Document:

Exhibit 10.1

 

CONFORMED*
 EXECUTION VERSION

 

U.S. $1,000,000,000

 

FIVE YEAR CREDIT AGREEMENT*

 

Dated as of June 7, 2013

 

among

 

THE TRAVELERS COMPANIES, INC.

 

as Borrower

 

and

 

THE INITIAL LENDERS NAMED HEREIN

 

as Initial Lenders

 

and

 

WELLS FARGO BANK, NATIONAL ASSOCIATION

 

as Administrative Agent

 

and

 

WELLS FARGO SECURITIES, LLC

 

CITIGROUP GLOBAL MARKETS INC.

 

J.P. MORGAN SECURITIES LLC

 

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

 

U.S. BANK NATIONAL ASSOCIATION

 

as Joint Lead Arrangers and Joint Bookrunners

 

and

 

BANK OF AMERICA, N.A.

 

CITIBANK, N.A.

 

JPMORGAN CHASE BANK, N.A.

 

U.S. BANK NATIONAL ASSOCIATION

 

as Co-Syndication Agents

 

and

 

HSBC BANK USA, NATIONAL ASSOCIATION

 

as Documentation Agent

 

* Conformed to show signatures

 

 

TABLE OF CONTENTS

 

	
 
    	
Page
    
	
 
    
	
ARTICLE I
    
	
 
    
	
DEFINITIONS AND ACCOUNTING TERMS
    
	
 
    
	
SECTION 1.01.
    	
Certain   Defined Terms
    	
1
    
	
SECTION 1.02.
    	
Computation   of Time Periods
    	
16
    
	
SECTION 1.03.
    	
Accounting   Terms
    	
16
    
	
 
    
	
ARTICLE II
    
	
 
    
	
AMOUNTS AND TERMS OF THE REVOLVING CREDIT ADVANCES AND LETTERS OF   CREDIT
    
	
 
    
	
 
    
	
SECTION 2.01.
    	
The   Revolving Credit Advances and Letters of Credit
    	
16
    
	
SECTION 2.02.
    	
Making   the Revolving Credit Advances
    	
18
    
	
SECTION 2.03.
    	
Issuance   of and Drawings and Reimbursement Under Letters of Credit
    	
20
    
	
SECTION 2.04.
    	
Fees
    	
24
    
	
SECTION 2.05.
    	
Optional   Termination or Reduction of the Commitments
    	
25
    
	
SECTION 2.06.
    	
Repayment   of Revolving Credit Advances
    	
25
    
	
SECTION 2.07.
    	
Interest   on Revolving Credit Advances
    	
26
    
	
SECTION 2.08.
    	
Interest   Rate Determination
    	
27
    
	
SECTION 2.09.
    	
Optional   Conversion of Revolving Credit Advances
    	
28
    
	
SECTION 2.10.
    	
Prepayments   of Revolving Credit Advances
    	
28
    
	
SECTION 2.11.
    	
Increased   Costs
    	
28
    
	
SECTION 2.12.
    	
Illegality
    	
30
    
	
SECTION 2.13.
    	
Payments   and Computations
    	
30
    
	
SECTION 2.14.
    	
Taxes
    	
31
    
	
SECTION 2.15.
    	
Sharing   of Payments, Etc.
    	
33
    
	
SECTION 2.16.
    	
Evidence   of Debt
    	
34
    
	
SECTION 2.17.
    	
Use   of Proceeds
    	
34
    
	
SECTION 2.18.
    	
Increase   in the Aggregate Commitments
    	
35
    
	
SECTION 2.19.
    	
Extension   of Termination Date
    	
36
    
	
SECTION 2.20.
    	
Replacement   of Lenders
    	
38
    
	
SECTION 2.21.
    	
Cash   Collateral
    	
38
    
	
SECTION 2.22.
    	
Defaulting   Lenders
    	
39
    
	
ARTICLE III
    
	
 
    
	
CONDITIONS TO EFFECTIVENESS AND LENDING
    
	
 
    
	
SECTION 3.01.
    	
Conditions   Precedent to Effectiveness of Section 2.01
    	
41
    
	
SECTION 3.02.
    	
Conditions   Precedent to Each Revolving Credit Borrowing, Issuance, Commitment   Increase and Extension of the Termination Date
    	
42
    
	
SECTION 3.03.
    	
Determinations   Under Section 3.01
    	
43
    

 

 

i

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
Page
    
	
 
    
	
ARTICLE IV
    
	
 
    
	
REPRESENTATIONS AND WARRANTIES
    
	
 
    
	
SECTION 4.01.
    	
Representations   and Warranties of the Borrower
    	
43
    
	
 
    	
 
    	
 
    
	
ARTICLE V
    
	
 
    
	
COVENANTS OF THE BORROWER
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
SECTION 5.01.
    	
Affirmative   Covenants
    	
45
    
	
SECTION 5.02.
    	
Negative   Covenants
    	
47
    
	
SECTION 5.03.
    	
Financial   Covenant
    	
49
    
	
 
    
	
ARTICLE VI
    
	
 
    
	
EVENTS OF DEFAULT
    
	
 
    
	
SECTION 6.01.
    	
Events   of Default
    	
50
    
	
SECTION 6.02.
    	
Actions   in Respect of the Letters of Credit upon Default
    	
52
    
	
SECTION 6.03.
    	
Application   of Funds
    	
52
    
	
 
    	
 
    	
 
    
	
ARTICLE VII
    
	
 
    
	
THE AGENT
    
	
 
    
	
SECTION 7.01.
    	
Authorization   and Action
    	
53
    
	
SECTION 7.02.
    	
Agent’s   Reliance, Etc.
    	
54
    
	
SECTION 7.03.
    	
Delegation   of Duties
    	
55
    
	
SECTION 7.04.
    	
Rights   as a Lender
    	
55
    
	
SECTION 7.05.
    	
Lender   Credit Decision
    	
55
    
	
SECTION 7.06.
    	
Indemnification
    	
55
    
	
SECTION 7.07.
    	
Successor   Agent
    	
56
    
	
SECTION 7.08.
    	
Other   Agents
    	
57
    
	
 
    
	
ARTICLE VIII
    
	
 
    
	
MISCELLANEOUS
    
	
 
    
	
SECTION 8.01.
    	
Amendments,   Etc.
    	
57
    
	
SECTION 8.02.
    	
Notices,   Etc.
    	
58
    
	
SECTION 8.03.
    	
No   Waiver; Remedies
    	
59
    
	
SECTION 8.04.
    	
Costs;   Expenses; and Indemnification
    	
60
    
	
SECTION 8.05.
    	
Right   of Set-off
    	
61
    
	
SECTION 8.06.
    	
Binding   Effect; Integration
    	
61
    
	
SECTION 8.07.
    	
Assignments   and Participations
    	
62
    
	
SECTION 8.08.
    	
Confidentiality
    	
64
    
	
SECTION 8.09.
    	
Governing   Law
    	
65
    

 

ii

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
SECTION 8.10.
    	
Execution in Counterparts
    	
65
    
	
SECTION 8.11.
    	
Jurisdiction, Etc.
    	
65
    
	
SECTION 8.12.
    	
No Liability of the   Issuing Banks
    	
66
    
	
SECTION 8.13.
    	
No Advisory or   Fiduciary Responsibility
    	
66
    
	
SECTION 8.14.
    	
Survival of   Representations and Warranties
    	
66
    
	
SECTION 8.15.
    	
Patriot Act
    	
66
    
	
SECTION 8.16.
    	
Waiver of Jury Trial
    	
67
    

 

iii

 

	
Schedules
    
	
 
    
	
Schedule 1.01 — Lender Commitments
    
	
Schedule 4.01(e) — Accounting Matters
    
	
Schedule 5.02(a) — Existing Liens
    
	
Schedule 8.02 — Notice Information
    
	
 
    
	
Exhibits
    
	
 
    
	
Exhibit A 
    	
-
    	
Form of   Revolving Credit Note
    
	
Exhibit B   
    	
-
    	
Form of   Notice of Revolving Credit Borrowing
    
	
Exhibit C 
    	
-
    	
Form of   Assignment and Assumption
    
	
Exhibit D 
    	
-
    	
Form of   Opinion of Counsel for the Borrower
    

 

iv

 

FIVE YEAR CREDIT AGREEMENT

 

Dated as of June 7, 2013

 

THE TRAVELERS COMPANIES, INC., a Minnesota corporation (the “Borrower”), the banks, financial institutions and other institutional lenders party hereto (the “Initial Lenders”), BANK OF AMERICA, N.A., CITIBANK, N.A., JPMORGAN CHASE BANK, N.A. and U.S. BANK NATIONAL ASSOCIATION, as co-syndication agents, WELLS FARGO SECURITIES, LLC, CITIGROUP GLOBAL MARKETS INC., J.P. MORGAN SECURITIES LLC, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED and U.S. BANK NATIONAL ASSOCIATION, as joint lead arrangers (the “Joint Lead Arrangers”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, as administrative agent (the “Agent”) for the Lenders (as hereinafter defined), agree as follows:

 

ARTICLE I

 

DEFINITIONS AND ACCOUNTING TERMS

 

SECTION 1.01.  Certain Defined Terms.  As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

 

“Administrative Questionnaire” means an Administrative Questionnaire in the form from time to time in use by the Agent.

 

“Agreement” means this Five Year Credit Agreement dated as of June 7, 2013 among the Borrower, the Initial Lenders, the Agent and each Lender from time to time party hereto, together with all amendments, modifications, restatements, or supplements thereof.

 

“Agent” has the meaning specified in the preamble hereto.

 

“Affiliate” means, as to any Person, any other Person that, directly or indirectly, controls, is controlled by or is under common control with such Person.

 

“Agent’s Account” means the account of the Agent set forth on Schedule 8.02 maintained by the Agent at Wells Fargo, or such other account as the Agent may from time to time notify the Borrower and the Lenders.

 

“Applicable Anniversary” has the meaning specified in Section 2.19(a).

 

“Applicable Lending Office” means, with respect to each Lender, such Lender’s Domestic Lending Office in the case of a Base Rate Advance and such Lender’s Eurodollar Lending Office in the case of a Eurodollar Rate Advance.

 

“Applicable Margin” means for Base Rate Advances and Eurodollar Rate Advances, as of any date, a percentage per annum determined by reference to the Public Debt Rating in effect on such date as set forth below:

 

 

	
Public Debt Rating
   S&P/Moody’s
    	
 
    	
Applicable Margin for
   Eurodollar Rate
   Advances
    	
 
    	
Applicable Margin for
   Base Rate Advances
    	
 
    
	
Level   1
   At least AA- or Aa3
    	
 
    	
0.795
    	
%
    	
0.00
    	
%
    
	
Level   2
   Lower than Level 1 but at least A+ or A1
    	
 
    	
0.900
    	
%
    	
0.00
    	
%
    
	
Level   3
   Lower than Level 2 but at least A or A2
    	
 
    	
1.000
    	
%
    	
0.00
    	
%
    
	
Level   4
   Lower than Level 3 but at least A- or A3
    	
 
    	
1.100
    	
%
    	
0.10
    	
%
    
	
Level   5
   Lower than Level 4
    	
 
    	
1.300
    	
%
    	
0.30
    	
%
    

 

“Applicable Percentage” means, as of any date a percentage per annum determined by reference to the Public Debt Rating in effect on such date as set forth below:

 

	
Public Debt Rating
   S&P/Moody’s
    	
 
    	
Applicable
   Percentage
    	
 
    
	
Level   1
   At least AA- or Aa3
    	
 
    	
0.080
    	
%
    
	
Level   2  
   Lower than Level 1 but at least A+ or A1
    	
 
    	
0.100
    	
%
    
	
Level   3  
   Lower than Level 2 but at least A or A2
    	
 
    	
0.125
    	
%
    
	
Level   4  
   Lower than Level 3 but at least A- or A3
    	
 
    	
0.150
    	
%
    
	
Level   5  
   Lower than Level 4
    	
 
    	
0.200
    	
%
    

 

“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee, and accepted by the Agent, in substantially the form of Exhibit C hereto.

 

“Assuming Lender” has the meaning specified in Section 2.18(d).

 

“Assumption Agreement” has the meaning specified in Section 2.18(d)(ii).

 

“Auto-Extension Letter of Credit” has the meaning specified in Section 2.03(a)(iv).

 

2

 

“Available Amount” of any Letter of Credit means, at any time, unless otherwise specified herein, the stated amount of such Letter of Credit in effect at such time; provided, however, that with respect to any Letter of Credit that, by its terms or the terms of any Issuing Bank Document related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time.

 

“Base Rate” means for any day a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus 1/2 of 1%, (b) the rate of interest in effect for such day as publicly announced from time to time by Wells Fargo as its “prime rate,” and (c) the Eurodollar Rate plus 1.00%.  The “prime rate” is a rate set by Wells Fargo based upon various factors including Wells Fargo’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate.  Any change in such prime rate announced by Wells Fargo shall take effect at the opening of business on the day specified in the public announcement of such change.

 

“Base Rate Advance” means a Revolving Credit Advance that bears interest as provided in Section 2.07(a)(i).

 

“Board” means the Board of Governors of the Federal Reserve System of the United States of America.

 

“Business Day” means a day of the year on which banks are not required or authorized by law to close in New York City and, if the applicable Business Day relates to any Eurodollar Rate Advances, on which dealings are carried on in the London interbank market.

 

“Cash Collateral Account” has the meaning specified in Section 2.21(b).

 

“Cash Collateralize” means to pledge and deposit with or deliver to the Agent, for the benefit of the Agent or an Issuing Bank (as applicable) and the Lenders, as collateral for L/C Obligations (other than L/C Obligations owing in connection with a Secured Letter of Credit) or obligations of Lenders to fund participations in respect thereof (as the context may require), cash or deposit account balances or, if each of the Borrower and the Issuing Bank benefitting from such collateral shall agree, other credit support, in each case pursuant to documentation in form and substance reasonably satisfactory to (a) the Agent, (b) the applicable Issuing Bank, and (c) the Borrower.  “Cash Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.

 

“Commitment” means a Revolving Credit Commitment or a Letter of Credit Commitment.

 

“Commitment Date” has the meaning specified in Section 2.18(b).

 

“Commitment Increase” has the meaning specified in Section 2.18(a).

 

“Commitment Letter” the Commitment Letter dated as of May 6, 2013 among the Borrower, Wells Fargo, Wells Fargo Securities, LLC, Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc., JPMorgan Chase Bank, N.A., J.P. Morgan Securities LLC and U.S. Bank National Association.

 

3

 

“Confidential Information” means all non-public information that the Borrower furnishes to the Agent or any Lender, but does not include any such information that is or becomes generally available to the public or that is or becomes available to the Agent or such Lender from a source other than the Borrower, provided such source is reasonably believed by the Agent or such Lender, as applicable, not to be in violation of a confidentiality agreement with the Borrower.

 

“Consenting Lender” has the meaning specified in Section 2.19(b).

 

“Consolidated” refers to the consolidation of accounts in accordance with GAAP.

 

“Convert”, “Conversion” and “Converted” each refers to a conversion of Revolving Credit Advances of one Type into Revolving Credit Advances of the other Type pursuant to Section 2.08 or 2.09.

 

“Debt” of any Person means, without duplication, (a) all indebtedness of such Person for borrowed money, (b) all obligations of such Person for the deferred purchase price of property or services (other than trade payables incurred in the ordinary course of such Person’s business that (x) are not overdue by more than 120 days or (y) are being contested in good faith and by proper proceedings and as to which appropriate reserves are being maintained), (c) all obligations of such Person evidenced by notes, bonds, debentures or other similar instruments, (d) all obligations of such Person created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), (e) all obligations of such Person as lessee under leases that are or should be, in accordance with GAAP, recorded as capital leases (the amount of Debt attributable thereto to be the capitalized amount thereof in accordance with GAAP), (f) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances, (g) all reimbursement obligations of such Person in respect of drawings or payments made under letters of credit or similar extensions of credit, (h) all obligations of such Person in respect of Hedge Agreements, (i) all Debt of others referred to in clauses (a) through (h) above or clause (j) below guaranteed directly or indirectly in any manner by such Person, or in effect guaranteed directly or indirectly by such Person through an agreement (1) to pay or purchase such Debt or to advance or supply funds for the payment or purchase of such Debt, (2) to purchase, sell or lease (as lessee or lessor) property, or to purchase or sell services, primarily for the purpose of enabling the debtor to make payment of such Debt or to assure the holder of such Debt against loss, (3) to supply funds to or in any other manner invest in the debtor (including any agreement to pay for property or services irrespective of whether such property is received or such services are rendered) for the purpose of enabling the debtor to make payment of such Debt or (4) otherwise to assure the holder of any such Debt against loss, and (j) all Debt of others referred to in clauses (a) through (i) above secured by any Lien on property (including, without limitation, accounts and contract rights) owned by such Person (the amount of Debt attributable thereto to be equal to the lesser of (i) the amount of such Debt and (ii) the fair market value of the property subject to such Lien), even though such Person has not assumed or become liable for the payment of such Debt.  For purposes of calculating the amount of Debt pursuant to clause (h) of the foregoing definition, such amount shall be equal to the amount that would be payable (giving effect to netting arrangements) by the relevant Person if the Hedge Agreement were terminated at such time.  Notwithstanding anything herein to the contrary, none of the following shall constitute “Debt”: (A) surety bonds, fidelity bonds and other similar insurance products and (B) instruments issued by financial institutions at the request of the Borrower or one of its Subsidiaries with respect to which the Borrower or one of its Subsidiaries has a reimbursement or indemnification obligation to such financial institution and 

 

4

 

any agreement relating to the issuance of such instruments, which in each case is accounted for, or would be accounted for upon issuance, as an insurance liability.

 

“Default” means any Event of Default or any event that would constitute an Event of Default but for the requirement that notice be given or time elapse or both, in each case, as specified in Section 6.01.

 

“Defaulting Lender” means, subject to Section 2.22(b), any Lender that, as reasonably determined by the Agent (which determination shall be made either at the Agent’s discretion or promptly at the request of the Borrower), (a) has failed to perform any of its funding obligations hereunder, including in respect of its Revolving Credit Advances or participations in respect of Letters of Credit (other than Secured Letters of Credit), within three Business Days of the date required to be funded by it hereunder unless such failure is the result of one or more conditions precedent to funding not having been satisfied (provided that such Lender notifies the Borrower and the Agent in writing of such failure and specifically identifies in such writing each of the conditions precedent, together with any Default, that have not been satisfied), (b) has notified the Borrower or the Agent that it does not intend to comply with its funding obligations or has made a public statement to that effect with respect to its funding obligations hereunder or under other agreements in which it commits to extend credit unless such position is the result of one or more conditions precedent to funding not having been satisfied (provided that such Lender notifies the Borrower and the Agent in writing of such failure and specifically identifies each of the conditions precedent, together with any Default, that have not been satisfied), (c) has failed, within three Business Days after request by the Agent (which request shall be made either at the Agent’s discretion or promptly at the request of the Borrower), to confirm in a manner reasonably satisfactory to the Agent that it will comply with its funding obligations (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Agent and the Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, (ii) had a receiver, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or a custodian appointed for it, or (iii) taken any action in furtherance of, or indicated its consent to, approval of or acquiescence in any such proceeding or appointment; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a governmental authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such governmental authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender.  Any determination by the Agent (which determination shall be made either at the Agent’s discretion or promptly at the request of the Borrower) that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.22(b)) upon delivery of written notice of such determination to the Borrower, each Issuing Bank and each Lender.

 

“Disclosed Litigation” has the meaning specified in Section 3.01(b).

 

“Domestic Lending Office” means, with respect to any Lender, the office of such Lender specified as its “Domestic Lending Office” in such Lender’s Administrative Questionnaire or in the Assumption Agreement or the Assignment and Assumption pursuant to which it became a 

 

5

 

Lender, or such other office of such Lender as such Lender may from time to time specify to the Borrower and the Agent.

 

“Effective Date” has the meaning specified in Section 3.01.

 

“Eligible Assignee” means (i) a Lender; (ii) an Affiliate of a Lender; and (iii) any other Person approved by the Agent, each Issuing Bank and, unless an Event of Default has occurred and is continuing at the time any assignment is effected in accordance with Section 8.07, the Borrower, such approval not to be unreasonably withheld or delayed, provided, that if an Event of Default has occurred and is continuing such that the Borrower does not have a right of approval with respect to any Eligible Assignee under this clause (iii), such Person shall be a commercial bank organized or licensed under the laws of the United States, or any State thereof, or organized under the laws of any other country which is a member of the Organization for Economic Cooperation and Development, or a political subdivision of any such country, and having a combined capital and surplus of at least $500,000,000; provided, that such bank is acting through a branch agency located and licensed in the United States (unless the Borrower otherwise approves such Eligible Assignee); provided, however, that none of the Borrower, any Affiliate of the Borrower or any natural person shall qualify as an Eligible Assignee.

 

“Environmental Law” means any federal, state, local or foreign statute, law, ordinance, rule, regulation, code, order, judgment, decree or judicial or agency interpretation, policy or guidance relating to pollution or protection of the environment, health, safety or natural resources, including, without limitation, those relating to the use, handling, transportation, treatment, storage, disposal, release or discharge of hazardous materials.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder.

 

“ERISA Affiliate” means any Person that for purposes of Title IV of ERISA is a member of the Borrower’s controlled group, or under common control with the Borrower, within the meaning of Section 414 of the Internal Revenue Code.

 

“ERISA Event” means (a) (i) the occurrence of a reportable event, within the meaning of Section 4043 of ERISA, with respect to any Plan unless the 30-day notice requirement with respect to such event has been waived by the PBGC or would have been waived under the regulations in effect under Section 4043 of ERISA as of the date of this Agreement, or (ii) the requirements of subsection (1) of Section 4043(b) of ERISA are met with respect to a contributing sponsor, as defined in Section 4001(a)(13) of ERISA, of a Plan, and an event described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA is reasonably expected to occur with respect to such Plan within the following 30 days; (b) the application for a minimum funding standard waiver with respect to a Plan; (c) the provision by the administrator of any Plan of a notice of intent to terminate such Plan pursuant to Section 4041(a)(2) of ERISA (including any such notice with respect to a plan amendment referred to in Section 4041(e) of ERISA); (d) the cessation of operations at a facility of the Borrower or any ERISA Affiliate in the circumstances described in Section 4062(e) of ERISA that is treated as a withdrawal under such Section; (e) the withdrawal by the Borrower or any ERISA Affiliate from a Multiple Employer Plan during a plan year for which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA; (f) the imposition of a lien under Section 303(k) of ERISA with respect to any Plan; (g) the institution by the PBGC of proceedings to terminate a Plan pursuant to Section 4042 of ERISA, or the occurrence of any event or condition described in Section 4042 of ERISA that constitutes grounds for the termination of, or the appointment of a trustee to administer, a Plan, 

 

6

 

provided, however, that the event or condition described in Section 4042(a)(4) shall be an ERISA Event only if the PBGC shall have notified the Borrower or any ERISA Affiliate that it intends to terminate, or appoint a trustee to administer, a Plan on such basis; (h) the determination that any Plan is considered an at risk plan within the meaning of Section 303 of ERISA or Section 430 of the Internal Revenue Code; or (i) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon Borrower or any ERISA Affiliate.

 

“Eurodollar Lending Office” means, with respect to any Lender, the office of such Lender specified as its “Eurodollar Lending Office” in such Lender’s Administrative Questionnaire or in the Assumption Agreement or the Assignment and Assumption pursuant to which it became a Lender (or, if no such office is specified, its Domestic Lending Office), or in each such case, such other office of such Lender as such Lender may from time to time specify to the Borrower and the Agent.

 

“Eurodollar Rate” means:

 

(a)           for any Interest Period with respect to a Eurodollar Rate Advance, the rate per annum equal to the British Bankers Association LIBOR Rate or the successor thereto if the British Bankers Association is no longer making such a rate available (“LIBOR”), as published by Reuters (or such other commercially available source providing quotations of LIBOR as may be designated by the Agent from time to time) at approximately 11:00 A.M. (London time) two London Banking Days prior to the commencement of such Interest Period, for U.S. dollar deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period.  If such rate is not available at such time for any reason, then the “Eurodollar Rate” for such Interest Period shall be the rate per annum equal to the average of the Quoted Rates supplied to the Agent by the Reference Banks; and

 

(b)           for any interest calculation with respect to a Base Rate Advance on any date, the rate per annum equal to (i) LIBOR, at approximately 11:00 A.M. (London time) determined two London Banking Days prior to such date for U.S. dollar deposits being delivered in the London interbank market for a term of one month commencing that day or (ii) if such published rate is not available at such time for any reason, the rate per annum determined by the Agent to be the rate at which deposits in U.S. dollars for delivery on the date of determination in same day funds in the approximate amount of the Base Rate Advance being made or maintained and with a term equal to one month would be offered by Wells Fargo’s London Branch to major banks in the London interbank eurodollar market at their request at the date and time of determination.

 

“Eurodollar Rate Advance” means a Revolving Credit Advance that bears interest as provided in Section 2.07(a)(ii).

 

“Events of Default” has the meaning specified in Section 6.01.

 

“Excluded Taxes” shall mean, with respect to a Lender, Agent or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder or under the Revolving Credit Notes, (i) Taxes imposed on its overall net income, branch profits taxes and franchise and similar taxes imposed on it in lieu of net income taxes, by a jurisdiction as a result of the recipient’s present or former connection with such jurisdiction (other than a connection 

 

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arising solely from the transactions contemplated herein), including the jurisdiction in which an Applicable Lending Office is located, (ii) any U.S. withholding taxes imposed on amounts payable with respect to such Lender on the date on which (a) such Lender becomes a party to this agreement (other than pursuant to an assignment request by Borrower pursuant to Section 2.20), or (b) such Lender changes its Applicable Lending Office to which payments by or on behalf of the Borrower is made and which relocation occurs after such Lender becomes a Lender (other than changes in such Lender’s Eurodollar Lending Office to mitigate certain increased costs or funding restrictions imposed upon such Lender referred to in Section 2.11), except in each case to the extent that, pursuant to Section 2.14, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changes its Applicable Lending Office, (iii) Taxes imposed as a result of a Lender’s failure to comply with Section 2.14(f), except as provided in Section 2.14(g), and (iv) any withholding Taxes imposed under FATCA.

 

“Extension Date” has the meaning specified in Section 2.19(b).

 

“FATCA” means Sections 1471 through 1474 of the Code, as of the Effective Date (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code.

 

“Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Wells Fargo on such day on such transactions as determined by the Agent.

 

“Fronting Exposure” means, at any time there is a Defaulting Lender, with respect to an Issuing Bank, such Defaulting Lender’s Ratable Share of the outstanding L/C Obligations other than L/C Obligations owing in connection with a Secured Letter of Credit or as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof.

 

“GAAP” has the meaning specified in Section 1.03.

 

“Hedge Agreements” means interest rate swap, basis swaps, credit derivative transactions, forward rate transactions, cap, floor or collar agreements, interest rate future or option contracts, currency swap agreements, cross-currency rate swap transactions, currency future or option contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, and other similar agreements or any combination of the foregoing (including any options to enter into any of the foregoing).

 

“Honor Date” has the meaning specified in Section 2.03(c)(i).

 

“Increase Date” has the meaning specified in Section 2.18(a).

 

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“Increasing Lender” has the meaning specified in Section 2.18(b).

 

“Indemnified Taxes” means (i) all Taxes imposed with respect to a payment made pursuant to this Agreement other than Excluded Taxes and (ii) to the extent not otherwise described in (i), Other Taxes.

 

“Initial Lenders” has the meaning specified in the preamble hereto.

 

“Insurance Subsidiary” means any Subsidiary of the Borrower that is licensed by any governmental authority to engage in the insurance business by issuing insurance policies or entering into Reinsurance Agreements.

 

“Interest Period” means, for each Eurodollar Rate Advance comprising part of the same Revolving Credit Borrowing, the period commencing on the date of such Eurodollar Rate Advance or the date of the Conversion of any Base Rate Advance into such Eurodollar Rate Advance and ending on the last day of the period selected by the Borrower pursuant to the provisions below and, thereafter, with respect to Eurodollar Rate Advances, each subsequent period commencing on the last day of the immediately preceding Interest Period and ending on the last day of the period selected by the Borrower pursuant to the provisions below.  The duration of each such Interest Period shall be one, two, three or six months (or such other period as may be requested by the Borrower and acceptable to the Agent and each Lender), as the Borrower may, upon notice received by the Agent not later than 11:00 A.M. (New York City time) on the third Business Day prior to the first day of such Interest Period, select; provided, however, that:

 

(a)                                 the Borrower may not select any Interest Period that ends after the Termination Date;

 

(b)                                 Interest Periods commencing on the same date for Eurodollar Rate Advances comprising part of the same Revolving Credit Borrowing shall be of the same duration;

 

(c)                                  whenever the last day of any Interest Period would otherwise occur on a day other than a Business Day, the last day of such Interest Period shall be extended to occur on the next succeeding Business Day, provided, however, that, if such extension would cause the last day of such Interest Period to occur in the next following calendar month, the last day of such Interest Period shall occur on the next preceding Business Day; and

 

(d)                                 whenever the first day of any Interest Period occurs on a day of an initial calendar month for which there is no numerically corresponding day in the calendar month that succeeds such initial calendar month by the number of months equal to the number of months in such Interest Period, such Interest Period shall end on the last Business Day of such succeeding calendar month.

 

“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated and rulings issued thereunder.

 

“Invested Assets” means cash, cash equivalents, short term investments, investments held for sale and any other assets which are treated as investments under GAAP.

 

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“ISP” means, with respect to any Letter of Credit, the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice, Inc. (or such later version thereof as may be in effect at the time of Issuance).

 

“Issuance” means, with respect to any Letter of Credit, the issuance, amendment (to the extent that same increases the Available Amount thereunder), renewal or extension of such Letter of Credit (other than an extension of an Auto-Extension Letter of Credit).

 

“Issuing Bank” means each of Wells Fargo, U.S. Bank National Association and any other Lender designated as an “Issuing Bank” hereunder by written notice to such effect to the Agent by the Borrower and such Lender so long as such Lender expressly agrees to perform in accordance with their terms all of the obligations that by the terms of this Agreement are required to be performed by it as an Issuing Bank and notifies the Agent of its Applicable Lending Office (which information shall be recorded by the Agent in the Register).

 

“Issuing Bank Documents” means, with respect to any Letter of Credit, the Letter of Credit Application, and any other document, agreement and instrument entered into by the applicable Issuing Bank and the Borrower (or any Subsidiary) or in favor of the applicable Issuing Bank and relating to such Letter of Credit.

 

“L/C Obligations” means, as at any date of determination, the aggregate amount available to be drawn under all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts.  For purposes of computing the amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with the definition of “Available Amount”.  For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.

 

“L/C Related Documents” has the meaning specified in Section 2.06(b)(i).

 

“Lenders” means, on any date of determination, each Initial Lender, each Issuing Bank, each Assuming Lender, and each Person that has become a party hereto pursuant to Section 8.07, which are party hereto on such date.

 

“Letter of Credit” has the meaning specified in Section 2.01(b)(i).

 

“Letter of Credit Application” means an application and agreement for the issuance or amendment of a Letter of Credit in the form from time to time in use by the applicable Issuing Bank.

 

“Letter of Credit Commitment” means, at any time, with respect to each Issuing Bank, the obligation of such Issuing Bank to issue Letters of Credit for the account of the Borrower and its specified Subsidiaries in (a) the amount set forth opposite the Issuing Bank’s name on Schedule 1.01 hereto or (b) in the notice designating such Issuing Bank as an Issuing Bank hereunder, in each case as such amount may be increased at or prior to such time pursuant to Section 2.18 or reduced at or prior to such time pursuant to Section 2.05.

 

“Letter of Credit Facility” means, at any time, an amount equal to the least of (a) the aggregate amount of the Issuing Banks’ Letter of Credit Commitments at such time, (b) $100,000,000, as such amount may be increased at or prior to such time pursuant to 

 

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Section 2.18 and (c) the aggregate amount of the Revolving Credit Commitments, as such amount may be reduced or increased at or prior to such time pursuant to Section 2.05 or 2.18.

 

“Letter of Credit Fee” has the meaning specified in Section 2.04(b).

 

“Lien” means any lien, security interest or other charge or encumbrance of any kind, including, without limitation, the lien or retained security title of a conditional vendor and mortgage, deed of trust or other encumbrance on title to real property.

 

“London Banking Day” means any day on which dealings in U.S. dollar deposits are conducted by and between banks in the London interbank eurodollar market.

 

“Mandatory Convertible Securities” means, as of any date, debt issued by the Borrower that is mandatorily convertible into common equity so long as the Borrower provides satisfactory evidence to the Agent and the Required Lenders that such debt is afforded equity capital credit by S&P.

 

“Margin Stock” has the meaning assigned to such term in Regulation U.

 

“Material Adverse Change” means any material adverse change in the business, financial condition or results of operations of the Borrower and its Subsidiaries taken as a whole.

 

“Material Adverse Effect” means a material adverse effect on (a) the business, financial condition or operations of the Borrower and its Subsidiaries taken as a whole, (b) the legality, validity or enforceability of this Agreement or any Revolving Credit Note or (c) the ability of the Borrower to perform its payment obligations under this Agreement or any Revolving Credit Note.

 

“Moody’s” means Moody’s Investors Service, Inc.

 

“Multiemployer Plan” means a multiemployer plan, as defined in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate is making or accruing an obligation to make contributions, or has within any of the preceding five plan years made or accrued an obligation to make contributions.

 

“Multiple Employer Plan” means, at a particular time, a Single Employer Plan, as defined in Section 4001(a)(15) of ERISA, (a) that is maintained for employees of the Borrower or any ERISA Affiliate and at least one contributing sponsor of such plan is a Person other than the Borrower and the ERISA Affiliates or (b) in respect of which the Borrower or any ERISA Affiliate would under Section 4064 or 4069 of ERISA be deemed to be a “contributing sponsor” as defined in Section 4001(a)(13) of ERISA if such plan were terminated at such time.

 

“Net Worth” of the Borrower means, as of any date, its total shareholders’ equity determined in accordance with GAAP plus (a) the amount of Trust Preferred Securities to the extent that the amount of Trust Preferred Securities do not exceed 15% of Total Capital plus (b) the amount of Mandatory Convertible Securities to the extent that the amount of Mandatory Convertible Securities plus Trust Preferred Securities do not in the aggregate exceed 25% of Total Capital.

 

“Non-Consenting Lender” has the meaning specified in Section 2.19(b).

 

“Non-Extension Notice Date” has the meaning specified in Section 2.03(a)(iv).

 

 

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“Non-U.S. Lender” has the meaning specified in Section 2.14(f).

 

“Notice of Revolving Credit Borrowing” has the meaning specified in Section 2.02(a).

 

“Other Taxes” means any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies that arise from any payment made hereunder or under the Revolving Credit Notes or any other documents to be delivered hereunder or from the execution, delivery or registration of, performing under, or otherwise with respect to, this Agreement or the Revolving Credit Notes or any other documents to be delivered hereunder.

 

“Participant Register” has the meaning specified in Section 8.07(h).

 

“Patriot Act” has the meaning specified in Section 8.15.

 

“PBGC” means the Pension Benefit Guaranty Corporation (or any successor).

 

“Permitted Liens” means:  (a) Liens for taxes, imposts, duties, assessments and governmental charges, withholdings imposed by any governmental authority or levies to the extent not required to be paid under Section 5.01(b) hereof; (b) Liens imposed by law, such as materialmen’s, mechanics’, carriers’, workmen’s and repairmen’s Liens and other similar Liens arising in the ordinary course of business securing obligations that are not overdue for a period of more than 60 days; (c) pledges or deposits to secure obligations under workers’ compensation laws or similar legislation or to secure public or statutory obligations; (d) easements, rights of way and other encumbrances on title to real property that do not render title to the property encumbered thereby unmarketable or materially adversely affect the use of such property for its present purposes; (e) Liens consisting of pledges or deposits of cash or securities made to secure the performance of bids, trade contracts (other than for borrowed money), leases or subleases, statutory obligations, utilities, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business; and (f) Liens consisting of pledges or deposits of cash or securities made to secure swaps and other derivatives entered into by the Borrower or any of its Subsidiaries to hedge against risks arising in the ordinary course of business in connection with transactions not prohibited under this Agreement (and not entered into for speculative purposes).

 

“Person” means an individual, partnership, corporation (including a business trust), joint stock company, trust, unincorporated association, joint venture, limited liability company or other entity, or a government or any political subdivision or agency thereof.

 

“Plan” means a Single Employer Plan or a Multiple Employer Plan.

 

“Platform” has the meaning specified in Section 8.02(b).

 

“Primary Policies” means any insurance policies issued by an Insurance Subsidiary.

 

“Public Debt Rating” means, as of any date, the rating that has been most recently announced by either S&P or Moody’s, as the case may be, for non-credit enhanced long-term senior unsecured debt issued by the Borrower.  For purposes of the foregoing, (a) if only one of S&P and Moody’s shall have in effect a Public Debt Rating, the Applicable Margin and the Applicable Percentage shall be determined by reference to the available rating; (b) if neither S&P nor Moody’s shall have in effect a Public Debt Rating, the Applicable Margin and the Applicable Percentage will be set in accordance with Level 5 under the definition of “Applicable Margin” or 

 

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“Applicable Percentage”, as the case may be; (c) if the ratings established by S&P and Moody’s shall fall within different levels, the Applicable Margin and the Applicable Percentage shall be based upon the higher rating unless such ratings differ by two or more levels, in which case the applicable level will be one level below the higher of such levels; (d) if any rating established by S&P or Moody’s shall be changed, such change shall be effective as of the date on which such change is first announced publicly by the rating agency making such change; and (e) if S&P or Moody’s shall change the basis on which ratings are established, each reference to the Public Debt Rating announced by S&P or Moody’s, as the case may be, shall refer to the then equivalent rating by S&P or Moody’s, as the case may be.

 

“Public Filings” means the public filings of the Borrower.

 

“Quotation Day” means, in respect of the determination of the Eurodollar Rate for any Interest Period, the day on which quotations would normally be given by prime banks in the London interbank market for U.S. Dollar deposits for delivery on the first day of such Interest Period; provided that if quotations would normally be given on more than one date, the Quotation Day for such Interest Period shall be the last of such dates.

 

“Quoted Rate” means, with respect to any Revolving Credit Borrowing, Conversion or continuation, the rate at which U.S. dollar deposits for delivery on the first day of the relevant Interest Period in immediately available funds in the approximate amount of the Eurodollar Rate Borrowing being made, Converted or continued are offered by the applicable Reference Bank in the London interbank market at 11:00 A.M. (London time) on the Quotation Day prior to the commencement of such Interest Period.

 

“Ratable Share” of any amount means, with respect to any Lender at any time, subject to adjustment as provided in Section 2.22, the product of such amount times a fraction the numerator of which is the amount of such Lender’s Revolving Credit Commitment at such time (or, if the Revolving Credit Commitments shall have been terminated pursuant to Section 2.05 or 6.01, such Lender’s Revolving Credit Commitment as in effect immediately prior to such termination) and the denominator of which is the aggregate amount of all Revolving Credit Commitments at such time (or, if the Revolving Credit Commitments shall have been terminated pursuant to Section 2.05 or 6.01, the aggregate amount of all Revolving Credit Commitments as in effect immediately prior to such termination).

 

“Reference Banks” means Wells Fargo, Bank of America, N.A., Citibank, N.A., JPMorgan Chase Bank, N.A., and U.S. Bank National Association.

 

“Register” has the meaning specified in Section 8.07(e).

 

“Regulation U” means Regulation U of the Board as from time to time in effect.

 

“Reinsurance Agreements” means any agreement, contract, treaty, certificate or other arrangement whereby the Borrower or any Subsidiary agrees to assume from or reinsure an insurer or reinsurer all or part of the liability of such insurer or reinsurer under a policy or policies of insurance issued by such insurer or reinsurer.

 

“Required Lenders” means at any time Lenders owed more than 50% in interest of the then aggregate unpaid principal amount of the Revolving Credit Advances and L/C Obligations owing to Lenders, or, if no such principal amount is then outstanding, Lenders having more than 50% of the Revolving Credit Commitments.

 

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“Restricted Margin Stock” means Margin Stock owned by the Borrower or any Subsidiary which represents not more than 25% of the aggregate value (determined in accordance with Regulation U), on a Consolidated basis, of the property and assets of the Borrower and the Subsidiaries that is subject to the provisions of Section 5.02(a).

 

“Revolving Credit Advance” means an advance by a Lender to the Borrower as part of a Revolving Credit Borrowing and refers to a Base Rate Advance or a Eurodollar Rate Advance (each of which shall be a “Type” of Revolving Credit Advance).

 

“Revolving Credit Borrowing” means a borrowing consisting of simultaneous Revolving Credit Advances of the same Type made by each of the Lenders pursuant to Section 2.01.

 

“Revolving Credit Commitment” means as to any Lender (a) the amount set forth opposite such Lender’s name on Schedule 1.01 hereto as such Lender’s “Revolving Credit Commitment”, (b) if such Lender has become a Lender hereunder pursuant to an Assumption Agreement, the amount set forth in such Assumption Agreement or (c) if such Lender has entered into an Assignment and Assumption, the amount set forth for such Lender in the Register maintained by the Agent pursuant to Section 8.07(e), as such amount may be reduced pursuant to Section 2.05 or increased pursuant to Section 2.18.

 

“Revolving Credit Note” means a promissory note of the Borrower payable to the order of any Lender, delivered pursuant to a request made under Section 2.16 in substantially the form of Exhibit A hereto, evidencing the aggregate indebtedness of the Borrower to such Lender resulting from the Revolving Credit Advances made by such Lender, together with all amendments, modifications, restatements, or supplements thereof.

 

“S&P” means Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc., and any successor thereto.

 

“Secured L/C Account” means an interest bearing deposit account, over which the Agent shall have control (as determined in accordance with the Uniform Commercial Code) upon terms as may be reasonably satisfactory to the Agent and the Borrower, to be established and maintained by the Borrower with the Agent or another financial institution selected by the Borrower.

 

“Secured Letter of Credit” means a Letter of Credit irrevocably designated as such by the Borrower for which the Borrower maintains on deposit in the Secured L/C Account cash in an amount equal to the Available Amount of such Letter of Credit.  The Borrower may by notice to the Agent from time to time pursuant to Section 2.03(g) designate which outstanding Letters of Credit at such time shall be “Secured Letters of Credit.”

 

“SEC” means the Securities and Exchange Commission, or any governmental authority succeeding to any of its principal functions.

 

“Significant Subsidiary” means any Subsidiary that constitutes a “significant subsidiary” under Regulation S-X promulgated by the Securities and Exchange Commission, as in effect from time to time.

 

“Single Employer Plan” means, at a particular time, a single employer plan, as defined in Section 4001(a)(15) of ERISA, (a) that is maintained for employees of the Borrower or any ERISA Affiliate and no Person other than the Borrower and the ERISA Affiliates is a 

 

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contributing sponsor of such plan or (b) in respect of which the Borrower or any ERISA Affiliate would under Section 4069 of ERISA be deemed to be a “contributing sponsor” as defined in Section 4001(a)(13) of ERISA if such plan were terminated at such time.

 

“St. Paul Fire” means St. Paul Fire and Marine Insurance Company, a Minnesota corporation.

 

“Subsidiary” of any Person means any corporation, partnership, joint venture, limited liability company, trust or estate of which (or in which) more than 50% of the issued and outstanding capital interests having ordinary voting power to elect a majority of the Board of Directors or comparable governing body of such entity (irrespective of whether at the time capital interests of any other class or classes of such entity shall or might have voting power upon the occurrence of any contingency) is at the time directly or indirectly owned or controlled by such Person, by such Person and one or more of its other Subsidiaries or by one or more of such Person’s other Subsidiaries.

 

“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any governmental authority, including any interest, additions to tax or penalties applicable thereto.

 

“Termination Date” means, for any Lender, the earlier of (a) June 7, 2018, subject to the extension thereof for such Lender pursuant to Section 2.19 or, if such date is not a Business Day, the immediately preceding Business Day and (b) the date of termination in whole of the Commitments pursuant to Section 2.05 or 6.01; provided, however, that the Termination Date of any Lender that is a Non-Consenting Lender to any requested extension pursuant to Section 2.19 shall be the Termination Date of such Lender in effect immediately prior to the applicable Extension Date for all purposes of this Agreement.

 

“Total Capital” means the sum, without duplication, of (a) all items that would, in accordance with GAAP, be classified as indebtedness on a Consolidated balance sheet of the Borrower and its consolidated Subsidiaries, (b) total Consolidated shareholders’ equity of the Borrower and its consolidated Subsidiaries determined in accordance with GAAP, (c) Trust Preferred Securities and (d) Mandatory Convertible Securities.

 

“Trust Preferred Securities” means, as of any date, all items in respect of trust preferred securities that would, in accordance with GAAP, be classified as indebtedness on a Consolidated balance sheet (or the footnotes thereto) of the Borrower and its consolidated Subsidiaries.

 

“Unissued Letter of Credit Commitment” means, with respect to any Issuing Bank, the obligation of such Issuing Bank to issue Letters of Credit for the account of the Borrower or its specified Subsidiaries in an amount equal to the excess of (a) the amount of its Letter of Credit Commitment over (b) the aggregate Available Amount of all Letters of Credit issued by such Issuing Bank.

 

“Unreimbursed Amount” has the meaning specified in Section 2.03(c)(i).

 

“Unrestricted Margin Stock” means any Margin Stock owned by the Borrower or any Subsidiary which is not Restricted Margin Stock.

 

“Unused Commitment” means, with respect to each Lender at any time, (a) such Lender’s Revolving Credit Commitment at such time minus (b) the sum of (i) the aggregate 

 

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principal amount of all Revolving Credit Advances made by such Lender (in its capacity as a Lender) and outstanding at such time, plus (ii) such Lender’s Ratable Share of (A) the aggregate Available Amount of all the Letters of Credit outstanding at such time and (B) the aggregate principal amount of all Revolving Credit Advances made by each Issuing Bank pursuant to Section 2.03(c) that have not been ratably funded by such Lender and outstanding at such time.

 

“Voting Stock” means capital stock issued by a corporation, or equivalent interests in any other Person, the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even if the right so to vote has been suspended by the happening of such a contingency.

 

“Wells Fargo” means Wells Fargo Bank, National Association and its permitted successors and assigns.

 

SECTION 1.02.  Computation of Time Periods.  In this Agreement in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each mean “to but excluding”.

 

SECTION 1.03.  Accounting Terms.  All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles as in effect from time to time (“GAAP”); provided that, if the Borrower notifies the Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change in GAAP or in the application thereof shall have become effective (“Fixed GAAP”) until such notice shall have been withdrawn or such provision amended in accordance herewith; provided that after the initial quarter in which such change in GAAP or in the application thereof occurs, such provision shall only be required to be interpreted on the basis of Fixed GAAP as described above to the extent reasonably practicable as determined in good faith by the Borrower (and then only until such notice shall have been withdrawn or such provision amended in accordance herewith); provided, further that in the event that Borrower determines in good faith that interpreting such provision on the basis of Fixed GAAP after the initial quarter in which such change in GAAP or in the application thereof occurs is not reasonably practicable, then the Borrower and the Agent shall negotiate in good faith to amend such provision within 90 days of the request for such amendment (it being understood that if the Borrower and the Agent are unable to agree on an amendment within such a time period, the Agreement shall continue in full force and effect and the Borrower and the Agent shall continue in good faith to seek agreement on an amendment).

 

ARTICLE II

 

AMOUNTS AND TERMS OF THE REVOLVING CREDIT ADVANCES AND LETTERS OF CREDIT

 

SECTION 2.01.  The Revolving Credit Advances and Letters of Credit.

 

(a)                                 Revolving Credit Advances.  Each Lender severally agrees, on the terms and conditions hereinafter set forth, to make Revolving Credit Advances in United States dollars to the Borrower from time to time on any Business Day during the period from the Effective Date until the Termination Date for such Lender in an amount not to exceed such Lender’s Unused Commitment 

 

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(immediately prior to the making of such Revolving Credit Advance).  Each Revolving Credit Borrowing shall be in an aggregate amount of $10,000,000 or an integral multiple of $1,000,000 in excess thereof and shall consist of Revolving Credit Advances of the same Type made, or continued as or Converted into Eurodollar Rate Advances or Base Rate Advances, on the same day by the Lenders ratably according to their respective Revolving Credit Commitments.  Within the limits of each Lender’s Revolving Credit Commitment, the Borrower may borrow under this Section 2.01(a), prepay pursuant to Section 2.10 and reborrow under this Section 2.01(a).

 

(b)                                 Letters of Credit.

 

(i)                                     Each Issuing Bank severally agrees, on the terms and conditions hereinafter set forth, in reliance upon the agreements of the other Lenders set forth in this Agreement, to issue and amend standby letters of credit (each, a “Letter of Credit”) for the account of the Borrower and its specified Subsidiaries from time to time on any Business Day during the period from the Effective Date until the seventh Business Day prior to the Termination Date for such Issuing Bank in an aggregate Available Amount (i) for all Letters of Credit not to exceed at any time the Letter of Credit Facility at such time, (ii) for all Letters of Credit issued by such Issuing Bank not to exceed at any time such Issuing Bank’s Letter of Credit Commitment at such time and (iii) for each such Letter of Credit not to exceed an amount equal to the Unused Commitments (immediately prior to such Issuance) of the Lenders at such time.  No Letter of Credit shall have an expiration date (including all rights of the Borrower or the beneficiary to require renewal) later than five Business Days prior to the Termination Date, unless all Lenders have approved such expiration date.  Within the limits referred to above, the Borrower may from time to time request the Issuance of Letters of Credit under this Section 2.01(b).

 

(ii)                                  Subject to Section 2.03(a)(iv), unless otherwise agreed by the Issuing Bank and all the Lenders, no Issuing Bank shall issue any Letter of Credit if the expiry date of the requested Letter of Credit would occur more than twelve months after the date of issuance.

 

(iii)                               No Issuing Bank shall be under any obligation to issue any Letter of Credit if:

 

(A)                               any order, judgment or decree of any governmental authority or arbitrator shall by its terms purport to enjoin or restrain such Issuing Bank from issuing the Letter of Credit, or any law applicable to such Issuing Bank or any directive (whether or not having the force of law) from any governmental authority with jurisdiction over such Issuing Bank shall prohibit, or direct that such Issuing Bank refrain from, the issuance of letters of credit generally or the Letter of Credit in particular or shall impose upon such Issuing Bank with respect to the Letter of Credit any restriction, reserve or capital requirement (for which such Issuing Bank is not otherwise entitled to be compensated hereunder) not in effect on the Effective Date, or shall impose upon such Issuing Bank any unreimbursed loss, cost or expense which was not applicable on the Effective Date (and for which such Issuing Bank is not otherwise entitled to be compensated hereunder) and which, in each case, such Issuing Bank in good faith deems material to it;

 

(B)                               the Issuance of such Letter of Credit would violate one or more policies of such Issuing Bank applicable to Letters of Credit generally, so long as such policies are consistently applied by such Issuing Bank to its customers and to letters of credit issued by it, such policies are not unusual to similarly situated financial institutions and such policies are not contrary to the express contractual obligations of such Issuing Bank under this Agreement;

 

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(C)                               except as otherwise agreed by the Agent and such Issuing Bank, the Letter of Credit is in an initial stated amount less than $500,000;

 

(D)                               the Letter of Credit is to be denominated in a currency other than U.S. dollars; or

 

(E)                                any Lender is at that time a Defaulting Lender, unless such Issuing Bank has entered into arrangements, including the delivery of Cash Collateral, satisfactory to such Issuing Bank (in its reasonable discretion) with the Borrower or such Lender to eliminate such Issuing Bank’s actual or potential Fronting Exposure (after giving effect to Section 2.22(a)(iv)) with respect to the Defaulting Lender arising from either the Letter of Credit then proposed to be issued or that Letter of Credit and all other L/C Obligations as to which such Issuing Bank has actual or potential Fronting Exposure, as it may elect in its reasonable discretion;

 

(iv)                              An Issuing Bank shall, subject to clauses (i), (ii), and (iii) above, amend any Letter of Credit at the request of the Borrower if such Issuing Bank would be permitted at such time to issue the Letter of Credit in its amended form under the terms hereof; provided, that if such Issuing Bank would not be permitted to issue the Letter of Credit in its amended form, it may amend such Letter of Credit so long as such amendment does not increase the amount of such Letter of Credit, extend the expiration date (including all rights of the Borrower or the beneficiary to require renewal) later than seven Business Days prior to the Termination Date, or provide for an expiry date of such Letter of Credit more than twelve months after the date of such amendment, and further so long as the beneficiary of the Letter of Credit accepts the proposed amendment to the Letter of Credit.

 

(v)                                 Each Issuing Bank shall act on behalf of the Lenders with respect to any Letters of Credit issued by such Issuing Bank and the Issuing Bank Documents associated therewith, and such Issuing Bank shall have all of the benefits and immunities (A) provided to the Agent in Article VII with respect to any acts taken or omissions suffered by such Issuing Bank in connection with Letters of Credit issued by it or proposed to be issued by it and Issuing Bank Documents pertaining to such Letters of Credit as fully as if the term “Agent” as used in Article VII included such Issuing Bank with respect to such acts or omissions, and (B) as additionally provided herein with respect to the such Issuing Bank.

 

SECTION 2.02.  Making the Revolving Credit Advances.

 

(a)                                 Except as otherwise provided in Section 2.03(c), each Revolving Credit Borrowing shall be made on notice, given not later than (x) 11:00 A.M. (New York City time) on the third Business Day prior to the date of the proposed Revolving Credit Borrowing in the case of a Revolving Credit Borrowing consisting of Eurodollar Rate Advances or (y) 11:00 A.M. (New York City time) on the date of the proposed Revolving Credit Borrowing in the case of a Revolving Credit Borrowing consisting of Base Rate Advances, by the Borrower to the Agent, which shall give to each Lender prompt notice thereof by facsimile, telecopier or other electronic means.  Each such notice of a Revolving Credit Borrowing (a “Notice of Revolving Credit Borrowing”) shall be by telephone, confirmed immediately in writing, or facsimile or telecopier in substantially the form of Exhibit B hereto, specifying therein the requested (i) date of such Revolving Credit Borrowing, (ii) Type of Revolving Credit Advances comprising such Revolving Credit Borrowing, (iii) aggregate amount of such Revolving Credit Borrowing, and (iv) in the case of a Revolving Credit Borrowing consisting of Eurodollar Rate Advances, initial Interest Period for each such Revolving Credit Advance.  Each Lender shall, before 1:00 P.M. (New York City time) on the date of such Revolving Credit Borrowing, make available for the 

 

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account of its Applicable Lending Office to the Agent at the Agent’s Account, in same day funds, such Lender’s ratable portion of such Revolving Credit Borrowing.  After the Agent’s receipt of such funds and upon fulfillment of the applicable conditions set forth in Article III, the Agent will promptly make such funds available to the Borrower at the Agent’s address referred to in Section 8.02.

 

(b)                                 Anything in Section 2.02(a) above to the contrary notwithstanding, (i) the Borrower may not select Eurodollar Rate Advances for any Revolving Credit Borrowing if the aggregate amount of such Revolving Credit Borrowing is less than $10,000,000 or if the obligation of the Lenders to make Eurodollar Rate Advances shall then be suspended pursuant to Section 2.08 or 2.12 and (ii) the Eurodollar Rate Advances may not be outstanding as part of more than twelve separate Revolving Credit Borrowings.

 

(c)                                  In the case of any Revolving Credit Borrowing that the related Notice of Revolving Credit Borrowing specifies is to be comprised of Eurodollar Rate Advances, the Borrower shall indemnify each Lender against any loss, cost or expense incurred by such Lender as a result of any failure of the Borrower to borrow such funds on the date specified in such Notice of Revolving Credit Borrowing, whether as a result of any failure to fulfill on or before the date specified in such Notice of Revolving Credit Borrowing for such Revolving Credit Borrowing the applicable conditions set forth in Section 3.02 or otherwise, including, without limitation, any loss (excluding loss of anticipated profits, indirect losses and special or consequential damages), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to fund the Revolving Credit Advance to be made by such Lender as part of such Revolving Credit Borrowing when such Revolving Credit Advance, as a result of such failure, is not made on such date.

 

(d)                                 Unless the Agent shall have received notice from a Lender prior to the date of any Revolving Credit Borrowing of Eurodollar Rate Advances (or in the case of any Revolving Credit Borrowing of Base Rate Advances, prior to 1:00 P.M. (New York City time) on the date of such Revolving Credit Borrowing) that such Lender will not make available to the Agent such Lender’s ratable portion of such Revolving Credit Borrowing, the Agent may assume that such Lender has made or will make such portion available to the Agent on the date of such Revolving Credit Borrowing in accordance with Section 2.02(a) and the Agent may, in reliance upon such assumption, make available to the Borrower on such date a corresponding amount.  If and to the extent that such Lender shall not have so made such ratable portion available to the Agent, such Lender and the Borrower severally agree to repay to the Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to the Borrower until the date such amount is repaid to the Agent, at (i) in the case of the Borrower, the interest rate applicable at the time to Revolving Credit Advances comprising such Revolving Credit Borrowing and (ii) in the case of such Lender, the Federal Funds Rate.  If such Lender shall repay to the Agent such corresponding amount, such amount so repaid shall constitute such Lender’s Revolving Credit Advance as part of such Revolving Credit Borrowing for purposes of this Agreement.

 

(e)                                  The failure of any Lender to make the Revolving Credit Advance to be made by it as part of any Revolving Credit Borrowing shall not relieve any other Lender of its obligation, if any, hereunder to make its Revolving Credit Advance on the date of such Revolving Credit Borrowing, but no Lender shall be responsible for the failure of any other Lender to make the Revolving Credit Advance to be made by such other Lender on the date of any Revolving Credit Borrowing.

 

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SECTION 2.03.  Issuance of and Drawings and Reimbursement Under Letters of Credit.

 

(a)                                 Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension Letters of Credit.

 

(i)                                     Each Letter of Credit shall be issued or amended, as the case may be, upon the request of the Borrower delivered to the applicable Issuing Bank (with a copy to the Agent) in the form of a Letter of Credit Application, appropriately completed and signed by a duly authorized officer of the Borrower.  Such Letter of Credit Application must be received by the applicable Issuing Bank and the Agent not later than 11:00 A.M. at least two Business Days (or such later date and time as the Agent and such Issuing Bank may agree in a particular instance in their sole discretion) prior to the proposed issuance date or date of amendment, as the case may be.  In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the applicable Issuing Bank: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; (G) the purpose and nature of the requested Letter of Credit; and (H) such other matters as the applicable Issuing Bank may reasonably request.

 

(ii)                                  In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the applicable Issuing Bank (A) the Letter of Credit to be amended; (B) the proposed date of amendment thereof (which shall be a Business Day); (C) the nature of the proposed amendment; and (D) such other matters as such Issuing Bank may reasonably request.  Additionally, the Borrower shall furnish to each Issuing Bank and the Agent such other documents and information pertaining to such requested Letter of Credit Issuance, including any Issuing Bank Documents, as such Issuing Bank or the Agent may reasonably request.

 

(iii)                               Promptly after receipt of any Letter of Credit Application, the applicable Issuing Bank will confirm with the Agent (by telephone or in writing) that the Agent has received a copy of such Letter of Credit Application from the Borrower and, if not, such Issuing Bank will provide the Agent with a copy thereof.  Unless the applicable Issuing Bank has received written notice from any Lender, the Agent or the Borrower, at least one Business Day prior to the requested date of issuance or amendment of the applicable Letter of Credit, that one or more applicable conditions contained in Section 3.02 shall not then be satisfied, then, subject to the terms and conditions hereof, such Issuing Bank shall, on the requested date, issue a Letter of Credit for the account of the Borrower or its applicable Subsidiary or enter into the applicable amendment, as the case may be, in each case in a format that is consistent with such Issuing Bank’s usual and customary business practices.

 

(iv)                              If the Borrower so requests in any applicable Letter of Credit Application, the applicable Issuing Bank may, in its sole discretion, agree to issue a Letter of Credit that has automatic extension provisions (each, an “Auto-Extension Letter of Credit”); provided that any such Auto-Extension Letter of Credit must permit the applicable Issuing Bank to prevent any such extension at least once in each twelve-month period (commencing with the date of Issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the “Non-Extension Notice Date”) in each such twelve-month period to be agreed upon at the time such Letter of Credit is issued.  Unless otherwise directed by the applicable Issuing Bank, the Borrower shall not be required to make a specific request to such Issuing Bank for any such 

 

 

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extension.  Once an Auto-Extension Letter of Credit has been issued, the Lenders shall be deemed to have authorized (but may not require) the applicable Issuing Bank to permit the extension of such Letter of Credit at any time to an expiry date not more than twelve months after the date of such extension, and not later than seven days prior to the Termination Date; provided, however, that the applicable Issuing Bank shall not permit any such extension if (A) such Issuing Bank has determined that it would not be permitted, or would have no obligation, at such time to issue such Letter of Credit in its revised form (as extended) under the terms hereof (by reason of the provisions of clause (ii) or (iii) of Section 2.01(b) or otherwise), or (B) an Event of Default has occurred and is continuing and it has received notice (which may be by telephone or in writing) on or before the day that is seven Business Days before the Non-Extension Notice Date from the Agent that the Required Lenders have elected not to permit such extension.

 

(v)                                 Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, the applicable Issuing Bank will also deliver to the Borrower and the Agent a true and complete copy of such Letter of Credit or amendment.

 

(b)                                 Participations.  Immediately upon the Issuance of each Letter of Credit (or an amendment to a Letter of Credit increasing or decreasing the amount thereof) and without any further action on the part of the applicable Issuing Bank or any Lender, such Issuing Bank hereby grants to each Lender, and each Lender hereby acquires from such Issuing Bank, a participation in such Letter of Credit equal to such Lender’s Ratable Share of the Available Amount of such Letter of Credit.  The Borrower hereby agrees to each such participation.  Each Lender acknowledges and agrees that its obligation to acquire participations pursuant to this Section 2.03(b) in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or reduction or termination of the Revolving Credit Commitments, and that each such payment in respect of the purchase of such participations shall be made without any offset, abatement, withholding or reduction whatsoever.  Each Lender further acknowledges and agrees that its participation in each Letter of Credit will be automatically adjusted to reflect such Lender’s Ratable Share of the Available Amount of such Letter of Credit at each time such Lender’s Revolving Credit Commitment is amended pursuant to a Commitment Increase in accordance with Section 2.18, an assignment in accordance with Section 8.07 or otherwise pursuant to this Agreement.

 

(c)                                  Drawing and Reimbursements; Funding of Participations.

 

(i)                                     Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, the applicable Issuing Bank shall promptly notify the Borrower and the Agent thereof.  Not later than 1:00 P.M. (New York City time) on the date of any payment by the applicable Issuing Bank under a Letter of Credit (each such date, an “Honor Date”), the Borrower shall reimburse such Issuing Bank through the Agent in an amount equal to the amount of such drawing; provided that the applicable Issuing Bank has notified the Borrower by 10:00 A.M. (New York City time) on the Honor Date that such drawing is to be paid on the Honor Date, otherwise the Borrower shall reimburse such Issuing Bank, together with interest at the Base Rate plus the Applicable Margin, on the Business Day immediately following the day that the Borrower receives such notice from such Issuing Bank.  If the Borrower fails to so reimburse such Issuing Bank by such time, such Issuing Bank shall so notify the Agent and the Agent shall promptly notify each Lender of the Honor Date, the amount of the unreimbursed drawing (the “Unreimbursed Amount”), and the amount of such Lender’s Ratable Share thereof.  In such event (but subject to the parenthetical at the end of the last sentence of this Section 2.03(c)(i)), payment of such drawing shall be deemed to be a Revolving Credit 

 

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Borrowing consisting of Base Rate Advances disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regard to (A) whether the making of such a Revolving Credit Advance would exceed such Issuing Bank’s Unused Commitment or (B) the satisfaction of the conditions set forth in Section 3.02.  Any notice given by an Issuing Bank or the Agent pursuant to this Section 2.03(c)(i) may be given by telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.  Any Revolving Credit Borrowing deemed to be made pursuant to this Section 2.03(c)(i) to reimburse the Issuing Bank for any Unreimbursed Amount shall relieve the Borrower of its obligations to reimburse such Unreimbursed Amount (except that such Unreimbursed Amount will not be deemed to be a Revolving Credit Borrowing and the Borrower shall not be relieved of its obligation to reimburse such Unreimbursed Amount, if an Event of Default under Section 6.01(e) shall have occurred, and this Section 2.03(c)(i) shall not relieve the Borrower’s obligations under any Revolving Credit Borrowing).

 

(ii)                                  Each Lender shall upon any notice pursuant to Section 2.03(c)(i) make funds available (and the Agent may apply Cash Collateral or, as provided in Section 2.03(g), cash on deposit in the Secured L/C Account for this purpose) for the account of the applicable Issuing Bank at the Agent’s Account in an amount equal to its Ratable Share of any Unreimbursed Amount not later than 1:00 P.M. (New York City time) on the Business Day (which may be the Honor Date) specified in such notice by the Agent, whereupon, each Lender that so makes funds available shall be deemed to have made a Revolving Credit Advance to the Borrower in such amount, or, if an Event of Default under Section 6.01(e) shall have occurred, such Lender shall be deemed to have purchased a participation in such Unreimbursed Amount.  The Agent shall remit the funds so received to the applicable Issuing Bank.

 

(iii)                               Until each Lender funds its Revolving Credit Advance or participation in any Unreimbursed Amount pursuant to this Section 2.03(c) to reimburse the applicable Issuing Bank for any amount drawn under any Letter of Credit, interest in respect of such Lender’s Ratable Share of such amount shall be solely for the account of such Issuing Bank.

 

(iv)                              Each Lender’s obligation to make Revolving Credit Advances or purchase participations in any Unreimbursed Amounts to reimburse the applicable Issuing Bank for amounts drawn under Letters of Credit, as contemplated by this Section 2.03(c), shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Lender may have against such Issuing Bank, the Borrower or any other Person for any reason whatsoever, (B) the occurrence or continuance of a Default, (C) the failure to satisfy the conditions set forth in Section 3.02, or (D) any other occurrence, event or condition, whether or not similar to any of the foregoing.

 

(v)                                 If any Lender fails to make available to the Agent for the account of the applicable Issuing Bank any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.03(c) by the time specified in Section 2.03(c)(ii), then, without limiting the other provisions of this Agreement, such Issuing Bank shall be entitled to recover from such Lender (acting through the Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to such Issuing Bank at a rate per annum equal to the Federal Funds Rate, plus any administrative, processing or similar fees customarily charged by such Issuing Bank in connection with the foregoing.  If such Lender pays such amount (with interest and fees as aforesaid), the amount so paid shall constitute such Lender’s Base Rate Advance included in the relevant Revolving Credit Borrowing.  A certificate of the applicable Issuing Bank submitted to 

 

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any Lender (through the Agent) with respect to any amounts owing under this Section 2.03(c)(v) shall be conclusive absent manifest error.

 

(d)                                 Repayment of Participations.

 

(i)                                     At any time after an Issuing Bank has made a payment under any Letter of Credit and has received from any Lender such Lender’s participation purchase in respect of such payment in accordance with Section 2.03(c), if the Agent receives for the account of such Issuing Bank any payment in respect of the related Unreimbursed Amount or interest thereon (whether directly from the Borrower or otherwise, including proceeds of Cash Collateral or, as provided in Section 2.03(g), applied thereto by the Agent), the Agent will distribute to such Lender its Ratable Share thereof in the same funds as those received by the Agent.

 

(ii)                                  If any payment received by the Agent for the account of the applicable Issuing Bank pursuant to Section 2.03(c)(i) is required to be returned under any of the circumstances described in Section 2.14 (including pursuant to any settlement entered into by such Issuing Bank in its discretion), each Lender shall pay to the Agent for the account of such Issuing Bank its Ratable Share thereof on demand of the Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Lender, at a rate per annum equal to the Federal Funds Rate from time to time in effect.  The obligations of the Lenders under this Section 2.03(d)(ii) shall survive the payment in full of all amounts owing hereunder and the termination of this Agreement.

 

(e)                                  Applicability of ISP.  Unless otherwise expressly agreed by the applicable Issuing Bank and the Borrower when a Letter of Credit is issued the rules of the ISP shall apply to each Letter of Credit.

 

(f)                                   Failure to Make Revolving Credit Advances.  The failure of any Lender to make the Revolving Credit Advance to be made by it or to purchase the participation to be purchased by it on the date specified in Section 2.03(c) shall not relieve any other Lender of its obligation hereunder to make its Revolving Credit Advance or to purchase its participation on such date, but no Lender shall be responsible for the failure of any other Lender to make the Revolving Credit Advance to be made by such other Lender or to purchase the participation to be purchased by it on such date.

 

(g)                                  Secured Letters of Credit.  The Borrower may from time to time irrevocably designate any Letter of Credit to be a Secured Letter of Credit by notice to the Agent (with a copy to the applicable Issuing Bank).  Upon any drawing under any Secured Letter of Credit, to the extent cash is on deposit in the Secured L/C Account, such cash shall, at the Borrower’s option, be applied to reimburse the applicable Issuing Bank to the extent permitted by applicable law and to the extent the Borrower elects not to reimburse such drawing as provided in Section 2.03(c).  Subject to Section 6.02, to the extent any Secured Letters of Credit shall have expired or been drawn upon, any excess amounts in such Secured L/C Account shall be returned to the Borrower at the Borrower’s request.

 

(h)                                 Letters of Credit Issued for Subsidiaries.  Notwithstanding that a Letter of Credit issued or outstanding hereunder is in support of any obligations of, or is for the account of, a Subsidiary, the Borrower shall be obligated to reimburse such Issuing Bank hereunder for any and all drawings under such Letter of Credit.  The Borrower hereby acknowledges that the Issuance of Letters of Credit for the account of Subsidiaries inures to the benefit of the Borrower, and that the Borrower’s business derives substantial benefits from the businesses of such Subsidiaries.

 

 

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SECTION 2.04.  Fees.

 

(a)                                 Facility Fee.  Subject to adjustment as provided in Section 2.22, the Borrower agrees to pay to the Agent for the account of each Lender a facility fee on the aggregate amount of such Lender’s Commitment from the date hereof in the case of each Initial Lender and from the effective date specified in the Assumption Agreement or in the Assignment and Assumption pursuant to which it became a Lender in the case of each other Lender until the Termination Date of such Lender at a rate per annum equal to the Applicable Percentage in effect from time to time, payable in arrears quarterly on the last day of each March, June, September and December, commencing June 30, 2013, and on the Termination Date of such Lender and on the date after the Termination Date of such Lender on which all Revolving Credit Advances and L/C Obligations owing to such Lender cease to be outstanding.

 

(b)                                 Letter of Credit Fees.

 

(i)                                     The Borrower shall pay to the Agent for the account of each Lender in accordance with its Ratable Share a Letter of Credit fee (the “Letter of Credit Fee”) for (A) the average daily aggregate Available Amount of all Secured Letters of Credit issued and outstanding from time to time at a rate per annum equal to 0.50% and (B) the average daily aggregate Available Amount of all other Letters of Credit issued and outstanding from time to time at a rate per annum equal to the Applicable Margin for Eurodollar Rate Advances in effect from time to time; provided that, any Letter of Credit Fees otherwise payable for the account of a Defaulting Lender with respect to any Letter of Credit (other than a Secured Letter of Credit) as to which such Defaulting Lender has not provided Cash Collateral satisfactory to the applicable Issuing Bank pursuant to this Section 2.04 shall be payable, to the maximum extent permitted by applicable law, to the other Lenders in accordance with the upward adjustments in their respective Ratable Shares allocable to such Letter of Credit pursuant to Section 2.22(a)(iv), and to such Issuing Bank for its own account to the extent of such Issuing Bank’s Fronting Exposure with the balance of such fee being retained by the Borrower.  Letter of Credit Fees shall be (A) due and payable to each Lender on the first Business Day after the end of each March, June, September and December, commencing with the first such date to occur after the Issuance of such Letter of Credit, on the Termination Date of such Lender and thereafter on the date that any Letter of Credit expiring after the Termination Date of such Lender ceases to be outstanding and (B) computed on a quarterly basis in arrears.  In calculating the Letter of Credit Fee, if there is any change in the Applicable Margin during any quarter, the daily Available Amount under each Letter of Credit shall be computed and multiplied by the Applicable Margin separately for each period during such quarter that such Applicable Margin was in effect.

 

(ii)                                  The Borrower shall pay directly to the applicable Issuing Bank for its own account a fronting fee with respect to each Letter of Credit issued by such Issuing Bank, at such rate and at such times as are separately agreed in writing between the Borrower and such Issuing Bank.  In addition, the Borrower shall pay directly to the applicable Issuing Bank for its own account the customary issuance, presentation, amendment and other processing fees, and other standard out-of-pocket costs and charges, of such Issuing Bank relating to letters of credit as from time to time in effect as the Borrower and such Issuing Bank shall agree.  Such customary fees and standard costs and charges shall be reasonably documented and shall be due and payable promptly upon receipt of an invoice and are nonrefundable.

 

(c)                                  Agent’s Fees.  The Borrower shall pay to the Agent for its own account such fees as may from time to time be separately agreed between the Borrower and the Agent.

 

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SECTION 2.05.  Optional Termination or Reduction of the Commitments.  The Borrower shall have the right, upon at least three Business Days’ notice to the Agent, to terminate in whole or permanently reduce ratably in part the Unused Commitments or the Unissued Letter of Credit Commitments of the Lenders, provided that each partial reduction shall be in the aggregate amount of $10,000,000 or an integral multiple of $1,000,000 in excess thereof; provided further that a notice of termination of the Commitments delivered by the Borrower may state that such notice is conditioned upon the effectiveness of other credit facilities, in which case such notice may be revoked by the Borrower (by notice to the Agent on or prior to the specified effective date) if such condition is not satisfied.

 

SECTION 2.06.  Repayment of Revolving Credit Advances.

 

(a)                                 Revolving Credit Advances.  The Borrower shall repay to the Agent for the account of each Lender on its Termination Date the aggregate principal amount of the Revolving Credit Advances then outstanding and owing to such Lender.

 

(b)                                 Letter of Credit Drawings.  The obligation of the Borrower to reimburse drawings under any Letter of Credit shall be unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including, without limitation, the following circumstances (it being understood that any such payment by the Borrower is without prejudice to, and does not constitute a waiver of, any rights the Borrower might have or might acquire as a result of the payment by any Lender of any draft or the reimbursement by the Borrower thereof, including, without limitation, pursuant to Section 8.12):

 

(i)                                     any lack of validity or enforceability of this Agreement, any Revolving Credit Note, any Letter of Credit Application, any Letter of Credit or any other agreement or instrument relating thereto (all of the foregoing being, collectively, the “L/C Related Documents”);

 

(ii)                                  any change in the time, manner or place of payment of, or in any other term of, all or any of the obligations of the Borrower in respect of any L/C Related Document or any other amendment or waiver of or any consent to departure from all or any of the L/C Related Documents;

 

(iii)                               the existence of any claim, set-off, defense or other right that the Borrower may have at any time against any beneficiary or any transferee of a Letter of Credit (or any Persons for which any such beneficiary or any such transferee may be acting), any Issuing Bank, the Agent, any Lender or any other Person, whether in connection with the transactions contemplated by the L/C Related Documents or any unrelated transaction;

 

(iv)                              any statement or any other document presented under a Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect;

 

(v)                                 payment by any Issuing Bank under a Letter of Credit against presentation of a draft or certificate that does not comply with the terms of such Letter of Credit;

 

(vi)                              any exchange, release or non-perfection of any collateral, or any release or amendment or waiver of or consent to departure from any guarantee, for all or any of the obligations of the Borrower in respect of the L/C Related Documents; or

 

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(vii)                           without prejudice to the other provisions of this Agreement, any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including, without limitation, any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Borrower or a guarantor.

 

The Borrower shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance by the applicable Issuing Bank with the Borrower’s instructions with respect to such Letter of Credit or other irregularity with respect to such Letter of Credit, the Borrower will promptly notify the applicable Issuing Bank.

 

In the event and to the extent that the provisions of any Letter of Credit Application shall conflict with this Agreement, the provisions of this Agreement shall govern (and in no event shall any provisions of any such Letter of Credit Application regarding representations, warranties, covenants, events of default, set-off rights or collateral be effective).

 

SECTION 2.07.  Interest on Revolving Credit Advances.

 

(a)                                 Scheduled Interest.  The Borrower shall pay interest on the unpaid principal amount of each Revolving Credit Advance owing to each Lender from the date of such Revolving Credit Advance until such principal amount shall be paid in full, at the following rates per annum:

 

(i)                                     Base Rate Advances.  During such periods as such Revolving Credit Advance is a Base Rate Advance, a rate per annum equal at all times to the sum of (x) the Base Rate in effect from time to time plus (y) the Applicable Margin in effect from time to time, payable in arrears quarterly on the last day of each March, June, September and December during such periods and on the date such Base Rate Advance shall be Converted or paid in full.

 

(ii)                                  Eurodollar Rate Advances.  During such periods as such Revolving Credit Advance is a Eurodollar Rate Advance, a rate per annum equal at all times during each Interest Period for such Revolving Credit Advance to the sum of (x) the Eurodollar Rate for such Interest Period for such Revolving Credit Advance plus (y) the Applicable Margin in effect from time to time, payable in arrears on the last day of such Interest Period and, if such Interest Period has a duration of more than three months, on each day that occurs during such Interest Period every three months from the first day of such Interest Period and on the date such Eurodollar Rate Advance shall be Converted or paid in full.

 

(b)                                 Default Interest.  Upon the occurrence and during the continuance of an Event of Default, the Agent may, and upon the request of the Required Lenders shall, require the Borrower to pay interest (“Default Interest”) on (i) the overdue and unpaid principal amount of each Revolving Credit Advance owing to each Lender which is not paid when due whether at stated maturity, upon acceleration or otherwise, payable in arrears on the dates referred to in clause (a)(i) or (a)(ii) above, at a rate per annum equal at all times to 2% per annum above the rate per annum required to be paid on such Revolving Credit Advance pursuant to clause (a)(i) or (a)(ii) above and (ii) to the fullest extent permitted by law, the amount of any interest, fee, including any Letter of Credit Fees, or other amount payable hereunder that is not paid when due, from the date such amount shall be due until such amount shall be paid in full, payable in arrears on the date such amount shall be paid in full and on demand, at a rate per annum (the “Default Rate”) equal at all times to 2% per annum above the rate per annum required to be paid on Base Rate Advances pursuant to clause (a)(i) above; provided, however, that following acceleration of the Revolving Credit Advances pursuant to Section 6.01, Default Interest shall accrue and be payable hereunder whether or not previously required by the Agent.

 

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SECTION 2.08.  Interest Rate Determination.

 

(a)                                 If with respect to any determination of the Eurodollar Rate the Agent determines (which determination shall be conclusive absent manifest error) that LIBOR will not be available on a Quotation Day using Reuters or another commercially available source providing quotations of LIBOR, the Agent shall promptly request that each Reference Bank supply it with its Quoted Rate, and the Eurodollar Rate to be used to determine the interest rate applicable to the relevant Revolving Credit Borrowing, Conversion or continuation shall be the average of the Quoted Rates supplied to the Agent by the Reference Banks.  If the Agent makes such request and one or more Reference Banks fails to supply its Quoted Rate to the Agent by 11:30 A.M. (London time) on a Quotation Day, the applicable Eurodollar Rate shall (subject to Section 2.08(f)) be determined on the basis of the Quoted Rates supplied by the remaining Reference Banks.  The Agent shall give prompt notice to the Borrower and the Lenders of the applicable interest rate determined by the Agent for purposes of Section 2.07(a)(i) or (ii), and the rate, if any, furnished by each Reference Bank for the purpose of determining the interest rate under Section 2.07(a)(ii).

 

(b)                                 If the Required Lenders reasonably determine that for any reason in connection with any request for a Eurodollar Rate Loan or a Conversion thereto or continuation thereof that (i) U.S. dollar deposits are not being offered to banks in the London interbank eurodollar market for the applicable amount and Interest Period of such Eurodollar Rate Advance, (ii) adequate and reasonable means do not exist for determining the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Advance or in connection with an existing or proposed Base Rate Advance, or (iii) the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Advance does not adequately and fairly reflect the cost to such Lenders of funding such Advance, the Agent will promptly so notify the Borrower and each Lender.  Thereafter, (A) the obligation of the Lenders to make or maintain Eurodollar Rate Advances shall be suspended, and (B) in the event of a determination described in the preceding sentence with respect to the Eurodollar Rate component of the Base Rate, the utilization of the Eurodollar Rate component in determining the Base Rate shall be suspended, in each case until the Agent (upon the instruction of the Required Lenders) revokes such notice.  Upon receipt of such notice, the Borrower may revoke any pending request for a Borrowing of, Conversion to or continuation of Eurodollar Rate Advance or, failing that, will be deemed to have converted such request into a request for a Revolving Credit Borrowing of Base Rate Advances in the amount specified therein.

 

(c)                                  If the Borrower shall fail to select the duration of any Interest Period for any outstanding Eurodollar Rate Advances in accordance with the provisions contained in the definition of “Interest Period” in Section 1.01, the Agent will forthwith so notify the Borrower and the Lenders and such Revolving Credit Advances will automatically, on the last day of the then existing Interest Period therefor, Convert into Base Rate Advances.

 

(d)                                 On the date on which the aggregate unpaid principal amount of Eurodollar Rate Advances comprising any Revolving Credit Borrowing shall be reduced, by payment or prepayment or otherwise, to less than $10,000,000, such Eurodollar Rate Advances shall automatically Convert into Base Rate Advances.

 

(e)                                  If an Event of Default has occurred and is continuing and the Required Lenders through the Agent so notify the Borrower, then, so long as such Event of Default is continuing (i) each Eurodollar Rate Advance will automatically, on the last day of the then existing Interest Period therefor, Convert into a Base Rate Advance and (ii) the obligation of the Lenders to make, or to Convert Eurodollar Rate Advances into, Eurodollar Rate Advances shall be suspended.

 

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(f)                                   Without limitation of the provisions of Section 2.08(b), if, with respect to any Revolving Credit Borrowing, Conversion or continuation for which the Eurodollar Rate is to be determined by reference to the Quoted Rates supplied to the Agent by the Reference Banks in accordance with Section 2.08(a), no Reference Banks supply the Agent with a Quoted Rate, then the Agent shall give notice thereof to the Borrower and the Lenders in writing as promptly as practicable thereafter, and the interest rate applicable to such Revolving Credit Borrowing, Conversion or continuation shall be the Base Rate plus the Applicable Margin.

