributed by Loral.
"FCC": the Federal Communications Commission.
"FCC Licenses": all licenses issued by the Federal Communications
Commission with respect to any Satellite.
"Ground Stations": the collective reference to the ground control
stations with respect to any Satellite.
"Guarantor Obligations": as to any Guarantor, all obligations of such
Guarantor under this Guarantee and the other Loan Documents.
"In-Orbit Failure": with respect to any Satellite, the occurrence of a
Total Failure or a Constructive Failure with respect to such Satellite.
"Intercompany Notes": any intercompany note evidencing intercompany
loans made by SatCom to Loral, substantially in the form of Exhibit A hereto.
"Launch Failure": with respect to any Satellite, any launch thereof
which does not result in a Successful Launch of such Satellite.
"Loral Corporation": Loral Space & Communications Corporation, a
Delaware corporation.
"Loral Satellite Collateral Account": as defined in Section 11(m)(i).
"Loral SpaceCom": Loral SpaceCom Corporation, a Delaware corporation.
"Master Lease Agreement": as defined in Section 11(b).
"Material Adverse Effect": a material adverse effect on (a) the
business, assets, property or condition (financial or otherwise) of SatCom,
Loral Satellite and their respective Subsidiaries, taken as a whole, (b) the
ability of any Guarantor to perform its obligations under this Guarantee or any
other Loan Document or (c) the validity or
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enforceability of any of the Loan Documents or the material rights or remedies
of the Administrative Agent, the Collateral Agent or the Lenders hereunder or
thereunder.
"New York UCC": the Uniform Commercial Code as from time to time in
effect in the State of New York.
"Orbiting Satellite": at any time, any Satellite which has experienced
a Successful Launch and has not suffered an In-Orbit Failure.
"Partial Failure": with respect to any Satellite, the occurrence of a
loss of capacity of any transponders on such Satellite to the extent such loss
does not result in an In-Orbit Failure of such Satellite.
"Plan": at any particular time, any employee benefit plan which is
covered by ERISA and in respect of which any Guarantor or a Commonly Controlled
Entity is (or, if such plan were terminated at such time, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Proceeds": all "proceeds" as such term is defined in Section 9-306(1)
of the Uniform Commercial Code in effect in the State of New York on the date
hereof.
"Properties": as defined in Section 10(n).
"Replacement Satellite": any Satellite constructed or purchased
pursuant to a Satellite Contract pursuant to Section 11(o) or 11(p) as a result
of a Telstar 7 Launch Failure or an In-Orbit Failure of any Orbiting Satellite.
"Responsible Officer": the Chairman, the President or any Vice
President of SatCom.
"Sale and Leaseback Transaction": an arrangement relating to property
now owned or hereafter acquired whereby SatCom or a Subsidiary transfers such
property to a Person and SatCom or a Subsidiary leases it from such Person.
"Satellite": Telstar 6, Telstar 7, Telstar 7-R or Telstar R.
"Satellite Contract": any contract entered into between Loral SpaceCom
and SS/L or a third party pursuant to Section 11(o) or 11(p) with respect to the
construction or purchase of a Replacement Satellite the material terms of which
shall be reasonably acceptable to the Administrative Agent.
"SatCom Cash Collateral Agreement": as defined in Section 11(m)(i).
"SatCom Collateral Account": as defined in Section 11(m)(i).
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"SatCom Default": any of the events specified in Section 14 whether or
not any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.
"SatCom Event of Default": any of the events specified in Section 14,
provided that any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
"Secured Parties": as defined in Section 2.
"SS/L": Space Systems/Loral, Inc., a Delaware corporation.
"Successful Launch": with respect to any Satellite, the successful
launch and placement of such Satellite into proper geosynchronous orbit at a
predetermined longitudinal location or, in the case of Telstar 7, at 129(degree)
West Longitude, in any case as certified by a Responsible Officer.
"Telstar 6": the satellite (and all transponders located thereon)
constructed pursuant to the Satellite Contract Number LLJ108E, dated as of
October 5, 1995, between Loral SpaceCom and SS/L with respect to the
construction of Telstar 6.
"Telstar 7": the satellite (and all transponders located thereon)
constructed pursuant to the Telstar 7 Satellite Construction Contract.
"Telstar 7 Launch Failure": the occurrence of a Launch Failure during
the launch of Telstar 7.
"Telstar 7-R": a Replacement Satellite constructed pursuant to a
Satellite Contract entered into pursuant to Section 11(p) or purchased as a
result of a Telstar 7 Launch Failure.
"Telstar R": a Replacement Satellite constructed pursuant to a
Satellite Contract entered into pursuant to Section 11(o) or purchased as a
result of an In-Orbit Failure of an Orbiting Satellite.
"Total Failure": as to any Satellite, the complete loss, destruction or
failure of such Satellite or the occurrence of or any other event or
circumstance as a result of which such Satellite or all of the transponders on
such Satellite are no longer available for their intended use or such Satellite
ceases to be in its proper geosynchronous orbit.
"Transponder Transfer Agreement": as defined in Section 11(b).
"TT&C Agreement": the Amended and Restated Agreement, effective as of
August 5, 1999, between SatCom and Loral SpaceCom, covering professional
services related to Telstar 6, as the same may be amended, supplemented or
otherwise modified from time to time.
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(b) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Guarantee shall refer to this Guarantee as a whole and
not to any particular provision of this Guarantee, and section and paragraph
references are to this Guarantee unless otherwise specified.
(c) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(d) For purposes of this Guarantee, the terms "Lender" shall include
any Affiliate of a lender which has entered into a Hedge Agreement with the
Borrower if such Hedge Agreement is designated by the Borrower as a Hedge
Agreement for purposes of this Guarantee and the term "Loan Document" shall
include any such Hedge Agreement.
2. Guarantee. (a) Subject to Sections 2(e) and (f), each of the
Guarantors hereby, jointly and severally, unconditionally and irrevocably
guarantees to the Collateral Agent, for the ratable benefit of the
Administrative Agent, the Collateral Agent, the Lenders and their respective
successors, indorsees, transferees and assigns (collectively, the "Secured
Parties"), the prompt and complete payment and performance by the Borrower when
due (whether at the stated maturity, by acceleration or otherwise) of the
Obligations.
(b) Each of the Guarantors further, jointly and severally agrees to pay
any and all expenses (including, without limitation, all fees and disbursements
of counsel) which may be paid or incurred by the Collateral Agent, the
Administrative Agent or any Lender in enforcing, or (in the case of a Lender, a
Default shall have occurred and be continuing under the Credit Agreement)
obtaining advice of counsel in respect of, any rights with respect to, or
collecting, any or all of the Obligations and/or enforcing any rights with
respect to, or collecting against, such Guarantors under this Guarantee. This
Guarantee shall remain in full force and effect until the Obligations are paid
in full and the Commitments are terminated, notwithstanding that from time to
time prior thereto the Borrower may be free from any Obligations, subject to the
provisions of Sections 2(e) and (f).
(c) No payment or payments made by the Borrower, any of the Guarantors
or any other Person or received or collected by the Collateral Agent, the
Administrative Agent or any Lender from the Borrower or any other Person by
virtue of any action or proceeding or any set-off or appropriation or
application, at any time or from time to time, in reduction of or in payment of
the Obligations shall be deemed to modify, reduce, release or otherwise affect
the liability of such Guarantor hereunder which liability shall continue,
notwithstanding any such payment or payments, until the Obligations are paid in
full and the Commitments are terminated.
(d) Each of the Guarantors agrees that whenever, at any time, or from
time to time, it shall make any payment to the Collateral Agent, the
Administrative Agent or any Lender on account of its liability hereunder, it
will notify the Collateral Agent, the Administrative Agent and such Lender in
writing that such payment is made under this Guarantee for such purpose.
(e) Subsection 2.5 of the Credit Agreement sets forth the terms on
which the obligations of each Guarantor under this Guarantee may be reduced and
increased and certain
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other arrangements with respect to this Guarantee and other matters. Each
Guarantor acknowledges and agrees to the provisions of subsection 2.5 of the
Credit Agreement and to be bound by the provisions thereof. No amendment of
subsection 2.5 of the Credit Agreement and no amendment to the Credit Agreement
which increases the amount of any of the Commitments or which extends the
Revolving Credit Termination Date or the Termination Date shall be effective as
to such Guarantor without its prior written consent.
(f) This Guarantee shall terminate, and the obligations of the
Guarantors hereunder (including under Sections 10, 11, 12 and 13) shall be
released, on the Release Date.
3. Collateral. (a) Each of the Guarantors hereby assigns and transfers
to the Collateral Agent, and hereby grants to the Collateral Agent, for the
ratable benefit of the Secured Parties, a security interest in, all of the
following property now owned or at any time hereafter acquired by such Guarantor
or in which such Guarantor now has or at any time in the future may acquire any
right, title or interest (collectively, the "Collateral Pool"), as collateral
security for the prompt and complete payment and performance when due (whether
at the stated maturity, by acceleration or otherwise) of the Guarantor
Obligations:
(i) Telstar 6, Telstar 7 and any Replacement Satellite;
(ii) the Availability Agreement, the TT&C Agreement and all other
agreements entered into pursuant to Section 11(b);
(iii) to the extent permitted by applicable law, the FCC Licenses;
(iv) all transponder lease agreements to which such Guarantor is a
party (including, without limitation, all Master Lease Agreements);
(v) the Intercompany Notes;
(vi) the SatCom Collateral Account, the Loral Satellite Collateral
Account and any other collateral account established pursuant to the
Collateral Agency Agreement;
(vii) the Transponder Transfer Agreements;
(viii) all Accounts, General Intangibles (including construction and
purchase contracts) and Equipment, in each case solely to the extent
relating to any other item in the Collateral Pool;
(ix) all books and records pertaining to the Collateral Pool;
(x) the Equity Interests of any Subsidiary of such Guarantor; and
(xi) to the extent not otherwise included, all Proceeds and products of
any and all of the foregoing and all collateral security and guarantees
given by any Person with respect to any of the foregoing.