 

SECTION 2.09.  Optional Conversion of Revolving Credit Advances.  The Borrower may on any Business Day, upon notice given to the Agent not later than 11:00 A.M. (New York City time) on the third Business Day prior to the date of the proposed Conversion and subject to the provisions of Sections 2.08 and 2.12, Convert all Revolving Credit Advances of one Type comprising the same Revolving Credit Borrowing into Revolving Credit Advances of the other Type; provided, however, that any Conversion of Eurodollar Rate Advances into Base Rate Advances shall be made only on the last day of an Interest Period for such Eurodollar Rate Advances, any Conversion of Base Rate Advances into Eurodollar Rate Advances shall be subject to Section 2.02(b) and no Conversion of any Revolving Credit Advances shall result in more separate Revolving Credit Borrowings than permitted under Section 2.02(b).  Each such notice of a Conversion shall, within the restrictions specified above, specify (i) the date of such Conversion, (ii) the Revolving Credit Advances to be Converted, and (iii) if such Conversion is into Eurodollar Rate Advances, the duration of the initial Interest Period for each such Revolving Credit Advance.  Each notice of Conversion shall be irrevocable and binding on the Borrower.

 

SECTION 2.10.  Prepayments of Revolving Credit Advances.  The Borrower may, upon notice at least two Business Days’ prior to the date of such prepayment, in the case of Eurodollar Rate Advances, and not later than 11:00 A.M. (New York City time) on the date of such prepayment, in the case of Base Rate Advances, to the Agent stating the proposed date and aggregate principal amount of the prepayment, and if such notice is given, the Borrower shall prepay the outstanding principal amount of the Revolving Credit Advances comprising part of the same Revolving Credit Borrowing in whole or ratably in part, together with accrued interest to the date of such prepayment on the principal amount prepaid; provided, however, that (x) each partial prepayment shall be in an aggregate principal amount of $10,000,000 or an integral multiple of $1,000,000 in excess thereof and (y) in the event of any such prepayment of a Eurodollar Rate Borrowing, the Borrower shall be entitled to select the Eurodollar Rate Borrowings to be prepaid and shall be obligated to reimburse the Lenders in respect thereof pursuant to Section 8.04(c).

 

SECTION 2.11.  Increased Costs.

 

(a)                                 If any governmental authority shall have in effect at any time during the term of this Agreement any reserve, liquid asset or similar requirement with respect to any category of deposits or liabilities customarily used to fund Eurodollar Rate Advances or by reference to which interest rates applicable to Eurodollar Rate Advances are determined, and the result of such requirement shall be to increase the cost to any Lender of making, funding or maintaining any Eurodollar Rate Advances (excluding for purposes of this Section 2.11 any such increased costs resulting from (i) Indemnified Taxes (as to which Section 2.14 shall govern) and Excluded Taxes and (ii) changes in the basis of taxation of overall net income or overall gross income by the United States or by the foreign jurisdiction or state under the laws of which such Lender is organized or has its Applicable Lending Office, or any political subdivision thereof) and such Lender shall have requested, by notice to the Borrower and the Agent (which notice shall specify the costs applicable to such Lender), compensation under this paragraph, then the Borrower will pay to such Lender following delivery of such notice (until the earlier of the date such Lender shall advise the Borrower that such requirement is no longer in effect or the date

 

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such Lender shall withdraw such request) such additional amounts as shall be necessary to compensate such Lender for such increased costs;

 

(b)                                 If, due to either (i) the introduction of or any change in or in the interpretation of any law or regulation or (ii) the compliance with (A) any guideline or request from any central bank or other governmental authority (whether or not having the force of law) after the date hereof or (B) (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act or any request, rule, guideline or directive thereunder or issued in connection therewith or (y) any request, rule, guidelines or directive promulgated by the Bank of International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case under this clause (y) pursuant to Basel III, there shall be any increase in the cost to any Lender of agreeing to make or making, funding or maintaining Eurodollar Rate Advances or of agreeing to issue or of issuing or maintaining or participating in Letters of Credit (excluding for purposes of this Section 2.11 any such increased costs resulting from (i) Indemnified Taxes (as to which Section 2.14 shall govern), or (ii) changes in the basis of taxation of overall net income or overall gross income by the United States or by the foreign jurisdiction or state under the laws of which such Lender is organized or has its Applicable Lending Office, or any political subdivision thereof) then the Borrower shall from time to time, upon demand by such Lender (with a copy of such demand to the Agent), pay to the Agent for the account of such Lender additional amounts sufficient to compensate such Lender for such increased cost (provided that the compensation sought from the Borrower shall be proportionate to the amounts that such Lender is generally seeking from similarly situated borrowers in connection with similar credit facilities);

 

(c)                                  If any Lender determines that compliance with any law or regulation or any guideline or request from any central bank or other governmental authority (whether or not having the force of law) affects or would affect the amount of capital or liquidity required or expected to be maintained by such Lender or any corporation controlling such Lender and that the amount of such capital or liquidity is increased by or based upon the existence of such Lender’s commitment to lend or to issue or participate in Letters of Credit hereunder and other commitments of such type or the Issuance or maintenance of or participation in the Letters of Credit, then, upon demand by such Lender (with a copy of such demand to the Agent), the Borrower shall pay to the Agent for the account of such Lender, from time to time as specified by such Lender, additional amounts sufficient to compensate such Lender or such corporation in the light of such circumstances, to the extent that such Lender reasonably determines such increase in capital or liquidity to be allocable to the existence of such Lender’s commitment to lend or to issue or participate in Letters of Credit hereunder or to the Issuance or maintenance of or participation in any Letters of Credit (provided that the compensation sought from the Borrower shall be proportionate to the amounts that such Lender is generally seeking from similarly situated borrowers in connection with similar credit facilities);

 

provided, however, that with respect to clauses (a), (b), and (c) above, before delivering such notice or making any such demand, each Lender agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to designate a different Applicable Lending Office if the making of such a designation would avoid the need for, or reduce the amount of, such increased cost or increase in capital or liquidity and would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender.  In the case of clauses (b) and (c) above, a certificate as to such amounts, submitted to the Borrower and the Agent by such Lender, shall constitute prima facie evidence of the amounts required to be paid by the Borrower in respect thereof, absent manifest error.

 

(d)                                 Failure or delay on the part of any Lender to demand compensation pursuant to this Section 2.11 shall not constitute a waiver of such Lender’s right to demand such compensation; provided that the Borrower shall not be required to compensate such Lender pursuant to this Section 2.11 for any increased costs or reductions incurred more than 180 days prior to the date that such Lender

 

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notifies the Borrower of the change in or in the interpretation of law or regulation giving rise to such increased costs or reductions and of such Lender’s intention to claim compensation therefore; provided further that, if the change in or in the interpretation of law or regulation giving rise to such increased costs or reductions is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof.

 

SECTION 2.12.  Illegality.  Notwithstanding any other provision of this Agreement, if any Lender shall notify the Agent that the introduction of or any change in or in the interpretation of any law or regulation makes it unlawful, or any central bank or other governmental authority asserts that it is unlawful, for any Lender or its Eurodollar Lending Office to perform its obligations hereunder to make Eurodollar Rate Advances or to fund or maintain Eurodollar Rate Advances hereunder, (a) each Eurodollar Rate Advance will automatically, upon such demand, Convert into a Base Rate Advance or a Revolving Credit Advance that bears interest at the rate set forth in Section 2.07(a)(i), as the case may be, and (b) the obligation of the Lenders to make Eurodollar Rate Advances or to Convert Revolving Credit Advances into Eurodollar Rate Advances shall be suspended until the Agent shall notify the Borrower and the Lenders that the circumstances causing such suspension no longer exist; provided, however, that before making any such demand, each Lender agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to designate a different Eurodollar Lending Office if the making of such a designation would allow such Lender or its Eurodollar Lending Office to continue to perform its obligations to make Eurodollar Rate Advances or to continue to fund or maintain Eurodollar Rate Advances and would not, in the judgment of such Lender, be otherwise disadvantageous to such Lender.

 

SECTION 2.13.  Payments and Computations.

 

(a)                                 All payments to be made by the Borrower hereunder shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff.  Unless otherwise expressly provided herein, the Borrower shall make each payment or prepayment hereunder not later than 12:00 noon (New York City time) on the day when due in U.S. Dollars to the Agent at the Agent’s Account in same day funds.  The Agent will promptly thereafter cause to be distributed like funds relating to the payment of principal, interest, fees or commissions ratably (other than amounts payable pursuant to Section 2.04(b) or (c), 2.11, 2.14 or 8.04(c)) to the Lenders for the account of their respective Applicable Lending Offices, and like funds relating to the payment of any other amount payable to any Lender to such Lender for the account of its Applicable Lending Office, in each case to be applied in accordance with the terms of this Agreement.  Upon any Assuming Lender becoming a Lender hereunder as a result of a Commitment Increase pursuant to Section 2.18 or an extension of the Termination Date pursuant to Section 2.19, and upon the Agent’s receipt of such Lender’s Assumption Agreement and recording of the information contained therein in the Register, from and after the applicable Increase Date or Extension Date, as the case may be, the Agent shall make all payments hereunder and under any Revolving Credit Notes issued in connection therewith in respect of the interest assumed thereby to the Assuming Lender.  Upon its acceptance of an Assignment and Assumption and recording of the information contained therein in the Register pursuant to Section 8.07(e), from and after the effective date specified in such Assignment and Assumption, the Agent shall make all payments hereunder and under the Revolving Credit Notes in respect of the interest assigned thereby to the Lender assignee thereunder, and the parties to such Assignment and Assumption shall make all appropriate adjustments in such payments for periods prior to such effective date directly between themselves.

 

(b)                                 All computations of interest based on the Base Rate (including at such time as the Base Rate is determined by reference to the Eurodollar Rate) shall be made by the Agent on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed.  All other computations of interest based on the Eurodollar Rate or in respect of facility fees and Letter of Credit Fees shall be made by the

 

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Agent on the basis of a year of 360 days and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year).  Each determination by the Agent of an interest rate hereunder shall be conclusive and binding for all purposes, absent manifest error.

 

(c)                                  Whenever any payment hereunder or under the Revolving Credit Notes shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest, fee or commission, as the case may be; provided, however, that, if such extension would cause payment of interest on or principal of Eurodollar Rate Advances to be made in the next following calendar month, such payment shall be made on the next preceding Business Day.

 

(d)                                 Unless the Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Agent for the account of the Lenders or an Issuing Bank hereunder that the Borrower will not make such payment in full, the Agent may assume that the Borrower has made such payment in full to the Agent on such date in accordance herewith and the Agent may, in reliance upon such assumption, cause to be distributed to each Lender on such due date an amount equal to the amount then due such Lender.  If and to the extent the Borrower shall not have so made such payment in full to the Agent, each Lender shall repay to the Agent forthwith on demand such amount distributed to such Lender together with interest thereon, for each day from the date such amount is distributed to such Lender until the date such Lender repays such amount to the Agent, at the Federal Funds Rate.

 

SECTION 2.14.  Taxes.

 

(a)                                 Any and all payments by the Borrower to or for the account of any Lender or the Agent hereunder or under the Revolving Credit Notes or any other documents to be delivered hereunder shall be made, in accordance with Section 2.13 or the applicable provisions of such other documents, free and clear of and without deduction for any Indemnified Taxes, provided that if the Borrower shall be required by law to deduct any Indemnified Taxes from or in respect of any sum payable hereunder or under any Revolving Credit Note or any other documents to be delivered hereunder to any Lender or the Agent, (i) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.14) such Lender or the Agent (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law.

 

(b)                                 In addition, the Borrower shall pay, or at the option of the Agent timely reimburse it for the payment of, any Other Taxes.

 

(c)                                  The Borrower shall indemnify each Lender and the Agent for and hold it harmless against the full amount of any Indemnified Taxes (including, without limitation, Taxes of any kind imposed or asserted by any jurisdiction on amounts payable under this Section 2.14) imposed on or paid by such Lender or the Agent (as the case may be) and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto; provided, however, that the Borrower shall not be obligated to make payment to any Lender in respect of penalties, interest and other similar liabilities attributable to such Indemnified Taxes if such penalties, interest or other similar liabilities are reasonably attributable to the conduct of, or any failure to act by, such Lender, except as permitted under this Agreement.  This indemnification shall be made within 30 days from the date such Lender or the Agent (as the case may be) makes written demand therefor.  The Lender or Agent requesting indemnification pursuant to this Section 2.14(c) shall provide the Borrower with evidence reasonably satisfactory to the

 

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Borrower documenting the payment by the Lender or Agent of such Taxes for which they are requesting indemnification pursuant to this Section 2.14(c).

 

(d)                                 Each Lender shall severally indemnify the Agent for and hold it harmless against (i) any Indemnified Taxes attributable to such Lender (but only to the extent that the Borrower has not already indemnified the Agent for such Indemnified Taxes and without limiting the obligation of the Borrower to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 8.07 relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Agent in connection with this Agreement or any Revolving Credit Note, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant governmental authority.  This indemnification shall be made within 30 days from the date the Agent makes written demand therefor.  A certificate as to the amount of such payment or liability delivered to any Lender by the Agent shall be conclusive absent manifest error.  Each Lender hereby authorizes the Agent to set off and apply any and all amounts at any time owing to such Lender under this Agreement or any Revolving Credit Note or otherwise payable by the Agent to the Lender from any other source against any amount due to the Agent under this Section 2.14(d).

 

(e)                                  Within 30 days after receiving written request from the Agent following the payment of any Indemnified Taxes, the Borrower shall furnish to the Agent, at its address referred to in Section 8.02, the original or a certified copy of a receipt evidencing the payment of such Indemnified Taxes to the extent such a receipt is issued therefor, or other written proof of payment thereof that is reasonably satisfactory to the Agent.

 

(f)                                   Each Lender (or Assignee) that is a U.S. Person shall deliver to the Borrower and the Agent (or, in the case of a participant, to the Lender from which the related participation shall have been purchased) on or before the date it becomes a party to this Agreement (or, in the case of any participant, on or before the date such participant purchases the related participation) and from time to time thereafter upon the request of the Borrower or the Agent, executed originals of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding Tax.  Each Lender (or Assignee) that is not a “U.S. Person” as defined in Section 7701(a)(30) of the Internal Revenue Code (a “Non-U.S. Lender”) shall deliver to the Borrower and the Agent (or, in the case of a participant, to the Lender from which the related participation shall have been purchased) two copies of either U.S. Internal Revenue Service (“IRS”) Form W-8BEN, Form W-8ECI, Form W-8IMY or any other form or documentation prescribed by FATCA as a basis for claiming exemption from withholding, or, in the case of a Non-U.S. Lender claiming exemption from U.S. federal withholding Tax under Section 871(h) or 881(c) of the Internal Revenue Code with respect to payments of “portfolio interest”, a certificate to the effect that such Non U.S. Lender is not (i) a “bank” within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, (ii) a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Internal Revenue Code, or (iii) a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Internal Revenue Code and the applicable IRS Form W-8, or any subsequent versions thereof or successors thereto, properly completed and duly executed by such Non-U.S. Lender claiming complete exemption from, or a reduced rate of, U.S. federal withholding Tax on all payments by the Borrower under this Agreement and any Revolving Credit Note.  Such forms shall be delivered by each Non-U.S. Lender on or before the date it becomes a party to this Agreement (or, in the case of any participant, on or before the date such participant purchases the related participation) and from time to time thereafter upon the request of the Borrower or the Agent.  In addition, each Non-U.S. Lender shall deliver such forms promptly upon the obsolescence or invalidity of any form previously delivered by such Non-U.S. Lender.  Each Non-U.S. Lender shall promptly notify the Borrower and the Agent at any time it determines that it is no longer in a position to provide any previously delivered certificate to the Borrower (or any other form of certification adopted by the U.S. taxing authorities for such purpose).

 

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Notwithstanding any other provision of this paragraph, a Non-U.S. Lender shall not be required to deliver any form pursuant to this Section 2.14(f) that such Non-U.S. Lender is not legally able to deliver.

 

(g)                                  For any period with respect to which a Lender has failed to provide the Borrower with the appropriate form, certificate or other document described in Section 2.14(f) (other than if such failure is due to a change in law, or in the interpretation or application thereof, occurring subsequent to the date on which a form, certificate or other document originally was required to be provided, or if such form, certificate or other document otherwise is not required under Section 2.14(f)), such Lender shall not be entitled to indemnification under Section 2.14(a) or (c) with respect to Taxes imposed by the United States by reason of such failure; provided, however, that should a Lender become subject to Taxes because of its failure to deliver a form, certificate or other document required hereunder, the Borrower shall take such steps as the Lender shall reasonably request to assist the Lender to recover such Taxes.

 

(h)                                 Any Lender claiming any additional amounts payable pursuant to this Section 2.14 agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to change the jurisdiction of its Applicable Lending Office if the making of such a change would avoid the need for, or reduce the amount of, any such Indemnified Taxes that it may thereafter be entitled to and would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender.

 

(i)                                     If the Agent or any Lender determines, in its sole discretion, that it is entitled to a refund or credit with respect to any Indemnified Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section 2.14 it shall pay over such refund or credit to the Borrower (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section 2.14 with respect to the Indemnified Taxes giving rise to such refund), net of all out-of-pocket expenses of the Agent or such Lender and without interest (other than any interest paid by the relevant governmental authority with respect to such refund); provided, that the Borrower, upon the request of the Agent or such Lender, agrees to repay the amount paid over to the Borrower to the Agent or such Lender in the event the Agent or such Lender is required to repay such refund (plus any interest imposed by the relevant governmental authority) to such governmental authority.  This paragraph shall not be construed to require the Agent or any Lender to make available its Tax returns (or any other information relating to its Taxes which it deems confidential) to the Borrower or any other Person.

 

SECTION 2.15.  Sharing of Payments, Etc.  If any Lender shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) on account of the Revolving Credit Advances or L/C Obligations owing to it (other than pursuant to Section 2.11, 2.14 or 8.04(c)) in excess of its Ratable Share of payments on account of the Revolving Credit Advances or L/C Obligations obtained by all the Lenders, such Lender shall notify the Agent of such fact and forthwith purchase from the other Lenders such participations or subparticipations in the Revolving Credit Advances or L/C Obligations owing to them as shall be necessary to cause such purchasing Lender to share the excess payment ratably with each of them; provided, however, that (i) if any such participations or subparticipations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations or subparticipations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and (ii) the provisions of this Section 2.15 shall not be construed to apply to (A) any payment made by or on behalf of the Borrower pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender), (B) the application of Cash Collateral provided for in Section 2.21, or (C) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Revolving Credit Advances or subparticipations in L/C Obligations to any assignee or participant, other than an assignment to the Borrower or any Subsidiary thereof (as to which the provisions of this Section 2.15 shall apply).

 

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The Borrower agrees that any Lender so purchasing a participation or subparticipation from another Lender pursuant to this Section 2.15 may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off provided in Section 8.05) with respect to such participation or subparticipation as fully as if such Lender were the direct creditor of the Borrower in the amount of such participation or subparticipation.

 

To the extent that any payment by or on behalf of the Borrower is made to the Agent, any Issuing Bank or any Lender, or the Agent, any Issuing Bank or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Agent, such Issuing Bank or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any law relating to bankruptcy, insolvency or reorganization or relief of debtors or otherwise, then (i) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred, and (ii) each Lender and each Issuing Bank severally agrees to pay to the Agent upon demand its applicable share (without duplication) of any amount so recovered from or repaid by the Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the Federal Funds Rate from time to time in effect.  The obligations of the Lenders and the Issuing Banks under clause (ii) of the preceding sentence shall survive the payment in full of all obligations owing under this Agreement or any Revolving Credit Note and the termination of this Agreement.

 

SECTION 2.16.  Evidence of Debt.

 

(a)                                 The Revolving Credit Advances made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Agent in the ordinary course of business.  Entries made in good faith in the accounts or records maintained by the Agent and each Lender shall be conclusive absent manifest error of the amount of the Revolving Credit Advances made by the Lenders to the Borrower and the interest and payments thereon.  Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrower hereunder to pay any amount owing with respect to the Obligations.  In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Agent in respect of such matters, the accounts and records of the Agent shall control in the absence of manifest error.  Upon the request of any Lender made through the Agent, the Borrower shall execute and deliver to such Lender (through the Agent) a Revolving Credit Note, which shall evidence such Lender’s Revolving Credit Advances in addition to such accounts or records.  Each Lender may attach schedules to its Revolving Credit Note and endorse thereon the date, amount and maturity of its Loans and payments with respect thereto.

 

(b)                                 In addition to the accounts and records referred to in Section 2.16(a), each Lender and the Agent shall maintain in accordance with its usual practice accounts or records evidencing the purchases and sales by such Lender of participations in Letters of Credit.  In the event of any conflict between the accounts and records maintained by the Agent and the accounts and records of any Lender in respect of such matters, the accounts and records of the Agent shall control in the absence of manifest error.

 

SECTION 2.17.  Use of Proceeds.  The proceeds of the Revolving Credit Advances shall be available (and the Borrower agrees that it shall use such proceeds) solely for general corporate purposes of the Borrower and its Subsidiaries, including commercial paper back up, not in contravention of this Agreement or any Revolving Credit Note.

 

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SECTION 2.18.  Increase in the Aggregate Commitments.

 

(a)                                 The Borrower may, at any time after the Effective Date and prior to the Termination Date, by notice to the Agent, request that the aggregate amount of the Revolving Credit Commitments be increased (with, at the Borrower’s option and subject to the agreement of an Issuing Bank (not to be unreasonably withheld or delayed), a proportionate increase in the Letter of Credit Facility) by an amount of $10,000,000 or an integral multiple of $10,000,000 in excess thereof (each a “Commitment Increase”) to be effective as of a date that is at least 90 days prior to the latest scheduled Termination Date then in effect (the “Increase Date”) as specified in the related notice to the Agent; provided, however that (i) in no event shall the aggregate amount of the Revolving Credit Commitments at any time exceed $1,500,000,000 and (ii) on the date of any request by the Borrower for a Commitment Increase and on the related Increase Date the applicable conditions set forth in Section 3.02 shall be satisfied.

 

(b)                                 The Agent shall promptly notify one or more Lenders (as requested by the Borrower) of a request by the Borrower for a Commitment Increase, which notice shall include (i) the proposed amount of such requested Commitment Increase, (ii) the proposed Increase Date and (iii) the date by which the applicable Lenders wishing to participate in the Commitment Increase must commit to an increase in the amount of their respective Revolving Credit Commitments (the “Commitment Date”).  Each applicable Lender that is willing to participate in such requested Commitment Increase (each an “Increasing Lender”) shall, in its sole discretion, give written notice to the Agent on or prior to the Commitment Date of the amount by which it is willing to increase its Revolving Credit Commitment.  If the applicable Lenders notify the Agent that they are willing to increase the amount of their respective Revolving Credit Commitments by an aggregate amount that exceeds the amount of the requested Commitment Increase, the requested Commitment Increase shall be allocated among the applicable Lenders willing to participate therein in such amounts as are agreed between the Borrower and the Agent.  If any Lender shall fail to notify the Agent and the Borrower in writing of its consent to any such request for a Commitment Increase on or prior to the Commitment Date, such Lender shall be deemed to have declined such request.

 

(c)                                  Promptly following each Commitment Date, the Agent shall notify the Borrower as to the amount, if any, by which the applicable Lenders are willing to participate in the requested Commitment Increase.  If the aggregate amount by which the applicable Lenders are willing to participate in any requested Commitment Increase on any such Commitment Date is less than the requested Commitment Increase, then the Borrower may extend offers to one or more Eligible Assignees to participate in any portion of the requested Commitment Increase that has not been committed to by the applicable Lenders as of the applicable Commitment Date; provided, however, that the Revolving Credit Commitment of each such Eligible Assignee shall be in an amount of $20,000,000 or an integral multiple of $1,000,000 in excess thereof.

 

(d)                                 On each Increase Date, each Eligible Assignee that accepts an offer to participate in a requested Commitment Increase in accordance with Section 2.18(b) (each such Eligible Assignee and each Eligible Assignee that agrees to an extension of the Termination Date in accordance with Section 2.19(c), an “Assuming Lender”) shall become a Lender party to this Agreement as of such Increase Date and the Revolving Credit Commitment of each Increasing Lender for such requested Commitment Increase shall be so increased by such amount (or by the amount allocated to such Lender pursuant to the last sentence of Section 2.18(b)) as of such Increase Date; provided, however, that the Agent shall have received on or before such Increase Date the following, each dated such date:

 

(i)                                     (A) certified copies of resolutions of the Board of Directors or committee thereof of the Borrower or the Executive Committee of such Board approving the Commitment Increase

 

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and the corresponding modifications to this Agreement and (B) if requested by the Agent, an opinion of counsel for the Borrower (which may be in-house counsel) in substantially the form of Exhibit D hereto;

 

(ii)                                  an assumption agreement from each Assuming Lender, if any, in form and substance satisfactory to the Borrower and the Agent (each an “Assumption Agreement”), duly executed by such Eligible Assignee, the Agent and the Borrower; and

 

(iii)                               confirmation from each Increasing Lender of the increase in the amount of its Commitment in a writing satisfactory to the Borrower and the Agent.

 

On each Increase Date, upon fulfillment of the conditions set forth in the immediately preceding sentence of this Section 2.18(d), the Agent shall notify the Lenders (including, without limitation, each Assuming Lender) and the Borrower, on or before 1:00 P.M. (New York City time), by facsimile or telecopier, of the occurrence of the Commitment Increase to be effected on such Increase Date and shall record in the Register the relevant information with respect to each Increasing Lender and each Assuming Lender on such date.

 

(e)                                  On the Increase Date, if any Revolving Credit Advances are then outstanding, the Borrower shall borrow from all or certain of the Lenders and/or (subject to compliance by the Borrower with Section 8.04(c)) prepay Revolving Credit Advances of all or certain of the Lenders such that, after giving effect thereto, the Revolving Credit Advances (including, without limitation, the Types and Interest Periods thereof) shall be held by the Lenders (including for such purposes the Increasing Lenders and the Assuming Lenders) ratably in accordance with their respective Revolving Credit Commitments.  On and after each Increase Date, the Ratable Share of each Lender’s participation in Letters of Credit and in Revolving Credit Advances from draws under Letters of Credit shall be calculated after giving effect to each such Commitment Increase.

 

SECTION 2.19.  Extension of Termination Date.

 

(a)                                 At least 60 days but not more than 90 days prior to the first and/or second anniversary of the Effective Date (the “Applicable Anniversary”), the Borrower, by written notice to the Agent, may request an extension of the Termination Date in effect at such time by one year from its then scheduled expiration (which request may be conditioned on a minimum level of Revolving Credit Commitments from Consenting Lenders and Assuming Lenders).  The Agent shall promptly notify each Lender of such request, and each Lender shall in turn, in its sole discretion, not later than 30 days prior to the Applicable Anniversary, notify the Borrower and the Agent in writing as to whether such Lender will consent to such extension.  If any Lender shall fail to notify the Agent and the Borrower in writing of its consent to any such request for extension of the Termination Date at least 30 days prior to the Applicable Anniversary, such Lender shall be deemed to be a Non-Consenting Lender with respect to such request.  The Agent shall notify the Borrower not later than 25 days prior to the Applicable Anniversary of the decision of the Lenders regarding the Borrower’s request for an extension of the Termination Date.

 

(b)                                 If all the Lenders consent in writing to any such request in accordance with Section 2.19(a), the Termination Date in effect at such time shall, effective as at the Applicable Anniversary (the “Extension Date”), be extended for one year; provided that on each Extension Date the applicable conditions set forth in Section 3.02 shall be satisfied.  If less than all of the Lenders consent in writing to any such request in accordance with Section 2.19(a), the Termination Date in effect at such time shall, effective as at the applicable Extension Date and subject to Section 2.19(d), be extended as to those Lenders that so consented (each a “Consenting Lender”) but shall not be extended as to any other Lender (each a “Non-Consenting Lender”).  To the extent that the Termination Date is not extended as to

 

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any Lender pursuant to this Section 2.19 and the Revolving Credit Commitment of such Lender is not assumed in accordance with Section 2.19(c) on or prior to the applicable Extension Date, the Revolving Credit Commitment of such Non-Consenting Lender shall automatically terminate in whole on such unextended Termination Date without any further notice or other action by the Borrower, such Lender or any other Person; provided that such Non-Consenting Lender’s rights under Sections 2.11, 2.14 and 8.04, and its obligations under Section 7.06, shall survive the Termination Date for such Lender as to matters occurring prior to such date.  It is understood and agreed that no Lender shall have any obligation whatsoever to agree to any request made by the Borrower for any requested extension of the Termination Date.

 

(c)                                  If less than all of the Lenders consent to any such request pursuant to Section 2.19(a), the Agent shall promptly so notify the Consenting Lenders, and each Consenting Lender may, in its sole discretion, give written notice to the Agent not later than ten days prior to the Extension Date of the amount of the Non-Consenting Lenders’ Revolving Credit Commitments for which it is willing to accept an assignment.  If the Consenting Lenders notify the Agent that they are willing to accept assignments of Revolving Credit Commitments in an aggregate amount that exceeds the amount of the Revolving Credit Commitments of the Non-Consenting Lenders, such Revolving Credit Commitments shall be allocated among the Consenting Lenders willing to accept such assignments in such amounts as are agreed between the Borrower and the Agent.  If after giving effect to the assignments of Revolving Credit Commitments described above there remains any Revolving Credit Commitments of Non-Consenting Lenders, the Borrower may arrange for one or more Consenting Lenders or other Eligible Assignees as Assuming Lenders to assume, effective as of the Extension Date, any Non-Consenting Lender’s Revolving Credit Commitment and all of the obligations of such Non-Consenting Lender under this Agreement thereafter arising, without recourse to or warranty by, or expense to, such Non-Consenting Lender; provided, however, that the amount of the Revolving Credit Commitment of any such Assuming Lender as a result of such substitution shall in no event be less than $20,000,000 unless the amount of the Revolving Credit Commitment of such Non-Consenting Lender is less than $20,000,000, in which case such Assuming Lender shall assume all of such lesser amount; and provided further that:

 

(i)                                     any such Consenting Lender or Assuming Lender shall have paid to such Non-Consenting Lender (A) the aggregate principal amount of, and any interest accrued and unpaid to the effective date of the assignment on, the outstanding Revolving Credit Advances, if any, of such Non-Consenting Lender plus (B) any accrued but unpaid facility fees owing to such Non-Consenting Lender as of the effective date of such assignment;

 

(ii)                                  all additional costs reimbursements, expense reimbursements and indemnities payable to such Non-Consenting Lender, and all other accrued and unpaid amounts owing to such Non-Consenting Lender hereunder, as of the effective date of such assignment shall have been paid to such Non-Consenting Lender; and

 

(iii)                               with respect to any such Assuming Lender, the applicable processing and recordation fee required under Section 8.07(b) for such assignment shall have been paid;

 

provided further that such Non-Consenting Lender’s rights under Sections 2.11, 2.14 and 8.04, and its obligations under Section 7.06, shall survive such substitution as to matters occurring prior to the date of substitution.  At least five Business Days prior to any Extension Date, (A) each such Assuming Lender, if any, shall have delivered to the Borrower and the Agent an Assumption Agreement, duly executed by such Assuming Lender, such Non-Consenting Lender, the Borrower and the Agent and (B) any such Consenting Lender shall have delivered confirmation in writing satisfactory to the Borrower and the Agent as to the increase in the amount of its Commitment.  Upon the payment or prepayment of all

 

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amounts referred to in clauses (i), (ii) and (iii) of the immediately preceding sentence, each such Consenting Lender or Assuming Lender, as of the Extension Date, will be substituted for such Non-Consenting Lender under this Agreement and shall be a Lender for all purposes of this Agreement, without any further acknowledgment by or the consent of the other Lenders, and the obligations of each such Non-Consenting Lender hereunder shall, by the provisions hereof, be released and discharged.

 

(d)                                 If (after giving effect to any assignments or assumptions pursuant to Section 2.19(c)) Lenders having Commitments equal to more than 50% of the Revolving Credit Commitments in effect immediately prior to the Extension Date consent in writing to a requested extension (whether by execution or delivery of an Assumption Agreement or otherwise) not later than one Business Day prior to such Extension Date, the Agent shall so notify the Borrower, and, subject to the satisfaction of the applicable conditions in Section 3.02, the Termination Date for each Consenting Lender and each Assuming Lender then in effect shall be extended for the additional one year period as described in Section 2.19(b); provided that the Termination Date for each Non-Consenting Lender shall not be so extended.  Promptly following each Extension Date, the Agent shall notify the Lenders (including, without limitation, each Assuming Lender) of the extension of the scheduled Termination Date in effect immediately prior thereto and shall thereupon record in the Register the relevant information with respect to each such Consenting Lender and each such Assuming Lender.  On and after each Extension Date, the Ratable Share of each Lender’s participation in Letters of Credit and in L/C Obligations shall be calculated after giving effect to the Revolving Credit Commitments of the Lenders after the occurrence of such Extension Date.

 

SECTION 2.20.  Replacement of Lenders.  If any Lender requests compensation under Section 2.11 or notifies the Agent under Section 2.12 that the making of Eurodollar Rate Advances would be unlawful, or if the Borrower is required to pay any additional amount to any Lender or any governmental authority for the account of any Lender pursuant to Section 2.14, or if any Lender becomes a Defaulting Lender or fails to approve any amendment to this Agreement which requires, by the terms hereof, the approval of all affected Lenders and is approved by the Required Lenders, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 8.07), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (i) if the assignee is not a Lender, the Borrower shall have received the prior written consent of the Agent, which consent shall not unreasonably be withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Revolving Credit Advances, accrued interest thereon, accrued fees and all other amounts then due and payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts) and (iii) in the case of any such assignment resulting from a claim for compensation under Section 2.11 or payments required to be made pursuant to Section 2.14, such assignment will result in a reduction in such compensation or payments at the time of such assignment, or in the case of any such assignment resulting from a Lender failing to approve an amendment to this Agreement, such assignee shall have approved such amendment.  A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

 

SECTION 2.21.  Cash Collateral.

 

(a)                                 Certain Credit Support Events.  Upon the occurrence of an Event of Default that is continuing, at the request of the Agent with the consent of the Required Lenders, or at the request of the Required Lenders, as contemplated by Section 6.02, the Borrower shall immediately pay to the Agent in same day funds at the office of the Agent set forth on Schedule 8.02, for deposit in the Cash Collateral

 

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Account, an amount equal to the then outstanding amount of all L/C Obligations.  At any time that there shall exist a Defaulting Lender, promptly upon the request of the Agent or an Issuing Bank, the Borrower shall deliver to the Agent Cash Collateral in an amount sufficient to cover all Fronting Exposure (after giving effect to Section 2.22(a)(iv) and any Cash Collateral provided by the Defaulting Lender).

 

(b)                                 Grant of Security Interest.  All Cash Collateral (other than credit support not constituting funds subject to deposit) shall be maintained in blocked, interest bearing deposit accounts at Wells Fargo (the “Cash Collateral Account”).  The Borrower, and to the extent provided by any Lender, such Lender, hereby grants to (and subjects to the control of) the Agent, for the benefit of the Agent, the Issuing Banks and the Lenders, and agrees to maintain, a first priority security interest in all such cash, deposit accounts and all balances therein, and all other property so provided as collateral pursuant hereto, and in all proceeds of the foregoing, all as security for the obligations to which such Cash Collateral may be applied pursuant to Section 2.21(c).  If at any time the Agent determines that Cash Collateral is subject to any right or claim of any Person other than the Agent as herein provided, or that the total amount of such Cash Collateral is less than the applicable Fronting Exposure and other obligations secured thereby, the Borrower or the relevant Defaulting Lender will, promptly upon demand by the Agent, pay or provide to the Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency.

 

(c)                                  Application.  Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under any of this Section 2.21 or Sections 2.03, 2.22 or 6.02 in respect of Letters of Credit shall be held and applied to the satisfaction of the specific L/C Obligations, obligations to fund participations therein (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) and other obligations for which the Cash Collateral was so provided, prior to any other application of such property as may be provided for herein.

 

(d)                                 Release.  Cash Collateral (or the appropriate portion thereof) provided to reduce Fronting Exposure or other obligations shall be released promptly (i) following the elimination of the applicable Fronting Exposure or other obligations giving rise thereto (including by the termination of Defaulting Lender status of the applicable Lender (or, as appropriate, its assignee following compliance with Section 8.07)) or (ii) if there exists any excess Cash Collateral; provided, however, (x) that Cash Collateral which the Borrower shall have furnished pursuant to Section 6.02 shall not be released during the continuance of an Event of Default (and following application as provided in this Section 2.21 may be otherwise applied in accordance with Section 6.03), and (y) any Lender providing Cash Collateral and an Issuing Bank, as applicable, may agree that Cash Collateral shall not be released but instead held to support future anticipated Fronting Exposure or other obligations.

 

SECTION 2.22.  Defaulting Lenders.

 

(a)                                 Adjustments.  Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as that Lender is no longer a Defaulting Lender, to the extent permitted by applicable law:

 

(i)                                     Waivers and Amendments.  That Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in Section 8.01.

 

(ii)                                  Reallocation of Payments.  Any payment of principal, interest, fees or other amounts received by the Agent for the account of that Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article VI or otherwise, and including any amounts made available to the Agent by that Defaulting Lender pursuant to Section 8.05), shall be applied at such time or times as may be determined by the Agent as follows: first, to the payment of any

 

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amounts owing by that Defaulting Lender to the Agent hereunder; second, to the payment on a pro rata basis of any amounts owing by that Defaulting Lender to any Issuing Bank hereunder; third, if so determined by the Agent or requested by any Issuing Bank, to be held as Cash Collateral for Fronting Exposure of that Defaulting Lender; fourth, as the Borrower may request (so long as no Default or Event of Default exists), to the funding of any Revolving Credit Advance in respect of which that Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Agent; fifth, if so determined by the Agent and the Borrower, to be held in a non-interest bearing deposit account and released in order to satisfy obligations of that Defaulting Lender to fund Revolving Credit Advance under this Agreement and to serve as Cash Collateral for future Fronting Exposure of that Defaulting Lender; sixth, to the payment of any amounts owing to the Lenders or the Issuing Banks as a result of any judgment of a court of competent jurisdiction obtained by any Lender or any Issuing Bank against that Defaulting Lender as a result of that Defaulting Lender’s breach of its obligations under this Agreement; seventh, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against that Defaulting Lender as a result of that Defaulting Lender’s breach of its obligations under this Agreement; and eighth, to that Defaulting Lender or as otherwise directed by a court of competent jurisdiction, provided that if (A) such payment referred to in this clause “eighth” is a payment of the principal amount of any Revolving Credit Advance in respect of which that Defaulting Lender has not fully funded its appropriate share and (B) such Revolving Credit Advance was made at a time when the conditions set forth in Section 3.02 were satisfied or waived, or such Revolving Credit Advance was made pursuant to Section 2.03(c), such payment shall be applied solely to pay the Revolving Credit Advances of all non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Revolving Credit Advances of that Defaulting Lender.  Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this Section 2.22(a)(ii) shall be deemed paid to and redirected by that Defaulting Lender, and each Lender irrevocably consents hereto.

 

(iii)                               Certain Fees.  That Defaulting Lender (A) shall be entitled to receive any facility fee pursuant to Section 2.04(a) for any period during which that Lender is a Defaulting Lender only to extent allocable to the sum of (1) aggregate outstanding amount of the Revolving Credit Advances funded by it and (2) its Ratable Share of the stated amount of Letters of Credit for which such Defaulting Lender has provided Cash Collateral pursuant to Section 2.22(a)(ii) (and the Borrower shall (x) be required to pay to each Issuing Bank the amount of such fee allocable to its Fronting Exposure arising from that Defaulting Lender and (y) not be required to pay the remaining amount of such fee that otherwise would have been required to have been paid to that Defaulting Lender) and (B) shall be limited in its right to receive Letter of Credit Fees as provided in Section 2.04(b).

 

(iv)                              Reallocation of Ratable Shares to Reduce Fronting Exposure.  During any period in which there is a Defaulting Lender, for purposes of computing the amount of the obligation of each non-Defaulting Lender to acquire, refinance or fund participations in Letters of Credit (other than Secured Letters of Credit) pursuant to Section 2.03, the “Ratable Share” of each non-Defaulting Lender shall be computed without giving effect to the Commitment of that Defaulting Lender; provided, that, (A) each such reallocation shall be given effect only if, at the date the applicable Lender becomes a Defaulting Lender, no Default or Event of Default exists (provided that such reallocation shall occur when the applicable Default or Event of Default has been cured or waived); and (B) the aggregate obligation of each non-Defaulting Lender to acquire, refinance or fund participations in Letters of Credit shall not exceed the positive difference, if any, of

 

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(1) the Revolving Credit Commitment of that non-Defaulting Lender minus (2) the aggregate outstanding amount of the Revolving Credit Advances funded by that Lender.

 

(v)                                 Non-Pro Rata Commitment Reduction.  During any period in which a Lender is a Defaulting Lender, the Borrower may (in its discretion) apply all or any portion to be specified by the Borrower of any optional reduction of unused Commitments under Section 2.06 to the unused Commitments of any one or more Defaulting Lenders specified by the Borrower before applying any remaining reduction to all Lenders in the manner otherwise specified in Section 2.06.

 

(b)                                 Defaulting Lender Cure.  If the Borrower, the Agent, and the Issuing Banks agree in writing in their sole discretion that a Defaulting Lender should no longer be deemed to be a Defaulting Lender, the Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), that Lender will, to the extent applicable, purchase that portion of outstanding Revolving Credit Advances of the other Lenders or take such other actions as the Agent may determine to be necessary to cause the Revolving Credit Advances and funded and unfunded participations in Letters of Credit to be held on a pro rata basis by the Lenders in accordance with their Ratable Shares (without giving effect to Section 2.22(a)(iv)), whereupon that Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; and provided further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

 

ARTICLE III

 

CONDITIONS TO EFFECTIVENESS AND LENDING

 

SECTION 3.01.  Conditions Precedent to Effectiveness of Section 2.01.  Section 2.01 shall become effective on and as of the first date (the “Effective Date”) on which the following conditions precedent have been satisfied:

 

(a)                                 Except as disclosed in the Public Filings, there shall have occurred no Material Adverse Change since December 31, 2012.

 

(b)                                 The Borrower shall have notified each Lender and the Agent in writing as to the proposed Effective Date, and the Agent shall have confirmed to the Borrower in writing that the Effective Date has occurred.

 

(c)                                  The Borrower shall have paid all accrued fees and expenses of the Agent, the Joint Lead Arrangers, and the Lenders (including the accrued fees and expenses of counsel to the Agent) that have been invoiced at least two Business Days prior to the proposed Effective Date.

 

(d)                                 On the Effective Date, the following statements shall be true and the Agent shall have received for the account of each Lender a certificate signed by a duly authorized officer of the Borrower, dated the Effective Date, stating that:

 

(i)                                     The representations and warranties contained in Section 4.01 are correct on and as of the Effective Date, except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall be true and correct as of such earlier date, and

 

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(ii)                                  No event has occurred and is continuing that constitutes a Default.

 

(e)                                  The Agent shall have received on or before the Effective Date the following, each dated such day, in form and substance satisfactory to the Agent and (except for the Revolving Credit Notes) in sufficient copies for each Lender:

 

(i)                                     The Revolving Credit Notes to the order of the Lenders to the extent requested by any Lender pursuant to Section 2.16.

 

(ii)                                  Certified copies of the resolutions of the Board of Directors of the Borrower approving this Agreement, and of all documents evidencing other necessary corporate action and governmental approvals, if any, with respect to this Agreement.

 

(iii)                               A certificate of the Secretary or an Assistant Secretary of the Borrower certifying the names and true signatures of the officers of the Borrower authorized to sign this Agreement and the Revolving Credit Notes and the other documents to be delivered hereunder.

 

(iv)                              One or more favorable opinions of counsel to the Borrower, substantially in the form of Exhibit D hereto and as to such other matters as any Lender through the Agent may reasonably request.

 

(f)                                   The Borrower shall have terminated the commitments (or such commitments shall have been terminated in accordance with their terms), and paid in full all Debt, interest, fees and other amounts then due and payable, under the Three Year Credit Agreement dated as of June 10, 2010, among the Borrower, the lenders and agents parties thereto and Bank of America, N.A., as administrative agent, and all letters of credit (if any) issued thereunder shall have been terminated or cancelled and each of the Lenders that is a party to such credit facility hereby waives, upon execution of this Agreement the requirement of prior notice under such credit facility relating to the termination of commitments thereunder.

 

(g)                                  Each of the Agent and the Lenders shall have received from the Borrower all documentation and other information requested by the Agent or any Lender (through the Agent) that has been reasonably requested no less than three Business Days prior to the Effective Date and is required to satisfy applicable “know your customer” and anti-money laundering rules and regulations, including without limitation the Patriot Act.

 

SECTION 3.02.  Conditions Precedent to Each Revolving Credit Borrowing, Issuance, Commitment Increase and Extension of the Termination Date.  The obligation of each Lender to make a Revolving Credit Advance (other than a Revolving Credit Advance made by any Issuing Bank or any Lender pursuant to Section 2.03(c)) on the occasion of each Revolving Credit Borrowing, the obligation of each Issuing Bank to Issue a Letter of Credit, each Commitment Increase and each extension of the Termination Date pursuant to Section 2.19 shall be subject to the conditions precedent that the Effective Date shall have occurred and on the date of such Revolving Credit Borrowing or such Issuance, such Commitment Increase or the applicable Extension Date the following statements shall be true (and each of the giving of the applicable Notice of Revolving Credit Borrowing, Letter of Credit Application, request for Commitment Increase or request for extension of the Termination Date and the acceptance by the Borrower of the proceeds of such Revolving Credit Borrowing or such Issuance shall constitute a representation and warranty by the Borrower that on the date of such Revolving Credit Borrowing, such Issuance, such Commitment Increase or such extension of the Termination Date such statements are true):

 

(a)                                 the representations and warranties contained in Section 4.01 (except, in the case

 

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of Revolving Credit Borrowings or Issuances, the representations set forth in the last sentence of Section 4.01(e) and in Section 4.01(f)) are correct in all material respects on and as of such date, before and after giving effect to such Revolving Credit Borrowing, such Issuance, such Commitment Increase or such extension of the Termination Date and to the application of the proceeds therefrom, as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date;

 

(b)                                 no event has occurred and is continuing, or would result from such Revolving Credit Borrowing, such Issuance, such Commitment Increase or such extension of the Termination Date or from the application of the proceeds therefrom, that constitutes a Default; and

 

(c)                                  the Borrower is in pro forma compliance with Section 5.03 on and as of such date after giving effect to such Revolving Credit Borrowing and to the application of proceeds therefrom, such Commitment Increase or such extension of the Termination Date.

 

SECTION 3.03.  Determinations Under Section 3.01.  For purposes of determining compliance with the conditions specified in Section 3.01, each Lender shall be deemed to have consented to, approved or accepted or to be satisfied with each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to the Lenders unless an officer of the Agent responsible for the transactions contemplated by this Agreement shall have received notice from such Lender prior to the date that the Borrower, by notice to the Lenders, designates as the proposed Effective Date, specifying its objection thereto.  The Agent shall promptly notify the Lenders of the occurrence of the Effective Date.

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES

 

SECTION 4.01.  Representations and Warranties of the Borrower.  The Borrower represents and warrants as follows:

 

(a)                                 The Borrower (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of Minnesota, (ii) has all corporate powers and authority required to carry on its business as now conducted and (iii) has all licenses, authorizations, consents and approvals required to carry on its business as now conducted, except where the failure to have any such license, authorization, consent or approval could not reasonably be expected to have a Material Adverse Effect.  Each of the Borrower and each Significant Subsidiary is duly qualified as a foreign corporation, licensed and in good standing in each jurisdiction where qualification or licensing is required by the nature of its business or the character and location of its property, business or customers, where the failure to be so qualified, licensed and/or in good standing could reasonably be expected to have a Material Adverse Effect.

 

(b)                                 The execution, delivery and performance by the Borrower of this Agreement and the Revolving Credit Notes to be delivered by it, and the consummation of the transactions contemplated hereby, are within the Borrower’s corporate powers, have been duly authorized by all necessary corporate action, and do not (i) contravene the Borrower’s charter or by-laws, (ii) violate any law, rule, regulation, order, writ, judgment, decree, determination or award applicable to the Borrower if such violation could reasonably be expected to have a Material Adverse Effect or (iii) violate or constitute a default under any contractual restriction binding on or affecting the Borrower if such violation or default could reasonably

 

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be expected to have a Material Adverse Effect or subject the Lenders, Agent or the Joint Lead Arrangers to liability.

 

(c)                                  No authorization or approval, and no notice to or filing with, any governmental authority or regulatory body or any other Person is required for the due execution, delivery and performance by the Borrower of this Agreement or the Revolving Credit Notes to be delivered by it, except for those that have been duly obtained, taken, given or made and are in full force and effect and except to the extent the failure to get any such authorization or approval or give any such notice or make any such filing could not be reasonably expected to have a Material Adverse Effect.

 

(d)                                 This Agreement has been, and each of the Revolving Credit Notes to be delivered by it when delivered hereunder will have been, duly executed and delivered by the Borrower.  This Agreement is, and each of the Revolving Credit Notes when delivered hereunder will be, the legal, valid and binding obligation of the Borrower enforceable against the Borrower in accordance with their respective terms, subject to (i) the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar law affecting creditors’ rights generally, (ii) the effect of general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law) and (iii) an implied covenant of good faith and fair dealing.

 

(e)                                  Except as disclosed on Schedule 4.01(e), (i) the Consolidated balance sheet of the Borrower and its Subsidiaries as at December 31, 2012, and the related Consolidated statements of income and cash flows of the Borrower and its Subsidiaries for the fiscal year then ended, accompanied by an opinion of KPMG LLP, independent public accountants, and (ii) the Consolidated balance sheet of the Borrower and its Subsidiaries as at March 31, 2013, which set forth the financial condition of the Borrower and is Subsidiaries, and the related Consolidated statements of income and cash flows of the Borrower and its Subsidiaries for the three months then ended, duly certified by the chief financial officer or chief accounting officer of the Borrower, copies of which have been furnished to each Lender, fairly present in all material respects, subject, in the case of said balance sheet as at March 31, 2013, and said statements of income and cash flows for the three months then ended, to year-end audit adjustments and the absence of certain notes, the Consolidated financial condition of the Borrower and its Subsidiaries as at such dates and the Consolidated results of the operations of the Borrower and its Subsidiaries for the periods ended on such dates, all in accordance with GAAP.  Except as otherwise disclosed in the Public Filings, since December 31, 2012, there has been no Material Adverse Change.

 

(f)                                   There is no pending or, to the knowledge of the Borrower, threatened action, suit, investigation, litigation or proceeding, including, without limitation, under any Environmental Law, affecting the Borrower or any of its Subsidiaries before any court, governmental agency or arbitrator that (i) except as disclosed in the Public Filings, could be reasonably likely to have a Material Adverse Effect, and there shall have been no additional claim made in respect of any action, suit, investigation, litigation or proceeding disclosed in the Public Filings that could be reasonably likely to have a Material Adverse Effect (except if such additional claim is disclosed in the Public Filings) or (ii) purports to affect the legality, validity or enforceability of this Agreement or any Revolving Credit Note or the consummation of the transactions contemplated hereby.

 

(g)                                  (i) The Borrower is not engaged in the business of extending credit for the purpose of purchasing or carrying Margin Stock that would result in or otherwise cause a violation of Regulation U with respect to any extensions of credit made by a Lender under this Agreement.

 

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(ii)                                  The Borrower will not use the proceeds of any Revolving Credit Advance in any manner that would result in or otherwise cause of violation of Regulation U with respect to any extensions of credit made by a Lender under this Agreement.

 

(h)                                 The Borrower is not an “investment company”, or a company “controlled” by an “investment company”, within the meaning of the Investment Company Act of 1940, as amended.

 

(i)                                     The Borrower and each of its Subsidiaries is in compliance with all applicable laws, rules, regulations and orders, including, without limitation, compliance with ERISA, the Patriot Act, the U.S. Foreign Corrupt Practices Act of 1977 and all Environmental Laws, except where the failure to so comply could not reasonably be expected to have a Material Adverse Effect.  The Borrower and each of its Subsidiaries is in compliance with the Trading with the Enemy Act and each of the foreign assets control regulations of the United States Treasury Department (31 C.F.R., Subtitle B, Chapter V) and any other enabling legislation or executive order relating thereto, except where the failure to so comply could not reasonably be expected to have a Material Adverse Effect.

 

ARTICLE V

 

COVENANTS OF THE BORROWER

 

SECTION 5.01.  Affirmative Covenants.  So long as any Revolving Credit Advance shall remain unpaid, any Letter of Credit is outstanding or any Lender shall have any Commitment hereunder, the Borrower will:

 

(a)                                 Compliance with Laws, Etc.  Comply, and cause each of its Subsidiaries to comply, in all material respects, with all applicable laws, rules, regulations and orders, such compliance to include, without limitation, compliance with ERISA and Environmental Laws, except to the extent that failure to so comply would not reasonably be expected to have a Material Adverse Effect.

 

(b)                                 Payment of Taxes, Etc.  Pay and discharge, and cause each of its Subsidiaries to pay and discharge, before the same shall become delinquent, (i) all taxes, assessments and governmental charges or levies imposed upon it or upon its property that, if unpaid, might by law become a Lien or charge upon its property and (ii) all lawful claims that, if unpaid, might by law become a Lien upon its property (other than Permitted Liens); provided, however, that neither the Borrower nor any of its Subsidiaries shall be required to pay or discharge any such tax, assessment, charge or claim (x) that is being contested in good faith and by proper proceedings and as to which appropriate reserves are being maintained or (y) the non-payment of which, either individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.

 

(c)                                  Maintenance of Insurance.  Maintain, and cause each of its Subsidiaries to maintain, insurance with responsible and reputable insurance companies or associations in such amounts and covering such risks as the Borrower shall from time to time determine, based on its experience and knowledge of the industry, are of a character usually carried by companies engaged in similar businesses and owning similar properties in the same general areas in which the Borrower or such Subsidiary operates; provided, however, that the Borrower and its Subsidiaries may self-insure to the extent consistent with prudent business practice.

 

(d)                                 Preservation of Corporate Existence, Etc.  (i) Preserve and maintain its corporate existence (other than pursuant to any transaction permitted under Section 5.02(b)), (ii) cause each of its Significant Subsidiaries to preserve and maintain its corporate existence (other than pursuant to any merger or consolidation of a Significant Subsidiary with any other Person) except to the extent that failure

 

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to do so could not reasonably be expected to have a Material Adverse Effect and (iii) take all reasonable action to maintain all rights, privileges and franchises necessary or desirable in the normal conduct of its business except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.

 

(e)                                  Visitation Rights.  Without limitation of Section 8.08, at any reasonable time and from time to time during normal business hours (but, so long as no Default has occurred and is continuing, no more than once per fiscal year of the Borrower), permit the Agent at the request of any of the Lenders or any agents or representatives thereof, to examine and make copies of and abstracts from the records and books of account of, and visit the properties of, the Borrower and any of its Subsidiaries, and to discuss the affairs, finances and accounts of the Borrower and any of its Subsidiaries with any of their officers or directors and with their independent certified public accountants.

 

(f)                                   Keeping of Books.  Except as disclosed on Schedule 4.01(e), the Borrower will keep proper books of record and account, in which full and correct entries shall be made of all financial transactions and the assets of the Borrower, and reported on a consolidated basis in accordance with GAAP.

 

(g)                                  Maintenance of Properties, Etc.  Maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, all of its properties that are used or useful in the conduct of its business in good working order and condition (ordinary wear and tear excepted) except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.

 

(h)                                 Transactions with Affiliates.  Conduct, and cause each of its Subsidiaries to conduct, all material transactions otherwise permitted under this Agreement with any of their Affiliates on terms that are fair and reasonable and no less favorable to the Borrower or such Subsidiary than it would obtain in a comparable arm’s-length transaction with a Person not an Affiliate, except for transactions between or among the Borrower and/or its Subsidiaries.

 

(i)                                     Reporting Requirements.  Furnish to the Lenders:

 

(i)                                     as soon as available and in any event within 45 days after the end of each of the first three quarters of each fiscal year of the Borrower, the Consolidated balance sheet of the Borrower and its Subsidiaries as of the end of such quarter and Consolidated statements of income and cash flows of the Borrower and its Subsidiaries for the period commencing at the end of the previous fiscal year and ending with the end of such quarter, duly certified (subject to year-end audit adjustments) by the chief financial officer or chief accounting officer of the Borrower as having been prepared in accordance with GAAP and certificates of the chief financial officer or chief accounting officer of the Borrower as to compliance with the terms of this Agreement and setting forth in reasonable detail the calculations necessary to demonstrate compliance with Section 5.03, provided that in the event of any change in generally accepted accounting principles used in the preparation of such financial statements, the Borrower shall also provide, if necessary for the determination of compliance with Section 5.03, after notification of a request for an amendment as contemplated under Section 1.03, a statement of reconciliation conforming such financial statements to Fixed GAAP; provided further that the Borrower shall only be required to provide any such statement of reconciliation with respect to the initial quarter in which any such change in GAAP occurs and only if an amendment has not been agreed upon prior to the date the compliance certificate referred to above is delivered pursuant to this clause (i);

 

(ii)                                  as soon as available and in any event within 90 days after the end of each fiscal year of the Borrower, a copy of the annual audit report for such year for the Borrower and its

 

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Subsidiaries, containing the Consolidated balance sheet of the Borrower and its Subsidiaries as of the end of such fiscal year and Consolidated statements of income and cash flows of the Borrower and its Subsidiaries for such fiscal year, in each case accompanied by an opinion by KPMG LLP or other independent public accountants of nationally recognized standing and, in addition, the Borrower will provide a certificate of its chief financial officer or chief accounting officer setting forth in reasonable detail the calculations necessary to demonstrate compliance with Section 5.03, provided that in the event of any change in generally accepted accounting principles used in the preparation of such financial statements, the Borrower shall also provide, if necessary for the determination of compliance with Section 5.03, after notification of a request for an amendment as contemplated under Section 1.03, a statement of reconciliation conforming such financial statements to Fixed GAAP; provided further that the Borrower shall only be required to provide any such statement of reconciliation with respect to the initial quarter in which any such change in GAAP occurs and only if an amendment has not been agreed upon prior to the date the compliance certificate referred to above is delivered pursuant to this clause (ii);

 

(iii)                               as soon as possible and in any event within five days after any senior officer becomes aware or should have become aware of the occurrence of each Default continuing on the date of such statement, a statement of the chief financial officer or chief accounting officer of the Borrower setting forth details of such Default and the action that the Borrower has taken and proposes to take with respect thereto;

 

(iv)                              promptly after the sending or filing thereof, copies of all reports and registration statements that the Borrower or any Subsidiary files with the SEC; and

 

(v)                                 such other information respecting the Borrower or any of its Subsidiaries as any Lender through the Agent may from time to time reasonably request.

 

Reports, financial statements and other information required to be delivered by Borrower pursuant to clauses (i), (ii), (iii), (iv) and (v) of this subsection (i) shall be deemed to have been delivered on the date on which the Borrower posts such reports, financial statements or other information on its website on the Internet at www.travelers.com, at www.sec.gov or at such other website identified by the Borrower in a notice to the Agent and the Lenders and that is accessible by the Lenders without charge; provided that the Borrower shall deliver paper copies of such information to any Lender promptly upon request of such Lender through the Agent and provided further that the Lenders shall be deemed to have received such information on the date such information is posted at the website pursuant to this sentence.

 

(j)                                    Use of Proceeds.  Use the proceeds of any Revolving Credit Advance for general corporate purposes, including commercial paper backup, not in contravention of this Agreement or any Revolving Credit Note.

 

SECTION 5.02.  Negative Covenants.  So long as any Revolving Credit Advance shall remain unpaid, any Letter of Credit is outstanding or any Lender shall have any Commitment hereunder, the Borrower will not:

 

(a)                                 Liens, Etc.  Create or suffer to exist, or permit any of its Subsidiaries to create or suffer to exist, any Lien on or with respect to any of its properties, whether now owned or hereafter acquired (other than Unrestricted Margin Stock), other than:

 

(i)                                     Permitted Liens,

 

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(ii)                                  purchase money Liens upon or in any real property or equipment acquired or held by the Borrower or any Subsidiary in the ordinary course of business to secure the purchase price of such property or equipment or to secure Debt incurred solely for the purpose of financing the acquisition of such property or equipment, or Liens existing on such property or equipment at the time of its acquisition (other than any such Liens created in contemplation of such acquisition that were not incurred to finance the acquisition of such property) or extensions, renewals or replacements of any of the foregoing for the same or a lesser amount, provided, however, that no such Lien shall extend to or cover any properties of any character other than the real property or equipment being acquired (including the “products” and “proceeds” thereof, as each such term is defined in the Uniform Commercial Code of the State of New York), and no such extension, renewal or replacement shall extend to or cover any properties not theretofore subject to the Lien being extended, renewed or replaced,

 

(iii)                               the Liens described on Schedule 5.02(a) hereto,

 

(iv)                              Liens on property of a Person existing at the time such Person is merged into or consolidated with the Borrower or any Subsidiary of the Borrower or becomes a Subsidiary of the Borrower; provided that such Liens were not created in contemplation of such merger, consolidation or acquisition and do not extend to any assets other than those of the Person so merged into or consolidated with the Borrower or such Subsidiary or acquired by the Borrower or such Subsidiary,

 

(v)                                 Liens arising in connection with capital lease obligations; provided, however, that no such Lien shall extend to or cover any property or assets other than the property and assets subject to such capital lease obligations,

 

(vi)                              Liens arising in connection with repurchase agreements, reverse purchase agreements and other similar agreements for the purchase, sale or loan of securities, in each case in the ordinary course of business; provided that no such Lien shall extend to or cover any property or assets other than the securities subject thereto,

 

(vii)                           Liens on accounts or notes receivable (whether such accounts or notes receivable constitute accounts, instruments, chattel paper or general intangibles) and other related assets, and sales or discounts on the foregoing, arising solely in connection with the securitization thereof (whether in one transaction or in a series of transactions); provided that no such Lien shall extend to or cover any property or assets other than the receivables and related assets subject to such securitization,

 

(viii)                        Liens on Invested Assets pursuant to trust, letter of credit, pledge or other security arrangements in connection with Reinsurance Agreements or Primary Policies or the Borrower’s Society of Lloyd’s insurance program (including syndicate 5000 and any other Lloyd’s syndicate which is managed by a Subsidiary of the Borrower or for which a Subsidiary of the Borrower acts as capital provider);

 

(ix)                              other Liens securing Debt and other obligations in an aggregate principal amount, which, together with, without duplication, all other Liens permitted by clauses (iv) through (viii) above and this clause (ix), secures Debt and other obligations in an aggregate principal amount at the time such Debt or other obligations are incurred not to exceed 15% of the Net Worth of the Borrower and its Subsidiaries on a consolidated basis as of the last day of the immediately preceding fiscal period for which financial statements have been delivered,

 

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(x)                                 the replacement, extension or renewal of any Lien permitted by clause (iii) or (iv) above upon or in the same property theretofore subject thereto or the replacement, extension or renewal (without increase in the amount or change in any direct or contingent obligor) of the Debt secured thereby,

 

(xi)                              Liens in favor of the Borrower which secure the obligation of any Subsidiary to the Borrower, and

 

(xii)                           any Lien on any asset of St. Paul Fire securing a reimbursement obligation arising from the issuance of a letter of credit for the account of St. Paul Fire (or one of its Affiliates) in the ordinary course of business.

 

(b)                                 Mergers, Etc.  Merge or consolidate with or into, or convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to, any Person, except that (i) the Borrower may merge or consolidate with or into any other Person so long as (A) the Borrower is the surviving corporation or, (B) if it is not the surviving entity, (x) the surviving entity shall have assumed all of the obligations of the Borrower under this Agreement pursuant to documentation reasonably satisfactory to the Agent and shall thereafter be deemed to be the Borrower for all purposes hereunder, (y) immediately following the closing date of such consolidation or merger, the surviving entity shall have senior long-term unsecured debt ratings from at least two nationally recognized rating agencies that are at least equal to the Borrower’s ratings immediately preceding the closing date of such consolidation or merger, but in any event such rating shall not be lower than BBB- by S&P or lower than Baa3 by Moody’s, and (z) the surviving entity shall be an entity organized or existing under the laws of the United States, any state thereof, the District of Columbia or any territory thereof, and (ii) and the Borrower may convey, transfer, lease or otherwise dispose of all or substantially all of its assets to any other Person, so long as (A) such other Person shall have assumed all of the obligations of the Borrower under this Agreement pursuant to documentation reasonably satisfactory to the Agent and shall thereafter be deemed to be the Borrower for all purposes hereunder (B) immediately following the closing date of such consolidation or merger, the acquiring entity shall have senior long-term unsecured debt ratings from at least two nationally recognized rating agencies that are at least equal to the Borrower’s ratings immediately preceding the closing date of such conveyance, but in any event no such rating shall be lower than BBB- by S&P or lower than Baa3 by Moody’s, transfer, lease or disposition and (C) the acquiring entity shall be an entity organized or existing under the laws of the United States, any state thereof, the District of Columbia or any territory thereof; provided that, in all cases, that no Default shall have occurred and be continuing at the time of such proposed transaction or would result therefrom.

 

(c)                                  Accounting Changes.  Make or permit, or permit any of its Subsidiaries to make or permit, any change in accounting policies or reporting practices, except as required or permitted by GAAP or statutory accounting principles.

 

(d)                                 Use of Proceeds.  Use the proceeds of any Revolving Credit Advance to purchase or carry Margin Stock or to extend credit to others for the purpose of purchasing or carrying Margin Stock or to refund indebtedness originally incurred for such purpose, to the extent that such use of the proceeds would result in or otherwise cause a violation of Regulation U.

 

SECTION 5.03.  Financial Covenant.  So long as any Revolving Credit Advance shall remain unpaid, any Letter of Credit is outstanding or any Lender shall have any Commitment hereunder, the Borrower will maintain, as of the end of each fiscal quarter as calculated in each compliance certificate delivered pursuant to Section 5.01(i)(i) and (ii), or, in the case of Section 3.02(c), as of the date of and after giving effect to any Revolving Credit Borrowing and to the application of proceeds

 

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therefrom, any Commitment Increase or any extension of the Termination Date, an excess of Consolidated Net Worth over goodwill and other intangible assets of not less than (i) $15,480,500,000 minus (ii) 70.0% of the aggregate amount of repurchases of capital stock of the Borrower consummated by the Borrower since March 31, 2013; provided that the amount subtracted pursuant to this clause (ii) shall not exceed $1,750,000,000.

 

ARTICLE VI

 

EVENTS OF DEFAULT

 

SECTION 6.01.  Events of Default.  If any of the following events (“Events of Default”) shall occur and be continuing:

 

(a)                                 The Borrower shall fail to pay any principal of any Revolving Credit Advance when the same becomes due and payable; or the Borrower shall fail to pay any interest on any Revolving Credit Advance or, to the extent any L/C Obligation is not deemed to be converted to a Revolving Credit Borrowing under the last sentence of Section 2.03(c)(i), any Unreimbursed Amount or make any other payment of fees or other amounts payable under this Agreement or any Revolving Credit Note within three Business Days after the same becomes due and payable; or

 

(b)                                 Any representation or warranty made by the Borrower (or any of its officers) herein or in any Revolving Credit Note shall prove to have been incorrect in any material respect when made or deemed made; or

 

(c)                                  (i) The Borrower shall fail to perform or observe any term, covenant or agreement contained in Section 5.01(d)(i), (h) or (i)(iii), 5.02 or 5.03, or (ii) the Borrower shall fail to perform or observe any other term, covenant or agreement contained in this Agreement on its part to be performed or observed and such failure shall remain unremedied for 30 days after written notice thereof shall have been given to the Borrower by the Agent or any Lender, provided that it shall not be an Event of Default for a failure to provide a notice of Default under Section 5.01(i)(iii) with respect to a Default under clause (ii) of this Section 6.01(c) until the day which is 30 days after any senior officer becomes aware or should have become aware of the occurrence of such Default at which time the failure to provide such notice shall be an Event of Default; or

 

(d)                                 (i) The Borrower or any of its Subsidiaries shall fail to pay any principal of or premium or interest on any Debt that is outstanding in a principal amount or, in the case of a Hedge Agreement, net amount, of at least $100,000,000 in the aggregate (but excluding Debt outstanding hereunder) of the Borrower or such Subsidiary (as the case may be), when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue (A) after the applicable grace period, if any, specified in the agreement or instrument relating to such Debt and (B) for two Business Days following receipt by Borrower of notice of such failure to pay when due and payable; or (ii) the Borrower or any of its Subsidiaries shall fail to observe, perform or comply with any other agreement or condition relating to any such Debt other than, with respect to Debt consisting of any Hedge Agreements, termination events or similar events pursuant to the terms of such Hedge Agreements, and such failure shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such failure to observe, conform or comply is to accelerate the maturity of such Debt or declare such Debt due and payable, or required to be prepaid or redeemed (other than by a regularly scheduled required prepayment or redemption), purchased or defeased, or an offer to prepay, redeem, purchase or defease such Debt shall be required to be made, in each case prior to the stated maturity thereof; or

 

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(e)                                  The Borrower or any of its Significant Subsidiaries shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against the Borrower or any of its Significant Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its property and, in the case of any such proceeding instituted against it (but not instituted by it), either such proceeding shall remain undismissed or unstayed for a period of 60 days, or any of the actions sought in such proceeding (including, without limitation, the entry of an order for relief against, or the appointment of a receiver, trustee, custodian or other similar official for, it or for any substantial part of its property) shall occur; or the Borrower or any of its Significant Subsidiaries shall take any corporate action to authorize any of the actions set forth above in this Section 6.01(e); or

 

(f)                                   Judgments or orders for the payment of money in excess of $100,000,000 in the aggregate shall be rendered against the Borrower or any of its Subsidiaries and either (i) enforcement proceedings shall have been commenced by any creditor upon such judgment following a failure of the Borrower or any of its Subsidiaries to pay the amount of such order and such proceedings shall remain unstayed for 10 consecutive Business Days or (ii) there shall be any period of 30 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; provided, however, that any such judgment or order shall not be an Event of Default under this Section 6.01(f) if and for so long as (i) the amount of such judgment or order is covered by a valid and binding policy of insurance between the defendant and the insurer covering payment thereof and (ii) such insurer, which shall be rated at least “A” by A.M. Best Company, has been notified of, and has not disputed the claim made for payment of, the amount of such judgment or order; or

 

(g)                                  (i) Any Person or two or more Persons acting in concert shall have acquired beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934), directly or indirectly, of Voting Stock of the Borrower (or other securities convertible into such Voting Stock) representing 35% or more of the combined voting power of all Voting Stock of the Borrower; or (ii) during any period of up to 24 consecutive months, commencing before or after the date of this Agreement, individuals who at the beginning of such 24-month period were directors of the Borrower (“Continuing Directors”) shall cease for any reason (other than due to death or disability) to constitute a majority of the board of directors of the Borrower; provided, however that individuals (x) appointed by a majority of the remaining members of the board of directors of the Borrower or (y) nominated for election by a majority of the remaining members of the board of directors of the Borrower and thereafter elected as directors by the shareholders of the Borrower, shall constitute Continuing Directors; or

 

(h)                                 The Borrower or any of its ERISA Affiliates shall incur, or shall be reasonably likely to incur, liabilities relating to any Plans as a result of one or more of the following:  (i) the occurrence of any ERISA Event; (ii) the partial or complete withdrawal of the Borrower or any of its ERISA Affiliates from a Multiemployer Plan within the meaning of Part 1 of Subtitle E of Title IV of ERISA; or (iii) the reorganization (within the meaning of Section 4241 of ERISA) or the termination of a Multiemployer Plan pursuant to Section 4041A or 4042 of ERISA, which in the case of clause (i), (ii) and (iii) individually or in the aggregate would have a Material Adverse Effect; or

 

(i)                                     (i) Any insurance commissioner or any other state insurance regulatory official shall intervene through legal proceedings and assume control of any portion of the business of the Borrower or any Significant Subsidiary, or (ii) any insurance commissioner or any State insurance

 

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regulatory official shall initiate any legal proceeding not dismissed or stayed within 90 days, with a view toward intervening, in the control of a portion of the business of the Borrower or any Significant Subsidiary, which actions in the foregoing clauses (i) or (ii) could be reasonably expected to result in a Material Adverse Effect with respect to the Borrower and its Significant Subsidiaries, taken as a whole; provided that the provisions of clauses (i) and (ii) shall not include normal regulatory practices, including the review and approval of rates and forms, market conduct examinations, financial examinations, and other routine examinations conducted in the ordinary course of business with respect to the Borrower and its Significant Subsidiaries;

 

then, and in any such event, the Agent (i) shall at the request, or may with the consent, of the Required Lenders, by notice to the Borrower, declare the obligation of each Lender to make Revolving Credit Advances (other than Revolving Credit Advances to be made by an Issuing Bank or a Lender pursuant to Section 2.03(c)) and of the Issuing Banks to issue Letters of Credit to be terminated, whereupon the same shall forthwith terminate, and (ii) shall at the request, or may with the consent, of the Required Lenders, by notice to the Borrower, declare the Revolving Credit Advances, all interest thereon and all other amounts payable under this Agreement to be forthwith due and payable, whereupon the Revolving Credit Advances, all such interest and all such amounts shall become and be forthwith due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Borrower; provided, however, that in the event of an actual or deemed entry of an order for relief with respect to the Borrower under the Federal Bankruptcy Code, (A) the obligation of each Lender to make Revolving Credit Advances (other than Revolving Credit Advances to be made by an Issuing Bank or a Lender pursuant to Section 2.03(c)) and of the Issuing Banks to issue Letters of Credit shall automatically be terminated and (B) the Revolving Credit Advances, all such interest and all such amounts shall automatically become and be due and payable, without presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by the Borrower.

 

SECTION 6.02.  Actions in Respect of the Letters of Credit upon Default.  If any Event of Default shall have occurred and be continuing, the Agent may with the consent, or shall at the request, of the Required Lenders, require that the Borrower provide Cash Collateral pursuant to the terms of Section 2.21; provided, however, that upon the occurrence of an actual or deemed entry of an order for relief with respect to the Borrower under the Federal Bankruptcy Code, the obligation of the Borrower to Cash Collateralize the L/C Obligations as aforesaid shall automatically become effective without further act of the Agent or any Lender.  If at any time thereafter the Agent determines that the funds held in the Secured L/C Account and the Cash Collateral Account are less than the then outstanding amount of all L/C Obligations, then the Borrower will, forthwith upon demand by the Agent, pay to the Agent, as additional funds, which the Agent determines to be free and clear of any right and claim, which additional funds shall be deposited and held in the Secured L/C Account or the Cash Collateral Account, as appropriate, an amount equal to the excess of (a) such then outstanding amount of all L/C Obligations over (b) the total amount of funds, if any, then held in the Secured L/C Account and the Cash Collateral Account.

 

SECTION 6.03.  Application of Funds.  After the exercise of remedies provided for in Sections 6.01 or 6.02 (or after the Revolving Credit Advances have automatically become immediately due and payable and the L/C Obligations have automatically been required to be Cash Collateralized as set forth in the proviso to Section 6.02), any amounts received on account of the amounts owing under this Agreement or any Revolving Credit Note shall, subject to the provisions of Sections 2.03(g), 2.21 and 2.22, be applied by the Agent in the following order:

 

First, to payment of that portion of the obligations constituting fees, indemnities, expenses and other amounts (including fees, charges and disbursements of counsel to the Agent and

 

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amounts payable under Article III) payable under this Agreement or other writing to the Agent in its capacity as such;

 

Second, to payment of that portion of the obligations constituting amounts payable pursuant to the second sentence of Section 8.04(a) to the Lenders and the Issuing Banks (including fees, charges and disbursements of counsel to the respective Lenders and the Issuing Banks), ratably among them in proportion to the respective amounts described in this clause Second payable to them;

 

Third, to payment of that portion of the obligations constituting accrued and unpaid Letter of Credit Fees and interest on the Revolving Credit Borrowings and other obligations, ratably among the Lenders and the Issuing Banks in proportion to the respective amounts described in this clause Third payable to them;

 

Fourth, to payment of that portion of the obligations constituting unpaid principal of the Revolving Credit Borrowings, ratably among the Lenders and the Issuing Banks in proportion to the respective amounts described in this clause Fourth held by them;

 

Fifth, to payment of that portion of the obligations constituting fees, indemnities and other amounts (other than principal, interest and Letter of Credit Fees and amounts payable pursuant to clause Second above) payable under this Agreement to the Lenders and the Issuing Banks (including fees, charges and disbursements of counsel to the respective Lenders and the Issuing Banks and amounts payable under Section 2.13), ratably among them in proportion to the respective amounts described in this clause Fifth payable to them;

 

Sixth, to the Agent for the account of the Issuing Banks, to Cash Collateralize that portion of L/C Obligations comprised of the aggregate undrawn amount of Letters of Credit to the extent not otherwise Cash Collateralized by the Borrower pursuant to Sections 2.03 and 2.21;

 

Last, the balance, if any, after all of the obligations have been indefeasibly paid in full, to the Borrower or as otherwise required by law.

 

Subject to Sections 2.03(c) and 2.22, amounts used to Cash Collateralize the aggregate undrawn amount of Letters of Credit pursuant to clause Fifth above shall be applied to satisfy drawings under such Letters of Credit as they occur.  Subject to Section 2.03(g), amounts deposited in the Secured L/C Account with respect to Secured Letters of Credit shall be applied to satisfy drawings under such Secured Letters of Credit as the occur.  After the exercise of remedies provided for in Sections 6.01 or 6.02, if any amount remains on deposit in the Cash Collateral Account or the Secured L/C Account after all Letters of Credit have either been fully drawn or expired, such remaining amount shall be applied to the other obligations, if any, in the order set forth above.

 

ARTICLE VII

 

THE AGENT

 

SECTION 7.01.  Authorization and Action.  Each Lender (in its capacities as a Lender and Issuing Bank, as applicable) hereby appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers and discretion under this Agreement as are delegated to the Agent by the terms hereof, together with such powers and discretion as are reasonably incidental thereto.  As to any matters not expressly provided for by this Agreement (including, without limitation, enforcement or collection of the Revolving Credit Notes), the Agent shall not be required to exercise any discretion (other than such discretion as is delegated to the Agent under the terms of this Agreement, together with such

 

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powers as are reasonably incidental thereto) or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Agent shall believe in good faith shall be necessary, under the circumstances), and such instructions shall be binding upon all Lenders and all holders of Revolving Credit Notes; provided, however, that the Agent shall not be required to take any action that, in its opinion or in the opinion of counsel to the Agent, exposes the Agent or its Affiliates and their officers, directors, employees, agents and advisors to personal liability or that is contrary to this Agreement or applicable law.  The Agent agrees to give to each Lender prompt notice of each notice given to it by the Borrower pursuant to the terms of this Agreement.  The provisions of this Article are solely for the benefit of the Agent, the Lenders, and the Issuing Banks, and the Borrower shall not have rights as a third party beneficiary of any of such provisions.

 

SECTION 7.02.  Agent’s Reliance, Etc.  Neither the Agent nor any of its directors, officers, agents or employees shall be liable for any action taken or omitted to be taken by it or them under or in connection with this Agreement, except for its or their own gross negligence or willful misconduct.  Without limitation of the generality of the foregoing, the Agent:  (i) may treat the Lender that made any Revolving Credit Advance as the holder of the Debt resulting therefrom until the Agent receives and accepts an Assumption Agreement entered into by an Assuming Lender as provided in Section 2.18 or 2.19, as the case may be, or an Assignment and Assumption entered into by such Lender, as assignor, and an Eligible Assignee, as assignee, as provided in Section 8.07; (ii) may consult with legal counsel (including counsel for the Borrower), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts; (iii) makes no warranty or representation to any Lender and shall not be responsible to any Lender for any statements, warranties or representations (whether written or oral) made in or in connection with this Agreement; (iv) shall not have any duty to ascertain or to inquire as to the performance, observance or satisfaction of any of the terms, covenants or conditions of this Agreement on the part of the Borrower or the existence at any time of any Default or to inspect the property (including the books and records) of the Borrower; (v) shall not be responsible to any Lender for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of, or the perfection or priority of any lien or security interest created or purported to be created under or in connection with, this Agreement or any other instrument or document furnished pursuant hereto; (vi) shall incur no liability under or in respect of this Agreement by acting upon any notice, consent, certificate or other instrument or writing (which may be by electronic message, Internet website posting, telecopier, facsimile, or other distribution) believed by it to be genuine and signed or sent by the proper party or parties and may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon; (viii) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing; (ix) shall not be deemed to have knowledge of any Default unless and until notice describing such Default is given to the Agent by the Borrower, a Lender, or an Issuing Bank; (x) shall not be responsible for the contents of any certificate, report, or other document delivered hereunder or in connection herewith; and (xi) shall not be responsible for the satisfaction of any condition set forth in Article III or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Agent; it being understood that in determining compliance with any condition hereunder to the making of a Revolving Credit Advance or the Issuance of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or an Issuing Bank, the Agent may presume that such condition is satisfactory to such Lender or such Issuing Bank unless the Agent shall have received notice to the contrary from such Lender or such Issuing Bank prior to the making of such Revolving Credit Advance or the Issuance of such letter of Credit.  The Agent may consult with legal counsel, independent accountants, and other experts selected by it, as well as the Borrower and its representatives, and shall not be liable to the Lenders or the Issuing Banks for any action taken or not taken by it in accordance with the advice of any such counsel, accountants, or experts.

 

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SECTION 7.03.  Delegation of Duties.  The Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any Revolving Credit Note by or through any one or more sub-agents appointed by the Agent.  The Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective officers, directors, employees, agents and advisors.  The exculpatory provisions of this Article VII shall apply to any such sub-agent and to the respective officers, directors, employees, agents and advisors of the Agent and any such sub agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Agent.

 

SECTION 7.04.  Rights as a Lender.  The Person serving as the Agent hereunder shall have the same rights and powers in its capacity as a Lender under this Agreement as any other Lender and may exercise the same as though it were not the Agent; and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Agent hereunder in its individual capacity.  Such Person and its Affiliates may accept deposits from, lend money to, act as trustee under indentures of, accept investment banking engagements from, act as the financial advisor or in any other advisory capacity for, and generally engage in any kind of business with, the Borrower, any of its Subsidiaries and any Person who may do business with or own securities of the Borrower or any Subsidiary or Affiliate thereof, all as if such Person were not the Agent and without any duty to account therefor to the Lenders.  The Agent shall have no duty to disclose information obtained or received by it or any of its Affiliates relating to the Borrower or its Subsidiaries to the extent such information was obtained or received in any capacity other than as Agent.

 

SECTION 7.05.  Lender Credit Decision.  Each Lender acknowledges that it has, independently and without reliance upon the Agent or any other Lender and based on the financial statements referred to in Section 4.01 and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement.  Each Lender also acknowledges that it will, independently and without reliance upon the Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement.

 

SECTION 7.06.  Indemnification.

 

(a)                                 Each Lender severally agrees to indemnify the Agent (to the extent not reimbursed by the Borrower), ratably according to the respective principal amounts of the Revolving Credit Advances (and any participations in Letter of Credit) then owed to each of them (or if no Revolving Credit Advances are at the time outstanding, ratably according to the respective amounts of their Revolving Credit Commitments), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever that may be imposed on, incurred by, or asserted against the Agent in any way relating to or arising out of this Agreement or any action taken or omitted by the Agent under this Agreement (collectively, the “Indemnified Costs”), provided that no Lender shall be liable for any portion of the Indemnified Costs resulting from the Agent’s gross negligence or willful misconduct.  Without limitation of the foregoing, each Lender agrees to reimburse the Agent promptly upon demand for its ratable share of any out-of-pocket expenses (including reasonable counsel fees) incurred by the Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, to the extent that the Agent is not reimbursed for such expenses by the Borrower.  In the case of any investigation, litigation or proceeding giving rise to any Indemnified Costs, this Section 7.06 applies whether any such investigation, litigation or proceeding is brought by the Agent, any Lender or a third party.

 

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(b)                                 Each Lender severally agrees to indemnify the Issuing Banks (to the extent not promptly reimbursed by the Borrower) from and against such Lender’s Ratable Share of any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever that may be imposed on, incurred by, or asserted against any such Issuing Bank in any way relating to or arising out of this Agreement, any Revolving Credit Note, or any action taken or omitted by such Issuing Bank hereunder or in connection herewith; provided, however, that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from such Issuing Bank’s gross negligence or willful misconduct.  Without limitation of the foregoing, each Lender agrees to reimburse any such Issuing Bank promptly upon demand for its Ratable Share of any costs and expenses (including, without limitation, fees and expenses of counsel) payable by the Borrower under Section 8.04, to the extent that such Issuing Bank is not promptly reimbursed for such costs and expenses by the Borrower.

 

(c)                                  The failure of any Lender to reimburse the Agent or any Issuing Bank promptly upon demand for its Ratable Share of any amount required to be paid by the Lenders to the Agent as provided herein shall not relieve any other Lender of its obligation hereunder to reimburse the Agent or any Issuing Bank for its Ratable Share of such amount, but no Lender shall be responsible for the failure of any other Lender to reimburse the Agent or any Issuing Bank for such other Lender’s Ratable Share of such amount.  Without prejudice to the survival of any other agreement of any Lender hereunder, the agreement and obligations of each Lender contained in this Section 7.06 shall survive the payment in full of principal, interest and all other amounts payable hereunder and under the Revolving Credit Notes.  Each of the Agent and each Issuing Bank agrees to return to the Lenders their respective Ratable Shares of any amounts paid under this Section 7.06 that are subsequently reimbursed by the Borrower.

 

SECTION 7.07.  Successor Agent.

 

(a)                                 The Agent may resign at any time by giving written notice thereof to the Lenders, the Issuing Banks, and the Borrower and may be removed at any time with cause by the Required Lenders.  Upon any such resignation or removal, the Required Lenders shall have the right to appoint a successor Agent with the consent, if no Event of Default has occurred and is continuing, of the Borrower, which consent shall not be unreasonably withheld or delayed.  If no successor Agent shall have been so appointed by the Required Lenders, and shall have accepted such appointment, within 30 days after the retiring Agent’s giving of notice of resignation or the Required Lenders’ removal of the retiring Agent, then the retiring Agent may, on behalf of the Lenders, appoint a successor Agent, which shall be a commercial bank organized under the laws of the United States of America or of any State thereof and having a combined capital and surplus of at least $500,000,000; provided that if the Agent shall notify the Borrower and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (i) the retiring Agent shall be discharged from its duties and obligations hereunder and under any Revolving Credit Note and (ii) all payments, communications and determinations provided to be made by, to or through the Agent shall instead be made by or to each Lender and each Issuing Bank directly, until such time as the Required Lenders appoint a successor Agent as provided for above in this Section.  Upon the acceptance of any appointment as Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, discretion, privileges and duties of the retiring or retired Agent, and the retiring or retired Agent shall be discharged from its duties and obligations under this Agreement (if not already discharged therefrom as provided above in this Section 7.07(a)).  After any retiring Agent’s resignation or removal hereunder as Agent, the provisions of this Article VII shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement. The fees payable by the Borrower to a successor Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor.  After the retiring Agent’s

 

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resignation hereunder and under any Revolving Credit Note, the provisions of this Article VII and Section 8.04 shall continue in effect for the benefit of such retiring Agent, its sub-agents and their respective officers, directors, employees, agents and advisors in respect of any actions taken or omitted to be taken by any of them while the retiring Agent was acting as Agent.

 

(b)                                 Any resignation by the Person then acting as Agent pursuant to this Section 7.07 shall also constitute, in the sole discretion of such Person, its resignation as an Issuing Bank with respect to any Letters of Credit issued after the date of such resignation.  Upon the acceptance of a successor’s appointment as Agent hereunder, (i) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the resigning Issuing Bank, (ii) the resigning Issuing Bank shall be discharged from all of its respective duties and obligations hereunder or under any Revolving Credit Note, and (iii) the successor Issuing Bank shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory to the resigning Issuing Bank to effectively assume the obligations of the resigning Issuing Bank with respect to such Letters of Credit.

 

SECTION 7.08.  Other Agents.  Each Lender hereby acknowledges that no documentation agent or any other Lender designated as any “Agent” on the cover page hereof or in the preamble hereto (other than Wells Fargo in its capacity as Agent) shall have any powers, duties, or responsibilities under this Agreement, except in its capacity, as applicable, as the Agent, a Lender, or an Issuing Bank hereunder.

 

ARTICLE VIII

 

MISCELLANEOUS

 

SECTION 8.01.  Amendments, Etc.  No amendment or waiver of any provision of this Agreement or the Revolving Credit Notes, nor consent to any departure by the Borrower therefrom, shall in any event be effective unless the same shall be in writing, signed by the Required Lenders, and the Borrower, and notice of such amendment or waiver shall be provided to the Agent, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no amendment, waiver or consent shall, unless in writing and signed by each Lender directly affected thereby, do any of the following:  (a) waive any of the conditions specified in Section 3.01; (b) extend or increase the Commitments of the Lenders (or reinstate any Commitment terminated pursuant to Section 6.01), other than increases of Commitments as provided in Section 2.18 and extensions of Commitments as provided in Section 2.19; (c) reduce the principal of, or rate of interest on, any Revolving Credit Advance or (subject to clause (iii) of the last proviso in this Section 8.01) any fees or other amounts payable hereunder or under any Revolving Credit Note; provided, however, that only the consent of the Required Lenders shall be necessary to amend the definition of “Default Interest” or “Default Rate” or to waive any obligation of the Borrower to pay Default Interest or interest or Letter of Credit Fees at the Default Rate; (d) change Section 6.03 in a manner that would alter the ratable sharing of payments required thereby; (e) postpone any date fixed by this Agreement or the Revolving Credit Notes for any payment or mandatory prepayment of principal, interest, fees, or other amounts due to the Lenders hereunder or under the Revolving Credit Notes, other than extensions of the Termination Date as provided in Section 2.19; (f) change the definition of “Required Lenders” or the percentage of the Revolving Credit Commitments or of the aggregate unpaid principal amount of the Revolving Credit Advances, or the number of Lenders, that shall be required for the Lenders or any of them to take any action hereunder; (g) release any of the collateral in the Secured L/C Account, the Cash Collateral Account or other collateral pledged pursuant to this Agreement, other than releases in accordance with the terms hereof; or (h) amend this Section 8.01; and provided further that (i) no amendment, waiver or consent shall, unless in writing and signed by the Agent in addition to the Lenders required above to take

 

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such action, affect the rights or duties of the Agent under this Agreement or any Revolving Credit Note; (ii) no amendment, waiver or consent shall, unless in writing and signed by each Issuing Bank adversely affected thereby in addition to the Lenders required above to take such action, affect the rights or obligations of such Issuing Bank in its capacity as such under this Agreement; and (iii) any fee letter may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto.  Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder (and any amendment, waiver or consent which by its terms requires the consent of all Lenders or each affected Lender may be effected with the consent of the applicable Lenders other than Defaulting Lenders), except that (x) the Commitment of any Defaulting Lender may not be increased or extended without the consent of such Defaulting Lender and (y) any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender that by its terms affects any Defaulting Lender more adversely than other affected Lenders shall require the consent of such Defaulting Lender.

 

SECTION 8.02.  Notices, Etc.

 

(a)                                 All notices and other communications provided for hereunder shall be either (x) in writing (including telecopier or facsimile communication) and mailed, emailed, telecopied, facsimiled or delivered; provided that the foregoing, with respect to electronic communication, shall not apply to notices to the Borrower, to any Lender or to any Issuing Bank pursuant to Article II if the Borrower, such Lender or such Issuing Bank, as applicable, has notified the Agent that it is incapable of receiving notices under such Article by electronic communication or (y) as and to the extent set forth in Section 8.02(b) and in the proviso to this Section 8.02(a), (i) if to the Borrower, to the address, telecopier or facsimile number, electronic mail address or telephone number specified on Schedule 8.02 or such other address(es) as shall be designated by the Borrower in a written notice to the Agent, (ii) if to any Lender, to the address, telecopier or facsimile number, electronic mail address or telephone number specified in its Administrative Questionnaire, and (iii) if to the Agent or an Issuing Lender, to the address, telecopier or facsimile number, electronic mail address or telephone number specified for such Person on Schedule 8.02; or, as to the Agent, at such other address as shall be designated by such party in a written notice to the Borrower and the other parties and, as to each other party, at such other address as shall be designated by such party in a written notice to the Borrower and the Agent, provided that materials required to be delivered pursuant to Section 5.01(i)(i), (ii), (iii), (iv) or (v) shall, at the option of the Borrower, be delivered to the Agent as specified in Section 5.01 or 8.02(b).  All such notices and other communications shall be deemed to be given or made upon the earlier to occur of (i) actual receipt by the relevant party hereto and (ii) (A) if delivered by hand or by overnight courier, when signed for by or on behalf of the relevant party hereto; (B) if delivered by mail, four (4) Business Days after deposit in the mails, postage prepaid; (C) if delivered by facsimile, when sent and receipt has been confirmed by telephone; (D) if delivered by email, upon confirmation of receipt (provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next Business Day for the recipient), except that notices and communications to the Agent pursuant to Article II, III or VII shall not be effective until received by the Agent; and (E) other than notices delivered pursuant to Section 5.01, if posted to an Internet or intranet website, upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (D) of notification that such notice or communication is available and identifying the website address therefore.  Delivery by telecopier or other electronic imaging means of an executed counterpart of any amendment or waiver of any provision of this Agreement or the Revolving Credit Notes or of any Exhibit hereto to be executed and delivered hereunder shall be effective as delivery of a manually executed counterpart thereof.

 

(b)                                 So long as Wells Fargo or any of its Affiliates is the Agent, materials required to be delivered pursuant to Section 5.01(i)(i), (ii), (iii), (iv) and (v) may be delivered to the Agent in an

 

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electronic medium in a format acceptable to the Agent and the Lenders by e-mail at agencyservices.requests@wellsfargo.com.  The Borrower agrees that the Agent may make such materials, as well as any other written information, documents, instruments and other material relating to the Borrower, any of its Subsidiaries or any other materials or matters relating to this Agreement, the Revolving Credit Notes or any of the transactions contemplated hereby (collectively, the “Communications”) available to the Lenders by posting such notices on SyndTrak or a substantially similar electronic system (the “Platform”).

 

(c)                                  Each Lender agrees that notice to it (as provided in the next sentence) (a “Notice”) specifying that any Communications have been posted to the Platform shall constitute effective delivery of such information, documents or other materials to such Lender for purposes of this Agreement; provided that if requested by any Lender the Agent shall deliver a copy of the Communications to such Lender by email, facsimile or telecopier.  Each Lender agrees (i) to notify the Agent in writing of such Lender’s e-mail address to which a Notice may be sent by electronic transmission (including by electronic communication) on or before the date such Lender becomes a party to this Agreement (and from time to time thereafter to ensure that the Agent has on record an effective e-mail address for such Lender) and (ii) that any Notice may be sent to such e-mail address.

 

(d)                                 The Platform.  THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.”  THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS.  NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM.  In no event shall the Agent or any of its officers, directors, employees, agents and advisors (collectively, the “Agent Parties”) have any liability to the Borrower, any Lender, any Issuing Bank or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of the Borrower’s or the Agent’s transmission of Borrower Materials through the Internet, except to the extent that such losses, claims, damages, liabilities or expenses are determined by a court of competent jurisdiction by a final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Agent Party; provided, however, that in no event shall any Agent Party have any liability to the Borrower, any Lender, any Issuing Bank or any other Person for indirect, special, incidental, consequential or punitive damages (as opposed to direct or actual damages).

 

SECTION 8.03.  No Waiver; Remedies.  No failure by any Lender, any Issuing Bank or the Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

 

Notwithstanding anything to the contrary contained herein or in any Revolving Credit Note, the authority to enforce rights and remedies hereunder and under any Revolving Credit Note against the Borrower shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the Agent in accordance with Section 6.01 for the benefit of all the Lenders and the Issuing Banks; provided, however, that the foregoing shall not prohibit (a) the Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Agent) hereunder and under any Revolving Credit Note,

 

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(b) each Issuing Bank from exercising the rights and remedies that inure to its benefit (solely in its capacity as Issuing Bank, as the case may be) hereunder and under any Revolving Credit Note, (c) any Lender from exercising setoff rights in accordance with Section 8.05 (subject to the terms of Section 2.14), (d) one or more Lenders appointed by the Required Lenders from exercising such lawful rights and remedies hereunder and under any Revolving Credit Note, as the Required Lenders may direct, in the event the Agent shall have been directed by the Required Lenders in writing to exercise such rights and remedies and shall have refused to do so, or (e) any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to the Borrower under any law relating to bankruptcy, insolvency or reorganization or relief of debtors; and provided, further, that if at any time there is no Person acting as Agent hereunder and under any Revolving Credit Note, then (i) the Required Lenders shall have the rights otherwise ascribed to the Agent pursuant to Section 6.01 and (ii) in addition to the matters set forth in clauses (b), (c) and (d) of the preceding proviso and subject to Section 2.14, any Lender may, with the consent of the Required Lenders, enforce any rights and remedies available to it and as authorized by the Required Lenders.

 

SECTION 8.04.  Costs; Expenses; and Indemnification.

 

(a)           The Borrower agrees to pay promptly all reasonable and documented costs and expenses of the Agent in connection with the preparation, syndication, execution, delivery, administration, modification and amendment of this Agreement, the Revolving Credit Notes and the other documents to be delivered hereunder, including, without limitation, the reasonable and documented fees and expenses of one counsel for the Agent with respect thereto and with respect to advising the Agent as to its rights and responsibilities under this Agreement.  The Borrower further agrees to pay promptly all costs and expenses of the Agent and the Lenders, if any, in connection with the enforcement (whether through negotiations, legal proceedings or otherwise) of this Agreement, the Revolving Credit Notes and the other documents to be delivered hereunder, including, without limitation, fees and expenses of one counsel for the Agent and the Lenders (including in connection with the enforcement of rights under this Section 8.04(a)), unless the Agent and the Lenders have conflicting interests that cannot reasonably be represented by one counsel, in which case such expenses shall include the reasonable fees and disbursements of no more than such number of counsels as are necessary to represent such conflicting interests).  All references in this clause (a) to fees and expenses shall be deemed to refer to invoiced and reasonably documented out-of-pocket fees and expenses.

 

(b)           The Borrower agrees to indemnify and hold harmless the Agent and each Lender and each of their respective Affiliates and their officers, directors, employees, agents and advisors (each, an “Indemnified Party”) from and against any and all claims, damages, penalties, losses, liabilities and expenses (including, without limitation, reasonable fees and expenses of counsel (limited in the case of legal fees and expenses to the reasonable fees and expenses of one counsel to the Indemnified Parties unless the Indemnified Parties have conflicting interests that cannot reasonably be represented by one counsel, in which case such expenses shall include the reasonable fees and disbursements of no more than such number of counsels as are necessary to represent such conflicting interests)) incurred by or asserted or awarded against any Indemnified Party in each case arising out of or in connection with or by reason of any investigation, litigation or proceeding (or preparation of a defense in connection therewith) by a third party with respect to the Revolving Credit Notes, this Agreement, the arrangement or syndication of this Agreement, any of the transactions contemplated herein or the actual or proposed use of the proceeds of the Revolving Credit Advances or Letters of Credit, except to the extent such claim, damage, loss, liability or expense is found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted from (i) such Indemnified Party’s gross negligence or willful misconduct or the gross negligence or willful misconduct of such Indemnified Party’s controlled Affiliates or its or their officers, directors or employees or (ii) a material breach by such Indemnified Party or its controlled Affiliates or officers, directors or employees of its express obligations under this Agreement.  Each party hereto agrees

 

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not to assert any claim for special, indirect, consequential or punitive damages against the Agent, any Lender, the Borrower, any of their Affiliates, or any of their respective directors, officers, employees, attorneys and agents, on any theory of liability, arising out of or otherwise relating to the Revolving Credit Notes, this Agreement, any of the transactions contemplated herein or the actual or proposed use of the proceeds of the Revolving Credit Advances, provided that this sentence shall not relieve the Borrower from any of its obligations hereunder, including, without limitation any of its indemnification obligations set forth in this Agreement.  All references in this clause (b) to fees and expenses shall be deemed to refer to invoiced and reasonably documented out-of-pocket fees and expenses.

 

(c)           If any payment of principal of, or Conversion of, any Eurodollar Rate Advance is made by the Borrower to or for the account of a Lender other than on the last day of the Interest Period for such Revolving Credit Advance, as a result of a payment or Conversion pursuant to Section 2.08(d) or (e), 2.10 or 2.12, acceleration of the maturity of the Revolving Credit Notes pursuant to Section 6.01 or for any other reason, or by an Eligible Assignee to a Lender other than on the last day of the Interest Period for such Revolving Credit Advance upon an assignment of rights and obligations under this Agreement pursuant to Section 8.07 as a result of a demand by the Borrower pursuant to Section 8.07(b), the Borrower shall, upon demand by such Lender (with a copy of such demand to the Agent), pay to the Agent for the account of such Lender any amounts required to compensate such Lender for any additional losses, costs or expenses that it may reasonably incur as a result of such payment or Conversion, including, without limitation, any loss (excluding loss of anticipated profits, indirect losses and special or consequential damages), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by any Lender to fund or maintain such Revolving Credit Advance.

 

(d)           Without prejudice to the survival of any other agreement of the Borrower hereunder, the agreements and obligations of the Borrower contained in Sections 2.11, 2.14 and 8.04 shall survive the payment in full of principal, interest and all other amounts payable hereunder and under the Revolving Credit Notes.

 

SECTION 8.05.  Right of Set-off.  Upon (i) the occurrence and during the continuance of any Event of Default under Section 6.01(a) and (ii) the making of the request or the granting of the consent specified by Section 6.01 to authorize the Agent to declare the Revolving Credit Advances due and payable pursuant to the provisions of Section 6.01, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Lender or such Affiliate to or for the credit or the account of the Borrower against any and all of the obligations of the Borrower now or hereafter existing under this Agreement and any Revolving Credit Note held by such Lender which are then due and payable.  Each Lender agrees promptly to notify the Borrower after any such set-off and application, provided that the failure to give such notice shall not affect the validity of such set-off and application.  The rights of each Lender and its Affiliates under this Section 8.05 are in addition to other rights and remedies (including, without limitation, other rights of set-off) that such Lender and its Affiliates may have.

 

SECTION 8.06.  Binding Effect; Integration.  This Agreement shall become effective (other than Section 2.01, which shall only become effective upon satisfaction of the conditions precedent set forth in Section 3.01) when it shall have been executed by the Borrower and the Agent and when the Agent shall have been notified by each Initial Lender that such Initial Lender has executed it and thereafter shall be binding upon and inure to the benefit of the Borrower, the Agent and each Lender and their respective successors and assigns, except that the Borrower shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of the Lenders.  Upon the effectiveness of this Agreement, the reimbursement and indemnification obligations of the Borrower in the seventh and eighth paragraphs of the Commitment Letter and the representations, warranties and

 

61

 

covenants of the Borrower in the sixth paragraph of the Commitment Letter shall automatically be terminated and be superseded by the applicable provisions of this Agreement.

 

SECTION 8.07.  Assignments and Participations.

 

(a)           No Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of Section 8.07(b), (ii) by way of participation in accordance with the provisions of Section 8.07(f), or (iii) by way of pledge or assignment of a security interest subject to the restrictions of Section 8.07(h) (and any other attempted assignment or transfer by any Lender shall be null and void).  Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, participants to the extent provided in Section 8.07(f) and, to the extent expressly contemplated hereby, the respective officers, directors, employees, agents and advisors of each of the Agent, the Issuing Banks and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

 

(b)           Each Lender may and, if demanded by the Borrower in accordance with Section 2.20, upon at least five Business Days’ notice to such Lender and the Agent, will assign to one or more Persons all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Revolving Credit Commitment, the Revolving Credit Advances owing to it, its participations in Letters of Credit and the Revolving Credit Note or Revolving Credit Notes held by it); provided, however, that (i) each such assignment shall be of a constant, and not a varying, percentage of all rights and obligations under this Agreement, (ii) except in the case of an assignment to a Person that, immediately prior to such assignment, was a Lender or an assignment of all of a Lender’s rights and obligations under this Agreement, the amount of the Revolving Credit Commitment of the assigning Lender being assigned pursuant to each such assignment (determined as of the date of the Assignment and Assumption with respect to such assignment) shall in no event be less than $10,000,000 or an integral multiple of $1,000,000 in excess thereof, unless the Borrower and the Agent otherwise agree, (iii) each such assignment shall be to an Eligible Assignee, (iv) each such assignment made as a result of a demand by the Borrower in accordance with Section 2.20 shall be arranged by the Borrower after consultation with the Agent and shall be either an assignment of all of the rights and obligations of the assigning Lender under this Agreement or an assignment of a portion of such rights and obligations made concurrently with another such assignment or other such assignments that together cover all of the rights and obligations of the assigning Lender under this Agreement, (v) no Lender shall be obligated to make any such assignment as a result of a demand by the Borrower in accordance with Section 2.20 unless and until such Lender shall have received one or more payments from either the Borrower or one or more Eligible Assignees in an aggregate amount at least equal to the aggregate outstanding principal amount of the Revolving Credit Advances owing to such Lender, together with accrued interest thereon to the date of payment of such principal amount and all other amounts payable to such Lender under this Agreement, (vi) the consent of the Issuing Banks (such consent not to be unreasonably withheld or delayed) shall be required for any assignment that increases the obligation of the assignee to participate in exposure under one or more Letters of Credit (whether or not then outstanding), (vii) the parties to each such assignment shall execute and deliver to the Agent, for its acceptance and recording in the Register, an Assignment and Assumption, together with an Administrative Questionnaire from any assignee that is not a Lender, and any Revolving Credit Note subject to such assignment and a processing and recordation fee of $3,500 payable by the assignor or the Eligible Assignee, as applicable, provided, however, that in the case of each assignment made as a result of a demand by the Borrower, such recordation fee shall be payable by the Borrower except that no such recordation fee shall be payable in the case of an assignment made at the request of the Borrower to an Eligible Assignee that is an existing Lender, and (viii) any Lender may, without the approval of the Borrower and the Agent, assign all or a portion of its rights to any of its Affiliates.  Upon such execution, delivery, acceptance and recording, from and after the effective date

 

62

 

specified in each Assignment and Assumption, (x) the assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Assumption, have the rights and obligations of a Lender hereunder and (y) the Lender assignor thereunder shall, to the extent that rights and obligations hereunder have been assigned by it pursuant to such Assignment and Assumption, relinquish its rights (other than its rights under Section 2.11, 2.14 and 8.04 to the extent any claim thereunder relates to an event arising prior such assignment) and be released from its obligations (other than its obligations under Section 8.05 to the extent any claim thereunder relates to an event arising prior to such assignment) under this Agreement (and, in the case of an Assignment and Assumption covering all or the remaining portion of an assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto).

 

(c)           By executing and delivering an Assignment and Assumption, the Lender assignor thereunder and the assignee thereunder confirm to and agree with each other and the other parties hereto as follows:  (i) other than as provided in such Assignment and Assumption, such assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of, or the perfection or priority of any lien or security interest created or purported to be created under or in connection with, this Agreement or any other instrument or document furnished pursuant hereto; (ii) such assigning Lender makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Borrower or the performance or observance by the Borrower of any of its obligations under this Agreement or any other instrument or document furnished pursuant hereto; (iii) such assignee confirms that it has received a copy of this Agreement, together with copies of the financial statements referred to in Section 4.01 and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Assumption; (iv) such assignee will, independently and without reliance upon the Agent, such assigning Lender or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement; (v) such assignee confirms that it is an Eligible Assignee; (vi) such assignee appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers and discretion under this Agreement as are delegated to the Agent by the terms hereof, together with such powers and discretion as are reasonably incidental thereto; and (vii) such assignee agrees that it will perform in accordance with their terms all of the obligations that by the terms of this Agreement are required to be performed by it as a Lender, including providing such documentation as is required under Section 2.14(f).

 

(d)           Upon its receipt of an Assignment and Assumption executed by an assigning Lender and an assignee representing that it is an Eligible Assignee, together with any Revolving Credit Notes subject to such assignment, the Agent shall, if such Assignment and Assumption has been completed and is in substantially the form of Exhibit C hereto, (i) accept such Assignment and Assumption, (ii) record the information contained therein in the Register and (iii) give prompt notice thereof to the Borrower.

 

(e)           The Agent shall maintain at its address referred to in Section 8.02 a copy of each Assumption Agreement and each Assignment and Assumption delivered to and accepted by it and a register for the recordation of the names and addresses of the Lenders and the Commitment of, and principal amount of the Revolving Credit Advances owing to, each Lender from time to time (the “Register”).  The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and the Borrower, the Agent and the Lenders shall treat each Person whose name is recorded in the Register as a Lender hereunder for all purposes of this Agreement.  The Register shall be available for inspection by the Borrower or any Lender at any reasonable time and from time to time upon reasonable prior notice.

 

63

 

(f)            Each Lender may sell participations to one or more banks or other entities (other than the Borrower or any of its Affiliates) in or to all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitment, the Revolving Credit Advances owing to it and any Revolving Credit Note or Revolving Credit Notes held by it); provided, however, that (i) such Lender’s obligations under this Agreement (including, without limitation, its Commitment to the Borrower hereunder) shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) such Lender shall remain the holder of any such Revolving Credit Note for all purposes of this Agreement, (iv) the Borrower, the Agent, the Issuing Banks and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement and (v) no participant under any such participation shall have any right to approve any amendment or waiver of any provision of this Agreement or any Revolving Credit Note, or any consent to any departure by the Borrower therefrom, except to the extent that such amendment, waiver or consent would reduce the principal of, or interest on, the Revolving Credit Notes or any fees or other amounts payable hereunder, in each case to the extent subject to such participation, or postpone any date fixed for any payment of principal of, or interest on, the Revolving Credit Notes or any fees or other amounts payable hereunder, in each case to the extent subject to such participation.

 

(g)           Any Lender may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 8.07, disclose to the assignee or participant or proposed assignee or participant, any information relating to the Borrower furnished to such Lender by or on behalf of the Borrower; provided that, prior to any such disclosure, the assignee or participant or proposed assignee or participant shall agree to preserve the confidentiality of any Confidential Information relating to the Borrower received by it from such Lender and the Borrower shall be a named third party beneficiary under such confidentiality agreement executed by such assignee or participant or proposed assignee or participant.

 

(h)           Each Lender that sells a participation, acting solely for this purpose as a non-fiduciary agent of the Borrower, shall maintain a register on which it enters the name and address of each participant and the principal amounts (and stated interest) of each participant’s interest in the Revolving Credit Notes or other obligations under this Agreement (the “Participant Register”), provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register to the Borrower or any other Person (including the identity of any Participant or any information relating to a Participant’s interest in any Revolving Credit Advance or its other obligations under this Agreement or any Revolving Credit Note) except to the extent that such disclosure is necessary to establish that the Revolving Credit Advances or such other obligations are in registered form under Section 5f.103-1(c) of the United States Treasury Regulations.  The entries in the Participant Register shall be conclusive, and such Lender, Borrower and the Agent shall treat each person whose name is recorded in the Participant Register pursuant to the terms hereof as the owner of such participation for all purposes of this Agreement, notwithstanding notice to the contrary.

 

(i)            Notwithstanding any other provision set forth in this Agreement, any Lender may at any time create a security interest in all or any portion of its rights under this Agreement (including, without limitation, the Revolving Credit Advances owing to it and any Revolving Credit Note or Revolving Credit Notes held by it) in favor of any Federal Reserve Bank in accordance with Regulation A of the Board or other central bank having jurisdiction over such Lender.

 

SECTION 8.08.  Confidentiality.  Neither the Agent nor any Lender shall disclose any Confidential Information to any other Person without the consent of the Borrower, other than (a) to the Agent’s or such Lender’s Affiliates and their officers, directors, employees, agents and advisors in connection with the performance of this Agreement with the Agent or such Lender being responsible for

 

64

 

compliance by the Agent’s or such Lender’s Affiliates and their officers, directors, employees, agents and advisors with the provisions of this Section 8.08 and, as contemplated by Section 8.07(g), to actual or prospective assignees and participants, and then only on a confidential basis, (b) as required by any law, rule or regulation or judicial process, (c) as requested or required by any state, federal or foreign authority or examiner regulating banks, banking or other financial institutions or self-regulatory body, (d) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder and (e) with the consent of the Borrower.  The Agent and the Lenders shall use Confidential Information solely for the purposes contemplated by this Agreement and shall not use such information for any other purpose, including using such information in connection with trading in the securities of the Borrower and or its Affiliates.

 

SECTION 8.09.  Governing Law.  This Agreement and the other L/C Related Documents and any claims, controversy, dispute or cause of action (whether in contract or tort or otherwise) based upon, arising out of or relating to this Agreement or any other L/C Related Document shall be governed by, and construed in accordance with, the laws of the State of New York (including Sections 5-1401 and 5-1402 of the New York General Obligations Law, but excluding all other choice of law and conflicts of law rules); provided that each Letter of Credit shall be governed by, and construed in accordance with, the laws or rules designated in such Letter of Credit or application therefor or, if no such laws or rules are designated, the International Standby Practices of the International Chamber of Commerce, as in effect from time to time (the “ISP”), and, as to matters not governed by the ISP, the laws of the State of New York (including Sections 5-1401 and 5-1402 of the New York General Obligations Law, but excluding all other choice of law and conflicts of law rules).

 

SECTION 8.10.  Execution in Counterparts.  This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of a signature page to this Agreement by telecopier or other electronic imaging means shall be effective as delivery of a manually executed counterpart of this Agreement.

 

SECTION 8.11.  Jurisdiction, Etc.

 

(a)           Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of any New York State court or federal court of the United States of America sitting in New York City, Borough of Manhattan, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or any other L/C Related Document or the transactions contemplated hereby or thereby, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in any such New York State court or, to the extent permitted by law, in such federal court.  The Borrower hereby irrevocably consents to the service of process in any action or proceeding in such courts by the mailing thereof by any parties hereto by registered or certified mail, postage prepaid, to the Borrower at its address specified pursuant to Section 8.02.  Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

 

(b)           Each of the parties hereto irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any other L/C Related Document in any New York State or federal court.  Each of the parties hereto hereby irrevocably

 

65

 

waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

 

SECTION 8.12.  No Liability of the Issuing Banks.  Subject to the next sentence, the Borrower assumes all risks of the acts or omissions of any beneficiary or transferee of any Letter of Credit with respect to its use of such Letter of Credit.  Neither an Issuing Bank nor any of its officers or directors shall be liable or responsible for:  (a) the use that may be made of any Letter of Credit or any acts or omissions of any beneficiary or transferee in connection therewith; (b) the validity, sufficiency or genuineness of documents, or of any endorsement thereon, even if such documents should prove to be in any or all respects invalid, insufficient, fraudulent or forged; (c) payment by such Issuing Bank against presentation of documents that do not comply with the terms of a Letter of Credit, including failure of any documents to bear any reference or adequate reference to the Letter of Credit; or (d) any other circumstances whatsoever in making or failing to make payment under any Letter of Credit, except that the Borrower shall have a claim against such Issuing Bank, and such Issuing Bank shall be liable to the Borrower, to the extent of any direct, but not consequential, damages suffered by the Borrower that the Borrower proves were caused by such Issuing Bank’s willful misconduct or gross negligence when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof.  In furtherance and not in limitation of the foregoing, such Issuing Bank may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary; provided that nothing herein shall be deemed to excuse such Issuing Bank if it acts with gross negligence or willful misconduct in accepting such documents.

 

SECTION 8.13.  No Advisory or Fiduciary Responsibility.  In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any Revolving Credit Note), the Borrower acknowledges and agrees that: (a) (i) the arranging and other services regarding this Agreement provided by the Agent, the Joint Lead Arrangers and the Lenders are arm’s-length commercial transactions between the Borrower, on the one hand, and the Agent, the Joint Lead Arrangers and the Lenders, on the other hand, (ii) the Borrower has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (iii) the Borrower is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by any Revolving Credit Note; (b) (i) each of the Agent, the Joint Lead Arrangers and the Lenders is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Borrower or any Affiliate thereof and (ii) neither the Agent nor any of the Joint Lead Arrangers nor any of the Lenders has any obligation to the Borrower or any Affiliate thereof with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in any Revolving Credit Note; and (iii) the Agent, the Joint Lead Arrangers, the Lenders, and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrower and its Affiliates, and neither the Agent nor any of the Joint Lead Arrangers nor any of the Lenders has any obligation to disclose any of such interests to the Borrower or its Affiliates.

 

SECTION 8.14.  Survival of Representations and Warranties.  All representations and warranties made hereunder and in any Revolving Credit Note or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof and shall terminate when no Revolving Credit Advance shall remain unpaid, no Letter of Credit is outstanding and no Lender shall have any Commitment hereunder.

 

SECTION 8.15.  Patriot Act.  Each Lender that is subject to the Act (as hereinafter defined) and the Agent (for itself and not on behalf of any Lender) hereby notifies the Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law

 

66

 

October 26, 2001)) (the “Patriot Act”), it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow such Lender or the Agent, as applicable, to identify the Borrower in accordance with the Patriot Act.  The Borrower shall, promptly following a request by the Agent or any Lender, provide all documentation and other information that the Agent or such Lender reasonably requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations, including the Patriot Act.

 

SECTION 8.16.  Waiver of Jury Trial.  EACH OF THE BORROWER, THE AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE REVOLVING CREDIT NOTES OR THE ACTIONS OF THE AGENT OR ANY LENDER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.

 

[Remainder of page left blank intentionally]

 

67

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.

 

 

	
 
    	
THE   TRAVELERS COMPANIES, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Maria Olivo
    
	
 
    	
 
    	
Name:   Maria Olivo
    
	
 
    	
 
    	
Title:     Executive Vice President, Strategic
               Development,   and Corporate Treasurer
    

 

Five Year Credit Agreement

 

 

	
 
    	
WELLS   FARGO BANK, NATIONAL ASSOCIATION,
    
	
 
    	
 
    	
as   Agent, as an Issuing Bank and as a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Kimberly Shaffer
    
	
 
    	
 
    	
Name:   Kimberly Shaffer
    
	
 
    	
 
    	
Title:     Managing Director
    

 

Five Year Credit Agreement

 

 

	
 
    	
JPMORGAN CHASE BANK, N.A.,
    
	
 
    	
 
    	
as a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Melvin Jackson
    
	
 
    	
 
    	
Name: Melvin Jackson
    
	
 
    	
 
    	
Title:   Executive Director
    

 

Five Year Credit Agreement

 

 

	
 
    	
BANK   OF AMERICA, N.A.,
    
	
 
    	
 
    	
as   a Lender
    	
 

	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Tiffany Burgess
    
	
 
    	
 
    	
Name:   Tiffany Burgess
    
	
 
    	
 
    	
Title:     Vice President
    

 

Five Year Credit Agreement

 

 

	
 
    	
CITIBANK,   N.A.,
    
	
 
    	
 
    	
as   a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Maureen Maroney
    
	
 
    	
 
    	
Name:   Maureen Maroney
    
	
 
    	
 
    	
Title:     Vice President
    

 

Five Year Credit Agreement

 

 

	
 
    	
U.S.   BANK NATIONAL ASSOCIATION,
    
	
 
    	
 
    	
as   an Issuing Bank and as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Bonnie S. Wiskowski
    
	
 
    	
 
    	
Name:   Bonnie S. Wiskowski
    
	
 
    	
 
    	
Title:     Vice President
    

 

Five Year Credit Agreement

 

 

	
 
    	
HSBC   BANK USA, NATIONAL ASSOCIATION,
    
	
 
    	
 
    	
as   a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Lawrence Karp
    
	
 
    	
 
    	
Name:   LAWRENCE KARP
    
	
 
    	
 
    	
Title:     MANAGING DIRECTOR
    

 

Five Year Credit Agreement

 

 

	
 
    	
BARCLAYS   BANK PLC,
    
	
 
    	
 
    	
as   a Lender
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Alicia Borys
    
	
 
    	
 
    	
Name:   Alicia Borys
    
	
 
    	
 
    	
Title:     Vice President
    

 

Five Year Credit Agreement

 

 

	
 
    	
CREDIT   SUISSE AG, CAYMAN ISLANDS BRANCH,
    
	
 
    	
 
    	
as   a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Doreen Barr
    
	
 
    	
 
    	
Name:   Doreen Barr
    
	
 
    	
 
    	
Title:     Authorized Signatory
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Alex Verdone
    
	
 
    	
 
    	
Name:   Alex Verdone
    
	
 
    	
 
    	
Title:     Authorized Signatory
    

 

Five Year Credit Agreement

 

 

	
 
    	
DEUTSCHE   BANK AG NEW YORK BRANCH,
    
	
 
    	
 
    	
as   a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Virginia Cosenza
    
	
 
    	
 
    	
Name:   Virginia Cosenza
    
	
 
    	
 
    	
Title:     Vice President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Mink K. Chu
    
	
 
    	
 
    	
Name:   Mink K. Chu
    
	
 
    	
 
    	
Title:     Vice President
    

 

Five Year Credit Agreement

 

 

	
 
    	
GOLDMAN   SACHS BANK USA,
    
	
 
    	
 
    	
as   a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Mark Walton
    
	
 
    	
 
    	
Name:   Mark Walton
    
	
 
    	
 
    	
Title:     Authorized Signatory
    

 

Five Year Credit Agreement

 

 

	
 
    	
MORGAN   STANLEY BANK, N.A.,
    
	
 
    	
 
    	
as   a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Michael King
    
	
 
    	
 
    	
Name:   Michael King
    
	
 
    	
 
    	
Title:     Authorized Signatory
    

 

Five Year Credit Agreement

 

 

	
 
    	
BRANCH   BANKING & TRUST COMPANY,
    
	
 
    	
 
    	
as   a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Eric Searls
    
	
 
    	
 
    	
Name:   Eric Searls
    
	
 
    	
 
    	
Title:     Senior Vice President
    

 

Five Year Credit Agreement

 

 

	
 
    	
THE   BANK OF NEW YORK MELLON,
    
	
 
    	
 
    	
as   a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Adim Offurum
    
	
 
    	
 
    	
Name:   Adim Offurum
    
	
 
    	
 
    	
Title:     Vice President
    

 

Five Year Credit Agreement

 

 

Schedule 1.01 — Lender Commitments

 

	
Lender
    	
 
    	
Revolving Credit
   Commitment
    	
 
    	
Letter of Credit
   Commitment
    	
 
    
	
Wells Fargo Bank, National   Association
    	
 
    	
$
    	
110,000,000
    	
 
    	
$
    	
50,000,000
    	
 
    
	
JPMorgan Chase Bank, N.A.
    	
 
    	
$
    	
110,000,000
    	
 
    	
—
    	
 
    
	
Bank of America, N.A.
    	
 
    	
$
    	
110,000,000
    	
 
    	
—
    	
 
    
	
Citibank, N.A.
    	
 
    	
$
    	
110,000,000
    	
 
    	
—
    	
 
    
	
U.S. Bank National   Association
    	
 
    	
$
    	
110,000,000
    	
 
    	
$
    	
50,000,000
    	
 
    
	
HSBC Bank USA, National   Association
    	
 
    	
$
    	
70,000,000
    	
 
    	
—
    	
 
    
	
Barclays Bank plc
    	
 
    	
$
    	
60,000,000
    	
 
    	
—
    	
 
    
	
Credit Suisse AG, Cayman   Islands Branch
    	
 
    	
$
    	
60,000,000
    	
 
    	
—
    	
 
    
	
Deutsche Bank AG New York   Branch
    	
 
    	
$
    	
60,000,000
    	
 
    	
—
    	
 
    
	
Goldman Sachs Bank USA
    	
 
    	
$
    	
60,000,000
    	
 
    	
—
    	
 
    
	
Morgan Stanley Bank, N.A.
    	
 
    	
$
    	
60,000,000
    	
 
    	
—
    	
 
    
	
Branch Banking &   Trust Company
    	
 
    	
$
    	
40,000,000
    	
 
    	
—
    	
 
    
	
The Bank of New York   Mellon
    	
 
    	
$
    	
40,000,000
    	
 
    	
—
    	
 
    
	
Total
    	
 
    	
$
    	
1,000,000,000.00
    	
 
    	
$
    	
100,000,000.00
    	
 
    

 

 

Schedule 4.01(e) — Accounting Matters

 

Comments from the SEC or any other Governmental Authority or third party that the Borrower may receive from time to time that do not result from material non-compliance with GAAP, and any other immaterial non-compliance with GAAP.

 

 

Schedule 5.02(a) — Existing Liens

 

None.

 

 

Schedule 8.02 — Notice Information

BORROWER’S OFFICE, AGENT’S OFFICE, AND ISSUING BANK’S OFFICE;
 CERTAIN ADDRESSES FOR NOTICES

 

BORROWER:

 

The Travelers Companies, Inc.

485 Lexington Avenue, 8th Floor

New York, NY 10017

Attention: Corporate Treasurer

Fax Number: 917-778-7033

Telephone: 860 277-8330

Email: molivo@travelers.com

 

With a copy to

 

One Tower Square

Hartford, CT 06183

 

AND TO

 

The Travelers Companies, Inc.

485 Lexington Avenue, 8th Floor

New York, NY 10017

Attention: Corporate Secretary

Fax Number: 866-825-3699

Telephone: 917-778-6828

Email: mfurman@travelers.com

 

With a copy to

 

One Tower Square

Hartford, CT 06183

 

AGENT:

 

Wells Fargo Bank, National Association

1525 West W.T. Harris Blvd.

Mail Code: D1109-019

Charlotte, North Carolina 28262

Attention: Syndication Agency Services

Telephone: (704) 590 2706

Facsimile: (704) 590 2790

E-mail: agencyservices.requests@wellsfargo.com

 

 

ISSUING BANK:

 

Wells Fargo Bank, National Association

One South Broad Street, 8th Floor

MAC: Y1375-080

Philadelphia, Pennsylvania 19107

Attention: Kimberly Shaffer

Telephone:  (267) 321-7033

Facsimile: (267) 321-7101

 

U.S. Bank, National Association

400 City Center

Oshkosh, Wisconsin 54901

Attention: Ann Marie Rogers

Telephone: (920) 237-7370

Facsimile: (920) 237-7993

 

 

EXHIBIT A - FORM OF

REVOLVING CREDIT NOTE

 

	
U.S.$                          
    	
Dated:                            ,   201  
    

 

FOR VALUE RECEIVED, the undersigned, THE TRAVELERS COMPANIES, INC., a Minnesota corporation (the “Borrower”), HEREBY PROMISES TO PAY to the order of                                                    (the “Lender”) for the account of its Applicable Lending Office on the Termination Date (each as defined in the Credit Agreement referred to below) of such Lender the principal sum of U.S.$[amount of the Lender’s Commitment in figures] or, if less, the aggregate principal amount of the outstanding and unpaid amount of the Revolving Credit Advances made by the Lender to the Borrower pursuant to the Five Year Credit Agreement dated as of June 7, 2013 among the Borrower, the Lender and certain other lenders parties thereto, Bank of America, N.A., Citibank, N.A., JPMorgan Chase Bank, N.A., and U.S. Bank National Association, as syndication agents, Wells Fargo Securities, LLC, Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and U.S. Bank National Association, as joint lead arrangers, and Wells Fargo Bank, National Association, as Agent for the Lender and such other lenders (as amended or modified from time to time, the “Credit Agreement”; the terms defined therein being used herein as therein defined) and outstanding on such date.

 

The Borrower promises to pay interest on the unpaid principal amount of each Revolving Credit Advance from the date of such Revolving Credit Advance until such principal amount is paid in full, at such interest rates, and payable at such times, as are specified in the Credit Agreement.

 

Both principal and interest are payable in lawful money of the United States of America to Wells Fargo Bank, National Association, as Agent, at the Agent’s Account, in same day funds.  Each Revolving Credit Advance owing to the Lender by the Borrower pursuant to the Credit Agreement, and all payments made on account of principal thereof, shall be recorded by the Lender and, prior to any transfer hereof, endorsed on the grid attached hereto which is part of this Promissory Note.

 

This Promissory Note is one of the Revolving Credit Notes referred to in, and is entitled to the benefits of, the Credit Agreement.  The Credit Agreement, among other things, (i) provides for the making of Revolving Credit Advances by the Lender to the Borrower from time to time in an aggregate amount not to exceed at any time outstanding the U.S. dollar amount first above mentioned, the indebtedness of the Borrower resulting from each such Revolving Credit Advance being evidenced by this Promissory Note and (ii) contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also for prepayments on account of principal hereof prior to the maturity hereof upon the terms and conditions therein specified.

 

	
 
    	
THE   TRAVELERS COMPANIES, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

 

ADVANCES AND PAYMENTS OF PRINCIPAL

 

	
Date
    	
 
    	
Amount of
   Advance
    	
 
    	
Amount of
   Principal Paid
   or Prepaid
    	
 
    	
Unpaid Principal
   Balance
    	
 
    	
Notation
   Made By
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

2

 

EXHIBIT B - FORM OF NOTICE OF

REVOLVING CREDIT BORROWING

 

Wells Fargo Bank, National Association, as Agent

for the Lenders parties

to the Credit Agreement

referred to below

1525 West W.T. Harris Blvd.

Mail Code:  D1109-019

Charlotte, NC  28262

Attention:  Syndication Agency Services

 

[Date]

 

Ladies and Gentlemen:

 

The undersigned, The Travelers Companies, Inc., refers to the Five Year Credit Agreement, dated as of June 7, 2013 (as amended or modified from time to time, the “Credit Agreement”, the terms defined therein being used herein as therein defined), among the undersigned, certain Lenders parties thereto, Bank of America, N.A., Citibank, N.A., JPMorgan Chase Bank, N.A., and U.S. Bank National Association, as syndication agents, Wells Fargo Securities, LLC, Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and U.S. Bank National Association, as joint lead arrangers, and Wells Fargo Bank, National Association, as Agent for said Lenders, and hereby gives you notice, irrevocably, pursuant to Section 2.02 of the Credit Agreement that the undersigned hereby requests a Revolving Credit Borrowing under the Credit Agreement, and in that connection sets forth below the information relating to such Revolving Credit Borrowing (the “Proposed Revolving Credit Borrowing”) as required by Section 2.02(a) of the Credit Agreement:

 

The Business Day of the Proposed Revolving Credit Borrowing is                               , 201 .

 

The Type of Revolving Credit Advances comprising the Proposed Revolving Credit Borrowing is [Base Rate Advances] [Eurodollar Rate Advances].

 

The aggregate amount of the Proposed Revolving Credit Borrowing is $                              .

 

[(iv)       The initial Interest Period for each Eurodollar Rate Advance made as part of the Proposed Revolving Credit Borrowing is            month[s].]

 

The undersigned hereby certifies that the following statements are true on the date hereof, and will be true on the date of the Proposed Revolving Credit Borrowing:

 

the representations and warranties contained in Section 4.01 of the Credit Agreement (except the representations set forth in the last sentence of Section 4.01(e) and in Section 4.01(f)) are correct in all material respects, before and after giving effect to the Proposed Revolving Credit Borrowing and to the application of the proceeds therefrom, as though made on and as of such date except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date;

 

 

no event has occurred and is continuing, or would result from such Proposed Revolving Credit Borrowing or from the application of the proceeds therefrom, that constitutes a Default; and

 

the Borrower is and will be in pro forma compliance with Section 5.03 of the Credit Agreement on and as of such date after giving effect to the Proposed Revolving Credit Borrowing and to the application of the proceeds therefrom.

 

	
 
    	
Very   truly yours,
    
	
 
    	
 
    
	
 
    	
THE   TRAVELERS COMPANIES, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

2

 

EXHIBIT C - FORM OF

ASSIGNMENT AND ASSUMPTION

 

ASSIGNMENT AND ASSUMPTION

 

This Assignment and Assumption (this “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between [the][each](1) Assignor identified in item 1 below ([the][each, an] “Assignor”) and [the][each](2) Assignee identified in item 2 below ([the][each, an] “Assignee”).  [It is understood and agreed that the rights and obligations of [the Assignors][the Assignees](3) hereunder are several and not joint.](4)  Capitalized terms used but not defined herein shall have the meanings given to them in the Five Year Credit Agreement identified below (the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee.  The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.

 

For an agreed consideration, [the][each] Assignor hereby irrevocably sells and assigns to [the Assignee][the respective Assignees], and [the][each] Assignee hereby irrevocably purchases and assumes from [the Assignor][the respective Assignors], subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of [the Assignor’s][the respective Assignors’] rights and obligations in [its capacity as a Lender][their respective capacities as Lenders] under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of [the Assignor][the respective Assignors] under the Credit Agreement (including, without limitation, the participations in Letters of Credit held by the Assignor) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of [the Assignor (in its capacity as a Lender)][the respective Assignors (in their respective capacities as Lenders)] against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned by [the][any] Assignor to [the][any] Assignee pursuant to clauses (i) and (ii) above being referred to herein collectively as [the][an] “Assigned Interest”).  Each such sale and assignment is without recourse to [the][any] Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by [the][any] Assignor.

 

	
Assignor[s]:
    	
 
    	
 
    

 

 

(1)           For bracketed language here and elsewhere in this form relating to the Assignor(s), if the assignment is from a single Assignor, choose the first bracketed language.  If the assignment is from multiple Assignors, choose the second bracketed language.

(2)           For bracketed language here and elsewhere in this form relating to the Assignee(s), if the assignment is to a single Assignee, choose the first bracketed language.  If the assignment is to multiple Assignees, choose the second bracketed language.

(3)           Select as appropriate.

(4)           Include bracketed language if there are either multiple Assignors or multiple Assignees.

 

1

 

	
Assignee[s]:
    	
 
    	
 
    

 

 

[for each Assignee, indicate [Affiliate][Approved Fund] of [identify Lender]]

 

Borrower(s):  The Travelers Companies, Inc.

 

Administrative Agent:  Wells Fargo Bank, National Association, as the administrative agent under the Credit Agreement

 

Credit Agreement:  Five Year Credit Agreement dated as of June 7, 2013 among the Borrower, the Lender and certain other lenders parties thereto, Bank of America, N.A., Citibank, N.A., JPMorgan Chase Bank, N.A., and U.S. Bank National Association, as syndication agents, Wells Fargo Securities, LLC, Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and U.S. Bank National Association, as joint lead arrangers, and Wells Fargo Bank, National Association, as Agent for the Lenders.

 

Assigned Interest[s]:

 

	
Assignor[s](5)
    	
 
    	
Assignee[s](6)
    	
 
    	
Aggregate Amount of
   Revolving Credit
   Commitment for all
   Lenders(7)
    	
 
    	
Amount of
   Revolving Credit
   Commitment
   Assigned
    	
 
    	
Percentage
   Assigned of
   Revolving Credit
   Commitment(8)
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
$
    	
 
    	
 
    	
$
    	
 
    	
 
    	
 
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
$
    	
 
    	
 
    	
$
    	
 
    	
 
    	
 
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
$
    	
 
    	
 
    	
$
    	
 
    	
 
    	
 
    	
%
    

 

[7.          Trade Date:                                       ]

 

Effective Date:                                     , 20     [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

 

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

	
 
    	
ASSIGNOR
    
	
 
    	
 
    
	
 
    	
[NAME   OF ASSIGNOR]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name,   Title:
    

 

(5)           List each Assignor, as appropriate.

(6)           List each Assignee, as appropriate.

(7)           Amounts in this column and in the column immediately to the right to be adjusted by the counterparties to take into account any payments or prepayments made between the Trade Date and the Effective Date.

(8)           Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder.

 

2

 

	
 
    	
ASSIGNEE
    
	
 
    	
 
    	
 
    
	
 
    	
[NAME   OF ASSIGNEE]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name,   Title:
    

 

[Consented to and](9) Accepted:

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, as

Administrative Agent

 

 

	
By:
    	
 
    	
 
    
	
 
    	
Name,   Title:
    	
 
    
	
 
    	
 
    
	
 
    	
[Consented   to:](10)
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name,   Title:
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name,   Title:
    	
 
    
				

 

(9)            To be added only if the consent of the Administrative Agent is required by the terms of the Credit Agreement.

(10)         To be added only if the consent of the Borrower and/or other parties (e.g. Issuing Banks) is required by the terms of the Credit Agreement.

 

3

 

ANNEX 1 TO ASSIGNMENT AND ASSUMPTION

 

STANDARD TERMS AND CONDITIONS FOR

 

ASSIGNMENT AND ASSUMPTION

 

Representations and Warranties.

 

Assignor.  [The][Each] Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of [the][the relevant] Assigned Interest, (ii) [the][such] Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other L/C Related Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the L/C Related Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any L/C Related Document or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any L/C Related Document.

 

Assignee.  [The][Each] Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it meets all the requirements to be an assignee under Section 8.07(b) of the Credit Agreement (subject to such consents, if any, as may be required under Section 8.07(b) of the Credit Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of [the][the relevant] Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by [the][such] Assigned Interest and either it, or the Person exercising discretion in making its decision to acquire [the][such] Assigned Interest, is experienced in acquiring assets of such type, (v) it has received a copy of the Credit Agreement, and has received or has been accorded the opportunity to receive copies of the most recent financial statements delivered pursuant to Section 5.01(i)(i) and 5.01(i)(ii) thereof, as applicable, and such other documents and information as it deems appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase [the][such] Assigned Interest, (vi) it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Assignment and Assumption and to purchase [the][such] Assigned Interest, and (vii) attached hereto is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by [the][such] Assignee; and (b) agrees that (i) it will, independently and without reliance upon the Administrative Agent, [the][any] Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement, (ii) confirms that it is an Eligible Assignee, and (iii) it will perform in accordance with their terms all of the obligations which by the terms of the Credit Agreement are required to be performed by it as a Lender.

 

Payments.  From and after the Effective Date, the Administrative Agent shall make all payments in respect of [the][each] Assigned Interest (including payments of principal, interest, fees and other amounts) to [the][the relevant] Assignor for amounts which have accrued to but excluding the Effective Date and to [the][the relevant] Assignee for amounts which have accrued from and after the Effective Date.

 

4

 

General Provisions.  This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns.  This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument.  Delivery of an executed counterpart of a signature page of this Assignment and Assumption by facsimile, telecopy or other electronic means shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption.  This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of New York (including Sections 5-1401 and 5-1402 of the New York General Obligations Law, but excluding all other choice of law and conflicts of law rules).

 

5

 

EXHIBIT D - FORM OF

OPINION(S) OF COUNSEL

FOR THE BORROWER

 

 

June 7, 2013

 

Wells Fargo Bank, N.A., as Administrative
      Agent under the Credit Agreement, as hereinafter
      defined (the “Administrative Agent”)

 

and

 

The Lenders listed on Schedule I hereto

 

Re:                     Five Year Credit Agreement dated as of June 7, 2013 (the “Credit Agreement”) among The Travelers Companies, Inc., a Minnesota corporation (the “Company”), the lending institutions identified in the Credit Agreement (the “Lenders”) and the Administrative Agent

 

Ladies and Gentlemen:

 

We have acted as counsel to the Company in connection with the preparation, execution and delivery of the following documents: (i) the Credit Agreement and (ii) the Revolving Credit Notes delivered to the Lenders on the date hereof (the Revolving Credit Notes, together with the Credit Agreement, collectively the “Credit Documents”).  Unless otherwise indicated, capitalized terms used but not defined herein shall have the respective meanings assigned to such terms in the Credit Agreement.  This opinion is furnished to you pursuant to Section 3.01(e)(iv) of the Credit Agreement.

 

We have examined the following:

 

(i)                                     the Credit Agreement, signed by the Company and by the Administrative Agent and certain of the Lenders; and

 

(ii)                                  the Revolving Credit Notes, signed by the Company.

 

In addition, we have examined, and have relied as to matters of fact upon, the documents delivered to you at the closing, and upon originals, or duplicates or certified or conformed copies, of such corporate records, agreements, documents and other instruments and such certificates or comparable documents of public officials and of officers and representatives of the Company, and have made such other investigations, as we have deemed relevant and necessary in connection with the opinions hereinafter set forth.  In such examination, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all

 

 

documents submitted to us as originals, the conformity to original documents of all documents submitted to us as duplicates or certified or conformed copies and the authenticity of the originals of such latter documents.  In addition, we have relied as to certain matters of fact upon the representations made in the Credit Documents.

 

Based upon the foregoing, and subject to the assumptions, qualifications and limitations set forth herein, we are of the opinion that:

 

1.                                      The execution and delivery of the Credit Agreement by the Company, its borrowings in accordance with the terms of the Credit Agreement and performance of its payment obligations thereunder will not result in any violation of, assuming that proceeds of borrowings will be used in accordance with the terms of the Credit Agreement, any federal or New York statute or any rule or regulation issued pursuant to any federal or New York statute.

 

2.                                      Assuming that each of the Credit Documents is a valid and legally binding obligation of each of the parties thereto other than the Company and assuming that  (a) the Company is validly existing and in good standing under the laws of Minnesota, and has duly authorized, executed and delivered the Credit Documents in accordance with its organizational documents, (b) execution, delivery and performance by the Company of the Credit Documents do not violate the laws of the State of Minnesota or any other applicable laws (excepting the law of the State of New York and the federal laws of the United States) and (c) execution, delivery and performance by the Company of the Credit Documents do not constitute a breach of or default under any agreement or instrument which is binding upon the Company, each Credit Document constitutes the valid and legally binding obligation of the Company, enforceable against the Company in accordance with its terms.

 

3.                                      Assuming that the Company will comply with the provisions of the Credit Agreement relating to the use of proceeds, the execution and delivery of the Credit Agreement by the Company and the making of the Loans under the Credit Agreement will not violate Regulation T, U or X of the Board of Governors of the Federal Reserve System.

 

4.                                      The Company is not an “investment company” within the meaning of, and subject to regulation under, the Investment Company Act of 1940, as amended.

 

Our opinion in paragraph 1 above is based on our review of only those statutes, regulations and rules that, in our experience, are customarily applicable to transactions of the type contemplated by the Credit Documents.

 

2

 

Our opinion in paragraph 2 above is subject to (i) the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, (ii) general equitable principles (whether considered in a proceeding in equity or at law) and (iii) an implied covenant of good faith and fair dealing.

 

We express no opinion with respect to:

 

(i)                                     the effect of any provision of the Credit Documents that is intended to permit modification thereof only by means of an agreement in writing signed by the parties thereto;

 

(ii)                                  the effect of any provision of the Credit Documents insofar as it provides that any Person purchasing a participation from a Lender or other Person may exercise set-off or similar rights with respect to such participation or that any Lender or other Person may exercise set-off or similar rights other than in accordance with applicable law;

 

(iii)                               the effect of any provision of the Credit Documents imposing penalties or forfeitures;

 

(iv)                              the enforceability of any provision of the Credit Documents to the extent that such provision constitutes a waiver of illegality as a defense to the performance of contract obligations; and

 

(v)                                 the effect of any provision of the Credit Documents relating to indemnification or exculpation in connection with violations of any securities laws or relating to indemnification, contribution or exculpation in connection with willful, reckless or criminal acts or gross negligence of the indemnified or exculpated Person or the Person receiving contribution.

 

In connection with the provisions of the Credit Documents whereby the parties submit to the jurisdiction of the courts of the United States of America located in the State and County of New York, we note the limitations of 28 U.S.C. Sections 1331 and 1332 on subject matter jurisdiction of the federal courts.  In connection with the provisions of the Credit Documents that relate to forum selection (including, without limitation, any waiver of any objection to venue or any objection that a court is an inconvenient forum), we note that under NYCPLR Section 510 a New York State court may have discretion to transfer the place of trial, and under 28 U.S.C. Section 1404(a) a United States district court has discretion to transfer an action from one federal court to another.

 

3

 

With respect to matters of the laws of the State of Minnesota, we understand that you are relying on the opinion of Wendy C. Skjerven, Deputy Corporate Secretary of the Company dated the date hereof.

 

We do not express any opinion herein concerning any law other than the federal law of the United States and the law of the State of New York.

 

This opinion letter is rendered to you in connection with the above described transactions.  This opinion letter may not be relied upon by you for any other purpose, or relied upon by, or furnished to, any other person, firm or corporation without our prior written consent; provided that this opinion letter may be furnished to, but may not be relied upon by (i) any person that purchases an interest or a participation in the Commitments or Loans, (ii) any auditor or regulatory authority having jurisdiction over a Lender and (iii) any other person pursuant to court order or judicial process.

 

	
 
    	
Very   truly yours,
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
SIMPSON   THACHER & BARTLETT LLP
    

 

4

 

SCHEDULE I

 

THE LENDERS

 

Wells Fargo Bank, National Association

 

JPMorgan Chase Bank, N.A.

 

Bank of America, N.A.

 

Citibank, N.A.

 

U.S. Bank National Association

 

HSBC Bank USA, National Association

 

Barclays Bank plc

 

Credit Suisse AG, Cayman Islands Branch

 

Deutsche Bank AG New York Branch

 

Goldman Sachs Bank USA

 

Morgan Stanley Bank, N.A.

 

Branch Banking & Trust Company

 

The Bank of New York Mellon

 

 

June 7, 2013

 

To each of the Lenders parties
 to the Credit Agreement dated
 as of June 7, 2013
 among The Travelers Companies, Inc.,
 and said Lenders and 
 to Wells Fargo Bank, National Association, as Agent

 

The Travelers Companies, Inc.

 

Ladies and Gentlemen:

 

This opinion is furnished to you pursuant to Article III of the Five-Year Credit Agreement, dated as of June     , 2013 (the “Credit Agreement”), among The Travelers Companies, Inc. (the “Borrower”), the Lenders parties thereto, Wells Fargo Securities, LLC, Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Merrill Lynch, Peirce, Fenner & Smith Incorporated and U.S. Bank National Association, as joint lead arrangers, and Wells Fargo Bank, National Association, as administrative agent for said Lenders. Terms defined in the Credit Agreement are used herein as therein defined.

 

I am an attorney licensed to practice law in the State of Minnesota, and I am also the Deputy Corporate Secretary of the Borrower. I am aware of the negotiation, execution and delivery of the Credit Agreement.

 

In that connection, I have examined or caused members of the Borrower’s legal department to examine:

 

(1)                                             The Credit Agreement;

 

(2)                                             The documents furnished by the Borrower pursuant to Article III of the Credit Agreement;

 

(3)                                             The Amended and Restated Articles of Incorporation of the Borrower and all amendments thereto (the “Charter”);

 

(4)                                             The bylaws of the Borrower and all amendments thereto (the “Bylaws”); and

 

 

(5)                                            A certificate of the Secretary of State of Minnesota, dated June 3, 2013, attesting to the continued corporate existence and good standing of the Borrower in that State.

 

I have also examined the originals, or copies certified to my satisfaction, of such other corporate records of the Borrower, certificates of public officials and of officers of the Borrower, and agreements, instruments and other documents, as I have deemed necessary as a basis for the opinions expressed below. As to questions of fact material to such opinions, I have relied upon certificates of the Borrower or its officers or of public officials.  I have assumed the due execution and delivery, pursuant to due authorization, of the Credit Agreement by the Initial Lenders and the Agent.

 

My opinions expressed below are limited to the law of the State of Minnesota and the Federal law of the United States.

 

Based upon, and subject to, the foregoing, I am of the following opinion:

 

1.                                      The Borrower is a corporation duly organized, validly existing and in good standing under the laws of the State of Minnesota.

 

2.                                      The execution, delivery and performance by the Borrower of the Credit Agreement and the Notes, and the consummation of the transactions contemplated thereby by the Borrower, are within the Borrower’s corporate powers, have been duly authorized by all necessary corporate action, and do not violate (i) the Charter or the Bylaws or (ii) any law, rule or regulation applicable to the Borrower if, in the case of (ii), such violation could reasonably be expected to have a Material Adverse Effect.  The Credit Agreement has been, and the Notes when executed will be, duly executed and delivered on behalf of the Borrower.

 

3.                                      To the best of my knowledge, there are no pending or overtly threatened actions or proceedings against the Borrower before any court, governmental agency or arbitrator that purport to affect the legality, validity, binding effect or enforceability of the Credit Agreement or any of the Notes or the consummation of the transactions contemplated thereby.

 

	
 
    	
Very   truly yours,
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Wendy   C. Skjerven
    
	
 
    	
Deputy   Corporate Secretary
    

 

2Exhibit 10.1

 

EXECUTION VERSION

 

PLAN SUPPORT AGREEMENT

 

This Plan Support Agreement (the “Agreement”) is made and entered into as of July 22, 2013, by and among (i) SP Special Opportunities, LLC (“SPSO”), (ii) the other undersigned lenders under the LP Credit Agreement (as defined below), exclusive of SPSO (each, a “Supporting LP Lender” and, together with SPSO, the “Plan Sponsors”), (iii) L-Band Acquisition, LLC (the “Stalking Horse Bidder”) and (iv) solely for the purposes of Section 7.11 hereof, DISH Network Corporation (“Parent Entity”). The Plan Sponsors, the Stalking Horse Bidder, and each other person that becomes a party to this Agreement in accordance with the terms hereof shall be referred to herein individually as a “Party” and collectively as the “Parties”; provided, however, that the Parent Entity shall not be deemed a Party for any purposes of any provision hereunder other than Section 7.11 of this Agreement.  Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Plan (as defined herein).

 

RECITALS

 

WHEREAS, on May 14, 2012 (the “Petition Date”), LightSquared Inc. and certain of its affiliates (collectively, the “Debtors”) filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code, 11 U.S.C. §§ 101-1532 (the “Bankruptcy Code”) with the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”);

 

WHEREAS, the Debtors are operating their businesses as debtors in possession in jointly administered cases under chapter 11 of the Bankruptcy Code that are styled as In re LightSquared Inc., et. al., Case No. 12-12080 (SCC) (the “Chapter 11 Cases”);

 

WHEREAS, on May 18, 2012, the Ontario Superior Court of Justice (Commercial List) (the “Canadian Court” and the proceeding before the Canadian Court, the “CCAA Recognition Proceeding”) granted orders under Part IV of the Companies’ Creditors Arrangement Act, R.S.C. 1985, c.C-36 (the “CCAA”) that, among other things, recognized the Chapter 11 Cases as a “foreign main proceeding” pursuant to Part IV of the CCAA;

 

WHEREAS, each Plan Sponsor is a holder of a Claim, as defined in section 101(5) of the Bankruptcy Code (each, an “LP Lender Claim”), arising under that certain Credit Agreement, dated as of October 1, 2010 (as amended, supplemented, amended and restated or otherwise modified from time to time, the “LP Credit Agreement”), between LightSquared LP, as borrower,  LightSquared, Inc., LightSquared Investors Holdings Inc., LightSquared GP Inc. and TMI Communications Delaware, Limited Partnership, ATC Technologies, LLC, LightSquared Corp., LightSquared Inc. of Virginia, LightSquared Subsidiary LLC, SkyTerra Holdings (Canada) Inc. and SkyTerra (Canada) Inc., as guarantors, the lenders party thereto, UBS AG, Stamford Branch, as administrative agent,  Wilmington Trust FSB, as collateral trustee, and UBS Securities LLC, as arranger, syndication agent and documentation agent;

 

WHEREAS, one or more Plan Sponsors may also hold or acquire Claims against or equity interests in Debtor LightSquared LP and/or its Debtor subsidiaries (including, without limitation, the Series A Preferred Units issued by LightSquared LP) other than LP Lender Claims

 

 

(such claims and interests, the “Additional LP Claims and/or Interests” and, together with the LP Lender Claims, the “Covered Claims and/or Interests”);

 

WHEREAS, the Plan Sponsors have agreed to propose and support exclusively a plan of reorganization in these Chapter 11 Cases substantially in the form attached hereto as Exhibit A (as may be amended, supplemented and restated or otherwise modified from time to time with the approval of the Plan Sponsors, the “Plan”);

 

WHEREAS, the Stalking Horse Bidder has offered, pursuant to the Purchase Agreement annexed hereto as Exhibit B (the “Stalking Horse Agreement”), to purchase the Acquired Assets, subject to an auction process as set forth in the Plan and in accordance with the Bid Procedures (as defined herein); and

 

WHEREAS, in expressing their support for the Agreement and the Plan (pursuant to the terms and conditions of this Agreement), the Parties do not desire and do not intend in any way to derogate, diminish or violate, and intend to fully comply with, the solicitation requirements of applicable securities and bankruptcy law.

 

NOW, THEREFORE, in consideration of the foregoing and the promises, mutual covenants, and agreements set forth herein and for other good and valuable consideration, the Parties agree as follows:

 

Section 1.                                          Commitments of the Parties Under this Agreement.

 

1.1          Plan Sponsors’ Commitments.

 

(a)           As consideration for the Stalking Horse Bidder entering into this Agreement and the Stalking Horse Agreement, so long as this Agreement shall not have been terminated in accordance with Section 6 hereof, each Plan Sponsor agrees that, by having executed and become party to this Agreement, it:

 

(1)                                 Shall, collectively with the other Plan Sponsors, file with the Bankruptcy Court the Plan and a related disclosure statement (the “Disclosure Statement”), on July 23, 2013;

 

(2)                                 Shall, collectively with the other Plan Sponsors, file with the Bankruptcy Court, motions for approval of the Bid Procedures and the Disclosure Statement, on or before 12:00 p.m. (Eastern time) on July 29, 2013;

 

(3)                                 Shall use commercially reasonable efforts to obtain confirmation of, and consummate, the Plan;

 

(4)                                 Shall use commercially reasonable efforts to achieve each of the milestones set forth in Exhibit C attached hereto (the “Milestones”);

 

(5)                                 Shall, after entry of the Disclosure Statement Order and the solicitation of votes on the Plan in accordance therewith, vote all Covered Claims and/or

 

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Interests held by such Plan Sponsor to accept the Plan, provided, that the Plan and Disclosure Statement, including any amendments, supplements, changes and modifications thereto, shall be in form and substance satisfactory to the Plan Sponsors;

 

(6)                                 Shall not directly or indirectly seek, solicit, support, or vote in favor of any other plan, sale, proposal, or offer of dissolution, winding up, liquidation, reorganization, merger, or restructuring of the Debtors other than the Plan (each, an “Alternative Plan”);

 

(7)                                 Shall not directly or indirectly (a) engage in, continue, or otherwise participate in any negotiations regarding any Alternative Plan, (b) enter into a letter of intent, memorandum of understanding, agreement in principle, or other agreement relating to any Alternative Plan or (c) withhold, withdraw, qualify, or modify its approval or recommendation of this Agreement or the Plan, the Disclosure Statement, the Stalking Horse Agreement or the Bid Procedures;

 

(8)                                 Shall not directly or indirectly object to or otherwise commence any proceeding opposing any of the terms of the Plan or the Disclosure Statement; provided, that nothing contained herein shall limit the ability of any Plan Sponsor to consult with the Debtors, to appear and be heard, or to file objections, concerning any matter arising in the Chapter 11 Cases, so long as such consultation, appearance or objection is not inconsistent with (i) such Plan Sponsor’s obligations under this Agreement or (ii) the terms of the Plan and the other transactions contemplated by and in accordance with this Agreement and the Plan;

 

(9)                                 Shall not, directly or indirectly, commence any proceeding or prosecute, join in, or otherwise support any action to oppose or object to entry of the Disclosure Statement Order, the order of the Bankruptcy Court approving the Bid Procedures, which shall be in form and substance acceptable to the Plan Sponsors and the Stalking Horse Bidder (the “Bid Procedures Order”), or the Confirmation Order (as defined below) or the entry of any order by the Canadian Court in the CCAA Recognition Proceeding recognizing any of the foregoing orders;

 

(10)                          Shall not, directly or indirectly, encourage any other entity to object to, delay, impede, appeal, or take any other action, directly or indirectly, to interfere with entry of the Disclosure Statement Order, the Bid Procedures Order or the Confirmation Order, or the entry of any order by the Canadian Court in the CCAA Recognition Proceeding recognizing any of the foregoing orders; and

 

(11)                          Shall not, directly or indirectly, take any action that is inconsistent with this Agreement or the Plan, or that would unreasonably delay beyond the

 

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date of any Milestone the approval of the Disclosure Statement or the confirmation and consummation of the Plan.

 

(b)           Nothing in this Agreement shall impair, prohibit, limit or restrict the rights of any Supporting LP Lender in connection with (i) the auction process to be conducted pursuant to the bid procedures related to the LP Sale set forth in Exhibit D attached hereto (the “Bid Procedures”), as approved by the Bankruptcy Court pursuant to the Bid Procedures Order, (ii) the Order Further Extending LightSquared’s Exclusive Periods to File a Plan of Reorganization and Solicit Acceptances Thereof [Docket No. 522], entered by the Bankruptcy Court on February 13, 2013, (iii) soliciting Potential Bidders (as defined in the Bid Procedures), or engaging in discussions and negotiations with Potential Bidders; or (iv) selecting the Successful Bidder (as defined in the Bid Procedures).

 

1.2          Stalking Horse Bidder’s Commitments.

 

As consideration for the Plan Sponsors entering into this Agreement, so long as this Agreement shall not have been terminated in accordance with Section 6 hereof, the Stalking Horse Bidder agrees that, by having executed and become party to this Agreement, it:

 

(a)                                 Shall use commercially reasonable efforts to effectuate and consummate the transactions contemplated by this Agreement, the Plan and the Stalking Horse Agreement;

 

(b)                                 Shall use commercially reasonable efforts to obtain the Confirmation Order;

 

(c)                                  Shall not directly or indirectly seek, solicit, support, or vote in favor of any Alternative Plan;

 

(d)                                 Shall not directly or indirectly (a) engage in, continue, or otherwise participate in any negotiations regarding any Alternative Plan, (b) enter into a letter of intent, memorandum of understanding, agreement in principle, or other agreement relating to any Alternative Plan, or (c) withhold, withdraw, qualify, or modify its approval or recommendation of this Agreement, the Plan, the Disclosure Statement, the Stalking Horse Agreement or the Bid Procedures;

 

(e)                                  Shall not encourage any other entity to object to, delay, impede, appeal, or take any other action, directly or indirectly, to interfere with entry of the Disclosure Statement Order or, after approval thereof, the Confirmation Order;

 

(f)                                   Shall not withdraw its offer made pursuant to the Stalking Horse Agreement;

 

(g)                                  Shall not take any action that is inconsistent with this Agreement, the Plan or the Stalking Horse Agreement, or that would unreasonably delay beyond the date of any Milestone the approval of the Disclosure Statement or the confirmation and consummation of the Plan; and

 

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(h)                                 Shall, in the event it acquires any Covered Claims and/or Interests, vote all Covered Claims and/or Interests it holds to accept the Plan when solicited pursuant to the Disclosure Statement Order.

 

1.3          Transfer of Claims and Interests.

 

Until the termination of this Agreement pursuant to the terms hereof, no Party shall (a) sell, transfer, assign, pledge, grant a participation interest in, or otherwise dispose of, directly or indirectly, its right, title, or interest in respect of any of its Covered Claims and/or Interests, in whole or in part, (b) grant any proxies, deposit any of its Covered Claims and/or Interests into a voting trust, or enter into a voting agreement with respect to any such claim or interest, or (c) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of its Covered Claims and/or Interests, whether any such transaction described in clause (a), (b) or (c) above is to be settled by delivery of Covered Claims and/or Interests, in cash or otherwise (collectively, the actions described in clauses (a), (b) and (c), a “Transfer”), unless such Transfer is to a Party or any other entity that first agrees in writing to be bound by the terms of this Agreement by executing and delivering to the other Parties transferee acknowledgments substantially in the form attached hereto as Exhibit E (the “Transferee Acknowledgment”) and is capable of fulfilling its obligations under this Agreement, as reasonably determined by the other Parties.  Copies of all Transferee Acknowledgements shall be served on all Parties in accordance with Section 7.14 hereof.  Any transferee shall be deemed to make all of the representations and warranties of a Plan Sponsor set forth in Section 2 of this Agreement.  Upon compliance with the foregoing, the transferor (other than in the case of the Stalking Horse Bidder) shall be deemed to relinquish its rights (and be released from its obligations) under this Agreement to the extent of such transferred rights and obligations.  Any Transfer made in violation of this Section 1.3 shall be deemed null and void and of no force or effect, regardless of any prior notice provided to the Parties hereunder (it being understood that the putative transferor shall continue to be bound by the terms and conditions set forth in this Agreement).

 

1.4          Further Acquisition of Claims and Interests.

 

This Agreement shall in no way be construed to preclude any Plan Sponsor or any of its affiliates (as defined in section 101(2) of the Bankruptcy Code) from acquiring additional Covered Claims and/or Interests following its execution of this Agreement.  Any such Covered Claims and/or Interests acquired by a Plan Sponsor shall automatically be deemed to be subject to the terms of this Agreement, and such acquiring Plan Sponsor shall promptly (and, in no event, later than two (2) business days) inform the other Plan Sponsors of such acquisition

 

1.5          Further Negotiation of Stalking Horse Agreement.

 

Each of the Parties acknowledges that, as of the date hereof, the Stalking Horse Agreement will be subject to further negotiation.  If at any time, based on diligence or otherwise, the Stalking Horse Bidder determines, in its sole discretion, that it will be unwilling or unable to enter into a final form of the Stalking Horse Agreement containing terms and conditions acceptable to it, it shall promptly, but in no event later than one (1) business day after making such determination, notify each of the Plan Sponsors of such determination in accordance with

 

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Section 7.14 hereof.  Upon receiving such notification, notwithstanding anything to the contrary herein (including Section 1.1(a)(6) hereof), the Plan Sponsors shall be permitted to engage in negotiations regarding an Alternative Plan with any party, including, without limitation, the Debtors and/or their affiliates.

 

Section 2.                                          Representations and Warranties of the Plan Sponsors.

 

Each Plan Sponsor hereby severally but not jointly represents and warrants that, as of the date hereof:

 

(a)                                 Authority.  (i) Such Plan Sponsor is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, and has all the requisite corporate, partnership or other power and authority to execute, deliver and perform its obligations under this Agreement, and to consummate the transactions contemplated herein; and (ii) the execution, delivery and performance by such Plan Sponsor of this Agreement and the consummation of the transactions contemplated herein have been duly authorized by all necessary action (corporate, partnership or otherwise) on the part of such Plan Sponsor and no other proceedings on the part of such Plan Sponsor are necessary to authorize and approve this Agreement or any of the transactions contemplated herein.

 

(b)                                 Validity.  This Agreement has been duly executed and delivered by such Plan Sponsor and constitutes the legal, valid and binding agreement of such Plan Sponsor, enforceable against such Plan Sponsor in accordance with its terms.

 

(c)                                  No Conflict.  The execution, delivery and performance by such Plan Sponsor (when such performance is due) of this Agreement does not and shall not (i) violate any provision of law, rule or regulation applicable to it or, in the case of an entity, any of its subsidiaries or its or their certificates of incorporation or bylaws or other organizational documents, or (ii) conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any material contractual obligation to which it, or, applicable, any of its subsidiaries is a party.

 

(d)                                 Authorization of Governmental Authorities and Creditors.  No action by (including any authorization, consent or approval), in respect of, or filing with, any governmental authority is required for, or in connection with, the valid and lawful authorization, execution, delivery and performance by such Plan Sponsor of this Agreement.

 

(e)                                  No Reliance.  Such Plan Sponsor (i) is a sophisticated party with respect to the subject matter of this Agreement, (ii) has been represented and advised by legal counsel in connection with this Agreement, (iii) has adequate information concerning the matters that are the subject of this Agreement and (iv) has independently and without reliance upon the Stalking Horse Bidder or any officer, employee, agent or representative thereof, and based on such information as such Plan Sponsor has deemed appropriate, made its own analysis and decision to enter

 

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into this Agreement, and such Plan Sponsor acknowledges that it has entered into this Agreement voluntarily and of its own choice and not under coercion or duress.

 

(f)                                   Title.  Such Plan Sponsor is the beneficial owner of, or the nominee for beneficial holders of, the Covered Claims and/or Interests in the aggregate principal amount or face amount (as applicable) set forth below such Plan Sponsor’s name on the signature page hereof (and in the case of a nominee, it has due and proper authorization to act on behalf of, and to bind, the beneficial owner of such Covered Claims and/or Interests).  Such Plan Sponsor’s interest in Covered Claims and/or Interests is free and clear of any pledge, lien, security interest, charge, claim, equity, option, proxy, voting restriction, right of first refusal or other limitation on disposition or encumbrances of any kind, that would adversely affect in any way such Plan Sponsor’s performance of its obligations contained in this Agreement at the time such obligations are required to be performed.

 

Section 3.                                          Representations and Warranties of the Stalking Horse Bidder.

 

The Stalking Horse Bidder hereby represents and warrants that, as of the date hereof:

 

(a)                                 Authority.  The Stalking Horse Bidder (i) has the power and authority to execute, deliver and perform its obligations under this Agreement, and to consummate the transactions contemplated herein and (ii) the execution, delivery and performance by the Stalking Horse Bidder under this Agreement and the consummation of the transactions contemplated herein have been duly authorized by all necessary action on the part of the Stalking Horse Bidder.

 

(b)                                 Validity.  This Agreement has been duly executed and delivered by the Stalking Horse Bidder and constitutes the legal, valid and binding agreement of the Stalking Horse Bidder, enforceable against the Stalking Horse Bidder in accordance with its terms.

 

(c)                                  No Conflict.  The execution, delivery and performance by the Stalking Horse Bidder (when such performance is due) of this Agreement does not and shall not (i) violate any provision of law, rule or regulation applicable to it or, in the case of an entity, any of its subsidiaries or its or their certificates of incorporation or bylaws or other organizational documents, or (ii) conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under its certificate of incorporation or by-laws (or other organizational documents).