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(b) So long as no Default or Event of Default shall have occurred and
be continuing or would result therefrom, the Guarantors shall be permitted to
(i) remove any Satellite or transponder on any Satellite from the Collateral
Pool upon delivery to the Collateral Agent of Acceptable Collateral, together
with such appraisals thereof as may be required by and be satisfactory to the
Administrative Agent and the Majority Lenders, and (ii) remove any Satellite or
transponder on any Satellite from the Collateral Pool, in each case, provided
that no such removal shall be permitted (A) if, after giving effect thereto, the
Collateral Coverage Ratio, as computed after giving effect to such removal or
substitution, would be less than 1.20 to 1.00 and (B) unless the Acceptable
Collateral (if any) is then subject to a fully perfected security interest in
favor of the Collateral Agent pursuant to this Guarantee, and provided further
that (x) no more than 25% of the transponders on any Satellite may be removed
(except in connection with the removal of a Satellite) from the Collateral Pool
pursuant to clause (ii) above and (y) for purposes of determining compliance
with clause (A) above and Section 11(a), the Appraised Value of any Satellite
shall be immediately reduced by the proceeds received from any such sale of any
transponders on such Satellite.
(c) So long as no Default or Event of Default shall have occurred and
be continuing or would result therefrom, the Guarantors shall be permitted to
make cash withdrawals from the SatCom Collateral Account, the Loral Satellite
Collateral Account or any other collateral account maintained by the Guarantors
in connection with the Guarantee.
(d) The Collateral Agent shall release the Collateral on the Release
Date. Any Lien on any property which is removed from the Collateral Pool in
accordance with Section 3(b) shall automatically be released upon such removal.
4. Right of Set-off. Each of the Collateral Agent, the Administrative
Agent and each Lender is hereby irrevocably authorized at any time and from time
to time to the extent permitted by law without notice to any of the Guarantors,
any such notice being expressly waived by such Guarantor, to set off and
appropriate and apply any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by the Collateral
Agent, the Administrative Agent or such Lender to or for the credit or the
account of such Guarantor, or any part thereof in such amounts as the Collateral
Agent, the Administrative Agent or such Lender may elect, against or on account
of the obligations and liabilities of such Guarantor to the Collateral Agent,
the Administrative Agent or such Lender hereunder and claims of every nature and
description of the Collateral Agent, the Administrative Agent or such Lender
against such Guarantor, in any currency, whether arising hereunder, under the
Credit Agreement, any Note, any Loan Document or otherwise, as the Collateral
Agent, the Administrative Agent or such Lender may elect, whether or not the
Collateral Agent, the Administrative Agent or such Lender has made any demand
for payment and although such obligations, liabilities and claims may be
contingent or unmatured. The Collateral Agent, the Administrative Agent and each
Lender shall notify each such Guarantor promptly of any such set-off and the
application made by the Collateral Agent, the Administrative Agent or such
Lender, as the case may be, of the proceeds thereof; provided that the failure
to give such notice shall not affect the validity of such set-off and
application. The rights of the Collateral Agent, the Administrative Agent and
each Lender under this paragraph are in addition to other
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rights and remedies (including, without limitation, other rights of set-off)
which the Collateral Agent, the Administrative Agent or such Lender may have.
5. No Subrogation. Notwithstanding any payment or payments made by any
Guarantor hereunder, or any set-off or application of funds of any Guarantor by
the Collateral Agent, the Administrative Agent or any Lender, no Guarantor shall
be entitled to be subrogated to any of the rights of the Collateral Agent, the
Administrative Agent or any Lender against the Borrower or any other Guarantor
or against any collateral security or guarantee or right of set-off held by the
Collateral Agent, the Administrative Agent or any Lender for the payment of the
Obligations, nor shall any Guarantor seek or be entitled to seek any
contribution or reimbursement from the Borrower or any other Guarantor in
respect of payments made by such Guarantor hereunder, until all amounts owing to
the Collateral Agent, the Administrative Agent and the Lenders by the Borrower
on account of the Obligations are paid in full and the Commitments are
terminated. If any amount shall be paid to any Guarantor on account of such
subrogation rights at any time when all of the Obligations shall not have been
paid in full, such amount shall be held by such Guarantor in trust for the
Collateral Agent, the Administrative Agent and the Lenders, segregated from
other funds of such Guarantor, and shall, forthwith upon receipt by such
Guarantor, be turned over to the Collateral Agent in the exact form received by
such Guarantor (duly indorsed by such Guarantor to the Collateral Agent, if
required), to be applied against the Obligations, whether matured or unmatured,
in accordance with the Collateral Agency Agreement.
6. Amendments, etc. with respect to the Obligations; Waiver of Rights.
Each Guarantor shall remain obligated hereunder notwithstanding that, without
any reservation of rights against any Guarantor, and without notice to or
further assent by any Guarantor, any demand for payment of any of the
Obligations made by the Collateral Agent, the Administrative Agent or any Lender
may be rescinded by the Collateral Agent, the Administrative Agent or such
Lender, and any of the Obligations continued, and the Obligations, or the
liability of any other Person upon or for any part thereof, or any collateral
security or guarantee therefor or right of set-off with respect thereto, may
from time to time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by the Collateral
Agent, the Administrative Agent or any Lender, and (subject to Section 2(e)) the
Credit Agreement, any Notes, and the other Loan Documents and any other
documents executed and delivered in connection therewith may be amended,
modified, supplemented or terminated, in whole or in part, as the Collateral
Agent or the Administrative Agent (or the Required Lenders, Majority Lenders or
Lenders, as the case may be) may deem advisable from time to time, and any
collateral security, guarantee or right of offset at any time held by the
Collateral Agent, the Administrative Agent or any Lender for the payment of the
Obligations may be sold, exchanged, waived, surrendered or released. Neither the
Collateral Agent, the Administrative Agent nor any Lender shall have any
obligation to protect, secure, perfect or insure any Lien at any time held by it
as security for the Obligations or for this Guarantee or any property subject
thereto. When making any demand hereunder against any Guarantor, the Collateral
Agent, the Administrative Agent or any Lender may, but shall be under no
obligation to, make a similar demand on the Borrower or any other guarantor, and
any failure by the Collateral Agent, the Administrative Agent or any Lender to
make any such demand or to collect any payments from the Borrower or any such
other guarantor or any release of the Borrower or such other guarantor shall not
relieve
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such Guarantor of its obligations or liabilities hereunder, and shall not impair
or affect the rights and remedies, express or implied, or as a matter of law, of
the Collateral Agent, the Administrative Agent or any Lender against such
Guarantor. For the purposes hereof "demand" shall include the commencement and
continuance of any legal proceedings.
7. Guarantee Absolute and Unconditional. Each Guarantor waives any and
all notice of the creation, renewal, extension or accrual of any of the
Obligations and notice of or proof of reliance by the Collateral Agent, the
Administrative Agent or any Lender upon this Guarantee or acceptance of this
Guarantee; the Obligations, and any of them, shall conclusively be deemed to
have been created, contracted or incurred, or renewed, extended, amended or
waived, in reliance upon this Guarantee; and all dealings between the Borrower
or any of the Guarantors, on the one hand, and the Collateral Agent, the
Administrative Agent and the Lenders, on the other, shall likewise be
conclusively presumed to have been had or consummated in reliance upon this
Guarantee. Each Guarantor waives diligence, presentment, protest, demand for
payment and notice of default or nonpayment to or upon the Borrower or any other
Guarantor with respect to the Obligations. This Guarantee shall be construed as
a continuing, absolute and unconditional guarantee of payment without regard to
(a) the validity, regularity or enforceability of the Credit Agreement, any
Note, or any other Loan Document, any of the Obligations or any other collateral
security therefor or guarantee or right of offset with respect thereto at any
time or from time to time held by the Collateral Agent, the Administrative Agent
or any Lender, (b) any defense, set-off or counterclaim (other than a defense of
payment or performance or release as a result of the occurrence of the Release
Date) which may at any time be available to or be asserted by the Borrower
against the Collateral Agent, the Administrative Agent or any Lender, or (c) any
other circumstance whatsoever (with or without notice to or knowledge of the
Borrower or such Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of the Borrower for the Obligations,
or of such Guarantor under this Guarantee, in bankruptcy or in any other
instance. When pursuing its rights and remedies hereunder against any Guarantor,
the Collateral Agent, the Administrative Agent and any Lender may, but shall be
under no obligation to, pursue such rights and remedies as it may have against
the Borrower, any other Guarantor, or any other Person or against any collateral
security or guarantee for the Obligations or any right of offset with respect
thereto, and any failure by the Collateral Agent, the Administrative Agent or
any Lender to pursue such other rights or remedies or to collect any payments
from the Borrower, any other Guarantor, or any such other Person or to realize
upon any such collateral security or guarantee or to exercise any such right of
offset, or any release of the Borrower, any other Guarantor, or any such other
Person or of any such collateral security, guarantee or right of offset, shall
not relieve any Guarantor of any liability hereunder, and shall not impair or
affect the rights and remedies, whether express, implied or available as a
matter of law, of the Collateral Agent, the Administrative Agent or any Lender
against any Guarantor. This Guarantee shall remain in full force and effect and
be binding in accordance with and to the extent of its terms upon each of the
Guarantors and its successors and assigns thereof, and shall inure to the
benefit of the Collateral Agent, the Administrative Agent and the Lenders, and
their respective successors, indorsees, transferees and assigns, until all the
Obligations and the obligations of such Guarantor under this Guarantee shall
have been satisfied by payment in full and the Commitments shall be terminated,
subject to the provisions of Sections 2(e) and (f) and notwithstanding that from
time to time during the term of the Credit Agreement the Borrower may be free
from any Obligations. No Guarantor shall be released from its obligations under
this Guarantee because of
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the failure of any other Guarantor (as defined in the Credit Agreement) to
perform its obligations under its Guarantee (as defined in the Credit
Agreement).
8. Reinstatement. This Guarantee shall continue to be effective, or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
any of the Obligations is rescinded or must otherwise be restored or returned by
the Collateral Agent, the Administrative Agent or any Lender upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Borrower or upon or as a result of the appointment of a receiver, intervenor or
conservator of, or trustee or similar officer for, the Borrower or any
substantial part of its property, or otherwise, all as though such payments had
not been made.
9. Payments. Each Guarantor hereby agrees that the Guarantor
Obligations will be paid to the Collateral Agent without set-off or counterclaim
in U.S. Dollars at the office of the Collateral Agent located at c/o Bank of
America, National Association, Agency Administrative Services #5596, 0000
Xxxxxxx Xxxxxxxxx, 0xx Xxxxx, Xxxxxxx, Xxxxxxxxxx 00000.