 

(d)                                 Authorization of Governmental Authorities.  No action by (including any authorization, consent or approval), in respect of, or filing with, any governmental authority is required for, or in connection with, the valid and lawful authorization, execution, delivery and performance by the Stalking Horse Bidder of this Agreement.

 

(e)                                  No Reliance.  The Stalking Horse Bidder (i) is a sophisticated party with respect to the matters that are the subject of this Agreement, (ii) has had the opportunity

 

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to be represented and advised by legal counsel in connection with this Agreement, (iii) has adequate information concerning the matters that are the subject of this Agreement and (iv) has independently and without reliance upon the Plan Sponsors, and based on such information as the Stalking Horse Bidder has deemed appropriate, made its own analysis and decision to enter into this Agreement, except that the Stalking Horse Bidder has relied upon the Plan Sponsors’ express representations, warranties and covenants in this Agreement, which it enters, or as to which it acknowledges and agrees, voluntarily and of its own choice and not under coercion or duress.

 

(f)                                   Financial Capability.  The Stalking Horse Bidder (i) has, as of the date of this Agreement, and will have on the Funding Date (as defined in the Stalking Horse Agreement) access to sufficient funds available to pay the Purchase Price and any expenses incurred by the Stalking Horse Bidder in connection with the Sale, and (ii) has as of the date of this Agreement and will have on the Funding Date the resources and capabilities (financial or otherwise) to perform its obligations under the Stalking Horse Agreement.

 

(g)                                  No Claim or Interest.  As of the date hereof, the Stalking Horse Bidder does not hold any claim against, or interest in, any of the Debtors.

 

Section 4.                                          No Waiver of Participation and Preservation of Rights.

 

Except as expressly provided in this Agreement, nothing herein is intended to, does or shall be deemed in any manner to waive, limit, impair, or restrict the ability of each of the Plan Sponsors to protect and preserve its rights, remedies, and interests, including, but not limited to, its claims against or interests in any of the Debtors, any liens or security interests it may have in any assets of any of the Debtors, or its full participation in the Chapter 11 Cases so long as such actions are not inconsistent with the Plan Sponsor’s obligations hereunder.  Without limiting the foregoing sentence in any way, if the transactions contemplated by this Agreement or otherwise set forth in the Plan are not consummated as provided herein or therein, if this Agreement is terminated for any reason, the Parties each fully reserve any and all of their respective rights, remedies and interests.

 

Section 5.                                          Acknowledgement.

 

THIS AGREEMENT, THE PLAN, THE STALKING HORSE AGREEMENT, AND THE TRANSACTIONS CONTEMPLATED HEREIN AND THEREIN, ARE THE PRODUCT OF NEGOTIATIONS BETWEEN THE PARTIES AND THEIR RESPECTIVE REPRESENTATIVES.  EACH PARTY HEREBY ACKNOWLEDGES THAT THIS AGREEMENT IS NOT AND SHALL NOT BE DEEMED TO BE A SOLICITATION OF VOTES FOR THE ACCEPTANCE OF A CHAPTER 11 PLAN FOR THE PURPOSES OF SECTIONS 1125 AND 1126 OF THE BANKRUPTCY CODE OR OTHERWISE.  THE PLAN SPONSORS WILL NOT SOLICIT ACCEPTANCES OF THE PLAN FROM HOLDERS OF COVERED CLAIMS AND/OR INTERESTS (OR ANY OTHER PERSON OR ENTITY) UNTIL SUCH HOLDERS (OR ANY OTHER PERSON OR ENTITY) HAVE BEEN PROVIDED WITH A COPY OF A DISCLOSURE STATEMENT APPROVED BY THE

 

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BANKRUPTCY COURT.  EACH PARTY FURTHER ACKNOWLEDGES THAT NO SECURITIES OF ANY DEBTOR ARE BEING OFFERED OR SOLD HEREBY AND THAT THIS AGREEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OF ANY DEBTOR.  NOTWITHSTANDING THE FOREGOING PROVISIONS, NOTHING IN THIS AGREEMENT SHALL REQUIRE ANY PARTY TO TAKE ANY ACTION PROHIBITED BY THE BANKRUPTCY CODE, THE SECURITIES ACT OF 1933 (AS AMENDED), THE SECURITIES EXCHANGE ACT OF 1934 (AS AMENDED), ANY RULE OR REGULATIONS PROMULGATED THEREUNDER, OR BY ANY OTHER APPLICABLE LAW OR REGULATION OR BY AN ORDER OR DIRECTION OF ANY COURT OR ANY STATE OR FEDERAL GOVERNMENTAL AUTHORITY.

 

Section 6.                                          Termination.

 

6.1          Termination Events.

 

This Agreement may be terminated:

 

(a)                                 immediately upon the written agreement of all the Parties to terminate this Agreement;

 

(b)                                 by any Party, solely as to such party, immediately upon the failure of the third Milestone set forth on Exhibit C to be satisfied;

 

(c)                                  by any Party, solely as to such Party, immediately following the occurrence of any event described in clause (1) or (2) below:

 

(1)                           any of the Chapter 11 Cases relating to a Debtor that owns material assets to be purchased pursuant to the Stalking Horse Agreement is dismissed or converted to a case under Chapter 7 of the Bankruptcy Code; or

 

(2)                           the Confirmation Order is vacated pursuant to Section 11.4 of the Plan;

 

(d)                                 by any Supporting LP Lender, upon three (3) business days written notice to each of the other Parties following the occurrence of any event described in clause (1) or (2) below:

 

(1)                                 the Plan has not been consummated by December 31, 2013 and the holders of LP Lender Claims shall not have received their Plan Consideration; or

 

(2)                                 there has been a material breach of any representation, warranty or covenant contained in this Agreement by SPSO or the Stalking Horse Bidder.

 

(e)                                  by SPSO, upon three (3) business days written notice to each of the other Parties following the occurrence of a material breach of any representation, warranty or covenant contained in this Agreement by any of the Supporting LP Lenders.

 

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(f)                                   by the Stalking Horse Bidder, upon three (3) business days written notice to each of the other Parties following the occurrence of any event described in clause (1), (2), (3), (4) or (5) below:

 

(1)                           a Milestone has not been met;

 

(2)                           there has been a material breach of any representation, warranty or covenant contained in this Agreement by any of the Supporting LP Lenders;

 

(3)                           consummation of the transactions contemplated by the Stalking Horse Agreement has become legally impossible as the result of an event or occurrence specified in Section 8.1(b) of the Stalking Horse Agreement;

 

(4)                           the Plan Sponsors have withdrawn the Plan or publicly announced their intention not to support the Plan or provided written notice to the Stalking Horse Bidder of their intention to do so; or

 

(5)                           any court has entered a final, non-appealable judgment or order declaring this Agreement or any material portion hereof to be unenforceable.

 

The provisions of this Section 6.1 are intended solely for the Parties; provided, however, that no Party to this Agreement may seek to terminate this Agreement based upon a material breach or a failure of a condition (if any) in this Agreement arising out of its own actions or omissions.  Any such termination (or partial termination) of this Agreement shall not restrict the Parties’ rights and remedies for any breach of this Agreement by any Party, including, but not limited to, the reservation of rights set forth in Section 4 hereof, and the right of specific performance set forth in Section 7.11.

 

Further, notwithstanding anything to the contrary contained in this Agreement, to the extent any Debtor or any of Harbinger Capital Partners LLC or its affiliates (“Harbinger Parties”) takes or has taken any action or failed to take any action that (a) may result in a condition set forth in this Agreement or the Stalking Horse Agreement to not be satisfied or (b) may give rise to a termination right pursuant to Section 6.1 hereof or under the Stalking Horse Agreement (as the case may be, a “Debtor/Harbinger Impediment”), then the Parties shall prepare and file with the Bankruptcy Court a joint motion (“Motion to Compel”), in form and substance reasonably satisfactory to each Party, to remedy a Debtor/Harbinger Impediment, and each Party shall support any other Parties’ request that such Motion to Compel be heard by the Bankruptcy Court on an expedited basis.  In the event that a Motion to Compel is filed by the Parties in accordance with this paragraph, no Party shall terminate this Agreement or the Stalking Horse Agreement until the Bankruptcy Court enters an order with respect to the Motion to Compel, and if the Bankruptcy Court grants the Motion to Compel, this Agreement and/or the Stalking Horse Agreement may not be terminated based on the Debtor/Harbinger Impediment that was the subject of the Motion to Compel; provided, however, that notwithstanding the foregoing, nothing herein shall be deemed to modify or otherwise affect the right of the Stalking Horse Bidder to terminate this Agreement in accordance with Section 6.1(f)(1) hereof.

 

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6.2                               Effects of Termination.

 

In the event this Agreement is terminated (or is terminated with respect to any Party), the Parties hereto (or the Parties with respect to which this Agreement has been terminated, as applicable) shall not have any continuing liability or obligation under this Agreement and each Party (or each Party with respect to which this Agreement has been terminated, as applicable) shall have all the rights and remedies available to it under applicable law; provided, however, that no such termination shall relieve any Party from liability for its breach or non-performance of its obligations hereunder prior to the date of termination.

 

Section 7.                                          Miscellaneous Terms.

 

7.1                               Binding Effect.

 

This Agreement shall inure to the benefit of and be binding upon the Parties and their respective successors, assigns, heirs, transferees, executors, administrators, and representatives, in each case solely as such parties are permitted under this Agreement.  The agreements, representations, warranties, covenants, and obligations of each Party contained in this Agreement are, in all respects, several, but not joint.

 

7.2                               Assignment.

 

No rights or obligations of any Party under this Agreement may be assigned or transferred to any other entity except as provided in Section 1.3 hereof.

 

7.3                               Further Assurances.

 

The Parties agree to execute and deliver such other instruments and perform such acts, in addition to the matters herein specified, as may be reasonably appropriate or necessary, from time to time, to effectuate the agreements and understandings of the Parties, whether the same occurs before or after the date of this Agreement.

 

7.4                               Headings.

 

The headings of all sections of this Agreement are inserted solely for the convenience of reference and are not a part of and are not intended to govern, limit, or aid in the construction or interpretation of any term or provision hereof.  References to sections, unless otherwise indicated, are references to sections of this Agreement.

 

7.5                               Governing Law.

 

THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ANY CONFLICTS OF LAW PROVISION WHICH WOULD REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER JURISDICTION.

 

By execution and delivery of this Agreement, each of the Parties hereto hereby irrevocably and unconditionally agrees that the Bankruptcy Court shall have exclusive

 

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jurisdiction of all matters arising out of or in connection with this Agreement, and waives any objection it may have to venue or the convenience of the forum.

 

7.6                               Incorporation of Exhibits.

 

The Plan, the Stalking Horse Agreement, the Milestones, the Bid Procedures, and the Transferee Acknowledgement (collectively, the “Exhibits”) are expressly incorporated herein by reference and are made part of this Agreement.  References to “the Agreement,” “this Agreement,” “herein” or “hereof” include this Agreement and each of the Exhibits.

 

7.7                               Entire Agreement.

 

This Agreement (including, for the avoidance of doubt, the Exhibits) constitute the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, representations, warranties, and understandings of the Parties, whether oral, written, or implied, as to the subject matter hereof; provided, however, that any confidentiality agreement or waivers executed by any Party shall survive this Agreement and shall remain in full force and effect in accordance with its terms.

 

7.8                               Interpretation.

 

This Agreement is the product of negotiation by and among the Parties.  Any Party enforcing or interpreting this Agreement shall interpret it in a neutral manner.  There shall be no presumption concerning whether to interpret this Agreement for or against any Party by reason of that Party having drafted this Agreement, or any portion thereof, or caused it or any portion thereof to be drafted.  To the extent there is any conflict between the terms of this Agreement and the terms of the Exhibits, the terms and conditions as set forth in this Agreement shall govern.

 

7.9                               Amendment and Waiver.

 

Except as otherwise specifically provided herein, this Agreement may not be modified, waived, amended, or supplemented unless such modification, waiver, amendment, or supplement is in writing and has been signed by each of the Parties.  No waiver of any of the provisions of this Agreement shall be deemed to constitute a waiver of any other provision of this Agreement, whether or not similar, nor shall any waiver be deemed a continuing waiver (unless such waiver expressly provides otherwise).

 

7.10                        Counterparts.

 

This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall constitute one and the same Agreement.  The signatures of all of the Parties need not appear on the same counterpart.  Delivery of an executed signature page of this Agreement by facsimile or electronic mail shall be effective as delivery of a manually executed signature page of this Agreement.

 

12

 

7.11                        Remedies.

 

(a)                                 Each Party shall be entitled to enforce the terms of this Agreement by a decree of specific performance without the necessity of proving the inadequacy of money damages as a remedy and without the necessity of posting a bond.  NO PARTY (OR ITS AFFILIATES OR REPRESENTATIVES) SHALL, UNDER ANY CIRCUMSTANCE, BE LIABLE TO ANY OTHER  PARTY (OR ITS AFFILIATES OR REPRESENTATIVES) FOR ANY CONSEQUENTIAL, EXEMPLARY, SPECIAL, INCIDENTAL OR PUNITIVE DAMAGES CLAIMED BY SUCH OTHER PARTY UNDER THE TERMS OF OR DUE TO ANY BREACH OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, LOSS OF REVENUE OR INCOME, DAMAGES BASED ON ANY MULTIPLIER OF PROFITS OR OTHER VALUATION METRIC, COST OF CAPITAL, DIMINUTION OF VALUE OR LOSS OF BUSINESS REPUTATION OR OPPORTUNITY.

 

(b)                                 If any Plan Sponsor breaches any obligation, term or provision of this Agreement, (i) such Party shall not be liable for money damages, and (ii) each non-breaching Party shall be entitled solely to specific performance and injunctive or other equitable relief as a remedy for any such breach.

 

(c)                                  To the extent the Bankruptcy Court determines, by a final nonappealable order, that the Stalking Horse Bidder is liable to another Party for a breach of this Agreement and that such Party is entitled to money damages from the Stalking Horse Bidder for such breach, Parent Entity and the Stalking Horse Bidder shall be  jointly and severally liable for such money damages.

 

7.12                        No Admissions.

 

This Agreement shall in no event be construed as or be deemed to be evidence of an admission or concession on the part of any Party of any claim or fault or liability or damages whatsoever.  Each of the Parties denies any and all wrongdoing or liability of any kind and does not concede any infirmity in the claims or defenses which it has asserted or could assert.  No Party shall have, by reason of this Agreement, a fiduciary relationship in respect of any other Party or any person or entity, and nothing in this Agreement, expressed or implied, is intended to or shall be so construed as to impose upon any Party any obligations in respect of this Agreement except as expressly set forth herein.  This Agreement (including all Exhibits hereto) is part of a proposed settlement of a dispute among the Parties.  Pursuant to Federal Rule of Evidence 408 and any applicable state rules of evidence, this Agreement (including all Exhibits hereto) and all negotiations relating thereto shall not be admissible into evidence in any proceeding other than a proceeding involving enforcement of the terms of this Agreement.

 

7.13                        Consideration.

 

Each Party hereby acknowledges that no consideration, other than that specifically described herein or the Plan, shall be due or paid to any Plan Sponsor for its agreement to file the

 

13

 

Plan with the Bankruptcy Court or to vote to accept the Plan in accordance with the terms and conditions of this Agreement, other than the Plan Sponsors’ representations, warranties and agreement to use commercially reasonable efforts to seek to effectuate and consummate the Plan.

 

7.14                        Notices.

 

All notices hereunder (including copies of Transferee Acknowledgments in accordance with Section 1.3 of this Agreement) shall be deemed given if in writing and hand-delivered or sent by courier, by registered or certified mail (return receipt requested), or by electronic mail to the following addresses (or at such other addresses as shall be specified by like notice):

 

(a)                                 if to SPSO or the Stalking Horse Bidder, to: Willkie Farr & Gallagher LLP, 787 Seventh Avenue, New York, NY 10019, Attn: Rachel C. Strickland (rstrickland@willkie.com); and

 

(b)                                 if to any other Party, including a transferee thereof, to: (i) White & Case LLP, Southeast Financial Center, 200 South Biscayne Boulevard, Suite 4900, Miami, Florida 33131, Attn.: Thomas E. Lauria (tlauria@miami.whitecase.com), and (ii) White & Case LLP, 1155 Avenue of the Americas, New York, New York 10036, Attn.: Glenn Kurtz (gkurtz@whitecase.com).

 

Any notice given by hand-delivery, courier, mail, or electronic mail shall be effective when received.

 

7.15                        Consents and Other Actions By the Plan Sponsors.

 

To the extent any provision of this Agreement or the Plan contemplates the provision of consent or other actions by the Plan Sponsors, such consent shall only be provided and/or such actions shall only be taken if supported by (a) SPSO and (b) Supporting LP Lenders holding over 50% in principal amount of the aggregate principal amount of LP Lender Claims held by the Supporting LP Lenders.

 

7.16                        Third Party Beneficiaries.

 

This Agreement shall be solely for the benefit of the Parties hereto (or any other party that may become a party to this Agreement pursuant to Section 1.3 or Section 1.4 of this Agreement) and no other person or entity shall be a third-party beneficiary hereof.

 

[Remainder of page intentionally left blank]

 

14

 

IN WITNESS WHEREOF, the Parties have entered into this Agreement on the day and year first above written.

 

	
 
    	
DISH   NETWORK CORPORATION, AS MANAGING MEMBER OF L-BAND ACQUISITION, LLC, as Stalking   Horse Bidder
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:   
    	
R.   Stanton Dodge 
    
	
 
    	
Title:
    	
Executive   Vice President, General Counsel and Secretary
    

 

Signature Page to Plan Support Agreement

 

 

	
 
    	
DISH   NETWORK CORPORATION, as Parent Entity, solely for the purposes   of Section 7.11
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
R.   Stanton Dodge 
    
	
 
    	
Title:
    	
Executive   Vice President, General Counsel and Secretary
    

 

Signature Page to Plan Support Agreement

 

 

	
 
    	
SP   SPECIAL OPPORTUNITIES HOLDINGS, LLC, AS MANAGING MEMBER OF SP SPECIAL   OPPORTUNITIES, LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
Charles   Ergen
    
	
 
    	
Title:
    	
Managing   Member
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Holder   of $824,323,097.83 in outstanding principal amount of LP Lender Claims
    

 

Signature Page to Plan Support Agreement

 

 

	
 
    	
SUPPORTING   LP LENDERS:
    
	
 
    	
 
    
	
 
    	
CAPITAL   RESEARCH AND MANAGEMENT COMPANY
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Holder   of $331,180,992.57 in outstanding principal amount of LP Lender Claims
    

 

Signature Page to Plan Support Agreement

 

 

	
 
    	
CYRUS   CAPITAL PARTNERS, L.P., IN ITS CAPACITY AS INVESTMENT MANAGER TO CERTAIN   FUNDS THAT ARE SUPPORTING LP LENDERS
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Holder   of $134,496,193.66 in outstanding principal amount of LP Lender Claims
    

 

Signature Page to Plan Support Agreement

 

 

	
 
    	
INTERMARKET   CORPORATION
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Holder   of $19,606,166.68 in outstanding principal amount of LP Lender Claims
    

 

Signature Page to Plan Support Agreement

 

 

	
 
    	
UBS   AG, STAMFORD BRANCH
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
Holder   of $37,000,000.00 in outstanding principal amount of LP Lender Claims
    

 

Signature Page to Plan Support Agreement

 

 

EXHIBIT A

 

PLAN

 

 

UNITED STATES BANKRUPTCY COURT
 SOUTHERN DISTRICT OF NEW YORK

 

	
 
    	
)
    	
 
    
	
In   re:
    	
)
    	
Chapter   11
    
	
 
    	
)
    	
 
    
	
LIGHTSQUARED, INC.,   et  al.,  
    	
)
    	
Case   No. 12-12080 (SCC)
    
	
 
    	
)
    	
 
    
	
 
    	
)
    	
Jointly   Administered
    
	
Debtors.(1)
    	
)
    	
 
    
	
 
    	
)
    	
 
    

 

JOINT CHAPTER 11 PLAN FOR LIGHTSQUARED LP, 
 ATC TECHNOLOGIES, LLC, LIGHTSQUARED CORP., LIGHTSQUARED INC. OF VIRGINIA, LIGHTSQUARED SUBSIDIARY LLC, LIGHTSQUARED FINANCE CO., LIGHTSQUARED NETWORK LLC, LIGHTSQUARED BERMUDA LTD., SKYTERRA HOLDINGS (CANADA) INC., AND SKYTERRA (CANADA) INC., PROPOSED 
  BY THE AD HOC SECURED GROUP OF LIGHTSQUARED LP LENDERS

 

Nothing contained herein shall constitute an offer, acceptance or a legally binding obligation of the Debtors or any other party in interest and this Plan is subject to approval of the Bankruptcy Court and other customary conditions.  This Plan is not an offer with respect to any securities.  This is not a solicitation of acceptances or rejections of the Plan.  Acceptances or rejections with respect to this Plan may not be solicited until a disclosure statement has been approved by the United States Bankruptcy Court for the Southern District of New York. Such a solicitation will only be made in compliance with applicable provisions of securities and/or bankruptcy laws.

 

	
Dated:
    	
New   York, New York 
    	
 
    
	
 
    	
July 23,   2013
    	
 
    
	
 
    	
 
    
	
 
    	
WHITE &   CASE LLP
    
	
 
    	
1155   Avenue of the Americas
    
	
 
    	
New   York, New York 10036
    
	
 
    	
(212)   819-8200
    
	
 
    	
Counsel   for the Ad Hoc Secured Group of LightSquared LP Lenders
    

 

(1)  The debtors in these chapter 11 cases, along with the last four digits of each debtor’s federal or foreign tax or registration identification number, are: LightSquared Inc. (8845), LightSquared Investors Holdings Inc. (0984), One Dot Four Corp. (8806), One Dot Six Corp. (8763), SkyTerra Rollup LLC (N/A), SkyTerra Rollup Sub LLC (N/A), SkyTerra Investors LLC (N/A), TMI Communications Delaware, Limited Partnership (4456), LightSquared GP Inc. (6190), LightSquared LP (3801), ATC Technologies, LLC (3432), LightSquared Corp. (1361), LightSquared Finance Co. (6962), LightSquared Network LLC (1750), LightSquared Inc. of Virginia (9725), LightSquared Subsidiary LLC (9821), Lightsquared Bermuda Ltd. (7247), SkyTerra Holdings (Canada) Inc. (0631), SkyTerra (Canada) Inc. (0629) and One Dot Six TVCC Corp. (0040).

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE I. DEFINITIONS AND   INTERPRETATION
    	
1
    
	
 
    	
 
    	
 
    
	
1.1.
    	
Definitions
    	
1
    
	
1.2.
    	
Interpretation; Application of Definitions and   Rules of Construction
    	
1
    
	
1.3.
    	
Appendices and Plan Documents
    	
2
    
	
 
    	
 
    	
 
    
	
ARTICLE II. RESOLUTION OF   CERTAIN INTER-DEBTOR ISSUES
    	
2
    
	
 
    	
 
    	
 
    
	
2.1.
    	
Substantive Consolidation of the LP Debtors for Purposes of   Voting, Confirmation and Distribution
    	
2
    
	
2.2.
    	
Inc. Entity General Unsecured Claims
    	
3
    
	
 
    	
 
    	
 
    
	
ARTICLE III. PROVISIONS FOR   TREATMENT OF UNCLASSIFIED CLAIMS
    	
3
    
	
 
    	
 
    	
 
    
	
3.1.
    	
Unclassified Claims
    	
3
    
	
3.2.
    	
Treatment of Administrative Claims
    	
3
    
	
3.3.
    	
Treatment of Fee Claims
    	
5
    
	
3.4.
    	
Treatment of U.S. Trustee Fees
    	
5
    
	
3.5.
    	
Treatment of Priority Tax Claims
    	
5
    
	
 
    	
 
    	
 
    
	
ARTICLE IV. CLASSIFICATION   OF CLAIMS AND EQUITY INTERESTS
    	
6
    
	
 
    	
 
    	
 
    
	
4.1.
    	
Classification/Impairment of Claims and Equity Interests
    	
6
    
	
4.2.
    	
Separate Classification of Other LP Secured Claims
    	
6
    
	
 
    	
 
    	
 
    
	
ARTICLE V. TREATMENT OF   CLASSIFIED CLAIMS AND EQUITY INTERESTS
    	
6
    
	
 
    	
 
    	
 
    
	
5.1.
    	
Class 1 — Priority Non-Tax Claims
    	
6
    
	
5.2.
    	
Class 2 — Other LP Secured Claims
    	
7
    
	
5.3.
    	
Class 3 — LP Facility Secured Claims
    	
7
    
	
5.4.
    	
Class 4 — General LP Unsecured Claims
    	
8
    
	
5.5.
    	
Class 5 — LP Preferred Unit Interests
    	
8
    
	
5.6.
    	
Class 6 — LP Common Equity Interests
    	
9
    
	
 
    	
 
    	
 
    
	
ARTICLE VI. ACCEPTANCE OR   REJECTION OF THE PLAN
    	
9
    
	
 
    	
 
    	
 
    
	
6.1.
    	
Classes of Claims Deemed to Accept the Plan
    	
9
    
	
6.2.
    	
Class Acceptance Requirement
    	
9
    
	
6.3.
    	
Confirmation Pursuant to Section 1129(b) of the   Bankruptcy Code or “Cramdown”
    	
9
    
	
6.4.
    	
Elimination of Vacant Classes
    	
9
    
	
6.5.
    	
Voting Classes; Deemed Acceptance by Non-Voting Classes
    	
10
    
	
 
    	
 
    	
 
    
	
ARTICLE VII. MEANS FOR   IMPLEMENTATION OF THE PLAN
    	
10
    
	
 
    	
 
    	
 
    
	
7.1.
    	
Plan Funding
    	
10
    
	
7.2.
    	
The LP Sale
    	
10
    
	
7.3.
    	
Distribution Account
    	
11
    
	
7.4.
    	
Cancellation of Credit Agreements, Existing Securities and   Agreements
    	
11
    
	
7.5.
    	
Comprehensive Settlement of Claims and Controversies
    	
12
    

 

i

 

	
7.6.
    	
Continued Corporate Existence and Vesting of Assets
    	
12
    
	
7.7.
    	
Existing Officers; Existing Boards
    	
13
    
	
7.8.
    	
Corporate Governance
    	
13
    
	
7.9.
    	
Wind Down of the LP Debtors and Their Estates
    	
13
    
	
7.10.
    	
Power and Authority of the Existing Boards
    	
14
    
	
7.11.
    	
Assumed Liabilities
    	
15
    
	
7.12.
    	
Cancellation of Certain Existing Security Interests
    	
15
    
	
7.13.
    	
Corporate Action
    	
15
    
	
7.14.
    	
Intercompany Equity Interests
    	
16
    
	
 
    	
 
    	
 
    
	
ARTICLE VIII. PLAN   DISTRIBUTION PROVISIONS
    	
16
    
	
 
    	
 
    	
 
    
	
8.1.
    	
The Disbursing Agent
    	
16
    
	
8.2.
    	
Postpetition Interest
    	
16
    
	
8.3.
    	
Timing of Plan Distributions
    	
17
    
	
8.4.
    	
Distribution Record Date
    	
17
    
	
8.5.
    	
Address for Delivery of Plan Distributions/Unclaimed Plan   Distributions
    	
17
    
	
8.6.
    	
Time Bar to Cash Payments
    	
18
    
	
8.7.
    	
No Distribution in Excess of Amount of Allowed Claim
    	
18
    
	
8.8.
    	
Setoffs and Recoupments
    	
18
    
	
8.9.
    	
Fractional Cents and De Minimis Distributions
    	
19
    
	
8.10.
    	
Manner of Payment Under the Plan
    	
19
    
	
8.11.
    	
Requirement to Give a Bond or Surety
    	
19
    
	
8.12.
    	
Withholding and Reporting Requirements
    	
19
    
	
8.13.
    	
Cooperation with Disbursing Agent
    	
20
    
	
 
    	
 
    	
 
    
	
ARTICLE IX. PROCEDURES FOR   RESOLVING DISPUTED CLAIMS
    	
20
    
	
 
    	
 
    	
 
    
	
9.1.
    	
Objections to Claims
    	
20
    
	
9.2.
    	
Amendment to Claims
    	
20
    
	
9.3.
    	
Settlement of Claims and Causes of Action
    	
20
    
	
9.4.
    	
Estimation of Claims
    	
21
    
	
9.5.
    	
Disputed Claims Reserves
    	
21
    
	
9.6.
    	
No Recourse
    	
23
    
	
 
    	
 
    	
 
    
	
ARTICLE X. TREATMENT OF   EXECUTORY CONTRACTS AND UNEXPIRED LEASES
    	
23
    
	
 
    	
 
    	
 
    
	
10.1.
    	
General Treatment
    	
23
    
	
10.2.
    	
Claims Based on Rejection of Executory Contracts or   Unexpired Leases
    	
24
    
	
10.3.
    	
Cure of Defaults for Assumed Executory Contracts and   Unexpired Leases
    	
25
    
	
10.4.
    	
Compensation and Benefit Programs
    	
26
    
	
10.5.
    	
Post-Petition Contracts and Leases
    	
26
    
	
 
    	
 
    	
 
    
	
ARTICLE XI. CONDITIONS   PRECEDENT TO CONFIRMATION OF THE PLAN AND THE OCCURRENCE OF THE EFFECTIVE   DATE
    	
27
    
	
 
    	
 
    	
 
    
	
11.1.
    	
Conditions Precedent to Confirmation
    	
27
    
	
11.2.
    	
Conditions Precedent to the Occurrence of the Effective   Date
    	
27
    
	
11.3.
    	
Waiver of Conditions
    	
27
    
	
11.4.
    	
Effect of Non-Occurrence of the Effective Date
    	
28
    

 

ii

	
 
    	
 
    	
 
    
	
ARTICLE XII. RETENTION OF   JURISDICTION
    	
28
    
	
 
    	
 
    	
 
    
	
ARTICLE XIII. MISCELLANEOUS   PROVISIONS
    	
30
    
	
 
    	
 
    	
 
    
	
13.1.
    	
Releases
    	
30
    
	
13.2.
    	
Exculpation and Limitation of Liability
    	
32
    
	
13.3.
    	
Injunctions
    	
32
    
	
13.4.
    	
Substantial Consummation
    	
33
    
	
13.5.
    	
Satisfaction of Claims
    	
33
    
	
13.6.
    	
Special Provisions Regarding Insured Claims
    	
33
    
	
13.7.
    	
Third Party Agreements; Subordination
    	
34
    
	
13.8.
    	
Status Reports
    	
34
    
	
13.9.
    	
Notices
    	
34
    
	
13.10.
    	
Headings
    	
35
    
	
13.11.
    	
Governing Law
    	
35
    
	
13.12.
    	
Section 1125(e) of the Bankruptcy Code
    	
35
    
	
13.13.
    	
Inconsistency
    	
36
    
	
13.14.
    	
Avoidance and Recovery Actions
    	
36
    
	
13.15.
    	
Expedited Determination
    	
36
    
	
13.16.
    	
Exemption from Transfer Taxes
    	
36
    
	
13.17.
    	
Notice of Entry of Confirmation Order and Relevant Dates
    	
36
    
	
13.18.
    	
Termination of Professionals
    	
36
    
	
13.19.
    	
Interest and Attorneys’ Fees
    	
37
    
	
13.20.
    	
Amendments
    	
37
    
	
13.21.
    	
Revocation or Withdrawal of this Plan
    	
37
    
	
13.22.
    	
No Successor Liability
    	
38
    
	
13.23.
    	
Allocation of Plan Distributions Between Principal and   Interest
    	
38
    
	
13.24.
    	
Compliance with Tax Requirements
    	
38
    
	
13.25.
    	
Rates
    	
38
    
	
13.26.
    	
Binding Effect
    	
38
    
	
13.27.
    	
Successors and Assigns
    	
39
    
	
13.28.
    	
Time
    	
39
    
	
13.29.
    	
Severability
    	
39
    
	
13.30.
    	
Reservation of Rights
    	
39
    

 

EXHIBITS

 

Exhibit A - Glossary of Defined Terms

 

SCHEDULES

 

Schedule 1 — Plan Sponsors

 

iii

 

INTRODUCTION

 

The Plan Sponsors, certain holders of LP Facility Secured Claims who are members of the Ad Hoc LP Secured Group, hereby propose the following joint chapter 11 plan for the resolution of the Claims against and Equity Interests in LightSquared LP, ATC Technologies, LLC, LightSquared Corp., LightSquared Inc. of Virginia, LightSquared Subsidiary LLC, LightSquared Finance Co., LightSquared Network LLC, LightSquared Bermuda Ltd., SkyTerra Holdings (Canada) Inc., and SkyTerra (Canada) Inc., certain of the debtors and debtors in possession in the above-captioned cases.

 

Reference is made to the Disclosure Statement, including the exhibits, schedules and supplements thereto, for a discussion of the Debtors’ history, business, properties and operations, risk factors, a summary and analysis of this Plan, and certain related matters including, among other things, certain tax matters and the consideration to be issued and/or distributed under this Plan.  Subject to certain restrictions and requirements set forth in section 1127 of the Bankruptcy Code, Bankruptcy Rule 3019, and Sections 13.20 and 13.21 of this Plan, the Plan Sponsors reserve the right to alter, amend, modify, revoke or withdraw this Plan prior to its substantial consummation.

 

The only Persons that are entitled to vote on this Plan are the holders of LP Facility Secured Claims, General LP Unsecured Claims, LP Preferred Unit Interests and LP Common Equity Interests.  Such Persons are encouraged to read in their entirety the Plan, the Disclosure Statement, their respective exhibits and schedules, and all other materials approved by the Bankruptcy Court in connection with solicitation of this Plan before voting to accept or reject the Plan.

 

ARTICLE I.
 DEFINITIONS AND INTERPRETATION

 

1.1.                            Definitions

 

The capitalized terms used herein shall have the respective meanings set forth in the Glossary of Defined Terms attached hereto as Exhibit “A” (such meanings to be equally applicable to both the singular and plural).

 

1.2.                            Interpretation; Application of Definitions and Rules of Construction

 

Unless otherwise specified, all section or exhibit references in this Plan are to the respective section in, or exhibit to, this Plan.  The words “herein,” “hereof,” “hereto,” “hereunder,” and other words of similar import refer to this Plan as a whole and not to any particular section, subsection, or clause contained therein.  Whenever from the context it is appropriate, each term, whether stated in the singular or the plural, will include both the singular and the plural.  Any term that is not otherwise defined herein, but that is used in the Bankruptcy Code or the Bankruptcy Rules, shall have the meaning given to that term in the Bankruptcy Code or the Bankruptcy Rules, as applicable.  Except for the rules of construction contained in section 102(5) of the Bankruptcy Code, which shall not apply, the rules of construction contained in section 102 of the Bankruptcy Code shall apply to the construction of the Plan.  Any reference in this Plan to a contract, instrument, release, indenture, or other agreement or documents being in a 

 

 

particular form or on particular terms and conditions means that such document shall be substantially in such form or substantially on such terms and conditions, and any reference in this Plan to an existing document or exhibit filed or to be filed means such document or exhibit as it may have been or may be amended, modified, or supplemented.  Subject to the provisions of any contract, certificates or articles of incorporation, by-laws, instruments, releases, or other agreements or documents entered into in connection with this Plan, the rights and obligations arising under this Plan shall be governed by, and construed and enforced in accordance with, federal law, including the Bankruptcy Code and Bankruptcy Rules.  The captions and headings in this Plan are for convenience of reference only and shall not limit or otherwise affect the provisions hereof.  Any reference to an entity as a holder of a Claim or Equity Interest includes that entity’s successors and assigns.  In the event of any ambiguity or conflict between the Plan and the Disclosure Statement, the provisions of the Plan shall govern.

 

1.3.                            Appendices and Plan Documents

 

All exhibits, supplements, appendices, and schedules to the Plan are incorporated into the Plan by this reference and are a part of the Plan as if set forth in full herein.  All Plan Documents shall be filed with the Bankruptcy Court as part of the Plan Supplement not less than five (5) calendar days prior to the Voting Deadline; provided, however, that any Plan Document that is or may be subject to confidentiality provisions or otherwise contain confidential or proprietary information may be filed in redacted form or under seal.

 

Holders of Claims and Equity Interests may obtain a copy of the Plan, once filed, at https://www.kccllc.net/LightSquared or by written request sent to the following address:

 

LightSquared LP Ballot Processing Center

c/o Kurtzman Carson Consultants LLC

2335 Alaska Avenue

El Segundo, CA 90245

 

ARTICLE II.
 RESOLUTION OF CERTAIN INTER-DEBTOR ISSUES

 

2.1.                            Substantive Consolidation of the LP Debtors for Purposes of Voting, Confirmation and Distribution

 

This Plan provides for substantive consolidation of the LP Debtors’ Estates, but solely for purposes of voting, confirmation, and making distributions to the holders of Allowed Claims and Allowed Equity Interests under the Plan.  Notwithstanding anything herein to the contrary, the LP Debtors shall not be merged or consolidated and shall maintain their pre-Effective Date corporate structure.  On the Effective Date: (i) all guarantees by any LP Debtor of the payment, performance or collection by another LP Debtor with respect to Claims against such second LP Debtor, and all Claims based on such guarantees, shall be deemed eliminated, cancelled, released and of no further force and effect; (ii) any obligation of any LP Debtor and all guarantees by another LP Debtor with respect to Claims of the first LP Debtor shall be treated as a single obligation; (iii) each Claim against any LP Debtor shall be deemed to be against the consolidated LP Debtors and shall be deemed a single Claim against, and a single obligation of, the consolidated LP Debtors; and (iv) all Intercompany Claims shall be deemed eliminated as a

 

2

 

result of the substantive consolidation of the LP Debtors, and therefore holders thereof shall not be entitled to vote on the Plan, or receive any Plan Distributions or other allocations of value under the Plan.  Except as set forth in this Section 2.1, such substantive consolidation shall not (other than for purposes related to the Plan) (x) affect the legal and corporate structure of the LP Debtors or (y) affect any obligations under any leases or contracts assumed in the Plan or otherwise after the Petition Date.

 

2.2.                            Inc. Entity General Unsecured Claims

 

On or before the Inc. Entity General Unsecured Claims Bar Date, any Inc. Entity that asserts an Inc. Entity General Unsecured Claim against any of the LP Debtors shall file a proof of such Claim with the Claims Agent by hand delivery, overnight courier, or first class mail to LightSquared Claims Processing Center, c/o Kurtzman Carson Consultants LLC, 2335 Alaska Avenue, El Segundo, CA 90254, and serve a copy of such proof of Claim on the Plan Sponsors.  Any timely filed Allowed Inc. Entity General Unsecured Claim shall receive the treatment set forth in Class 4 — General LP Unsecured Claims, unless otherwise ordered by the Bankruptcy Court.

 

ARTICLE III.
 PROVISIONS FOR TREATMENT OF UNCLASSIFIED CLAIMS

 

3.1.                            Unclassified Claims

 

As provided by section 1123(a)(1) of the Bankruptcy Code, Administrative Claims, Fee Claims, U.S. Trustee Fees and Priority Tax Claims against the LP Debtors shall not be classified under the Plan, and shall instead be treated separately as unclassified Claims on the terms set forth in this Article III.  Holders of such Claims are not entitled to vote on this Plan.

 

3.2.                            Treatment of Administrative Claims

 

(a)                                 Time for Filing Administrative Claims

 

Each holder of an Administrative Claim, other than (i) a Fee Claim, (ii) a liability incurred and payable in the ordinary course of business by any LP Debtor (and not past due), (iii) an Administrative Claim that has become an Allowed Claim on or before the Effective Date, or (iv) any claim by the Stalking Horse Bidder for payment of the Break-Up Fee or Expense Reimbursement under the Stalking Horse Agreement must file with the Bankruptcy Court and serve on (a) the LP Debtors, (b) the Office of the U.S. Trustee, and (c) the Plan Sponsors notice of such Administrative Claim within thirty (30) days after service of the Notice of Effective Date.  Such notice of Administrative Claim must include, at a minimum, (i) the name of the holder of the Administrative Claim, (ii) the amount of the Administrative Claim, and (iii) a detailed description of the basis for the Administrative Claim.  Failure to file and serve such notice timely and properly shall result in the Administrative Claim being forever barred and discharged.

 

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(b)                                 Allowance of Administrative Claims

 

An Administrative Claim with respect to which notice has been properly filed and served pursuant to Section 3.2(a) of this Plan shall become an Allowed Administrative Claim if no objection is filed within thirty (30) days after the later of (i) the Effective Date, (ii) the date of service of the applicable notice of Administrative Claim, or (iii) such later date as may be (a) agreed to by the holder of such Administrative Claim or (b) approved by the Bankruptcy Court on motion of a party in interest, without notice or a hearing.  If an objection is filed within such thirty (30) day period (or any extension thereof) and is not otherwise resolved, the Administrative Claim shall become an Allowed Administrative Claim only to the extent allowed by Final Order.  For the avoidance of doubt, any claim by the Stalking Horse Bidder for the Break-Up Fee or Expense Reimbursement shall be deemed an Allowed Administrative Expense Claim in accordance with the Bid Procedures Order, and the Stalking Horse Bidder shall not be required to file any notice of Administrative Claim in accordance with Section 3.2(a) of this Plan or any other proof of claim or administrative expense in respect of any claim for the Break-Up Fee or Expense Reimbursement.

 

(c)                                  Payment of Allowed Administrative Claims

 

On the Plan Distribution Date, each holder of an Allowed Administrative Claim shall receive, (i) the amount of such holder’s Allowed Administrative Claim in one payment of Plan Consideration in the form of Cash (to the extent not previously paid by the LP Debtors) or (ii) such other treatment as may be agreed upon in writing by (a) the LP Debtors (or, if after the Effective Date, the Disbursing Agent), and (b) such holder; provided, that such treatment shall not provide a recovery to such holder having a present value as of the Effective Date in excess of such holder’s Allowed Administrative Claim; provided, further, that an Administrative Claim representing a liability incurred in the ordinary course of business of any of the LP Debtors may be paid by the respective LP Debtor (or, if after the Effective Date, the Disbursing Agent), as applicable, in the ordinary course of business; provided, further, that the Break-Up Fee and Expense Reimbursement shall be paid in accordance with the terms of the Stalking Horse Agreement and Bid Procedures Order; and provided, further, that any Allowed Administrative Claim accrued or incurred prior to the Effective Date, but not paid on or prior to the Effective Date, shall be paid from the reserve established pursuant to Section 9.5(b) of this Plan (and, to the extent that amounts deposited in the reserve established pursuant to Section 9.5(b) of this Plan are insufficient to pay such Allowed Administrative Claim, the LP Debtors may withdraw Cash from the Wind Down Reserve to pay such Allowed Administrative Claim).

 

(d)                                 Ad Hoc LP Secured Group Fee Claims and Plan Sponsor Fee Claims

 

In the case of the Ad Hoc LP Secured Group Fee Claims and Plan Sponsor Fee Claims, such Ad Hoc LP Secured Group Fee Claims and Plan Sponsor Fee Claims will be paid in full in Plan Consideration in the form of Cash on the Effective Date for all reasonable fees and expenses incurred up to the Effective Date (to the extent not previously paid), subject to the LP Debtors’ prior receipt of invoices and reasonable documentation in connection therewith and without the requirement to file a Fee Application with the Bankruptcy Court.  In the event that the LP Debtors dispute all or a portion of the Ad Hoc LP Secured Group Fee Claims or Plan Sponsor Fee Claims, the LP Debtors shall pay the undisputed amount of such Ad Hoc LP Secured Group Fee Claims or Plan Sponsor Fee Claims (as applicable), and segregate the

 

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remaining portion of such Ad Hoc LP Secured Group Fee Claims or Plan Sponsor Fee Claims (as applicable) until such dispute is resolved by the parties or by the Bankruptcy Court.

 

3.3.                            Treatment of Fee Claims

 

(a)                                 Time for Filing Fee Claims

 

Each Professional Person who holds or asserts a Fee Claim against the LP Debtors shall be required to file with the Bankruptcy Court, and serve on all parties required to receive notice, a final Fee Application within forty (40) days after the Effective Date or such other date as may be fixed by the Bankruptcy Code.  The failure to timely file and serve such final Fee Application shall result in the Fee Claim being forever barred and discharged.

 

(b)                                 Allowance of Fee Claims

 

A Fee Claim in respect of which a Fee Application has been properly filed and served pursuant to Section 3.3(a) of this Plan shall become an Allowed Fee Claim only to the extent allowed by Final Order.

 

(c)                                  Treatment of Fee Claims

 

Each holder of an Allowed Fee Claim shall receive, in full satisfaction of such Allowed Fee Claim, (i) on the date such Fee Claim becomes an Allowed Fee Claim, or as soon thereafter as is practicable, Plan Consideration in the form of Cash in an amount equal to such Allowed Fee Claim (less any amounts previously paid on account of such Fee Claim by the LP Debtors) or (ii) such other treatment as may be agreed to by such holder of an Allowed Fee Claim; provided, that such treatment shall not provide a recovery to such holder having a present value as of the Effective Date in excess of such holder’s Allowed Fee Claim; provided, further, that any Allowed Fee Claim accrued or incurred prior to the Effective Date, but not paid on or prior to the Effective Date, shall be paid from the reserve established pursuant to Section 9.5(b) of this Plan (and, to the extent that amounts deposited in the reserve established pursuant to Section 9.5(b) of this Plan are insufficient to pay such Allowed Fee Claim, the LP Debtors may withdraw Cash from the Wind Down Reserve to pay such Allowed Fee Claim).

 

3.4.                            Treatment of U.S. Trustee Fees

 

The Disbursing Agent, on behalf of each of the LP Debtors, shall pay all outstanding U.S. Trustee Fees of such LP Debtor on an ongoing basis on the later of: (i) the Effective Date; and (ii) the date such U.S. Trustee Fees become due, until such time as a final decree is entered closing the applicable Chapter 11 Case or the applicable Chapter 11 Case is converted or dismissed, or the Bankruptcy Court orders otherwise.  Any deadline for filing Administrative Claims shall not apply to U.S. Trustee Fees.

 

3.5.                            Treatment of Priority Tax Claims

 

Each holder of an Allowed Priority Tax Claim shall receive, in full satisfaction of such Allowed Priority Tax Claim:  (a) Plan Consideration in the form of Cash in the amount of such Allowed Priority Tax Claim (to the extent not previously paid by the LP Debtors) on the later of 

 

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(i) the applicable Plan Distribution Date and (ii) as soon as practicable after such Priority Tax Claim becomes an Allowed Priority Tax Claim or (b) such other treatment as may be agreed to by such holder of an Allowed Priority Tax Claim; provided, that such treatment shall not provide a recovery to such holder having a present value as of the Effective Date in excess of such holder’s Allowed Priority Tax Claim.

 

ARTICLE IV.
 CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS

 

4.1.                            Classification/Impairment of Claims and Equity Interests

 

The following table designates the Classes of Claims and Equity Interests, and specifies which Classes are: (i) impaired or unimpaired by this Plan; (ii) entitled to vote to accept or reject this Plan in accordance with section 1126 of the Bankruptcy Code; and (iii) deemed to accept this Plan pursuant to section 1126(f) of the Bankruptcy Code.

 

	
Class
    	
 
    	
Designation
    	
 
    	
Impairment
    	
 
    	
Entitled to Vote
    
	
Class 1
    	
 
    	
Priority   Non-Tax Claims
    	
 
    	
No
    	
 
    	
No   (deemed to accept)
    
	
Class 2
    	
 
    	
Other   LP Secured Claims
    	
 
    	
No
    	
 
    	
No   (deemed to accept)
    
	
Class 3
    	
 
    	
LP   Facility Secured Claims
    	
 
    	
Yes
    	
 
    	
Yes
    
	
Class 4
    	
 
    	
General   LP Unsecured Claims
    	
 
    	
Yes   
    	
 
    	
Yes
    
	
Class 5
    	
 
    	
LP   Preferred Unit Interests
    	
 
    	
Yes
    	
 
    	
Yes
    
	
Class 6
    	
 
    	
LP   Common Equity Interests
    	
 
    	
Yes
    	
 
    	
Yes
    

 

4.2.                            Separate Classification of Other LP Secured Claims

 

Other LP Secured Claims have been classified together for each LP Debtor solely for purposes of describing treatment under the Plan.  Each Other LP Secured Claim, to the extent secured by a Lien on Collateral different than that securing any other Other LP Secured Claim, shall be treated as being in a separate sub-Class for the purpose of receiving Plan Distributions.

 

ARTICLE V.
 TREATMENT OF CLASSIFIED CLAIMS AND EQUITY INTERESTS

 

5.1.                            Class 1 — Priority Non-Tax Claims

 

(a)                                 Treatment: The legal, equitable and contractual rights of the holders of Priority Non-Tax Claims are unaltered by this Plan.  Except to the extent that a holder of an Allowed Priority Non-Tax Claim agrees to different treatment, on the applicable Plan Distribution Date, each holder of an Allowed Priority Non-Tax Claim shall receive Plan Consideration in the form of Cash in an amount equal to such Allowed Claim.

 

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(b)                                 Voting: The Priority Non-Tax Claims are not impaired Claims.  In
 accordance with section 1126(f) of the Bankruptcy Code, the holders of Priority Non-Tax Claims are conclusively presumed to accept this Plan and are not entitled to vote to accept or reject the Plan, and the votes of such holders will not be solicited with respect to such Allowed Priority Non-Tax Claims.

 

5.2.                            Class 2 — Other LP Secured Claims

 

(a)                                 Treatment: The legal, equitable and contractual rights of the holders of Other LP Secured Claims are unaltered by this Plan.  Except to the extent that a holder of an Allowed Other LP Secured Claim agrees to different treatment, on the applicable Plan Distribution Date, each holder of an Allowed Other LP Secured Claim shall receive, at the election of the Plan Sponsors or Disbursing Agent, as applicable: (i) Plan Consideration in the form of Cash in an amount equal to such Allowed Other LP Secured Claim; or (ii) such other treatment that will render the Other LP Secured Claim unimpaired pursuant to section 1124 of the Bankruptcy Code.  Each holder of an Allowed Other LP Secured Claim shall retain the Liens securing its Allowed Other LP Secured Claim as of the Effective Date until (A) full and final payment of such Allowed Other LP Secured Claim is made as provided herein or (B) the Collateral securing such Liens is sold and such Liens shall attach to the respective proceeds of such sale to the extent attributable to such Collateral and with the same validity, priority, force and effect. Upon the full payment or other satisfaction of such Claims in accordance with the Plan, the Liens securing such Allowed Other LP Secured Claim shall be deemed released, terminated and extinguished, in each case without further notice to or order of the Bankruptcy Court, act or action under applicable law, regulation, order or rule or the vote, consent, authorization or approval of any Person.

 

(b)                                 Voting: The Other LP Secured Claims are not impaired Claims. In accordance with section 1126(f) of the Bankruptcy Code, the holders of Other LP Secured Claims are conclusively presumed to accept this Plan and are not entitled to vote to accept or reject the Plan, and the votes of such holders will not be solicited with respect to such Allowed Other LP Secured Claims.

 

(c)                                  Deficiency Claims: To the extent that the value of the Collateral securing each Other LP Secured Claim is less than the allowed amount of such Other LP Secured Claim, the undersecured portion of such Allowed Claim shall be treated for all purposes under this Plan as an Allowed General LP Unsecured Claim and shall be classified as a General LP Unsecured Claim.

 

5.3.                            Class 3 — LP Facility Secured Claims

 

(a)                                 Allowance:  On the Effective Date, the LP Facility Secured Claims shall be Allowed Claims.

 

(b)                                 Treatment:  In full satisfaction, settlement, release and discharge of, and in exchange for, LP Facility Secured Claims, and except to the extent that a holder of an Allowed LP Facility Secured Claim agrees to less favorable treatment, each holder of an LP Facility Secured Claim shall receive, on the Effective Date, its Pro Rata Share of Plan Consideration remaining after (A) payment in full of Unclassified Claims pursuant to Article III, (B) payment 

 

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in full of Priority Non-Tax Claims and Other LP Secured Claims pursuant to Sections 5.1 and 5.2 of this Plan, respectively, and (C) payment of the General LP Unsecured Claims Distribution; provided, that, in the event that the Stalking Horse Bid is selected as the Successful Bid and the Effective Date occurs, the Plan Consideration distributed to the holders of Allowed LP Facility Secured Claims, in full satisfaction, settlement, release and discharge of, and in exchange for, such Claims, shall equal $2,102,000,000 in the aggregate; and provided, further, in no event, shall any distribution to a holder of an Allowed LP Facility Secured Claim pursuant to this Section 5.3(b) be in excess of 100% of the amount of such holder’s Allowed LP Facility Secured Claim.

 

(c)                                  Voting:  The LP Facility Secured Claims are impaired Claims.  Holders of such Claims are entitled to vote to accept or reject the Plan, and the votes of such holders will be solicited with respect to such LP Facility Secured Claims.

 

5.4.                            Class 4 — General LP Unsecured Claims

 

(a)                                 Treatment: In complete and final satisfaction, settlement, release, and discharge of, and in exchange for, General LP Unsecured Claims, and except to the extent that a holder of an Allowed General LP Unsecured Claim agrees to less favorable treatment, on the applicable Plan Distribution Date, each holder of an Allowed General LP Unsecured Claim shall receive such holder’s Pro Rata Share of (A) the General LP Unsecured Claims Distribution, and (B) to the extent Allowed General LP Unsecured Claims exceed the General LP Unsecured Claims Distribution, Plan Consideration remaining, if any, after payment in full of all Allowed LP Facility Secured Claims and Allowed Other LP Secured Claims; provided, in no event shall such distribution(s) be in excess of 100% of the amount of its Allowed General LP Unsecured Claim.

 

(b)                                 Voting:  The General LP Unsecured Claims are impaired Claims.  Holders of such Claims are entitled to vote to accept or reject the Plan, and the votes of such holders will be solicited with respect to such General LP Unsecured Claims.

 

5.5.                            Class 5 — LP Preferred Unit Interests

 

(a)                                 Treatment:  In complete and final satisfaction, settlement, release, and discharge of, and in exchange for, LP Preferred Unit Interests, on the Effective Date, the LP Preferred Unit Interests shall be cancelled and, except to the extent that a holder of an Allowed LP Preferred Unit Interest agrees to less favorable treatment, on the applicable Plan Distribution Date, each holder of a LP Preferred Unit Interest shall receive its Pro Rata Share of Plan Consideration remaining, if any, after payment in full of the Allowed General LP Unsecured Claims, including the amount (if any) of the General LP Unsecured Claims Distribution in excess of all Allowed General LP Unsecured Claims; provided, in no event shall such distribution(s) be in excess of 100% of the amount of its Allowed LP Preferred Unit Interest.

 

(b)                                 Voting:  The LP Preferred Unit Interests are impaired Equity Interests.  Holders of such Equity Interests are entitled to vote to accept or reject the Plan, and the votes of such holders will be solicited with respect to such LP Preferred Unit Interests.

 

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5.6.                            Class 6 — LP Common Equity Interests

 

(a)                                 Treatment:  In complete and final satisfaction, settlement, release, and discharge of, and in exchange for, LP Common Equity Interests, on the Effective Date, LP Common Equity Interests shall be cancelled (except as set forth in Section 7.14 of this Plan) and, on the applicable Plan Distribution Date, each holder of an LP Common Equity Interest shall receive its Pro Rata Share of the Plan Consideration remaining, if any, after payment in full of the LP Preferred Unit Interests.

 

(b)                                 Voting:  The LP Common Equity Interests are impaired Equity Interests.  Holders of such Equity Interests are entitled to vote to accept or reject the Plan, and the votes of such holders will be solicited with respect to such LP Common Equity Interests.

 

ARTICLE VI.
 ACCEPTANCE OR REJECTION OF THE PLAN

 

6.1.                            Classes of Claims Deemed to Accept the Plan

 

Class 1 — Priority Non-Tax Claims and Class 2 — Other LP Secured Claims are unimpaired under the Plan and are therefore deemed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code.

 

6.2.                            Class Acceptance Requirement

 

A Class of Claims shall have accepted the Plan if it is accepted by the holders of at least two-thirds (2/3) in amount and more than one-half (1/2) in number of the Allowed Claims in such Class that have voted on the Plan.  A Class of Equity Interests shall have accepted the Plan if it is accepted by holders of at least two-thirds (2/3) in amount of the Equity Interests in such Class that actually vote on the Plan.

 

6.3.                            Confirmation Pursuant to Section 1129(b) of the Bankruptcy Code or “Cramdown”

 

If all applicable requirements for confirmation of the Plan are met as set forth in section 1129(a) of the Bankruptcy Code, except subsection (8) thereof, the Plan shall be treated as a request that the Bankruptcy Court confirm the Plan in accordance with section 1129(b) of the Bankruptcy Code, notwithstanding the failure to satisfy the requirements of section 1129(a)(8), on the basis that the Plan is fair and equitable and does not discriminate unfairly with respect to each Class of Claims or Equity Interests that is impaired under, and has not accepted, the Plan.

 

6.4.                            Elimination of Vacant Classes

 

Any Class of Claims that does not have a holder of an Allowed Claim or a Claim temporarily allowed by the Bankruptcy Court as of the date of the Confirmation Hearing shall be deemed eliminated from the Plan for purposes of voting to accept or reject the Plan and for purposes of determining acceptance or rejection of the Plan by such Class pursuant to section 1129(a)(8) of the Bankruptcy Code.

 

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6.5.                            Voting Classes; Deemed Acceptance by Non-Voting Classes

 

If a Class contains Claims or Equity Interests eligible to vote and no holders of Claims or Equity Interests eligible to vote in such Class vote to accept or reject the Plan, the Plan shall be deemed accepted by the holders of such Claims or Equity Interests in such Class.

 

ARTICLE VII.
 MEANS FOR IMPLEMENTATION OF THE PLAN

 

7.1.                            Plan Funding

 

Plan Distributions shall be made from Plan Consideration (which excludes, for the avoidance of doubt, Cash in the Wind Down Reserve) as of the Effective Date.  Such Plan Consideration shall be used (i) first, to satisfy Allowed Administrative Claims, Allowed Fee Claims, U.S. Trustee Fees, Allowed Priority Tax Claims, Allowed Priority Non-Tax Claims and Allowed Other LP Secured Claims in Cash (or, with respect to Other LP Secured Claims, as otherwise permitted under Section 5.2 of this Plan); (ii) second, to fund the General LP Unsecured Claims Distribution in Cash; and (iii) third, to satisfy the LP Debtors’ other obligations with regards to payment of Allowed Claims and Allowed Equity Interests under this Plan, in accordance with the terms hereof.  The issuance or delivery of any Plan Distributions that are securities shall be exempt from registration under applicable securities laws pursuant to section 1145(a) of the Bankruptcy Code.

 

On the Effective Date, Cash from the LP Sale Proceeds in an amount equal to $[            ](2) million, or such other amount as may be (a) mutually agreed by the Plan Sponsors and the LP Debtors or (b) ordered by the Bankruptcy Court, shall be deposited in a segregated account to be held by the LP Debtors (the “Wind Down Reserve”), which proceeds shall be used to provide funding for reasonable expenses incurred or accrued by the LP Debtors on or after the Effective Date that are directly related to the Wind Down, including, without limitation, professional fees and expenses incurred by the LP Debtors in connection therewith.  To the extent that amounts deposited in the Wind Down Reserve are insufficient to pay such expenses, the LP Debtors may withdraw Cash from the Disputed Claims Reserves established under Section 9.5 of this Plan, in an amount not to exceed $1,000,000.  For the avoidance of doubt, Purchaser shall not be responsible for the payment of any expenses associated with the Wind Down in the event that the Wind Down Reserve is insufficient to pay such expenses.

 

7.2.                            The LP Sale

 

The Confirmation Order shall approve a sale of the Acquired Assets under sections 105(a), 1123(a)(5), 1123(b)(4), 1129(b)(2)(A), 1141, 1142(b), 1145 and 1146(a) of the Bankruptcy Code pursuant to a sale process under the terms and conditions of the Asset Purchase Agreement and the Bid Procedures Order free and clear of any Claims, Liens, interests, or encumbrances.  The LP Sale Proceeds shall include a Cash component in an amount sufficient for the Disbursing Agent to make all Plan Distributions required to be in the form of Cash, and for the LP Debtors to fund the Wind Down Reserve and Disputed Claims Reserves, and to pay all amounts due to be paid to the Stalking Horse Bidder pursuant to the terms of the Bid

 

(2)  To be inserted prior to solicitation.

 

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Procedures Order in the event the Stalking Horse Bidder is not the Purchaser, including the Break-Up Fee and Expense Reimbursement.  Upon entry of the Confirmation Order, the LP Debtors shall be (a) authorized to, among other things, sell, assume, assign and/or transfer the Acquired Assets, subject to applicable law and the terms and conditions of the Asset Purchase Agreement (including, without limitation, receipt of the Specified Regulatory Approvals to the extent applicable), and take any and all actions necessary to consummate the LP Sale; and (b) authorized and directed to execute the Asset Purchase Agreement (to the extent not executed as of the Confirmation Date).  Actions necessary to consummate the LP Sale may include, among others, (a) the execution and delivery of appropriate instruments of transfer, assignment, assumption or delegation of any Asset, property, rights, liability, duty or obligation on terms consistent with the terms of the Asset Purchase Agreement and the Plan and having such other terms to which the LP Debtors and the Purchaser may agree and (b) all other actions that are necessary and appropriate in connection with such transactions, including making such filings or recordings that may be required by or appropriate under applicable state law.  Nothing in the Plan or Confirmation Order authorizes the transfer or assignment of the Acquired Assets to the Purchaser without the Purchaser’s compliance with applicable non-bankruptcy laws regarding the transfer, assignment, or ownership of such Assets.

 

7.3.                            Distribution Account

 

The Distribution Account shall be established to receive on the Effective Date the Plan Consideration, which shall vest in the Distribution Account on the Effective Date free and clear of any and all claims, encumbrances, or interests in accordance with section 1141 of the Bankruptcy Code, but subject to the rights of holders of Claims and Equity Interests to obtain the distributions provided for in this Plan.  Upon the distribution of all Plan Consideration in the Distribution Account, the Distribution Account shall be extinguished.  Upon the transfer of the Plan Consideration into the Distribution Account, the LP Debtors and the Purchaser will have no interest in, or with respect to, the Plan Consideration in the Distribution Account, except as otherwise provided herein.

 

7.4.                            Cancellation of Credit Agreements, Existing Securities and Agreements

 

Except for the purpose of evidencing a right to distribution under this Plan, and except as otherwise set forth herein, on the Effective Date all agreements, instruments, and other documents evidencing any Claim or Equity Interest and any rights of any holder in respect thereof, shall be deemed cancelled, discharged and of no force or effect.  Notwithstanding the foregoing, the applicable provisions of the LP Facility Credit Documents shall continue in effect solely for the purposes of permitting the LP Facility Agent and/or the Disbursing Agent to make distributions pursuant to this Plan on account of Allowed LP Facility Secured Claims and to effectuate any charging Liens permitted under the LP Facility Credit Agreement, and to assert any rights the holders of LP Facility Secured Claims may have with respect to any guaranty of such LP Facility Secured Claims by a Person other than an LP Debtor.  Except as otherwise set forth herein, the holders of or parties to such cancelled instruments, securities and other documentation will have no rights arising from or relating to such instruments, securities and other documentation or the cancellation thereof, except the rights provided for pursuant to the Plan.  Except as provided pursuant to this Plan, the LP Facility Agent and its agents, successors 

 

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and assigns shall be discharged of all of their obligations associated with the LP Facility Credit Documents upon payment in full of the LP Facility Secured Claims.

 

7.5.                            Comprehensive Settlement of Claims and Controversies

 

Pursuant to Bankruptcy Rule 9019 and in consideration for the distributions and other benefits provided under this Plan, the provisions of this Plan will constitute a good faith compromise and settlement of all claims or controversies relating to the rights (including any subordination rights) that a holder of a Claim or Equity Interest may have with respect to any Allowed Claim or Allowed Equity Interest or any distribution to be made pursuant to this Plan on account of any Allowed Claim or Allowed Equity Interest.  The entry of the Confirmation Order will constitute the Bankruptcy Court’s approval, as of the Effective Date, of the compromise or settlement of all such claims or controversies and the Bankruptcy Court’s finding that all such compromises or settlements are: (a) in the best interests of the LP Debtors and their respective Estates and property, and of holders of Claims or Equity Interests; and (b) fair, equitable and reasonable.

 

7.6.                            Continued Corporate Existence and Vesting of Assets

 

(a)                                 Except as otherwise provided in this Plan, the LP Debtors will continue to exist after the Effective Date as separate corporate entities, in accordance with the applicable laws of the respective jurisdictions in which they are incorporated or organized, for the purposes of satisfying their obligations under the Asset Purchase Agreement and the Plan, including making or assisting the Disbursing Agent in making distributions as required under the Plan, maintaining the Acquired Assets and the LP Debtors’ business in accordance with the requirements of the Asset Purchase Agreement, and effectuating the Wind Down.  On or after the Effective Date, each LP Debtor, in its sole and exclusive discretion, but subject to and in accordance with the terms and conditions of the Asset Purchase Agreement, and subject to receipt of any required governmental or regulatory approvals (if any), may take such action as permitted by applicable law as such LP Debtor may determine is reasonable and appropriate, including, but not limited to, causing: (i) an LP Debtor to be merged into another LP Debtor, or its subsidiary or Affiliate; (ii) an LP Debtor to be dissolved without the necessity for any other or further actions to be taken by or on behalf of such dissolving LP Debtor or any payments to be made in connection therewith subject to the filing of a certificate of dissolution with the appropriate governmental authorities; (iii) the legal name of an LP Debtor to be changed; or (iv) the closing of an LP Debtor’s Chapter 11 Case on the Effective Date or any time thereafter.

 

(b)                                 On and after the Effective Date, pursuant to sections 1141(b) and (c) of the Bankruptcy Code, and except as otherwise provided in this Plan or in the Confirmation Order, all property of the LP Debtors’ Estates (other than the Plan Consideration), including all claims, rights and Causes of Action shall vest in each respective LP Debtor free and clear of all Claims, Liens, charges, other encumbrances and interests (other than (a) the rights of the Purchaser with respect to the Acquired Assets, and (b) with respect to the Retained Assets, any Liens, charges or other encumbrances created under the Asset Purchase Agreement).  On and after the Effective Date, the LP Debtors shall maintain the Acquired Assets and comply with all of their obligations under the Asset Purchase Agreement.  In addition, subject to the terms and conditions of the Asset Purchase Agreement and this Plan (including, without limitation, Article IX hereof), the LP Debtors shall effectuate the Wind Down of the LP Debtors’ Estates, and may use, acquire and

 

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dispose of property and prosecute, compromise or settle any Claims (including any Administrative Claims) and Causes of Action (in each case that are not Acquired Assets or Assumed Liabilities), as well as disputes relating to allowance of any Equity Interest, without supervision of or approval by the Bankruptcy Court and free and clear of any restrictions of the Bankruptcy Code or the Bankruptcy Rules other than restrictions expressly imposed by this Plan or the Confirmation Order.  Without limiting the foregoing, the LP Debtors may pay, from the proceeds of the Wind Down Reserve, the charges that they incur on or after the Effective Date for Professional Persons’ fees, disbursements, expenses or related support services without application to the Bankruptcy Court.

 

7.7.                            Existing Officers; Existing Boards

 

(a)                                 Existing Officers.  The Existing Officers shall continue in their positions with the LP Debtors on and after the Effective Date, in accordance with their respective existing employment agreements with the LP Debtors (to the extent assumed by the LP Debtors in accordance with Section 10.1 of this Plan) or any new employment agreement entered into by the LP Debtors and the applicable Existing Officer on or prior to the Effective Date.  To the extent the employment of any of the Existing Officers with the LP Debtors is terminated on or after the Effective Date, the LP Debtors shall replace such terminated Existing Officer in accordance with the terms and conditions of the Asset Purchase Agreement.  The Existing Officers shall be entitled to indemnification for claims, losses, expenses and liabilities arising on or after the Effective Date pursuant to the terms and conditions of the articles of incorporation, by-laws, or similar organizational documents of the applicable LP Debtor in place as of the Effective Date.

 

(b)                                 Existing Boards.  The members of the Existing Boards shall continue in their positions with the LP Debtors on and after the Effective Date.  In the event that a vacancy arises on any Existing Board on or after the Effective Date (as a result of a Person’s termination, resignation, removal or otherwise), such vacancy shall be filled in accordance with the terms and conditions of the Asset Purchase Agreement.  The members of the Existing Boards shall be entitled to indemnification for claims, losses, expenses and liabilities arising on or after the Effective Date pursuant to the terms and conditions of the articles of incorporation, by-laws, or similar organizational documents of the applicable LP Debtor in place as of the Effective Date.

 

7.8.                            Corporate Governance

 

From and after the Effective Date, each of the LP Debtors shall be managed and administered by the Existing Boards, who shall have full authority to administer the provisions of the Plan and the Asset Purchase Agreement, subject to the terms of the Asset Purchase Agreement.  Each Existing Board may, subject to the terms of the Asset Purchase Agreement, authorize its applicable Existing Officers to take any actions contemplated by this Plan or the Asset Purchase Agreement on behalf of the applicable LP Debtor to the extent permitted by the articles of incorporation, by-laws, or similar organizational documents of such LP Debtor in place as of the Effective Date.

 

7.9.                            Wind Down of the LP Debtors and Their Estates

 

(a)                                 The Existing Boards shall oversee the Wind Down, subject to the terms and conditions of the Asset Purchase Agreement and this Plan, and shall make distributions to, and 

 

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otherwise hold all property of the LP Debtors’ Estates for the benefit of, holders of Allowed Claims and Allowed Equity Interests consistent and in accordance with the Plan and the Confirmation Order.  The LP Debtors shall not be required to post a bond in favor of the United States.

 

(b)                                 Following the Effective Date, the LP Debtors shall not engage in any business activities or take any actions, except those necessary to effectuate the Plan, the Wind Down and compliance with their obligations under the Asset Purchase Agreement.  On and after the Effective Date, the LP Debtors may take such action and settle and compromise Claims or Equity Interests without supervision or approval by the Bankruptcy Court and free of any restrictions of the Bankruptcy Code or the Bankruptcy Rules, other than any restrictions expressly imposed by the Plan, the Confirmation Order and/or the Asset Purchase Agreement (including, without, limitation, Article IX of this Plan).

 

7.10.                     Power and Authority of the Existing Boards

 

The Existing Boards shall have the power and authority to perform the following acts on behalf of the LP Debtors, in addition to any powers granted by law or conferred by any other provision of the Plan and orders of the Bankruptcy Court, but in each case subject to the terms and conditions of the Asset Purchase Agreement and this Plan (including, without limitation, Article IX hereof):  (i) take all steps and execute all instruments and documents necessary to make or assist the Disbursing Agent in making distributions to holders of Allowed Claims and Allowed Equity Interests; (ii) object to Claims and Equity Interests as provided in this Plan and prosecute such objections; (iii) resolve, compromise and/or settle any objections to the amount, validity, priority, treatment, allowance or priority of Claims, Administrative Claims, or Equity Interests; (iv) comply with this Plan and the obligations hereunder; (v) if necessary, employ, retain, or replace professionals to assist the LP Debtors in compliance with their obligations under the Asset Purchase Agreement and/or the Wind Down; (vi) establish, replenish or release reserves as provided in this Plan, as applicable; (vii) take all actions necessary or appropriate to enforce the LP Debtors’ rights under the Asset Purchase Agreement and any related document and to fulfill, comply with or otherwise satisfy the LP Debtors’ covenants, agreements and obligations under the Asset Purchase Agreement and any related document; (viii) make all determinations on behalf of the LP Debtors under the Asset Purchase Agreement; (ix) prepare and file applicable tax returns for any of the LP Debtors; (x) liquidate any of the Retained Assets; (xi) deposit the LP Debtors’ Estate funds, draw checks and make disbursements consistent with the terms of this Plan; (xii) purchase or continue insurance protecting the LP Debtors and property of the LP Debtors’ Estates; (xiii) seek entry of a final decree in any of the Chapter 11 Cases at the appropriate time; (xiv) prosecute, resolve, compromise and/or settle any litigation; (xv) abandon in any commercially reasonable manner, including abandonment or donation to a charitable organization (as such term is described in Internal Revenue Code section 501(c)(3) (whose contributions are deductible under Internal Revenue Code section 170)) of the LP Debtors’ choice, any LP Debtors’ Estate Assets that are of no material benefit; and (xvi) take such other action as the LP Debtors may determine to be necessary or desirable to carry out the purpose of this Plan and/or consummation of the LP Sale in accordance with the Asset Purchase Agreement.

 

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7.11.                     Assumed Liabilities

 

In accordance with the terms of the Asset Purchase Agreement, upon and after the Closing of the LP Sale pursuant to the Asset Purchase Agreement, the Purchaser (or, if applicable, the Alternative Purchaser) shall be responsible for payment and satisfaction of all Assumed Liabilities.  Upon and after the Closing of the LP Sale pursuant to the Asset Purchase Agreement, all Persons holding Claims and Equity Interests arising out of or concerning an Assumed Liability, shall be forever barred, estopped and permanently enjoined from asserting against the LP Debtors and any of their property, such Claims or Equity Interests, as applicable.  The Purchaser (or, if applicable, the Alternative Purchaser) is not assuming, and shall not become liable for the payment or performance of, any liabilities or other obligations of any of the LP Debtors of any nature whatsoever, whether accrued or unaccrued, other than the Assumed Liabilities.

 

7.12.                     Cancellation of Certain Existing Security Interests

 

Upon the full payment or other satisfaction of an Allowed Other LP Secured Claim, or promptly thereafter, the holder of such Allowed Other LP Secured Claim shall deliver to the LP Debtors any Collateral or other property of the LP Debtors held by such holder, and any termination statements, instruments of satisfactions, or releases of all security interests with respect to its Allowed Other LP Secured Claim that may be reasonably required in order to terminate any related financing statements, mortgages, mechanic’s liens, or lis pendens; provided, however, any such Collateral that is an Acquired Asset received by the LP Debtors from the holder of such Allowed Claim shall be delivered promptly to the Purchaser (or, if applicable, the Alternative Purchaser) following the Closing.

 

7.13.                     Corporate Action

 

(a)                                 The LP Debtors shall serve on the U.S. Trustee quarterly reports of the disbursements made until such time as a final decree is entered closing the applicable Chapter 11 Case or the applicable Chapter 11 Case is converted or dismissed, or the Bankruptcy Court orders otherwise.  The deadline for filing Administrative Claims set forth in Section 3.2(a) of this Plan shall not apply to fees payable pursuant to section 1930 of title 28 of the United States Code.

 

(b)                                 Entry of the Confirmation Order shall establish conclusive corporate and other authority (and evidence of such corporate and other authority) required for each of the LP Debtors to undertake any and all acts and actions required to implement or contemplated by the Plan (including, without limitation, the execution and delivery of the Asset Purchase Agreement), and such acts and actions shall be deemed to have occurred and shall be in effect pursuant to applicable non-bankruptcy law and the Bankruptcy Code, without the need for board or shareholder vote and without any requirement of further action by the stockholders, directors or managers of the LP Debtors (if any).

 

(c)                                  On the Effective Date, the Existing Boards are authorized and directed to execute and/or deliver, as the case may be, the agreements, documents and instruments contemplated by the Plan, the Plan Supplement and the Asset Purchase Agreement and any schedules, exhibits or

 

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other documents attached thereto or contemplated thereby in the name and on behalf of the LP Debtors.

 

(d)                                 Upon entry of a final decree in each Chapter 11 Case, if not previously dissolved, the applicable LP Debtor shall be deemed dissolved and wound up without any further action required by such LP Debtor.

 

7.14.                     Intercompany Equity Interests

 

No Equity Interest held by an LP Debtor in another LP Debtor shall be cancelled by the terms of this Plan, and all such Equity Interests shall continue in place following the Effective Date solely for the purpose of maintaining the existing corporate structure of the LP Debtors.  For the avoidance of doubt, Equity Interests held by any Inc. Entity in any LP Debtor shall be cancelled in accordance with Section 5.6 of this Plan.

 

ARTICLE VIII.
 PLAN DISTRIBUTION PROVISIONS

 

8.1.                            The Disbursing Agent

 

All Plan Distributions under this Plan shall be made by the Disbursing Agent on and after the Effective Date as provided herein.  The Disbursing Agent shall be empowered to: (a) take all steps and execute all instruments and documents necessary to make Plan Distributions to holders of Allowed Claims and Equity Interests; (b) comply with the Plan and the obligations thereunder; (c) make periodic reports regarding the status of distributions under the Plan to the holders of Allowed Claims that are outstanding at such time, with such reports to be made available upon request to the holder of any Disputed Claim; and (d) exercise such other powers as may be vested in the Disbursing Agent pursuant to the Plan, the Plan Documents, the Confirmation Order, or any other order of the Bankruptcy Court.  Except as otherwise ordered by the Bankruptcy Court, and subject to the written agreement of the LP Debtors if the Disbursing Agent is a Person other than the LP Debtors, the amount of any reasonable documented fees and expenses incurred by the Disbursing Agent on or after the Effective Date (including, without limitation, taxes) and any reasonable compensation and expense reimbursement Claims (including, without limitation, reasonable attorney and other professional fees and expenses) made by the Disbursing Agent shall be paid in Cash by the LP Debtors from the Wind Down Reserve.

 

8.2.                            Postpetition Interest

 

Postpetition interest shall be paid on Allowed LP Facility Secured Claims as set forth in this Plan.  In addition, postpetition interest and/or dividends shall be paid on Allowed LP Preferred Unit Interests to the extent that (a) there is sufficient LP Cash to make a Plan Distribution to holders of LP Common Equity Interests after giving effect to all other Plan Distributions contemplated by this Plan and (b) payment of such amounts is permitted under applicable bankruptcy or non-bankruptcy law.  With respect to all Claims and Equity Interests other than Allowed LP Facility Secured Claims and Allowed LP Preferred Unit Interests, postpetition interest shall not accrue or be paid, and no holder of a Claim or Equity Interest shall be entitled to interest accruing on such Claim or Equity Interest after the Petition Date, except as

 

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otherwise specifically provided for in the Confirmation Order or other order of the Bankruptcy Court, or required by applicable bankruptcy or non-bankruptcy law.

 

8.3.                            Timing of Plan Distributions

 

Unless otherwise provided herein, any distributions and deliveries to be made hereunder shall be made on the applicable Plan Distribution Date or as soon thereafter as is practicable, provided that the LP Debtors or the Disbursing Agent, as applicable, may utilize periodic distribution dates to the extent appropriate and not otherwise inconsistent with the Plan.  In the event that any payment or act under this Plan is required to be made or performed on a date that is not a Business Day, then the making of such payment or the performance of such act may be completed on the next succeeding Business Day, but shall be deemed to have been completed as of the required date.

 

8.4.                            Distribution Record Date

 

(a)                                 As of the close of business on the Distribution Record Date, the various lists of holders of Claims and Equity Interests in each of the Classes, as maintained by the LP Debtors, or their agents, shall be deemed closed and there shall be no further changes in the record holders of any of the Claims and Equity Interests.  Neither the LP Debtors nor the Disbursing Agent shall have any obligation to recognize any transfer of Claims or Equity Interests occurring after the close of business on the Distribution Record Date.  Additionally, with respect to payment of any Cure Costs or any Cure Disputes in connection with the assumption and/or assignment of the LP Debtors’ executory contracts and leases, the LP Debtors shall have no obligation to recognize or deal with any party other than the non-LP Debtor party to the underlying executory contract or lease, even if such non-LP Debtor party has sold, assigned or otherwise transferred its Claim for a Cure Cost.

 

(b)                                 Plan Distributions to be made on account of Allowed LP Facility Secured Claims shall be made by the Disbursing Agent to the LP Facility Agent, who shall distribute such Plan Distributions to holders of Allowed LP Facility Secured Claims in accordance with the terms of the LP Facility Credit Agreement.  The LP Facility Agent shall cooperate and assist the Disbursing Agent in connection with such distributions to the holders of Allowed LP Facility Secured Claims.  The LP Debtors, through the Disbursing Agent, shall pay the LP Facility Agent’s reasonable documented fees and expenses incurred in providing any such cooperation or assistance from the Wind Down Reserve.

 

(c)                                  Plan Distributions to be made on account of Allowed Claims and Equity Interests other than LP Facility Secured Claims shall be made directly by the Disbursing Agent to the holders of such Claims and Equity Interests.

 

8.5.                            Address for Delivery of Plan Distributions/Unclaimed Plan Distributions

 

Subject to Bankruptcy Rule 9010, any Plan Distribution or delivery to a holder of an Allowed Claim or Equity Interest shall be made at the address of such holder as set forth in the latest-dated of the following actually held or received by the Disbursing Agent prior to the Effective Date:  (a) the Schedules; (b) the Proof of Claim filed by such holder; (c) any notice of

 

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assignment filed with the Bankruptcy Court with respect to such Claim or Equity Interest pursuant to Bankruptcy Rule 3001(e);  (d) any notice served by such holder giving details of a change of address; or (e) the transfer ledger in respect of the LP Preferred Unit Interests and LP Common Equity Interests.  If any Plan Distribution sent to the holder of a Claim or Equity Interest is returned to the Disbursing Agent as undeliverable, no Plan Distributions shall be made to such holder unless the Disbursing Agent is notified of such holder’s then current address within one hundred and twenty (120) days after such Plan Distribution was returned.  After such date, if such notice was not provided, such holder shall have forfeited its right to such Plan Distribution, and the undeliverable Plan Distribution shall revert to the Distribution Account.  Upon such reversion, the Claim or Equity Interest of any holder or its successors with respect to such property shall be cancelled, discharged and forever barred notwithstanding any applicable federal or state escheat, abandoned or unclaimed property laws to the contrary.

 

8.6.                            Time Bar to Cash Payments

 

Checks issued in respect of Allowed Claims shall be null and void if not negotiated within ninety (90) days after the date of issuance thereof.  Requests for reissuance of any voided check shall be made directly to the Disbursing Agent by the holder of the Allowed Claim to whom such check was originally issued.  Any claim in respect of such a voided check shall be made within one hundred and twenty (120) days after the date of issuance of such check.  If no request is made as provided in the preceding sentence, any claims in respect of such voided check shall be discharged and forever barred and such unclaimed Plan Distribution shall revert to the Distribution Account.

 

8.7.                            No Distribution in Excess of Amount of Allowed Claim

 

Notwithstanding anything to the contrary herein, no holder of an Allowed Claim shall, on account of such Allowed Claim, receive a Plan Distribution (of a value set forth herein) in excess of the allowed amount of such Claim plus postpetition interest on such Claim, to the extent interest is permitted under Section 8.2 of this Plan.

 

8.8.                            Setoffs and Recoupments

 

Each LP Debtor, or such entity’s designee as instructed by such LP Debtor, may, pursuant to section 553 of the Bankruptcy Code or applicable non-bankruptcy law, set off and/or recoup against any Allowed Claim (other than an Allowed LP Facility Secured Claim) or any Allowed Equity Interest, and the Plan Distributions on account of such Allowed Claim or Allowed Equity Interest, any and all claims, rights and Causes of Action that an LP Debtor or its successors may hold against the holder of such Allowed Claim or Allowed Equity Interest after the Effective Date; provided, however, that neither the failure to effect a setoff or recoupment nor the allowance of any Claim or Equity Interest (other than an Allowed LP Facility Secured Claim) hereunder will constitute a waiver or release by an LP Debtor or its successor of any and all claims, rights and Causes of Action that an LP Debtor or its successor may possess against such holder; and provided, further, that any proposed setoff or recoupment of the LP Debtors’ rights or Causes of Action against an Allowed Inc. Entity General Unsecured Claim shall be subject to Bankruptcy Court approval as a settlement of such Allowed Inc. Entity General Unsecured Claim pursuant to Section 9.3 of this Plan.

 

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8.9.                            Fractional Cents and De Minimis Distributions

 

Notwithstanding any other provision of the Plan to the contrary, (i) no payment of fractions of cents will be made; and (ii) the Disbursing Agent shall not have any obligation to make a Plan Distribution that is less than or $40.00 in Cash.  Whenever any payment of a fraction of a cent would otherwise be called for, the actual payment shall reflect a rounding down of such fraction to the nearest whole cent.

 

8.10.                     Manner of Payment Under the Plan

 

Unless the Person receiving a Plan Distribution agrees otherwise, any Plan Distribution to be made in Cash under the Plan shall be made, at the election of the Disbursing Agent, by check drawn on a domestic bank or by wire transfer from a domestic bank.  Cash payments to foreign creditors may be, in addition to the foregoing, made at the option of the Disbursing Agent in such funds and by such means as are necessary or customary in a particular foreign jurisdiction.  The issuance or delivery of any Plan Distribution that is a security shall be exempt from registration under applicable securities laws pursuant to section 1145(a) of the Bankruptcy Code.

 

8.11.                     Requirement to Give a Bond or Surety

 

The Disbursing Agent shall not be required to give any bond or surety or other security for the performance of its duties unless otherwise ordered by the Bankruptcy Court and, in the event that the Disbursing Agent is so otherwise ordered, all costs and expenses of procuring any such bond or surety shall be borne by the applicable LP Debtor.  Furthermore, any such Person required to give a bond shall notify the Bankruptcy Court and the U.S. Trustee in writing before terminating any such bond that is obtained.

 

8.12.                     Withholding and Reporting Requirements

 

In connection with this Plan and all distributions hereunder, the LP Debtors shall comply with all withholding and reporting requirements imposed by any federal, state, local or foreign taxing authority, and all Plan Distributions hereunder shall be subject to any such withholding and reporting requirements.  The LP Debtors shall be authorized to take any and all actions that may be necessary or appropriate to comply with such withholding and reporting requirements, including, without limitation, liquidating a portion of any Plan Distribution to generate sufficient funds to pay applicable withholding taxes or establishing any other mechanisms the LP Debtors or the Disbursing Agent believe are reasonable and appropriate, including requiring a holder of a Claim or Equity Interest to submit appropriate tax and withholding certifications.  Notwithstanding any other provision of this Plan: (a) each holder of an Allowed Claim and/or an Allowed Equity Interest that is to receive a distribution under this Plan shall have sole and exclusive responsibility for the satisfaction and payment of any tax obligations imposed by any governmental unit, including income, withholding and other tax obligations on account of such distribution; and (b) no Plan Distributions shall be required to be made to or on behalf of such holder pursuant to this Plan if, after 120 days from the date of transmission of a written request to the holder of an Allowed Claim or Allowed Equity Interest, the LP Debtors do not receive a valid, completed IRS form from such holder of an Allowed Claim or Allowed Equity Interest, which is otherwise required for reporting purposes, and such holder shall be treated as if their Claims or Equity Interests had been disallowed.

 

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8.13.                     Cooperation with Disbursing Agent

 

The LP Debtors and their Professional Persons shall use all commercially reasonable efforts to provide the Disbursing Agent with the amount of Claims and Equity Interests and the identity and addresses of holders of Claims and Equity Interests, in each case, as set forth in the LP Debtors’ books and records. The LP Debtors and their Professional Persons shall cooperate in good faith with the Disbursing Agent to comply with any of its reporting and withholding requirements.

 

ARTICLE IX.
 PROCEDURES FOR RESOLVING DISPUTED CLAIMS

 

9.1.                            Objections to Claims

 

Other than with respect to Fee Claims (to which any party in interest may object) and Inc. Entity General Unsecured Claims (to which the Ad Hoc LP Secured Group or any member thereof may object), only the LP Debtors shall be entitled to object to Claims after the Effective Date.  Any objections to Claims (other than Administrative Claims), shall be served and filed on or before the later of:  (a) one-hundred twenty (120) days after the Effective Date; and (b) such other date as may be fixed by the Bankruptcy Court, whether fixed before or after the date specified in clause (a) hereof.  Any Claims filed after the applicable bar date (including Inc. Entity General Unsecured Claims filed after the Inc. Entity General Unsecured Claims Bar Date), shall be deemed disallowed and expunged in their entirety without further order of the Bankruptcy Court or any action being required on the part of the LP Debtors unless the Person wishing to file such untimely Claim has received Bankruptcy Court authority to do so.  Notwithstanding any authority to the contrary, an objection to a Claim shall be deemed properly served on the claimant if the objecting party effects service in any of the following manners: (i) in accordance with Federal Rule of Civil Procedure 4, as modified and made applicable by Bankruptcy Rule 7004; (ii) by first class mail, postage prepaid, on the signatory on the Proof of Claim as well as all other representatives identified in the Proof of Claim or any attachment thereto; or (iii) if counsel has agreed to or is otherwise deemed to accept service, by first class mail, postage prepaid, on any counsel that has appeared on the claimant’s behalf in the Chapter 11 Cases (so long as such appearance has not been subsequently withdrawn).

 

9.2.                            Amendment to Claims

 

Except with respect to Administrative Expense Claims and Fee Claims, from and after the Effective Date, no Claim may be filed to increase or assert additional Claims not reflected in an already filed Claim (or Claim scheduled, unless superseded by a filed Claim, on the applicable LP Debtor’s Schedules) asserted by such claimant and any such Claim shall be deemed disallowed and expunged in its entirety without further order of the Bankruptcy Court or any action being required on the part of the LP Debtors unless the claimant has obtained the Bankruptcy Court’s prior approval to file such amended or increased Claim.

 

9.3.                            Settlement of Claims and Causes of Action

 

Notwithstanding any requirements that may be imposed pursuant to Bankruptcy Rule 9019, from and after the Effective Date, the LP Debtors shall have authority to settle or

 

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compromise all Claims (to the extent not previously compromised, settled and released under the Plan) without further review or approval of the Bankruptcy Court; provided, that notwithstanding the foregoing, the LP Debtors may not settle or compromise any Inc. Entity General Unsecured Claim without approval of the Bankruptcy Court, which the LP Debtors may seek on fourteen (14) calendar days’ notice to the Ad Hoc LP Secured Group and Plan Sponsors.

 

9.4.                            Estimation of Claims

 

The LP Debtors (or any of them, as applicable), may at any time request that the Bankruptcy Court estimate any Disputed Claim pursuant to section 502(c) of the Bankruptcy Code regardless of whether the LP Debtors (or any of them, as applicable) has previously objected to such Claim or whether the Bankruptcy Court has ruled on any such objection, and the Bankruptcy Court shall retain jurisdiction to estimate any Claim at any time during litigation concerning any objection to any Claim, including during the pendency of any appeal relating to any such objection.  In the event that the Bankruptcy Court estimates any Disputed Claim, that estimated amount shall constitute the allowed amount of such Claim for all purposes under the Plan except with respect to Plan Distributions, and with respect to Plan Distributions, the estimated amount shall constitute the maximum allowed amount of such Claim.  All of the objection, estimation, settlement, and resolution procedures set forth in the Plan are cumulative and not necessarily exclusive of one another.  Claims may be estimated and subsequently compromised, settled, withdrawn or resolved by any mechanism approved by the Bankruptcy Court.

 

9.5.                            Disputed Claims Reserves

 

(a)                                 No Plan Distributions Pending Allowance.  Except as provided in this Section 9.5, Disputed Claims shall not be entitled to any Plan Distributions unless and until such Claims become Allowed Claims.

 

(b)                                 Disputed Unclassified Claims Reserve.  On the Effective Date or as soon thereafter as is reasonably practicable, the LP Debtors shall set aside and reserve, for the benefit of each holder of a Disputed Claim that is an Administrative Claim or Priority Tax Claim, Plan Consideration in the form of Cash in an amount equal to (i) the amount of such Claim as estimated by the Bankruptcy Court pursuant to an Estimation Order, (ii) if no Estimation Order has been entered with respect to such Claim, the amount in which such Disputed Claim is proposed to be allowed in any pending objection filed with respect to such Claim, or (iii) if no Estimation Order has been entered with respect to such Claim, and no objection to such Claim is pending on the Effective Date, (A) the amount listed in the Schedules or (B) if the amount listed in the Schedules is less than the amount set forth in a timely filed Proof of Claim or application for payment filed with the Bankruptcy Court or Claims Agent, the amount set forth in such timely filed Proof of Claim or application for payment, as applicable.  In addition, on the Effective Date or as soon thereafter as is reasonably practicable, the LP Debtors shall set aside and reserve, for the benefit of each holder of an Administrative Claim (including a Fee Claim) incurred or accrued by the LP Debtors prior to the Effective Date that are not paid on or prior to the Effective Date, Plan Consideration in the form of Cash in amount equal to such Administrative Claim (based on the Plan Sponsors’ best estimate of the allowable amount of such Claim); provided that, to the extent that amounts deposited in the reserve established pursuant to this Section 9.5(b) are insufficient to pay any such Allowed Administrative Claim,

 

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the LP Debtors may withdraw Cash from the Wind Down Reserve to pay such Allowed Administrative Claim.

 

(c)                                  Disputed Priority-Non Tax Claims and Disputed Other LP Secured Claims Reserve.  On the Effective Date or as soon thereafter as is reasonably practicable, the LP Debtors shall set aside and reserve, for the benefit of each holder of a Disputed Claim that is a Priority Non-Tax Claim or Other LP Secured Claim, Plan Consideration in the form of Cash in an amount equal to (i) the amount of such Claim as estimated by the Bankruptcy Court pursuant to an Estimation Order, (ii) if no Estimation Order has been entered with respect to such Claim, the amount in which such Disputed Claim is proposed to be allowed in any pending objection filed with respect to such Claim, or (iii) if no Estimation Order has been entered with respect to such Claim, and no objection to such Claim is pending on the Effective Date, (A) the amount listed in the Schedules or (B) if the amount listed in the Schedules is less than the amount set forth in a timely filed Proof of Claim or application for payment filed with the Bankruptcy Court or Claims Agent, the amount set forth in such timely filed Proof of Claim or application for payment, as applicable.

 

(d)                                 Disputed General LP Unsecured Claims Reserve.  On the Effective Date or as soon thereafter as is reasonably practicable, the LP Debtors shall set aside and reserve, for the benefit of each holder of a Disputed Claim that is a General LP Unsecured Claim, Plan Consideration in an amount equal to (i) the General LP Unsecured Claims Distribution minus the amount of Allowed General LP Unsecured Claims as of the Effective Date, or (ii) such other amount as may be ordered by the Bankruptcy Court on or prior to the Confirmation Date.  Further, so long as the Allowed LP Facility Secured Claims have been paid in full on the Effective Date as set forth in Section 5.3 of this Plan, and only to the extent the aggregate amount of Disputed General LP Unsecured Claims (as calculated hereunder) exceeds the Cash set aside and reserved pursuant to the first sentence of this Section 9.5(d), the LP Debtors shall, on the Effective Date or as soon thereafter as is reasonably practicable, set aside and reserve, for the benefit of each holder of a Disputed General LP Unsecured Claim, Cash in an amount equal to (i) the amount of such Claim as estimated by the Bankruptcy Court pursuant to an Estimation Order, (ii) if no Estimation Order has been entered with respect to such Claim, the amount in which such Disputed Claim is proposed to be allowed in any pending objection filed by the LP Debtors, or (iii) if no Estimation Order has been entered with respect to such Claim, and no objection to such Claim is pending on the Effective Date, (A) the amount listed in the Schedules or (B) if the amount listed in the Schedules is less than the amount set forth in a timely filed Proof of Claim or application for payment filed with the Bankruptcy Court or Claims Agent, the amount set forth in such timely filed Proof of Claim or application for payment, as applicable.

 

(e)                                  Plan Distributions to Holders of Subsequently Allowed Claims.  On each Plan Distribution Date (or such earlier date as determined by the LP Debtors or the Disbursing Agent in their sole discretion but subject to this Section 9.5), the Disbursing Agent will make Plan Distributions from the applicable Disputed Claims Reserve on account of any Disputed Claim that has become an Allowed Claim since the occurrence of the previous Plan Distribution Date.  The Disbursing Agent shall distribute from the applicable Disputed Claims Reserve in respect of such newly Allowed Claims the Plan Distributions to which holders of such Claims would have been entitled under this Plan if such newly Allowed Claims were fully or partially Allowed, as

 

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the case may be, on the Effective Date, less direct and actual expenses, fees, or other direct costs of maintaining Cash on account of such Disputed Claims.

 

(f)                                   Distribution from Disputed Claims Reserves Upon Disallowance.  Except as otherwise provided in this Plan, to the extent any Disputed Claim has become a Disallowed Claim in full or in part (in accordance with the procedures set forth in the Plan), any Cash held in any Disputed Claim Reserve by the LP Debtors on account of, or to pay, such Disputed Claim, shall revert to the Distribution Account and be distributed to holders of Allowed Claims or Allowed Equity Interests in accordance with Article V.

 

9.6.                            No Recourse

 

Notwithstanding that the allowed amount of any particular Disputed Claim is (a) reconsidered under the applicable provisions of the Bankruptcy Code and Bankruptcy Rules or (b) allowed in an amount for which after application of the payment priorities established by this Plan there is insufficient value to provide a recovery equal to that received by other holders of Allowed Claims or Allowed Equity Interests in the respective Class, no Claim or Equity Interest holder shall have recourse against the Disbursing Agent, the LP Debtors, the Purchaser (and, if applicable, the Alternative Purchaser) or any of their respective professionals, consultants, officers, directors, employees or members or their successors or assigns, or any of their respective property.  However, nothing in the Plan shall modify any right of a holder of a Claim under section 502(j) of the Bankruptcy Code, nor shall it modify or limit the ability of claimants (if any) to seek disgorgement to remedy any unequal distribution from parties other than those released under this section.  For the avoidance of doubt, and notwithstanding anything to the contrary herein, except as expressly provided in the Asset Purchase Agreement, the Purchaser (and, if applicable, the Alternative Purchaser) shall not be liable for the payment of any Administrative Claims (including Fee Claims) accrued or incurred prior to the Effective Date under any circumstances, including in the event that the reserve for such claims established under Section 9.5(b) of this Plan is insufficient to pay such Administrative Claims in full as provided in Section 3.2 of this Plan.  The estimation of Claims and the establishment of reserves under the Plan may limit the distribution to be made on individual Disputed Claims and other Claims contemplated to be paid from the reserves established under Section 9.5 of this Plan, regardless of the amount finally allowed on account of such Claims.

 

ARTICLE X.
 TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES

 

10.1.                     General Treatment

 

(a)                                 As of and subject to the occurrence of the Effective Date and payment (or provision of the adequate assurance of payment) of the applicable Cure Costs, to the fullest extent permitted under applicable law, all executory contracts and unexpired leases of the LP Debtors (including the Designated Contracts) shall be deemed to be assumed by the applicable LP Debtor as of the Effective Date, except for any executory contract or unexpired lease that: (i) previously has been assumed, assumed and assigned, or rejected pursuant to a Final Order of the Bankruptcy Court; (ii) is designated specifically or by category as a contract or lease to be rejected on the Schedule of Rejected Executory Contracts and Unexpired Leases; or (iii) is the subject of a separate motion to assume and assign to a Person other than the Purchaser (or, if

 

23

 

applicable, the Alternative Purchaser) or to reject under section 365 of the Bankruptcy Code pending on the Effective Date.  Listing a contract or lease in the Schedule of Rejected Executory Contracts and Unexpired Leases shall not constitute an admission by the applicable LP Debtor that the applicable LP Debtor has any liability thereunder.

 

(b)                                 To the extent that an executory contract or unexpired lease is a Designated Contract, any such Designated Contract will be assumed by the LP Debtors, as applicable, on the Effective Date and assigned by the LP Debtors to the Purchaser (or, if applicable, the Alternative Purchaser, subject to Section 10.3(e) of this Plan) at the Closing.  Each executory contract or unexpired lease assumed pursuant to the Plan or by Bankruptcy Court order but not assigned to a third party before the Effective Date shall revest in and be fully enforceable by the applicable contracting LP Debtor in accordance with its terms, except as such terms may have been modified by such order.

 

(c)                                  Notwithstanding anything to the contrary in the Plan, but subject to the terms and conditions of the Asset Purchase Agreement, the LP Debtors reserve the right to alter, amend, modify or supplement the Schedule of Rejected Executory Contracts and Unexpired Leases at any time before the Confirmation Date; provided, that to the extent that, as of the Confirmation Date, there is any pending dispute between one or more of the LP Debtors and a counterparty to an executory contract or unexpired lease regarding the Cure Costs payable under such contract or lease, the LP Debtors shall reserve the right to add the applicable contract or lease to the Schedule of Rejected Executory Contracts and Unexpired Leases following the resolution of such dispute, in which event such contract or lease shall be deemed rejected.

 

(d)                                 Entry of the Confirmation Order shall, subject to the occurrence of the Effective Date, constitute the approval, pursuant to sections 365(a) and 1123(b) of the Bankruptcy Code, of:  (i) subject to Section 10.3(e) of this Plan, the assumptions and rejections of executory contracts and unexpired leases pursuant to Section 10.1(a) of this Plan; and (ii) the assumption and assignment of the Designated Contracts pursuant to Section 10.1(b) of this Plan.

 

10.2.                     Claims Based on Rejection of Executory Contracts or Unexpired Leases

 

(a)                                 All Claims arising from the rejection of executory contracts or unexpired leases, if any, will be treated as General LP Unsecured Claims.  Upon receipt of their applicable Plan Distribution pursuant to Section 5.4 of this Plan, all such Claims shall be discharged on the Effective Date, and shall not be enforceable against the LP Debtors, the Purchaser (and, if applicable, the Alternative Purchaser, subject to Section 10.3(e) of this Plan) or their respective properties or interests in property (and shall not, for the avoidance of doubt, constitute Assumed Liabilities).

 

(b)                                 Each Person who is a party to a contract or lease rejected under the Plan must file with the Bankruptcy Court and serve on the LP Debtors, not later than thirty (30) days after the Effective Date, a Proof of Claim for damages alleged to arise from the rejection of the applicable contract or lease or be forever barred from filing a Claim, or sharing in distributions under the Plan, related to such alleged rejection damages.

 

24

 

10.3.                     Cure of Defaults for Assumed Executory Contracts and Unexpired Leases

 

(a)                                 No later than the applicable deadline set forth in the Bid Procedures Order, the LP Debtors shall serve a notice (the “Assumption Notice”) on counterparties to the executory contracts and unexpired leases that are then anticipated to be Designated Contracts (or otherwise assumed pursuant to the Plan) and the amount, if any, that the LP Debtors contend is the amount needed to cure any defaults and pecuniary losses with respect to such contracts or leases (the “Cure Costs”).  To the extent a counterparty to an executory contract or unexpired lease does not receive an Assumption Notice, the Cure Cost for such executory contract or unexpired lease shall be $0.00.  If the LP Debtors identify additional executory contracts and unexpired leases that might be assumed by the LP Debtors, the LP Debtors will promptly send a supplemental Assumption Notice to the applicable counterparties to such contract or lease.

 

(b)                                 Except to the extent that less favorable treatment has been agreed to by the non-LP Debtor party or parties to each such executory contract or lease, monetary defaults arising under each executory contract and lease to be assumed, or assumed and assigned, pursuant to the Plan shall be cured, in accordance with section 365(b)(1) of the Bankruptcy Code, by payment of the Cure Cost on the later of: (i) the Effective Date or as soon thereafter as is reasonably practicable; and (ii) the date on which the Cure Cost has been resolved (either consensually or through judicial decision, subject, in any such case, to the terms and conditions of the Asset Purchase Agreement) or as soon thereafter as is reasonably practicable.

 

(c)                                  Any party that fails to object to the applicable Cure Cost listed on the Assumption Notice, or the assumption of the applicable executory contract or unexpired lease, by 5:00 p.m. (prevailing Eastern time) on the date that is seven (7) calendar days prior to the Confirmation Hearing (or, with respect to any objection to a supplemental Assumption Notice, on the date that is seven (7) calendar days after service of such supplemental Assumption Notice on such party):  (i) shall be forever barred, estopped and enjoined from (x) disputing the Cure Cost relating to any executory contract or unexpired lease set forth on the Assumption Notice or, if no Assumption Notice is received and such executory contract or unexpired lease is not listed on the Schedule of Rejected Executory Contracts and Unexpired Leases, a Cure Cost of $0.00, and (y) asserting any Claim against the applicable LP Debtor arising under section 365(b)(1) of the Bankruptcy Code other than as set forth on the Assumption Notice or, if no Assumption Notice is received and such executory contract or unexpired lease is not listed on the Schedule of Rejected Executory Contracts and Unexpired Leases, a Claim in the amount of $0.00; and (ii) subject to Section 10.3(e) of this Plan, shall be deemed to have consented to the assumption and assignment of such executory contract and unexpired lease and shall be forever barred and estopped from asserting or claiming against the LP Debtors, the Purchaser or any other assignee of the relevant executory contract or unexpired lease (including, if applicable, the Alternative Purchaser) that any additional amounts are due or defaults exist, or conditions to assumption and assignment of such executory contract or unexpired lease must be satisfied (pursuant to section 365(b)(1) of the Bankruptcy Code or otherwise).  Any objection relating to the Cure Cost shall specify the Cure Cost proposed by the counterparty to the applicable contract or lease.

 

(d)                                 In the event of a dispute (each, a “Cure Dispute”) regarding:  (i) any Cure Cost; (ii) the ability of the LP Debtors or the Purchaser to demonstrate “adequate assurance of future performance” (within the meaning of section 365 of the Bankruptcy Code) under any contract or 

 

25

 

lease to be assumed; or (iii) any other matter pertaining to the proposed assumption, the cure payments required by section 365(b)(1) of the Bankruptcy Code shall be made at the times set forth in Section 10.3(b) of this Plan following the entry of a Final Order resolving such Cure Dispute and approving the assumption.  To the extent a Cure Dispute relates solely to a Cure Cost, the applicable LP Debtor may assume and assign the applicable contract or lease prior to the resolution of the Cure Dispute provided that a reserve is established containing Cash in an amount sufficient to pay the full amount asserted as cure payment by the non-LP Debtor party to such contract or lease (or such smaller amount as may be fixed or estimated by the Bankruptcy Court).  To the extent the Cure Dispute is resolved or determined unfavorably to the LP Debtors, the LP Debtors may, subject to the terms and conditions of the Asset Purchase Agreement, reject the applicable executory contract or unexpired lease after such determination.  Any Cure Disputes not consensually resolved prior to the Confirmation Hearing shall be heard at the Confirmation Hearing (or such other hearing as requested by the LP Debtors and determined appropriate by the Bankruptcy Court), including any disputed Cure Costs or objections to assumption and assignment, and/or objections to the adequacy of assurance of future performance being provided.

 

(e)                                  Notwithstanding anything to the contrary herein, in the event that there is an Alternative Sale under the Asset Purchase Agreement:  (i) the assumption and assignment of any executory contract or unexpired lease to the Alternative Purchaser shall be subject to further approval by the Bankruptcy Court, which approval the LP Debtors may seek on no less than fourteen (14) calendar days’ notice; and (ii) counterparties to any executory contract or unexpired lease proposed to be assumed and assigned to such Alternative Purchaser shall be entitled to object to such proposed assumption on assignment on the grounds that the LP Debtors or such Alternative Purchaser are unable to demonstrate “adequate assurance of future performance” (within the meaning of section 365 of the Bankruptcy Code), but not on any other grounds.

 

10.4.                     Compensation and Benefit Programs

 

All employment and severance policies, and all compensation and benefit plans, policies, and programs of the LP Debtors applicable to their respective employees, retirees and non-employee directors including, without limitation, all savings plans, retirement plans, healthcare plans, disability plans, severance benefit plans, incentive plans, and life, accidental death and dismemberment insurance plans are treated as executory contracts under the Plan and on the Effective Date will be listed on the Schedule of Rejected Executory Contracts and Unexpired Leases and will be rejected unless any of the foregoing is an Acquired Asset and the counterparty thereto receives an Assumption Notice, in which case the same shall be assumed and assigned to the Purchaser (or, if applicable, the Alternative Purchaser) pursuant to the Asset Purchase Agreement and in accordance with sections 365 and 1123 of the Bankruptcy Code.

 

10.5.                     Post-Petition Contracts and Leases

 

Except to the extent set forth on the Schedule of Rejected Executory Contracts and Unexpired Leases, all contracts, agreements and leases that were entered into or assumed by the LP Debtors after the Petition Date (other than the Asset Purchase Agreement) shall be deemed assumed by the LP Debtors on the Effective Date, and, with respect to any such contracts, agreements or leases that are Designated Contracts, assigned to the Purchaser (or, if applicable,

 

26

 

the Alternative Purchaser) at Closing, without a need for any consent or approval of, or notice to, the counterparty to any such contract, agreement or lease (subject to, with respect to any assignment to an Alternative Purchaser, Section 10.3(e) of this Plan).

 

ARTICLE XI.
 CONDITIONS PRECEDENT TO CONFIRMATION OF THE PLAN AND THE OCCURRENCE OF THE EFFECTIVE DATE

 

11.1.                     Conditions Precedent to Confirmation

 

The following are conditions precedent to confirmation of the Plan:

 

(a)                                 the Bankruptcy Court shall have entered the Disclosure Statement Order and the Bid Procedures Order, and the Canadian Court shall have entered the Disclosure Statement Recognition Order and the Bid Procedures Recognition Order;

 

(b)                                 the Auction shall have been completed; and

 

(c)                                  the Bankruptcy Court shall have entered the Confirmation Order, which shall, among other things, approve the LP Sale if not approved by a separate order of the Bankruptcy Court.

 

11.2.                     Conditions Precedent to the Occurrence of the Effective Date

 

The following are conditions precedent to the occurrence of the Effective Date:

 

(a)                                 each of the Confirmation Order and the Confirmation Recognition Order shall have become a Final Order;

 

(b)                                 the Plan Documents being executed and delivered, and any conditions (other than the occurrence of the Effective Date or certification by an LP Debtor that the Effective Date has occurred) contained therein having been satisfied or waived in accordance therewith;

 

(c)                                  the LP Debtors having paid in full in Cash all undisputed Ad Hoc LP Secured Group Fee Claims; and

 

(d)                                 the Funding having occurred in accordance with the terms and conditions of the Asset Purchase Agreement.

 

11.3.                     Waiver of Conditions

 

The Plan Sponsors may waive, without further order of the Bankruptcy Court, any one or more of the conditions set forth in this Article XI.  Further, the stay of the Confirmation Order, pursuant to Bankruptcy Rule 3020(e), shall be deemed waived by the Confirmation Order.

 

27

 

11.4.                     Effect of Non-Occurrence of the Effective Date

 

If all of the conditions precedent to the occurrence of the Effective Date have not been satisfied or duly waived (as provided in Section 11.3 of this Plan) on or before the first Business Day that is more than sixty (60) days after the Confirmation Date, or by such later date as set forth by the Plan Sponsors in a notice filed with the Bankruptcy Court prior to the expiration of such period, then the Plan Sponsors may file a motion to vacate the Confirmation Order before all of the conditions have been satisfied or duly waived.  It is further provided that notwithstanding the filing of such a motion, the Confirmation Order shall not be vacated if all of the conditions precedent to the Effective Date set forth in Section 11.2 of this Plan are either satisfied or duly waived before the Bankruptcy Court enters an order granting the relief requested in such motion.  If the Confirmation Order is vacated pursuant to this Section 11.4, this Plan shall be null and void in all respects, the Confirmation Order shall be of no further force or effect, no distributions under this Plan shall be made, the LP Debtors and all holders of Claims and Equity Interests in the LP Debtors shall be restored to the status quo ante as of the day immediately preceding the Confirmation Date as though the Confirmation Date had never occurred, and upon such occurrence, nothing contained in this Plan shall:  (a) constitute a waiver or release of any Claims against or Equity Interests in the LP Debtors; (b) prejudice in any manner the rights of the holder of any Claim against or Equity Interest in the LP Debtors; or (c) constitute an admission, acknowledgment, offer or undertaking by any LP Debtor or any other Person with respect to any matter set forth in the Plan.

 

ARTICLE XII.
 RETENTION OF JURISDICTION

 

Pursuant to sections 105(a) and 1142 of the Bankruptcy Code, the Bankruptcy Court shall retain and shall have exclusive jurisdiction, pursuant to 28 U.S.C. §§ 1334 and 157, over any matter, other than Avoidance Actions (excluding any Avoidance Actions that are Acquired Assets under the Asset Purchase Agreement), over which the Bankruptcy Court shall have concurrent jurisdiction, (a) arising under the Bankruptcy Code, (b) arising in or related to the Chapter 11 Cases of the LP Debtors, or the Plan, or (c) that relates to the following:

 

(i)                                     To determine any and all adversary proceedings, applications, motions, and contested or litigated matters that may be pending on the Effective Date or that, pursuant to the Plan, may be instituted by the LP Debtors after the Effective Date;

 

(ii)                                  To hear and determine any objections to the allowance of Claims, whether filed, asserted, or made before or after the Effective Date, including, without express or implied limitation, to hear and determine any objections to the classification of any Claim and to allow, disallow or estimate any Disputed Claim in whole or in part;

 

(iii)                               To ensure that distributions to holders of Allowed Claims or Allowed Equity Interests are accomplished as provided herein;

 

(iv)                              To consider Claims or the allowance, classification, priority, compromise, estimation, or payment of any Claim, including any Administrative Claim;

 

(v)                                 To consider Equity Interests or the allowance, compromise or distributions 

 

28

 

on account of any Equity Interest;

 

(vi)                              To enter, implement, or enforce such orders as may be appropriate in the event the Confirmation Order is for any reason stayed, reversed, revoked, modified, or vacated;

 

(vii)                           To issue such orders in aid of execution of the Plan to the extent authorized or contemplated by section 1142 of the Bankruptcy Code;

 

(viii)                        To consider any modifications of the Plan, remedy any defect or omission, or reconcile any inconsistency in any order of the Bankruptcy Court, including, without limitation, the Confirmation Order;

 

(ix)                              To hear and determine all Fee Applications;

 

(x)                                 To resolve disputes concerning any reserves with respect to Disputed Claims or the administration thereof;

 

(xi)                              To hear and determine all controversies, suits and disputes that may relate to, impact upon, or arise in connection with the LP Sale or its interpretation, implementation, enforcement or consummation (subject to the terms thereof);

 

(xii)                           To recover all Assets of the LP Debtors and property of the Estates, wherever located (other than any Acquired Assets, after the occurrence of the Closing of the LP Sale);

 

(xiii)                        To hear and determine all controversies, suits and disputes that may relate to, impact upon or arise in connection with the Plan, the Plan Documents or their interpretation, implementation, enforcement or consummation;

 

(xiv)                       To hear and determine all controversies, suits and disputes that may relate to, impact upon, or arise in connection with the Confirmation Order (and all exhibits to the Plan) or its interpretation, implementation, enforcement or consummation;

 

(xv)                          To the extent that Bankruptcy Court approval is required and to the extent not released pursuant to the Plan, to consider and act on the compromise and settlement of any Claim by, on behalf of, or against the LP Debtors or their Estates;

 

(xvi)                       To hear and determine such other matters that may be set forth in the Plan, or the Confirmation Order, or that may arise in connection with the Plan, or the Confirmation Order;

 

(xvii)                    To hear and determine matters concerning state, local and federal taxes, fines, penalties or additions to taxes for which the LP Debtors may be liable, directly or indirectly;

 

29

 

(xviii)                 To hear and determine all controversies, suits and disputes that may relate to, impact upon, or arise in connection with any setoff and/or recoupment rights of the LP Debtors or any Person under the Plan;

 

(xix)                       To hear and determine all controversies, suits, and disputes that may relate to, impact upon, or arise in connection with Causes of Action of the LP Debtors (including Avoidance Actions) commenced by the LP Debtors, or any third parties, as applicable, before or after the Effective Date, except to the extent such Causes of Action are compromised, settled and released under the Plan or constitute Acquired Assets under the Asset Purchase Agreement;

 

(xx)                          To hear and determine all controversies, suits, or disputes that may arise in relation to the rights and obligations of the Disbursing Agent;

 

(xxi)                       To enter an order or final decree closing the Chapter 11 Case of any LP Debtor;

 

(xxii)                    In the event of an Alternative Sale, to determine whether the assignment of any Designated Contract to the Alternative Purchaser satisfies and provide such other authorizations and approvals as may be reasonably necessary to consummate an Alternative Sale;

 

(xxiii)                 To issue injunctions, enter and implement other orders or take such other actions as may be necessary or appropriate to restrain interference by any Person with consummation, implementation or enforcement of the Plan or the Confirmation Order; and

 

(xxiv)                To hear and determine any other matters related hereto and not inconsistent with chapter 11 of the Bankruptcy Code.

 

ARTICLE XIII.
 MISCELLANEOUS PROVISIONS

 

13.1.                     Releases

 

(a)                                 Releases by the LP Debtors.  For good and valuable consideration, the adequacy of which is hereby confirmed, and except as otherwise provided in this Plan or the Confirmation Order, as of the Effective Date, the LP Debtors, in their individual capacities and as debtors in possession shall be deemed to forever release, waive and discharge all claims, obligations, suits, judgments, damages, demands, debts, rights, Causes of Action and liabilities (other than the rights of the LP Debtors to enforce this Plan, the contracts, instruments, releases, indentures and other agreements or documents delivered thereunder and the Asset Purchase Agreement) against the Released Parties, whether liquidated or unliquidated, fixed or contingent, matured or unmatured, known or unknown, foreseen or unforeseen, then existing or thereafter arising, in law, equity or otherwise that are based in whole or in part on any act, omission, transaction, event or other occurrence taking place on or prior to the Effective Date in any way relating to the LP Debtors, the parties released pursuant to this Section 13.1, the Chapter 11 Cases, this

 

30

 

Plan or the Disclosure Statement, and that could have been asserted by or on behalf of the LP Debtors or their Estates, whether directly, indirectly, derivatively or in any representative or any other capacity.

 

(b)                                 Releases by Holders of Claims and Equity Interests.  Except as otherwise provided in this Plan or the Confirmation Order, on the Effective Date: (i) each of the Released Parties; (ii) each holder of a Claim or Equity Interest entitled to vote on the Plan that did not “opt-out” of the releases provided in this Section 13.1 in a timely submitted Ballot; and (iii) to the fullest extent permissible under applicable law, as such law may be extended or interpreted subsequent to the Effective Date, all holders of Claims and Equity Interests, in consideration for the obligations of the LP Debtors under this Plan and the other contracts, instruments, releases, agreements or documents executed and delivered in connection with this Plan, and each Person (other than the LP Debtors) that has held, holds or may hold a Claim or Equity Interest, as applicable, will be deemed to have consented to this Plan for all purposes and the restructuring embodied herein and deemed to forever release, waive and discharge all claims, demands, debts, rights, Causes of Action or liabilities (other than the right to enforce the obligations of any party under this Plan and the contracts, instruments, releases, agreements and documents delivered under or in connection with this Plan, including, without limitation, the Asset Purchase Agreement) against the Released Parties, whether liquidated or unliquidated, fixed or contingent, matured or unmatured, known or unknown, foreseen or unforeseen, then existing or thereafter arising, in law, equity or otherwise that are based in whole or in part on any act or omission, transaction, event or other occurrence taking place on or prior to the Effective Date in any way relating to the LP Debtors, the LP Debtors’ Chapter 11 Cases, the LP Sale, the transactions contemplated by the Asset Purchase Agreement, this Plan or the Disclosure Statement.

 

(c)                                  Notwithstanding anything to the contrary contained herein: (i)  except to the extent permissible under applicable law, as such law may be extended or interpreted subsequent to the Effective Date, the releases provided for in this Section 13.1 shall not release any LP Debtor from any liability arising under (x) the Internal Revenue Code or any state, city or municipal tax code, or (y) any criminal laws of the United States or any state, city or municipality; and (ii) the releases set forth in this Section 13.1 shall not release any (x) LP Debtor’s claims, right, or Causes of Action for money borrowed from or owed to an LP Debtor or its subsidiary by any of its directors, officers or former employees, as set forth in such LP Debtor’s or subsidiary’s books and records, (y) any claims against any Person to the extent such Person asserts a crossclaim, counterclaim and/or claim for setoff which seeks affirmative relief against an LP Debtor or any of its officers, directors, or representatives and (z) claims against any Person arising from or relating to such Person’s fraud, gross negligence or willful misconduct, each as determined by a Final Order of the Bankruptcy Court.

 

(d)                                 Notwithstanding anything to the contrary contained herein, nothing herein: (i) discharges, releases, or precludes any (x) environmental liability that is not a Claim; (y) environmental claim of the United States that first arises on or after the Confirmation Date, or (z) other environmental claim or environmental liability that is not otherwise dischargeable under the Bankruptcy Code; (ii) releases the LP Debtors from any

 

31

 

environmental liability that an LP Debtor may have as an owner or operator of real property owned or operated by an LP Debtor on or after the Confirmation Date; (iii) releases or precludes any environmental liability to the United States on the part of any Persons other than the LP Debtors; or (iv) enjoins the United States from asserting or enforcing any liability described in this paragraph.

 

13.2.                     Exculpation and Limitation of Liability

 

None of the Released Parties shall have or incur any liability to any holder of any Claim or Equity Interest or any other party in interest, or any of their respective agents, employees, representatives, financial advisors, attorneys, or agents acting in such capacity, or affiliates, or any of their successors or assigns, for any act or omission in connection with, or arising out of the LP Debtors’ Chapter 11 Cases, the Asset Purchase Agreement, the Disclosure Statement, the solicitation of votes for and the pursuit of confirmation of this Plan, the consummation of the Plan, or the implementation or administration of the Plan, the transactions contemplated by the Plan or the property to be distributed under the Plan, including, without limitation, all documents ancillary thereto, all decisions, actions, inactions and alleged negligence or misconduct relating thereto and all prepetition activities leading to the promulgation and confirmation of this Plan, except for fraud, willful misconduct or gross negligence as finally determined by a Final Order of the Bankruptcy Court, and, in all respects shall be entitled to rely upon the advice of counsel and all information provided by other exculpated Persons herein without any duty to investigate the veracity or accuracy of such information with respect to their duties and responsibilities under the Plan.

 

13.3.                     Injunctions

 

(a)                                 Except as otherwise provided in this Plan or the Confirmation Order, as of the Confirmation Date, but subject to the occurrence of the Effective Date, all Persons who have held, hold or may hold Claims against or Equity Interests in the LP Debtors or their Estates are, with respect to any such Claims or Equity Interests, permanently enjoined after the Confirmation Date from:  (i) commencing, conducting or continuing in any manner, directly or indirectly, any suit, action or other proceeding of any kind (including, without limitation, any proceeding in a judicial, arbitral, administrative or other forum) against or affecting the LP Debtors, their Estates or any of their property, or any direct or indirect transferee of any property of, or direct or indirect successor in interest to, any of the foregoing Persons or any property of any such transferee or successor; (ii) enforcing, levying, attaching (including, without limitation, any pre-judgment attachment), collecting or otherwise recovering by any manner or means, whether directly or indirectly, any judgment, award, decree or order against the LP Debtors, or their Estates or any of their property, or any direct or indirect transferee of any property of, or direct or indirect successor in interest to, any of the foregoing Persons, or any property of any such transferee or successor; (iii) creating, perfecting or otherwise enforcing in any manner, directly or indirectly, any encumbrance of any kind against the LP Debtors, or their Estates or any of their property, or any direct or indirect transferee of any property of, or successor in interest to, any of the foregoing Persons (iv) acting or proceeding in any manner, in any place whatsoever, that does not conform to or comply with the provisions of this Plan to the full extent permitted by applicable law; and (v) commencing or continuing, 

 

32

 

in any manner or in any place, any action that does not comply with or is inconsistent with the provisions of this Plan; provided, however, that nothing contained herein shall preclude such Persons from exercising their rights, or obtaining benefits, pursuant to and consistent with the terms of this Plan; and provided, further, that nothing contained herein shall preclude the Purchaser from exercising any rights and remedies under the Asset Purchase Agreement.

 

(b)                                 By accepting distributions pursuant to this Plan, each holder of an Allowed Claim or Equity Interest will be deemed to have specifically consented to the injunctions set forth in this Section 13.3.

 

(c)                                  The Confirmation Order shall permanently enjoin the commencement or prosecution by any Person, whether directly, derivatively or otherwise, of any claims, obligations, suits, judgments, damages, demands, debts, rights, Causes of Action or liabilities released pursuant to this Plan, including but not limited to the claims, obligations, suits, judgments, damages, demands, debts, rights, Causes of Action or liabilities released in Sections 13.1 and 13.2 of this Plan.  Such injunction shall extend to successors of the LP Debtors and their respective properties and interests in property.

 

13.4.                     Substantial Consummation

 

On the Effective Date, the Plan shall be deemed to be substantially consummated under sections 1101 and 1127(b) of the Bankruptcy Code.

 

13.5.                     Satisfaction of Claims

 

The rights afforded in the Plan and the treatment of all Claims and Equity Interests herein shall be in exchange for and in complete satisfaction, discharge and release of all Claims and Equity Interests of any nature whatsoever against the LP Debtors and their Estates, Assets, properties and interests in property.  Except as otherwise provided herein, on the Effective Date, all Claims and Equity Interests shall be satisfied, discharged and released in full.  Neither the Disbursing Agent nor the Purchaser shall be responsible for any pre-Effective Date obligations of the LP Debtors, except those expressly assumed by the Purchaser (if any), or as otherwise provided in the Plan.  Except as otherwise provided herein, all Persons shall be precluded and forever barred from asserting against the Disbursing Agent or Purchaser, or their successors or assigns, Assets, properties, or interests in property any event, occurrence, condition, thing, or other or further Claims or Causes of Action based upon any act, omission, transaction, or other activity of any kind or nature that occurred or came into existence prior to the Effective Date in connection with the LP Debtors, whether or not the facts of or legal bases therefor were known or existed prior to the Effective Date.

 

13.6.                     Special Provisions Regarding Insured Claims

 

The Plan Distributions to each holder of an Allowed Insured Claim against the LP Debtors shall be made in accordance with the treatment provided under the Plan for the Class in which such Allowed Insured Claim is classified; except, that there shall be deducted from any Plan Distribution on account of an Insured Claim, for purposes of calculating the allowed amount of such Claim, the amount of any insurance proceeds actually received by such holder in 

 

33

 

respect of such Allowed Insured Claim.  Nothing in this Section 13.6 shall (i) constitute a waiver of any Claim, right, or Cause of Action of the LP Debtors or their Estates may hold against any Person, including any insurer, or (ii) provide for the allowance of any Insured Claim.  Pursuant to section 524(e) of the Bankruptcy Code, nothing in the Plan shall release or discharge any insurer from any obligations to any Person under applicable law or any policy of insurance under which any of the LP Debtors is an insured or a beneficiary.

 

13.7.                     Third Party Agreements; Subordination

 

Except as otherwise provided in the Plan, the Plan Distributions to the various Classes of Claims and Equity Interests hereunder shall not affect the right of any Person to levy, garnish, attach, or employ any other legal process with respect to such Plan Distributions by reason of any claimed subordination rights or otherwise.  All such rights and any agreements relating thereto shall remain in full force and effect.  The right of the LP Debtors to seek subordination of any Claim or Equity Interest pursuant to section 510 of the Bankruptcy Code is fully reserved, and the treatment afforded any Claim or Equity Interest that becomes a subordinated Claim or Equity Interest at any time shall be modified to reflect such subordination.

 

13.8.                     Status Reports

 

Following entry of the Confirmation Order, the LP Debtors shall file post-confirmation quarterly status reports with the Bankruptcy Court in accordance with Rule 3021-1 of the Local Bankruptcy Rules for the Southern District of New York and shall meet all Post-Confirmation Operating Report requirements of the U.S. Trustee’s Operating Guidelines and Reporting Requirements (unless the Bankruptcy Court orders otherwise).

 

13.9.                     Notices

 

In order to be effective, all notices, requests, and demands to or upon the LP Debtors or the Plan Sponsors (or the Ad Hoc LP Secured Group) shall be in writing (including by facsimile transmission) and, unless otherwise provided herein, shall be deemed to have been duly given or made only when actually delivered or, in the case of notice by facsimile transmission, when received and telephonically confirmed, addressed as follows:

 

	
If   to the LP Debtors:
    	
 
    
	
 
    	
LightSquared   LP 
   Attention: Marc Montagner 
   450 Park Avenue, Suite 2201 
   New York, NY 10022 
   Telephone: (877) 678-2920 
   E-mail: Marc.Montagner@lightsquared.com
    
	
with a copy to:
    	
 
    
	
 
    	
Milbank,   Tweed, Hadley & McCloy LLP 
   Attention: Matthew S. Barr 
   One Chase Manhattan Plaza 
   New York, NY 10005-1413 
   Telephone: (212) 530-5000 
   Facsimile: (212) 822-5194 
    

 

34

 

	
 
    	
E-mail: mbarr@milbank.com
    
	
 
    	
 
    
	
If   to the Plan Sponsors (or Ad Hoc LP Secured Group):
    	
 
    
	
 
    	
White & Case LLP

Attention:  Glenn   M. Kurtz 
   Andrew Ambruoso

1155   Avenue of the Americas 

New York, NY 10036

Telephone: (212) 819-8200

Facsimile: (212) 354-8113

E-mail:                      gkurtz@whitecase.com   
   andrew.ambruoso@whitecase.com 
    
	
 
    	
 
    
	
 
    	
White &   Case LLP 
   Attention: Thomas E Lauria 
                                                              Matthew Brown   
   Southeast Financial Center, Suite 4900 
   200 South Biscayne Blvd. 
   Miami, FL 33131 
   Telephone: (305) 995-5282 
   Facsimile: (305) 358-5744

E-mail:                      tlauria@whitecase.com   
   mbrown@whitecase.com
    

 

13.10.              Headings

 

The headings used in the Plan are inserted for convenience only, and neither constitute a portion of the Plan nor in any manner affect the construction of the provisions of the Plan.

 

13.11.              Governing Law

 

Except to the extent that the Bankruptcy Code or other federal law is applicable, or to the extent an Plan Document or exhibit or schedule to the Plan provides otherwise, the rights, duties, and obligations arising under this Plan and the Plan Documents shall be governed by, and construed and enforced in accordance with, the laws of the state of New York, without giving effect to the principles of conflict of laws thereof.

 

13.12.              Section 1125(e) of the Bankruptcy Code

 

The Plan Sponsors have and, upon confirmation of this Plan shall be deemed to have, solicited acceptances of this Plan in good faith and in compliance with the applicable provisions of the Bankruptcy Code, and therefore are not and will not be liable at any time for the violation of any applicable law, rule, or regulation governing the solicitation of acceptances or rejections of this Plan.

 

35

 

13.13.              Inconsistency

 

In the event of any inconsistency among the Plan, the Disclosure Statement, the Plan Documents, any exhibit to the Plan or any other instrument or document created or executed pursuant to the Plan, the provisions of the Plan shall govern; provided, that, notwithstanding the foregoing, in the event of any inconsistency among the Asset Purchase Agreement and any other document (including the Plan), the Asset Purchase Agreement shall govern.

 

13.14.              Avoidance and Recovery Actions

 

Effective as of the Effective Date, the LP Debtors retain the right to prosecute any avoidance or recovery actions under sections 544, 547, 548, 549 and 550 of the Bankruptcy Code except for any such actions that are Acquired Assets.

 

13.15.              Expedited Determination

 

The LP Debtors are hereby authorized to file a request for expedited determination under section 505(b) of the Bankruptcy Code for all tax returns filed with respect to the LP Debtors.

 

13.16.              Exemption from Transfer Taxes

 

To the fullest extent permitted by applicable law, all sale transactions consummated by the LP Debtors and approved by the Bankruptcy Court on and after the Confirmation Date through and including the Effective Date, including any transfers effectuated under this Plan, the sale by the LP Debtors of any owned property pursuant to section 1123(b)(4) of the Bankruptcy Code, and any assumption, assignment, and/or sale by the LP Debtors of their interests in unexpired leases of non-residential real property or executory contracts pursuant to section 365(a) of the Bankruptcy Code, shall constitute a “transfer under a plan” within the purview of section 1146 of the Bankruptcy Code, and shall not be subject to any stamp, real estate transfer, mortgage recording, or other similar tax.

 

13.17.              Notice of Entry of Confirmation Order and Relevant Dates

 

Promptly upon entry of the Confirmation Order, the LP Debtors shall publish as directed by the Bankruptcy Court and serve on all known parties in interest and holders of Claims and Equity Interests, notice of the entry of the Confirmation Order and all relevant deadlines and dates under the Plan, including, but not limited to, the deadline for filing notice of Administrative Claims, and the deadline for filing rejection damage Claims.

 

13.18.              Termination of Professionals

 

On the Effective Date, the engagement of each Professional Person retained by the LP Debtors, if any, shall be terminated without further order of the Bankruptcy Court or act of the parties; provided, however, such Professional Persons shall be entitled to prosecute their respective Fee Claims and represent their respective constituents with respect to applications for payment of such Fee Claims and the LP Debtors shall be responsible for the fees, costs and expenses associated with the prosecution of such Fee Claims.  Nothing herein shall preclude any

 

36

 

LP Debtor from engaging a Professional Person on and after the Effective Date in the same capacity as such Professional Person was engaged prior to the Effective Date.

 

13.19.              Interest and Attorneys’ Fees

 

Interest accrued after the applicable Petition Date will accrue and be paid on Claims only to the extent specifically provided for in this Plan, the Plan Documents, the Confirmation Order, or as otherwise required by the Bankruptcy Court or by applicable law.  No award or reimbursement of attorneys’ fees or related expenses or disbursements shall be allowed on, or in connection with, any Claim, except as set forth in the Plan or as ordered by the Bankruptcy Court.

 

13.20.              Amendments

 

(a)           Plan Modifications. This Plan may be amended, modified, or supplemented by the Plan Sponsors, in the manner provided for by section 1127 of the Bankruptcy Code or as otherwise permitted by law, without additional disclosure pursuant to section 1125 of the Bankruptcy Code, except as otherwise ordered by the Bankruptcy Court.  In addition, after the Confirmation Date, so long as such action does not materially and adversely affect the treatment of holders of Allowed Claims and Allowed Equity Interests pursuant to this Plan, the Plan Sponsors may remedy any defect or omission or reconcile any inconsistencies in this Plan, the Plan Documents and/or the Confirmation Order, with respect to such matters as may be necessary to carry out the purposes and effects of this Plan, and any holder of a Claim or Equity Interest that has accepted this Plan shall be deemed to have accepted this Plan as amended, modified, or supplemented.

 

(b)           Other Amendments. Prior to the Effective Date, the Plan Sponsors may make appropriate technical adjustments and modifications to this Plan without further order or approval of the Bankruptcy Court; provided, however, that, such technical adjustments and modifications do not adversely affect in a material way the treatment of holders of Claims or Equity Interests under the Plan.

 

13.21.              Revocation or Withdrawal of this Plan

 

The Plan Sponsors reserve the right to revoke or withdraw this Plan prior to the Effective Date.  If the Plan Sponsors revoke or withdraw this Plan prior to the Effective Date as to any or all of the LP Debtors, or if confirmation or consummation as to any or all of the LP Debtors does not occur, then, with respect to such LP Debtors: (a) this Plan shall be null and void in all respects; (b) any settlement or compromise embodied in this Plan (including the fixing or limiting to an amount certain any Claim or Equity Interest or Class of Claims or Equity Interests), assumption, assumption or assignment, or rejection of executory contracts or leases affected by this Plan, and any document or agreement executed pursuant to this Plan shall be deemed null and void; and (c) nothing contained in this Plan shall (i) constitute a waiver or release of any Claims by or against, or any Equity Interests in, such LP Debtors or any other Person, (ii) prejudice in any manner the rights of such LP Debtors or any other Person or (iii) constitute an admission of any sort by the LP Debtors or any other Person.

 

37

 

13.22.              No Successor Liability

 

Except as otherwise expressly provided in the Plan or the Asset Purchase Agreement, the Purchaser and any Alternative Purchaser do not, pursuant to this Plan or otherwise, assume, agree to perform, pay or indemnify or otherwise have any responsibilities for any liabilities or obligations of the LP Debtors or any other party relating to or arising out of the operations of or Assets of the LP Debtors, whether arising prior to, on, or after the Effective Date.  The Purchaser and any Alternative Purchaser are not, and shall not be, successors to any of the LP Debtors by reason of any theory of law or equity, and it shall not have any successor or transferee liability of any kind or character, except that the Purchaser (or, if applicable, the Alternative Purchaser) shall assume the Assumed Liabilities under the terms and subject to the conditions set forth in the Asset Purchase Agreement.

 

13.23.              Allocation of Plan Distributions Between Principal and Interest

 

To the extent that any Allowed Claim entitled to a distribution under the Plan consists of indebtedness and other amounts (such as accrued but unpaid interest thereon), such distribution shall be allocated first to the principal amount of the Claim (as determined for federal income tax purposes) and then, to the extent the consideration exceeds the principal amount of the Claim, to such other amounts.

 

13.24.              Compliance with Tax Requirements

 

In connection with the Plan, the Disbursing Agent shall comply with all withholding and reporting requirements imposed by federal, state, local and foreign taxing authorities and all Plan Distributions hereunder shall be subject to such withholding and reporting requirements.  Notwithstanding the foregoing, each holder of an Allowed Claim that is to receive a Plan Distribution shall have the sole and exclusive responsibility for the satisfaction and payment of any tax obligations imposed by any government unit, including income, withholding and other tax obligations, on account of such Plan Distribution.  The Disbursing Agent has the right, but not the obligation, to not make a Plan Distribution until such holder has made arrangements satisfactory to the Disbursing Agent for payment of any such tax obligations.

 

13.25.              Rates

 

The Plan does not provide for the change of any rate that is within the jurisdiction of any governmental regulatory commission after the occurrence of the Effective Date.  Where a Claim has been denominated in foreign currency on a Proof of Claim, the allowed amount of such Claim shall be calculated in legal tender of the United States based upon the conversion rate in place as of the Petition Date and in accordance with section 502(b) of the Bankruptcy Code.

 

13.26.              Binding Effect

 

Except as otherwise provided in section 1141(d)(3) of the Bankruptcy Code and subject to the occurrence of the Effective Date, on and after the Confirmation Date, the provisions of this Plan shall be binding upon the LP Debtors, the holders of all Claims and Equity Interests and inure to the benefit of and be binding on such holder’s respective successors and assigns,

 

38

 

whether or not the Claim or Equity Interest of any holder is impaired under this Plan and whether or not such holder has accepted this Plan.

 

13.27.              Successors and Assigns

 

The rights, benefits and obligations of any Person named or referred to in the Plan shall be binding on, and shall inure to the benefit of, any heir, executor, administrator, successor or assign of such Person.

 

13.28.              Time

 

In computing any period of time prescribed or allowed by this Plan, unless otherwise set forth herein or determined by the Bankruptcy Court, the provisions of Bankruptcy Rule 9006 shall apply.

 

13.29.              Severability

 

If, prior to the entry of the Confirmation Order, any term or provision of this Plan is held by the Bankruptcy Court to be invalid, void, or unenforceable, the Bankruptcy Court, at the request of the Plan Sponsors shall have the power to alter and interpret such term or provision to make it valid or enforceable to the maximum extent practicable, consistent with the original purpose of the term or provision held to be invalid, void, or unenforceable, and such term or provision shall then be applicable as altered or interpreted.  Notwithstanding any such holding, alteration, or interpretation, the remainder of the terms and provisions of this Plan will remain in full force and effect and will in no way be affected, impaired, or invalidated by such holding, alteration, or interpretation.  The Confirmation Order shall constitute a judicial determination and shall provide that each term and provision of this Plan, as it may have been altered or interpreted in accordance with the foregoing, is valid and enforceable pursuant to its terms.

 

13.30.              Reservation of Rights

 

Except as expressly set forth herein, the Plan shall have no force or effect unless the Bankruptcy Court shall enter the Confirmation Order.  None of the filing of this Plan, any statement or provision contained herein, or the taking of any action by the Plan Sponsors or the Stalking Horse Bidder with respect to this Plan shall be or shall be deemed to be, an admission or waiver of any rights of the Plan Sponsors or the Stalking Horse Bidder with respect to any Claims or Equity Interests prior to the Effective Date.

 

[The remainder of this page is intentionally left blank.]

 

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Dated: July 23, 2013
    	
 
    
	
New York, New   York
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
WHITE &   CASE LLP
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Glenn M. Kurtz
    
	
 
    	
 
    	
Glenn   M. Kurtz
    
	
 
    	
 
    	
Andrew   C. Ambruoso
    
	
 
    	
 
    	
1155   Avenue of the Americas
    
	
 
    	
 
    	
New   York, NY 10036
    
	
 
    	
 
    	
Telephone:   (212) 819-8200
    
	
 
    	
 
    	
Facsimile:   (212) 354-8113
    
	
 
    	
 
    	
gkurtz@whitecase.com
    
	
 
    	
 
    	
andrew.ambruoso@whitecase.com
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
-and-
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Thomas   E Lauria (admitted pro hac vice)
    
	
 
    	
 
    	
Matthew   Brown (admission pro hac vice   pending)
    
	
 
    	
 
    	
Southeast   Financial Center, Suite 4900
    
	
 
    	
 
    	
200   South Biscayne Blvd.
    
	
 
    	
 
    	
Miami,   FL 33131
    
	
 
    	
 
    	
Telephone:   (305) 371-2700
    
	
 
    	
 
    	
Facsimile:   (305) 358-5744
    
	
 
    	
 
    	
tlauria@whitecase.com
    
	
 
    	
 
    	
mbrown@whitecase.com
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Counsel   to the Ad Hoc Secured Group of LightSquared LP Lenders
    

 

 

EXHIBIT “A”

 

GLOSSARY OF DEFINED TERMS

 

“Acquired Assets” means the LP Debtors’ Assets to be sold pursuant to the terms and conditions of the Asset Purchase Agreement and the Bid Procedures Order.

 

“Ad Hoc LP Secured Group” means that certain Ad Hoc Group of LightSquared LP Lenders comprised of holders, advisors or affiliates of advisors to holders, or managers of various accounts with investment authority, contractual authority or voting authority, of the loans under the LP Facility Credit Agreement, each of which is acting as a Plan Sponsor under this Plan.

 

“Ad Hoc LP Secured Group Advisors” means White & Case LLP, as counsel to the Ad Hoc LP Secured Group, and Blackstone Advisory Partners L.P., as financial advisor to the Ad Hoc LP Secured Group.

 

“Ad Hoc LP Secured Group Fee Claims” means all Claims for: (a) the reasonable documented fees and expenses of the Ad Hoc LP Secured Group Advisors; and (b) reasonable out-of-pocket expenses incurred by members of the Ad Hoc LP Secured Group in their capacities as such, including reasonable documented fees and expenses of LightSquared LP Lender Advisors.

 

“Administrative Claim” means any right to payment constituting a cost or expense of administration of any of the Chapter 11 Cases of the LP Debtors under sections 503(b) and 507(a)(2) of the Bankruptcy Code (other than a Fee Claim or U.S. Trustee Fees), including, without limitation, (i) any actual and necessary expenses of preserving the Estates of the LP Debtors, (ii) any actual and necessary expenses of operating the businesses of the LP Debtors, (iii) any indebtedness or obligations incurred or assumed by the LP Debtors in connection with the conduct of their business from and after the Petition Date, all Fee Claims, all compensation and reimbursement of expenses to the extent allowed by the Bankruptcy Court under section 330 or 503 of the Bankruptcy Code, (iv) any fees and charges assessed against the Estates of the LP Debtors under section 1930 of chapter 123 of title 28 of the United States Code, (v) the Ad Hoc LP Secured Group Fee Claims, and (vi) the Break-Up Fee and Expense Reimbursement, to the extent payable in accordance with the terms of the Stalking Horse Agreement and the Bid Procedures Order.

 

“Affiliate” means, with respect to any Person, all Persons that would fall within the definition assigned to such term in section 101(2) of the Bankruptcy Code, if such Person were a debtor in a case under the Bankruptcy Code.

 

“Allowed Claim” or “Allowed [          ] Claim” (with respect to a specific type of Claim, if specified) means: (a) any Claim (or a portion thereof) as to which no action to dispute, deny, equitably subordinate or otherwise limit recovery with respect thereto, or alter priority thereof, has been sought within the applicable period of limitation fixed by this Plan or applicable law, except to the extent the LP Debtors object to the enforcement

 

i

 

of such Claim or, if an action to dispute, deny, equitably subordinate or otherwise limit recovery with respect thereto, or alter priority thereof, has been sought, to the extent such Claim has been allowed (whether in whole or in part) by a Final Order of a court of competent jurisdiction with respect to the subject matter; or (b) any Claim or portion thereof that is allowed (i) in any contract, instrument, indenture or other agreement entered into in connection with the Plan, (ii) pursuant to the terms of the Plan, (iii) by Final Order of the Bankruptcy Court, or (iv) with respect to an Administrative Claim only (x) that was incurred by a LP Debtor in the ordinary course of business during the Chapter 11 Cases to the extent due and owing without defense, offset, recoupment or counterclaim of any kind, and (y) that is not otherwise disputed.

 

“Allowed Equity Interest” or “Allowed [          ] Equity Interest” means a valid and enforceable Equity Interest, as determined by the Disbursing Agent based on the LP Debtors’ books and records and any applicable registries of holders of Equity Interests.

 

“Alternative Purchaser” means the purchaser in any Alternative Sale.

 

“Alternative Sale” has the meaning given to such term in the Asset Purchase Agreement.

 

“Asset Purchase Agreement” means either (i) the Stalking Horse Agreement or (ii) if the Stalking Horse Bidder is not the Purchaser, an asset purchase agreement by and among the LP Debtors, as sellers, and the Purchaser, as buyer, which asset purchase agreement shall comply with the requirements of the Bid Procedures Order.

 

“Assets” means all rights, title and interest of any nature in property of any kind, wherever located, as specified in section 541 of the Bankruptcy Code.

 

“Assumed Liabilities” means the liabilities of the LP Debtors assumed by the Purchaser pursuant to the Asset Purchase Agreement and the Bid Procedures Order.

 

“Assumption Notice” has the meaning set forth in Section 10.3(a) of this Plan.

 

“Auction” means the auction conducted in connection with the LP Sale and in accordance with the Bid Procedures Order.

 

“Avoidance Actions” means all Causes of Action of the Estates of the LP Debtors that arise under section 544, 545, 547, 548, 549, 550, 551 and/or 553 of the Bankruptcy Code.

 

“Ballot” means the form distributed to holders of impaired Claims or Equity Interests entitled to vote on the Plan on which is to be indicated the acceptance or rejection of the Plan approved by the Bankruptcy Court.

 

“Bankruptcy Code” means the Bankruptcy Reform Act of 1978, as codified at title 11 of the United States Code, as amended from time to time.

 

ii

 

“Bankruptcy Court” means the United States Bankruptcy Court for the Southern District of New York, or such other United States Bankruptcy Court having jurisdiction over the Chapter 11 Cases.

 

“Bankruptcy Rules” means the Federal Rules of Bankruptcy Procedure, as promulgated by the United States Supreme Court pursuant to section 2075 of title 28 of the United States Code, as amended from time to time, applicable to the Chapter 11 Cases, and any Local Rules of the Bankruptcy Court.

 

“Bar Date Notice” means the Notice of Deadlines for Filing Proofs of Claim that was approved pursuant to, and served in accordance with, the Bar Date Order.

 

“Bar Date Order” means the Order Pursuant to 11 U.S.C. § 502(b)(9) and Fed. R. Bankr. P. 2002 and 3003(c)(3) Establishing Deadlines for Filing Proofs of Claim and Procedures Relating Thereto and Approving Form and Manner of Notice Thereof entered as Docket No. 266 in the Chapter 11 Cases.

 

“Bid Procedures Order” means an order granting the Motion of the Plan Sponsors for Entry of an Order (I) Approving Bid Procedures for the Sale of LightSquared LP Assets, (II) Scheduling an Auction, (III) Approving the Form and Scope of Notice of the Bid Procedures and Auction, (IV) Approving Procedures for Assumption and Assignment of Certain Executory Contracts and Unexpired Leases, and (V) Granting Related Relief, dated                , 2013, in form and substance acceptable to the Plan Sponsors.

 

“Bid Procedures Recognition Order” means the order of the Canadian Court, which shall be in form and substance acceptable to the Plan Sponsors, recognizing the entry of the Bid Procedures Order.

 

“Break-Up Fee” has the meaning given to such term in the Bid Procedures Order.

 

“Business Day” means any day other than a Saturday, a Sunday or any other day on which commercial banks are required or authorized to close for business in New York, New York.

 

“Canadian Court” means the Ontario Superior Court of Justice (Commercial List) having jurisdiction over the proceedings commenced by Debtors SkyTerra Holdings (Canada) Inc., SkyTerra (Canada) Inc., and LightSquared Corp. pursuant to Part IV of the Companies’ Creditors Arrangement Act, R.S.C. 1985, c.C-36.

 

“Cash” means legal tender of the United States of America and equivalents thereof.

 

“Causes of Action” means all claims, rights, actions, causes of action (including avoidance actions), liabilities, obligations, suits, debts, remedies, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages or judgments, whether known or unknown, liquidated or unliquidated, fixed or contingent, matured or unmatured, foreseen

 

iii

 

or unforeseen, asserted or unasserted, arising in law, equity or otherwise including intercompany claims.

 

“Chapter 11 Cases” means the voluntary cases commenced by the Debtors under chapter 11 of the Bankruptcy Code, which are being jointly administered and are currently pending before the Bankruptcy Court, styled In re LightSquared Inc., et al., Case No. 12-12080 (SCC).

 

“Claim” means any “claim” as defined in section 101(5) of the Bankruptcy Code, against any LP Debtor.

 

“Claims Agent” means Kurtzman Carson Consultants LLC, or any other Person approved by the Bankruptcy Court to act as the Debtors’ claims and noticing agent pursuant to 28 U.S.C. § 156(c).

 

“Class” means each category of Claims or Equity Interests established under Article IV of the Plan pursuant to sections 1122 and 1123(a) of the Bankruptcy Code.

 

“Closing” means the consummation of all transactions required to close the LP Sale, after satisfaction of all applicable conditions to Closing, as set forth in the Asset Purchase Agreement.

 

“Collateral” means any property or interest in property of the Estates of the LP Debtors subject to a Lien to secure the payment or performance of a Claim, which Lien is not subject to avoidance or otherwise invalid under the Bankruptcy Code or applicable non-bankruptcy law.

 

“Confirmation Date” means the date on which the Clerk of the Bankruptcy Court enters the Confirmation Order on the docket of the Bankruptcy Court.

 

“Confirmation Hearing” means the hearing held by the Bankruptcy Court, as it may be continued from time to time, to consider confirmation of the Plan.

 

“Confirmation Order” means the order of the Bankruptcy Court confirming this Plan pursuant to section 1129 of the Bankruptcy Code and authorizing and directing the LP Debtors to execute the Asset Purchase Agreement (to the extent not executed as of the Confirmation Date) pursuant to sections 105(a), 365, 1123(b)(4), 1129, 1142(b) and 1146(a) of the Bankruptcy Code, in form and substance reasonably acceptable to the Plan Sponsors.

 

“Confirmation Recognition Order” means the order of the Canadian Court, which shall be in form and substance acceptable to the Plan Sponsors:  (a) recognizing the entry of the Confirmation Order; and (b) vesting in the Purchaser all of the LP Debtors’ right, title and interest in and to the Acquired Assets that are owned, controlled, regulated or situated in Canada, free and clear of all liens, claims, charges, interests or other encumbrances, in accordance with applicable law and to the extent set forth in the Asset Purchase Agreement.

 

iv

 

“Cure Costs” has the meaning set forth in Section 10.3(a) of this Plan.

 

“Cure Dispute” has the meaning set forth in Section 10.3(d) of this Plan.

 

“Debtor” means any of the entities identified in footnote 1 of this Plan.

 

“Designated Contract” has the meaning set forth in the Asset Purchase Agreement.

 

“Disallowed Claim” when used with respect to a Claim, means a Claim, or such portion of a Claim, that has been disallowed by a Final Order.

 

“Disbursing Agent” means, for purposes of making distributions under the Plan, the LP Debtors or a designee thereof.

 

“Disclosure Statement” means that certain disclosure statement describing the Plan, including, without limitation, all exhibits and schedules thereto, as approved by the Bankruptcy Court pursuant to section 1125 of the Bankruptcy Code and Bankruptcy Rule 3017.

 

“Disclosure Statement Order” means the order entered by the Bankruptcy Court in the Chapter 11 Cases of the LP Debtors, in form and substance reasonably acceptable to the Plan Sponsors, (a) approving the Disclosure Statement as containing adequate information required under section 1125 of the Bankruptcy Code and Bankruptcy Rule 3017, and (b) authorizing the use of the Disclosure Statement for soliciting votes on the Plan.

 

“Disclosure Statement Recognition Order” means the order of the Canadian Court, which shall be in form and substance acceptable to the Plan Sponsors, recognizing the entry of the Disclosure Statement Order.

 

“Disputed Claim” or “ Disputed [          ] Claim” means, as of any relevant date, any Claim, or any portion thereof: (a) that is not an Allowed Claim or Disallowed Claim as of the relevant date; or (b) for which a proof of Claim has been timely filed with the Bankruptcy Court or a written request for payment has been made, to the extent the LP Debtors, the Disbursing Agent or any party in interest has interposed a timely objection or request for estimation, which objection or request for estimation has not been withdrawn or determined by a Final Order as of the relevant date.

 

“Disputed Claims Reserves” means a reserve or reserves that may be established and maintained by the Disbursing Agent for the purpose of effectuating distributions to holders of Disputed Claims pending allowance or disallowance of such Claims in accordance with the Plan.

 

“Distribution Account” means an account or accounts, as applicable, maintained by the Disbursing Agent into which the Plan Consideration will be delivered and then distributed by the Disbursing Agent in accordance with the Plan.

 

v

 

“Distribution Record Date” means, with respect to all Classes, the third (3rd) Business Day after the date the Confirmation Order is entered by the Bankruptcy Court or such other date as shall be established by the Bankruptcy Court in (a) the Confirmation Order or, (b) upon request of the LP Debtors or the Plan Sponsors, a separate order of the Bankruptcy Court.

 

“Effective Date” means a date selected by the Plan Sponsors that shall be a Business Day that is no later than five (5) days after all of the conditions precedent set forth in Section 11.2 of this Plan have been satisfied or waived (to the extent such conditions can be waived).

 

“Equity Interest” the interest (whether legal, equitable, contractual or other rights) of any holders of any class of equity securities of any of the LP Debtors represented by shares of common or preferred stock or other instruments evidencing an ownership interest in any of the LP Debtors, whether or not certificated, transferable, voting or denominated “stock” or a similar security, and any Claim or Cause of Action related to or arising from the foregoing, or any option, warrant or right, contractual or otherwise, to acquire any such interest means any outstanding ownership interest, including, without limitation, interests evidenced by membership or partnership interests, or other rights to purchase or otherwise receive any ownership interest and any right to payment or compensation based upon any such interest, whether or not such interest is owned by the holder of such right to payment or compensation.

 

“Estate” means each estate created in the Chapter 11 Cases pursuant to section 541 of the Bankruptcy Code.

 

“Estimation Order” means an order or orders of the Bankruptcy Court estimating for voting and/or distribution purposes (under section 502(c) of the Bankruptcy Code) the allowed amount of any Claim.  The defined term Estimation Order includes the Confirmation Order if the Confirmation Order grants the same relief that would have been granted in a separate Estimation Order.

 

“Existing Board” means, with respect to each LP Debtor, the board of directors, board of managers or similar governing entity of such LP Debtor prior to the Effective Date.

 

“Existing Officers” means, with respect to each LP Debtor, the officers of such LP Debtor immediately prior to the Effective Date.

 

“Expense Reimbursement” has the meaning given to such term in the Bid Procedures Order.

 

“Fee Application” means an application for allowance and payment of a Fee Claim (including Claims for “substantial contribution” pursuant to section 503(b) of the Bankruptcy Code).

 

vi

 

“Fee Claim” means a Claim of a Professional Person for compensation, indemnification or reimbursement of expenses pursuant to sections 327, 328, 330, 331, 503(b) or 1103(a) of the Bankruptcy Code.

 

“Final Order” means (a) an order or judgment of the Bankruptcy Court or any other court or adjudicative body as to which the time to appeal, petition for certiorari, or move for reargument or rehearing has expired and as to which no appeal, petition for certiorari, or other proceedings for reargument or rehearing shall then be pending, or (b) in the event that an appeal, writ of certiorari, reargument, or rehearing thereof has been taken or sought, such order of the Bankruptcy Court or any other court or adjudicative body shall have been affirmed by the highest court to which such order was appealed, or certiorari has been denied, or from which reargument or rehearing was sought, and the time to take any further appeal, petition for certiorari or move for reargument or rehearing shall have expired; provided, that no order shall fail to be a Final Order solely because of the possibility that a motion pursuant to section 502(j) of the Bankruptcy Code, Rule 59 or Rule 60 of the Federal Rules of Civil Procedure or Bankruptcy Rule 9024 may be filed with respect to such order.

 

“Funding” has the meaning given to such term in the Asset Purchase Agreement.

 

“Funding Date” has the meaning given to such term in the Asset Purchase Agreement.

 

“General LP Unsecured Claim” means any Claim against an LP Debtor other than an Administrative Claim, a Priority Non-Tax Claim, a Priority Tax Claim, a Fee Claim, U.S. Trustee Fees, an Other LP Secured Claim, an LP Facility Secured Claim, or an Intercompany Claim.

 

“General LP Unsecured Claims Distribution” means Plan Consideration in the form of Cash in an amount equal to $10,000,000.

 

“Inc. Entity” means any of LightSquared Inc., LightSquared Investors Holdings Inc., TMI Communications Delaware, Limited Partnership, LightSquared GP Inc., One Dot Four Corp., One Dot Six Corp., One Dot Six TVCC Corp., TVCC Holdings Company, LLC, TVCC Intermediate Corp., Columbia One Six Partners IV, Inc., Columbia FMS Spectrum Partners IV, Inc., TVCC One Six Holdings LLC, CCMM I LLC, SkyTerra Rollup LLC, SkyTerra Rollup Sub LLC or SkyTerra Investors LLC.

 

“Inc. Entity General Unsecured Claim” means a General Unsecured Claim held by any Inc. Entity against any LP Debtor.

 

“Inc. Entity General Unsecured Claims Bar Date” means the deadline by which Inc. Entity General Unsecured Claims must be filed, which shall be set forth in the Disclosure Statement Order.

 

“Insured Claim” means any Claim for which the LP Debtors or the holder of a Claim is entitled to indemnification, reimbursement, contribution or other payment under

 

vii

 

a policy of insurance wherein any of the LP Debtors is an insured or beneficiary of the coverage.

 

“Intercompany Claim” means a Claim held by any LP Debtor against any other LP Debtor.

 

“Lien” has the meaning set forth in section 101(37) of the Bankruptcy Code.

 

“LightSquared LP Lender Advisors” means counsel to a LightSquared LP Lender that is a member of the Ad Hoc LP Secured Group (but does not include the Ad Hoc LP Secured Group Advisors).

 

“LightSquared LP Lenders” means those lenders from time to time party to the LP Facility Credit Agreement.

 

“LP Cash” means the LP Debtors’ Cash on hand as of the Effective Date.

 

“LP Cash Collateral Order” means the Amended Agreed Final Order (a) Authorizing Debtors to Use Cash Collateral, (b) Granting Adequate Protection to LP Facility Secured Parties, and (c) Modifying Automatic Stay, which has been entered as Docket No. 544 in the Chapter 11 Cases.

 

“LP Common Equity Interests” means the outstanding Equity Interests in LightSquared LP held by TMI Communications Delaware, Limited Partnership and LightSquared Investors Holdings Inc.

 

“LP Debtors” means each of LightSquared LP, ATC Technologies, LLC, LightSquared Inc. of Virginia, LightSquared Corp., LightSquared Subsidiary LLC, Sky Terra Holdings (Canada) Inc., SkyTerra (Canada) Inc., LightSquared Finance Co., LightSquared Network LLC and LightSquared Bermuda Ltd.

 

“LP Facility Agent” means UBS AG, Stamford Branch and any successor thereto, in its capacity as administrative agent on behalf of the LightSquared LP Lenders under the LP Facility Credit Agreement.

 

“LP Facility Credit Agreement” means that certain Credit Agreement, dated as of October 1, 2010, by and among LightSquared LP, as borrower, LightSquared Inc., the other LP Facility Parent Guarantors and the LP Facility Subsidiary Guarantors, as guarantors, and the LightSquared LP Lenders party thereto (as amended, supplemented, amended and restated or otherwise modified from time to time).

 

“LP Facility Credit Documents” means any related agreements, instruments and other documents executed and delivered in connection with the LP Facility Credit Agreement (each as amended, supplemented, amended and restated or otherwise modified from time to time).

 

“LP Facility Parent Guarantors” means LightSquared Inc., LightSquared

 

viii

 

Investors Holdings Inc., LightSquared GP Inc., and TMI Communications Delaware, Limited Partnership.

 

“LP Facility Postpetition Interest” means all interest owed to the LP Facility Secured Parties pursuant to the LP Facility Credit Documents from and after the Petition Date less the amount of adequate protection payments made by LightSquared LP during the Chapter 11 Cases pursuant to the LP Cash Collateral Order (exclusive of Professional Fees (as defined in the LP Cash Collateral Order) paid in accordance with the LP Cash Collateral Order).

 

“LP Facility Prepetition Interest” means all interest owed to the LP Facility Secured Parties pursuant to the LP Facility Credit Documents prior to the Petition Date.

 

“LP Facility Principal” means the principal amount owed to the LP Facility Secured Parties pursuant to the LP Facility Credit Documents as of the Petition Date.

 

“LP Facility Repayment Premium” means the repayment premium due and owing pursuant to § 2.10(f) of the LP Facility Credit Agreement.

 

“LP Facility Secured Claims” means any Claim of the LP Facility Secured Parties under the LP Facility Credit Documents, inclusive of LP Facility Principal, LP Facility Prepetition Interest, LP Facility Postpetition Interest and all applicable fees and premiums due and owing under the LP Facility Credit Documents (including the LP Facility Repayment Premium), in each case, unless the Bankruptcy Court orders otherwise.

 

“LP Facility Secured Parties” means the LP Facility Agent and the LightSquared LP Lenders.

 

“LP Facility Subsidiary Guarantors” means ATC Technologies, LLC, LightSquared Corp., LightSquared Inc. of Virginia, LightSquared Subsidiary LLC, SkyTerra Holdings (Canada) Inc., and SkyTerra (Canada) Inc.

 

“LP Preferred Unit Interests” means an Equity Interest in LightSquared LP arising from ownership of any outstanding non-voting Series A Preferred Units of LightSquared LP.

 

“LP Sale” means the sale of the Acquired Assets under sections 105(a), 1123(a)(5), 1123(b)(4), 1129(b)(2)(A), 1141, 1145 and 1146(a) of the Bankruptcy Code under terms and conditions of the Asset Purchase Agreement free and clear of any Claims, Liens, interests, or encumbrances.

 

“LP Sale Proceeds” means all Cash proceeds and other consideration deliverable to the LP Debtors from the LP Sale in accordance with the Asset Purchase Agreement.

 

ix

 

“Notice of Effective Date” means the notice of the occurrence of the Effective Date to be filed with the Bankruptcy Court and mailed, as necessary, to holders of Claims and Equity Interests.

 

“Other LP Secured Claim” means any Secured Claim against an LP Debtor other than the LP Facility Secured Claims.

 

“Parent Entity” means DISH Network Corporation.

 

“Person” means an individual, corporation, partnership, limited liability company, joint venture, association, indenture trustee, organization, joint stock company, trust, estate, unincorporated association, unincorporated organization, governmental entity, or political subdivision thereof, Equity Interest holder or any other entity or organization.

 

“Petition Date” means May 14, 2012.

 

“Plan” means this chapter 11 plan, including all exhibits, supplements, appendices, and schedules hereto, either in its present form or as it may be amended, supplemented, or otherwise modified from time to time (but solely in accordance with the terms hereof), in form and substance reasonably acceptable to the Plan Sponsors.

 

“Plan Consideration” means LP Cash and LP Sale Proceeds less the amount of Cash necessary to fund the Wind Down Reserve.

 

“Plan Distribution” means a payment or distribution to holders of Allowed Claims or Allowed Equity Interests under the Plan.

 

“Plan Distribution Date” means, with respect to any Claim or Equity Interest, (a) the Effective Date or a date that is as soon as reasonably practicable and permissible after the Effective Date, if such Claim or Equity Interest is then an Allowed Claim or Allowed Equity Interest, or (b) if not allowed on the Effective Date, a date that is as soon as reasonably practicable and permissible after the date such Claim of Equity Interest becomes allowed.

 

“Plan Documents” means the documents, other than the Plan and the Asset Purchase Agreement, to be executed, delivered, assumed, and/or performed in connection with the consummation of the Plan, including, without limitation, the documents to be included in the Plan Supplement and the Schedule of Rejected Executory Contracts and Unexpired Leases, each of which shall be in form and substance reasonably acceptable to the Plan Sponsors and filed with the Bankruptcy Court as specified in the Plan.

 

“Plan Sponsor Fee Claims” means all Claims for the reasonable out-of-pocket expenses incurred by the Plan Sponsors.

 

“Plan Sponsors” means the holders of LP Facility Secured Claims listed on Schedule 1 hereto, solely in their capacities as sponsors of this Plan.