10. Representations and Warranties. In order to induce the Lenders to
make the Loans pursuant to the Credit Agreement, each Guarantor hereby
represents and warrants to the Collateral Agent, the Administrative Agent and to
each Lender that:
(a) Financial Condition. The unaudited balance sheet of SatCom on a
stand-alone basis at March 31, 1999, copies of which have heretofore been
furnished to each Lender, is complete and correct in all material respects and
presents fairly the financial condition of SatCom as at such date. Such balance
sheet has been prepared in accordance with GAAP (except for the absence of
footnotes).
(b) No Change. Since March 31, 1999 (i) there has been no change in the
business, operations, property or financial or other condition of SatCom that
has or could reasonably be expected to have a Material Adverse Effect, (ii) no
dividends or other distributions have been declared, paid or made upon any
shares of capital stock of SatCom nor have any shares of capital stock of SatCom
been redeemed, retired, purchased or otherwise acquired for value by SatCom
except as permitted by Section 13(e) and (iii) no Guarantor has engaged in any
business or incurred any liabilities prior to or after the Closing Date, other
than as relates to such Guarantor's limited businesses as previously disclosed
to the Administrative Agent.
(c) Corporate Existence; Compliance with Law. Such Guarantor and each
of its Subsidiaries (a) is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or organization, (b) has
the corporate power and authority and the legal right to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification, except to the extent that the failure to be so
qualified could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect, and (d) is in compliance with all Requirements of Law except to
the extent that the failure to comply therewith could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.
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(d) Corporate Power; Authorization; Enforceable Obligations. Such
Guarantor has the corporate power and authority and the legal right to make,
deliver and perform this Guarantee and the other Loan Documents to which it is a
party and has taken all necessary corporate action to authorize the execution,
delivery and performance of this Guarantee and the other Loan Documents to which
it is a party. Except as set forth on Schedule 10(d), no consent or
authorization of, filing with or other act by or in respect of any Governmental
Authority is required in connection with the execution, delivery, performance,
validity or enforceability of this Guarantee or any security interests created
pursuant to this Guarantee, other than those which have been obtained or made
and are in full force and effect. This Guarantee has been duly executed and
delivered by such Guarantor. This Guarantee constitutes a legal, valid and
binding obligation of such Guarantor enforceable against such Guarantor in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
(e) No Legal Bar. The execution, delivery and performance of this
Guarantee will not violate any Requirement of Law or any Contractual Obligation
applicable to such Guarantor or any of its Subsidiaries, and will not result in,
or require, the creation or imposition of any Lien on any of its properties or
revenues pursuant to any Requirement of Law or Contractual Obligation.
(f) No Material Litigation. No litigation, investigation or proceeding
of or before any arbitrator or Governmental Authority is pending or, to the
knowledge of such Guarantor, threatened by or against such Guarantor or any of
its Subsidiaries or against any of its or their respective properties or
revenues (a) with respect to this Guarantee or any of the other Loan Documents
or any of the transactions contemplated hereby or thereby, or (b) which could
reasonably be expected to have a Material Adverse Effect.
(g) No Default. Such Guarantor is not in default under or with respect
to any Contractual Obligation in any respect which could reasonably be expected
to have a Material Adverse Effect.
(h) Ownership of Property; Liens. Such Guarantor has good record and
marketable title in fee simple to or valid leasehold interests in all its real
property, and good title to all its other property, and none of such property is
subject to any Lien, except for Liens permitted under Section 13(b).
(i) Taxes. Such Guarantor has filed or caused to be filed all tax
returns which to the knowledge of such Guarantor are required to be filed and
has paid all taxes shown to be due and payable on said returns or on any
assessments made against it or any of its property and all other taxes, fees or
other charges imposed on it or any of its property by any Governmental Authority
(other than those the amount or validity of which is currently being contested
in good faith by appropriate proceedings and with respect to which reserves in
conformity with GAAP have been provided on the books of such Guarantor, as the
case may be, and other than those the non-payment of which could not, in the
aggregate, reasonably be expected to have a Material
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Adverse Effect); and no federal income tax liens have been filed and, to the
knowledge of such Guarantor, no claims are being asserted with respect to any
such taxes, fees or other charges, except any such claims which could not
reasonably be expected to have a Material Adverse Effect.
(j) Federal Regulations. Such Guarantor is not engaged in the business
of extending credit for the purpose of "purchasing" or "carrying" "margin stock"
within the respective meanings of each of the quoted terms under Regulation U of
the Board of Governors of the Federal Reserve System as now and from time to
time hereafter in effect.
(k) ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan which has
resulted or could reasonably be expected to result in a liability to such
Guarantor in excess of $1,000,000, and each Plan has complied in all material
respects with the applicable provisions of ERISA and the Code. No termination of
a Single Employer Plan has occurred, and no Lien in favor of the PBGC or a Plan
has arisen, during such five-year period. The present value of all accrued
benefits under each Single Employer Plan (based on those assumptions used to
fund such Plans) did not, as of the last annual valuation date prior to the date
on which this representation is made or deemed made, exceed, by more than
$1,000,000, the value of the assets of such Plan allocable to such accrued
benefits. None of the Guarantors nor any Commonly Controlled Entity has had a
complete or partial withdrawal from any Multiemployer Plan, and neither such
Guarantor nor any Commonly Controlled Entity would become subject to any
liability under ERISA if such Guarantor or any such Commonly Controlled Entity
were to withdraw completely from all Multiemployer Plans as of the valuation
date most closely preceding the date on which this representation is made or
deemed made, where such liability could, in the aggregate, reasonably be
expected to have a Material Adverse Effect. No such Multiemployer Plan is in
Reorganization or Insolvent.
(l) Investment Company Act; Other Regulations. Such Guarantor is not an
"investment company," or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended. Such
Guarantor is not subject to regulation under any Federal or State statute or
regulation which limits its ability to incur Indebtedness.
(m) Subsidiaries. Such Guarantor has no Subsidiaries as of the Closing
Date.
(n) Environmental Matters. Each of the representations and warranties
set forth in paragraphs (i) through (v) of this Section is true and correct with
respect to each parcel of real property owned or operated by such Guarantor (the
"Properties"), except to the extent that (a) the facts and circumstances giving
rise to any such failure to be so true and correct could not
reasonably be expected to have a Material Adverse Effect or (b) such Guarantor
fully indemnified against any liabilities by creditworthy Persons which may
result from any such failure to be so true and correct:
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(i) The Properties do not contain, and have not previously contained,
in, on, or under, including, without limitation, the soil and groundwater
thereunder, any Hazardous Materials in concentrations which violate
Environmental Laws.
(ii) The Properties and all operations and facilities at the Properties
are in compliance with all Environmental Laws, and there is no Hazardous
Materials contamination or violation of any Environmental Law which could
interfere with the continued operation of any of the Properties or impair
the fair saleable value of any thereof.
(iii) Such Guarantor has not received any written complaint, notice of
violation, alleged violation, investigation or advisory action or of
potential liability or of potential responsibility regarding environmental
protection matters or permit compliance with regard to the Properties, nor
is such Guarantor aware that any Governmental Authority is threatening to
deliver to such Guarantor any such notice.
(iv) Hazardous Materials have not been generated, treated, stored,
disposed of, at, on or under any of the Properties, nor have any Hazardous
Materials been transferred from the Properties to any other location in
violation of any Environmental Law.
(v) There are no governmental, administrative actions or judicial
proceedings pending or (to the knowledge of such Guarantor) contemplated
under any Environmental Laws to which such Guarantor is or (to the
knowledge of such Guarantor) will be named as a party with respect to the
Properties, nor are there any consent decrees or other decrees, consent
orders, administrative orders or other orders, or other administrative or
judicial requirements outstanding under any Environmental Law with respect
to any of the Properties.
(o) Year 2000 Matters. Each Guarantor shall take all actions reasonably
believed by it to be necessary and commit resources reasonably believed by it to
be adequate to assure that its computer-based and other systems are able to
effectively process data including dates before, on and after January 1, 2000
without experiencing any Year 2000 Problem that could reasonably be expected to
have a Material Adverse Effect. At the request of the Administrative Agent, each
Guarantor shall provide or cause to be provided to each Lender information
(including, but not limited to, the results of internal or external audit
reports prepared in the ordinary course of business) reasonably acceptable to
the Administrative Agent as to the Year 2000 Compliance of such Guarantor and
its abilities to conduct its business and operations before, on and after
January 1, 2000 without experiencing a Year 2000 Problem causing a Material
Adverse Effect.
(p) Full Disclosure. All information heretofore furnished by such
Guarantor to the Collateral Agent, the Administrative Agent or any Lender for
purposes of or in connection with this Guarantee or any transaction contemplated
hereby is, and all such information hereafter furnished by such Guarantor to the
Collateral Agent, the Administrative Agent or any Lender will be, true and
accurate in all material respects on the date as of which such information is
stated or certified. Such Guarantor has disclosed to the Lenders in writing any
and all facts which could reasonably be expected to have a Material Adverse
Effect.
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(q) Chief Executive Office. On the date hereof, such Grantor's
jurisdiction of organization and the location of such Grantor's chief executive
office in the United States are specified on Schedule 1.
(r) Equipment, Ground Stations and Satellite Construction Sites. (a) On
the date hereof, the Equipment (other than mobile goods) is found at the
locations listed on Schedule 2 and the Ground Stations are found at the
locations listed on Schedule 3 and (b) the location of the construction site of
each Satellite is listed on Schedule 4.
Such Guarantor agrees that the foregoing representations and warranties
shall be deemed to have been made by such Guarantor to the extent they relate to
such Guarantor on the date of each borrowing by the Borrower under the Credit
Agreement on and as of such date of borrowing as though made hereunder on and as
of such date, except to the extent they expressly relate to an earlier date and,
in the case of Sections 10(q) and 10(r), as updated from time to time by any
Guarantor.
11. Affirmative Covenants. SatCom and Loral Satellite, jointly and
severally, hereby agree (and, in the case of paragraphs (e), (f), (g), (h), (j),
(q) and (s), each other Guarantor hereby agrees), that, so long as this
Guarantee remains in effect or any amount is owing to any Lender, the Collateral
Agent or the Administrative Agent hereunder, SatCom or such other Guarantor, as
the case may be, shall:
(a) Collateral Coverage Ratio. Maintain a Collateral Coverage Ratio
which is at all times equal to or in excess of 1.20 to 1.00; provided that, if
at any time the Collateral Coverage Ratio falls below 1.20 to 1.00 then either
(i) SatCom shall designate and deliver additional Acceptable Collateral for
inclusion in the Collateral Pool or (ii) additional Acceptable Letters of Credit
shall be issued to the Collateral Agent on behalf of the Lenders, in each case,
in amounts such that after giving effect thereto the Collateral Coverage Ratio
shall be at least 1.20 to 1.00. In connection with the delivery of any
Acceptable Collateral to the Collateral Agent pursuant to this paragraph, SatCom
and Loral Satellite shall execute such documents and take such actions as the
Collateral Agent or the Administrative Agent may require to cause such
Acceptable Collateral to become subject to a perfected security interest in
favor of the Collateral Agent and shall deliver satisfactory appraisals of such
Acceptable Collateral to the Collateral Agent and the Administrative Agent.
(b) Transponders Lease Agreements. Cause (i) title to all transponders
on all Orbiting Satellites to be transferred from Loral SpaceCom to SatCom upon
the Successful Launch thereof pursuant to asset purchase agreements which are in
form and substance satisfactory to the Administrative Agent (each, a
"Transponder Transfer Agreement"), (ii) intercompany lease agreements for the
lease of transponders on any Orbiting Satellite by SatCom to Loral SpaceCom
(each, a "Master Lease Agreement") to have terms and conditions which are, in
all material respects, substantially in the form of Exhibit C (which form is
hereby approved) and (iii) in connection with entering into any such Master
Lease Agreement, all relevant Persons to enter into an Availability Agreement, a
Termination Agreement and a TT&C Agreement, substantially in the form of
Exhibits D, E and F.
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(c) Financial Statements. Furnish to the Administrative Agent:
(i) as soon as available, but in any event within 120 days after the
end of each fiscal year of SatCom, a copy of (x) (1) the audited Loral-only
condensed financial statements of Loral on a stand alone basis and (2) the
audited consolidated financial statements for Loral and its consolidated
Subsidiaries, in each case, as at the end of such year and the related audited
statements of operations and cash flows, (y) the audited consolidated financial
statements for Loral SpaceCom and its consolidated Subsidiaries as at the end of
such year and the related audited consolidated statements of operations and cash
flows and (z) the audited combined balance sheet of SatCom and Loral Satellite
and their respective Subsidiaries as of the end of such year and the related
audited combined statements of operations and cash flows of SatCom and Loral
Satellite and their respective Subsidiaries. Each financial statement delivered
pursuant to this Section 11(c)(i) shall to the extent appropriate set forth in
comparative form the figures for the previous year and shall be reported on
without a "going concern" or like qualification or exception, or qualification
arising out of the scope of the audit, by independent certified public
accountants of nationally recognized standing; and
(ii) as soon as available, but in any event not later than 60 days
after the end of each of the first three quarterly periods of each fiscal year
of SatCom, (x) the unaudited consolidated financial statements for Loral and its
Subsidiaries as at the end of such quarter and the related unaudited statements
of operations and cash flows, (y) the unaudited consolidated financial
statements for Loral SpaceCom and its consolidated Subsidiaries as at the end of
such quarter and the related unaudited consolidated statements of operations and
cash flows and (z) the unaudited combined balance sheet of SatCom and Loral
Satellite and their respective Subsidiaries as of the end of such quarter and
the related unaudited combined statements of operations and cash flows of SatCom
and Loral Satellite and their respective Subsidiaries on a combined basis. Each
financial statement delivered pursuant to this Section 11(c)(ii) shall to the
extent appropriate set forth in comparative form the figures for the previous
year and shall be reported on without a "going concern" or like qualification or
exception, or qualification arising out of the scope of the audit, by
independent certified public accountants of nationally recognized standing;
all such financial statements to be complete and correct in all material
respects and to be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein (except as
approved by such accountants or officer, as the case may be, and disclosed
therein).
(d) Certificates; Other Information. Furnish to the Administrative
Agent:
(i) concurrently with the delivery of the financial statements referred
to in Section 11(c)(i) above, a certificate of the independent certified public
accountants reporting on such financial statements stating that in making the
examination necessary therefor no knowledge was obtained of any SatCom Default
or SatCom Event of Default except as specified in such certificate;
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(ii) concurrently with the delivery of the financial statements
referred to in Section 11(c) above, a certificate of a Responsible Officer (i)
stating that, to the best of such officer's knowledge, SatCom during such period
has observed or performed all of its covenants and other agreements, and
satisfied every condition, contained in this Guarantee, and in the other Loan
Documents to which it is a party, to be observed, performed or satisfied by it,
and that such officer has obtained no knowledge of any SatCom Default or SatCom
Event of Default except as specified in such certificate, and (ii) showing in
detail the calculations supporting such statement in respect of Sections 11(a),
12(a) and 12(b);
(iii) within five days after the same are sent, copies of all periodic
reports which Loral sends to its respective stockholders, and within five days
after the same are filed, copies of all periodic reports which Loral may make
to, or file with, the Securities and Exchange Commission or any successor or
analogous Governmental Authority; and
(iv) promptly, such additional financial and other information as any
Lender may from time to time reasonably request.
(e) Payment of Obligations. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
material obligations of whatever nature (other than judgments, Indebtedness and
Contingent Obligations, which shall be beyond the scope of this Section)
including, without limitation, taxes, except when the amount or validity thereof
is currently being contested in good faith by appropriate proceedings and
reserves in conformity with GAAP with respect thereto have been provided on the
books of such Guarantor or its Subsidiaries, as the case may be.
(f) Conduct of Business and Maintenance of Existence. Continue to
engage in the same business as now conducted by it and preserve, renew and keep
in full force and effect its corporate existence and maintain all rights,
privileges and franchises necessary or desirable in the normal conduct of its
business and comply in all material respects with all material Contractual
Obligations (other than judgments, Indebtedness and Contingent Obligations,
which shall be beyond the scope of this Section) and material Requirements of
Law (except for Environmental Laws, which shall be governed by Section 11(k)),
except as otherwise expressly permitted by this Guarantee.
(g) Maintenance of Property; Insurance.
(i) Keep all property useful and necessary in its business in good
working order and condition; maintain with financially sound and reputable
insurance companies insurance on all its property in at least such amounts
and against at least such risks but including in any event public
liability, product liability and business interruption as are usually
insured against in the same general area by companies engaged in the same
or a similar business, as certified by a Responsible Officer; and furnish
to each Lender, upon written request, full information as to the insurance
carried;
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(ii) Without limiting the foregoing, maintain with financially sound
and reputable insurance companies commercial launch insurance on Telstar 7,
Telstar 7-R and Telstar R and in-orbit insurance with respect to each
Orbiting Satellite for each such Satellite's replacement cost, as certified
by a Responsible Officer. All such insurance shall provide that no
cancellation, material reduction in amount or material change in coverage
thereof shall be effective until at least 30 days after receipt by the
Collateral Agent of written notice thereof.
(h) Inspection of Property; Books and Records; Discussions. Keep proper
books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities; and, subject to
applicable governmental security and secrecy regulations, permit representatives
of any Lender to visit and inspect any of its properties and examine and make
abstracts from any of its books and records at any reasonable time and as often
as may reasonably be desired with prior notice to such Guarantor (which can have
a representative present if it so chooses), and to discuss the business,
operations, properties and financial and other condition of such Guarantor and
its Subsidiaries with officers and employees of such Guarantor and its
Subsidiaries and with its independent certified public accountants.
(i) Notices. Promptly give notice (to be confirmed promptly in writing)
to the Administrative Agent and each Lender:
(i) of any (x) default or event of default under any Contractual
Obligation of such Guarantor or any of its Subsidiaries or (y) litigation,
investigation or proceeding which may exist at any time between such
Guarantor or any of its Subsidiaries and any Governmental Authority, which
in either case, if not cured or if adversely determined, as the case may
be, could reasonably be expected to have a Material Adverse Effect;
(ii) of any litigation or proceeding affecting such Guarantor or any of
its Subsidiaries in which the amount involved is $1,000,000 or more and not
covered by insurance; or in which injunctive or similar relief is sought
and which could reasonably be expected to have a Material Adverse Effect;
(iii) as soon as possible and in any event within 30 days after such
Guarantor knows or has reason to know of the following events: (i) the
occurrence or expected occurrence of any Reportable Event with respect to
any Plan which could reasonably be expected to result in any liability to
such Guarantor or any Subsidiary in excess of $1,000,000 or any withdrawal
from, or the termination, Reorganization or Insolvency of, any
Multiemployer Plan, or (ii) the institution of proceedings or the taking or
expected taking of any other action by PBGC or such Guarantor or any
Commonly Controlled Entity with respect to the withdrawal from, or the
terminating, Reorganization or Insolvency of, any Plan. Such Guarantor
shall deliver to the Administrative Agent and each Lender a certificate of
the chief financial officer of such Guarantor setting forth the details
thereof and the action that such Guarantor or Commonly Controlled Entity
proposes to take with respect thereto; and
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(iv) of the occurrence of any event having or which could reasonably be
expected to have a Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a
statement of a Responsible Officer setting forth details of the occurrence
referred to therein and stating what action, if any, such Guarantor proposes to
take with respect thereto.
(j) Environmental Laws.
(i) Comply with, and require compliance by all tenants and subtenants,
if any, with, all Environmental Laws and obtain and comply with and
maintain, and insure that all tenants and subtenants obtain and comply with
and maintain, any and all licenses, approvals, registrations or permits
required by Environmental Laws, except to the extent that failure to do so
could not reasonably be expected to have a Material Adverse Effect;
(ii) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required by a
Governmental Authority under Environmental Laws and promptly comply with
all lawful orders and directives of all Governmental Authorities respecting
Environmental Laws, except to the extent that the same are being contested
in good faith by appropriate proceedings and the pendency of such
proceedings could not reasonably be expected to have a Material Adverse
Effect; and
(iii) Defend, indemnify and hold harmless the Collateral Agent, the
Administrative Agent and the Lenders, and their respective employees,
agents, officers and directors, from and against any claims, demands,
penalties, fines, liabilities, settlements, damages, costs and expenses of
whatever kind or nature known or unknown, contingent or otherwise, arising
out of, or in any way relating to the violation of or noncompliance with
any Environmental Laws applicable to the Properties, or any orders,
requirements or demands of Governmental Authorities related thereto,
including, without limitation, attorney's and consultant's fees,
investigation and laboratory fees, court costs and litigation expenses,
except to the extent that any of the foregoing arise out of the gross
negligence or willful misconduct of the party seeking indemnification
therefor. The agreements in this paragraph shall survive the termination of
this Guarantee.