 

x

 

“Plan Supplement” means the supplemental appendix to this Plan, to be filed no later than five (5) calendar days prior to the Voting Deadline, which will contain, among other things, draft forms, signed copies, or summaries of material terms, as the case may be, of the Plan Documents; provided, that such supplemental appendix may be amended, supplemented or modified from time to time after the Voting Deadline in accordance with the terms of this Plan, the Bid Procedures Order and the Confirmation Order.

 

“Priority Non-Tax Claim” means any Claim other than an Administrative Claim, a Fee Claim or a Priority Tax Claim, entitled to priority in right of payment under section 507(a) of the Bankruptcy Code.

 

“Priority Tax Claim” means a Claim that is of a kind specified in section 507(a)(8) of the Bankruptcy Code.

 

“Professional Person” means all Persons retained by order of the Bankruptcy Court in connection with the Chapter 11 Cases, pursuant to sections 327, 328, 330 or 1103 of the Bankruptcy Code, excluding any ordinary course professionals retained pursuant to an order of the Bankruptcy Court.

 

“Proof of Claim” means the proof of Claim that must be filed by a holder of a Claim by the deadline, if any, designated by the Bankruptcy Court as the deadline for filing proofs of Claim against any of the LP Debtors.

 

“Pro Rata Share” means the proportion that an Allowed Claim or Equity Interest bears to the aggregate amount of all Claims or Equity Interests in a particular Class, including, with respect to Classes of Claims, Disputed Claims, but excluding Disallowed Claims, (a) as calculated by the Disbursing Agent; or (b) as determined or estimated by the Bankruptcy Court.

 

“Purchaser” shall have the meaning set forth in the Bid Procedures Order, identifying the Qualified Bidder submitting the highest and best bid for the Assets of the LP Debtors to be sold pursuant to the Auction.

 

“Qualified Bidder” means a Person eligible to submit a bid pursuant to the Bid Procedures Order.

 

“Released Parties” means (a) the LP Debtors, (b) the Ad Hoc LP Secured Group and each member thereof, (c) the Plan Sponsors, (d) the Stalking Horse Bid Parties, (e) the Purchaser, (f) each LightSquared LP Lender, (g) the LP Facility Agent, (h) the present and former directors, officers, managers, equity holders, agents, successors, assigns, attorneys, accountants, consultants, investment bankers, bankruptcy and restructuring advisors, financial advisors, in each case in their capacity as such, and each of the respective affiliates of the parties listed in (a) through (h), in their capacity as such, and (i) any Person claimed to be liable derivatively through any of the foregoing; provided, however, that neither the Purchaser nor the LP Debtors shall be deemed to be a Released Party as against one another with respect to each such party’s right to enforce

 

xi

 

the Asset Purchase Agreement against the other party.

 

“Retained Assets” means the LP Debtors’ Assets that are excluded from the LP Sale pursuant to the terms and conditions of the Asset Purchase Agreement.

 

“Schedule of Rejected Executory Contracts and Unexpired Leases” means a schedule of the contracts and leases to be rejected by the LP Debtors pursuant to Article X of this Plan, the initial version of which shall be filed with the Bankruptcy Court by the LP Debtors no later than five (5) Business Days prior to the Voting Deadline, as the same may be amended or modified from time to time.

 

“Schedules” means, unless otherwise stated, the schedules of assets and liabilities and list of Equity Interests and the statements of financial affairs filed by the LP Debtors with the Bankruptcy Court, as required by section 521 of the Bankruptcy Code and in conformity with the Official Bankruptcy Forms of the Bankruptcy Rules, as such schedules and statements have been or may be amended or supplemented from time to time in accordance with Bankruptcy Rule 1009.

 

“Secured Claim” means a Claim, either as set forth in this Plan, as agreed to by the holder of such Claim and the Plan Sponsors or Disbursing Agent, as applicable, or as determined by a Final Order in accordance with sections 506(a) and 1111(b) of the Bankruptcy Code: (a) that is secured by a valid, perfected and enforceable Lien on Collateral, to the extent of the value of the Claim holder’s interest in such Collateral as of the Confirmation Date; or (b) to the extent that the holder thereof has a valid right of setoff pursuant to section 553 of the Bankruptcy Code.

 

“Specified Regulatory Approvals” has the meaning given to such term in the Asset Purchase Agreement.

 

“Stalking Horse Agreement” means that certain asset purchase agreement, dated  [                       ], 2013, executed by the Stalking Horse Bid Parties setting forth the terms of the Stalking Horse Bidder’s offer for the Acquired Assets.

 

“Stalking Horse Bid” means the initial bid of the Stalking Horse Bidder pursuant to the Stalking Horse Agreement, pursuant to which the Stalking Horse Bidder has offered a cash purchase price of $2.22 billion for the Acquired Assets.

 

“Stalking Horse Bidder” means L-Band Acquisition, LLC, a Delaware limited liability company, in its capacity as the stalking horse bidder under the Stalking Horse Agreement.

 

“Stalking Horse Bid Parties” means the Stalking Horse Bidder and the Parent Entity.

 

“Successful Bid” means the bid selected as the highest or otherwise best bid for the Acquired Assets in accordance with the Bid Procedures Order.

 

xii

 

“Unclassified Claims” means Administrative Claims, Fee Claims, U.S. Trustee Fees and Priority Tax Claims against the LP Debtors.

 

“U.S. Trustee” means the Office of the U.S. Trustee for Region 2, Southern District of New York.

 

“U.S. Trustee Fees” means fees arising under 28 U.S.C. § 1930(a)(6) and, to the extent applicable, accrued interest thereon arising under 31 U.S.C. § 3717, each as determined by the Bankruptcy Court at the Confirmation Hearing.

 

“Voting Deadline” means [                   ], 2013, at 5:00 p.m. (prevailing Eastern time), or such later date as may be determined by the Plan Sponsors or as otherwise determined by the Bankruptcy Court.

 

“Wind Down” means the wind down of the LP Debtors in accordance with the Plan, as more fully set forth in Article VII herein.

 

“Wind Down Reserve” has the meaning set forth in Section 7.1 of this Plan.

 

xiii

 

Schedule 1

 

Plan Sponsors

 

1.             Capital Research and Management Company

 

2.             Cyrus Capital Partners, L.P.

 

3.             Intermarket Corporation

 

4.             SP Special Opportunities, LLC

 

5.             UBS AG, Stamford Branch

 

 

EXHIBIT B

 

STALKING HORSE AGREEMENT

 

 

DRAFT — SUBJECT IN ALL RESPECTS TO FURTHER NEGOTIATION AND APPROVAL BY PURCHASER (AS DEFINED HEREIN) AND THE MAJORITY IN INTEREST OF THE LP LENDERS (AS DEFINED HEREIN)

 

 

PURCHASE AGREEMENT

 

by and among

 

LIGHTSQUARED LP,

 

ATC TECHNOLOGIES, LLC,

 

LIGHTSQUARED CORP.,

 

LIGHTSQUARED INC. OF VIRGINIA,

 

LIGHTSQUARED SUBSIDIARY LLC,

 

LIGHTSQUARED FINANCE CO.,

 

LIGHTSQUARED NETWORK LLC,

 

LIGHTSQUARED BERMUDA LTD.,

 

SKYTERRA HOLDINGS (CANADA) INC.,

 

SKYTERRA (CANADA) INC.,

 

L-BAND ACQUISITION, LLC

 

AND

 

[PARENT ENTITY]

 

(Solely for the Purposes of Section 9.17)

 

dated as of [  ], 2013

 

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE I. DEFINITIONS
    	
2
    
	
 
    	
 
    
	
ARTICLE II. PURCHASE AND SALE OF ASSETS
    	
2
    
	
 
    	
 
    	
 
    
	
Section 2.1
    	
Sale and Transfer of Assets
    	
2
    
	
Section 2.2
    	
Retained Assets
    	
5
    
	
Section 2.3
    	
Assumption of Liabilities
    	
5
    
	
Section 2.4
    	
Non-Assumed Liabilities
    	
6
    
	
Section 2.5
    	
The Purchase Price
    	
6
    
	
Section 2.6
    	
Sale Free and Clear
    	
8
    
	
Section 2.7
    	
Other Payments
    	
9
    
	
 
    	
 
    	
 
    
	
ARTICLE III. CLOSING
    	
9
    
	
 
    	
 
    	
 
    
	
Section 3.1
    	
Funding and Closing
    	
9
    
	
Section 3.2
    	
Deliveries by Sellers
    	
10
    
	
Section 3.3
    	
Deliveries by Purchaser
    	
11
    
	
Section 3.4
    	
Nonassignable Assets
    	
11
    
	
Section 3.5
    	
Termination and Alternative   Sale
    	
12
    
	
 
    	
 
    	
 
    
	
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF   SELLERS
    	
16
    
	
 
    	
 
    	
 
    
	
Section 4.1
    	
Organization
    	
17
    
	
Section 4.2
    	
Financial Statements
    	
17
    
	
Section 4.3
    	
Real and Personal Property
    	
17
    
	
Section 4.4
    	
Authorization;   Enforceability
    	
18
    
	
Section 4.5
    	
No Conflicts
    	
18
    
	
Section 4.6
    	
Consents and Approvals
    	
19
    
	
Section 4.7
    	
Intellectual Property
    	
19
    
	
Section 4.8
    	
Material Contracts
    	
21
    
	
Section 4.9
    	
Absence of Certain   Developments
    	
23
    
	
Section 4.10
    	
No Undisclosed Liabilities
    	
23
    
	
Section 4.11
    	
Litigation
    	
23
    
	
Section 4.12
    	
Permits and Compliance with   Laws
    	
24
    
	
Section 4.13
    	
Taxes
    	
25
    
	
Section 4.14
    	
Employees
    	
25
    
	
Section 4.15
    	
Compliance With ERISA and   Canadian Plans
    	
26
    
	
Section 4.16
    	
Communications Matters
    	
27
    
	
Section 4.17
    	
Company Satellites
    	
28
    
	
Section 4.18
    	
Coordination Agreements
    	
28
    
	
Section 4.19
    	
Company Earth Stations
    	
28
    
	
Section 4.20
    	
U.S. Labor Relations
    	
29
    

 

i

 

	
Section 4.21
    	
Canada Labor Relations
    	
29
    
	
Section 4.22
    	
Brokers
    	
29
    
	
Section 4.23
    	
Environmental Matters
    	
29
    
	
Section 4.24
    	
Title to Assets; Sufficiency   of Assets
    	
30
    
	
Section 4.25
    	
Insurance
    	
30
    
	
Section 4.26
    	
Customer Information
    	
30
    
	
Section 4.27
    	
Related Party Transactions
    	
30
    
	
 
    	
 
    	
 
    
	
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF   PURCHASER
    	
31
    
	
 
    	
 
    	
 
    
	
Section 5.1
    	
Organization
    	
31
    
	
Section 5.2
    	
Authorization;   Enforceability
    	
31
    
	
Section 5.3
    	
No Conflicts
    	
31
    
	
Section 5.4
    	
Consents and Approvals
    	
31
    
	
Section 5.5
    	
Financial Capability
    	
32
    
	
Section 5.6
    	
Bankruptcy
    	
32
    
	
Section 5.7
    	
Broker’s, Finder’s or   Similar Fees
    	
32
    
	
Section 5.8
    	
Litigation
    	
32
    
	
Section 5.9
    	
Investment Canada Act
    	
32
    
	
Section 5.10
    	
Condition of Business
    	
32
    
	
Section 5.11
    	
Solvency
    	
33
    
	
 
    	
 
    	
 
    
	
ARTICLE VI. COVENANTS
    	
33
    
	
 
    	
 
    	
 
    
	
Section 6.1
    	
Interim Operations of the   Business
    	
33
    
	
Section 6.2
    	
Access; Confidentiality
    	
36
    
	
Section 6.3
    	
Efforts and Actions to Cause   Closing to Occur
    	
36
    
	
Section 6.4
    	
Notification of Certain   Matters
    	
40
    
	
Section 6.5
    	
Submission for Court   Approvals
    	
41
    
	
Section 6.6
    	
Employee Matters
    	
41
    
	
Section 6.7
    	
Subsequent Actions
    	
43
    
	
Section 6.8
    	
Publicity
    	
43
    
	
Section 6.9
    	
Tax Matters
    	
43
    
	
Section 6.10
    	
Designation Dates
    	
45
    
	
Section 6.11
    	
Prompt Payment of Cure Amounts;   Prepayment of Designated Customer Contracts
    	
46
    
	
Section 6.12
    	
Completion of Nonassignable   Designated Contracts
    	
47
    
	
Section 6.13
    	
No Violation
    	
47
    
	
Section 6.14
    	
Insurance; Risk of Loss
    	
47
    
	
 
    	
 
    	
 
    
	
ARTICLE VII.   CONDITIONS
    	
48
    
	
 
    	
 
    	
 
    
	
Section 7.1
    	
Conditions to Obligations of   Purchaser
    	
48
    
	
Section 7.2
    	
Conditions to Obligations of   Sellers
    	
52
    

 

ii

 

	
ARTICLE VIII.   TERMINATION
    	
54
    
	
 
    	
 
    	
 
    
	
Section 8.1
    	
Termination
    	
54
    
	
Section 8.2
    	
Effect of Termination
    	
56
    
	
Section 8.3
    	
Good Faith Deposit; Break-Up   Fee; Expense Reimbursement
    	
56
    
	
 
    	
 
    	
 
    
	
ARTICLE IX.   MISCELLANEOUS
    	
57
    
	
 
    	
 
    	
 
    
	
Section 9.1
    	
Survival of Covenants,   Representations and Warranties
    	
57
    
	
Section 9.2
    	
Amendment and Modification
    	
57
    
	
Section 9.3
    	
Notices
    	
58
    
	
Section 9.4
    	
Counterparts
    	
59
    
	
Section 9.5
    	
Entire Agreement; No Third   Party Beneficiaries
    	
59
    
	
Section 9.6
    	
Severability
    	
60
    
	
Section 9.7
    	
Governing Law
    	
60
    
	
Section 9.8
    	
Exclusive Jurisdiction
    	
60
    
	
Section 9.9
    	
Remedies
    	
60
    
	
Section 9.10
    	
Specific Performance
    	
60
    
	
Section 9.11
    	
Assignment
    	
61
    
	
Section 9.12
    	
Headings
    	
61
    
	
Section 9.13
    	
No Consequential or Punitive   Damages
    	
61
    
	
Section 9.14
    	
Definitions
    	
61
    
	
Section 9.15
    	
Bulk Transfer Notices
    	
80
    
	
Section 9.16
    	
Interpretation
    	
80
    
	
Section 9.17
    	
Parent
    	
81
    

 

 

EXHIBITS

 

Exhibit A               Form of Release(2)

Exhibit B               Alternative Sale Procedures

Exhibit C               Form of Bill of Sale(3)

Exhibit D               Form of Escrow Agreement(4)

Exhibit E               Form of Instrument of Assumption(5)

Exhibit F                Form of Sale Order(6)

Exhibit G               Operating Budget(7)

Exhibit H               Inmarsat Side Letter(8)

 

(2)         Draft to be provided at a later date.

(3)         Draft to be provided at a later date.

(4)         Draft to be provided at a later date.

(5)         Draft to be provided at a later date.

(6)         Draft to be provided at a later date.

(7)         Draft to be provided at a later date.

(8)         Draft to be provided at a later date.

 

iii

 

PURCHASE AGREEMENT

 

This Purchase Agreement, dated as of [   ], 2013, is made and entered into by and among (i) LightSquared LP, a Delaware limited partnership, ATC Technologies, LLC, a Delaware limited liability company, LightSquared Corp., a Nova Scotia unlimited liability company, LightSquared Inc. of Virginia., a Virginia corporation, LightSquared Subsidiary LLC, a Delaware limited liability company, LightSquared Finance Co., a Delaware corporation, LightSquared Network LLC, a Delaware limited liability company, LightSquared Bermuda Ltd., a Bermuda limited company, SkyTerra Holdings (Canada) Inc., an Ontario corporation, and SkyTerra (Canada) Inc., an Ontario corporation (each, a “Seller” and collectively, “Sellers”),(ii) L-Band Acquisition, LLC, a Delaware limited liability company (“Purchaser”) and (iii) [                  ] (“Parent”) (solely for the purposes of Section 9.17).

 

RECITALS

 

WHEREAS, Sellers are engaged in the business [of (a) operating a mobile and terrestrial wireless communications system based on integrated satellite and ground-based technology to provide mobile coverage throughout North America and (b) developing a 4th Generation Long Term Evolution (4G LTE) wireless broadband network (the “Business”);]

 

WHEREAS, on May 14, 2012, LightSquared Inc. and certain of its affiliates, including the Sellers, filed voluntary petitions for relief under chapter 11 of title 11 of the United States Code, 11 U.S.C. §§ 101-1532, as amended (the “Bankruptcy Code”), in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”), which cases are being jointly administered under Case No. 12-12080 (such cases, including the cases of the Sellers and their non-Seller affiliates, the “Bankruptcy Cases”);

 

WHEREAS, on May 18, 2012, the Ontario Superior Court of Justice (Commercial List) (the “Canadian Court” and the proceeding before the Canadian Court, the “CCAA Recognition Proceeding”) granted orders under Part IV of the Companies’ Creditors Arrangement Act, R.S.C. 1985, c.C-36 (the “CCAA”) that, among other things, recognized the Bankruptcy Cases as a “foreign main proceeding” pursuant to Part IV of the CCAA;

 

WHEREAS, on July [    ], 2013, SP Special Opportunities, LLC, [LIST ADDITIONAL PLAN SPONSORS] (collectively, the “Plan Sponsors”) filed the Joint Chapter 11 Plan for LightSquared, LP, ATC Technologies, LLC, LightSquared Corp., LightSquared Inc. of Virginia, LightSquared Subsidiary LLC, LightSquared Finance Co., LightSquared Network LLC, LightSquared Bermuda Ltd., SkyTerra Holdings (Canada) Inc., and SkyTerra (Canada) Inc. (as amended, modified and/or supplemented, the “Plan”).

 

WHEREAS, the Plan provides for Purchaser to purchase and acquire from Sellers certain assets and rights used in the operation of the Business, and Sellers to sell, convey, assign and transfer such assets and rights to Purchaser, in the manner and subject to the terms and conditions set forth herein and as authorized under sections 105, 363, 365, 1123(b)(4) and 1142(b) of the Bankruptcy Code; and

 

1

 

WHEREAS, Purchaser desires to assume from Sellers, certain liabilities, in the manner and subject to the terms and conditions set forth herein and as authorized under sections 105, 363, 365 and 1123(b)(2) of the Bankruptcy Code.

 

NOW, THEREFORE, in consideration of the foregoing premises and the representations, warranties, covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

 

ARTICLE I.

 

DEFINITIONS

 

The terms defined or referenced in Section 9.14, whenever used herein, shall have the meanings set forth therein for all purposes of this Agreement.

 

ARTICLE II.

 

PURCHASE AND SALE OF ASSETS

 

Section 2.1            Sale and Transfer of Assets.  On the terms and subject to the conditions set forth in this Agreement, on the Closing Date, Sellers shall unconditionally Transfer or cause to be transferred to Purchaser and/or one or more of Purchaser’s Affiliates or Subsidiaries, as designated by Purchaser (in its sole discretion), and Purchaser and/or one or more of its Affiliates or Subsidiaries, as applicable, shall purchase, acquire, assume and accept from Sellers, free and clear of all Seller Liabilities, Liens, Claims and Interests (except for Liens created by Purchaser and any Assumed Permitted Liens and Assumed Liabilities), all of Sellers’ right, title and interest in and to all of their Assets, other than the Retained Assets (collectively, the “Acquired Assets”), including (except as listed in Section 2.2):

 

(a)           all Intellectual Property of the Sellers, including the items listed on Section 2.1(a) of the Disclosure Letter;

 

(b)           all Contracts set forth on Section 2.1(b) of the Disclosure Letter (which Purchaser has the right to revise in its discretion in accordance with Section 6.10 hereof) and the Required Contracts (collectively, the “Designated Contracts”); provided that Purchaser shall not be permitted to revise the Disclosure Letter so as to remove the Required Contracts from Section 2.1(b) therein; provided, however, that to the extent that any Required Contract is (i) not capable of being assumed and assigned under Applicable Law or (ii) amended or modified on or after July 22, 2013, Purchaser shall have the right, in its sole discretion, to not acquire such Required Contract and such Required Contract shall be deemed a Retained Asset (as defined below);

 

(c)           the Real Property and personal property of Sellers, including the Leased Real Property (to the extent the applicable lease is a Designated Contract), all easements and rights of way and all buildings, fixtures and improvements erected on the Real Property;

 

2

 

(d)           all books, files, data, customer and supplier lists, cost and pricing information, business plans, quality control records and manuals, blueprints, research and development files, personnel records of Transferred Employees to the extent the Transfer of such items is permitted under Applicable Law (excluding personnel files for employees who are not Transferred Employees) and related books and records for the Acquired Assets and all other records of Sellers;

 

(e)           all computer systems, computer hardware and Software of Sellers;

 

(f)            all inventory, supplies, finished goods, works in process, goods-in-transit, packaging materials and other consumables of Sellers (the “Inventory”);

 

(g)           all Transferable Permits of any Seller, including all letters of intent, reservations of spectrum and Permits issued by the FCC and Industry Canada listed on Section 2.1(g) of the Disclosure Letter;

 

(h)           the mobile satellite service system owned or operated by Sellers (including Sellers’ rights or rights of ownership and/or use with respect to the Company Satellites, fixed earth stations, gateway earth stations, calibration earth stations, mobile earth stations (to the extent that the Sellers hold legal title to such earth stations), and other facilities and equipment related thereto, collectively, the “Mobile Satellite System”), including all rights to (A) own, operate and control the Mobile Satellite System (and an aspect thereof), (B) own, operate and control the Ancillary Terrestrial Component service in the United States and/or Canada, (C) construct and operate terrestrial wireless facilities in the United States and/or Canada utilizing the Spectrum, (D) fully utilize the FCC Licenses and the Industry Canada Licenses in accordance with the conditions set out therein, (E) fully utilize all Spectrum subject to Coordination Agreements in accordance with the conditions set out therein, and (F) fully utilize any other Spectrum subject to agreements with Governmental Entities or third parties not otherwise covered by this Agreement;

 

(i)            the rights to all Spectrum, whether granted or obtained through the FCC, Industry Canada, or Coordination Agreements, whether pursuant to any lease, license or otherwise;

 

(j)            all machinery, vehicles, tools, equipment, furnishings, office equipment, fixtures, furniture, spare parts and other fixed Assets which are owned by Sellers (and Sellers’ right, title and interest in any leases relating to the same to the extent the applicable lease is a Designated Contract), including all of Sellers’ right, title and interest in or to all ground infrastructure, towers, transmission lines, antennas, microwave facilities, transmitters and related equipment (“System Equipment”) (all of the foregoing, collectively, “Equipment”);

 

(k)           all advertising or promotional materials of Sellers;

 

(l)            all manufacturer’s warranties to the extent related to the Acquired Assets and all claims under such warranties;

 

3

 

(m)                             to the extent Transferable under Applicable Law, all rights to the telephone numbers (and related directory listings), Internet domain names, Internet sites and other electronic addresses used by, assigned or allocated to Sellers;

 

(n)                                 all prepaid expenses (excluding prepaid expenses related to Taxes) of Sellers relating to any portion of the Acquired Assets;

 

(o)                                 all advances, withholdings or similar prepayments relating to Transferred Employees;

 

(p)                                 third party cash held in any security deposits, earnest deposits, customer deposits and other deposits and all other forms of security, in each case, placed with Sellers for the performance of a contract or agreement which otherwise constitutes a portion of the Acquired Assets (“Third Party Deposits”);

 

(q)                                 all Investments and any and all Cash and Cash Equivalents or revenues, in each case, received by the Sellers after the Funding Date in respect of the Acquired Assets;

 

(r)                                    proceeds received after the Funding Date under insurance policies of Sellers to the extent received or receivable with respect to the Business or the Acquired Assets and all rights of every nature and description under or arising out of such policies to the extent unexpired as of the Closing Date, in each case, other than (i) policies which relate to any Employee Benefit Plans of Sellers which are not being assumed by Purchaser and (ii) any policies relating to the liability of Sellers’ directors and officers;

 

(s)                                   [all Accounts Receivable and Intercompany Receivables, whether or not reflected on the books of Sellers as of the Closing Date;]

 

(t)                                    customer relationships, goodwill and all other intangible assets relating to, symbolized by or associated with the Business;

 

(u)                                 each document relating to the Mobile Satellite System, including without limitation, any document relating to any actual or potential interference with Global Positioning Systems, the Radio Navigation Satellite Service, the Search and Rescue Service, the Global Maritime Distress and Safety Service, the Radio Astronomy Service, the Fixed Service, the Fixed Satellite Service, the Mobile Satellite Service, the Passive Space Research Service, the Aeronautical Mobile Routing Satellite Service®, and the Aeronautical Navigation Service;

 

(v)                                 all Cash and Cash Equivalents received by any Seller on and after the Funding Date arising from the operation of the Business or from any Acquired Assets, to the extent not used by Sellers to pay working capital expenses and other expenses incurred in connection with the operation and/or maintenance of the Acquired Assets after the Funding Date in accordance with Section 2.7 hereof;

 

(w)                               all other rights of each Seller in the Assets owned by the Sellers necessary to or utilized in the operation of the Business as it is presently conducted other than the Retained Assets; and

 

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(x)                                 all rights, privileges, claims, demands, choses in action, prepayments, deposits, refunds, indemnification rights, warranty claims, offsets and other claims of Sellers against (i) Third Parties (“Actions”) relating to the Acquired Assets set forth in clauses (a) through (w) of this Section 2.1, including, without limitation, any Avoidance Actions relating to the Acquired Assets or (ii) the Purchaser and/or any of Purchaser’s Affiliates or Subsidiaries.

 

Section 2.2                                    Retained Assets.  Notwithstanding anything in this Agreement to the contrary, the Acquired Assets shall not include the following Assets which are to be retained by Sellers and not sold or assigned to Purchaser (collectively, the “Retained Assets”), it being understood that the Retained Assets shall be limited to the following:

 

(a)                                 Cash and Cash Equivalents on hand of the Sellers as of the Funding Date other than as specifically provided for in Section 2.1(r) and net of Third Party Deposits;

 

(b)                                 all rights of Sellers in and to all Contracts other than the Designated Contracts;

 

(c)                                  all losses, loss carryforwards and rights to receive refunds, and credits with respect to any and all Taxes of Sellers (and/or of any of their Affiliates) that constitute Non-Assumed Liabilities;

 

(d)                                 all Tax Returns of Sellers;

 

(e)                                  all personnel files for employees who are not Transferred Employees and personnel files of Transferred Employees that may not be Transferred under Applicable Laws;

 

(f)                                   books and records that Sellers are required by Applicable Law to retain;

 

(g)                                  customer relationships, goodwill and other intangible assets directly and exclusively relating to the Retained Assets;

 

(h)                                 all Employee Benefit Plans and Canadian Plans, including rights and any assets under any Employee Benefit Plan or Canadian Plan of Sellers which are not being assumed by Purchaser;

 

(i)                                     any directors and officers liability insurance policies of Sellers and any claims thereunder and the rights of Sellers thereunder and any proceeds thereof;

 

(j)                                    all Actions, including Avoidance Actions, related to the Retained Assets set forth in clauses (a) through (i) of this Section 2.2; and

 

(k)                                 all right and claims of Sellers arising under this Agreement and the Ancillary Agreements.

 

Section 2.3                                    Assumption of Liabilities.

 

(a)                                 Purchaser shall (or shall cause its designated Subsidiaries or Affiliates to) assume, and become solely and exclusively liable for, the following liabilities of Sellers and no others 

 

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(collectively, the “Assumed Liabilities”): (i) all liabilities and obligations of Sellers under the Designated Contracts that arise exclusively after the Closing Date; (ii) all liabilities relating to, or arising in respect of the Acquired Assets accruing, arising out of or relating to events, occurrences, acts or omissions occurring or existing after the Closing Date, or the operation of the Business or the Acquired Assets after the Closing Date; (iii) the Excess Cure Amounts; (iv) [all accrued liabilities with respect to the Employees and the Transferred Employees; including all accrued salary, vacation, and other compensation, and workers’ compensation obligations (except for liabilities related to the Employee Benefit Plans and the Canadian Plans and such other non-assumed liabilities as are set forth in Section 2.4);] (v) all liabilities arising out of or resulting from a change of control, layoffs, or termination of the Employees and the Transferred Employees by any Seller prior to or on the Closing Date, including WARN Obligations, to the extent such liabilities arise solely as a consequence of the actions taken by or at the direction of Purchaser; and (vi) all liabilities and obligations of the Purchaser under Section 6.7 herein (the liabilities and obligations described in Sections 2.3(a)(iv), 2.3(a)(v) and 2.3(a)(vi), collectively, the “Employee Obligations”); [provided, that Purchaser shall not assume the Employee Obligations to the extent they exceed $[  ] million in the aggregate.]

 

(b)                                 Nothing contained in this Agreement shall require Purchaser or any of its Affiliates to pay, perform or discharge any Assumed Liability so long as it shall in good faith contest or cause to be contested the amount or validity thereof.

 

(c)                                  Nothing contained in this Section 2.3 or in any Instrument of Assumption or similar instrument, agreement or document executed by Purchaser at the Funding or the Closing shall release or relieve Sellers from their representations, warranties, covenants and agreements contained in this Agreement or any Ancillary Agreement or any certificate, schedule, instrument, agreement or document executed pursuant hereto or in connection herewith.

 

Section 2.4                                    Non-Assumed Liabilities.  Notwithstanding anything in this Agreement to the contrary, Purchaser shall not assume, and shall be deemed not to have assumed, any Seller Liabilities or any obligations or liabilities of any of their Subsidiaries or Affiliates or the Business, other than the Assumed Liabilities specified in Section 2.3(a) (collectively, the “Non-Assumed Liabilities”).  For purposes of clarity, each of (a) any liabilities or obligations with respect to any Employee Benefit Plan, Canadian Plan, Canadian Union Plan, the Canada Pension Plan, the Quebec Pension Plan or other such plans created by an Applicable Law or administered by a Governmental Entity, (b) any Cure Amounts (other than Excess Cure Amounts), (c) any liabilities or obligations of Sellers with respect to Taxes with respect to Sellers, the Business, or the Acquired Assets (except as provided in Section 6.9), (d) other claims (including Taxes) against or relating to any of the Acquired Assets, Assumed Liabilities and/or the Business arising prior to the Closing Date, and (e) Employee Obligations in excess of $[  ] million in the aggregate, shall be Non-Assumed Liabilities.

 

Section 2.5                                    The Purchase Price.

 

(a)                                 Purchase Price.  The total purchase price (“Purchase Price”) shall be $2,220,000,000 plus (i) the value of any Employee Obligations assumed by Purchaser plus (ii) Excess Cure Amounts paid by Purchaser, and shall consist of:  (i) $[CASH PURCHASE PRICE 

 

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MINUS], which shall be payable on or before the Funding Date (the “Funding Date Payment” or the “Funding Date Consideration”); (ii) the Purchaser’s assumption of the Employee Obligations on the Closing Date; and (iii) the payment by Purchaser of any Cure Amounts in excess of $[      ] million (such excess amounts, the “Excess Cure Amounts”); provided, that notwithstanding anything to the contrary in this Agreement, Purchaser shall not be responsible for, and the Excess Cure Amounts (and Cure Amounts) shall not include any amounts that represent obligations or liabilities that were incurred or accrued during the period May 14, 2012 through and including the Funding Date, regardless of when such amounts are paid.   The Purchase Price is payable as set forth in Section 2.5(b).

 

(b)                                 Payment of Purchase Price and Other Sources of Funding.

 

(i)                                     Simultaneously with the execution of this Agreement, the parties shall execute and deliver the Escrow Agreement and Purchaser shall contemporaneously deposit into the Escrow Account, by wire transfer of immediately available funds, cash in the amount of $100 million, which funds shall be held by the Escrow Agent and invested as provided for in the Escrow Agreement (such funds, the “Good Faith Deposit”) and released by the Escrow Agent only in accordance with this Agreement and the Escrow Agreement.

 

(ii)           On the Funding Date, the Good Faith Deposit shall be released from the Escrow Account pursuant to the Escrow Agreement and credited against the Funding Date Consideration portion of the Purchase Price payable to Sellers.

 

(iii)          On the Funding Date, Purchaser shall cause the aggregate sum of Escrow Cure Amounts to be deposited into the Escrow Account.

 

(iv)                              At the Funding, Purchaser shall pay to Sellers the Funding Date Payment (net of the Good Faith Deposit released to Sellers from the Escrow Account) by wire transfer of immediately available funds to an account specified by Sellers in writing.

 

(v)                                 Purchaser shall be entitled to withhold from any amount payable pursuant to this Agreement, such amounts as Purchaser is required to deduct and withhold with respect to the making of such payment under any provision of applicable federal, state, local or foreign Tax law.  To the extent that amounts are so withheld and paid over to the appropriate Tax Authority by Purchaser, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to Sellers.  To the extent Purchaser believes a withholding tax will apply, Purchaser shall give Seller notice thereof and shall work with Seller in good faith in an effort to mitigate such withholding.

 

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(c)                                  Allocation of Purchase Price.  Within ninety (90) days of the Closing Date, Purchaser shall prepare and deliver to Sellers a statement allocating the sum of the Purchase Price, the Assumed Liabilities and other relevant items among the Acquired Assets in accordance with Section 1060 of the Code and the Treasury regulations promulgated thereunder and the Income Tax Act and upon reasonable consultation with Sellers (such statement, the “Allocation Statement”).  The parties shall follow the Allocation Statement for purposes of filing IRS Form 8594 and all other Tax Returns, and shall not voluntarily take any position inconsistent therewith.  If the IRS or any other taxation authority proposes a different allocation, Sellers or Purchaser, as the case may be, shall promptly notify the other party of such proposed allocation.  Sellers or Purchaser, as the case may be, shall provide the other party with such information and shall take such actions (including executing documents and powers of attorney in connection with such proceedings) as may be reasonably requested by such other party to carry out the purposes of this section.  Except as otherwise required by Applicable Law or pursuant to a “determination” under Section 1313(a) of the Code (or any comparable provision of United States state, local, or non-United States law), (i) the transactions contemplated by Article II of this Agreement shall be reported for all Tax purposes in a manner consistent with the terms of this Section 2.5(c); and (ii) neither party (nor any of their Affiliates) will take any position inconsistent with this Section 2.5(c) in any Tax Return, in any refund claim, in any litigation or otherwise.  Notwithstanding the allocation of the Purchase Price set forth in the Allocation Statement, nothing in the foregoing shall be determinative of values ascribed to the Acquired Assets or the allocation of the value of the Acquired Assets in any plan or reorganization or liquidation that may be proposed and the Sellers reserve the right on their behalf and on behalf of the Sellers’ estates, to the extent not prohibited by Applicable Law and accounting rules, for purposes of any plan of reorganization or liquidation, to ascribe values to the Acquired Assets and to allocate the value of the Acquired Assets to different Sellers in the event of, or in order to resolve, inter-estate creditor disputes in the Bankruptcy Cases.

 

Section 2.6                                    Sale Free and Clear.  Sellers acknowledge and agree and the Sale Order and the Sale Recognition Order shall provide that, on the Funding Date and concurrently with the Funding, all then existing or thereafter arising Seller Liabilities, Claims, Interests and Liens (other than those in favor of Purchaser created under this Agreement and/or any Ancillary Agreement, the Assumed Permitted Liens, if any, and Assumed Liabilities) of, against or created by any of Sellers or their bankruptcy estates, to the fullest extent permitted by Section 363 or 1123(a)(5) of the Bankruptcy Code and other Applicable Law, shall be fully released from and with respect to the Acquired Assets and thereupon shall attach to the Purchase Price with the same force, effect, validity, enforceability, and priority as such Seller Liabilities, Claims, Interests and Liens had attached to the Acquired Assets as of the Funding Date.  Following receipt of the Specified Regulatory Approvals, on the Closing Date in accordance with Section 3.1(c)(i) of this Agreement, the Acquired Assets shall be Transferred to Purchaser and/or one or more of its Affiliates or Subsidiaries, as applicable, to the fullest extent permitted by Section 363 or 1123(a)(5) of the Bankruptcy Code, free and clear of all Seller Liabilities, Claims, Interests, Liens, and rights of first refusal or offer, other than the Assumed Permitted Liens, if any, and the Assumed Liabilities or, in the event of an Alternative Sale to a Third Party purchaser under Section 3.5 of this Agreement, the Acquired Assets shall be Transferred to such Third Party purchaser and/or one or more of its Affiliates or Subsidiaries, as applicable, free and clear 

 

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to the fullest extent permitted by Section 363 or 1123(a)(5) of the Bankruptcy Code and other Applicable Law, to the same extent as contemplated under this Agreement had the Acquired Assets been transferred to Purchaser hereunder.

 

Section 2.7                                    Other Payments.  During the period from the Funding Date through the Closing Date, Purchaser shall reimburse Sellers for their reasonable, documented working capital expenses and other expenses incurred in connection with the operation and/or maintenance of the Acquired Assets during such period (excluding, for the avoidance of doubt, reasonable expenses incurred or accrued by Sellers on or after the Funding Date that are directly related to the wind-down of Sellers’ bankruptcy estates pursuant to the Plan, including, without limitation, professional fees and expenses incurred by the Sellers in connection therewith), subject to (a) the Operating Budget and (b) Seller’s submission, and Purchaser’s written approval (which shall not be unreasonably withheld) of appropriate documentation evidencing such expenses; provided, that prior to seeking reimbursement from the Purchaser in accordance with this Section 2.7, Sellers shall use all then available Cash or Cash Equivalents received by Sellers on or after the Funding Date arising from the operation of the Business or from the Acquired Assets to pay such expenses as they become payable.

 

ARTICLE III.

 

CLOSING

 

Section 3.1                                    Funding and Closing.

 

(a)                                 Upon the terms and subject to the conditions of this Agreement, each of the Funding and the Closing shall take place at the offices of Willkie Farr & Gallagher LLP, 787 Seventh Avenue, New York, NY 10019, at 10:00 a.m., New York time as specified below, unless another date, time and/or place is agreed in writing by each of the parties hereto.

 

(b)                                 The Funding shall occur on or before the date (the “Funding Date”) that is not later than the fifth Business Day following the satisfaction and/or waiver of all conditions to the Funding as set forth in Article VII (other than conditions which by their nature can be satisfied only at the Funding).  At the Funding, the Good Faith Deposit shall be released to Sellers and Purchaser shall deliver the Funding Date Consideration (net of the amount of the Good Faith Deposit released to Sellers from the Escrow Amount)) to Sellers in accordance with Sections 2.5(b).

 

(c)                                  The Closing shall occur on or before the date (the “Closing Date”) that is the fifth Business Day following the satisfaction and/or waiver of all conditions to the Closing as set forth in Article VII (other than conditions which by their nature can be satisfied only at the Closing), unless an Alternative Sale is consummated in accordance with Section 3.5.

 

(d)                                 Sellers will retain de facto and de jure ownership, direction and control (within the meaning of the Communications Laws), of the Acquired Assets, including, for the avoidance of doubt of all FCC Licenses, FCC-licensed facilities, Industry Canada Licenses and Industry Canada-licensed facilities, until the Closing has occurred.

 

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(e)                                  For the avoidance of doubt, the parties hereby agree that once the Funding shall have occurred, Purchaser shall not be entitled to any refund of any portion of the Purchase Price.

 

Section 3.2                                    Deliveries by Sellers.

 

(a)                                 At the Funding, Sellers shall deliver or cause to be delivered to Purchaser (unless previously delivered):

 

(i)                                     the officers’ certificate referred to in Section 7.1(a)(viii);

 

(ii)                                  a duly executed release (the “Release”) from each of the Sellers substantially in the form attached as Exhibit A hereto;(9)

 

(iii)                               a certified copy of the Sale Recognition Order;

 

(iv)                              executed copies of the consents and approvals referred to in Section 7.1(a)(iii); and

 

(v)                                 such other instruments as are reasonably requested by Purchaser and are otherwise necessary to consummate the Funding.

 

(b)                                 At the Closing, Sellers shall deliver or cause to be delivered to Purchaser (unless previously delivered) each of the following:

 

(i)                                     copies of the FCC Consent and the Industry Canada Approval;

 

(ii)                                  the duly executed Bill of Sale and duly executed counterparts of each Conveyance Document in respect of the Acquired Assets;

 

(iii)                               a duly executed Instrument of Assumption for the Designated Contracts and Assumed Liabilities;

 

(iv)                              a certification of non-foreign status for each Seller (other than Sellers organized in Canada or Bermuda) in a form and manner which complies with the requirements of Section 1445 of the Code and the Treasury regulations promulgated thereunder; provided however, that provision of such certification shall not be a condition to Closing and that the sole 

 

(9)                   Such Release shall provide that the Purchaser and its Affiliates and Subsidiaries (collectively, the “Released Parties”) are deemed released and discharged by the Sellers from any and all claims, obligations, rights, suits, damages, causes of action, remedies and liabilities whatsoever, including any derivative claims, asserted or assertable on behalf of the Sellers, whether known or unknown, foreseen or unforeseen, liquidated or unliquidated, fixed or contingent, matured or unmatured, existing or hereinafter arising, in law, equity or otherwise, that the Sellers would have been legally entitled to assert in their own right (whether individually or collectively) or on behalf of another entity, based in whole or in part on any act, omission, transaction, event or other occurrence taking place on or prior to the Funding Date, other than (i) arising under this Agreement or (ii) relating to any act or omission of a Released Party that constitutes gross negligence, fraud or willful misconduct, as determined by a Final Order.

 

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                                                remedy for failure to provide such certification shall be that Purchaser shall be entitled to withhold any amount required to be withheld pursuant to Applicable Law as a result of failure to provide such certification; and

 

(v)                                 all other documents required to be delivered by Sellers to Purchaser at or prior to the Closing in connection with the Transactions, including any tax election or other tax-related deliverables provided in Section 6.9 hereof.

 

Subject to the provisions of Section 6.12 hereof, nothing contained in this Section 3.2 is intended to nor shall be deemed to require the assignment or novation of, at the Closing, any Nonassignable Designated Contract.

 

Section 3.3                                    Deliveries by Purchaser.

 

(a)                                 At the Funding, Purchaser shall deliver or cause to be delivered to Sellers (unless previously delivered):

 

(i)                                     the Purchase Price, as provided in Section 2.5(b);

 

(ii)                                  all other documents required to be delivered by Purchaser to Sellers at or prior to the Funding in connection with the Transactions;

 

(iii)          copies of the Investment Canada Approval and Competition Act Approval, if they are required under the Investment Canada Act and the Competition Act, as the case may be; and

 

(iv)                              such other instruments as are reasonably requested by Sellers and are otherwise necessary to consummate the Funding.

 

(b)                                 At the Closing, Purchaser shall deliver or cause to be delivered to Sellers (unless previously delivered):

 

(i)                                     a duly executed Instrument of Assumption for the Designated Contracts and Assumed Liabilities;

 

(ii)                                  all other documents required to be delivered by Purchaser to Sellers at or prior to the Closing in connection with the Transactions, including any tax election provided in Section 6.9 hereof.

 

Section 3.4                                    Nonassignable Assets.  To the extent that any Asset otherwise to be acquired by Purchaser upon the Closing pursuant to Section 2.1 hereof is determined by the Bankruptcy Court to be non-assignable pursuant to section 365(c) of the Bankruptcy Code or is otherwise determined to be non-assignable pursuant to Applicable Law by a court of competent jurisdiction (each, a “Nonassignable Asset”), such Nonassignable Asset shall be held, as of and from the Closing Date, for the benefit and burden of Purchaser and the covenants and obligations thereunder shall be fully performed by Purchaser on the relevant Seller’s behalf (to the extent such covenants and obligations are Assumed Liabilities) and all 

 

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rights (to the extent such rights are Acquired Assets) existing thereunder shall be for Purchaser’s account.  To the extent permitted by Applicable Law, the relevant Seller shall take or cause to be taken, at Purchaser’s expense, such actions as Purchaser may reasonably request which are required to be taken or appropriate in order to provide Purchaser with the benefits and burdens of the Nonassignable Asset.  The relevant Seller shall promptly pay over to Purchaser the net amount (after expenses and Taxes of Seller (after taking into account any Tax benefits arising from such payments)) of all payments received by it in respect of all Nonassignable Assets, other than payments received from Purchaser pursuant to this Agreement.

 

Section 3.5                                    Termination and Alternative Sale.

 

(a)                                 Notwithstanding anything to the contrary set forth in this Agreement, in any Ancillary Agreement or otherwise, if the Funding shall have occurred, then neither party shall thereafter have any right to terminate this Agreement (pursuant to Article VIII hereof or otherwise) or rescind any of its actions or modify any of its obligations hereunder or thereunder, except pursuant to this Section 3.5.  After the Funding, the obligations of Sellers under this Section 3.5 and the accompanying Alternative Sale Procedures (the “Alternative Sale Obligations”) shall (x) not be terminable or dischargeable at any time for any reason except as set forth in this Section 3.5, (y) survive any conversion, dismissal, or consolidation of the Bankruptcy Cases or the CCAA Recognition Proceeding and (z) survive the termination of this Agreement by any means other than as expressly set forth in this Section 3.5.  In addition, this Agreement and the Alternative Sale Obligations shall survive the confirmation and consummation of the Plan, or any plan, scheme, composition, reorganization, liquidation or other arrangement in the Bankruptcy Cases or other insolvency proceeding related to Sellers, including any order in the CCAA Recognition Proceeding recognizing any of the foregoing (an “Arrangement”) and shall be binding in any additional or subsequent insolvency proceeding whether under the Bankruptcy Code or any other state, national or international insolvency or bankruptcy law.  This Section 3.5 is intended to be, and the Sale Order shall specifically provide that it shall be, binding upon (i) any successors or assigns of Sellers, (ii) any trustee, examiner, or other party in interest or representative of any Seller’s estate, (iii) any reorganized Seller, liquidating trustee, receiver, debtor in possession, administrator, liquidator or trustee in the Bankruptcy Cases, the CCAA Recognition Proceeding or any other insolvency proceeding involving or related to the Acquired Assets, (iv) any other entity vested or revested with any right, title or interest in or to the Acquired Assets, whether under a Plan, an Arrangement or otherwise and (v) any other Person claiming any rights in or control over any of the Acquired Assets, (each of the foregoing, under subclauses (i)-(v), inclusive of this Section 3.5(a), a “Seller Successor”) as if such Seller Successor were a Seller hereunder.  After the Funding, the obligations under this Agreement, including the Alternative Sale Obligations, may not be discharged under Bankruptcy Code section 1141 or 727 or otherwise and may not be abandoned under Bankruptcy Code section 554 or otherwise or terminated for any reason except as specifically set forth in this Section 3.5.

 

(b)                                 Alternative Sale.

 

(i)                                     Sale Notice.  Upon Purchaser’s election, at any time after the Funding Date has occurred, Purchaser shall have the right to deliver a written 

 

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                                                notice (“Purchaser Alternative Sale Notice”) to Sellers to implement the Alternative Sale Procedures and request that Sellers sell or otherwise dispose of some or all of the Acquired Assets to one or more Third Parties that are eligible to hold legal title to such Acquired Assets, with all proceeds from such sales accruing to the sole benefit and account of Purchaser in accordance with the procedures set out in Exhibit B, including the procedure for identifying bona fide potential Third Party purchasers (each such sale or disposal, the “Alternative Sale”).  In the event that the Funding Date has occurred but the Closing has not occurred, at any time after [                ], unless a Purchaser Alternative Sale Notice shall previously have been delivered, Sellers shall have the right to deliver a written notice (“Seller Alternative Sale Notice” and together with the Purchaser Alternative Sale Notice, the “Alternative Sale Notice”) to Purchaser to implement the Alternative Sale Procedures to sell or otherwise dispose of the Acquired Assets.  Notwithstanding any other provision hereof, it is understood and agreed that all Specified Regulatory Approvals and any other required approvals from Governmental Entities must be obtained for any Alternative Sale and are conditions precedent to the closing of any Alternative Sale and Sellers will retain de facto and de jure ownership, direction and control (within the meaning of the Communications Laws) of the Acquired Assets, including, for the avoidance of doubt, of all FCC Licenses, FCC-licensed facilities, Industry Canada Licenses and Industry Canada-licensed facilities until the closing of any Alternative Sale.

 

(ii)                                  Alternative Sale Procedures.  From and after the date of an Alternative Sale Notice, Sellers shall comply with all commercially reasonable directions from Purchaser with respect to an Alternative Sale and otherwise cooperate with Purchaser in conducting each Alternative Sale in accordance with the Alternative Sale Procedures (including engaging the Investment Bank and such other advisors in connection with each Alternative Sale as may be requested by Purchaser), and shall follow reasonable instructions from Purchaser in determining the terms and conditions of the Alternative Sale and the sale process.  It is expressly understood and agreed that the Alternative Sale is for the sole benefit and account and at the sole risk of Purchaser, in no event shall Sellers market, initiate or enter into any Alternative Sale or any agreement therefor without the prior written consent of Purchaser and in no event shall Sellers be required to provide any indemnification to a Third Party purchaser in connection with an Alternative Sale nor shall Purchaser be entitled to any refund or reduction of the Purchase Price regardless of the price paid for the Acquired Assets by a Third Party in an Alternative Sale.  Sellers further agree and confirm that they shall direct the Third Party purchasers in the Alternative Sale to pay all proceeds payable in the Alternative Sale directly to Purchaser.  Purchaser shall pay for any and all of costs and

 

13

 

expenses reasonably incurred by Sellers at the Purchaser’s direction in accordance with this Section 3.5(b) in conducting an Alternative Sale; provided, however, that the engagement of any Investment Bank or any other professional shall be governed by and paid for pursuant to the procedures set forth in Exhibit B.

 

(iii)          Effect of Alternative Sale.  Upon the closing and consummation of any Alternative Sale, (A) any amounts in the Escrow Account shall be released therefrom and delivered to the Purchaser and (B) this Agreement and the Escrow Agreement shall immediately be terminated (except for provisions of this Section 3.5(b) and such other provisions of this Agreement and the Escrow Agreement as are expressly stated to survive termination).

 

(c)           Subject to any order of the Bankruptcy Court, the Canadian Court or other court of competent jurisdiction, and without in any way limiting any provision of this Agreement (including Section 6.1 or Section 6.4 hereof) that is otherwise operative during such period, Sellers covenant and agree that, after the Funding and until the Closing:

 

(i)            Sellers shall cause to be delivered to Purchaser the following:

 

(1)           as soon as practicable, but in any event within 90 days after the end of each fiscal year, the audited consolidated balance sheet as of the last day of such year and related consolidated statements of income and cash flow of LightSquared LP (including the notes thereto) for such year, reported on and accompanied by a report from [  ] or other independent public accountants of nationally recognized standing selected by Sellers with the approval (not to be unreasonably withheld) of Purchaser, such year-end financial reports to be in reasonable detail and prepared in accordance with GAAP;

 

(2)           as soon as practicable, but in any event within 45 days after the end of each of the first 3 quarters of each fiscal year, an unaudited consolidated balance sheet and related consolidated statement of income, schedule as to the sources and application of funds for such fiscal quarter, and statement of cash flow for LightSquared LP (including the notes thereto) as of the end of such fiscal quarter, prepared in accordance with Sellers’ internal accounting policies applied consistently with those used in the Audited Financial Statements and in accordance with GAAP;

 

(3)           as soon as practicable, but in any event within 30 days of the end of each month, an unaudited consolidated balance sheet and the related unaudited consolidated statements of income and cash flow for LightSquared LP (including the notes thereto) as of the end of such month, prepared in accordance with Sellers’ internal

 

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accounting policies applied consistently with those used in the Audited Financial Statements and in accordance with GAAP;

 

(4)           as soon as practicable, but in any event within 30 days of the end of each month, a budget, cash flow forecast and actual results comparison prepared by Sellers;

 

(5)           accompanying each of the financial statements called for in subsections (1), (2) and (3) of this Section 3.5(c)(i), an instrument executed by the Chief Financial Officer or Chief Executive Officer of each Seller certifying that such financials were prepared in accordance with GAAP applied on a consistent basis with Sellers’ prior practice for earlier periods (in the case of subsections (2) and (3), with the exception of footnotes that may be required by GAAP) and fairly present the consolidated financial condition of LightSquared LP and the consolidated results of operations and cash flows of LightSquared LP for the periods specified therein, subject to normal, recurring year-end audit adjustment;

 

(6)           monthly reports relating to the Company Satellites generated by Sellers and notice of any material anomalies affecting the Company Satellites of which any Seller has Knowledge;

 

(7)           monthly reports relating to the status of the Communications Licenses, including material progress or setbacks in securing authority to provide terrestrial wireless services pursuant to the Company Ancillary Terrestrial Component authority or other such applicable authority; and

 

(8)           such other information relating to the condition (financial or otherwise), results of operations, business, prospects or corporate affairs of Sellers or the Acquired Assets as Purchaser or any assignee thereof from time to time reasonably request, as promptly as practicable after any such request.

 

(ii)           Following the Funding Date, Purchaser shall be permitted to designate one representative of its choosing to attend all meetings of the Board of Directors of each Seller or each Seller Successor and any committees thereof, in each instance, in a nonvoting observer capacity.  Except to the extent prohibited by Applicable Law, LightSquared LP and each of the other Sellers, on behalf of itself and each Seller Successor, agrees to provide Purchaser’s representative the opportunity to attend any and all such meetings, and to cause such representative to be provided with copies of any and all notices, minutes, consents, and other materials (financial or otherwise) that are provided to directors of any such Board of Directors at the same time and in the same manner as provided to such directors;

 

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provided, however, that such representative shall agree to hold in confidence all information so provided, and provided, further, that Sellers shall not be required to provide such representative with any information that Sellers (1) reasonably believe to be protected by attorney-client privilege in circumstances where such privilege would be breached by providing information to such representative, after taking into account ameliorative actions (including, without limitation and by way of example, joint defense arrangements), or (2) reasonably determine is a matter as to which there is a conflict of interest between Purchaser or its Affiliates, on the one hand, and such Seller, on the other hand.  The Purchaser representative shall be required to leave any board meeting for any discussion that Sellers (1) reasonably believe to be protected by attorney-client privilege in circumstances where such privilege would be breached by such representative’s participation in the discussion, after taking into account ameliorative actions (including, without limitation and by way of example, joint defense arrangements), or (2) reasonably determine involves a matter as to which there is a conflict of interest between Purchaser or its Affiliates, on the one hand, and such Seller, on the other hand; provided, that, in the event the Purchaser representative is required to leave any board meeting in accordance with the foregoing, the applicable board shall discuss only the foregoing matters (and discuss such matters only to the extent necessary in respect of the circumstances requiring the Purchaser representative to leave the meeting), and shall not discuss any other matters, in the absence of the Purchaser representative.  In the event that any Seller or Seller Successor does not have a Board of Directors, then, with respect to such Seller or Seller Successor, Purchaser’s representative shall be provided with the rights set forth herein with respect to any comparable governing body; provided, that to the extent any such Seller or Seller Successor does not have a governing body comparable to a Board of Directors, such Seller shall establish such a comparable governing body (a “New Governing Body”) on or before the Funding Date and Purchaser shall be provided with the rights set forth herein with respect to such New Governing Body; provided, further, that to the extent a New Governing Body is established, any individual that is appointed, elected or otherwise selected to serve as a director for such New Governing Body shall be (x) mutually agreeable to each of the Sellers (or Seller Successors, if applicable) and Purchaser, and (y) immediately prior to such appointment, an Independent Person.

 

ARTICLE IV.

 

REPRESENTATIONS AND WARRANTIES OF SELLERS

 

Each Seller with respect to itself only, hereby represents and warrants to Purchaser that the statements contained in this Article IV are true and correct as of the date of

 

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this Agreement, (i) except as otherwise stated in this Article IV, and (ii) except as set forth in the corresponding sections or subsections of the Disclosure Letter delivered by Sellers to Purchaser concurrently with the execution and delivery hereof (it being agreed that disclosure of any information in a particular section or subsection of the Disclosure Letter shall be deemed disclosure with respect to any other section or subsection only to the extent that the relevance of such item is readily apparent from such disclosure).

 

Section 4.1            Organization.  Each of the Sellers has been duly organized and is validly existing in good standing under the laws of its respective jurisdiction of incorporation or organization, with the requisite power and authority to own its properties and conduct its business as currently conducted.  Each of the Sellers has been duly qualified as a foreign corporation or organization for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties or conducts any business so as to require such qualification, except to the extent that the failure to be so qualified or be in good standing has not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

Section 4.2            Financial Statements.

 

(a)           [The audited consolidated balance sheet as of December 31, 2012 and related consolidated statements of income and cash flow of LightSquared LP (including the notes thereto) for the year ended December 31, 2012, reported on and accompanied by a report from [      ] (the “Audited Financial Statements”), copies of which have heretofore been furnished to Purchaser, were prepared in accordance with GAAP and present fairly in all material respects the consolidated financial position of LightSquared LP as at such date and the consolidated results of operations and cash flows of LightSquared LP for the period then ended.

 

(b)           The unaudited consolidated balance sheet as of June 30, 2013 (the “Balance Sheet”) and the related unaudited consolidated statements of income and cash flow of LightSquared LP (including the notes thereto) for the six month period ended June 30, 2013 (the “Unaudited Financial Statements” and, together with the Audited Financial Statements, the “Historical Financial Statements”), copies of which have heretofore been furnished to Purchaser, were prepared in accordance with Sellers’ internal accounting practices applied consistently with those used in the Audited Financial Statements and in accordance with GAAP and present fairly in all material respects the consolidated financial position of LightSquared LP as at such dates and the consolidated results of operations and cash flows of LightSquared LP for the applicable periods.]

 

Section 4.3            Real and Personal Property.

 

(a)           Each of the Sellers has good and insurable fee simple title to, or valid leasehold interests in, or easements or other limited property interests in, all of its Real Properties constituting Acquired Assets and has good and marketable title to its personal property and Assets constituting Acquired Assets, in each case, except for defects in title that do not interfere with its ability to conduct its business as currently conducted or to utilize such properties and Assets for their intended purposes.  All such Acquired Assets are free and clear of Liens, other

 

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than as (i) are described in the consolidated balance sheets included in the Historical Financial Statements or (ii) are Permitted Liens.

 

(b)           Each of the Sellers has complied with all obligations under all leases relating to Acquired Assets to which it is a party.  All such leases may be assumed or rejected in the Bankruptcy Cases and otherwise are in full force and effect, except as set forth in Section 4.3(b) of the Disclosure Letter.  Except as set forth in Section 4.3(b) of the Disclosure Letter, each Seller enjoys peaceful and undisturbed possession under all such leases, other than leases in respect of which the failure to enjoy peaceful and undisturbed possession would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

(c)           Section 4.3(c) of the Disclosure Letter is a true and correct list, as of the date of this Agreement, of all Real Property constituting Acquired Assets owned by Sellers and the addresses thereof.

 

(d)           Section 4.3(d) of the Disclosure Letter is a true and correct list, as of the date of this Agreement, of all Real Property constituting Acquired Assets leased by Sellers and the addresses thereof.

 

(e)           As of the date of this Agreement, no Seller has received any written notice of any pending or contemplated condemnation proceeding affecting any of its owned Real Property constituting Acquired Assets or any sale or disposition thereof in lieu of condemnation that remains unresolved.

 

Section 4.4            Authorization; Enforceability.  Subject to the entry of the Sale Order and the Sale Recognition Order, each Seller has all requisite corporate power and authority to enter into, execute and deliver this Agreement and the other Ancillary Agreements to which it is or is to be a party and to perform its obligations hereunder and thereunder.  The execution, delivery and performance by each Seller of this Agreement and each of the other Ancillary Agreements to which it is or is to be a party, and the consummation by each Seller of the Transactions, have been duly authorized by all necessary corporate action on the part of each Seller.  The Board of Directors (or other governing body or entity, including any New Governing Body) of each Seller has resolved to recommend that the Bankruptcy Court approve this Agreement, the Ancillary Agreements and the Transactions.  This Agreement has been and, when executed and delivered, each other Ancillary Agreement to which each of them is to be a party, will be, duly and validly executed and delivered by each Seller and, subject to the entry of the Sale Order and the Sale Recognition Order, constitutes (in the case of this Agreement) and will constitute (in the case of each of the Ancillary Agreements) the valid and binding obligation of each Seller, enforceable against such Seller in accordance with its terms.

 

Section 4.5            No Conflicts.  Except as set forth in Section 4.5 of the Disclosure Letter, subject to the entry of the Sale Order and the Sale Recognition Order, the execution, delivery and performance of this Agreement and each other Ancillary Agreement, and the consummation of the Transactions will not (a) result in a violation of the certificate of incorporation, certificate of formation or bylaws or similar organizational document of any Seller, (b) assuming receipt of all required consents and approvals from Governmental Entities in

 

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accordance with Section 7.1(a)(iii), result in a violation of any Applicable Law, or (c) result in the creation or imposition of any Lien upon or with respect to any Acquired Asset, other than the Permitted Liens.  No Seller is in violation of its certificate of incorporation, articles of organization or bylaws or similar organizational document (as applicable in each case).

 

Section 4.6            Consents and Approvals.  Except as set forth in Section 4.6 of the Disclosure Letter or otherwise in this Agreement, no consent, approval, authorization, order, registration or qualification of or with any Governmental Entity having jurisdiction over Sellers or any of their properties is required for the execution and delivery by Sellers of the Agreement and the Ancillary Agreements and performance of and compliance by Sellers with all of the provisions hereof and thereof and the consummation of the Transactions, except (a) the entry of the Sale Order and the expiration, or waiver by the Bankruptcy Court, of the 14-day period set forth in Bankruptcy Rules 6004(h) and 3020(e), as applicable, and the entry of the Sale Recognition Order and the expiry of any appeal periods in respect thereof, (b) filings with respect to and any consents, approvals or expiration or termination of any waiting period, required under any United States or foreign antitrust or investment laws which may include the Competition Act, the Investment Canada Act, the HSR Act and any other Regulatory Approvals required, (c) the prior approval of the FCC for the assignment of the FCC licenses, letters of intent, reservations of spectrum, permits and authorizations (including any related agreements with the United States Department of Justice, the United States Department of Homeland Security, and the Federal Bureau of Investigation regarding national security, law enforcement, defense or public safety issues, or any agreements related to the shared use of U.S. government Spectrum required in connection with such prior approval of the FCC) (the “FCC Licenses”) held by Sellers or (d) the Industry Canada Approval, and (e) such other consents, approvals, authorizations, registrations or qualifications the absence of which will not have or would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

Section 4.7            Intellectual Property.

 

(a)           Section 4.7(a) of the Disclosure Letter sets forth a complete and accurate list of all (i) United States and non-United States Patents and Patent applications owned by Sellers; (ii) United States and non-United States Trademark registrations (including Internet domain registrations), Trademark applications, and material unregistered Trademarks owned by Sellers; (iii) United States and non-United States Copyright and mask work registrations, and material unregistered Copyrights owned by Sellers; and (iv) Software (other than readily available commercial software programs having an acquisition price of less than $10,000) that is owned, licensed, leased, by Sellers, describing which Software is owned, licensed, or leased, as the case may be, and the applicable owner, licensor or lessor.  All of the Intellectual Property set forth in Section 4.7(a) of the Disclosure Letter constitutes Acquired Assets, except as otherwise stated therein.

 

(b)           Section 4.7(b) of the Disclosure Letter sets forth a complete and accurate list of all Contracts (whether oral or written, and whether between any Seller and Third Parties or inter-corporate) to which a Seller is a party or otherwise bound, (i) granting or obtaining any right to use or practice any rights under any Intellectual Property (other than licenses for readily available commercial software programs having an acquisition price of less than $10,000), or

 

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(ii) restricting any Seller’s rights to use any Intellectual Property, including license agreements, development agreements, distribution agreements, settlement agreements, consent to use agreements, and covenants not to sue (collectively, the “License Agreements”).  Each License Agreement constitutes a Designated Contract except as otherwise indicated in Section 4.7(b) of the Disclosure Letter.  No Seller has licensed or sublicensed its rights in any Intellectual Property other than pursuant to the License Agreements and, as of the Funding Date, pursuant to the Ancillary Agreements.

 

(c)           Sellers and the Sold Companies own or possess valid and enforceable rights to use all Intellectual Property used in the conduct of the Business, the failure to own or possess which has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.  All registrations with and applications to Governmental Entities in respect of such Intellectual Property are valid and in full force and effect, have not, except in accordance with the ordinary course practices of Sellers, lapsed, expired or been abandoned (subject to the vulnerability of a registration for trademarks to cancellation for lack of use), are not the subject of any opposition filed with the United States Patent and Trademark Office or any other applicable Intellectual Property registry.  The consummation of the Transactions will not result in the loss or impairment of any rights to use such Intellectual Property or obligate Purchaser to pay any royalties or other amounts to any third party in excess of the amounts that would have been payable by Sellers absent the consummation of the Transactions.

 

(d)           Each Seller has taken reasonable security measures to protect the confidentiality and value of its and their trade secrets (or other Intellectual Property for which the value is dependent upon its confidentiality), and no such information has been misappropriated or the subject of an unauthorized disclosure, except to the extent that such misappropriation or unauthorized disclosure has not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

(e)           No present or former employee, officer or director of any Seller, or agent, outside contractor or consultant of any Seller, holds any right, title or interest, directly or indirectly, in whole or in part, in or to any Intellectual Property.  Other than with respect to copyrightable works Sellers hereby represent to be “works made for hire” within the meaning of Section 101 of the Copyright Act of 1976 owned by Sellers, each Seller has obtained from all individuals who participated in any respect in the invention or authorship of any Intellectual Property created by or for such Seller (the “Owned Intellectual Property”), as consultants, as employees of consultants or otherwise, effective waivers of any and all ownership rights of such individuals in the Owned Intellectual Property and written assignments to Sellers of all rights with respect thereto.  No officer or employee of any Seller is subject to any agreement with any third party that requires such officer or employee to assign any interest in inventions or other Intellectual Property or to keep confidential any trade secrets, proprietary data, customer lists or other business information or that restricts such officer or employee from engaging in competitive activities or solicitation of customers.

 

(f)            No Seller has (i) incorporated open source materials into, or combined open source materials with, Intellectual Property or Software, (ii) distributed open source materials in conjunction with Intellectual Property or Software, or (iii) used open source materials that create,

 

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or purport to create, obligations for any Seller with respect to any Intellectual Property or grant, or purport to grant to any Third Party, rights or immunities under any Intellectual Property (including, but not limited to, using open source materials that require, as a condition of use, modification and/or distribution that other Software incorporated into, derived from or distributed with such open source materials be (A) disclosed or distributed in source code form, (B) be licensed for the purpose of making derivative works, or (C) redistributable at no charge).  No Seller has disclosed, or is under an obligation to disclose, any material Software in source code form, except to parties that have executed written obligations to preserve the confidentiality of such source code.

 

(g)           No Seller has received any notice that it is, or they are, in default (or with the giving of notice or lapse of time or both, would be in default) under any contract relating to such Intellectual Property.  No Intellectual Property rights of any Seller are being infringed by any other Person, except to the extent that such infringement has not had and would not have, individually or in the aggregate, a Material Adverse Effect.  The conduct of the Business does not conflict in any material respect with any Intellectual Property rights of others, and no Seller has received any notice of any claim of infringement or conflict with any such rights of others.

 

Section 4.8            Material Contracts.

 

(a)           Section 4.8(a) of the Disclosure Letter sets forth a complete and accurate list of Contracts that relate to the conduct and operations of the Business or the Acquired Assets (each a “Material Contract”), including:

 

(i)            any Contract that would be required to be filed by a Seller as a “material contract” pursuant to Item 601(b)(10) of Regulation S-K under the Exchange Act, were such law applicable to it;

 

(ii)           any Contract containing covenants that purport to (1) restrict the business activity or ability of a Seller to compete (and which, following the consummation of the Transactions, purport to prohibit a Seller or Purchaser or its Affiliates from competing) in any business or geographic area or with any Person or limit the freedom of a Seller or to solicit any Person, or (2) grant “most favored nation” status to the counterparty following consummation of the Transactions;

 

(iii)          each lease, rental or occupancy agreement, easement, right of way, license, installment and conditional sale agreement, and other contract affecting a Seller’s ownership of, leasing of, title to, use of, or any leasehold or other interest in, any real or personal property (except personal property leases and installment and conditional sales agreements having a value per item or aggregate payments of less than $100,000 and with terms of less than one (1) year);

 

(iv)          each joint venture, partnership, and other Contract involving a sharing of profits, losses, costs or liabilities by a Seller with any other Person;

 

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(v)           each Contract providing for capital expenditures by a Seller or with remaining obligations in excess of $100,000 and which relates to the Acquired Assets;

 

(vi)          each Contract under which a Seller has created, incurred, assumed or guaranteed (or may create, incur, assume or guarantee) Indebtedness or under which a Seller has imposed (or may impose) a security interest or other Lien upon any Acquired Assets to secure Indebtedness;

 

(vii)         each employment, severance, management, consulting or other Contract of a Seller involving compensation for services rendered or to be rendered, in each case involving payments of more than $100,000 per year or $200,000 in the aggregate;

 

(viii)        each lease of satellite capacity or other Contract of a Seller for the provision of satellite services;

 

(ix)          each Contract relating to handset development;

 

(x)           each Contract relating to software or chipset development;

 

(xi)          each Contract to which a Governmental Entity is a party;

 

(xii)         each lease of terrestrial or satellite radio frequencies or Contract granting any Seller any rights in frequencies licenses for terrestrial use;

 

(xiii)        each mobile communications services Contract of a Seller;

 

(xiv)        each Contract related to the siting, buildout, and servicing of any mobile communications service network to be provided with the Spectrum;

 

(xv)         each Contract or other agreement relating to Sellers’ use of the Spectrum, including any Contract or other agreement purporting to restrict, constrain, or direct Seller’s emissions in the Spectrum or construction or design of Seller’s mobile communications services and related equipment;

 

(xvi)        each Coordination Agreement and all relevant supporting documentation;

 

(xvii)       each Concession Agreement;

 

(xviii)     each Contract relating to a Seller’s or Third Party’s rights with respect to the use of the satellite capacity of any Company Satellite, or affecting the use of the satellite capacity of any Company Satellite or its associated feeder links;

 

(xix)        each Contract for or related to the design, construction, launch, orbit, operation or licensing of any Company Satellite;

 

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(xx)         each license agreement or distributor, dealer, sales representative or other sales agency Contract of a Seller involving annual payments in excess of $50,000 per year or $100,000 in the aggregate;

 

(xxi)        every customer Contract of any Seller executed during the period from January 1, 2013 to the date hereof, other than customer Contracts in the standard forms previously provided by Sellers to Purchaser or its representatives; and

 

(xxii)      each amendment, supplement, or modification (whether oral or written) in respect of any of the foregoing, except as would not, individually or in the aggregate, reasonably be likely to result in a Material Adverse Effect.

 

Except as may have occurred solely as a result of the commencement of the Bankruptcy Cases (or any other action taken by Sellers during the Bankruptcy Cases), each Material Contract is in full force and effect and, to the Knowledge of Sellers, there are no material defaults thereunder on the part of any other party thereto which are not subject to an automatic stay.  None of the Sellers is in default in any material respect in the performance, observance or fulfillment of any of its obligations, covenants or conditions contained in any Material Contract to which it is a party or by which it or its property is bound which are not subject to an automatic stay.

 

(b)           No Seller is subject to any oral agreements that if binding would be Material Contracts.  No Seller has assumed, rejected, or assigned any Material Contract without the express written consent of Purchaser.

 

Section 4.9            Absence of Certain Developments.  Except as set forth in Section 4.9 of the Disclosure Letter, since [                ], 20[    ],(i) no Seller has suffered any change or development which has had or would be reasonably likely to have a Material Adverse Effect, (ii) no Seller has Transferred ownership of any of its Assets to any of its Subsidiaries or Affiliates that is not a Seller, (iii) no Seller has in any way modified its or their collection policies or practices and (iv) no Seller has abandoned or waived, voluntarily or involuntarily, the collection of any Accounts Receivable and have not in any way modified their policies or practices with respect to Accounts Receivable.

 

Section 4.10          No Undisclosed Liabilities.  Except (a) as disclosed or reflected in the Historical Financial Statements, (b) as incurred in the ordinary course of business consistent with past practice since December 31, 2012 in an aggregate amount not in excess of $100,000, and (c) professional fees and expenses accrued in the Bankruptcy Cases or the CCAA Recognition Proceeding, no Seller has any liabilities or obligations of any nature (whether accrued, absolute, contingent or otherwise) that are or would reasonably be expected to be, individually or in the aggregate, material in relation to the total liabilities reported in the Historical Financial Statements.

 

Section 4.11          Litigation.  Except as set forth in Section 4.11 of the Disclosure Letter, there are no legal, governmental or regulatory actions, suits, proceedings or investigations pending or, to the Knowledge of Sellers, threatened to which any Seller is or may

 

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be a party or to which any property of any Seller, any director or officer of a Seller in their capacities as such, or the Business, Assumed Liabilities or Acquired Assets is or may be the subject that, individually or in the aggregate, has had or, if determined adversely to Sellers, would reasonably be expected to have a Material Adverse Effect.

 

Section 4.12                             Permits and Compliance with Laws.

 

(a)                                 No Seller is, or has been at any time since January 1, 2010, in violation of any Applicable Law except for any such violation that has not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

(b)                                 Except as set forth in Section 4.12 of the Disclosure Letter, no Seller has received written notification from any Governmental Entity (i) asserting a violation of any Applicable Law regarding the conduct of the Business; (ii) threatening to revoke any Permit; or (iii) restricting or in any way limiting its operations as currently conducted.

 

(c)                                  Sellers possess all Permits issued by, and have made all declarations and filings with, the appropriate Governmental Entities that are necessary for the ownership, lease, use and operation of the Acquired Assets (collectively, the “Seller Permits”), except any such Permits the absence of which would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.  Section 4.12(c) of the Disclosure Letter sets forth a true and correct list of all Seller Permits as presently in effect and a true and correct list of all material pending applications for Permits, that would be Seller Permits if issued or granted and all material pending applications by Sellers for modification, extension or renewal of the Seller Permits.  Except as set forth in Section 4.12(c) of the Disclosure Letter, all Seller Permits constitute Acquired Assets.  Sellers have operated the Business in compliance with the terms and conditions of the Seller Permits except where the failure to comply would not reasonably be likely to have a Material Adverse Effect, and no Seller has received any written notice alleging any such failure to comply.  No Seller has received notice of any revocation or modification of any such Permit or has any reason to believe that any such Permit will not be renewed in the ordinary course.

 

(d)                                 Each Seller, to the extent applicable, is in compliance with all relevant Communications Laws, the international radio regulations, rules, published decisions and written policies of the International Telecommunication Union (the “ITU”), except for any such violation that has not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.  There is no claim, action, suit, investigation, litigation or proceeding regarding any Seller’s compliance with any provision of the Communications Laws or the international radio regulations, rules, published decisions and written policies of the ITU, pending or to any Seller’s Knowledge, threatened in the FCC, ITU, Industry Canada, any court or before any arbitrator or governmental instrumentality, except for any such claims, actions, suits, investigations, litigation or proceedings that if determined adversely to Sellers would not have and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

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Section 4.13                             Taxes.

 

(a)                                 Each Seller has timely filed or caused to be filed all United States federal, state, local and non-United States Tax Returns required to have been filed that are material to such companies, taken as a whole, and each such Tax Return is true, complete and correct in all material respects.

 

(b)                                 Each Seller has timely paid or caused to be timely paid all Taxes shown to be due and payable by it or them on the returns referred to in Section 4.13(a) and all other Taxes or assessments (or made adequate provision (in accordance with GAAP) for the payment of all Taxes due) with respect to all periods or portions thereof ending on or before the Closing Date (except Taxes or assessments that are being contested in good faith by appropriate proceedings and for which any Seller has set aside on its books adequate reserves in accordance with GAAP), which Taxes, if not paid or adequately provided for, would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

(c)                                  Except as set forth in Section 4.13(c) of the Disclosure Letter to Sellers’ Knowledge, no material United States federal, state, local or non-United States federal, provincial, local or other audits, examinations, investigations or other administrative proceedings or court proceedings have been commenced or are presently pending or threatened in writing with regard to any Taxes or Tax Returns with respect to the Acquired Assets.  There is no material unresolved dispute or claim concerning any Tax liability with respect to the Acquired Assets either claimed or raised by any Tax Authority in writing.

 

(d)                                 All material Taxes with respect to the Acquired Assets that any Seller is (or was) required by law to withhold or collect in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder or other third party have been duly withheld or collected, and have been timely paid to the proper authorities to the extent due and payable, except to the extent that Purchaser will not have liability following the Closing with respect to any of the foregoing.

 

(e)                                  Except as set forth in Section 4.13(d) of the Disclosure Letter, there are no statutory Liens for Taxes upon any of the Acquired Assets or the Business.

 

(f)                                   [No Seller, other than the Canadian Sellers, is selling property that is taxable property for purposes of the Income Tax Act.

 

(g)                                  The Canadian Sellers are registered under Part IX of the Excise Tax Act (Canada) and Chapter VIII of an Act Respecting the Quebec Sales Tax (Quebec), and have provided Purchaser with their respective registration numbers.

 

(h)                                 The Canadian Sellers are not non-residents of Canada for purposes of the Income Tax Act.]

 

Section 4.14                             Employees.  Section 4.14 of the Disclosure Letter (i) contains a complete and accurate list of all current employees and independent contractors of 

 

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Sellers and each such employee’s or independent contractor’s respective positions, dates of hire or engagement, current annual salary and any other relevant compensation and benefits, (ii) indicates which employees and/or independent contractors are parties to a written or oral agreement with Sellers (including confidentiality, non-competition, non-solicitation and other restrictive covenant agreements) and (iii) indicates whether each employee or independent contractor is on short-term or long-term disability, pregnancy or parental leave, temporary lay-off, workers’ compensation or other leave of absence.  Except as disclosed in Section 4.14 of the Disclosure Letter, no Seller is party to any currently in effect agreement(s) with past or present employees, agents or independent contractors in connection with the Business.  The Sellers have properly characterized retained individuals as either employees or independent contractors for the purposes of Tax and other Applicable Laws.

 

Section 4.15                             Compliance With ERISA and Canadian Plans.

 

(a)                                 Section 4.15(a) of the Disclosure Letter contains a complete and accurate list of all material Employee Benefit Plans and Canadian Plans of Sellers.  Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, each Seller and any trade or business (whether or not incorporated) that, together with a Seller, is treated as a single employer under Section 414(b) or (c) of the Code, or, solely for purposes of Section 302 of ERISA, and Section 412 of the Code, is treated as a single employer under Section 414 of the Code (the “ERISA Affiliates”), are in compliance with the applicable provisions of ERISA, the Code and other Applicable Laws, and each Employee Benefit Plan complies in form and has been established, maintained, operated and funded in compliance with its terms and the applicable provisions of ERISA, the Code and other Applicable Laws.  No “employee benefit plan” (as defined in Section 3(3) of ERISA) maintained by Sellers or any of their ERISA Affiliates within the preceding six years is (i) a “multiemployer plan” (as defined in Section 3(37) of ERISA), (ii) subject to Title IV of ERISA, Section 302 of ERISA or Section 412 of the Code or (iii) a plan described in Section 4063(a) of ERISA and no event has occurred and no condition exists that would be reasonably expected to subject the Sellers, either directly or by reason of their affiliation with any ERISA Affiliate, to any tax, lien, penalty or other liability imposed by ERISA, the Code or other Applicable Law.  Each Employee Benefit Plan that is intended to be tax-qualified under Section 401(a) of the Code has received a favorable determination or opinion letter (as applicable) from the IRS as to the tax-qualified status of such Employee Benefit Plan, and no event has occurred that could reasonably be expected to adversely affect the tax-qualified status of such Benefit Plan or the trusts created thereunder.

 

(b)                                 Each Seller is in compliance (A) with all Applicable Laws with respect to any employee pension benefit plan or other employee benefit plan governed by the laws of a jurisdiction other than the United States and (B) with the terms of any such plan, except, in each case, for such noncompliance that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

(c)                                  (i) Each of the Canadian Plans is and has been established, maintained, funded, invested and administered in compliance in all material respects with its terms, all employee plan summaries and booklets and with Applicable Laws, (ii) current and complete copies of all written Canadian Plans (or, where oral, written summaries of the material terms thereof) have 

 

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been provided or made available to Purchaser, (iii) except as set forth in Section 4.5(c) of the Disclosure Letter, no Seller currently sponsors, maintains, contributes to or has any liability, nor has ever sponsored, maintained, contributed to or incurred any liability under a “registered pension plan” or a “retirement compensation arrangement” or a “deferred profit sharing plan”, each as defined under the Income Tax Act, a “pension plan” as defined under applicable pension standards legislation, or any other plan organized and administered to provide pensions for employees, (iv) no amendments or promises of benefit improvements under the Canadian Plans have been made or will be made prior to the Funding Date by any Seller to its or their Canadian employees or former Canadian employees, except as required by the terms of such plans or Applicable Laws (and any such amendments shall be communicated to Purchaser in writing before the Funding), (v) no Seller currently sponsors, maintains, contributes to or has any liability, nor has ever sponsored, maintained, contributed to or incurred any liability under a Defined Benefit Plan or a Canadian Union Plan, and (vi) no Canadian Plan promises or provides retiree welfare benefits (except as required by Applicable Law) or retiree life insurance benefits or any other non-pension post retirement benefits to any Person.  In addition, no Canadian Plan is presently or will, at any time prior to or on the Closing Date, be in the process of being wound-up, except where such wind-up has been consented to in advance in writing by the Purchaser.

 

(d)                                 Except as set forth in Section 4.15(d) of the Disclosure Letter, neither the execution and delivery of this Agreement nor the consummation of Transactions contemplated by this Agreement, will (either alone or in conjunction with any other event) result in, cause the accelerated vesting or delivery of, or increase the amount or value of, any payment or benefit to any Employee, entitle any Employee to notice of termination or pay in lieu of notice, severance pay, unemployment compensation or any other payment or result in any breach or violation of, or a default under, any of the Employee Benefit Plans or Canadian Plans.

 

(e)                                  To the Knowledge of Sellers, no Employee who is a manager, director, officer or in a position or having responsibility to perform management functions similar to a manager or officer, has given, or has been given by any of the Sellers, notice of intent to terminate employment, directorship or other service relationship with the Sellers.

 

Section 4.16                             Communications Matters.

 

(a)                                 Sellers hold all the material licenses, permits, authorizations, orders and approvals issued by a Governmental Entity under the Communications Laws (collectively, “Communications Licenses”) and Coordination Agreements, in each case, necessary for the lawful conduct of the Business as currently conducted.  Section 4.16(a) of the Disclosure Letter sets forth a true and correct list of all Communications Licenses held by each Seller.