(k) Telstar 7 Launch. Use its best efforts to attempt a Successful
Launch of Telstar 7 by December 31, 2000.
(l) Appraisals. (i) By May 31 of each year or at the request of SatCom,
deliver to the Administrative Agent an appraisal demonstrating the Appraised
Value of each Orbiting Satellite prepared by an Approved Appraiser and
satisfactory in form and substance to the Administrative Agent; and
(ii) Within 60 days of the occurrence of a Partial Failure with respect
to any Orbiting Satellite, deliver to the Administrative Agent an appraisal
demonstrating the Appraised Value (after giving effect to such Partial Failure)
of such Orbiting Satellite prepared by an Approved Appraiser and satisfactory in
form to the Administrative Agent.
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(m) Cash Collateral Accounts.
(i) (A) establish and maintain a pledged collateral account
(as to SatCom, the "SatCom Collateral Account" and, as to Loral
Satellite, the "Loral Satellite Collateral Account") with the
Collateral Agent subject to the sole dominion and control of the
Collateral Agent pursuant to a Cash Collateral Agreement, substantially
in the form of Exhibit B (as the same may be amended, supplemented or
otherwise modified from time to time, a "SatCom Cash Collateral
Agreement"), (B) at any time after a Default or Event of Default occurs
and is continuing, deposit all lease payments received by SatCom in
connection with the Master Lease Agreements with respect to any
Orbiting Satellite directly into the SatCom Collateral Account, and (C)
deposit directly into the SatCom Collateral Account or the Loral
Satellite Collateral Account, as the case may be, (x) all insurance
proceeds received as a result of a Partial Failure with respect to any
Orbiting Satellite and (y) all amounts required to be deposited
pursuant to Sections 11(o) and 11(p); and
(ii) at any time after a Default or Event of Default occurs
and is continuing, cause all payments received by SatCom or Loral
Satellite in connection with any Intercompany Note to be deposited
directly into the SatCom Collateral Account or the Loral Satellite
Collateral Account, as the case may be.
(n) Payments under Intercompany Notes. At any time after the
occurrence and during the continuation of a Default or Event of Default, demand,
accept and receive all payments of interest and principal on any Intercompany
Note which is then due and payable pursuant to the terms thereof.
(o) In-Orbit Failures.
(i) Upon the first occurrence of an In-Orbit Failure with
respect to any Orbiting Satellite after the Closing Date, (A) use its
best efforts to promptly (and, in any event, except in the case of a
purchase agreement, prior to the receipt of the insurance proceeds
referred to in clause (B) below ) enter into a Satellite Contract or
purchase agreement for the construction or purchase of a Replacement
Satellite (which has a comparable value to the Satellite being replaced
(as determined pursuant to an appraisal by an Approved Appraiser) and
is operationally equivalent thereto) which shall have the same
ownership structure as such Orbiting Satellite, (B) cause the insurance
proceeds (other than Excess Insurance Proceeds) from such In-Orbit
Failure to be segregated and maintained in a separate bank account (as
to which the Collateral Agent has no Lien), such account to be
satisfactory to the Administrative Agent and subject to withdrawal
solely to make payments under such Satellite Contract or purchase
agreement, as the case may be, (it being understood that the
documentation relating to such bank account shall be satisfactory in
form and substance to the Administrative Agent and may not be amended
without the consent of the Administrative Agent (which consent shall
not be unreasonably withheld)); (C) use its best efforts to ensure that
such Replacement Satellite will be constructed or purchased and a
Successful Launch, if necessary, of such Replacement Satellite will be
attempted within a reasonable period of time; (D) cause the Collateral
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Agent, on behalf of the Secured Parties, to be named as the loss payee
under the insurance policies for such Replacement Satellite; and (E) in
the event that such Satellite Contract or purchase agreement, as the
case may be, is terminated for any reason, cause all insurance proceeds
on deposit in the segregated bank account at the time of such
termination to be immediately deposited in the SatCom Collateral
Account and the Loral Satellite Collateral Account, as appropriate;
(ii) Upon any subsequent In-Orbit Failure with respect to an
Orbiting Satellite after the Closing Date, cause the insurance proceeds
from such In-Orbit Failure to be immediately deposited in the SatCom
Collateral Account and the Loral Satellite Collateral Account, as
appropriate.
(p) Launch Failures.
(i) Upon the occurrence of a Xxxxxxx 0 Xxxxxx Xxxxxxx, (X) use
its best efforts to promptly (and, in any event, except in the case of
a purchase agreement, prior to the receipt of the insurance proceeds
referred to in clause (B) below) enter into a Satellite Contract or
purchase agreement for the construction or purchase of a Replacement
Satellite (which has a comparable value to the Satellite being replaced
(as determined pursuant to an appraisal by an Approved Appraiser) and
is operationally equivalent thereto) which shall have the same
ownership structure as Telstar 7, (B) cause the insurance proceeds
(other than Excess Insurance Proceeds) from such Launch Failure to be
segregated and maintained in a separate bank account, such account to
be satisfactory to the Administrative Agent and subject to withdrawal
solely to make payments under such Satellite Contract or purchase
agreement, as the case may be, (it being understood that the
documentation relating to such bank account shall be satisfactory in
form and substance to the Administrative Agent and may not be amended
without the consent of the Administrative Agent (which consent shall
not be unreasonably withheld)); (C) use its best efforts to ensure that
such Replacement Satellite will be constructed or purchased and a
Successful Launch, if necessary, of such Replacement Satellite will be
attempted within a reasonable period of time; (D) cause the Collateral
Agent, on behalf of the Secured Parties, to be named as the loss payee
under the insurance policies for such Replacement Satellite; and (E) in
the event that such Satellite Contract or purchase agreement, as the
case may be, is terminated for any reason, cause all insurance proceeds
on deposit in the segregated bank account at the time of such
termination to be immediately deposited in the SatCom Collateral
Account and the Loral Satellite Collateral Account, as appropriate.
(ii) Upon any subsequent Launch Failure with respect to any
Satellite after the Closing Date, cause the insurance proceeds from
such Launch Failure to be immediately deposited in the SatCom
Collateral Account and the Loral Satellite Collateral Account, as
appropriate.
(q) New Subsidiaries; Further Security and Guarantees. In the
event that such Guarantor or any of its Subsidiaries forms any new
Subsidiary, such Guarantor shall cause such Subsidiary to become a
party to (i) this Guarantee by causing such Subsidiary to (x) execute
and deliver to the Collateral Agent an Assumption Agreement in the form
of
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Annex 1 hereto, (y) cause each holder of any Equity Interest of such
Subsidiary to pledge 100% of such Equity Interest and (z) take any
necessary steps to perfect the security interest to be created thereby
and (ii) the Collateral Agency Agreement by causing such Subsidiary to
execute and deliver to the Collateral Agent an assumption agreement in
the form of Exhibit A to the Collateral Agency Agreement.
(r) Final FCC Order. Use its best efforts to obtain a final
order from the FCC with respect to the transfer of the FCC Licenses to
Loral Satellite and consummate such transfer as soon as practicable
following the Closing Date, but in no event later than October 15,
1999.
(s) Preservation of Separate Corporate Existence of SatCom and
Loral Satellite. From and after the Closing Date, in the case of SatCom
and Loral Satellite and their respective Subsidiaries, take (or refrain
from taking, as the case may be) such actions such actions as shall be
required to insure its compliance with the following provisions:
(i) Each of SatCom, Loral Satellite and their respective
Subsidiaries shall maintain corporate records and books of
account separate from those of Loral, the Borrower and their
respective Subsidiaries and stationery and other business
forms that are separate and distinct from those of Loral, the
Borrower and their respective Subsidiaries.
(ii) The assets of each of SatCom, Loral Satellite and their
respective Subsidiaries will be maintained in a manner that
facilitates their identification and segregation from those of
Loral, the Borrower and their respective Subsidiaries.
(iii) Each of SatCom, Loral Satellite and their respective
Subsidiaries, shall strictly observe corporate formalities in
its dealings with Loral, the Borrower and their respective
Subsidiaries, and no funds or other assets of Loral, the
Borrower or their respective Subsidiaries will be commingled
or pooled with those of SatCom or Loral Satellite or their
respective Subsidiaries. Neither SatCom, Loral Satellite nor
their respective Subsidiaries will maintain joint bank
accounts with Loral, the Borrower or their respective
Subsidiaries or other depository accounts with Loral, the
Borrower or their respective Subsidiaries to which SatCom,
Loral Satellite or their respective Subsidiaries has
independent access.
(iv) To the extent that either SatCom, Loral Satellite or
their respective Subsidiaries shares any officers or other
employees with Loral, the Borrower or any of their respective
Subsidiaries, the salaries of and the expenses related to
providing benefits to such officers and other employees will
be fairly allocated among SatCom, Loral Satellite or any of
their respective Subsidiaries, as the case may be, and Loral,
the Borrower or such Subsidiary, and SatCom, Loral Satellite
or any of their respective Subsidiaries, as the case may be,
and Loral, the Borrower or such Subsidiary shall bear their
fair shares of the salary and benefit costs associated with
all such common officers and employees.
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(v) To the extent that SatCom, Loral Satellite or any of their
respective Subsidiaries jointly contracts with Loral, the
Borrower or any of their respective Subsidiaries to do
business with vendors or service providers or to share
overhead expenses, the costs incurred in so doing will be
allocated fairly between SatCom, Loral Satellite or any of
their respective Subsidiaries, as the case may be, and Loral,
the Borrower or such Subsidiary, and SatCom, Loral Satellite
or any of their and their respective Subsidiaries, as the case
may be, and Loral, the Borrower or such Subsidiary shall bear
their fair shares of such costs. To the extent that SatCom,
Loral Satellite or any of their and their respective
Subsidiaries contracts or does business with vendors or
service providers where the goods and services provided are
partially for the benefit of Loral, the Borrower or any of
their respective Subsidiaries, the costs incurred in so doing
shall be fairly allocated between SatCom, Loral Satellite or
any of their respective Subsidiaries, as the case may be, and
Loral, the Borrower or such Subsidiary in proportion to the
benefit of the goods or services each is provided, and SatCom,
Loral Satellite or any of their respective Subsidiaries, as
the case may be, and Loral, the Borrower or such Subsidiary
shall bear their fair shares of such costs. All material
transactions between SatCom, Loral Satellite or any of their
respective Subsidiaries, and Loral, the Borrower or any of
their respective Subsidiaries, whether currently existing or
hereafter entered into, shall be only on an arm's length
basis, it being understood and agreed that the transactions
contemplated in the Loan Documents meet the requirements of
this clause (v).
(vi) Each of SatCom and Loral Satellite and their respective
Subsidiaries shall maintain office space separate from the
office space of Loral, the Borrower or any of their respective
Subsidiaries (but which may be located at the same address as
the Loral, the Borrower or such Subsidiary). To the extent
that SatCom, Loral Satellite or any of their respective
Subsidiaries, as the case may be, and Loral, the Borrower or
any of their respective Subsidiaries have offices in the same
location, there shall be a fair and appropriate allocation of
overhead costs between them, and each shall bear its fair
share of such expenses.
(vii) Except as provided in the Loan Documents, neither SatCom
nor Loral Satellite nor any of their Subsidiaries shall assume
or guarantee any of the liabilities of Loral, the Borrower or
any of their respective Subsidiaries.
12. Financial Covenants. SatCom and Loral Satellite, jointly
and severally, hereby agree that, so long as this Guarantee remains in effect or
any amount is owing to any Lender, the Collateral Agent or the Administrative
Agent hereunder, they shall not:
(a) Maintenance of Combined Net Worth. Permit Combined Net
Worth at the end of any fiscal quarter to be less than $375,000,000.
(b) Maintenance of Combined EBITDA. (i) At such time as there
exists (x) one Orbiting Satellite and (y)(A) the Guarantors are permitted to
construct or purchase a Replacement Satellite in accordance with Section
11(o)(i) or 11(p)(i) hereof or (B) a Successful Launch of
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Telstar 7 has not been attempted, permit at the last day of any fiscal quarter
ending during any test period set forth below, Combined EBITDA for the period of
two fiscal quarters (or four fiscal quarters in the case of the period ending
December 31, 1999) ending on such date to be less than the amounts set forth
opposite such test period below:
Test Period Combined EBITDA
----------- ---------------
January 1, 1999 - December 31, 1999 12,500,000
January 1, 2000 - June 30, 2000 12,500,000
July 1, 2000 - December 31, 2000 12,500,000
January 1, 2001 - June 30, 2001 15,000,000
July 1, 2001 - December 31, 2001 15,000,000
January 1, 2002 - June 30, 2002 17,500,000
July 1, 2002 - December 31, 2002 17,500,000
January 1, 2003 - June 30, 2003 17,500,000
July 1, 2003 - December 31, 2003 17,500,000
and (ii) at all other times, permit at the last day of any fiscal quarter ending
during any test period set forth below, Combined EBITDA for the period of two
fiscal quarters ending on such date to be less than the amounts set forth
opposite such test period below:
Test Period Combined EBITDA
----------- ---------------
Closing Date - December 31, 1999 12,500,000
January 1, 2000 - June 30, 2000 25,000,000
July 1, 2000 - December 30, 2000 25,000,000
January 1, 2001 - June 30, 2001 30,000,000
July 1, 2001 - December 31, 2001 30,000,000
January 1, 2002 - June 30, 2002 35,000,000
July 1, 2002 - December 31, 2002 35,000,000
January 1, 2003 - June 30, 2003 35,000,000
July 1, 2003 - December 31, 2003 35,000,000
; provided that (A) this Section 12(b) shall not apply at such time as (x) there
are no Orbiting Satellites and (y) the Guarantors are permitted to construct or
purchase two Replacement
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Satellites in accordance with Section 11(o)(i) and 11(p)(i), (B) in any test
period in which a Satellite experiences a Total Failure for any part of such
test period, for purposes of this Section 12(b), Combined EBITDA for such period
shall be calculated on a pro forma basis, and shall be tested under this Section
12(b), as if such Total Failure occurred at the beginning of such period, (C) in
any test period in which a Satellite experiences a Partial Failure for any part
of such test period, the amounts set forth above shall be adjusted on a pro
forma basis to reflect the loss of capacity (and the resulting decrease in the
required amount of Combined EBITDA for the relevant test period under this
Section 12(b)) resulting from such Partial Failure, and such adjustment shall be
acceptable to the Administrative Agent and the Majority Lenders and (D) for
purposes of calculating the covenants set forth in this Section 12(b), in the
event of a Successful Launch of Telstar 7 or any Replacement Satellite in any
test period, Combined EBITDA for such period shall be calculated on a pro forma
basis, and shall be tested under this Section 12(b), as if such Successful
Launch occurred on the first day of the next succeeding test period.
13. Negative Covenants. Each Guarantor hereby agrees that, so
long as this Guarantee remains in effect or any amount is owing to any Lender,
the Collateral Agent or the Administrative Agent hereunder, such Guarantor shall
not and shall not permit any of its Subsidiaries to:
(a) Indebtedness. Create, incur, assume or suffer to exist any
Indebtedness other than Indebtedness set forth on Schedule 13(a), Indebtedness
created hereunder and Indebtedness between SatCom and Loral Satellite.
(b) Limitation on Liens. Create, incur, assume or suffer to
exist any Lien upon any of its property, assets or revenues, whether now owned
or hereafter acquired, except:
(i) Liens for taxes not yet due or which are being contested
in good faith and by appropriate proceedings if adequate reserves with
respect thereto are maintained on the books of such Guarantor in
accordance with GAAP;
(ii) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 60 days or
which are being contested in good faith and by appropriate proceedings;
(iii) easements, rights-of-way, restrictions and other Liens
incurred in the ordinary course of business which do not secure
Indebtedness and which do not in any case materially detract from the
value of the property subject thereto or materially interfere with the
ordinary conduct of the business of such Guarantor;
(iv) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in connection
with the importation of goods;
(v) Liens under the Loan Documents; and
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(vi) other Liens incidental to the conduct of such Guarantor's
businesses or the ownership of its property not securing any
Indebtedness, and which do not in the aggregate materially detract from
the value of such Guarantor's property when taken as a whole, or
materially impair the use thereof in the operation of its businesses.
(c) Limitation on Fundamental Changes. Enter into any
transaction of merger or consolidation or amalgamation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution) except that any
Subsidiary may be merged or consolidated with or into such Guarantor (provided
that such Guarantor shall be the continuing or surviving corporation) and a
Guarantor may merge into another Guarantor.
(d) Limitation on Sale of Assets. Convey, sell, lease,
transfer or otherwise dispose of any assets in a transaction or series of
related transactions, including in connection with any Sale and Leaseback
Transaction, except that:
(i) so long as no Default or Event of Default shall have
occurred and be continuing or would result therefrom, such Guarantor
may sell, lease, transfer or otherwise dispose of assets released from
the Collateral Pool pursuant to Section 3(b);
(ii) such Guarantor may sell, lease, transfer or otherwise
dispose of obsolete or worn out property in the ordinary course of
business;
(iii) such Guarantor may sell, lease or transfer its interests
in any FCC Licenses to any other Guarantor;
(iv) such Guarantor may sell, transfer or otherwise dispose of
Cash Equivalents in exchange for a comparable amount of cash and/or
Cash Equivalents;
(v) such Guarantor may enter into and perform its obligations
under the Loan Documents; and
(vi) such Person may make such transfers permitted by Sections
13(e) and (f).
(e) Limitation on Restricted Payments. Declare or pay any
dividends on, or make any payment on account of, or set apart assets for a
sinking or other analogous fund for the purchase, redemption, retirement or
other acquisition of, any shares of any class of stock of such Guarantor,
whether now or hereafter outstanding, or make any other distribution in respect
thereof, either directly or indirectly, whether in cash or property or in
obligations of such Guarantor or any Subsidiary, or permit any Subsidiary to
make any payment on account of, or purchase or otherwise acquire, any shares of
any class of stock of such Guarantor or any Subsidiary from any Person, except
that:
(i) SatCom and Loral Satellite may pay dividends to Loral or
Loral Corporation, as the case may be, so long as (A) no Default or
Event of Default shall have occurred and be continuing or would result
therefrom, (B) after giving effect to any such dividends, the combined
aggregate unencumbered cash on hand (including any Cash Equivalents
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permitted hereunder) at SatCom and Loral Satellite is at least equal to
$50,000,000 and (C) SatCom and Loral Satellite shall have made loans
(evidenced by Intercompany Notes) to Loral in an aggregate outstanding
principal amount at least equal to $100,000,000 at the time such
dividend is paid;
(ii) SatCom may make a distribution in the form of a dividend
to Loral of assets released from the Collateral Pool pursuant to
Section 3(b);
(iii) Subsidiaries of SatCom may pay dividends to SatCom;
(iv) SatCom and Loral Satellite may pay dividends consisting
of the non-cash consideration from the Borrower paid in connection with
this Agreement;
(v) Subsidiaries of Loral Satellite may pay dividends to Loral
Satellite; and
(vi) Dividends consisting of Excess Insurance Proceeds.
(f) Limitation on Investments and Capital Expenditures. Make,
commit to make or maintain any Investment or capital expenditures, except:
(i) loans to Loral by SatCom so long as (A) no Default or
Event of Default shall have occurred and be continuing or would result
therefrom, (B) any such loans are evidenced by Intercompany Notes which
are pledged to the Collateral Agent pursuant to this Guarantee and (C)
after giving effect to any such loans or dividends, the combined
aggregate unencumbered cash on hand (including any Cash Equivalents
permitted hereunder) at SatCom is at least equal to $50,000,000;
(ii) the construction or purchase of Telstar 7 and Replacement
Satellites contemplated under this Guarantee; and
(iii) Investments by such Guarantor in its Subsidiaries
created in the ordinary course of business, provided that no such
Investment in any Subsidiary shall include the transfer to such
Subsidiary of any assets included in calculating the Collateral Pool
Value at such time.