 

(b)                                 Except as set forth in Section 4.16(a) of the Disclosure Letter, (i) each Communications License identified on Section 4.16(a) of the Disclosure Letter is in full force and effect; (ii) Sellers are operating or preparing to operate the facilities authorized by the Communications Licenses identified on Section 4.16(a) of the Disclosure Letter in accordance with their terms and such operation is in substantial compliance with the Communications Laws; (iii) each Seller is operating in compliance in all material respects with Communications Laws; and (iv) to the Knowledge of Sellers, no action or proceeding is pending or threatened to revoke,

 

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suspend, cancel, or refuse to renew or modify in any material respect any of the Communications Licenses identified on Section 4.16(a) of the Disclosure Letter or any ITU registration.

 

(c)                                  Except for the representations and warranties contained in Section 4.12 and this Section 4.16, Sellers makes no other express or implied representation or warranty with respect to Communications Laws.

 

Section 4.17                             Company Satellites.

 

(a)                                 All information previously made available by Sellers to Purchaser in connection with the Transactions with respect to the orbital location, data transmission capabilities and the remaining useful life of the Company Satellites is accurate in all material respects.  No Material Satellite Event or, to the Knowledge of Sellers, conditions that would reasonably be expected to result in a Material Satellite Event have been observed on the Company Satellites since their respective launches.  Sellers have previously made available to Purchaser copies of all applicable status reports.  No Seller has waived or modified or agreed to waive any provision of any Contract in a manner that could reasonably be expected to impair the ability of the Company Satellites to perform in accordance with its respective agreed operating Satellite Performance Specifications.

 

(b)                                 Section 4.17(b) of the Disclosure Letter contains a summary, by orbital location, of the status of frequency registration at the ITU, of the Company Satellites and each advanced published satellite filed on behalf of any Seller, including the identity of the sponsoring administration and the frequency bands covered.  Except as set forth in Section 4.17(b) of the Disclosure Letter, as of the date hereof, Sellers have no Knowledge of any material claims(s) with respect to any Seller’s use of the frequency assignment(s) described in their ITU filings at any such orbital locations(s).

 

(c)                                  Section 4.17(c) of the Disclosure Letter contains a summary, to the Knowledge of Sellers, of prejudicial interferences to the Company Satellites.

 

Section 4.18                             Coordination Agreements.  As of the date of this Agreement, to the Knowledge of Sellers, the relevant coordination rights are perfected and there are no pending claim(s) with respect to any Seller’s use of the frequency and orbital location assignment(s) described in any Coordination Agreement other than any such coordination rights or claim(s) that are resolved by operation of the relevant Coordination Agreement.  As of the date of this Agreement, to the Knowledge of Sellers, there are no pending requests for use or material claim(s) with respect to any Seller’s use of the frequency and orbital location assignment(s) whether or not described in any Concession Agreement.

 

Section 4.19                             Company Earth Stations.  To the Knowledge of Sellers, the material improvements to each Company Earth Station and all material items of equipment used in connection therewith are in good operating condition and repair and are suitable for their intended purposes, subject to normal wear and tear.  To the Knowledge of Sellers, as of the date hereof, no other radio communications facility is causing interference to the transmissions from or the receipt of signals by any Company Satellite or Company Earth Station, except for any 

 

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instances of interference that, individually or in the aggregate, have not had, and would not reasonably be expected to be material to the operation of and provisions of services from any Company Satellite.

 

Section 4.20                             U.S. Labor Relations.  To the Knowledge of Sellers, except as set forth in Section 4.20 of the Disclosure Letter:  (i) there are no pending or threatened strikes or other labor disputes against any Seller; (ii) no Seller has received written notice of any claim for a material violation of any applicable federal, state, or local civil rights law, the Fair Labor Standards Act, as amended, the Age Discrimination in Employment Act, as amended, the National Labor Relations Act, as amended, the Occupational Safety and Health Act, as amended, the Americans with Disabilities Act, as amended, or the Vocational Rehabilitation Act of 1973, as amended, any applicable state or local laws analogous to the United States federal laws listed above; and (iii) all payments due from any Seller or for which any claim may be made against any Seller, on account of wages and employee health and welfare insurance and other benefits, have been paid or accrued as a liability on the books of Sellers to the extent required by GAAP.  Except as set forth in the Disclosure Letter, the consummation of the Transactions will not give rise to a right of termination or renegotiation of any material collective bargaining agreement governing employees located in the United States to which any Seller (or any predecessor thereof) is a party or by which any Seller (or any predecessor thereof) is bound.

 

Section 4.21                             Canada Labor Relations.  To the Knowledge of Sellers, except as set forth in Section 4.21 of the Disclosure Letter, (i) no Seller has made any agreements, whether directly or indirectly, with any labor union, employee association or any similar entity or made any commitments to or conducted negotiations with any labor union or employee association or other similar entity with respect to any future agreements, (ii) no trade union, employee association or other similar entity has any bargaining rights acquired either by certification or voluntary recognition with respect to any employees of any Seller, (iii) no Seller is aware of any attempt to organize or establish any labor union, employee association or other similar entity affecting the Business, (iv) there are no outstanding labor relations tribunal proceedings of any kind, including any proceedings which could result in certification of a trade union as bargaining agent for the employees, and there have not been any such proceedings within the last two years, (v) there are no threatened or apparent union organizing activities involving employees of any Seller, and (vi) there is no labor strike, dispute, slowdown, stoppage, refusal to work or other labor difficulty pending, involving, threatened against or affecting the Sellers or the Business.

 

Section 4.22                             Brokers.  Except with respect to fees payable to [Moelis & Company, LLC and Blackstone Advisory Partners, L.P.], no Seller is a party to any contract, agreement or understanding with any Person that would give rise to a valid claim against Purchaser for a brokerage commission, finder’s fee or like payment in connection with the Transactions.

 

Section 4.23                             Environmental Matters.  Except as disclosed in Section 4.23 of the Disclosure Letter:  (i) no written notice, request for information, claim, demand, order, complaint or penalty has been received by any Seller, and there are no judicial, administrative or other actions, suits or proceedings pending or, to any Seller’s Knowledge, 

 

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threatened, which allege a violation of or liability under any Environmental Laws, in each case relating to any Seller or any of the Acquired Assets, (ii) except as to matters that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, each Seller has all Permits necessary for its or their operations to comply with all applicable Environmental Laws and are, and during the term of all applicable statutes of limitation, have been, in compliance with the terms of such Permits and with all other applicable Environmental Laws, and (iii) except as to matters that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, no pollutants, contaminants, wastes, chemicals, materials, substances and constituents of any nature which are subject to regulation or which would reasonably be likely to give rise to liability under any Environmental Law, including Hazardous Material, is located at, in, or under any property currently or formerly owned, operated or leased by any Seller that would reasonably be expected to give rise to any liability or obligation of any Seller under any Environmental Laws, and no Hazardous Material has been generated, owned or controlled by any Seller and has been transported to or released at any location in a manner that would reasonably be expected to give rise to any liability or obligation on any Seller under any Environmental Laws.

 

Section 4.24                             Title to Assets; Sufficiency of Assets.

 

(a)                                 Sellers hold, and subject to the entry of the Sale Order and the Sale Recognition Order, at the Closing shall cause to be delivered to Purchaser (or, in the case of an Alternative Sale, a Third Party purchaser), good and valid title to or, in the case of leased or licensed Assets, a valid and binding leasehold interest in or license to or rights under (as the case may be), all of the Acquired Assets, free and clear of all Liens, other than Assumed Permitted Liens and Permitted Liens.

 

(b)                                 The Acquired Assets include all tangible Assets, intangible Assets and Intellectual Property that are used in the conduct of the Business immediately following the Closing Date in substantially the same manner as conducted by Sellers prior to the commencement of the Bankruptcy Cases, except for (i) Employees that are not Transferred Employees and (ii) the Retained Assets.

 

(c)                                  No Assets owned or held by any Affiliate of any Seller are used in the operation of the Business, other than any such Assets that constitute Acquired Assets or Retained Assets.

 

Section 4.25                             Insurance.  Section 4.25 of the Disclosure Letter sets forth a true, complete and correct description of all material insurance maintained by or on behalf of any Seller as of the date of this Agreement other than those relating to any Employee Benefit Plan.  As of such date, such insurance is in full force and effect.

 

Section 4.26                             Customer Information.  No Seller holds any customer information, received by Sellers through their websites or otherwise, other than the customer information that forms part of the Acquired Assets to be Transferred to Purchaser hereunder.

 

Section 4.27                             Related Party Transactions.  Except as set forth on Schedule 4.27, no Seller is a party to any contract or arrangement with any equityholder, officer,

 

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director or Affiliate of any Seller (other than another Seller) related to the Acquired Assets or the conduct of the Business.

 

ARTICLE V.

 

REPRESENTATIONS AND WARRANTIES
 OF PURCHASER

 

Purchaser hereby represents and warrants to Sellers that the statements contained in this Article V are true and correct as of the date of this Agreement.

 

Section 5.1                                    Organization.  Purchaser is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware.  Purchaser is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction where the nature of the property owned or leased by it or the nature of the business conducted by it makes such qualification necessary, except where the failure to be so qualified would not have a Purchaser Material Adverse Effect.

 

Section 5.2                                    Authorization; Enforceability.  Purchaser has all requisite corporate power and authority to enter into this Agreement and the other Ancillary Agreements to which Purchaser is a party.  The execution, delivery and performance by Purchaser of this Agreement and each of the other Ancillary Agreements to which Purchaser is a party, and the consummation by Purchaser of the Transactions, have been duly authorized by all necessary corporate action on the part of Purchaser.  Subject to the entry of the Sale Order and the Sale Recognition Order, this Agreement and, when executed, each other Ancillary Agreement to which Purchaser is a party, have been duly and validly executed and delivered by Purchaser and, assuming due and valid execution and delivery by Sellers, constitute the valid and binding obligation of Purchaser, enforceable against them in accordance with its terms, subject to laws of general application relating to bankruptcy, insolvency, and the relief of debtors and other laws of general application affecting enforcement of creditors’ rights generally, rules of law governing specific performance, injunctive relief and other equitable remedies.

 

Section 5.3                                    No Conflicts.  Subject to the entry of the Sale Order and the Sale Recognition Order, the execution, delivery and performance of this Agreement and each other Ancillary Agreement, and the consummation of the Transactions will not (a) result in a violation of the certificate of incorporation, certificate of formation or bylaws or similar organizational document of Purchaser or (b) assuming receipt of all required consents and approvals from Governmental Entities in accordance with Section 7.1(b)(i), result in a violation of any law, statute, rule or regulation of any Governmental Entity or any applicable order of any court or any rule, regulation or order of any Governmental Entity applicable to Purchaser or by which any property or asset of Purchaser is bound, except for violations which, individually or in the aggregate, has not had and would not reasonably be likely to have a Purchaser Material Adverse Effect.

 

Section 5.4                                    Consents and Approvals.  Except as set forth in this Agreement, no consent, approval, authorization, order, registration or qualification of or with any 

 

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Governmental Entity having jurisdiction over Purchaser or any of its properties is required for the execution and delivery by Purchaser of the Agreement and the Ancillary Agreements and performance of and compliance by Purchaser with all of the provisions hereof and thereof and the consummation of the Transactions, except (a) the entry of the Sale Order and the expiration, or waiver by the Bankruptcy Court, of the 14-day period set forth in Bankruptcy Rules 6004(h) and 3020(e), as applicable, and the entry of the Sale Recognition Order and the expiry of any appeal periods in respect thereof, (b) filings with respect to and any consents, approvals or expiration or termination of any waiting period, required under any United States or foreign antitrust investment laws which may include the Competition Act, the Investment Canada Act, the HSR Act and any other Regulatory Approvals required, (c) the prior approval of the FCC for the assignment of the FCC Licenses, (d) the Industry Canada Approval, and (e) such other consents, approvals, authorizations, registrations or qualifications the absence of which will not have or would not reasonably be expected to have, individually or in the aggregate, a Purchaser Material Adverse Effect.

 

Section 5.5                                    Financial Capability.  Purchaser (a) has as of the date of this Agreement and will have on the Funding Date access to sufficient funds available to pay the Purchase Price and any expenses incurred by Purchaser in connection with the Transactions, and (b) has as of the date of this Agreement and will have on the Funding Date the resources and capabilities (financial or otherwise) to perform its obligations hereunder.

 

Section 5.6                                    Bankruptcy.  There are no bankruptcy, reorganization or arrangement proceedings pending against, being contemplated by, or to the knowledge of Purchaser, threatened against, Purchaser.

 

Section 5.7                                    Broker’s, Finder’s or Similar Fees.  Except fees payable to [   ], there are no brokerage commissions, finder’s fees or similar fees or commissions payable by Purchaser in connection with the Transactions.

 

Section 5.8                                    Litigation.  There are no legal proceedings pending or, to the knowledge of Purchaser, threatened against Purchaser, or to which Purchaser is otherwise a party, which, if adversely determined, would reasonably be expected to have a Purchaser Material Adverse Effect.

 

Section 5.9                                    Investment Canada Act.  Purchaser is a “WTO Investor” as that term is defined in the Investment Canada Act.

 

Section 5.10                             Condition of Business.  Notwithstanding anything contained in this Agreement to the contrary, Purchaser acknowledges and agrees that no Seller, its Affiliates or any other Person is making any representations or warranties whatsoever, express or implied, beyond those expressly given by Sellers in Article IV hereof (as modified by the Disclosure Letter), and Purchaser acknowledges and agrees that, except for the representations and warranties contained therein, the Acquired Assets are being transferred on a “where is” and, as to condition, “as is” basis.  Purchaser further represents that no Seller, its Affiliates or any other Person has made any representation or warranty, express or implied as to the accuracy or completeness of any information regarding Sellers, the Business or the transactions contemplated 

 

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by this Agreement not expressly set forth in this Agreement, and no Seller, its Affiliates or any other Person will have or be subject to liability to Purchaser or any other Person resulting from the distribution to Purchaser or its Representatives of Purchaser’s use of, any such information.  Purchaser acknowledges that it has conducted to its satisfaction its own independent investigation of the Business and, in making the determination to proceed with the Transactions, Purchaser has relied on the results of its own independent investigation.

 

Section 5.11                             Solvency.  Immediately after giving effect to the transactions contemplated by this Agreement, the Purchaser shall be Solvent.  For purposes of this Section 5.11, “Solvent” means, with respect to the Purchaser, that it: (a) is able to pay its debts as they become due and shall own property having a fair saleable value greater than the amounts required to pay its debts (including a reasonable estimate of the amount of all contingent liabilities) and (b) has adequate capital to carry on its business.

ARTICLE VI.

 

COVENANTS

 

Section 6.1                                    Interim Operations of the Business.  From the date of this Agreement through the Closing Date, subject to Section 3.5, Sellers covenant and agree that, except as expressly provided in this Agreement or the Plan, required by Applicable Law(10) or as may be agreed in writing by Purchaser, such agreement not to be unreasonably withheld, conditioned or delayed:

 

(a)                                 (i) the Business shall be conducted in the ordinary course consistent with past practice, (ii) subject to prudent management of workforce and business needs, each Seller shall use reasonable best efforts to preserve intact the business organization of the Business, keep available the services of the current officers and employees of the Business and maintain the existing relations with customers, suppliers, vendors, creditors, business partners and others having business dealings with the Business and (iii) Sellers shall pay all working capital and other ordinary course expenditures of the Business, including during the period between the Funding Date through the Closing Date;

 

(b)                                 Sellers shall, use reasonable best efforts to, maintain, preserve and protect all of the Acquired Assets in the condition in which they exist on the date hereof, except for ordinary wear and tear and except for replacements, modifications or maintenance in the ordinary course of business;

 

(c)                                  Sellers shall not, (i) modify, amend, reject, waive any rights under or terminate any Designated Contract (except to the extent required under Section 6.1(d)) or (ii) waive, release, compromise, settle or assign any material rights or claims related to any Designated Contract;

 

(10)  Orders of the Bankruptcy Court are covered by “Applicable Law”.

 

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(d)                                 Subject to Purchaser’s compliance with Section 6.11, Sellers shall use their reasonable best efforts to, prior to or contemporaneously with confirmation of the Plan, obtain entry of an order from the Bankruptcy Court authorizing Seller to assume, if necessary pursuant to section 365 of the Bankruptcy Code, the Designated Contracts and assign such Designated Contracts to Purchaser and an order from the Canadian Court recognizing such order of the Bankruptcy Court;

 

(e)                                  Sellers shall (i) make all payments related to Designated Contracts that accrued or were incurred during the period from May 14, 2012 through and including the Funding Date (regardless of when such amounts were or are actually paid, or became or become payable) and (ii) promptly pay, as approved and directed pursuant to any Bankruptcy Court order, and on the terms set forth therein, all Cure Amounts due or under any order of the Bankruptcy Court authorizing the assumption and assignment of any such Designated Contract to Purchaser;

 

(f)                                   Sellers shall not (i) enter into, amend, restate or modify, any employment or other agreement with any directors, officers or employees so as to increase the monetary value of the benefits provided thereunder other than in accordance with past practice and in no event in an amount exceeding 3% of the current monetary value of the benefits provided thereunder, (ii) make any advance to any directors, officers or employees other than in connection with any employee related travel expenses in accordance with past practice, (iii) alter, commence or terminate any other employment, compensation or employee benefit arrangement outside the ordinary course of business or (iv) hire any individual to be employed by Seller to regularly and consistently provide services to the Business and, except for removals as a result of termination of employment for cause by Sellers, remove any Employees; provided, however, that Seller may hire individuals in the ordinary course of business for non-executive positions on the same terms and conditions as similarly situated Employees; provided, further, that, notwithstanding anything contained herein to the contrary, in the event that any vacancy should occur with respect to:  (1) an individual serving on a New Governing Body, board of directors or managers, or similar governing entity of any Seller or Seller Successor or (2) an officer of any Seller or Seller Successor, such vacancy shall be by appointing an individual that is (x) mutually agreeable to each of the Sellers (or Seller Successors, if applicable) and Purchaser and (y) immediately prior to such appointment, an Independent Person.

 

(g)                                  Sellers shall use reasonable best efforts not to take or agree to or commit to assist any other Person in taking any action that would reasonably be expected to result (i) in a failure of any of the conditions to the Funding or the Closing as set forth in Article VII or (ii) that would reasonably be expected to impair the ability of Sellers or Purchaser to consummate the Funding or the Closing in accordance with the terms hereof or to materially delay such consummation;

 

(h)                                 Sellers shall use reasonable best efforts to, with respect to the Acquired Assets or the Business, not make or authorize (i) any material change to its accounting principles, methods or practices or (ii) any material change to its Tax accounting principles, methods or practices other than, in each case, as required by changes in Applicable Law, or GAAP, or would not reasonably be expected to affect any Tax related to the Acquired Assets after the Closing Date;

 

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(i)                                     Except to the extent provided in the Plan, no Seller shall (i) cause or permit the amendment, restatement or modification of the certificate of incorporation, certificate of formation or bylaws or similar organizational document of itself or any other Seller, except as otherwise required by Applicable Law, (ii) effect a split or reclassification or other adjustment of any equity interests of itself or any other Seller or a recapitalization thereof, (iii) issue, sell, pledge, dispose of or encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any equity interest of itself or any other Seller or any equity interest of, or similar interest in, a joint venture or similar arrangement to which a Seller is a party which is an Acquired Asset hereunder, (iv) alter, whether through a complete or partial liquidation, dissolution, merger, consolidation, restructuring, reorganization or in any other manner, the legal structure or ownership of itself or any other Seller or any joint venture or similar arrangement to which a Seller is a party which is an Acquired Asset hereunder, (v) declare, set aside or pay any type of dividend, whether in cash, stock or other property, in respect of any of the equity interests of itself or any other Seller, or repurchase, redeem or otherwise acquire or offer to repurchase, redeem or otherwise acquire any such equity interests, or (vi) propose, adopt or approve a plan with respect to any of the foregoing;

 

(j)                                    Sellers shall not grant or execute any power of attorney to or for the benefit of any Person that vests in such Person decision-making authority or the ability to bind such Seller or any other Seller with respect to any matters that is in any respect material to such Seller or other Seller, any Acquired Asset or the Business;

 

(k)                                 Sellers shall not: (i) enter into any new material Contracts with respect to any Spectrum; (ii) enter into any new Contracts to accept potential or actual interference as defined by the FCC, the ITU or Industry Canada in connection with any of the Communications Licenses identified on Section 4.16(a) of the Disclosure Letter; or (iii) seek to modify any Communications Licenses identified on Section 4.16(a) of the Disclosure Letter, except for such modifications, which become authorized pursuant to pending applications of Sellers as of the date hereof or which are reasonably required in the judgment of Sellers in order to maintain the Communications Licenses in effect;

 

(l)                                     Sellers shall not sell, lease, transfer or otherwise dispose (including through right of use agreements) of any Acquired Assets;

 

(m)                             Sellers shall not, assume, reject or assign any Material Contract other than the assumption and assignment of the Designated Contracts, as contemplated by this Agreement, to Purchaser (or to a third party in connection with an Alternative Sale);

 

(n)                                 Sellers shall not enter into any Contract, directly or indirectly, unilaterally or in concert, and whether orally, in writing, formally or informally, to do any of the foregoing or assist or cooperate with any other Person in doing any of the foregoing, or authorize, recommend, propose or announce an intention to do any of the foregoing; and

 

(o)                                 Sellers shall, with respect to the Business, file, when due or required, all Tax Returns and other tax returns and other reports required to be filed and pay when due all Taxes, assessments, fees and other charges lawfully levied or assessed against them.

 

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Section 6.2                                    Access; Confidentiality.

 

(a)                                 From the date hereof until the earlier of (i) termination of this Agreement and (ii) the Closing, Sellers will, (w) upon reasonable notice, give Purchaser and its employees, accountants, financial advisors, counsel and other representatives reasonable access during normal business hours to the offices, properties, books and records of Sellers relating to the Acquired Assets, the Assumed Liabilities, and the Business; (x) furnish to Purchaser such financial and operating data and other information relating to the Acquired Assets, the Assumed Liabilities, and the Business and the financial condition, prospects and corporate affairs of Sellers as may be reasonably requested; and (y) instruct the executive officers and senior business managers, employees, counsel, auditors and financial advisors of Sellers to cooperate with Purchaser’s employees, accountants, counsel and other representatives; provided (A) all activities covered by this Section 6.2(a) shall be at the sole cost and expense of Purchaser and (B) that any such activities pursuant to this provision shall be conducted in such manner as not to interfere unreasonably with the conduct of the business of Sellers.  Notwithstanding anything herein to the contrary, no such investigation or examination shall be permitted to the extent that it would require Sellers to disclose information, (i) subject to attorney-client privilege, (ii) in violation of any competition or anti-trust laws or (iii) that conflicts with any confidentiality obligations to which Sellers are bound.

 

(b)                                 Purchaser shall cooperate with Sellers and make available to Sellers such documents, books, records or information Transferred to Purchaser and relating to activities of the Business prior to the Closing as Sellers may reasonably require after the Funding in connection with any Tax determination or contractual obligations to Third Parties or to defend or prepare for the defense of any claim against Sellers or to prosecute or prepare for the prosecution of claims against Third Parties by Sellers relating to the conduct of the Business by Sellers prior to the Closing or in connection with any governmental investigation of Sellers or any of its Affiliates; provided that any such activities pursuant to this provision shall be at the sole cost and expense of Sellers and shall be conducted in such manner as not to interfere unreasonably with the conduct of the business of Purchaser.

 

(c)                                  No party shall destroy any files or records which are subject to this Section 6.2 without giving reasonable notice to the other parties, and within 15 days of receipt of such notice, any such other party may cause to be delivered to it the records intended to be destroyed, at such other party’s expense.

 

Section 6.3                                    Efforts and Actions to Cause Closing to Occur.

 

(a)                                 At all times prior to the Closing, upon the terms and subject to the conditions of this Agreement, Sellers and Purchaser shall use their reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to be done all things necessary, proper or advisable (subject to any Applicable Laws) to cause the Funding Date to occur and consummate the Closing and the other Transactions as promptly as practicable including, (i) the preparation and filing of all forms, registrations and notices required to be filed to cause the Funding Date to occur and consummate the Closing and the other Transactions and the taking of such actions as are necessary to obtain any requisite approvals, authorizations, consents, releases, orders,

 

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licenses, Permits, qualifications, exemptions or waivers by any Third Party or Governmental Entity, including the FCC Consent and the Industry Canada Consent; and (ii) at the sole cost of Purchaser, the preparation of any documents reasonably requested by Purchaser in order to facilitate financing (if any) of any of the Transactions.  In addition, subject to the terms of this Agreement, no party hereto shall take any action after the date hereof that would reasonably be expected to materially delay the obtaining of, or result in not obtaining, any permission, approval or consent from any Governmental Entity or other Person required to be obtained prior to the Closing as applicable; provided, however, that nothing herein shall be construed to prevent, limit, or restrict Purchaser from initiating or participating in any proceeding with any Governmental Entity that either (x) does not specifically pertain to the Spectrum, or (y) relates to the use of the Spectrum in conjunction with any other radio frequencies.  Each of Purchaser and Sellers shall bear their own costs, fees and expenses relating to the obtaining of any approvals, authorizations, consents, releases, orders, licenses, Permits, qualifications, exemptions or waivers referred to in this Section 6.3(a) except that the filing fee required by the Competition Bureau in relation to any pre-notification filing or any filing of a request for an Advance Ruling Certificate made under the Competition Act, and any filing fees associated with the filings related to the FCC Consent and Industry Canada Approval, shall be paid by Purchaser.

 

(b)                                 Prior to the Closing, other than with respect to the Investment Canada Approval, each of Sellers, on the one hand, and Purchaser, on the other hand, shall promptly consult with the other with respect to, provide any necessary information with respect to, and provide the other (or its counsel) with copies of, all filings made by such party with any Governmental Entity or any other information supplied by such party to a Governmental Entity in connection with this Agreement and the Transactions.  Each of Sellers, on the one hand, and Purchaser, on the other hand, shall promptly provide the other with copies of any written communication received by it from any Governmental Entity regarding any of the Transactions.  If any of Sellers or their respective Affiliates, on the one hand, and Purchaser or its Affiliate, on the other hand, thereof receives a request for additional information or documentary material from any such Governmental Entity with respect to any of the Transactions, then such party shall endeavor in good faith to make, or cause to be made, as soon as reasonably practicable and after consultation with the other, an appropriate response in compliance with such request.  To the extent that Transfers, amendments or modifications of Permits are required as a result of the execution of this Agreement or consummation of any of the Transactions, Sellers shall use their reasonable best efforts to effect such Transfers, amendments or modifications.

 

(c)                                  In addition to and without limiting the agreements of the parties contained above, Sellers and Purchaser shall, other than with respect to the Investment Canada Approval:

 

(i)                                     (A) take promptly, but in no event more than twenty (20) Business Days after the execution of this Agreement, all actions necessary to make any filings required of them or any of their Affiliates in connection with obtaining any required approvals or consents other than the FCC Consent, Industry Canada Approval, [Investment Canada Approval,] Controlled Goods Directorate Consent, [Export Control Authorizations, or any approvals or consents required to effect the Transfer to Purchaser of all Export Control Authorizations,] (B) take promptly, but in no event later

 

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than [  ], all actions necessary to make any filings required of them or any of their Affiliates in connection with obtaining the Controlled Goods Directorate Consent; (D) take promptly, but in no event later than [  ], all actions necessary to make any filings required of them or any of their Affiliates in connection with obtaining the FCC Consent or the Industry Canada Approval; and (E) take promptly, but in no event later than [  ], all actions necessary to assign all Coordination Agreements that are material to the Business;

 

(ii)                                  comply at the earliest practicable date with any request for additional information or documentary material received by Sellers or Purchaser or any of their Affiliates from the FCC or Industry Canada or other Governmental Entity in connection with the FCC Consent, the Industry Canada Consent or any other required approvals or consents;

 

(iii)                               reasonably cooperate with each other in connection with any filing in connection with the FCC Consent, the Industry Canada Consent or any other required approvals or consents;

 

(iv)                              use their respective reasonable best efforts to oppose any petitions to deny or other objections that may be filed with respect to the FCC Consent application or the Industry Canada Consent applications and any requests for reconsideration or review of the grant of the FCC Consent or the Industry Canada Consent, provided, however, that the parties shall have no obligation to participate in any evidentiary hearing before the FCC on the FCC Consent application. Neither Sellers nor Purchaser shall take any action that it knows or should know would materially adversely affect or delay the grant of FCC Consent or the Industry Canada Consent;

 

(v)                                 use reasonable best efforts to resolve such objections, if any, as may be asserted in connection with the FCC Consent, Industry Canada Consent, under any antitrust law or otherwise in connection with any other required approvals or consents;

 

(vi)                              advise the other party promptly of any material communication received by such party from the FCC in connection with the FCC Consent, from Industry Canada or the Commissioner of Competition in connection with the Industry Canada Consent or from any Governmental Entity in connection with any of the Transactions;

 

(vii)                           advise the other party promptly of any material communication received from a party to a Coordination Agreement, the ITU or any other party as to a Coordination Agreement or matters relating to a Coordination Agreement;

 

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(viii)                        not make any submission or filings, and to the extent permitted by such Governmental Entity, participate in any meetings or any material conversations with Governmental Entities in respect of any required FCC Consent, Industry Canada Approval, Competition Act Approval, ITU action or Coordination Agreement, unless the party consults with the other party in advance and gives the other party the opportunity to review drafts of any submissions or filings, and attend and participate in any communications or meetings;

 

(ix)                              where a party seeks not to provide the other party with any information under this Section 6.3 on grounds that such information is competitively sensitive, such party will be required to provide the information to the other party’s external counsel (except for information that relates to a party’s valuation of the transactions contemplated by this Agreement) and such external counsel will not provide the information to its client; and

 

(x)                                 cooperate in all proceedings before any Governmental Entity related to the use or conditions of use of the Spectrum or any radio frequencies proposed to be used in conjunction with the Spectrum to provide communications services, including without limitation making a joint petition and fully participating in any such proceedings to promote the interests of the Business.

 

(d)                                 Notwithstanding the foregoing or any other covenant herein contained, nothing in this Agreement shall be deemed to require Purchaser or Sellers to (i) commence any litigation against any Person in order to facilitate the consummation of any of the Transactions; (ii) take or agree to take any other action or agree to any limitation that would reasonably be expected to have a Purchaser Material Adverse Effect on the one hand, or a Material Adverse Effect on the other hand; (iii) agree to sell or hold separate any material assets, businesses, or interest in any material assets or businesses of Purchaser or Sellers, or to agree to any material changes or restrictions in the operation of any assets or businesses of Purchaser or Sellers; (iv) defend against any litigation brought by any Governmental Entity seeking to prevent the consummation of, or impose limitations on, any of the Transactions; or (v) participate in an evidentiary hearing before the FCC in order to facilitate the consummation of any of the Transactions.

 

(e)                                  Purchaser shall in no event later than [  ], prepare and file with the Investment Review Division of Industry Canada an application for review under Part IV of the Investment Canada Act (the “Investment Canada Filing”) and, as promptly as reasonably practicable following such filing, submit to the Director of Investments under the Investment Canada Act draft written undertakings to Her Majesty in Right of Canada, on terms and conditions satisfactory to Purchaser in its reasonable discretion, and shall, in a timely manner, submit executed undertakings in connection with the Investment Canada Approval.  With respect to the Investment Canada Approval, Sellers shall use commercially reasonable efforts to assist Purchaser in obtaining the Investment Canada Approval as Purchaser may reasonably request from time to time including, promptly providing such information and assistance as may be reasonably requested by Purchaser to assist in preparing the Investment Canada Act Filing and to

 

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satisfy, as promptly as reasonably practicable, any requests for information and documentation Purchaser receives from any Governmental Entity in respect of the Investment Canada Approval.  Purchaser shall keep Sellers reasonably informed as to the status of the Investment Canada Approval proceedings and shall promptly advise Sellers of any material written or verbal communications Purchaser has with the Investment Review Division of Investment Canada staff or the Minister of Industry or his designee relating to the Investment Canada Approval.  Information and documentation may be provided to counsel to Sellers on an external counsel basis, in which case such information and documentation shall not be communicated to Sellers.

 

(f)                                   If reasonably requested by Purchaser, Sellers shall make, and shall collaborate with Purchaser in making, at such time as requested by Purchaser, all submissions and notifications required to effect the Transfer to Purchaser of all Export Control Authorizations or, only if so directed by Purchaser, for Purchaser or any of its Affiliates or Subsidiaries to otherwise obtain the Export Control Authorizations, and shall promptly supply Purchaser with all information required for such submissions and notifications.

 

(g)                                  Sellers and Purchasers shall use their reasonable best efforts to (i) prosecute and pursue to a successful conclusion for the Business all applications, modifications, petitions, or other requests for action filed with any Governmental Entity in relation to the FCC Licenses or the Industry Canada Licenses either by the Sellers or any third party, and (ii) ensure that, upon receipt of the FCC Consent and the Industry Canada Consent, the Purchaser or its designated Affiliate or Subsidiary shall be the operator on behalf of whom the United States and Canadian administrations coordinate the Spectrum pursuant to ITU rules.

 

(h)                                 Sellers and Purchaser shall consult with each other and use their respective commercially reasonable efforts to accommodate the other’s suggestions and concerns prior to requesting or advising any Governmental Entity or other party to a Coordination Agreement that the U.S. or Canadian administrations or such party take any action in relation to any Coordination Agreement that may affect the Business’ access to or use of the Spectrum. Sellers shall use commercially reasonable efforts to ensure that, upon receipt of the FCC Consent and the Industry Canada consent, the Purchaser or its designated Affiliate or Subsidiary shall be the operator, on behalf of whom the United States and Canadian administrations coordinate the Spectrum pursuant to ITU rules.

 

Section 6.4                                    Notification of Certain Matters.  Sellers shall give written notice to Purchaser promptly after becoming aware of (i) the occurrence of any event, which would be likely to cause any condition set forth in Article VII to be unsatisfied at any time from the date hereof to the Closing Date, (ii) any notice or other communication from (x) any Person alleging that the consent of such Person is or may be required in connection with any of the Transactions or (y) any Governmental Entity in connection with any of the Transactions or (iii) any actions, suits, claims, investigations, proceedings or written inquiries commenced relating to Sellers, the Acquired Assets or the Business that, if pending on the date of this Agreement, would have been required to be disclosed pursuant to Section 4.9 or, if determined adversely to Sellers, could materially and adversely affect any Seller, the Acquired Assets or the Business; provided, however, that the delivery of any notice pursuant to this Section 6.4 shall not limit or otherwise affect the remedies available hereunder to Purchaser.

 

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Section 6.5                                    Submission for Court Approvals.

 

(a)                                 At least 24 hours prior to serving or filing any material motion, application, pleading, schedule, report and other paper (including memoranda, exhibits, supporting affidavits and evidence and other supporting documentation) in their Bankruptcy Cases or in the CCAA Recognition Proceedings relating to or affecting the Transactions, including any pleading seeking relief related to the Sale, Sellers shall provide a draft thereof to Purchaser and its counsel, and provide Purchaser (and its advisors and counsel) with a reasonable opportunity to consult within such 48 hour period with Sellers with respect to any and all such motions, applications, pleadings, schedules, reports and other papers.

 

(b)                                 Sellers shall take all actions reasonably required to assume and assign the Designated Contracts to Purchaser, including taking all actions reasonably required to (i) obtain a Bankruptcy Court order containing a finding that the proposed assumption and assignment of the Designated Contracts to Purchaser satisfies all applicable requirements of section 365 or 1123(b)(2) of the Bankruptcy Code, and (ii) obtain an order of the Canadian Court recognizing such order of the Bankruptcy Court.

 

(c)                                  Sellers shall use reasonable best efforts to obtain, on or prior to the Funding Date, entry of (i) a Final Order of the Bankruptcy Court providing that the Bankruptcy Court shall retain jurisdiction to hear and determine a motion to assign the Designated Contracts to a Third Party purchaser in an Alternative Sale, pursuant to section 365 or 1123(b)(2) of the Bankruptcy Code, including, without limitation, to determine whether the Sellers have provided “adequate assurance” to counterparties to the Designated Contracts within the meaning of, and as required by, sections 365(b) and 365(f) of the Bankruptcy Code, and (ii) a Final Order of the Canadian Court recognizing such order of the Bankruptcy Court.

 

(d)                                 Promptly upon the execution of this Agreement, Sellers shall use reasonable best efforts to obtain as soon as possible, but subject to the notice requirements of the Bankruptcy Code and Bankruptcy Rules, the requirements of the Purchaser Protections Order (and the bidding procedures contained therein), the Exclusivity Stipulation, and the Bankruptcy Court’s availability, the Bankruptcy Court’s entry of the Sale Order, and thereafter the Canadian Court’s entry of the Sale Recognition Order.  Each of the Sale Order and the Sale Recognition Order shall be in form and substance reasonably satisfactory to Purchaser.

 

(e)                                  If the Sale Order or the Sale Recognition Order shall be appealed by any Person (or if any petition for certiorari or motion for reconsideration, amendment, clarification, modification, vacation, stay, rehearing, reargument or leave to appeal shall be filed with respect to any such order), Sellers and Purchaser will cooperate in taking steps to reasonably diligently defend such appeal, petition or motion and use reasonable best efforts to obtain an expedited resolution of any such appeal, petition or motion.

 

Section 6.6                                    Employee Matters.

 

(a)                                 Prior to the Closing Date, Purchaser may, or may cause an Affiliate to, offer to employ, such employment to be effective on the Closing Date, each of the employees of Sellers

 

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listed in the [   ]  (each such employee who accepts an offer and commences working for Purchaser or its Affiliate on the Closing Date, a “Transferred Employee”) on terms and conditions that are substantially similar to the terms and conditions that are in effect for those employees immediately prior to the Closing Date.  Purchaser shall assume all Employee Obligations with respect to both Transferred Employees and the Sellers’ other employees; provided, that Purchaser shall not assume the Employee Obligations to the extent they exceed $[ ] million in the aggregate.  Sellers shall use reasonable efforts to cooperate with Purchaser in Purchaser’s recruitment of and offer to employ the Transferred Employees.

 

(b)                                 Notwithstanding anything to the contrary contained in this Agreement, Sellers shall retain, and Purchaser shall not assume, any Employee Benefit Plans or Canadian Plans or any other arrangement or agreements with any employees of any Seller or any other Person.  Specifically and without limiting the foregoing, Sellers shall retain and Purchaser does not assume any retention or sale bonus arrangements of any Seller with any such employee even if that employee is employed by Purchaser whether under Section 6.7(a) or otherwise.  All Seller Liabilities to, or relating to, the Employee Benefit Plans or Canadian Plans, and all Seller Liabilities to, or relating to, any employee under such plans shall be Non-Assumed Liabilities, and Purchaser shall have no obligation or liability with respect to such Employee Benefit Plans and Canadian Plans.  Purchaser and Sellers shall take all actions necessary to cause the retention by Sellers of all such Employee Benefit Plans and Canadian Plans.

 

(c)                                  Sellers shall pay in the ordinary course of business pursuant to the Operating Budget all material Employee Obligations in respect of each Employee prior to the Closing Date, or, if applicable, the date upon which the Employee commences employment with Purchaser as a Transferred Employee pursuant to Section 6.1(a)(iii), including premium contributions, remittance and assessments for unemployment insurance, employer health tax, Canada Pension Plan, Quebec Pension Plan, income tax, workers’ compensation and any other employment related legislation, accrued wages, taxes, salaries, commissions and employee benefit plan payments.  Sellers shall have no obligation to reinstate any employees in connection with the Business.

 

(d)                                 To the extent that any obligations might arise under the Worker Adjustment Retraining Notification Act (“WARN”), 29 U.S.C. Section 2101 et seq., or under any similar provision of any United States federal, state, regional, non-United States or local law, rule or regulation (hereinafter referred to collectively at “WARN Obligations”) solely as a consequence of the actions taken by or at the direction of Purchaser, Purchaser shall be responsible for such WARN Obligations.

 

(e)                                  From the date of this Agreement through the Closing Date, Sellers shall allow Purchaser reasonable access to meet with and interview Employees during normal business hours and Sellers shall provide reasonable cooperation and information to Purchaser as reasonably requested by Purchaser with respect to its determination of appropriate terms and conditions of employment for any Employee to whom it is making, or causing an Affiliate to make, an offer of employment with Purchaser or its Affiliate.

 

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(f)                                   At Purchaser’s request, as of immediately prior to the Closing Date (but conditioned upon the occurrence of the Closing), Sellers shall take all actions necessary or appropriate to terminate or cause to be terminated any or all of the Employee Benefit Plans that are intended to be tax-qualified within the meaning of Section 401(a) of the Code.  Sellers and Purchaser shall cooperate in good faith prior to the Closing with respect to the preparation and execution of all documentation necessary to effect the foregoing termination, and Sellers shall provide Purchaser a reasonable opportunity to review and comment on all such documentation.

 

Section 6.7                                    Subsequent Actions.  If at any time after the Closing Date, Purchaser or Sellers consider or are advised that any deeds, bills of sale, instruments of conveyance, assignments, assurances or any other actions or things are necessary or desirable to vest, perfect or confirm ownership (of record or otherwise) in Purchaser, its right, title or interest in, to or under any or all of the Acquired Assets or otherwise to carry out this Agreement, including the assumption of the Assumed Liabilities, Purchaser or Sellers shall at Purchaser’s expense, execute and deliver all deeds, bills of sale, instruments of conveyance, powers of attorney, assignments, assumptions and assurances and take and do all such other actions and things as may be requested by the other party in order to vest, perfect or confirm any and all right, title and interest in, to and under such rights, properties or assets in Purchaser or otherwise to carry out this Agreement.

 

For the avoidance of doubt, this Section 6.8 shall survive the Closing.

 

Section 6.8                                    Publicity.  Prior to the Closing and without limiting or restricting any party from making any filing with the Bankruptcy Court with respect to this Agreement or the Transactions, no party shall issue any press release or public announcement concerning this Agreement or the Transactions without obtaining the prior written approval of the other party, which approval will not be unreasonably withheld or delayed, unless, in the reasonable judgment of Purchaser or Sellers, disclosure is otherwise required by Applicable Law, the Bankruptcy Code or the Bankruptcy Court with respect to filings to be made with the Bankruptcy Court in connection with this Agreement or by the applicable rules of the Securities Exchange Commission or any stock exchange on which Purchaser lists securities, provided that the party intending to make such release shall use its reasonable best efforts consistent with such Applicable Law, the Bankruptcy Code or Bankruptcy Court requirement to consult with the other party with respect to the text thereof.

 

Section 6.9                                    Tax Matters.

 

(a)                                 The Purchaser and the Sellers agree that the Purchase Price is exclusive of any Transfer Taxes.  The Purchaser shall promptly pay directly to the appropriate Tax Authority all applicable Transfer Taxes that may be imposed upon or payable or collectible or incurred in connection with this Agreement or the transactions contemplated herein, or that may be imposed upon or payable or collectible or incurred in connection with the Transactions provided that if any such Transfer Taxes are required to be collected, remitted or paid by a Seller, such Transfer Taxes shall be paid by the Purchaser to such Seller at such time as such Transfer Taxes are required to be paid under Applicable Law.

 

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(b)                                 Purchaser and Sellers covenant and agree that they will use their reasonable best efforts to obtain an order from the Bankruptcy Court pursuant to section 1146 of the Bankruptcy Code exempting, to the maximum extent possible, the Transfer of the Acquired Assets from Sellers to Purchaser from any and all Transfer Taxes (as hereinafter defined).  To the extent the Transactions or any portion of the Transactions are not exempt from Transfer Taxes under section 1146 of the Bankruptcy Code, Purchaser shall be responsible for and shall pay all Transfer Taxes in accordance with Section 6.9(a).  Purchaser and Sellers shall cooperate in providing each other with any appropriate certification and other similar documentation relating to exemption from Transfer Taxes (including any appropriate resale exemption certifications), as provided under Applicable Law.

 

(c)                                  Purchaser and Sellers agree to furnish, or cause their Affiliates to furnish, to each other, upon request, as promptly as practicable, such information and assistance relating to the Acquired Assets or the Business (including access to books and records) as is reasonably necessary for the filing of all Tax Returns, and making of any election related to Taxes, the preparation for any audit by any taxing authority, and the prosecution or defense of any claim, suit or proceeding relating to any Tax Return.  Purchaser and Sellers shall cooperate, and cause their Affiliates to cooperate, with each other in the conduct of any audit or other proceeding related to Taxes and each shall execute and deliver such powers of attorney and other documents as are reasonably necessary to carry out the intent of this Section 6.9(c).  Purchaser and Sellers shall provide, or cause their Affiliates to provide, timely notice to each other in writing of any pending or threatened tax audits, assessments or litigation with respect to the Acquired Assets or the Business for any taxable period for which the other party may have liability under this Agreement.  Purchaser and Sellers shall furnish, or cause their respective Affiliates to furnish, to each other copies of all correspondence received from any taxing authority in connection with any tax audit or information request with respect to any taxable period for which the other party or its Affiliates may have liability under this Agreement.

 

(d)                                 Real and personal property Taxes and assessments, and all rents, utilities and other charges, on the Acquired Assets for any taxable period commencing on or prior to the Closing Date and ending after the Closing Date (the “Straddle Period Property Tax”) shall be prorated on a per diem basis between Purchaser and Sellers as of the [Funding Date]; provided, however, that Sellers shall not be responsible for, or benefit from, any increased or decreased assessments on real or personal property resulting from the transactions contemplated hereby.  All such prorations of Straddle Period Property Taxes shall be allocated so that items relating to time periods ending on or prior to the [Funding Date] shall be allocated to Sellers and items relating to time periods beginning after the Closing Date shall be allocated to Purchaser.  The amount of all such prorations shall be settled and paid on the Closing Date.  If any of the rates for the Straddle Period Property Taxes for any taxable period commencing on or prior to the [Funding Date] and ending after the [Funding Date] are not established by the Closing Date, the prorations shall be made on the basis of such rates in effect for the preceding taxable period.  The apportioned obligations under this Section 6.9(d) shall be timely paid and all applicable filings made in the same manner as set forth for the apportioned Transfer Taxes in Section 6.9(a) and (b).

 

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(e)                                  The Canadian Sellers and Purchaser shall jointly execute an election, where such election is available, under Section 22 of the Income Tax Act and the corresponding sections of any other applicable provincial statute and any regulations under such statutes with respect to the sale, assignment, transfer and conveyance of the Accounts Receivable.  The Canadian Sellers and Purchaser further agree to make jointly the necessary elections and execute and file, within the prescribed delays, the prescribed election forms and any other documents required to give effect to the foregoing and shall also prepare and file all of their respective Tax Returns in a manner consistent with the aforesaid allocations.

 

(f)                                   Canadian Sellers and Purchaser shall, where such election is available, jointly execute an election under Section 167 of the Excise Tax Act (Canada) and the corresponding provisions of any applicable provincial statute and any regulations under such statutes on the forms prescribed for such purposes along with any documentation necessary or desirable in order to effect the transfer of the Acquired Assets by Canadian Sellers without payment of any GST/HST or any other applicable provincial tax. Purchaser shall file the election forms referred to above, along with any documentation necessary or desirable to give effect to such, with the tax authorities, together with Purchaser’s GST/HST or any other applicable provincial tax returns for the reporting period in which the transactions contemplated herein are consummated. Notwithstanding such election, in the event that it is determined by the tax authorities that there is GST/HST or any other provincial tax liability of Purchaser to pay GST/HST or any other provincial tax on all or part of the Acquired Assets, the Canadian Sellers and Purchaser agree that such GST/HST or any other provincial tax shall, unless already collected from Purchaser and remitted by the Canadian Sellers, be forthwith remitted by Purchaser to the Canadian Sellers or to the tax authorities as required by the tax authorities, and Purchaser shall indemnify and save the Canadian Sellers harmless with respect to any such GST/HST or any other provincial tax liability arising herein, as well as any interest and penalties related thereto.

 

(g)                                  Prior to the Closing Date, the Canadian Sellers shall obtain all clearance certificates that are required to be obtained under applicable Provincial Sales Tax Laws and shall provide the Purchaser with such certificates, or the Canadian Sellers shall provide the Purchaser with evidence satisfactory to the Purchaser that the Canadian Sellers have complied with the requirements to obtain clearance certificates under applicable Provincial Sales Tax Laws.

 

(h)                                 The Canadian Sellers shall comply with the provisions of section 99 of the Social Services Tax Act (British Columbia) prior to the Closing and shall deliver to Purchaser all documents necessary in the opinion of the Purchaser for compliance with that Act.  The Canadian Sellers shall comply with the provisions of section 51 of the Revenue and Financial Services Act (Saskatchewan) prior to the Closing and shall deliver to Purchaser all documents necessary in the opinion of the Purchaser for compliance with such Provincial Sales Tax Laws.

 

(i)                                     At the Funding Date, Purchaser shall be registered under Part IX of the Excise Tax Act (Canada) and, if applicable, Chapter VIII of An Act Respecting the Quebec Sales Tax (Quebec) and shall provide its registration number to the Canadian Seller.

 

Section 6.10                             Designation Dates. [On or prior to the date of the hearing with regard to entry of the Sale Order, Purchaser shall make its final designations of all contracts,

 

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in accordance with Section 2.1(c) hereof, and may, prior to the Effective Date of the Plan, revise Section 2.1(c) of the Disclosure Letter to exclude from the definition of Designated Contracts and to include in the definition of Retained Assets, any Contract previously included in the definition of Designated Contracts and not otherwise included in the definition of Retained Assets; provided, that no such final designation or revision shall reduce the amount of the Purchase Price; provided further, that any Cure Amounts associated with any Contract so excluded from the definition of Designated Contracts shall reduce the Excess Cure Amounts payable by Purchaser under Section 6.11(a) hereof.]

 

Section 6.11                             Prompt Payment of Cure Amounts; Prepayment of Designated Customer Contracts.

 

(a)                                 [With respect to each Designated Contract, Sellers shall:  (i) no later than five (5) calendar days after entry of the Purchaser Protections Order and the Purchaser Protections Recognition Order, serve each counterparty to a proposed Designated Contract as of such date with notice of the proposed Cure Amount for such Contract; and (ii) pay, as soon as practicable after the Effective Date of the Plan, all amounts (the “Cure Amounts”) that (x) are required to be paid under section 365(b)(1)(A) or (b)(1)(B) of the Bankruptcy Code in order to assume and assign such contract, or (y) are due pursuant to order of the Bankruptcy Court as a condition to assuming and assigning such Designated Contracts (in each case excluding any amounts that represent obligations or liabilities that were incurred or accrued by the Sellers during the period May 14, 2012 through and including the Funding Date, regardless of when such amounts are paid); provided, that, notwithstanding the foregoing, Seller shall not be responsible for paying any Excess Cure Amounts, which Excess Cure Amounts shall be deposited by Purchaser into the Escrow Account on the Funding Date; provided, further, that to the extent that, on or prior to the Effective Date, the Purchaser determines to exclude one or more Contracts from the definition of Designated Contracts and to include such Contracts in the definition of Retained Assets, (A) any Excess Cure Amounts deposited in the Escrow Account in respect of such Contracts shall be returned to Purchaser and (B) the threshold for determining Excess Cure Amounts (i.e., Cure Amounts in excess of $[      ] million) shall be reduced on a dollar-for-dollar basis in an amount equal to the return(s) specified in clause (A); provided, further, that Cure Amounts that are the subject of a bona fide dispute shall be paid by Sellers within two (2) Business Days of the effectiveness of a settlement or order of the Bankruptcy Court, as the case may be, with respect thereto.  All Cure Amounts deposited into the Escrow Account shall be thereafter held, invested and released by the Escrow Agent only in accordance with this Agreement and the Escrow Agreement.]

 

(b)                                 If there are any payments under any Designated Customer Contract invoiced and collected during the month ending on the Funding Date for services to be rendered under such Designated Customer Contract after the Funding Date, Sellers shall provide to Purchaser, no later than the third (3rd) Business Day after the Funding Date, a statement setting forth the amounts of such prepayments and the Designated Customer Contracts to which they relate.  Sellers shall, concurrently with the delivery of the statement referred to in the preceding sentence, pay over to Purchaser an amount equal to such prepayments.

 

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Section 6.12                             Completion of Nonassignable Designated Contracts.  Sellers shall use their best efforts to obtain any consent, approval or amendment, if any, required to novate and/or assign any Designated Contract to be assigned to Purchaser hereunder which the Bankruptcy Court determines is not able to be assumed and assigned under section 365(c) of the Bankruptcy Code or which a court of competent jurisdiction determines is not able to be assumed pursuant to Applicable Law (a “Nonassignable Designated Contract”).  Sellers shall keep Purchaser reasonably informed from time to time of the status of the foregoing and Purchaser shall cooperate with Sellers in this regard.  To the extent that the rights of Sellers under any Nonassignable Designated Contract, or under any other Asset to be assigned to Purchaser hereunder, may not be assigned without the consent of a Third Party which has not been obtained prior to the Closing this Agreement shall not constitute an agreement to assign the same at the Closing, if an attempted assignment would be unlawful.  Subject to Section 7.1(a)(xiii) hereof, if any such consent has not been obtained or if any attempted assignment would be ineffective or would impair Purchaser’s rights under the instrument in question so that Purchaser would not acquire the benefit of all such rights, then Sellers, to the maximum extent permitted by Applicable Law and the instrument, shall act as Purchaser’s agent in order to obtain for Purchaser the benefits thereunder and shall cooperate, to the maximum extent permitted by Applicable Law and the instrument, with Purchaser in any other reasonable arrangement designed to provide such benefits to Purchaser; provided, however, that nothing contemplated by this Section 6.13 shall reduce the amount of the Purchase Price.

 

Section 6.13                             No Violation.  Nothing in this Agreement is intended to result in Purchaser assuming ownership or control (whether de facto or de jure) of the FCC Licenses and Industry Canada Licenses of Sellers hereunder in a manner that violates any Communications Laws of the United States or Canada.  To the extent any term or provision of this Agreement is held by a court of competent jurisdiction or other authority to result Purchaser assuming such ownership or control in violation of any Communications Laws of the United States or Canada, the parties agree that such violative term or provision shall be replaced, reformed or deleted, in each case in a manner that comes closest to expressing the intention of the violative term or provision, solely to the extent necessary to cause such term or provision to comply with the Communications Laws of the United States and Canada.

 

Section 6.14                             Insurance; Risk of Loss.  Until the Funding Date, Sellers shall bear the risk of any loss or damage to the Acquired Assets from fire, casualty or any other occurrence.  Sellers shall maintain insurance coverage substantially similar to Sellers’ policies in effect as of the date hereof for the period from the date hereof until the Closing Date with respect to the Business and the Acquired Assets for events occurring, circumstances existing and Seller Liabilities accruing before the Closing Date.  Following the Funding Date, Purchaser shall have the benefit of any unexpired portion of Sellers’ insurance coverage, and Sellers will use commercially reasonable efforts to, on or prior to the Funding Date, cause Purchaser to be named as the insured party or loss payee under all insurance policies maintained by Sellers or Sold Companies relating to the Acquired Assets to the extent unexpired, and in the event any proceeds become payable under such unexpired insurance policies relating to occurrences or events after the Funding Date and are not paid to Purchaser, Sellers shall and shall cause the Sold Companies to hold such proceeds in trust for the benefit of Purchaser, and shall pay over such proceeds

 

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without any deduction to Purchaser promptly after receipt thereof.  Nothing herein shall require Sellers to maintain insurance coverage in respect of any Acquired Asset after the Closing Date.

 

ARTICLE VII.

 

CONDITIONS

 

Section 7.1                                    Conditions to Obligations of Purchaser.  The obligations of Purchaser to consummate the Funding and the Closing shall be subject to the satisfaction (or waiver by Purchaser) on or prior to the Funding Date or the Closing Date, respectively, of the following conditions:

 

(a)                                 Conditions to the Funding:

 

(i)                                     Government Action. There shall be no injunction, restraining order or decree of any Governmental Entity (other than the FCC or Industry Canada) in connection with the Bankruptcy Cases or the Canadian Recognition Proceedings:

 

(1)                                 prohibiting or imposing any material limitations on Purchaser’s ownership or operation (or that of any of its Subsidiaries or Affiliates) of all or a material portion of its businesses or assets or the Acquired Assets, or compelling Purchaser or any of its Subsidiaries or Affiliates to dispose of or hold separate any material portion of the Acquired Assets or the business or assets of Purchaser or any of its Subsidiaries or Affiliates;

 

(2)                                 restraining or prohibiting the consummation of the Funding or the performance of any of the other Transactions, or imposing upon Purchaser or any of its Subsidiaries or Affiliates any damages or payments that are material;

 

(3)                                 imposing material limitations on the ability of Purchaser, its Subsidiaries or its Affiliates, or rendering Purchaser, its Subsidiaries or its Affiliates unable, to accept for payment or pay for or purchase a material portion of the Acquired Assets or otherwise to consummate the Funding;

 

(4)                                 imposing material limitations on the ability of Purchaser, its Subsidiaries or its Affiliates to exercise effectively full rights of ownership of the Acquired Assets; or

 

(5)                                 otherwise having a Material Adverse Effect.

 

(ii)                                  Regulatory Action. There shall be no injunction, restraining order or decree by the FCC or Industry Canada in effect prohibiting the consummation of the Funding or the performance of any material aspect

 

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of the Transactions, taken as a whole or having any of the effects listed in Section 7.1(a)(i)(1) through (5) above, including without limitation any decree, order, or other action purporting to suspend, revoke, or cancel any of the FCC Licenses or Industry Canada Licenses or any portions thereof or material rights granted thereunder.

 

(iii)                               Consents, Approvals and Permits.  Other than the Specified Regulatory Approvals, the Export Control Authorizations, and any approvals or consents required to effect the Transfer to Purchaser of all Export Control Authorizations, all consents and approvals of any Person (other than a Governmental Entity) set forth in Section 7.1(a)(iii) of the Disclosure Letter,(11) shall have been obtained, except (x) to the extent that the requirement for a particular consent or approval is rendered inapplicable by the Sale Order or other order of the Bankruptcy Court or the Canadian Court, if applicable, or (y) in the case of any Nonassignable Designated Contract other than a Required Contract.  Other than the Specified Regulatory Approvals, the Export Control Authorizations, and any approvals or consents required to effect the Transfer to Purchaser of all Export Control Authorizations, all consents and approvals of any Governmental Entity, whether United States federal, state, local or non-United States, required in connection with the consummation of the Funding and the other Transactions, shall have been obtained except where the failure to obtain would not constitute a Material Adverse Effect.  A copy of each such consent or approval referred to in this Section 7.1(a)(iii) shall have been provided to Purchaser at or prior to the Funding.  All Permits (other than any Permit that constitutes a Specified Regulatory Approval, an Export Control Authorization, or an approval or consent required to effect the Transfer to Purchaser of any Export Control Authorization) necessary for the operation of the Business included in the Acquired Assets either have been Transferred to Purchaser or have been obtained by Purchaser except where the failure to obtain would not constitute a Material Adverse Effect.  All such consents, approvals and Permits referred to in this Section 7.1(a)(iii) shall be in effect at the Funding and shall not have been amended, modified, revoked or rescinded.  For clarity, the Investment Canada Approval (if required under the Investment Canada Act), the Competition Act Approval (if required under the Competition Act), and the Controlled Goods Directorate Consent (if required under the Defence Production Act (Canada)) shall be in effect at the Funding and shall not have been amended, modified, revoked or rescinded.

 

(iv)                              Antitrust Approvals.  Other than the Specified Regulatory Approvals, all terminations or expirations of waiting periods imposed by any

 

(11)  Such Schedule to include the Boeing contract.

 

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Governmental Entity necessary for the consummation of the transactions contemplated by this Agreement, including under any applicable antitrust regulations in any non-United States jurisdiction, shall have occurred and all other notifications, consents, authorizations and approvals required to be made or obtained from any non-United States competition or antitrust authority (including any required Competition Act Approval and any required Investment Canada Approval) shall have been made or obtained for the transactions contemplated by this Agreement.

 

(v)                                 Material Adverse Effect.  Since the date of this Agreement, there shall not have occurred and be continuing any Material Adverse Effect or any facts, events or circumstances that would reasonably be expected to have such a Material Adverse Effect.

 

(vi)                              Sellers’ Representations and Warranties.  Each of the representations and warranties set forth in Article IV disregarding all materiality and Material Adverse Effect qualifications contained therein, shall be true and correct (i) as of the date hereof and as of the Funding Date (as though made on the Funding Date) or (ii) if made as of a date specified therein, as of such date, except (with respect to all representations and warranties set forth in Article IV other than the first sentence of Section 4.1, and Sections 4.4 and 4.22) for any failure to be true and correct that, individually and together with other such failures, has not had and would not reasonably be expected to have a Material Adverse Effect.

 

(vii)                           Sellers’ Performance of Covenants.  Sellers shall not have failed to perform in any material respect any material obligation or to comply in any material respect with any material agreement or material covenant of Sellers to be performed or complied with by them under this Agreement.

 

(viii)                        Certificate of Sellers’ Officers.  Purchaser shall have received from Sellers a certificate, dated the Funding Date, duly executed by the Chief Executive Officer, and the Chief Financial Officers of each individual Seller, reasonably satisfactory in form to Purchaser, to the effect of paragraph (v) through (vii) above.

 

(ix)                              Sale Order.  The Bankruptcy Court shall have entered the Sale Order, the Sale Order shall have become a Final Order and the Sale Order shall not have been reversed, stayed, modified or amended.

 

(x)                                 Sale Recognition Order.  The Canadian Court shall have entered the Sale Recognition Order, the Sale Recognition Order shall be a Final Order and the Sale Recognition Order shall not have been reversed, stayed, modified or amended in any manner materially adverse to Purchaser without Purchaser’s consent.

 

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(xi)                              Ancillary Agreements.  Sellers have duly executed and delivered to Purchaser each of the Ancillary Agreements and such Ancillary Agreements shall have been approved by order of the Bankruptcy Court (which may be included in the Sale Order) and, to the extent required by Applicable Law, the Canadian Court shall have entered an order recognizing any such order.

 

(xii)                           New Governing Bodies.  Any New Governing Bodies required to be established pursuant to Section 3.5(c)(ii) hereof shall have been established, in each case, in accordance with the terms of Section 3.5(c)(ii) hereof.

 

(xiii)                        Inmarsat Cooperation Agreement.  All consents and approvals (if any) required to be obtained in order to assign the Inmarsat Cooperation Agreement to Purchaser shall have been obtained, and the Inmarsat Side Letter shall have been executed and shall be in full force and effect; provided, however, that for the avoidance of doubt, the assignment of the Inmarsat Cooperation Agreement shall not be effective until the Closing.

 

(xiv)                       Coordination Agreements.  All consents and approval (if any) required to be obtained in order to assign to Purchaser any Coordination Agreements that are material to the Business shall have been obtained, provided however that for the avoidance of doubt, the assignment of any Coordination Agreement shall not be effective until Closing.

 

(b)                                 Conditions to the Closing.  All of the conditions specified in Section 7.1(a) shall be conditions to the Closing (treating references in Section 7.1(a) to the “Funding” as references to the Closing, as applicable, and “Funding Date” as references to the Closing Date, as applicable), in addition to the following conditions:

 

(i)                                     Other Consents. All Third Party consents necessary for the Transfer of the Acquired Assets not previously delivered shall have been obtained.

 

(ii)                                  FCC Consent.  The FCC Consent shall have been issued.

 

(iii)                               Industry Canada Approval.  The Industry Canada Approval shall have been issued and shall not have been amended, modified, revoked or rescinded.

 

(iv)                              Bill of Sale; Conveyance Documents.  Sellers shall have duly executed and delivered to Purchaser the Bill of Sale, each of the Intellectual Property Instruments and each other Conveyance Document.

 

(v)                                 Tax Certifications.  Purchaser shall have received a certification of non-foreign status for each Seller (other than the Canadian Sellers) in the form

 

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and manner which complies with the requirements of Section 1445 of the Code and the Treasury regulations promulgated thereunder.

 

The foregoing conditions in this Section 7.1(a) and Section 7.1(b) are for the sole benefit of Purchaser and may be waived by Purchaser, in whole or in part, at any time and from time to time in its sole discretion.  The failure by Purchaser at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right and each such right shall be deemed an ongoing right which may be asserted at any time and from time to time.

 

Section 7.2                                    Conditions to Obligations of Sellers.  The obligations of Sellers to consummate the Funding and the Closing shall be subject to the satisfaction (or waiver by Sellers) on or prior to the Funding Date or Closing Date, respectively, of the following conditions:

 

(a)                                 Conditions to the Funding.

 

(i)                                     Government Action. There shall be no injunction, restraining order or decree of any Governmental Entity in effect restraining or prohibiting the consummation of the Funding or imposing upon Sellers any damages or payments that are material.

 

(ii)                                  Consents, Approvals and Permits.  Other than the Specified Regulatory Approvals, Export Control Authorizations, and any approvals or consents required to effect the Transfer to Purchaser of all Export Control Authorizations, all consents and approvals of any Governmental Entity, whether United States federal, state, local or non-United States, required in connection with the consummation of the Funding and the other Transactions, shall have been obtained except where the failure to obtain would not constitute a Material Adverse Effect.  All such consents, approvals and Permits referred to in this Section 7.2(a)(ii) shall be in effect at the Funding and shall not have been amended, modified, revoked or rescinded.

 

(iii)                               Antitrust Approvals.  Other than the Specified Regulatory Approvals, all terminations or expirations of waiting periods imposed by any Governmental Entity necessary for the consummation of the transactions contemplated by this Agreement, including under any applicable antitrust regulations in any non-United States jurisdiction, shall have occurred and all other notifications, consents, authorizations and approvals required to be made or obtained from any non-United States competition or antitrust authority (including any required Competition Act Approval and any required Investment Canada Approval) shall have been made or obtained for the transactions contemplated by this Agreement.

 

(iv)                              Representations and Warranties.  The representations and warranties of Purchaser set forth in this Agreement shall be true and correct, in all

 

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material respects, as of the date of this Agreement and as of the Funding Date as though made as of the Funding Date (except to the extent such representations and warranties expressly relate to an earlier date, in which case as of such earlier date).

 

(v)                                 Sellers’ Performance of Covenants. Purchaser shall not have failed to perform in any material respect any material obligation or to comply in any material respect with any material agreement or material covenant of Purchaser to be performed or complied with by them under this Agreement.

 

(vi)                              Certificate of Purchaser’s Officers.  Sellers shall have received from Purchaser a certificate, dated the Funding Date, duly executed by the Chief Executive Officer, and the Chief Financial Officers of Purchaser, to the effect of paragraph (v) and (vi) above.

 

(vii)                           Sale Order.  The Sale Order shall have become a Final Order and the Sale Order shall not have been reversed, stayed, modified or amended in any manner materially adverse to any Seller without such Seller’s consent.

 

(viii)                        Sale Recognition Order.  The Canadian Court shall have entered the Sale Recognition Order the Sale Recognition Order shall be a Final Order and the Sale Recognition Order shall not have been reversed, stayed, modified or amended in any manner materially adverse to any Seller without such Seller’s consent.

 

(ix)                              Ancillary Agreements.  Purchaser shall have duly executed and delivered to Sellers each of the Ancillary Agreements to which Purchaser is a party and such Ancillary Agreements shall have been approved by order of the Bankruptcy Court (which may be included in the Sale Order) and, to the extent required by Applicable Law the Canadian Court shall have entered an order recognizing any such order.

 

(b)                                 Conditions to Closing.

 

(i)                                     FCC Consent.  The FCC Consent shall have been issued.

 

(ii)                                  Industry Canada Approval.  The Industry Canada Approval shall have been issued and shall not have been amended, modified, revoked or rescinded.

 

(iii)                               Assumption of Designated Contracts.  Purchaser shall have executed an Instrument of Assumption for the Designated Contracts.

 

The foregoing conditions in Section 7.2(a) and 7.2(b) are for the sole benefit of Sellers and may be waived by Sellers, in whole or in part, at any time and from time to time in its sole discretion; provided, however, that Sellers shall not be permitted to waive any such

 

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condition or otherwise make any determination as to whether any such condition has been satisfied without first consulting with, and obtaining the prior written consent of, the LP Lenders, which consent shall not be unreasonably withheld.  The failure by Sellers at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right and each such right shall be deemed an ongoing right which may be asserted at any time and from time to time.

 

ARTICLE VIII.

 

TERMINATION

 

Section 8.1            Termination.  This Agreement may be terminated or abandoned at any time prior to the Funding Date as follows:

 

(a)           By the mutual written consent of Purchaser and Sellers;

 

(b)           By either Purchaser or Sellers upon written notice given to the other, if the Bankruptcy Court, Canadian Court or any other Governmental Entity shall have issued an order, decree or ruling or taken any other action (which order, decree, ruling or other action the parties hereto shall use their reasonable best efforts to prevent the entry of and remove), which permanently restrains, enjoins or otherwise prohibits the consummation of the Transactions and such order, decree, ruling or other action shall have become a Final Order;

 

(c)           By either Purchaser or Sellers upon written notice given to the other, if the Funding Date shall not have taken place on or before [            ] (the “Termination Date”).  The initial Termination Date may be extended by Purchaser by written notice to each other Party privy to the then-scheduled Termination Date up to but not beyond [   ]; provided, that Purchasers may only extend the initial Termination Date on one occasion and only if, simultaneous with the delivery of the notice to extend, Purchaser deposits into the Escrow Account additional funding to Sellers in order to operate the Business and, to the extent necessary for payment of Sellers’ expenses in connection with the Bankruptcy Cases, which amount shall be released to Purchaser pursuant to the terms of the Escrow Agreement, and such later date shall thereafter be deemed to be the Termination Date; provided, further that the failure of the Funding to occur on or before such date is not the result of a material breach of any covenant, agreement, representation or warranty hereunder by the party seeking such termination; provided, further, that notwithstanding the foregoing, the Sellers may not terminate this Agreement pursuant to this Section 8.1(c) if that the failure of the Funding Date to occur on or prior to the Termination Date arises primarily from litigation commenced by the Sellers in the Bankruptcy Court or the Canadian Court; and

 

(d)           By Sellers upon written notice given to Purchaser, if Purchaser shall have breached or failed to perform in any material respect any of its representations, warranties, covenants or other agreements contained in this Agreement, which breach or failure to perform (i) would result in a failure of a condition set forth in Section 7.2 and (ii) cannot be cured by the date that is the earlier of (A) ten (10) Business Days after Sellers notify Purchaser of such breach and (B) the third Business Day prior to the Funding Date.

 

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(e)           By Purchaser or Sellers upon written notice given to Purchaser, if:

 

(i)                                     the Sale Hearing has been completed and Purchaser is not determined by the Bankruptcy Court to be the successful bidder; or

 

(ii)                                  the Bankruptcy Court enters any order approving an Alternative Transaction.

 

For the avoidance of doubt, Purchaser shall not be required to act as the Back-Up Bidder in any auction for the Acquired Assets, except to the extent Purchaser consents in writing to act as the Back-Up Bidder.

 

(f)            By Purchaser upon written notice given to Sellers, if any Seller shall have breached or failed to perform in any material respect any of its representations, warranties, covenants or other agreements contained in this Agreement, which breach or failure to perform (i) would result in a failure of a condition set forth in Section 7.1 and (ii) cannot be cured by the date that is the earlier of (A) ten (10) Business Days after Purchaser notifies Sellers of such breach and (B) the third Business Day prior to the Funding Date;

 

(g)           By Purchaser upon written notice given to Sellers:

 

(i)                                     unless, on or prior to [                    ], (A) the Bankruptcy Court has entered the Sale Order and (B) the Canadian Court has subsequently entered the Sale Recognition Order no longer than 21 days after (A);

 

(ii)                                  if any Seller seeks to have the Bankruptcy Court enter an order dismissing a Bankruptcy Case of any Seller or converting it to a case under Chapter 7 of the Bankruptcy Code, or appointing a trustee in its Bankruptcy Cases or appointing a responsible officer or an examiner with enlarged powers relating to the operation of Sellers’ businesses (beyond those set forth in Section 1106(a)(3) or (4) of the Bankruptcy Code) under Bankruptcy Code Section 1106(b), and such order is not reversed or vacated within three Business Days after the entry thereof; or

 

(iii)                               if the Purchaser Protections Order, the Sale Order, the Purchaser Protections Recognition Order or the Sale Recognition Order has been revoked, rescinded or modified in any material respect and the order revoking, rescinding or modifying such order(s) shall not be reversed or vacated within thirty Business Days after the entry thereof; provided that Purchaser shall have the right to designate any later date for this purpose in its sole discretion.

 

After the Funding Date, this Agreement may not be terminated for any reason other than pursuant to and strictly in compliance with the terms of Section 3.5 hereof.  Any party seeking to invoke its rights to terminate this Agreement shall give written notice thereof to the other party or parties specifying the provision hereof pursuant to which such termination is made

 

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and the effective date of such termination being the date of such notice.  Notwithstanding anything to the contrary contained in this Article VIII, the Sellers shall not be permitted to terminate this Agreement without the prior written consent, which consent shall not be unreasonably withheld, of the Ad Hoc Group of LightSquared LP Lenders, which is comprised of holders, advisors or affiliates of advisors to holders, or managers of various accounts with investment authority, contractual authority or voting authority, of loans made pursuant to that certain Credit Agreement, dated as of October 1, 2010, by and among LightSquared LP, as borrower, LightSquared Inc. and certain of its subsidiaries as guarantors, the lenders from time to time party thereto, and certain other parties (the “LP Lenders”).

 

Section 8.2            Effect of Termination.  If this Agreement is terminated by either party in accordance with and pursuant to Section 8.1, then, except as otherwise provided in Section 8.3 and Section 9.10, all rights and obligations of the parties under this Agreement shall terminate without any liability of any party to any other party; provided, however, that nothing herein shall relieve any party from liability for fraud or willful breach of any provision of this Agreement prior to such termination; provided, further, however, that the provisions of this Article VIII, Article IX or any provision requiring any party to pay or reimburse another party’s expenses shall survive any termination.

 

Section 8.3            Good Faith Deposit; Break-Up Fee; Expense Reimbursement.

 

(a)           Solely in the event that this Agreement is terminated by Sellers pursuant to Section 8.1(d), the Good Faith Deposit shall be paid to Sellers in accordance with a Certificate of Instruction delivered pursuant to the Escrow Agreement.

 

(b)           Except as described in Section 8.3(a), in all other cases under Section 8.1, upon the termination or abandonment of this Agreement by any party, the Good Faith Deposit shall be returned to Purchaser by wire transfer in immediately available funds or applied as Purchaser may in its sole discretion direct the Escrow Agent, in each case without withholding, set-off or deduction and so as to be received not later than two (2) Business Days following the date of such termination or abandonment.

 

(c)           Notwithstanding Section 8.2 of this Agreement: (i) in the event that this Agreement is terminated by either Purchaser or Sellers pursuant to Section 8.1(c), (f) (except as set forth in Section 8.3(c)(ii) below) or (g) of this Agreement, then Purchaser shall have an Allowed Termination Claim equal to the amount of the Expense Reimbursement, and Sellers shall pay the Expense Reimbursement to Purchaser by wire transfer of immediately available funds within three (3) Business Days following such termination; (ii) notwithstanding Section 8.3(c)(i), in the event that this Agreement is terminated by Purchaser pursuant to Section 8.1(f) due to a willful breach by Sellers of their covenants contained in this Agreement, then Purchaser shall have an Allowed Termination Claim equal to the amount of the sum of the Break-Up Fee plus the Expense Reimbursement, and Sellers shall pay the Break-Up Fee plus the Expense Reimbursement to Purchaser by wire transfer of immediately available funds within three (3) Business Days following such termination; and (iii) in the event that this Agreement is terminated by Purchaser or Sellers pursuant to Section 8.1(e) of this Agreement, then Purchaser

 

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shall have an Allowed Termination Claim equal to the amount of the sum of the Break-Up Fee plus the Expense Reimbursement, and Sellers shall pay the Break-Up Fee plus the Expense Reimbursement to Purchaser by wire transfer of immediately available funds within three (3) Business Days following the Bankruptcy Court’s entry of a sale order approving the applicable Alternative Transaction referenced in Section 8.1(e) of this Agreement.  The Break-Up Fee and Expense Reimbursement shall be paid in accordance with the terms and conditions set forth in this Section 8.3 and in the Purchaser Protections Order, and the Sellers’ obligation to pay the Break-Up Fee and Expense Reimbursement shall have such status as is specified in this Section 8.3 and in the Purchaser Protections Order.

 

(d)           The Sellers’ obligation to pay the Breakup Fee and/or the Expense Reimbursement in accordance with this Agreement shall be joint and several, absolute and unconditional and not subject to any defense, claim, counterclaim, offset, recoupment, or reduction of any kind whatsoever and shall not be amended, discharged, expunged or released in any respect pursuant to any Plan.

 

(e)           The parties acknowledge that the agreements contained in this Section 8.3 are an integral part of the transactions contemplated by this Agreement and that without these agreements neither Sellers nor Purchaser would enter into this Agreement.

 

(f)            If Sellers and Purchaser, acting reasonably, agree that any payment of the Good Faith Deposit or any other amount payable under this section is subject to GST/HST or any other applicable provincial sales tax or is deemed by any provision of the Excise Tax Act (Canada) or the corresponding provisions of any applicable provincial statute and any regulation under such statute to be inclusive of such tax or taxes, the party required to make such payment agrees to pay in addition to the payment an amount equal to all GST/HST or any other applicable provincial sales tax payable or deemed to be included in respect of such payment.

 

ARTICLE IX.

 

MISCELLANEOUS

 

Section 9.1            Survival of Covenants, Representations and Warranties.  The representations and warranties set forth in Article IV and Article V shall not survive the Closing Date; provided, however, that all covenants and agreements set forth herein that contemplate or may involve actions to be taken or obligations in effect after the Closing Date (including, for the avoidance of doubt, Sections 3.5(a), 6.2(c), 6.7, 6.8, 6.9, 6.13, 6.14 and 6.15) shall survive the Closing Date.

 

Section 9.2            Amendment and Modification; Waiver.  This Agreement may be amended, modified and supplemented in any and all respects, but only by a written instrument signed by all of the parties hereto expressly stating that such instrument is intended to amend, modify or supplement this Agreement.  Notwithstanding anything to the contrary contained in this Section 9.2, the Sellers shall not be permitted to amend, modify or supplement all or any portion of this Agreement without the LP Lender Consent.  Any of the terms, covenants, representations, warranties or conditions may be waived, only by a written instrument

 

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executed by the party waiving compliance, provided that the Sellers shall not be permitted to waive any of the of the terms, covenants, representations, warranties or conditions of this Agreement without the LP Lender Consent.

 

Section 9.3            Notices.  All notices and other communications hereunder shall be in writing and shall be deemed given when mailed by first-class certified mail, facsimile or sent by an overnight courier service, such as Federal Express, to the parties at the following addresses:

 

if to Purchaser, to:

 

L-Band Acquisition, LLC
 Attn: [                    ]

 

If by overnight courier service:

9601 South Meridian Blvd.
 Englewood, CO 80112

 

If by first-class certified mail:

P.O. Box 6655

Englewood, CO 80155

 

If by facsimile:

Fax: (      )

 

cc: Office of the General Counsel of DISH Network Corporation

 

If by overnight courier service:

9601 South Meridian Blvd.
 Englewood, CO 80112

 

If by first-class certified mail:

P.O. Box 6655

Englewood, CO 80155

 

If by facsimile:

Fax: (303) 723-2050

 

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with an additional copy (which shall not constitute notice) to:

 

Willkie Farr & Gallagher LLP
 787 Seventh Avenue
 New York, NY 10019
 Facsimile:  (212) 728-8111

Attention:     Robert B. Stebbins
 Rachel C. Strickland

 

if to any Seller, to:

 

LightSquared LP
 [450 Park Avenue

Suite 2201

New York, NY 10022]
 Facsimile: [    ]

Attn:              Marc Montagner, Chief Financial Officer]

 

with a copy (which shall not constitute notice) to:

 

Milbank, Tweed, Hadley & McCloy LLP
 One Chase Manhattan Plaza
 New York, NY 10005
 Facsimile: [    ]

Attention:     Matthew S. Barr, Esq.
 Karen Gartenberg, Esq.

 

or to such other address as a party may from time to time designate in writing in accordance with this Section 9.3.  Each notice or other communication given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been received (i) on the Business Day it is sent, if sent by facsimile, or (ii) on the first Business Day after sending, if sent by overnight courier service, or (iii) upon receipt, if sent by first-class certified mail; provided, however, that notice of change of address shall be effective only upon receipt.  The parties agree that delivery of process or other papers in connection with any such action or proceeding in the manner provided in this Section 9.3, or in such other manner as may be permitted by law, shall be valid and sufficient service thereof.

 

Section 9.4            Counterparts.  This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when two or more counterparts have been signed by each of the parties and delivered to the other party.

 

Section 9.5            Entire Agreement; No Third Party Beneficiaries.  This Agreement, the Disclosure Letter and other schedules, annexes, and exhibits hereto, the Ancillary

 

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Agreements, the Conveyance Documents and the Sale Order (i) constitute the entire agreement and supersede all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof and thereof and supersede and cancel all prior agreements, negotiations, correspondence, undertakings, understandings and communications of the parties, oral and written, with respect to the subject matter hereof, and (ii) are not intended to confer upon any Person other than the parties hereto and thereto any rights or remedies hereunder; provided, that the LP Lenders are intended third party beneficiaries of the second to last sentence of Section 7.2, the last sentence of Section 8.1(g), Section 9.2 and this Section 9.5.

 

Section 9.6            Severability.  Any term or provision of this Agreement that is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.  If the final judgment of a court of competent jurisdiction or other authority declares that any term or provision hereof is invalid, void or unenforceable, the parties agree that the court making such determination shall have the power to reduce the scope, duration, area or applicability of the term or provision, to delete specific words or phrases, or to replace any invalid, void or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision.

 

Section 9.7            Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE APPLICABLE PROVISIONS OF THE BANKRUPTCY CODE.

 

Section 9.8            Exclusive Jurisdiction.  If the Bankruptcy Court does not have or declines to exercise subject matter jurisdiction over any action or proceeding arising out of or relating to this Agreement, then each party (i) agrees that all such actions or proceedings shall be heard and determined in federal court of the United States for the Southern District of New York, (ii) irrevocably submits to the jurisdiction of such courts in any such action or proceeding, (iii) consents that any such action or proceeding may be brought in such courts and waives any objection that such party may now or hereafter have to the venue or jurisdiction or that such action or proceeding was brought in an inconvenient court, and (iv) 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 party at its address as provided in Section 9.3 (provided that nothing herein shall affect the right to effect service of process in any other manner permitted by New York law).