(g) Negative Pledge Clauses. Enter into or suffer to exist or
become effective any agreement that prohibits or limits the ability of such
Guarantor or any of its Subsidiaries to create, incur, assume or suffer to exist
any Lien upon any of its property or revenues, whether now owned or hereafter
acquired, to secure its obligations under the Loan Documents to which it is a
party, other than this Guarantee and the other Loan Documents.
(h) Affiliates. Except as set forth on Schedule 13(h), enter
into any transaction, including, without limitation, the purchase, sale or
exchange of property or the rendering of any services, with any Affiliate (other
than a Wholly Owned Subsidiary) or enter into, assume or suffer to exist any
employment or consulting contract with any such Affiliate (including any
modification or amendment to any such transaction or contract that, in the
reasonable judgment of
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such Guarantor, is no less favorable to such Guarantor than such transaction or
contract) and any transaction or contract which is upon terms no less favorable
to such Guarantor than it would obtain in a comparable arm's length transaction
with a Person not an Affiliate (which, prior to the Release Date, shall be
determined in the reasonable judgment of such Guarantor), provided that this
subsection shall not prohibit (a) employee compensation arrangements entered
into in the ordinary course of business and approved by the compensation
committee (or equivalent body) of such Guarantor, (b) payments permitted under
Section 13(e), (c) the Master Lease Agreements, (d) tax sharing agreements, (e)
management fees and related costs payable to Loral or its Subsidiaries by SatCom
or Loral Satellite, (f) the Transponder Transfer Agreement with respect to
Telstar 7 or (g) the transfer of assets with respect to Telstar 7 from Loral
SpaceCom to Loral Satellite.
(i) Changes in Fiscal Periods. Permit the fiscal year of such
Guarantor to end on a day other than December 31 or such other date as such
Guarantor is required to use for U.S. federal income tax purposes or change such
Guarantor's method of determining fiscal quarters.
(j) Lines of Business. Enter into any business, either
directly or through any Subsidiary, except for the business in which SatCom is
engaged on the Closing Date.
(k) Dividend and Other Payment Restrictions Affecting
Subsidiaries. Create or permit to exist or become effective any consensual
encumbrance or restriction on the ability of any Subsidiary to:
(A) pay dividends or make any other distributions on
its Equity Interests to such Guarantor or any of its
Subsidiaries, or with respect to any other interest or
participation in, or measured by, its profits, or pay any
indebtedness owed to such Guarantor or any of its
Subsidiaries;
(B) make loans or advances to such Guarantor or any
of its Subsidiaries;
(C) transfer any of its properties or assets to such
Guarantor or any of its Subsidiaries; or
(D) pay dividends described on Schedule 6.9 of the
Credit Agreement.
(l) Amendments to Certain Documents. Without the consent of
the Administrative Agent and the Majority Lenders (such consent not to be
unreasonably withheld), amend, modify or waive any provision of any Master Lease
Agreement, the Availability Agreement, the TT&C Agreement, any Transponder
Transfer Agreement or any other agreement entered into pursuant to Section
11(b).
(m) Loss Payee. Name or caused to be named any Person other
than the Collateral Agent, Loral Satellite or SatCom as loss payee under any
insurance policy relating to any Satellite that constitutes Collateral.
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(n) Changes in Locations. Except upon 15 days' prior written
notice to the Administrative Agent and the Collateral Agent and delivery to the
Administrative Agent and the Collateral Agent of (a) all additional executed
financing statements and other documents reasonably requested by the
Administrative Agent to maintain the validity, perfection and priority of the
security interests provided for herein and (b) if applicable, a written
supplement to Schedules 2, 3 or 4, as applicable, showing any additional
location at which Equipment shall be kept, any additional location of any Ground
Station and any additional construction site of any Satellite, as the case may
be :
(i) permit any of the Equipment to be kept at a location other
than those listed on Schedule 2;
(ii) change its jurisdiction of organization or the location
of its chief executive office in the United States from that existing
on the Closing Date;
(iii) permit the existence or use of any Ground Station at a
location other than those listed on Schedule 3; or
(iv) permit the existence or use of a construction site for
any Satellite at a location other than those listed on Schedule 4.
14. SatCom Events of Default. Upon the occurrence of any of
the following events:
(i) Any representation or warranty made or deemed made by or
on behalf of any Guarantor herein or in any other Loan Document or which is
contained in any certificate, document or financial or other statement furnished
at any time under or in connection with this Guarantee shall prove to have been
incorrect in any material respect on or as of the date made or deemed made; or
(ii) Any Guarantor shall default in the observance or
performance of any agreement contained in Section 11(a), 11(b), 11(g) (ii),
11(k), 11(l), 11(m), 11(n), 11(o), 11(p), 11(r), 11(s) (without regard to, in
each case, whether such Guarantor has used its best efforts), 12 or 13; or
(iii) Any Guarantor shall default in the observance or
performance of any other agreement contained in this Guarantee, and such default
shall continue unremedied for a period of 30 days; or
(iv) Any Guarantor, Loral (but only so long as any
Intercompany Notes remain unpaid) or Loral SpaceCom shall (A) default in any
payment of principal of or interest on any Indebtedness or in the payment of any
Contingent Obligation in respect of Indebtedness, beyond the period of grace, if
any, provided in the instrument or agreement under which such Indebtedness or
Contingent Obligation was created and (I) in each case, the aggregate principal
amount of all such Indebtedness equals or exceeds $1,000,000 (or, in the case of
Loral or Loral SpaceCom, $25,000,000 and (II) with respect to a default in the
payment of interest by such
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Guarantor, Loral or Loral SpaceCom, the effect of such default is to cause, or
permit the holder or holders of such Indebtedness or beneficiary or
beneficiaries of such Contingent Obligation (or a trustee or agent on behalf of
such holder or holders or beneficiary or beneficiaries) to cause, with the
giving of notice if required, such Indebtedness to become due prior to its
stated maturity or such Contingent Obligation to become payable or (B) default
in the observance or performance of any other agreement or condition relating to
any such Indebtedness or such Contingent Obligation or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event shall occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Contingent Obligation (or a
trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or such Contingent
Obligation to become payable; or
(v) (A) Any Guarantor or any of its Subsidiaries, Loral or
Loral SpaceCom shall commence any case, proceeding or other action (I) under any
existing or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an
order for relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debts, or (II) seeking appointment of a receiver, trustee,
custodian or other similar official for it or for all or any substantial part of
its assets, or such Guarantor or any of its Subsidiaries, Loral or Loral
SpaceCom, as the case may be, shall make a general assignment for the benefit of
its creditors; or (B) there shall be commenced against such Guarantor or any of
its Subsidiaries, Loral or Loral SpaceCom, any case, proceeding or other action
of a nature referred to in clause (A) above which (I) results in the entry of an
order for relief or any such adjudication or appointment or (II) remains
undismissed, undischarged or unbonded for a period of 60 days; or (C) there
shall be commenced against such Guarantor or any of its Subsidiaries, Loral or
Loral SpaceCom any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, restraint or similar process against all or
any substantial part of its assets which results in the entry of an order for
any such relief which shall not have been vacated, discharged, or stayed or
bonded pending appeal within 60 days from the entry thereof; or (D) such
Guarantor or any of its Subsidiaries, Loral or Loral SpaceCom shall take any
action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (A), (B), or (C) above; or
(E) such Guarantor or any of its Subsidiaries, Loral or Loral SpaceCom shall
generally not, or shall be unable to, or shall admit in writing its inability
to, pay its debts as they become due; or
(vi) (A) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (B) any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, shall exist with respect to any
Plan, (C) a Reportable Event shall occur with respect to, or proceedings shall
commence to have a trustee appointed, or a trustee shall be appointed, to
administer or to terminate, any Single Employer Plan, which Reportable Event or
commencement of proceedings or appointment of a trustee is, in the reasonable
opinion of the Required Lenders, likely to result in the termination of such
Plan for purposes of Title IV of ERISA, (D) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (E) such Guarantor or any Commonly
Controlled Entity shall, or is, in the reasonable opinion of the Required
Lenders, likely to, incur
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any liability in connection with a withdrawal from, or the Insolvency or
Reorganization of, a Multiemployer Plan, or (F) any other event or condition
shall occur or exist with respect to a Plan; and in each case in clauses (A)
through (F) above, such event or condition, together with all other such events
or conditions, if any, could subject such Guarantor or any of its Subsidiaries
to any tax, penalty or other liabilities in the aggregate material in relation
to the business, operations, property or financial or other condition of SatCom
and its Subsidiaries taken as a whole; or
(vii) One or more judgments or decrees shall be entered
against SatCom or any of its Subsidiaries involving in the aggregate a liability
(not paid or fully covered by insurance) of $1,000,000 or more and all such
judgments or decrees shall not have been vacated, discharged, stayed or bonded
pending appeal within 60 days from the entry thereof; or
(viii) any Security Document (including this Guarantee) shall
cease, for any reason, to be in full force and effect, or any Loan Party or any
Affiliate of any Loan Party shall so assert, or any Lien created by any of the
Security Documents shall cease to be enforceable and of the same effect and
priority purported to be created thereby; or
(ix) A Change of Control shall occur;
then, and in any such event, a SatCom Event of Default shall have occurred.
15. Authority of Collateral Agent and Administrative Agent.
Each Guarantor acknowledges that the rights and responsibilities of the
Collateral Agent and the Administrative Agent under this Guarantee with respect
to any action taken by the Collateral Agent or the Administrative Agent or the
exercise or non-exercise by the Collateral Agent or the Administrative Agent of
any option, right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Guarantee shall, as between the
Collateral Agent, the Administrative Agent and the Lenders, be governed by the
Collateral Agency Agreement and the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Collateral Agent or the Administrative Agent and such Guarantor,
the Collateral Agent or the Administrative Agent shall be conclusively presumed
to be acting as agent for the Secured Parties with full and valid authority so
to act or refrain from acting, and such Guarantor shall not be under any
obligation, or entitlement, to make any inquiry respecting such authority.