 

Section 9.9            Remedies.  Neither the exercise of nor the failure to exercise a right of set-off or to give notice of a claim under this Agreement will constitute an election of remedies or limit Sellers or Purchaser in any manner in the enforcement of any other remedies that may be available to any of them, whether at law or in equity.

 

Section 9.10          Specific Performance.  Sellers and Purchaser hereby acknowledge and agree that any breach of the terms of this Agreement would give rise to irreparable harm for which money damages would not be an adequate remedy, and, accordingly

 

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agree that, in addition to any other remedies, Sellers and Purchaser or their respective successors or assigns shall be entitled to enforce the terms of this Agreement by a decree of specific performance without the necessity of proving the inadequacy of money damages as a remedy and without the necessity of posting a bond.

 

Section 9.11          Assignment.  Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto (whether by operation of law or otherwise) without the prior written consent of the other party.  Any purported assignment in violation of this clause shall be void.  Any permitted assignment by a party of its rights hereunder shall not relieve it of its obligations hereunder.  Subject to the first sentence of this Section 9.11, this Agreement shall be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and permitted assigns.

 

Section 9.12          Headings.  The article, section, paragraph and other headings contained in this Agreement are inserted for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement.

 

Section 9.13          No Consequential or Punitive Damages.  NO PARTY (OR ITS AFFILIATES OR REPRESENTATIVES) SHALL, UNDER ANY CIRCUMSTANCE, BE LIABLE TO THE OTHER PARTY (OR ITS AFFILIATES OR REPRESENTATIVES) FOR ANY CONSEQUENTIAL, EXEMPLARY, SPECIAL, INCIDENTAL OR PUNITIVE DAMAGES CLAIMED BY SUCH OTHER PARTY UNDER THE TERMS OF OR DUE TO ANY BREACH OF THIS AGREEMENT, INCLUDING LOSS OF REVENUE OR INCOME, DAMAGES BASED ON ANY MULTIPLIER OF PROFITS OR OTHER VALUATION METRIC, COST OF CAPITAL, DIMINUTION OF VALUE OR LOSS OF BUSINESS REPUTATION OR OPPORTUNITY.

 

Section 9.14          Definitions.  For all purposes of this Agreement, except as otherwise expressly provided or unless the context clearly requires otherwise:

 

“Accounts Receivable” means any and all trade accounts, notes and other receivables and indebtedness for borrowed money or overdue accounts receivable, in each case owing to any Seller and all claims relating thereto or arising therefrom including GST/HST included in Accounts Receivable.

 

“Acquired Assets” has the meaning set forth in Section 2.1.

 

“Actions” has the meaning set forth in Section 2.1(v).

 

“Advance Ruling Certificate” means an advance ruling certificate issued by the Commissioner of Competition pursuant to section 102 of the Competition Act with respect to the transactions contemplated by this Agreement.

 

“Affiliate” has the meaning set forth in Rule 12b-2 of the Exchange Act; provided that, for the avoidance of doubt, each of Parent, Mr. Charles Ergen, DISH Network Corporation, EchoStar Corporation and their respective Affiliates shall be deemed “Affiliates” of Purchaser..

 

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“Agreement” or “this Agreement” means this Purchase Agreement, together with the Exhibits hereto and the exhibits and schedules thereto and the Disclosure Letter.

 

“Allocation Statement” has the meaning set forth in Section 2.5(c)

 

“Allowed Termination Claim” means a claim (as such term is defined in section 101(5) of the Bankruptcy Code), which:  (i) shall be entitled to administrative expense status under sections 503(b)(1)(A) and 507(a)(2) of the Bankruptcy Code; (ii) shall not be subordinate to any other administrative expense claim against the Sellers (other than the carve-outs for professional fees and expenses set forth in the Cash Collateral Order); and (iii) shall survive the termination of the Purchase Agreement.

 

“Alternative Sale” has the meaning set forth in Section 3.5(b)(i).

 

“Alternative Sale Notice” has the meaning set forth in Section 3.5(b)(i).

 

“Alternative Sale Obligations” has the meaning set forth in Section 3.5(a).

 

“Alternative Sale Procedures” means those processes and obligations triggered by Purchaser’s delivery of notice of an Alternative Sale under Section 3.5(b) as determined pursuant to Exhibit B, and as the parties may agree.

 

“Alternative Transaction” means (i) any investment in, financing of, capital contribution or loan to, or restructuring or recapitalization of all or any portion of Sellers (including, without limitation, any exchange of Sellers’ outstanding debt obligations for equity securities of Sellers), (ii) any merger, consolidation, share exchange or other similar transaction to which Sellers are a party, (iii) any sale of all or substantially all of the Acquired Assets of, or any issuance, sale or transfer of any equity interests in, Sellers, (iv) any other transaction that transfers ownership of, economic rights to, or benefits in all or a substantial portion of the Acquired Assets, or (v) any chapter 11 plan of reorganization or liquidation for any Seller other than the Plan; provided that, notwithstanding the foregoing, any plan of reorganization or liquidation which (x) contemplates the consummation of the Transactions or (y) does not apply to any Seller shall not be deemed an Alternative Transaction.

 

“Ancillary Agreements” means the Escrow Agreement and all exhibits and appendices thereto.

 

“Applicable Law” means any law, regulation, rule, order, judgment, guideline or decree to which the Business, any Acquired Asset, or any Seller is subject.

 

“Arrangement” has the meaning set forth in Section 3.5(a).

 

“Assets” means assets, properties, rights, interests, claims, contracts, and businesses of every kind, type, character and description, whether tangible or intangible, whether real, personal or mixed, whether accrued, contingent, liquidated or unliquidated, whether owned, leased or licensed and wherever located, and all rents, issues, profits, royalties, entitlements, products and proceeds of any of the foregoing.

 

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“Assumed Liabilities” has the meaning set forth in Section 2.3(a).

 

“Assumed Permitted Liens” means, (i) with respect to Real Property (a) zoning laws and other land use restrictions that do not materially impair the present use or occupancy of the property subject thereto; and (b) defects, easement rights of way, restrictions, covenants, claims or other similar charges, that would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect on the use, title, value or possession of such Real Property; and (ii) other Permitted Liens, if any, as may be expressly designated by Purchaser in its sole and absolute discretion by written notice delivered to Sellers at least two Business Days’ prior to the Funding.

 

“Audited Financial Statements” has the meaning set forth in Section 4.2(a).

 

“Avoidance Action” means any claim, right or cause of action of Sellers arising under sections 544 through 553 of the Bankruptcy Code, except for any such actions (i) against Purchaser or any of its Affiliates (all such claims to be released at Funding); (ii) related to Designated Contracts; or (iii) in connection with any setoffs related to Acquired Assets.

 

“Back-Up Bidder” has the meaning set forth in the Purchaser Protections Order.

 

“Balance Sheet” has the meaning set forth in Section 4.2(b).

 

“Bankruptcy Cases” has the meaning set forth in the recitals hereof.

 

“Bankruptcy Code” has the meaning set forth in the recitals hereof.

 

“Bankruptcy Court” has the meaning set forth in the recitals hereof.

 

“Bankruptcy Rules” means the Federal Rules of Bankruptcy Procedure.

 

“Bill of Sale” means the bill of sale substantially in the form attached as Exhibit C hereto.

 

“Break-Up Fee” means cash in an amount equal to 3% of the Purchase Price.

 

“Business” has the meaning set forth in the recitals hereof.

 

“Business Day” means any day other than a Saturday, Sunday or a day on which banks in New York are authorized or obligated by Applicable Law or executive order to close or are otherwise generally closed.

 

“Canada Pension Plan” means the retirement pension plan sponsored by the Government of Canada.

 

“Canadian Court” has the meaning set forth in the recitals hereof.

 

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“Canadian Plan” means all plans, arrangements, programs, policies, undertakings, whether formal or informal, funded or unfunded, insured or uninsured, registered or unregistered to which any Seller is a party to or bound by or in which the Canadian employees or former Canadian employees of any Seller participate or under which any Seller has, or will have, any liability or contingent liability or, pursuant to which payments are made, or benefits are provided to, or an entitlement to payments or benefits may arise with respect to any Canadian employees or former Canadian employees of any Seller, or Canadian directors, officers or individuals working on contract with any Seller (or any spouses, dependents, survivors or beneficiaries of any such persons), relating to retirement savings, pensions, supplemental pensions, bonuses, profit sharing, deferred compensation, incentive compensation, equity or unit based compensation, life or accident insurance, hospitalization, health , medical or dental treatment or expenses, disability, unemployment insurance benefits, employee loans, vacation pay, fringe benefits, severance or termination pay or other benefit plan, other than any Canadian Union Plan, or the Canada Pension Plan, the Quebec Pension Plan or other such plan created by an Applicable Law or administered by a Governmental Entity.

 

“Canadian Sellers” means SkyTerra Holdings (Canada) Inc., an Ontario corporation, and SkyTerra (Canada) Inc., an Ontario corporation, and LightSquared Corp., a Nova Scotia unlimited liability company.

 

“Canadian Union Plans” mean all pension and other benefit plans for the benefit of Canadian employees or former Canadian employees of any Seller, which are not maintained, sponsored or administered by a Seller but to which any Seller is or was required to contribute pursuant to a collective agreement or participation agreement.

 

“Cash and Cash Equivalents” means (a) cash; (b) marketable direct obligations issued by, or unconditionally guaranteed by, the United States government or issued by any agency thereof, maturing within one (1) year from the date of issuance; (c) certificates of deposit, time deposits, eurodollar time deposits, deposit accounts or overnight bank deposits having maturities of six months or less from the date of acquisition issued by any commercial bank; (d) commercial paper of an issuer and maturing within six (6) months from the date of acquisition; (e)  securities with maturities of one (1) year or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, by any political subdivision or taxing authority of any such state, commonwealth or territory or by any non-United States government, the securities of which state, commonwealth, territory, political subdivision, taxing authority or non-United States government (as the case may be); (f) eurodollar time deposits having a maturity not in excess of 180 days to final maturity; (g) any other investment in United States Dollars which has no more than 180 days to final maturity; or (h) shares of money market mutual or similar funds which invest exclusively in assets satisfying the requirements of clauses (a) through (g) of this definition.

 

“Cash Collateral Order” means that certain Amended Agreed Final Order (A) Authorizing Debtors to Use Cash Collateral, (B) Granting Adequate Protection to Prepetition Secured Parties, and (C) Modifying Automatic Stay [Docket No. 544], or any subsequent cash collateral or financing order entered by the Bankruptcy Court applying to any of the Sellers.

 

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“CCAA” has the meaning set forth in the recitals hereof.

 

“CCAA Recognition Proceeding” has the meaning set forth in the recitals hereof.

 

“Claim” has the meaning assigned to such term under Section 101(5) of the Bankruptcy Code.

 

“Closing” means the consummation of all transactions contemplated in this Agreement or, at Purchaser’s or Sellers’ election, the consummation of an Alternative Sale in accordance with Section 3.5.

 

“Closing Date” has the meaning set forth in Section 3.1(c).

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Commissioner of Competition” means the Commissioner of Competition appointed pursuant to the Competition Act or a person designated or authorized pursuant to the Competition Act to exercise the powers and perform the duties of the Commissioner of Competition.

 

“Communications Laws” means the Communications Act of 1934, as amended, the Telecommunications Act of 1996, as amended, and/or any rule, regulation, decision or published policy of the FCC or its staff acting pursuant to delegated authority, and the Radiocommunication Act (Canada), as amended, and the Telecommunications Act (Canada), as amended, and all rules, regulations, orders, and published decisions promulgated thereunder by Industry Canada and the Canadian Radio-television and Telecommunications Commission (or any successor agency thereto) and any applicable communications laws or regulations of any other Governmental Entity.

 

“Communications Licenses” has the meaning set forth in Section 4.16(a).

 

“Company Earth Station” means any material Tracking, Telemetry, Command and Monitoring and transmitting and/or receiving teleport earth station facility on real property that is either owned in fee or leased by any Seller, except for earth stations facilities (i) hosted by any Seller for Third Parties and (ii) for which no Seller is liable for instances of interference.

 

“Company Satellite” means a satellite owned by any Seller or any of their respective Subsidiaries as of the date of this Agreement, including without limitation MSAT-1, MSAT-2, SkyTerra-1 and SkyTerra-2 and any satellite work in progress.

 

“Competition Act” means the Competition Act (Canada), as amended.

 

“Competition Act Approval” means:

 

(i)            the issuance of an Advance Ruling Certificate and such Advance Ruling Certificate has not been rescinded prior to Closing; or

 

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(ii)           both of (A) the waiting period, including any extension thereof, under section 123 of the Competition Act shall have expired or been terminated or the obligation to provide a pre-merger notification in accordance with Part IX of the Competition Act shall have been waived in accordance with paragraph 113(c) of the Competition Act, and (B) Purchaser has been advised in writing by the Commissioner of Competition that, in effect, such person does not, at that time, intend to make an application under section 92 of the Competition Act in respect of the transactions contemplated by this Agreement, and any terms and conditions attached to any such advice are acceptable to Purchaser, in its reasonable discretion, and such advice has not been rescinded or amended prior to Closing.

 

“Competition Tribunal” means the Competition Tribunal established under the Competition Tribunal Act (Canada).

 

“Concession Agreement” means any concession agreement that any Seller has entered into, as of the date hereof, with the ITU sponsoring administrations that permits any Seller to operate Company Satellites pursuant to the ITU filings of such administrations.

 

“Contract” means any written agreement, contract, lease, license, consensual obligation, promise or undertaking.

 

“Controlled Goods Directorate” means the Canadian federal agency responsible for administering registrations made pursuant to Section 38 of the Defence Production Act (R.S.C., 1985, c.D-1) and the regulations made thereunder, including any successor agency or department thereto, and including all staff acting under delegated authority in relation thereto.

 

“Controlled Goods Directorate Consent” means any and all registration(s) with the Minister of Public Works and Government Services Canada, including with the Controlled Goods Directorate, in accordance with Section 38, or any exemption in accordance with Section 39.1, of the Defence Production Act (Canada) and the regulations made thereunder, necessary in order to consummate the Transactions, where such registration(s) or exemption, as applicable, are in full force and effect and have not been reconsidered, vacated or set aside, and no petition for reconsideration or review has been filed and the time period to do so has elapsed, and where such registration(s) or exemption, as applicable, are not subject to any conditions deemed unacceptable in Purchaser’s sole discretion.

 

“Conveyance Documents” means (a) the Bill of Sale; (b) the Intellectual Property Instruments; (c) all documents of title and instruments of conveyance necessary to Transfer record and/or beneficial ownership to Purchaser of Acquired Assets composed of automobiles, trucks, or other vehicles, trailers, and any other property owned by any Seller which requires execution, endorsement and/or delivery of a certificate of title or other document in order to vest record or beneficial ownership thereof in Purchaser; and (d) all such other documents of title, customary title insurance affidavits, deeds, endorsements, assignments and other instruments of conveyance or Transfer as are necessary to vest in Purchaser good and marketable title to any Acquired Assets.

 

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“Coordination Agreement” means any intersystem coordination agreement (whether formal or informal) entered into by any ITU sponsoring administration related to the Company Satellites or the Spectrum, including without limitation that certain agreement between ITU sponsoring administrations related to the use of the L-band frequencies known as the Mexico City Memorandum of Understanding and any spectrum sharing agreement reached thereunder or pursuant thereto either between or among the parties thereto and/or satellite operators, and any other relevant multilateral or bilateral agreements.

 

“Copyrights” means any non-United States or United States copyright registrations and applications for registration thereof, and any nonregistered copyrights, all content and information contained on any website, “mask works” (as defined under 17 U.S.C. § 901) and any registrations and applications for “mask works.”

 

“CRTC” means the Canadian Radio-television and Telecommunications Commission or any successor agency thereto.

 

“Cure Amounts” has the meaning set forth in Section 6.12.

 

“Debtors” has the meaning set forth in the recitals hereof.

 

“Defence Production Act (Canada)” means the Defence Production Act (R.S.C., 1985, c. D-1), as amended.

 

“Defined Benefit Plan” means a Canadian Plan which is a “registered pension plan” under the Income Tax Act (Canada)  and contains a “defined benefit provision” as defined in subsection 14.7(1) of the Income Tax Act (Canada).

 

“Designated Contracts” has the meaning set forth in Section 2.1(b).

 

“Disclosure Letter” means the disclosure letter of even date herewith prepared and signed by Sellers and delivered to Purchaser simultaneously with the execution hereof.

 

“Effective Date” has the meaning set forth in the Plan.

 

“Employee Benefit Plans” means all bonus, deferred compensation, pension, retirement, profit-sharing, thrift, savings, employee stock ownership, stock bonus, stock purchase, restricted stock and stock option plans, employment, termination, change-in-control or severance contracts, health and medical insurance plans, life insurance and disability insurance plans, other employee benefit plans, contracts or arrangements which cover employees or former employees of any Seller, including “employee benefit plans” within the meaning of Section 3(3) of ERISA, other than any Canadian Plans or Canadian Union Plans or the Canada Pension Plan, the Québec Pension Plan or other such plan created by an Applicable Law or administered by a Governmental Entity.

 

“Employee” means any employee of the Sellers as of the Closing Date, as identified on Section 4.14 of the Disclosure Letter.  Sellers shall update Section 4.14 of the

 

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Disclosure Letter  periodically to reflect new hires, terminations and the commencement of approved leaves of absence.

 

“Employee Obligation Amount” has the meaning set forth in Section 2.5(b)(v).

 

“Employee Obligations” has the meaning set forth in Section 2.3.

 

“Environmental Laws” means United States federal, state, local and non-United States laws, permits and governmental agreements and requirements of Governmental Entities relating to human health, safety and the environment, including, but not limited to, Hazardous Materials.

 

“Equipment” has the meaning set forth in Section 2.1(j).

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

“ERISA Affiliate” has the meaning set forth in Section 4.15(a).

 

“Escrow Account” has the meaning specified for the term in the Escrow Agreement.

 

“Escrow Agent” has the meaning specified for the term in the Escrow Agreement.

 

“Escrow Agreement” means an agreement between Purchaser, Sellers and Escrow Agent in substantially the form attached as Exhibit D hereto.

 

“Excess Cure Amounts” has the meaning set forth in Section [2.5(a)].

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Exclusivity Stipulation” means that certain Stipulation Between Parties in Interest Regarding Entry of Order Pursuant to 11 U.S.C. § 1121(d) Further Extending LightSquared’s Exclusive Periods to File a Plan of Reorganization and Solicit Acceptances Thereof, which was approved by the Bankruptcy Court on February 13, 2013 [Docket No. 522]

 

“Expense Reimbursement” means all reasonable costs and expenses of Purchaser incurred in connection with the negotiation, documentation, execution and delivery of this Agreement, and the consummation of the Transactions, including, without limitation, reasonable costs and expenses of the Purchaser’s counsel [and financial advisors]; provided, however, that the aggregate amount of the Expense Reimbursement shall not exceed $[2,000,000].

 

“Export Control Authorizations” means any and all licenses and approvals required in connection with the Transactions for the lawful conduct of the Business following the Closing Date in substantially the same manner as conducted as of the date of this Agreement pursuant to the Export Control Laws as administered by the relevant U.S. Governmental Entities, including the Department of Commerce Bureau of Industry Security, the United States

 

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Department of State Directorate of Defense Trade Controls and Department of Treasury Office of Foreign Assets Control.

 

“Export Control Laws” means the Arms Export Control Act (22 U.S.C. § 2778 et seq.), as amended, the Export Administration Act (50 U.S.C. App. §§ 2401 et seq.), as amended and continued in force by presidential order, any international sanctions programs promulgated under the International Emergency Economic Powers Act (50 U.S.C. §§ 1701-1706), the National Emergencies Act (50 U.S.C. §§ 1601-1651), the Trading With the Enemy Act (50 U.S.C. App. §§ 5, 16), additional international sanctions programs administered by the Department of Treasury Office of Foreign Assets Control and any other regulations promulgated under each such act.

 

“FCC” means the Federal Communications Commission or any successor agency thereto.

 

“FCC Consent” means an order, orders, or public notice of the FCC (or its staff acting pursuant to delegated authority) consenting or confirming the consent, to the Transfer of control and/or assignment of Permits from Sellers to Purchaser (including any related agreements with the United States Department of Justice, the United States Department of Homeland Security, and the Federal Bureau of Investigation regarding national security, law enforcement, defense or public safety issues or other government agencies with regard to shared use of the relevant Spectrum required in connection with such prior approval of the FCC) (a) that is in full force and effect and (b) that has either (i) not been reconsidered, vacated or set aside on appeal, reconsideration, or review and (ii) all applicable periods for appeal, reconsideration, or review of such orders, or of an order on review of such orders, have elapsed, and no appeal or petition for reconsideration or review has been filed, and no reconsideration by the FCC sua sponte has occurred, and (c) that is not subject to conditions deemed unacceptable in Purchaser’s reasonable discretion; provided, however, that, in Purchaser’s sole judgment, an order shall qualify as an FCC Consent even though one or more of the requirements of (b)(i) and (b)(ii) have not been satisfied.

 

“FCC Licenses” has the meaning set forth in Section 4.6.

 

“Final Instruction” has the meaning specified for the term in the Escrow Agreement.

 

“Final Order” means an order or judgment of the Bankruptcy Court, the Canadian Court or other court of competent jurisdiction, the implementation or operation or effect of which has not been stayed, and as to which the time to appeal or petition for certiorari, has expired and as to which no appeal or petition for certiorari, shall then be pending or in the event that an appeal or writ of certiorari thereof has been sought, such appeal or petition for certiorari shall have been denied by the highest court to which such order was appealed, or certiorari was sought, and the time to take any further appeal or petition for certiorari shall have expired.

 

“Funding” means the consummation of the transactions contemplated hereby except the Transfer of the Acquired Assets.

 

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“Funding Date” has the meaning set forth in Section 3.1(b).

 

“Funding Date Consideration” has the meaning set forth in Section 2.5(a).

 

“Funding Date Payment” has the meaning set forth in Section 2.5(a).

 

“GAAP” means United States generally accepted accounting principles, Canadian generally accepted accounting principles or international financial reporting standards, as may be applicable, and as consistently applied.

 

“Good Faith Deposit” has the meaning set forth in Section 2.5(b)(i).

 

“Governmental Entity” means any national, federal, state, municipal, local, provincial, territorial, government or any department, commission, board, bureau, agency, regulatory authority or instrumentality thereof, or any court, judicial, administrative or arbitral body or public or private tribunal, including any United States, Canadian or other such entity anywhere in the world.

 

“GST/HST” means goods and services tax or harmonized sales tax payable under Part IX of the Excise Tax Act (Canada) and any regulation under such statute.

 

“Guaranteed Obligations” has the meaning set forth in Section 6.18.

 

“Hazardous Material” means all substances or materials regulated as hazardous, toxic, explosive, dangerous, flammable or radioactive under any Environmental Law including, but not limited to: (i) petroleum, asbestos, or polychlorinated biphenyls; and (ii) all substances defined as Hazardous Substances, Oils, Pollutants or Contaminants in the National Oil and Hazardous Substances Pollution Contingency Plan or that are identified as hazardous substances under Health Canada’s Workplace Hazardous Materials Information System.

 

“Historical Financial Statements” has the meaning set forth in Section 4.2(b).

 

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended.

 

“Immediate Family Member” shall, with respect to any Person that is a natural person, mean any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law of such Person.

 

“Income Tax Act” means the Income Tax Act (Canada), as amended.

 

“Indebtedness” means, at any time and with respect to any Person: (a) all indebtedness of such Person for borrowed money; (b) all indebtedness of such Person for the deferred purchase price of property or services (other than trade payables, other expense accruals and deferred compensation items arising in the ordinary course of business, consistent with past practice); (c) all obligations of such Person evidenced by notes, bonds, debentures or other similar instruments (other than performance, surety and appeal bonds arising in the ordinary

 

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course of business in respect of which such Person’s liability remains contingent); (d) all indebtedness of such Person created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property); (e) all obligations of such Person under leases which have been or should be, in accordance with GAAP, recorded as capital leases, to the extent required to be so recorded; (f) all reimbursement, payment or similar obligations of such Person, contingent or otherwise, under acceptance, letter of credit or similar facilities; (g) all Indebtedness of others referred to in clauses (a) through (f) above guaranteed directly or indirectly by such Person, or in effect guaranteed directly or indirectly by such Person through an agreement (i) to pay or purchase such Indebtedness or to advance or supply funds for the payment or purchase of such Indebtedness, (ii) to purchase, sell or lease (as lessee or lessor) property, or to purchase or sell services, primarily for the purpose of enabling the debtor to make payment of such Indebtedness, (iii) to supply funds to or in any other manner invest in the debtor (including any agreement to pay for property or services irrespective of whether such property is received or such services are rendered) or (iv) otherwise to assure a creditor against loss in respect of such Indebtedness; and (h) all Indebtedness referred to in clauses (a) through (g) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in property (including accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness.

 

“Independent Person” means any individual that is not, has never been, and has no Immediate Family Member that has ever been, affiliated with any of the Sellers, Successor Sellers, Purchaser or any of their respective Affiliates as an employee, officer, director, manager, advisor or otherwise.

 

“Industry Canada” means the Canadian federal Department of Industry, or any successor or any department or agency thereof, administering the Radiocommunication Act (Canada), among other statutes, including its staff acting under delegated authority, and includes the Minister of Industry (Canada) and the Commissioner of Competition (Canada).

 

“Industry Canada Approval” means the prior approval of Industry Canada in respect of the transfer of control of the Canadian Sellers and/or the Transfer of the Industry Canada Licenses from Sellers to Purchaser, pursuant to the terms and conditions set out in the Industry Canada Licenses, provided that such approval (a) is in full force and effect and (b) has either (i) not been reconsidered, vacated or set aside on appeal, reconsideration, or review and (ii) all applicable periods for appeal, reconsideration, or review of such approval have elapsed, and no appeal or petition for reconsideration or review has been filed, and no reconsideration by Industry Canada sua sponte has occurred, and (c) that is not subject to conditions deemed unacceptable in Purchaser’s reasonable discretion; provided, however, that, in Purchaser’s sole judgment, an approval shall qualify as an Industry Canada Approval even though one or more of the requirements of (b)(i) and (b)(ii) have not been satisfied.

 

“Industry Canada Consent” includes the Industry Canada Approval and, if required, the Investment Canada Approval and the Competition Act Approval.

 

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“Industry Canada Licenses” means the Industry Canada licenses and authorizations held by Sellers listed on Section 2.1(h) of the Disclosure Letter.

 

“Inmarsat Cooperation Agreement” means that certain Amended and Restated Cooperation Agreement, dated as of August 6, 2010, by and between LightSquared LP, SkyTerra (Canada) Inc., LightSquared Inc. and Inmarsat Global Limited, as amended, supplemented, amended and restated or otherwise modified from time to time.

 

“Inmarsat Side Letter” means the letter agreement to be entered into by LightSquared LP, SkyTerra (Canada) Inc., LightSquared Inc. and Purchaser prior to the Funding Date, substantially in the form attached as Exhibit H hereto, pursuant to which, among other things, LightSquared Inc. shall consent to the assignment to Purchaser, subject to and effective upon the Closing, of all of LightSquared Inc.’s right, title, and interest in, and obligations under, the Inmarsat Cooperation Agreement.

 

“Instrument of Assumption” means the instrument of assumption substantially in the form attached as Exhibit E hereto.

 

“Intellectual Property” means Trademarks; Patents; Copyrights; Software; rights of publicity and privacy relating to the use of the names, likenesses, voices, signatures and biographical information of real persons; inventions (whether or not patentable), discoveries, improvements, ideas, know-how, formulae, methodologies, research and development, business methods, processes, technology, interpretive code or source code, object or executable code, libraries, development documentation, compilers (other than commercially available compilers), programming tools, drawings, specifications and data, and applications or grants in any jurisdiction pertaining to the foregoing, including re-issues, continuations, divisions, continuations-in-part, reexaminations, renewals and extensions; trade secrets, including confidential information and the right in any jurisdiction to limit the use or disclosure thereof; database rights; Internet websites, web pages, domain names and applications and registrations pertaining thereto and all intellectual property used in connection with or contained in websites; all rights under agreements relating to the foregoing; all books and records pertaining to the foregoing, and claims or causes of action arising out of or related to past, present or future infringement or misappropriation of the foregoing; in each case used in or necessary for the conduct of Sellers’ businesses as currently conducted.

 

“Intellectual Property Instruments” means instruments of Transfer, in form suitable for recording in the appropriate office or bureau, effecting the Transfer of the Copyrights, Trademarks and Patents owned or held by Sellers.

 

“Intercompany Receivables” means any and all amounts that are owed (i) by any direct or indirect Subsidiary or Affiliate of any Seller to any Seller, or (ii) from one Seller to another, in each case pursuant to bona fide obligations, and all claims relating thereto or arising therefrom.

 

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“Interests” means all liens, claims, interests, encumbrances, rights, remedies, restrictions, liabilities and contractual commitments of any kind or nature whatsoever, whether arising before or after the petition date in the Bankruptcy Cases, whether at law or in equity.

 

“Inventory” has the meaning set forth in Section 2.1(f).

 

“Investment” means shares of stock (other than shares of stock in Subsidiaries), notes, bonds, debentures, options and other securities but not including Cash and Cash Equivalents.

 

“Investment Bank” means a national or international investment bank of recognized standing acceptable to Sellers and Purchaser or, if Sellers and Purchasers cannot agree, then one of two such institutions proposed by Purchaser with the final selection from the two to be made by Sellers.

 

“Investment Canada Act” means the Investment Canada Act (Canada), as amended.

 

“Investment Canada Approval” means, if required under the Investment Canada Act, that the Minister of Industry has approved or shall be deemed to have approved the transactions contemplated by this Agreement pursuant to the Investment Canada Act on terms and conditions acceptable to Purchaser in its reasonable discretion.

 

“Investment Canada Filing” has the meaning set forth in Section 6.3(e).

 

“IRS” means the United States Internal Revenue Service.

 

“ITU” means the International Telecommunications Union.

 

“Knowledge” as applied to each Seller, means the actual knowledge of each person listed on Section 9.15(a) of the Disclosure Letter, after due inquiry; and “knowledge” as applied to Purchaser, means the actual knowledge of each person listed under “Purchaser” in Section 9.15(a) of the Disclosure Letter, after due inquiry.

 

“Leased Real Property” means the leasehold interests held by Sellers under the Real Property Leases.

 

“License Agreements” has the meaning set forth in Section 4.7(b).

 

“Lien” means, with respect to any asset, any mortgage or deed of trust, pledge, hypothecation, assignment, deposit arrangement, lien, charge, claim, security interest, easement or encumbrance, or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including any lease or title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, and the filing of, or agreement to give, any financing statement perfecting a security interest under the Uniform Commercial Code as in effect from time to time in the State of New York or comparable law of

 

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any jurisdiction) and, in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

 

“LP Lender Consent” shall mean the prior written consent of the majority in interest of LP Lenders, which consent shall not be unreasonably withheld.

 

“LP Lenders” shall mean the Ad Hoc Group of LightSquared LP Lenders (which is comprised of holders, advisors or affiliates of advisors to holders, or managers of various accounts with investment authority, contractual authority or voting authority, of loans made pursuant to that certain Credit Agreement, dated as of October 1, 2010, by and among LightSquared LP, as borrower, LightSquared Inc. and certain of its subsidiaries as guarantors, the lenders from time to time party thereto, and certain other parties) other than the Purchaser, Parent, SP Special Opportunities, LLC or any of their Affiliates.

 

“Material Adverse Effect” means any change, effect, event or condition that has had or would reasonably be expected to have (i) a material adverse effect on the assets, operations, results of operations or condition (financial or otherwise) of the Business or the Acquired Assets or (ii) a material adverse effect on the ability of Sellers to consummate the Transactions; it being understood and agreed that any Material Satellite Event shall constitute a Material Adverse Effect; provided that the following shall not constitute a Material Adverse Effect and shall not be taken into account in determining whether or not there has been or would reasonably be expected to be a Material Adverse Effect: (A) changes in general economic conditions or securities or financial markets in general that do not have a disproportionate effect on the Business (relative to the effect on other Persons operating in the same industry as Sellers), (B) changes in the industry in which Sellers operate and that do not specifically relate to, or have a disproportionate effect on, the Business (relative to the effect on other Persons operating in the same industry as Sellers), (C) changes in Applicable Law or interpretations thereof by any Governmental Entity that do not have a disproportionate effect on the Business (relative to the effect on other Persons operating in the same industry as Sellers), (D) any outbreak or escalation of hostilities or war (whether declared or not declared) or any act of terrorism that does not have a disproportionate effect on the Business (relative to the effect on other Persons operating in the same industry as Sellers), (E) changes to the extent resulting from the announcement or the existence of, or compliance with, this Agreement and the Transactions (including without limitation any lawsuit related thereto), the impact on relationships with suppliers, customers, employees or others and any action or anticipated action by the FCC or Industry Canada as a result of this Agreement and/or the Transactions, (F) any changes in accounting regulations or principles that does not have a disproportionate effect on the Business (relative to the effect on other Persons operating in the same industry as Sellers), (G) any change in the market price or trading volumes of Sellers (it being understood for the purposes of this subclause (G) that any facts underlying such change that are not otherwise covered by the immediately preceding clauses (A) through (F) may be taken into account in determining whether or not there has been a Material Adverse Effect), and (H) any changes resulting from actions of Sellers expressly agreed to or requested in writing by Purchaser.

 

“Material Contract” has the meaning set forth in Section 4.8.

 

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“Material Satellite Event” means with respect to MSAT-1, MSAT-2, SkyTerra-1 and SkyTerra-2, as applicable, (A) a Total Loss or (B) a Partial Loss.

 

“Mobile Satellite System” has the meaning set forth in Section 2.1(h).

 

“MSAT-1” means the first-generation satellite MSAT-1 and its components.

 

“MSAT-2” means the second-generation satellite MSAT-2 and its components.

 

“New Governing Body” has the meaning set forth in Section 3.5(c)(ii).

 

“Nonassignable Asset” has the meaning set forth in Section 3.4.

 

“Nonassignable Designated Contract” has the meaning set forth in Section 6.12.

 

“Non-Assumed Liabilities” has the meaning set forth in Section 2.4.

 

“Operating Budget” means the budget annexed hereto as Exhibit G, as may be amended from time to time with the consent of Purchaser.

 

“Owned Intellectual Property” has the meaning set forth in Section 4.7(e).

 

“Partial Loss” means a reduction of 10% or more to Throughput Capacity as compared to the agreed operating Satellite Performance Specifications of MSAT-1, MSAT-2, SkyTerra-1 or SkyTerra-2, as applicable, for any reason, including by reason of a System Failure.

 

“Patents” means all patents, patent applications and non-United States counterparts thereof, and industrial designs (including any continuations, divisionals, continuations-in-part, renewals, reissues, and applications for any of the foregoing).

 

“Permits” means permits, certificates, licenses, filings, approvals and other authorizations of any Governmental Entity, including, without limitation, the FCC Licenses and Industry Canada Licenses and any Coordination Agreements.

 

“Permitted Liens” means (i) zoning laws and other land use restrictions that do not materially impair the present use or occupancy of the property subject thereto, (ii) any statutory Liens imposed by law for material Taxes that are not yet due and payable, or that a Seller is contesting in good faith in proper proceedings and which are set forth on Section 9.16(b) of the Disclosure Letter, (iii) any mechanics’, workmen’s, repairmen’s, warehousemen’s, carriers’ or other similar Liens arising in the ordinary course of business, consistent with past practice or being contested in good faith, and (iv) with respect to any Real Property, any defects, easement rights of way, restrictions, covenants, claims or other similar charges, that would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect on the use, title, value or possession of such Real Property.

 

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“Person” means any individual, sole proprietorship, partnership, limited liability company, joint venture, trust, incorporated organization, association, corporation, institution, public benefit corporation, Governmental Entity or other entity.

 

“Plan” has the meaning set forth in the recitals hereto.

 

“Provincial Sales Tax Laws” means the sales, consumption or use laws of the Provinces of Manitoba, Saskatchewan, British Columbia or any province of territory of Canada that enacts, prior to the Closing Date, a sales, use or consumption tax similar to such provinces.

 

“Purchase Price” has the meaning set forth in Section 2.5(a).

 

“Purchaser” has the meaning set forth in the preamble hereof.

 

“Purchaser Alternative Sale Notice” has the meaning set forth in Section 3.5(b)(i).

 

“Purchaser Material Adverse Effect” means a material adverse effect on the business, assets, operations, results of operations or financial condition of Purchaser or on Purchaser’s ability to consummate the Transactions or delay the same in any material respect.

 

“Purchaser Protections Order” means an order of the Bankruptcy Court (together with all exhibits thereto), in form and substance acceptable to Purchaser in its sole discretion: (a) approving the payment of the Break-Up Fee on the terms and conditions set forth in Section 8.3 of this Agreement; (b) approving the Expense Reimbursement on the terms and conditions set forth in Section 8.3 of this Agreement; (c) requiring the initial bid by each party at any auction for the sale of the Acquired Assets to be payable in cash; and (d) requiring the minimum initial overbid at any auction for the sale of the Acquired Assets to exceed the Purchase Price by the sum of (i) the maximum amount of the Expense Reimbursement plus (ii) the amount of the Break-Up Fee plus (iii) $[50,000,000].

 

“Purchaser Protections Recognition Order” means an Order of the Canadian Court, in form and in substance satisfactory to the Purchaser in its sole discretion, inter alia, recognizing the entry of the Purchaser Protections Order in Canada.

 

“Quebec Pension Plan” means the retirement pension plan sponsored by the Province of Quebec.

 

“Real Property” means all real property that is owned or used by any Seller or that is reflected as an Asset of any Seller on the Balance Sheet.

 

“Real Property Leases” means the real property leases to which any Seller is a party as described in Section 2.1(b).

 

“Regulatory Approvals” means those sanctions, rulings, consents, orders, exemptions, permits and other approvals (including the lapse, without objection, of a prescribed time under a statute or regulation that states that a transaction may be implemented if a prescribed time lapses following the giving of notice without an objection being made), waivers,

 

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early termination authorizations, clearances or written confirmation of no intention to initiate legal proceedings from Governmental Entities as required and as set out in Section 4.6 of the Disclosure Letter.

 

“Required Contracts” shall mean, collectively, (i) Inmarsat Cooperation Agreement and (ii) [Boeing contract].

 

“Retained Assets” has the meaning set forth in Section 2.2.

 

“Rights” means, with respect to any Person, securities or obligations convertible into or exercisable or exchangeable for, or giving any other Person any right to subscribe for or acquire, or any options, calls, warrants, performance awards, units, dividend equivalent awards, deferred rights, “phantom” stock or other equity or equity-based rights or commitments relating to, or any stock appreciation right or other instrument the value of which is determined in whole or in part by reference to the market price of or value for or which has the right to vote with, shares of capital stock or other voting securities or equity interests of such first Person.

 

“Sale Hearing” means a hearing under sections 363, 365 and 1123(a)(5) of the Bankruptcy Code to obtain the approval by the Bankruptcy Court of the sale of the Acquired Assets to Purchaser and of the Transactions, which hearing may also be the hearing regarding confirmation of the Plan.

 

“Sale Order” means an order of the Bankruptcy Court in the form attached as Exhibit F hereto, or otherwise in form and substance satisfactory to Purchaser in its sole discretion, approving the Agreement and authorizing and directing the Sellers to consummate the Transactions under sections 105, 363 and 365 of the Bankruptcy Code, which order may also be an order confirming the Plan.

 

“Sale Recognition Order” means an Order of the Canadian Court, in form and substance satisfactory to Purchaser in its sole discretion, inter alia, recognizing the entry of the Sale Order (which may also be an order recognizing the Bankruptcy Court’s confirmation of the Plan) and vesting in the Purchaser all of the Sellers’ right, title and interest in and to the Acquired Assets that are owned, controlled, regulated or situated in Canada, free and clear of all Seller Liabilities, Claims, Interests and Liens (other than those in favor of the Purchaser created under this Agreement and/or any Ancillary Agreement, the Assumed Permitted Liens, if any, and the Assumed Liabilities).

 

“Satellite Performance Specifications” of a satellite means the performance specifications as set forth in the construction contract for such satellite.

 

“Securities Act” has the meaning set forth in Section 5.9.

 

“Seller” and “Sellers” each has the meaning set forth in the preamble hereof.

 

“Seller Alternative Sale Notice” has the meaning set forth in Section 3.5(b)(i).

 

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“Seller Liabilities”  means all Indebtedness, Claims, Liens, demands, expenses, commitments and obligations (whether accrued or not, known or unknown, disclosed or undisclosed, matured or unmatured, fixed or contingent, asserted or unasserted, liquidated or unliquidated, arising prior to, at or after the commencement of the Bankruptcy Cases) of or against any Seller or any of the Acquired Assets.

 

“Seller Permits” has the meaning set forth in Section 4.12(c).

 

“Seller Successor” has the meaning set forth in Section 3.5(a).

 

“SkyTerra-1” means the first-generation satellite SkyTerra-1 and its components.

 

“SkyTerra-2” means the second-generation satellite SkyTerra-2 and its components.

 

“Software” means any and all (a) computer programs, including any and all software implementation of algorithms, models and methodologies, whether in source code or object code form, (b) computerized databases and compilations, including any and all data and collections of data, and (c) all documentation, including user manuals and training materials, relating to any of the foregoing.

 

“Specified Regulatory Approvals” means the FCC Consent and the Industry Canada Approval and “Specified Regulatory Approval” means any of them.

 

“Spectrum” means any radio frequencies that any Seller has any right, title, or interest in, including the radio frequencies that are the subject of any FCC License or Industry Canada License.

 

“Straddle Period Property Tax” has the meaning set forth in Section 6.9(d).

 

“Subsidiary” means, with respect to any Person, any corporation, association trust, limited liability company, partnership, joint venture or other business association or entity (i) at least 50% of the outstanding voting securities of which are at the time owned or controlled directly or indirectly by such Person or (ii) with respect to which such Person possesses, directly or indirectly, the power to direct or cause the direction of the affairs or management.

 

“System Equipment” has the meaning set forth in Section 2.1(j).

 

“System Failure” means the failure of any component that supports the overall power supply, operation, and/or maneuverability of a satellite, including solar arrays, momentum wheels, earth sensors, thrusters, propulsion systems, traveling wave tube amplifiers, low noise amplifiers, and other similar equipment.

 

“Tax” or “Taxes” means any and all United States federal, state, local or non-United States, federal, provincial or municipal taxes, fees, levies, duties, tariffs, imposts, and other similar charges on or with respect to net income, alternative or add-on minimum, gross income, gross receipts, sales, use, ad valorem, franchise, capital, paid-up capital, profits, license,

 

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withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, environmental, or windfall profit tax, customs duties, value added or other tax, governmental fee or other like assessment or charge of any kind whatsoever, together with any interest or any penalty, addition to tax or additional amount imposed by any Governmental Entity responsible for the imposition of any such tax.

 

“Tax Authority” means any Governmental Entity with responsibility for, and competent to impose, collect or administer, any form of Tax.

 

“Tax Return” means any return, claim, election, information return, declaration, report, statement, schedule, or other document required to be filed in respect of Taxes and amended Tax Returns and claims for refund.

 

“Termination Date” has the meaning set forth in Section 8.1(c).

 

“Third Party” means any Person other than Sellers, Purchaser or any of their respective Affiliates.

 

“Third Party Deposits” has the meaning set forth in Section 2.1(p).

 

“Throughput Capacity” means the rate at which MSAT-1, MSAT-2, SkyTerra-1 or SkyTerra-2, as applicable, is downlinking data at a particular point in time, expressed in megabits per second.

 

“Total Loss” means the loss of all or substantially all Throughput Capacity for any reason, including by reason of a System Failure.

 

“Trademarks” means any trademarks, service marks, trade names, corporate names, Internet domain names, designs, trade dress, product configurations, logos, slogans, and general intangibles of like nature, together with all translations, adaptations, derivations and combinations thereof, all goodwill, registrations and applications in any jurisdiction pertaining to the foregoing.

 

“Transactions” means all the transactions provided for or contemplated by this Agreement and/or the Ancillary Agreements.

 

“Transfer” means sell, convey, assign, transfer and deliver, and “Transferable” shall have a corollary meaning.

 

“Transfer Taxes” means all goods and services, harmonized sales, excise, sales, use, transfer, stamp, stamp duty, recording, value added, gross receipts, documentary, filing, and all other similar Taxes or duties, fees  or other like charges, however denominated (including any real property transfer taxes and conveyance and recording fees and notarial fees), in each case including interest, penalties or additions attributable thereto whether or not disputed and for greater certainty includes GST/HST and any other Canadian federal or provincial sales or excise taxes, arising out of or in connection with the Transactions, regardless of whether the Governmental Entity seeks to collect the Transfer Tax from Sellers or Purchasers.

 

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“Transferred Employee” has the meaning set forth in Section 6.7(b).

 

“Unaudited Financial Statements” has the meaning set forth in Section 4.2(b).

 

“WARN” has the meaning set forth in Section 6.7(e).

 

“WARN Obligations” has the meaning set forth in Section 6.7(e).

 

Section 9.15                             Bulk Transfer Notices.  Sellers and Purchaser hereby waive compliance with any bulk transfer provisions of the Uniform Commercial Code (or any similar Applicable Law), to the extent not repealed in any applicable jurisdiction, in connection with this Agreement and the Transactions.

 

Section 9.16                             Interpretation.

 

(a)                                 When a reference is made in this Agreement to a Section, Article, subsection, paragraph, item or Exhibit, such reference shall be to a Section, Article, subsection, paragraph, item or Exhibit of this Agreement unless clearly indicated to the contrary.

 

(b)                                 Whenever the words “include,” “includes” or “including” are used in this Agreement they shall be deemed to be followed by the words “without limitation.”

 

(c)                                  The words “hereof,” “herein” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement.

 

(d)                                 The meaning assigned to each term defined herein shall be equally applicable to both the singular and the plural forms of such term, and words denoting any gender shall include all genders.  Where a word or phrase is defined herein, each of its other grammatical forms shall have a corresponding meaning.

 

(e)                                  A reference to any party to this Agreement or any other agreement or document shall include such party’s predecessors, successors and permitted assigns.

 

(f)                                   A reference to any legislation or to any provision of any legislation shall include any amendment to, and any modification or re-enactment thereof, any legislative provision substituted therefore and all regulations and statutory instruments issued thereunder or pursuant thereto.

 

(g)                                  References to $ are to United States Dollars.

 

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(h)                                 The parties have participated jointly in the negotiation and drafting of this Agreement.  In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement.

 

Section 9.17                             Parent.

 

(a)                                 Parent agrees to take all action necessary to cause Purchaser to perform all of its agreements, covenants and obligations under this Agreement that arise prior to the Closing Date.  Parent unconditionally guarantees to Sellers the full and complete performance by Purchaser of its obligations under this Agreement with respect to payment of the Purchase Price.  This is a guarantee of payment and performance and not of collectability.  Parent hereby waives diligence, presentment, demand of performance, filing of any claim, any right to require any proceeding first against Purchaser, protest, notice and all demands whatsoever in connection with the performance of its obligations set forth in this Section 9.17.

 

(b)                                 Parent hereby expressly acknowledges and agrees to be bound by the following provisions of this Agreement: Section 9.3 (Notices), Section 9.4 (Counterparts), Section 9.6 (Severability),  Section 9.7 (Governing Law), Section 9.8 (Exclusive Jurisdiction), Section 9.9 (Remedies), Section 9.10 (Specific Performance), the first sentence of  Section 9.11 (Assignment), Section 9.12 (Headings), Section 9.16 (Interpretation) and Section 9.17 (Parent).

 

(c)                                  Parent shall be entitled to withhold from any amount payable pursuant to this Section 9.17, such amounts as Parent is required to deduct and withhold with respect to the making of such payment under any provision of applicable federal, state, local or foreign Tax law.  To the extent that amounts are so withheld and paid over to the appropriate Tax Authority by Parent, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to Sellers.

 

[Remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, Purchaser and Sellers have executed this Agreement or caused this Agreement to be executed by their respective officers thereunto duly authorized as of the date first written above.

 

	
 
    	
SELLERS:
    
	
 
    	
 
    
	
 
    	
LIGHTSQUARED LP
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
ATC TECHNOLOGIES, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
LIGHTSQUARED   CORP.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
LIGHTSQUARED   INC. OF VIRGINIA
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

[Signature Pages to Purchase Agreement]

 

 

	
 
    	
LIGHTSQUARED SUBSIDIARY LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
LIGHTSQUARED FINANCE CO.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
LIGHTSQUARED NETWORK LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
LIGHTSQUARED BERMUDA LTD.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

[Signature Pages to Purchase Agreement]

 

 

	
 
    	
SKYTERRA HOLDINGS (CANADA) INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
SKYTERRA (CANADA) INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
PURCHASER:
    
	
 
    	
 
    
	
 
    	
L-BAND ACQUISITION, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
PARENT:
    
	
 
    	
 
    
	
 
    	
[                          ]   (solely for the purposes of Section 9.17)
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

[Signature Pages to Purchase Agreement]

 

 

Exhibit A

 

Form of Release

 

 

Exhibit B

 

Alternative Sale Procedures

 

These Procedures will be utilized by Sellers and Purchaser in the marketing for an Alternative Sale.

 

Purchaser and Sellers shall agree on the selection of an investment bank (“Investment Bank”) to market the Alternative Sale.  If Purchaser and Sellers are unable to agree, Purchaser shall provide Sellers with the names of at least two nationally recognized investment banks and Sellers shall select an investment bank from the list provided by Purchaser to market the Alternative Sale.  The Investment Bank selected to market the Alternative Sale shall be directed to identify bona fide and potential Third Party purchasers for the Alternative Sale.  All fees, expenses and indemnities due to the Investment Bank under its engagement letter shall be paid for by Purchaser to the extent that Purchaser reviews and approves in writing the engagement letter terms, it being understood that Sellers will not be required to engage an Investment Bank until Purchaser approves an engagement letter.  In addition, and to the extent requested and prepaid by Purchaser, Sellers shall engage such other accountants, advisors and other professionals as may be necessary to market the Alternative Sale.  For the avoidance of doubt, Sellers shall not be responsible for any costs associated with or incurred in connection with the Alternative Sale process, all of which costs shall be solely borne by Purchaser.

 

Sellers shall make themselves, their management team and their advisors available to the Investment Bank during the sale process and shall assist the Investment Bank by providing marketing materials in customary form subject to customary indemnities in favor of Sellers for liabilities they may incur in doing so, provided Purchaser reviews and approves in writing the marketing materials and marketing process.  Sellers shall not be required to provide any cooperation without receipt of such indemnity and reasonable compensation with regard thereto.  Sellers shall further assist the Investment Bank by providing potential purchasers with reasonable access to due diligence information and Sellers’ management team and advisors.  For the avoidance of doubt, Purchaser hereby acknowledges and agrees that during the process of seeking an Alternative Sale, neither Sellers nor the Boards of Directors (or comparable governing body, including any New Governing Body) of any of the Sellers shall have any obligations, fiduciary or otherwise to Purchaser, other than as set forth in this Agreement.

 

At Purchaser’s election, the Alternative Sale may include all or any portion of the Acquired Assets.

 

Notwithstanding anything to the contrary in this Exhibit B, at Purchaser’s election, Purchaser may pursue an Alternative Sale and dispose of any of the Acquired Assets through any spectrum auction processes that may be established by the U.S. Congress or by the FCC.

 

 

Exhibit C

 

Form of Bill of Sale

 

 

Exhibit D

 

Form of Escrow Agreement

 

 

Exhibit E

 

Form of Instrument of Assumption

 

 

Exhibit F

 

Form of Sale Order

 

 

Exhibit G

 

Operating Budget

 

 

Exhibit H

 

Inmarsat Side Letter

 

 

EXHIBIT C

 

MILESTONES

 

1.              The Plan Sponsors shall file the Plan, Disclosure Statement, each in form and substance satisfactory to the Plan Sponsors, on July 23, 2013.

 

2.              The Plan Sponsors shall file motions for approval of the Bid Procedures and the Disclosure Statement, each in form and substance acceptable to the Plan Sponsors, on or before 12:00 p.m. (Eastern time) on July 29, 2013.

 

3.              No later than September 20, 2013, the Purchase Agreement shall be in a form that is (a) acceptable to the Plan Sponsors and the Stalking Horse Bidder and (b) substantially complete such that, if a seller accepted the form, it would be capable of execution; provided, however, that for the avoidance of doubt, satisfaction of this Milestone shall not require the actual acceptance of or agreement to such form by any non-Party, including the Debtors or their affiliates.

 

4.              The Plan Sponsors shall obtain the entry of the Disclosure Statement Order, in form and substance acceptable to the Plan Sponsors, on or before September 20, 2013, and the Canadian Court shall have entered an order in the CCAA Recognition Proceeding, in form and substance acceptable to the Plan Sponsors and the Stalking Horse Bidder, recognizing the Bankruptcy Court’s entry of the Disclosure Statement Order, no later than seven (7) days after entry of the Disclosure Statement Order.

 

5.              The Plan Sponsors shall obtain the entry of the Bid Procedures Order, in form and substance acceptable to the Plan Sponsors and the Stalking Horse Bidder, on or before September 20, 2013, and the Canadian Court shall have entered an order in the CCAA Recognition Proceeding, in form and substance acceptable to the Plan Sponsors and the Stalking Horse Bidder, recognizing the Bankruptcy Court’s entry of the Bid Procedures Order, no later than seven (7) days after entry of the Bid Procedures Order.

 

6.              All applicable deadlines established by the Bid Procedures Order shall have been satisfied, unless waived by the Stalking Horse Bidder.

 

7.              The Plan Sponsors shall obtain the entry of the Confirmation Order, including all exhibits, appendices and related documents, each in form and substance acceptable to the Plan Sponsors (and, to the extent the Confirmation Order approves an LP Sale to the Stalking Horse Bidder, the Stalking Horse Bidder), on or before December 6, 2013, and the Canadian Court shall have entered an order in the CCAA Recognition Proceeding, in form and substance acceptable to the Plan Sponsors (and, to the extent the Confirmation Order approves an LP Sale to the Stalking Horse Bidder, the Stalking Horse Bidder), recognizing the Bankruptcy Court’s entry of the Confirmation Order, no later than seven (7) days after entry of the Confirmation Order.

 

8.              The Plan shall be consummated on or before December 31, 2013.

 

 

EXHIBIT D

 

BID PROCEDURES

 

 

BID PROCEDURES

 

Set forth below are the procedures (the “Bid Procedures”) to be employed in connection with the proposed auction and sale of substantially all of the assets (the “LP Assets”) of LightSquared LP (“LSLP”), ATC Technologies, LLC, LightSquared Corp., LightSquared Inc. of Virginia, LightSquared Subsidiary LLC, LightSquared Finance Co., LightSquared Network LLC, LightSquared Bermuda Ltd., Skyterra Holdings (Canada) Inc., and SkyTerra (Canada) Inc. (collectively, the “Debtors”), including the Acquired Assets (as defined below).  Reference is made to that certain Purchase Agreement, dated [          ], 2013 (including any related ancillary agreements, the “Stalking Horse Agreement”), by and between the Sellers, L-Band Acquisition, LLC (“Stalking Horse Bidder”) and, as to certain provisions, DISH Network Corporation (the “Parent Entity”).  Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Stalking Horse Agreement.

 

a.                                      Assets to Be Sold.  The LP Assets will be offered for sale (the “Sale”) pursuant to a joint chapter 11 plan for the Debtors (the “Plan”) proposed by the Plan Sponsors (as defined in the Plan).  The Stalking Horse Agreement provides for the sale and acquisition of certain assets specified in Section 2.1 of the Stalking Horse Agreement (the “Acquired Assets”).

 

b.                                      The Bidding Process. The Ad Hoc Group exclusive of SPSO(1) (the “Independent Ad Hoc Group”) together with their advisors, in consultation with the Debtors, shall: (i) determine whether any person is a Potential Bidder (as defined below); (ii) coordinate the efforts of Potential Bidders in conducting their respective due diligence investigations regarding the Debtors’ businesses; (iii) receive offers from Qualified Bidders (as defined below); and (iv) negotiate any offer made to purchase the LP Assets together or separately by a Qualified Bidder (collectively, the “Bidding Process”).

 

c.                                       Due Diligence for Potential Bidders.   The Debtors shall be directed to provide each Potential Bidder reasonable due diligence information upon reasonable request.  Neither the Debtors nor any of their affiliates (nor any of their respective representatives) are obligated to furnish any information relating to the LP Assets to any person except to Potential Bidders prior to the Bid Deadline (as defined below).  Potential Bidders are advised to exercise their own discretion before relying on any information regarding the LP Assets, whether provided by the Debtors or their representatives or any other party.  The due diligence period will end on the Bid Deadline.  To be a “Potential Bidder”, each bidder (other than the Stalking Horse Bidder):

 

i.                                          must have delivered an executed confidentiality agreement in form and substance satisfactory to the Independent Ad Hoc Group, in consultation with the Debtors, which confidentiality agreement, is no less restrictive to

 

(1)         The “Ad Hoc Group” means that certain ad hoc group of holders of loans made pursuant to that certain Credit Agreement, dated as of October 1, 2010, by and among LSLP as borrower, certain of LSLP’s affiliates (including, but not limited to, the other Sellers) as guarantors, the lenders party thereto, UBS AG, Stamford Branch, as administrative agent, and UBS Securities LLC, as arranger, syndication agent and documentation, as such group may be reconstituted from time to time (as amended, restated, supplemented and/or modified, the “LP Credit Agreement”).  “SPSO” means SP Special Opportunities, LLC.

 

 

the Potential Bidder than the confidentiality agreement that has been or will be executed by the Stalking Horse Bidder;

 

ii.                                       must have delivered the most current audited and the most current unaudited financial statements (collectively, the “Financials”) of the Potential Bidder, or, if the Potential Bidder is an entity formed for the purpose of acquiring the LP Assets, the Financials of the Potential Bidder’s equity holder(s) or other financial backer(s), or such other form of financial disclosure and evidence acceptable to the Independent Ad Hoc Group, in consultation with the Debtors, demonstrating such Potential Bidder’s financial ability to: (i) close the proposed transaction contemplated by the Stalking Horse Agreement (the “Proposed Transaction”); and (ii) provide adequate assurance of future performance to counterparties to any executory contracts and unexpired leases to be assumed by the Debtors and assigned to the Potential Bidder; provided that if a Potential Bidder is unable to provide Financials, the Independent Ad Hoc Group, in consultation with the Debtors, may, accept such other information sufficient to demonstrate to the Independent Ad Hoc Group’s reasonable satisfaction that such Potential Bidder has the financial wherewithal and ability to consummate the Proposed Transaction; and

 

iii.                                    shall comply with all reasonable requests for additional information by the Independent Ad Hoc Group, in consultation with the Debtors, or the Independent Ad Hoc Group’s advisors, regarding such Potential Bidder’s financial wherewithal and ability to consummate and perform obligations in connection with the Sale.  Failure by a Potential Bidder to comply with requests for additional information may be a basis for the Independent Ad Hoc Group, in consultation with the Debtors, to determine that a bid made by such Potential Bidder is not a Qualified Bid (as defined below).

 

d.                                      Participation Requirements.  Unless otherwise ordered by the Bankruptcy Court, for cause shown, or as otherwise determined by the Independent Ad Hoc Group, in consultation with the Debtors, in order to participate in the Bidding Process each person that is a Potential Bidder (a “Qualified Bidder”) must submit a bid that adheres to the requirements below (a “Qualified Bid”).  Notwithstanding anything in these Bid Procedures to the contrary, the Stalking Horse Bidder is deemed to be a Qualified Bidder, and (i) the Stalking Horse Bid (as defined below) shall  (A) be deemed a Qualified Bid for all purposes and (B) be deemed to have complied with the requirements herein, and (ii) the Stalking Horse Bidder shall not be required to take any further action in order to participate at the Auction (if any) or, if the Stalking Horse Bidder is the Successful Bidder (defined below), to be named the Successful Bidder at the hearing to confirm the Plan (the “Confirmation Hearing”).  Nothing in these Bid Procedures shall prohibit Harbinger Capital Partners LLC and its affiliates from submitting a Qualified Bid.

 

i.                                          Qualified Bidders must deliver written copies of their bids not later than 5:00 p.m. (prevailing Eastern Time) on [                  ], 2013 (the “Bid Deadline”) to: (i) Milbank, Tweed, Hadley & McCloy LLP, One Chase

 

 

Manhattan Plaza, New York, NY 10005 (Attn: Matthew S. Barr, Esq. and Karen Gartenberg, Esq.), counsel to the Debtors; (ii) the United States Trustee for the Southern District of New York, Office of the United States Trustee, U.S. Federal Office Building, 201 Varick Street, Room 1006, New York, NY 10014 (Attn: Susan D. Golden, Esq.); (iii) Willkie Farr & Gallagher LLP, 787 7th Avenue, New York, New York 10019-6099 (Attn: Rachel C. Strickland, Esq. and Andrew D. Sorkin, Esq.), counsel to the Stalking Horse Bidder; (iv) White & Case LLP, 1155 Avenue of the Americas, New York, NY 10036 (Attn: Thomas E. Lauria, Esq. and Andrew C. Ambruoso, Esq.), counsel to the Ad Hoc Group (collectively, the “Notice Parties”).

 

ii.                                       All Qualified Bids must be in the form of an offer letter, which letter states:

 

(A)                               that such Qualified Bidder offers to purchase the LP Assets upon terms and conditions substantially similar to the Stalking Horse Agreement pursuant to an asset purchase agreement (together with its exhibits and schedules, and any ancillary agreements related thereto, the “Proposed Agreement”), three copies of which (one hard copy executed by an individual authorized to bind such Qualified Bidder and two electronic versions in Word format (one clean and one blacklined against the Stalking Horse Agreement to show amendments and modifications to the Stalking Horse Agreement)), are to be provided to the Notice Parties therewith;

 

(B)                               that such Qualified Bidder is prepared to consummate the transaction set forth in the Proposed Agreement promptly following (i) entry of an order of this Court confirming the Plan and approving the Sale to the Successful Bidder (as defined below) (the “Confirmation Order”) and (ii) receipt of other requisite governmental and regulatory approvals on the terms set forth in the Stalking Horse Agreement;

 

(C)                               that the offer shall remain open and irrevocable as provided below; and

 

(D)                               which of the Debtors’ leases and executory contracts are to be assumed and assigned in connection with the consummation of the Qualified Bidder’s bid.

 

iii.                                    All Qualified Bids shall be accompanied by a deposit into escrow with the Debtors of an amount in cash equal to $100,000,000 (the “Good Faith Deposit”).

 

 

iv.                                   Qualified Bids may provide for forms of consideration that include cash or a combination of cash and other distributable forms of consideration that may be distributed under the Plan (for the avoidance of doubt, other than with respect to assumed liabilities), which shall be delivered to the Debtors on the Closing Date; provided, however, that a Qualified Bid must include a minimum cash component sufficient to pay the amounts set forth in section (d)(v) below plus all distributions under the Plan that are required to be made in cash, including, without limitation, all amounts necessary to fund the Wind Down Reserve and Disputed Claims Reserves (each as defined in the Plan).

 

v.                                      All Qualified Bids must exceed the aggregate consideration to be paid to or for the benefit of the Debtors’ estates as set forth in the Stalking Horse Bid by at least $118,600,000 (the “Minimum Purchase Price”), which represents the sum of: (i) the break-up fee payable to the Stalking Horse under the Stalking Horse Agreement, i.e., $66,600,000 (the “Break-Up Fee”); (ii) the maximum expense reimbursement payable to the Stalking Horse Bidder under the Stalking Horse Agreement, i.e., $2,000,000 (the “Expense Reimbursement,” and together with the Break-Up Fee, the “Bid Protections”); and (iii) $50,000,000, the minimum overbid increment at the Auction (defined below).

 

vi.                                   All Qualified Bids shall be accompanied by satisfactory evidence, in the opinion of the Independent Ad Hoc Group, in consultation with the Debtors, of the Qualified Bidder’s ability to: (a) fund the purchase price proposed by the Qualified Bidder with cash on hand (or sources of immediately available funds that are not conditioned on third party approvals or other commitments) or other distributable forms of consideration that may be distributed under the Plan, and (b) otherwise perform all transactions contemplated by the Proposed Agreement.

 

vii.                                All Qualified Bids must provide for funding of all payments required under the Plan.

 

viii.                             All Qualified Bids must fully disclose the identity of each entity that will be bidding for the LP Assets or otherwise participating in connection with such bid (including any equity holder or other financial backer if the Qualified Bidder is an entity formed for the purpose of acquiring the LP Assets), and the complete terms of any such participation, as well as whether each such person or entity holds an interest in another mobile satellite service provider and, if so, the name of the mobile satellite service provider and the nature and size of the interest, provided, that the Debtors and the Independent Ad Hoc Group will keep such information confidential and will not disclose such information without the written consent of the applicable Potential Bidder.  Further, each bid must provide sufficient information regarding both the Potential Bidder and any participants (and each of their ultimate controlling persons, if any) to

 

 

permit the Debtors and the Independent Ad Hoc Group to ascertain whether a petition for declaratory ruling to permit indirect foreign ownership of the Debtors’ Federal Communications Commission (“FCC”) licenses (or the applicable Debtors owning such licenses) must be filed with the FCC.

 

ix.                                   Qualified Bids cannot contain conditions or contingencies of any kind relating to the outcome of due diligence.  A Qualified Bid cannot provide that receipt of FCC or Industry Canada approval is a condition to funding of the purchase price thereunder (i.e., all Qualified Bids must provide for Early Funding (as defined below)).

 

x.                                      Qualified Bids must contain evidence that the Qualified Bidder has obtained authorization or approval from its Board of Directors (or comparable governing body) with respect to the submission of its bid and execution of the Proposed Agreement and the consummation of the transactions contemplated thereby.

 

xi.                                   Qualified Bids must not entitle the Qualified Bidder to any termination or break-up fee, expense reimbursement or similar type of payment.

 

xii.                                Qualified Bids must be irrevocable until entry by the Bankruptcy Court of the Confirmation Order (unless chosen as the Successful Bid or Second-Highest Bid (each as defined below), in which case such bid shall be irrevocable on the terms set forth in section (i) below).

 

Pursuant to the terms and conditions of this section (d), the Independent Ad Hoc Group, after consultation with the Debtors, shall notify the Qualified Bidders by the second day prior to the commencement of the Auction, of the Independent Ad Hoc Group’s, after consultation with the Debtors, determination of, and the identity of, the Qualified Bidders.  The Independent Ad Hoc Group, after consultation with the Debtors, shall notify the Qualified Bidders of the Qualified Bid it believes to represent the then highest or otherwise best bid (the “Starting Qualified Bid”).  No later than two (2) calendar days prior to the commencement of the Auction, the Independent Ad Hoc Groups shall distribute copies of the Starting Qualified Bid and all other Qualified Bids to each Qualified Bidder.

 

e.                                       “As Is, Where Is.”  The sale of the LP Assets shall be on an “as is, where is” basis, “with all faults,” and without representations or warranties (express or implied) of any kind, nature, or description by the Debtors, their agents or estates, except to the extent set forth in the Stalking Horse Agreement or the Proposed Agreement of the Successful Bidder.  Except as otherwise provided in the Stalking Horse Agreement or the Proposed Agreement of the Successful Bidder, all of the Debtors’ right, title and interest in and to the LP Assets shall be sold pursuant to the Plan free and clear of all liens, claims, charges, security interests, restrictions and other encumbrances of any kind or nature thereon and there against (collectively, the “Liens”), with such Liens to be satisfied in accordance with the Plan.  Each bidder (except for the Stalking Horse Bidder (whose

 

 

acknowledgments and representations are contained in the Stalking Horse Agreement)), shall be deemed to acknowledge and represent that it has relied solely upon its own independent review, investigation and/or inspection of any documents and/or LP Assets in making its bid, and that it did not rely upon any written or oral statements, representations, promises, warranties or guaranties whatsoever, whether express, implied, by operation of law or otherwise, regarding the LP Assets or the completeness of any information provided in connection with the bidding process, in each case except as expressly stated in the Stalking Horse Agreement or the Proposed Agreement, as applicable.

 

f.                                        Stalking Horse.  The Stalking Horse Bidder has submitted a Qualified Bid of:  (i) cash in the amount of $2.22 billion; plus (ii) the value of employee obligations assumed by the Stalking Horse Bidder; plus (iii) Excess Cure Amounts; plus (iv) assumption by the Stalking Horse Bidder of certain liabilities specifically designated in the Stalking Horse Agreement as assumed liabilities, which Qualified Bid shall serve as a stalking horse bid (the “Stalking Horse Bid”).  In addition, the Stalking Horse Bid provides that receipt of the FCC Consent and Industry Canada Approval is not a condition precedent for the funding of the cash purchase price payable thereunder (the “Early Funding”).

 

g.                                       Auction.  Except as otherwise set forth in section (d) hereof, if the Independent Ad Hoc Group receives a Qualified Bid other than the Stalking Horse Bid prior to the Bid Deadline, the Independent Ad Hoc Group shall conduct an auction (the “Auction”) at the offices of White & Case LLP, 1155 Avenue of the Americas, New York, NY 10036 on [              ], 2013 beginning at [ ]:00 [ _ ].m. (prevailing Eastern Time), or such other place (located in New York City) and time as the Independent Ad Hoc Group, after consultation with the Debtors, shall notify all Qualified Bidders and other invitees.  If no Qualified Bids are received other than the Stalking Horse Bid, no Auction will take place and the Plan Sponsors shall request that the Bankruptcy Court approve the Sale to the Stalking Horse Bidder at the Confirmation Hearing.  Only representatives of the Stalking Horse Bidder, the Debtors, the United States Trustee, the Ad Hoc Group and any Qualified Bidders who have timely submitted Qualified Bids shall be entitled to attend the Auction.  The Independent Ad Hoc Group, after consultation with the Debtors, may announce at the Auction additional procedural rules that are reasonable under the circumstances (e.g., the amount of time allotted to make overbids) for conducting the Auction, so long as such rules are not inconsistent with these Bid Procedures, including that bids may be required to be made and received in one room, on an open basis, with all other Qualified Bidders entitled to be present for all bidding.  Based upon the terms of the Qualified Bids received, the number of Qualified Bidders participating in the Auction, and such other information as the Independent Ad Hoc Group, after consultation with the Debtors, determines is relevant, the Independent Ad Hoc Group, after consultation with the Debtors, may conduct the Auction in the manner they determine will achieve the maximum value for the LP Assets.  Bidding at the Auction will be transcribed or videotaped.

 

·                                          Only a Qualified Bidder (including the Stalking Horse Bidder) and its authorized representatives who have submitted a Qualified Bid will be eligible to participate at the Auction.  The bidding at the Auction shall

 

 

start at the purchase price stated in the Starting Qualified Bid as disclosed to all Qualified Bidders prior to commencement of the Auction.  Subsequent overbids shall be made in minimum increments of $50,000,000.

 

·                                          During the course of the Auction, the Independent Ad Hoc Group, after consultation with the Debtors, shall, after the submission of each Qualified Bid, promptly inform each participant which Qualified Bid reflects the highest or otherwise best offer (the “Leading Bid”).  To the extent that such Qualified Bid has been determined to be the highest or otherwise best offer entirely or in part because of the addition, deletion or modification of a provision or provisions in the Stalking Horse Agreement or the applicable Proposed Agreement, other than a provision or provisions related to an increase in the cash purchase price, the Independent Ad Hoc Group, after consultation with the Debtors, shall advise each participant of the value ascribed (as determined by the Independent Ad Hoc Group, after consultation with the Debtors) to any such added, deleted or modified provision or provisions.

 

·                                          Each Qualified Bidder participating at the Auction will be required to confirm that: (i) it has not engaged in any collusion with respect to the bidding or the Sale and (ii) its Qualified Bid is a good faith bona fide offer and it intends to consummate the Proposed Transaction if selected as the Successful Bidder.

 

·                                          The Auction may be adjourned to any date the Independent Ad Hoc Group, after consultation with the Debtors, deems appropriate; provided, that notwithstanding the foregoing, the Auction may not be adjourned to a date that is after December 3, 2013.  Reasonable notice of any such adjournment and the time and place (which shall be in New York City) for the resumption of the Auction shall be given to the Stalking Horse Bidder, all other Qualified Bidders who have timely submitted Qualified Bids and the United States Trustee.

 

·                                          The Independent Ad Hoc Group, after consultation with the Debtors, shall not close the Auction until all Qualified Bidders have been given a reasonable opportunity to submit an overbid at the Auction to the then-existing highest or otherwise best bid, as determined by the Independent Ad Hoc Group, after consultation with the Debtors.

 

h.                                      Acceptance of Qualified Bids.  At the conclusion of the Auction, (i) the successful bid shall be the bid made in accordance with that order of the Bankruptcy Court approving these Bid Procedures (the “Approval Order”) that represents, in the Independent Ad Hoc Group’s discretion, after consultation with the Debtors, the highest or otherwise best offer for the LP Assets (the “Successful Bid”, and the Qualified Bidder who submitted the Successful Bid, the “Successful Bidder”); and (ii) the Independent Ad Hoc Group, after

 

 

consultation with the Debtors, shall announce the identity of the Successful Bidder.  There shall be no further bidding after the conclusion of the Auction.

 

The Debtors’ acceptance of the Successful Bid is conditioned solely upon approval by the Bankruptcy Court of the Successful Bid and the entry of the Confirmation Order.

 

Subject to the Approval Order, if the final bid of the Stalking Horse Bidder is not the Successful Bid, the Break-Up Fee and Expense Reimbursement shall be paid as described in the Stalking Horse Agreement.

 

i.                                          Irrevocability of Certain Bids.  The Successful Bid shall remain irrevocable in accordance with the terms of the purchase agreement executed by the Successful Bidder; provided, that (i) the last bid of the bidder (the “Second-Highest Bidder”) that submits the next highest or otherwise best bid (the “Second-Highest Bid”) at the Auction shall be subject to the terms of such Second-Highest Bidder’s purchase agreement, irrevocable until the earlier of: (a) thirty (30) days after entry of the Confirmation Order approving the Successful Bid; and (b) the date on which the Debtors receive the purchase price in connection with the Successful Bid or the Second-Highest Bid (the “Outside Back-up Date”), and (ii) subject to the terms of such Second-Highest Bidder’s purchase agreement, the Good Faith Deposit of the Second-Highest Bidder shall be returned within two (2) business days of the Outside Back-up Date; provided further, that the Stalking Horse shall have no obligation to serve as the Second-Highest Bidder (and its bid shall not be irrevocable under this section (i)), but the Stalking Horse may serve as the Second-Highest Bidder at its option.  The identity of the Second-Highest Bidder and the amount and material terms of the Second-Highest Bid shall be announced by the Debtors at the same time the Debtors announce the identity of the Successful Bidder.  Following the entry of the Confirmation Order, if the Successful Bidder fails to consummate the Sale because of a breach or failure to perform on the part of the Successful Bidder, the Second-Highest Bidder will be deemed to be the Successful Bidder (and the Second-Highest Bid the Successful Bid), and the Debtors will be authorized and directed to consummate the Sale with the Second-Highest Bidder without further order of the Bankruptcy Court.  In such case, the defaulting Successful Bidder’s Good Faith Deposit shall be forfeited to the Debtors and the Debtors shall have the right to seek any and all other remedies and damages from the defaulting Successful Bidder subject to the terms of, and the limitations and restrictions set forth in, the Proposed Agreement or the Stalking Horse Agreement (as the case may be) of the Successful Bidder.

 

j.                                         Return of Good Faith Deposit. Except as otherwise provided in this paragraph with respect to any Successful Bid and the Second-Highest Bid, if any, the Good Faith Deposits of all Qualified Bidders shall be returned upon or within two (2) business days after the closing of the Auction.  The Good Faith Deposit of the Successful Bidder shall be held until the closing of the Sale and applied in accordance with the Successful Bid.  The Good Faith Deposit of the Second-Highest Bidder shall be returned as set forth in section (i) above.

 

k.                                      Modifications. At or before the Confirmation Hearing, consistent with the purposes of these Bid Procedures to obtain the highest or otherwise best offer for the LP Assets, the

 

 

Independent Ad Hoc Group, after consultation with the Debtors, may impose such other terms and conditions as they may determine to be in the best interests of the Debtors’ estates and creditors.

 

l.                                          Reservation of Rights.  The Independent Ad Hoc Group, after consultation with the Debtors, may (i) determine which Qualified Bid, if any, is the highest or otherwise best offer and (ii) reject at any time before entry of the Confirmation Order approving a Qualified Bid, any bid (other than the Stalking Horse Bid or any other Qualified Bid for which the applicable Proposed Agreement is identical to the Stalking Horse Agreement in all respects other than with respect to the cash purchase price offered thereunder) that is: (A) inadequate or insufficient; (B) not in conformity with the requirements of the Plan, the Bankruptcy Code, these Bid Procedures or the terms and conditions of the Sale; (C) contrary to the best interests of the Debtors, their estates, their creditors and other parties in interest; or (D) subject to any due diligence, financing condition or other contingencies (including representations, warranties, covenants and timing requirements) of any kind or any other conditions precedent to such party’s obligation to acquire the LP Assets or fund the purchase price offered in connection with such Qualified Bid other than, in any such case, as may be included in the Stalking Horse Agreement.  Nothing in these Bid Procedures shall, or shall be deemed to: (1) amend, modify, limit or otherwise affect the terms or conditions of the Stalking Horse Agreement, or the rights and remedies of the parties thereunder or under applicable bankruptcy law; or (2) except for their consent to the Stalking Horse Agreement, constitute the consent of the lenders under the LP Credit Agreement to any other sale or disposition of their respective collateral.

 

m.                                  Expenses.  Any bidders presenting bids shall bear their own expenses in connection with the proposed sale, whether or not such sale is ultimately approved, except as provided in the Stalking Horse Agreement with respect to the Expense Reimbursement.

 

n.                                      Highest Or Otherwise Best Bid.  Whenever these Bid Procedures refer to a determination as to the highest or otherwise best offer, the Independent Ad Hoc Group, after consultation with the Debtors, shall have the final authority to make such determinations.

 

o.                                      Stalking Horse Agreement.  It shall be a condition precedent to entry of the order of the Bankruptcy Court approving these Bid Procedures (the “Bid Procedures Order”) that the Stalking Horse Agreement shall be in a form that is (a) acceptable to the Independent Ad Hoc Group, SPSO and the Stalking Horse Bidder and (b) substantially complete such that, if a seller accepted the form, it would be capable of execution.

 

p.                                      Action of Independent Ad Hoc Group.  To the extent these Bid Procedures contemplate the provision of consent or the taking of other actions by the Independent Ad Hoc Group, such consent shall only be provided and/or such actions shall only be taken if supported by members of the Independent Ad Hoc Group holding over 50% in principal amount of the claims under the LP Credit Agreement held by the members of the Independent Ad Hoc Group.

 

 

EXHIBIT E

 

FORM OF TRANSFER AGREEMENT

 

 

TRANSFER AND PLAN SUPPORT JOINDER AGREEMENT

 

This Transfer and Plan Support Joinder Agreement (the “Agreement”) is dated as of                      and is entered into by and between [Insert name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the “Assignee”) in accordance with Section 1.3 of the Plan Support Agreement attached hereto as Exhibit A (the “Plan Support Agreement”).  Capitalized terms used but not defined herein shall have the meanings given to them in the Plan Support Agreement.

 

WHEREAS, Assignor is a party to the Plan Support Agreement and has assigned to Assignee by separate agreement one or more Covered Claims and/or Interests;

 

WHEREAS, the assignment by Assignor to Assignee is not effective unless Assignee complies with Section 1.3 of the Plan Support Agreement; and

 

WHEREAS, Assignee agrees to comply with the Plan Support Agreement by entering into this Agreement.

 

NOW, THEREFORE, in consideration of the mutual conditions and agreements set forth in the Assignment and herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

 

1.             The Assignee (a) agrees to be bound by the Plan Support Agreement as a Plan Sponsor and (b) assumes the rights and obligations of a Plan Sponsor under the Plan Support Agreement, and shall be deemed for all purposes to be a Plan Sponsor.  The Assignee (a) represents and warrants to each of the other Parties to the Plan Support Agreement that, solely with respect to itself, the statements set forth in Section 2 of the Plan Support Agreement are true, correct and complete as of the date hereof; and (b) further represents and warrants that (i) it is acquiring the Covered Claims and/or Interests from the Assignor in the amounts set forth on Schedule 1 hereof (the “Assigning Claims and/or Interests”), and (ii) upon consummation of such acquisition (the “Acquisition Closing”) under the applicable agreements to which such Assigning Claims and/or Interests relate, it will be the legal or beneficial owner of the Assigning Claims and/or Interests.

 

2.             Assignee shall deliver a copy of this Agreement to all other Parties (in accordance with the Sections 1.3 and 7.14 of the Plan Support Agreement) no later than three (3) Business Days after the date of this Agreement.

 

3.             When acknowledged by each of the other Plan Sponsors, this Agreement may be attached to the Plan Support Agreement to evidence the foregoing assumptions and agreements; provided that any failure by the other Parties to acknowledge this Agreement shall not affect the validity or enforceability hereof.

 

4.             Notwithstanding anything to the contrary herein, Assignor shall remain bound by the Plan Support Agreement until the occurrence of the Acquisition Closing.

 

5.             THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED

 

 

AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF OR OF ANY OTHER JURISDICTION, AND, TO THE EXTENT APPLICABLE, THE BANKRUPTCY CODE.

 

6.             ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PARTY ARISING OUT OF OR RELATING HERETO SHALL BE BROUGHT IN THE BANKRUPTCY COURT, OR IN THE EVENT THAT THE BANKRUPTCY COURT DECLINES TO EXERCISE SUCH JURISDICTION FOR ANY REASON, THEN IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK.

 

7.             This Agreement shall be effective upon execution by the Assignor and Assignee and shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns.  This Agreement may be executed in any number of counterparts, which together shall constitute one instrument.  Delivery of an executed counterpart of a signature page of this Agreement by telecopy or electronic mail in portable document format (.pdf) shall be effective as delivery of a manually executed counterpart of this Assignment.

 

[Remainder of page intentionally left blank]

 

 

 

The terms set forth in this Agreement are hereby agreed to:

 

	
 
    	
ASSIGNOR
    
	
 
    	
[NAME OF ASSIGNOR]
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
Address:
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Telephone:
    	
 
    
	
 
    	
Facsimile:
    	
 
    
	
 
    	
Email:
    	
 
    
	
 
    	
 
    
	
 
    	
ASSIGNEE
    
	
 
    	
[NAME OF ASSIGNEE]
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
Address:
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Telephone:
    	
 
    
	
 
    	
Facsimile:
    	
 
    
	
 
    	
Email:
    	
 
    
				

 

 

SCHEDULE 1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00219-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00219-of-00352.parquet"}]]