16. Notices. All notices, requests and demands to or upon the
Collateral Agent, the Administrative Agent, any Lender or any Guarantor to be
effective shall be in writing (or by telex, fax or similar electronic transfer
confirmed in writing) and shall be deemed to have been duly given or made when
delivered by hand or if given by mail, when deposited in the mails by certified
mail, return receipt requested, or if by telex, fax or similar electronic
transfer, when sent and receipt has been confirmed, addressed as follows:
(a) if to the Administrative Agent or any Lender, at its
address or transmission number for notices provided in Section 9.2 of the Credit
Agreement;
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(b) if to the Collateral Agent, at its address or transmission
number for notices provided on the signature pages of the Collateral Agency
Agreement; and
(c) if to any Guarantor, at its address or transmission number
for notices set forth under its signature below.
The Collateral Agent, the Administrative Agent, each Lender
and each Guarantor may change its address and transmission numbers for notices
by notice in the manner provided in this Section.
17. Severability. Any provision of this Guarantee which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
18. Integration. This Guarantee and the other Loan Documents
represent the agreement of the Loan Parties, the Collateral Agent, the
Administrative Agent and the Lenders with respect to the subject matter hereof,
and there are no promises, undertakings, representations or warranties by the
Collateral Agent, the Administrative Agent or any Lender relative to subject
matter hereof not expressly set forth or referred to herein or in the other Loan
Documents.
19. Amendments in Writing; No Waiver; Cumulative Remedies. (a)
Subject to subsection 9.1 of the Credit Agreement, none of the terms or
provisions of this Guarantee may be waived, amended, supplemented or otherwise
modified except by a written instrument executed by the Guarantors, the
Collateral Agent and the Administrative Agent.
(b) Neither the Collateral Agent, the Administrative Agent nor
any Lender shall by any act (except by a written instrument pursuant to Section
19(a) hereof), delay, indulgence, omission or otherwise be deemed to have waived
any right or remedy hereunder or to have acquiesced in any SatCom Default or
SatCom Event of Default or in any breach of any of the terms and conditions
hereof. No failure to exercise, nor any delay in exercising, on the part of the
Collateral Agent, the Administrative Agent or any Lender, any right, power or
privilege hereunder shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
A waiver by the Collateral Agent, the Administrative Agent or any Lender of any
right or remedy hereunder on any one occasion shall not be construed as a bar to
any right or remedy which the Collateral Agent, the Administrative Agent or such
Lender would otherwise have on any future occasion.
(c) The rights and remedies herein provided are cumulative,
may be exercised singly or concurrently and are not exclusive of any other
rights or remedies provided by law.
20. Section Headings. The section headings used in this
Guarantee are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
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21. Successors and Assigns. This Guarantee shall be binding
upon the successors and assigns of each Guarantor and shall inure to the benefit
of the Collateral Agent, the Administrative Agent and the Lenders and their
successors and assigns. No Guarantor may transfer any of its rights or
obligations under this Guarantee without the written consent of each Lender
except pursuant to Section 13(c).
22. Governing Law. This Guarantee shall be governed by, and
construed and interpreted in accordance with, the law of the State of New York.
23. Submission To Jurisdiction; Waivers. Each Guarantor hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Guarantee and the other Loan Documents to which it
is a party, or for recognition and enforcement of any judgement in respect
thereof, to the non-exclusive general jurisdiction of the Courts of the State of
New York, the courts of the United States of America for the Southern District
of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to such
Guarantor at its address set forth under its signature below or at such other
address of which the Administrative Agent shall have been notified pursuant
thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding referred
to in this subsection any special, exemplary, punitive or consequential damages.
24. Acknowledgments. Each Guarantor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Guarantee and the other Loan Documents;
(b) neither the Collateral Agent, the Administrative Agent nor
any Lender has any fiduciary relationship with or duty to any Loan Party arising
out of or in connection with this Guarantee or any of the other Loan Documents,
and the relationship between the Collateral Agent, the Administrative Agent and
Lenders, on one hand, and the Loan Parties, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and
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(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated hereby
among the Lenders or among the Loan Parties and the Lenders.
25. WAIVERS OF JURY TRIAL. EACH GUARANTOR, THE COLLATERAL
AGENT, THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS GUARANTEE OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
26. Regulatory Approvals. (a) Any provision contained herein
to the contrary notwithstanding, except for the security interests expressly
granted herein or therein or upon the exercise by the Collateral Agent or the
Administrative Agent of rights and remedies in accordance herewith or therewith
and pursuant to clause (b), below, upon the occurrence and continuation of an
Event of Default, this Agreement, the other Loan Documents and the transactions
contemplated hereby and thereby (i) do not and will not constitute, create, or
have the effect of constituting or creating, directly or indirectly, actual or
practical ownership of any Loan Parties by the Secured Parties, or control,
affirmative or negative, direct or indirect, by the Secured Parties over the
management or any other aspect of the operation of any Guarantor, which
ownership and control remain exclusively and at all times in such Guarantor and
(ii) do not and will not constitute the transfer, assignment, or disposition in
any manner, voluntarily or involuntarily, directly or indirectly, of any
license, permit, certificate or authorization at any time issued to any
Guarantor by the FCC, any other federal, state or local regulatory or
governmental bodies applicable to or having jurisdiction over such Guarantor or
any Governmental Authority, or the transfer of control of any such Guarantor
within the meaning of the Federal Communications Act of 1934, as amended, and
the respective rules and regulations thereunder and thereof, any other federal
or state laws, rules and regulations of other operating municipality regulatory
or governmental bodies applicable to or having jurisdiction over any Guarantor
as well as pursuant to the terms of any franchise, license or similar operating
right held by such Guarantor.
(b) Any provision contained herein to the contrary
notwithstanding, no action, including any foreclosure on, sale, transfer or
other disposition of, or the exercise of any right to vote or consent, shall be
taken hereunder by the Collateral Agent with respect to any item of the
Collateral unless and until all applicable requirements (if any) of the FCC
under the Federal Communications Act of 1934, as amended, and the respective
rules and regulations thereunder and thereof, as well as any other federal or
state laws, rules and regulations of other operating municipality regulatory or
governmental bodies applicable to or having jurisdiction over any Guarantor,
have been satisfied with respect to such action and there have been obtained
such consents, approvals and authorizations (if any) as may be required to be
obtained from the FCC, any operating municipality and any other Governmental
Authority under the terms of any franchise, license or similar operating right
held by such Guarantor. It is the intention of the parties hereto that the Liens
in favor of the Collateral Agent on the Collateral shall in all relevant aspects
be subject to and governed by said statutes, rules and regulations as well as
the terms of any franchise, license or similar operating right held by any
Guarantor and that nothing in this Agreement shall be construed to diminish the
control exercised by such Guarantor except in accordance with the provisions of
such statutory requirements and rules and regulations as well as
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the terms of any franchise, license or similar operating right held by such
Guarantor and the obtaining in advance of any necessary consents, approvals or
authorizations pursuant thereto. Each Guarantor agrees that upon request by the
Collateral Agent from time to time after which a Notice of Default is in effect,
it will use its reasonable best efforts to obtain any governmental, regulatory
or third party consents, approvals or authorizations referred to in this
Section 26.
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IN WITNESS WHEREOF, the undersigned has caused this Guarantee
to be duly executed and delivered by its duly authorized officer as of the day
and year first above written.
LORAL SATCOM LTD.
By: /s/ Xxxx X. Xxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Vice President
Address for Notices:
c/o Loral SpaceCom Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: General Counsel and Treasurer
Telex: 212-697-1105
Fax: 000-000-0000
000-000-0000
LORAL SATELLITE, INC.
By: /s/ Xxxx X. Xxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Vice President
Address for Notices:
c/o Loral SpaceCom Corporation
000 Xxxxx Xxxxxx
Attn: General Counsel and Treasurer
Xxx Xxxx, Xxx Xxxx 00000
Telex: 212-697-1105
Fax: 000-000-0000
000-000-0000
00
XXXX XX XXXXXXX, NATIONAL
ASSOCIATION, as Collateral Agent
By: /s/ Xxxxxxx Xxxxx
-----------------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President
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Annex 1 to
Guarantee and Collateral Agreement
ASSUMPTION AGREEMENT, dated as of ________________, 199_, made
by ______________________________, a ______________ corporation (the "Additional
Guarantor"), in favor of ____________________, as collateral agent (in such
capacity, the "Collateral Agent") for the banks and other financial institutions
(the "Lenders") parties to the Credit Agreement referred to below. All
capitalized terms not defined herein shall have the meaning ascribed to them in
such Credit Agreement.
W I T N E S S E T H :
WHEREAS, Globalstar, L.P. (the "Borrower"), the Lenders and
Bank of America, National Association, as Administrative Agent for the Lenders,
have entered into a Credit Agreement, dated as of August 5, 1999 (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement");
WHEREAS, in connection with the Credit Agreement, SatCom and
Loral Satellite (other than the Additional Guarantor) have entered into the
Guarantee and Collateral Agreement, dated as of August 5, 1999 (as amended,
supplemented or otherwise modified from time to time, the "Guarantee and
Collateral Agreement") in favor of the Collateral Agent for the benefit of the
Lenders;
WHEREAS, the Credit Agreement requires the Additional
Guarantor to become a party to the Guarantee and Collateral Agreement; and
WHEREAS, the Additional Guarantor has agreed to execute and
deliver this Assumption Agreement in order to become a party to the Guarantee
and Collateral Agreement;
NOW, THEREFORE, IT IS AGREED:
1. Guarantee and Collateral Agreement. By executing and
delivering this Assumption Agreement, the Additional Guarantor, as provided in
Section 11(p) of the Guarantee and Collateral Agreement, hereby becomes a party
to the Guarantee and Collateral Agreement as a Guarantor thereunder with the
same force and effect as if originally named therein as a Guarantor and, without
limiting the generality of the foregoing, hereby expressly assumes all
obligations and liabilities of a Guarantor thereunder. The Additional Guarantor
hereby represents and warrants that each of the representations and warranties
contained in Section 10 of the Guarantee and Collateral Agreement is true and
correct as to it on and as the date hereof (after giving effect to this
Assumption Agreement) as if made on and as of such date.
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2. GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK.
IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above written.
[ADDITIONAL GUARANTOR]
By:
-----------------------------------
Name:
Title:
