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ECHOSTAR DBS CORPORATION
$375,000,000
12 1/2% SENIOR SECURED NOTES DUE 2002
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INDENTURE
Dated as of June 25, 1997
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First Trust National Association
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Trustee
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INDENTURE dated as of June 25, 1997 among EchoStar DBS Corporation (the
"Company"), a Colorado corporation, the Guarantors (as defined herein) and First
Trust National Association, as trustee (the "Trustee").
The Company, the Guarantors and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of the Holders of
the 12 1/2% Senior Secured Notes due 2002:
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS.
"ACCOUNTS RECEIVABLE SUBSIDIARY" means one Unrestricted Subsidiary of the
Company specifically designated as an Accounts Receivable Subsidiary for the
purpose of financing the accounts receivable of the Company, and provided that
any such designation shall not be deemed to prohibit the Company from financing
accounts receivable through any other entity, including without limitation, any
other Unrestricted Subsidiary.
"ACCOUNTS RECEIVABLE SUBSIDIARY NOTES" means the notes to be issued by the
Accounts Receivable Subsidiary for the purchase of accounts receivable.
"ACQUIRED DEBT" means, with respect to any specified person, Indebtedness
of any other person existing at the time such other person merges with or into
or becomes a Subsidiary of such specified person, or Indebtedness incurred by
such person in connection with the acquisition of assets, including Indebtedness
incurred in connection with, or in contemplation of, such other person merging
with or into or becoming a Subsidiary of such specified person or the
acquisition of such assets, as the case may be.
"ADDITIONAL PAYMENT OBLIGATIONS" means the portion of the payment
obligations, under any vendor financing arrangements, of any of the Company,
EchoStar or any of the Company's Subsidiaries with respect to the construction,
launch or insurance of EchoStar IV in excess of $15.0 million.
"AFFILIATE" of any specified person means any other person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such person, whether through the
ownership of voting securities, by agreement or otherwise; PROVIDED, HOWEVER,
that beneficial ownership of 10% or more of the voting securities of a person
shall be deemed to be control; PROVIDED FURTHER that no individual, other than a
director of EchoStar or an officer of EchoStar with a policy making function,
shall be deemed an Affiliate of EchoStar or any of its Subsidiaries, solely by
reason of such individual's employment, position or responsibilities by or with
respect to EchoStar or any of its Subsidiaries.
"AGENT" means any Registrar, Paying Agent or co-registrar.
"BANK DEBT" means Indebtedness incurred pursuant to the Credit Agreement in
an aggregate amount not to exceed 90% of the accounts receivable of the
borrowers under the Credit Agreement eligible for inclusion in the borrowing
base under the Credit Agreement, plus 75% of the inventory of the Credit
Agreement borrowers under the Credit Agreement eligible for inclusion in the
borrowing base under the Credit Agreement, plus 100% of the cash collateral and
marketable securities of the Borrowers under the Credit Agreement eligible for
inclusion in the borrowing base under the Credit Agreement.
"BANKRUPTCY LAW" means title 11, U.S. Code or any similar federal or state
law for the relief of debtors.
"BUSINESS DAY" means any day other than a Legal Holiday.
"CAPITAL LEASE" means, at the time any determination thereof is made, any
lease of property, real or personal, in respect of which the present value of
the minimum rental commitment would be capitalized on a balance sheet of the
lessee in accordance with GAAP.
"CAPITAL LEASE OBLIGATION" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at such time be so required to be capitalized on the balance sheet in accordance
with GAAP.
"CAPITAL STOCK" means any and all shares, interests, participations, rights
or other equivalents (however designated) of corporate stock or partnership or
membership interests, whether common or preferred.
"CASH EQUIVALENTS" means: (a) U.S. dollars; (b) securities issued or
directly and fully guaranteed or insured by the U.S. government or any agency or
instrumentality thereof having maturities of not more than six months from the
date of acquisition; (c) certificates of deposit and eurodollar time deposits
with maturities of six months or less from the date of acquisition, bankers'
acceptances with maturities not exceeding six months and overnight bank
deposits, in each case with any domestic commercial bank having capital and
surplus in excess of $500 million; (d) repurchase obligations with a term of not
more than seven days for underlying securities of the types described in clauses
(b) and (c) entered into with any financial institution meeting the
qualifications specified in clause (c) above; and (e) commercial paper rated
P-1, A-l or the equivalent thereof by Xxxxx'x Investors Service, Inc. or
Standard & Poor's Corporation, respectively, and in each case maturing within
six months after the date of acquisition.
"CHANGE OF CONTROL" means: (a) any transaction or series of transactions
(including, without limitation, a tender offer, merger or consolidation) the
result of which is that the Principals and their Related Parties or an entity
controlled by the Principals and their Related Parties cease to (i) be the
"beneficial owners" (as defined in Rule 13(d)(3) under the Exchange Act) of at
least 30% of the total Equity Interests in EchoStar and (ii) have the voting
power to elect at least a majority of the Board of Directors of EchoStar; (b)
the first day on which a majority of the members of the Board of Directors of
EchoStar are not Continuing Directors; (c) any transaction or series of
transactions (including, without limitation, a tender offer, merger or
consolidation) the result of which is that the Principals and their Related
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Parties or any entity controlled by the Principals and their Related Parties
cease to be the "beneficial owners" (as defined in Rule 13(d)(3) under the
Exchange Act) of at least 30% of the total Equity Interests in the Company and
have the voting power to elect at least a majority of the Board of Directors of
the Company, or (d) the first day on which a majority of the members of the
Board of Directors of the Company are not Continuing Directors.
"COLLATERAL" means all assets pledged, mortgaged or collaterally assigned
as Security pursuant to the Collateral Documents.
"COLLATERAL ASSIGNMENT" means the Security Agreement dated the date hereof,
substantially in the form of Exhibit I hereto.
"COLLATERAL DOCUMENTS" means (i) the Interest Escrow Agreement, (ii) the
Satellite Escrow Agreement, (iii) the Stock Pledge Agreement, (iv) the Escrow
Accounts Security Agreement, (v) the EchoStar IV Security Agreement, (vi) the
Collateral Assignment and (vii) the Orbital Slot Security Agreement.
"COMMUNICATIONS ACT" means the Communications Act of 1934, as amended.
"CONSOLIDATED CASH FLOW" means, with respect to any person for any period,
the Consolidated Net Income of such person for such period, plus, to the extent
deducted in computing Consolidated Net Income: (a) provision for taxes based on
income or profits; (b) Consolidated Interest Expense; (c) depreciation and
amortization (including amortization of goodwill and other intangibles) of such
person for such period; and (d) any extraordinary loss and any net loss realized
in connection with any Asset Sale, in each case, on a consolidated basis
determined in accordance with GAAP, provided that Consolidated Cash Flow shall
not include interest income derived from the net proceeds of the Offering.
"CONSOLIDATED INTEREST EXPENSE" means, with respect to any person for any
period, consolidated interest expense of such person for such period, whether
paid or accrued (including amortization of original issue discount and deferred
financing costs, non-cash interest payments and the interest component of
Capital Lease Obligations), on a consolidated basis determined in accordance
with GAAP.
"CONSOLIDATED NET INCOME" means, with respect to any person for any period,
the aggregate of the Net Income of such person and its Subsidiaries for such
period, on a consolidated basis, determined in accordance with GAAP; PROVIDED,
HOWEVER, that: (a) the Net Income of any person that is not a Subsidiary or
that is accounted for by the equity method of accounting shall be included only
to the extent of the amount of dividends or distributions paid in cash to such
person, in the case of a gain, or to the extent of any contributions or other
payments by the referent person, in the case of a loss; (b) the Net Income of
any person that is a Subsidiary that is not a Wholly Owned Subsidiary shall be
included only to the extent of the amount of dividends or distributions paid in
cash to the referent person; (c) the Net Income of any person acquired in a
pooling of interests transaction for any period prior to the date of such
acquisition shall be excluded; (d) the Net Income of any Subsidiary of such
person shall be excluded to the extent that the declaration or payment of
dividends or similar distributions is not at the time permitted by operation of
the terms of its charter or bylaws or any other agreement, instrument, judgment,
decree,
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order, statute, rule or government regulation to which it is subject;
and (e) the cumulative effect of a change in accounting principles shall be
excluded.
"CONSOLIDATED NET WORTH" means, with respect to any person, the sum of:
(a) the stockholders' equity of such person; plus (b) the amount reported on
such person's most recent balance sheet with respect to any series of preferred
stock (other than Disqualified Stock) that by its terms is not entitled to the
payment of dividends unless such dividends may be declared and paid only out of
net earnings in respect of the year of such declaration and payment, but only to
the extent of any cash received by such person upon issuance of such preferred
stock, less: (i) all write-ups (other than write-ups resulting from foreign
currency translations and write-ups of tangible assets of a going concern
business made within 12 months after the acquisition of such business)
subsequent to the date of the Indenture in the book value of any asset owned by
such person or a consolidated Subsidiary of such person; and (ii) all
unamortized debt discount and expense and unamortized deferred charges, all of
the foregoing determined in accordance with GAAP.
"CONTINUING DIRECTOR" means, as of any date of determination, any member of
the Board of Directors of EchoStar or the Company, as the case may be, who: (a)
was a member of such Board of Directors on the date of the Indenture; or (b) was
nominated for election or elected to such Board of Directors with the
affirmative vote of a majority of the Continuing Directors who were members of
such Board at the time of such nomination or election.
"CORPORATE TRUST OFFICE OF THE TRUSTEE" shall be at the address of the
Trustee specified in Section 12.02 or such other address as to which the Trustee
may give notice to the Company.
"CREDIT AGREEMENT" means any one or more credit agreements (which may
include or consist of revolving credits) between EchoStar, the Company or any of
the Company's Restricted Subsidiaries and one or more banks or other financial
institutions providing financing for the business of EchoStar, the Company and
the Company's Restricted Subsidiaries, PROVIDED that the lenders party to the
Credit Agreement may not be Affiliates of EchoStar.
"CREDIT AGREEMENT BORROWERS" means Echo Acceptance Corporation, Echosphere
Corporation, EchoStar International Corporation, Houston Tracker Systems, Inc.,
Satellite Source, Inc., EchoStar Satellite Corporation and DNCC.
"CUSTODIAN" means any receiver, trustee, assignee, liquidator or similar
official under any Bankruptcy Law.
"DBS" means direct broadcast satellite.
"DEFAULT" means any event that is or with the passage of time or the giving
of notice or both would be an Event of Default.
"DEFERRED PAYMENTS" means Indebtedness to satellite contractors incurred in
connection with the construction and launch of EchoStar I, EchoStar II, EchoStar
III and EchoStar IV in an amount not to exceed $135.0 million.
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"DISH" means Dish, Ltd., a Nevada corporation.
"DISH GUARANTEE" means the Guarantee dated the date hereof, by Dish, of
the Obligations of the Company under the Notes and this Indenture, in
substantially the same form as Exhibit D hereto.
"DISH GUARANTEE DATE" means the earlier of: (i) the first date upon which
Dish is permitted, pursuant to the terms of both the 1996 Notes Indenture and
the 1994 Notes Indenture, to Guarantee the Company's total payment obligations
under all of the then-outstanding Senior Secured Notes; and (ii) the first date
upon which both the 1996 Notes and the 1994 Notes are no longer outstanding or
have been defeased.
"DISH PREFERRED STOCK" means Dish's 8% Series A Cumulative Preferred Stock
having an aggregate liquidation preference not in excess of $15.1 million.
"DISQUALIFIED STOCK" means any Capital Stock which, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof, in whole or in part, on or prior to date on
which the Notes mature.
"DNCC" means Dish Network Credit Corporation, a Colorado corporation.
"ECHOSTAR" means EchoStar Communications Corporation, a Nevada corporation.
"ECHOSTAR DBS" means EchoStar DBS Corporation, a Colorado corporation.
"ECHOSTAR DBS SYSTEM" means the digital direct broadcast satellite system
of the Company, as defined in the Offering Memorandum.
"ECHOSTAR I" means the Company's high-powered direct broadcast satellite
designated as EchoStar I in the Offering Memorandum.
"ECHOSTAR II" means the Company's high-powered direct broadcast satellite
designated as EchoStar II in the Offering Memorandum.
"ECHOSTAR III" means the high-powered direct broadcast satellite being
constructed by DBSC as of the date of this Indenture, and any replacement
satellite thereof to the extent permitted by the terms of the Indenture.
"ECHOSTAR IV" means the high-powered direct broadcast satellite being
constructed which is designated as EchoStar IV in the Offering Memorandum, and
any replacement satellite thereof to the extent permitted by the terms of this
Indenture.
"ECHOSTAR IV SECURITY AGREEMENT" means the Security Agreement dated the
date hereof, substantially in the form of Exhibit J hereto.
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"ECHOSTAR GUARANTEE" means the Guarantee by EchoStar of the Obligations of
the Company under the Notes and this Indenture, in substantially the same form
as Exhibit B hereto.
"ECHOSTAR RECEIVER SYSTEM" means a satellite dish, digital satellite
receiver, remote control and related components, used in connection with the DBS
service PROVIDED by EchoStar and its Subsidiaries.
"ELIGIBLE INSTITUTION" means a commercial banking institution that has
combined capital and surplus of not less than $500 million or its equivalent in
foreign currency, whose debt is rated Investment Grade at the time as of which
any investment or rollover therein is made.
"EQUITY INTERESTS" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"ESBC" means EchoStar Satellite Broadcasting Corporation.
"ESBC GUARANTEE" means the Guarantee dated the date hereof, by ESBC, of
the Obligations of the Company under the Notes and this Indenture, in
substantially the same form as Exhibit C hereto.
"ESBC GUARANTEE DATE" means the earlier of: (i) the first date upon which
ESBC is permitted, pursuant to the terms of the 1996 Notes Indenture, to
Guarantee the Company's total payment obligations under all of the
then-outstanding Notes; and (ii) the first date upon which the 1996 Notes are no
longer outstanding or have been defeased.
"ESC" means EchoStar Satellite Corporation.
"ESCROW AGENT" means First Trust National Association, as Escrow Agent
under the Interest Escrow Agreement and the Satellite Escrow Agreement, or any
successor thereto appointed pursuant to such agreements.
"ESCROW ACCOUNTS SECURITY AGREEMENT" means the Security Agreement dated the
date hereof, substantially in the form of Exhibit H hereto.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE NOTES" means 121/2% Senior Secured Notes Due 2002 issued by the
Company, and containing terms identical to those of the Notes (except that such
Exchange Notes shall have been issued in an exchange offer registered under the
Securities Act), that are issued and exchanged for the Notes pursuant to the
Registration Rights Agreement and this Indenture.
"EXISTING INDEBTEDNESS" means the Notes and any other Indebtedness of the
Company and its Subsidiaries in existence on the date of the Indenture until
such amounts are repaid.
"FCC" means Federal Communications Commission.
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"FULL-CONUS ORBITAL SLOT" means the 101, 110 or 119 degrees West Longitude
orbital slot.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the U.S., which are applicable as of the date of determination;
PROVIDED, HOWEVER; that these definitions and all ratios and calculations
contained in Sections 4.07, 4.08, 4.09 and 4.10 shall be determined in
accordance with GAAP as in effect and applied by EchoStar and its Subsidiaries
on the date of the Indenture, consistently applied; PROVIDED, FURTHER, that in
the event of any change in GAAP or in any change by EchoStar or any of its
Subsidiaries in GAAP applied that would result in any change in any such ratio
or calculation, the Company shall deliver to the Trustee, each time any such
ratio or calculation is required to be determined or made, an Officers'
Certificate setting forth the computations showing the effect of such change or
application on such ratio or calculation.
"GLOBAL NOTE" means a Note evidencing all or part of the Notes issued to
the Depositary for such Notes.
"GOVERNMENT SECURITIES" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which guarantee
or obligations the full faith and credit of the United States of America is
pledged.
"GUARANTEE" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"GUARANTOR" means EchoStar and any other entity that executes a Guarantee
of the obligations of the Company under the Notes, and their respective
successors and assigns.
"HEDGING OBLIGATIONS" means, with respect to any person, the obligations of
such person under: (a) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements; and (b) other agreements or
arrangements designed to protect such person against fluctuations in interest
rates.
"HOLDER" means a Person in whose name a Note is registered.
"INDEBTEDNESS" means, with respect to any person, any indebtedness of such
person, whether or not contingent, in respect of borrowed money or evidenced by
bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof) or representing the balance
deferred and unpaid of the purchase price of any property (including pursuant to
capital leases) or representing any Hedging Obligations, except any such balance
that constitutes an accrued expense or trade payable, if and to the extent any
of the foregoing (other than Hedging Obligations) would appear as a liability
upon a balance sheet of such person prepared in accordance with GAAP, and also
includes, to the extent not otherwise included, the Guarantee of items that
would be included within this definition.
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"INDEBTEDNESS TO CASH FLOW RATIO" means, with respect to any person, the
ratio of: (a) the Indebtedness of such person and its Subsidiaries as of the
end of the most recently ended fiscal quarter, plus the amount of any
Indebtedness incurred subsequent to the end of such fiscal quarter; to (b) such
person's Consolidated Cash Flow for the most recently ended four full fiscal
quarters for which internal financial statements are available immediately
preceding the date on which such event for which such calculation is being made
shall occur (the "Measurement Period"), PROVIDED, HOWEVER; that: (i) in making
such computation, Indebtedness shall include the total amount of funds
outstanding and available under any revolving credit facilities; and (ii) in the
event that the Company or any of its Subsidiaries consummates a material
acquisition or an Asset Sale or other disposition of assets subsequent to the
commencement of the Measurement Period but prior to the event for which the
calculation of the Indebtedness to Cash Flow Ratio is made, then the
Indebtedness to Cash Flow Ratio shall be calculated giving pro forma effect to
such material acquisition or Asset Sale or other disposition of assets, as if
the same had occurred at the beginning of the applicable period.
"INDENTURE" means this Indenture, as amended or supplemented from time to
time.
"IN-ORBIT INSURANCE" means, with respect to a satellite, In-Orbit insurance
providing coverage beginning 180 days after the launch (or contemporaneously
with the expiration of any applicable Launch Insurance) of such satellite in an
amount which is, together with cash and Cash Equivalents (not including cash and
Cash Equivalents in the Satellite Escrow Account) segregated and reserved on the
balance sheet of the Company, for the duration of the useful life of the
satellite or until applied in accordance with the covenant entitled "Maintenance
of Insurance," in an amount equal to or greater than the cost of construction,
launch and insurance of such satellite, which insurance shall provide pro rata
benefits to the insured upon a loss of more than 20% of the capacity of such
satellite and shall compensate the insured for a total loss upon a loss of more
than 50% of the capacity of such satellite. For purposes of the Indenture, the
proceeds of any In-Orbit Insurance shall be deemed to include the amount of cash
and Cash Equivalents segregated and reserved by the Company for purposes of the
preceding sentence.
"INTEREST ESCROW ACCOUNT" means an escrow account for the deposit of the
proceeds from the sale of the Notes under the Interest Escrow Agreement.
"INTEREST ESCROW AGREEMENT" means the Interest Escrow Agreement, dated as
of the date hereof, by and among the Escrow Agent, the Trustee and the Company,
governing the disbursement and loan of funds from the Interest Escrow Account,
in the form of Exhibit E.
"INVESTMENT GRADE" means with respect to a security, that such security is
rated, by at least two nationally recognized statistical rating organizations,
in one of each such organization's four highest generic rating categories.
"INVESTMENTS" means, with respect to any person, all investments by such
person in other persons (including Affiliates) in the forms of loans (including
Guarantees), advances or capital contributions (excluding commission, travel and
similar advances to officers and employees made in the ordinary course of
business), purchases or other acquisitions for consideration of Indebtedness,
Equity Interests or other securities and all other items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
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"LAUNCH CONTRACT" means any contract for the launching of EchoStar IV into
geostationary transfer orbit.
"LAUNCH INSURANCE" means, with respect to a satellite, launch insurance
(including, at the option of the Company, reflight coverage for any launch by
Lockheed Xxxxxx or LKE, PROVIDED that such coverage permits assignment of the
right to any subsequent launch, without consent of the launch provider) covering
the period of the launch of such satellite to 180 days after such launch (or for
such period as otherwise specified in the applicable policy) in an amount which,
together with cash and Cash Equivalents segregated and reserved on the
consolidated balance sheet of the Company until the successful launch of such
satellite or until applied in accordance with the covenant entitled "Maintenance
of Insurance," is equal to or greater than the cost of construction, launch and
insurance of such satellite, which insurance shall provide pro rata benefits to
the insured upon a loss of more than 20% of the capacity of such satellite and
shall compensate the insured for a total loss upon a loss of more than 50% of
the capacity of such satellite; PROVIDED, HOWEVER, that the amount of cash and
Cash Equivalents that may be used by the Company for purposes of this definition
may include cash and Cash Equivalents contained in the Satellite Escrow Account
only for purposes of Launch Insurance with respect to EchoStar IV, but only to
the extent that the Company certifies, in an Officers' Certificate delivered to
the Trustee, that such cash and Cash Equivalents are reasonably not expected to
be necessary for the completion of the development, construction, launch and
operation of the relevant satellite. For purposes of the Indenture, the proceeds
of any Launch Insurance shall be deemed to include the amount of cash and Cash
Equivalents segregated and reserved by the Company for purposes of the preceding
sentence.
"LEGAL HOLIDAY" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent status) of any jurisdiction).
"LKE" means Lockheed-Khruenichev-Energia, Inc., a Delaware corporation.
"LOCKHEED XXXXXX" means Lockheed Xxxxxx Corporation, a Maryland
corporation, and its successors.
"LOCKHEED XXXXXX SATELLITE CONTRACT" means the Satellite Contract, dated as
of July 18, 1996, between Lockheed Xxxxxx and the Company, as amended from time
to time.
"MARKETABLE SECURITIES" means: (a) Government Securities; (b) any
certificate of deposit maturing not more than 365 days after the date of
acquisition issued by, or time deposit of, an Eligible Institution; (c)
commercial paper maturing not more than 365 days after the date of acquisition
issued by a corporation (other than an Affiliate of the Company)
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with an Investment Grade rating, at the time as of which any investment
therein is made, issued or offered by an Eligible Institution; (d) any bankers
acceptances or money market deposit accounts issued or offered by an Eligible
Institution; and (e) any fund investing exclusively in investments of the
types described in clauses (a) through (d) above.
"MINIMUM APPRAISED VALUE" means: (a) an appraised value determined and set
forth in writing by a nationally recognized appraisal firm experienced in the
industry described under Section 4.18 of this Indenture in an amount not less
than the aggregate principal amount of Senior Secured Notes then outstanding
plus all accrued and unpaid interest thereon (less any funds remaining in the
Interest Escrow Account as of the date of determination); or (b) a satellite of
equal or greater value as compared to EchoStar IV.
"NET INCOME" means, with respect to any person, the net income (loss) of
such person, determined in accordance with GAAP, excluding, however, any gain
(but not loss), together with any related provision for taxes on such gain (but
not loss), realized in connection with any Asset Sale (including, without
limitation, dispositions pursuant to sale and leaseback transactions), and
excluding any extraordinary gain (but not loss), together with any related
provision for taxes on such extraordinary gain (but not loss).
"NET PROCEEDS" means the aggregate cash proceeds received by the Company or
any of its Restricted Subsidiaries, as the case may be, in respect of any Asset
Sale, net of the direct costs relating to such Asset Sale (including, without
limitation, legal, accounting and investment banking fees, and sales
commissions) and any relocation expenses incurred, as a result thereof, taxes
paid or payable as a result thereof (after taking into account any available tax
credits or deductions and any tax sharing arrangements), amounts required to be
applied to the repayment of Indebtedness secured by a Lien on the asset or
assets that are the subject of such Asset Sale and any reserve for adjustment in
respect of the sale price of such asset or assets. Net Proceeds shall exclude
any non-cash proceeds received from any Asset Sale, but shall include such
proceeds when and as converted by the Company or any Restricted Subsidiary to
cash.
"1994 NOTES INDENTURE" means the Indenture relating to the 1994 Notes.
"1994 NOTES" means the 12 7/8% Senior Discount Notes due 2004 of Dish.
"1994 CREDIT AGREEMENT" has the meaning set forth in the 1996 Notes
Indenture.
"1996 NOTES INDENTURE" means the Indenture relating to the 1996 Notes.
"1996 NOTES" means the 13 1/8% Senior Discount Notes due 2004 of ESBC.
"NON-RECOURSE INDEBTEDNESS" of any person means Indebtedness of such person
that: (i) is not guaranteed by any other person (except a Wholly Owned
Subsidiary of the referent person); (ii) is not recourse to and does not
obligate any other person (except a Wholly Owned Subsidiary of the referent
person) in any way; (iii) does not subject any property or assets of any other
person (except a Wholly Owned Subsidiary of the referent person), directly or
indirectly, contingently or otherwise, to the satisfaction thereof; and (iv) is
not
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required by GAAP to be reflected on the financial statements of any other
person (other than a Subsidiary of the referent person) prepared in accordance
with GAAP.
"NOTES" means the 12 1/2% Senior Secured Notes due 2002 issued under this
Indenture on the date of this Indenture. For purpose of this Indenture, the
term "Notes" shall include any Exchange Notes and all Notes and Exchange Notes
shall vote together as a single class.
"OBLIGATIONS" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"OFFERING MEMORANDUM" means the Offering Memorandum dated June 25, 1997
relating to the offering of the Notes.
"OFFICER" means, with respect to any Person, the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, Controller, Secretary
or any Vice-President of such Person.
"OFFICERS' CERTIFICATE" means a certificate signed on behalf of the Company
by two Officers of the Company, one of whom must be the principal executive
officer, principal financial officer, treasurer or principal accounting officer
of the Company.
"OPINION OF COUNSEL" means an opinion from legal counsel, who may be an
employee of or counsel to the Company (or any Guarantor, if applicable), any
Subsidiary of the Company (or any Guarantor, if applicable) or the Trustee.
"ORBITAL SLOT SECURITY AGREEMENT" means the Security Agreement dated the
date hereof, substantially in the form of Exhibit K hereto.
"PERMITTED INVESTMENTS" means: (a) Investments in the Company or in a
Wholly Owned Subsidiary of the Company, other than Unrestricted Subsidiaries of
the Company, (b) Investments in Cash Equivalents and Marketable Securities; (c)
conversion of debentures of SSET and DBS Industries, Inc. ("DBSI"), in
accordance with their terms, into Equity Interests of SSET and DBSI; and (d)
Investments by the Company or any Subsidiary of the Company in a person if, as a
result of such Investment: (i) such person becomes a Wholly Owned Restricted
Subsidiary of the Company, or (ii) such person is merged, consolidated or
amalgamated with or into, or transfers or conveys substantially all of its
assets to, or is liquidated into, the Company or a Wholly Owned Subsidiary of
the Company that is not an Unrestricted Subsidiary of the Company.
"PERMITTED LIENS" means: (a) Liens securing the Notes; (b) Liens securing
the Deferred Payments; (c) Liens on EchoStar IV to the extent permitted under
Article X of this Indenture and the Collateral Documents; (d) Liens securing the
Bank Debt on current assets of the Company's Restricted Subsidiaries; (e) Liens
securing the 1996 Notes and the 1994 Notes; (f) Liens securing Purchase Money
Indebtedness, PROVIDED that such Indebtedness was permitted to be incurred by
the terms of the Indenture and such Liens do not extend to any assets of the
Company or its Restricted Subsidiaries other than the assets so acquired; (g)
Liens securing Indebtedness the proceeds of which are used to develop,
construct, launch or
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insure any satellites other than EchoStar I, EchoStar II, EchoStar III or
EchoStar IV (or any permitted replacements thereof), PROVIDED that such
Indebtedness was permitted to be incurred by the terms of the Indenture and
such Liens do not extend to any assets of the Company or its Restricted
Subsidiaries other than such satellites being developed, constructed, launched
or insured and to the related licenses, permits and construction, launch,
insurance and TT&C contracts; (h) Liens on orbital slots, licenses and other
assets and rights of the Company, PROVIDED that such orbital slots, licenses
and other assets and rights relate solely to the satellites referred to in
clause (g) of this definition; (i) Liens on property of a person existing at
the time such person is merged into or consolidated with the Company or any
Restricted Subsidiary of the Company, PROVIDED, that such Liens were not
incurred in connection with, or in contemplation of, such merger or
consolidation, other than in the ordinary course of business; (j) Liens on
property of an Unrestricted Subsidiary at the time that it is designated as a
Restricted Subsidiary pursuant to the definition of "Unrestricted Subsidiary,"
PROVIDED that such liens were not incurred in connection with, or
contemplation of, such designation; (k) Liens on property existing at the time
of acquisition thereof by the Company or any Restricted Subsidiary of the
Company; PROVIDED that such Liens were not incurred in connection with, or in
contemplation of, such acquisition and do not extend to any assets of the
Company or any of its Restricted Subsidiaries other than the property so
acquired; (l) Liens to secure the performance of statutory obligations, surety
or appeal bonds or performance bonds, or landlords', carriers',
warehousemen's, mechanics', suppliers', materialmen's or other like Liens, in
any case incurred in the ordinary course of business and with respect to
amounts not yet delinquent or being contested in good faith by appropriate
process of law, if a reserve or other appropriate provision, if any, as is
required by GAAP shall have been made therefore; (m) Liens existing on the
date of the Indenture; (n) Liens for taxes, assessments or governmental
charges or claims that are not yet delinquent or that are being contested in
good faith by appropriate proceedings promptly instituted and diligently
concluded; PROVIDED that any reserve or other appropriate provision as shall
be required in conformity with GAAP shall have been made therefor; (o) Liens
incurred in the ordinary course of business of the Company or any Restricted
Subsidiary of the Company (including, without limitation, Liens securing
Purchase Money Indebtedness) with respect to obligations that do not exceed $2
million in principal amount in the aggregate at any one time outstanding; and
(p) extensions, renewals or refundings of any Liens referred to in clauses (a)
through (o) above, PROVIDED that any such extension, renewal or refunding does
not extend to any assets or secure any Indebtedness not securing or secured by
the Liens being extended, renewed or refinanced.
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust or unincorporated organization
(including any subdivision or ongoing business of any such entity or
substantially all of the assets of any such entity, subdivision or business).
"PREFERRED EQUITY INTEREST", in any person, means an Equity Interest of any
class or classes (however designated) which is preferred as to the payment of
dividends or distributions, or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of such person, over Equity
Interests of any other class in such person.
"PRINCIPALS" means Xxxxxxx X. Xxxxx, Xxxxx XxXxxxxx, R. Xxxxx Xxxxxx,
Xxxxxx X. Xxxxxxx and Xxxxx X. Xxxxxxxxx.
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"PURCHASE MONEY INDEBTEDNESS" means indebtedness of the Company or any
of its Restricted Subsidiaries incurred (within 180 days of such purchase) to
finance the purchase of any assets of the Company or any of its Restricted
Subsidiaries: (a) to the extent the amount of Indebtedness thereunder does
not exceed 80% of the purchase cost of such assets; (b) to the extent the
purchase cost of such assets is or should be included in "additions to
property, plant and equipment" in accordance with GAAP; (c) to the extent
that such Indebtedness is not recourse to the Company or any of its
Restricted Subsidiaries or any of their respective assets, other than the
assets so purchased; and (d) if the purchase of such assets is not part of an
acquisition of any Person.
"RECEIVER SUBSIDY" means a subsidy, rebate or other similar payment by
EchoStar or any of its Subsidiaries, in the ordinary course of business, to
subscribers, vendors or distributors, relating to an EchoStar Receiver
System, not to exceed the cost of such EchoStar Receiver System, together
with the cost of installation of such EchoStar Receiver System.
"RECEIVABLES TRUST" means a trust organized solely for the purpose of
securitizing the accounts receivable held by the Accounts Receivable
Subsidiary that (a) shall not engage in any business other than (i) the
purchase of accounts receivable or participation interests therein from the
Accounts Receivable Subsidiary and the servicing thereof, (ii) the issuance
of and distribution of payments with respect to the securities permitted to
be issued under clause (b) below and (iii) other activities incidental to the
foregoing, (b) shall not at any time incur Indebtedness or issue any
securities, except (i) certificates representing undivided interests in the
Trust issued to the Accounts Receivable Subsidiary and (ii) debt securities
issued in an arm's length transaction for consideration solely in the form of
cash and Cash Equivalents, all of which (net of any issuance fees and
expenses) shall promptly be paid to the Accounts Receivable Subsidiary, and
(c) shall distribute to the Accounts Receivable Subsidiary as a distribution
on the Accounts Receivable Subsidiary's beneficial interest in the
Receivables Trust no less frequently than once every six months all available
cash and Cash Equivalents held by it, to the extent not required for
reasonable operating expenses or reserves therefor or to service any
securities issued pursuant to clause (b) above that are not held by the
Accounts Receivable Subsidiary.
"RELATED PARTY" means, with respect to any Principal, (a) the spouse and
each immediate family member of such Principal and (b) each trust,
corporation, partnership or other entity of which such Principal beneficially
holds an 80% or more controlling interest.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement
among the Company, the Guarantors, Xxxxxxxxx, Lufkin & Xxxxxxxx Securities
Corporation and Xxxxx Xxxxxx Inc.
"RESPONSIBLE OFFICER," when used with respect to the Trustee, means any
officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee
customarily performing functions similar to those performed by any of the
above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.
"RESTRICTED INVESTMENT" means an Investment other than Permitted
Investments.
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"RESTRICTED SUBSIDIARY" means, any corporation, association or other
business entity of which more than 50% of the total voting power of shares of
Capital Stock entitled (without regard to the occurrence of any contingency)
to vote in the election of directors, managers or trustees thereof is at the
time owned or controlled, directly or indirectly, by the Company or one or
more Subsidiaries of the Company or a combination thereof, other than
Unrestricted Subsidiaries.
"SATELLITE CONTRACT" means any contract relating to the construction of
EchoStar IV, including, without limitation, the Lockheed Xxxxxx Satellite
Contract.
"SATELLITE ESCROW ACCOUNT" means an escrow account for the deposit of
the proceeds from the sale of the Notes under the Satellite Escrow Agreement.
"SATELLITE ESCROW AGREEMENT" means the Satellite Escrow Agreement, dated
as of the date hereof, by and among the Escrow Agent, the Trustee and the
Company, governing the disbursement and loan of funds from the Satellite
Escrow Account, in the form of Exhibit F.
"SATELLITE RECEIVER" means any satellite receiver capable of receiving
programming from the EchoStar DISH Network-SM-.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SENIOR ECHOSTAR INDEBTEDNESS" means all Indebtedness for borrowed money
of EchoStar, whether outstanding on the date of this Indenture or incurred
after the date of this Indenture, which is not by its terms subordinate and
junior to other Indebtedness of EchoStar.
"SIGNIFICANT SUBSIDIARY" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X
promulgated pursuant to the Securities Act, as such Regulation is in effect
on the date of this Indenture.
"SPRINGING GUARANTEES" means the Guarantees by the Springing Guarantors
of the Obligations of the Company under the Notes and this Indenture.
"SPRINGING GUARANTORS" means Dish and ESBC.
"SSET" means Satellite Systems Engineering Technologies, Inc. and its
Affiliates.
"STOCK PLEDGE AGREEMENT" means the Pledge Agreement dated the date
hereof, substantially in the form of Exhibit G hereto.
"SUBSIDIARY" means, with respect to any person, any corporation,
association or other business entity of which more than 50% of the total
voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers
or trustees thereof is at the time owned or controlled, directly or
indirectly, by such person or one or more of the other Subsidiaries of such
person or a combination thereof.
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"SUPPLEMENTAL INDENTURE" means any supplemental indenture relating to
this Indenture.
"TIA" means the Trust Indenture Act of 1939 as in effect on the date on
which this Indenture is qualified under the TIA.
"TRUSTEE" means the party named as such above until a successor replaces
it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.
"TT&C" means telemetry, tracking and control.
"UNRESTRICTED SUBSIDIARY" means; (A) EchoStar Real Estate Corporation,
EchoStar International (Mauritius) Ltd., EchoStar Manufacturing and
Distribution Pvt. Ltd. and Satrec Mauritius Ltd.; and (B) any Subsidiary of
the Company designated as an Unrestricted Subsidiary in a resolution of the
Board of Directors of the Company: (a) no portion of the Indebtedness or any
other obligation (contingent or otherwise) of which, at the time of such
designation: (i) is guaranteed by the Company or any other Subsidiary of the
Company (other than another Unrestricted Subsidiary); (ii) is recourse to or
obligates the Company or any other Subsidiary of the Company (other than
another Unrestricted Subsidiary) in any way; or (iii) subjects any property
or asset of the Company or any other Subsidiary of the Company (other than
another Unrestricted Subsidiary), directly or indirectly, contingently or
otherwise, to satisfaction thereof; (b) with which neither the Company nor
any other Subsidiary of the Company (other than another Unrestricted
Subsidiary) has any contract, agreement, arrangement, understanding or is
subject to an obligation of any kind, written or oral, other than on terms no
less favorable to the Company or such other Subsidiary than those that might
be obtained at the time from persons who are not Affiliates of the Company;
(c) with which neither the Company nor any other Subsidiary of the Company
(other than another Unrestricted Subsidiary) has any obligation: (i) to
subscribe for additional shares of Capital Stock or other equity interests
therein; or (ii) to maintain or preserve such Subsidiary's financial
condition or to cause such Subsidiary to achieve certain levels of operating
results and (d) which does not provide direct broadcast services in any
capacity other than as a selling, billing and collection agent for one or
more of the Company and its Restricted Subsidiaries; PROVIDED, HOWEVER, that
none of the Company, Dish, EchoStar Satellite Corporation, DirectSat
Corporation, Echo Acceptance Corporation, Houston Tracker Systems, Inc.,
EchoStar International Corporation and Echosphere Corporation may be
designated as Unrestricted Subsidiaries. At the time that the Company
designates a Subsidiary as an Unrestricted Subsidiary, the Company will be
deemed to have made a Restricted Investment in an amount equal to the fair
market value (as determined in good faith by the Board of Directors of the
Company evidenced by a resolution of the Board of Directors of the Company
and set forth in an Officers' Certificate delivered to the Trustee; PROVIDED,
HOWEVER, that if the fair market value of such Subsidiary exceeds $10
million, the fair market value shall be determined by an investment banking
firm of national standing selected by the Company) of such Subsidiary;
provided that the Company may designate DNCC as an Unrestricted Subsidiary at
any time and such designation shall not be deemed a Restricted Investment if,
but only if, the provisions of clauses (B) (a), (b), (c) and (d) shall have
been complied with prior to such designation. An Unrestricted Subsidiary may
be designated as a Restricted Subsidiary of the Company if, at the time of
such designation after giving pro forma effect thereto as if such designation
had occurred at the beginning of the
-15-
applicable four-quarter period, the Company would be permitted to incur at
least $1.00 of additional Indebtedness pursuant to the Cash Flow Ratio test
set forth in the covenant entitled "--Incurrence of Indebtedness, Issuance of
Disqualified Stock and Issuance of Preferred Equity Interest of Subsidiaries."
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the
then outstanding principal amount of such Indebtedness into (b) the total of
the product obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (ii)
the number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment.
"WHOLLY OWNED RESTRICTED SUBSIDIARY" means a Wholly Owned Subsidiary of
the Company that is a Restricted Subsidiary of the Company.
"WHOLLY OWNED SUBSIDIARY" means, with respect to any person, any
Subsidiary all of the outstanding voting stock (other than directors'
qualifying shares) of which is owned by such person, directly or indirectly.
SECTION 1.02. OTHER DEFINITIONS.
TERM DEFINED IN SECTION
"Affiliate Transaction" . . . . . . . . . . . . . . . 4.11
"Asset Sale". . . . . . . . . . . . . . . . . . . . . 4.10
"Change of Control Offer" . . . . . . . . . . . . . . 4.15
"Change of Control Payment" . . . . . . . . . . . . . 4.15
"Change of Control Payment Date". . . . . . . . . . . 4.15
"Covenant Defeasance" . . . . . . . . . . . . . . . . 8.03
"EAC" . . . . . . . . . . . . . . . . . . . . . . . . 4.07
"Event of Default". . . . . . . . . . . . . . . . . . 6.01
"Excess Proceeds" . . . . . . . . . . . . . . . . . . 4.10; 4.16; 3.09
"Excess Proceeds Offer" . . . . . . . . . . . . . . . 3.09
"Incur" . . . . . . . . . . . . . . . . . . . . . . . 4.09
"Legal Defeasance". . . . . . . . . . . . . . . . . . 8.02
"Offer Amount". . . . . . . . . . . . . . . . . . . . 3.09
"Offer Payment" . . . . . . . . . . . . . . . . . . . 4.21
"Offer Payment Date". . . . . . . . . . . . . . . . . 4.21
"Offer Period". . . . . . . . . . . . . . . . . . . . 3.09
"Offer to Purchase" . . . . . . . . . . . . . . . . . 4.21
"Paying Agent". . . . . . . . . . . . . . . . . . . . 2.04
"Payment Default" . . . . . . . . . . . . . . . . . . 6.01
"Permitted Refinancing" . . . . . . . . . . . . . . . 4.09
"Purchase Date" . . . . . . . . . . . . . . . . . . . 3.09
"Refinancing Indebtedness". . . . . . . . . . . . . . 4.09
"Registrar" . . . . . . . . . . . . . . . . . . . . . 2.04
"Restricted Payments" . . . . . . . . . . . . . . . . 4.07
"Significant Transaction" . . . . . . . . . . . . . . 4.22
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"Special Offer Payment" . . . . . . . . . . . . . . . 4.22
"Special Offer Payment Date". . . . . . . . . . . . . 4.22
"Special Offer to Purchase" . . . . . . . . . . . . . 4.22
"Strategic Partner" . . . . . . . . . . . . . . . . . 4.22
"Subordinate and junior". . . . . . . . . . . . . . .11.01
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"INDENTURE SECURITIES" means the Notes and any Guarantee of the Notes;
"INDENTURE SECURITY HOLDER" means a Holder of a Note;
"INDENTURE TO BE QUALIFIED" means this Indenture;
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee;
"OBLIGOR" on the Notes means each of the Company and any successor
obligor upon the Notes or any Guarantor.
All other terms used in this Indenture that are defined by the TIA,
defined by reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural include
the singular; and
(5) provisions apply to successive events and transactions.
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ARTICLE 2.
THE NOTES
SECTION 2.01. FORM AND DATING.
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A hereto, the terms of which are
incorporated in and made a part of this Indenture. The Guarantees of the
Notes by the Guarantors shall be substantially in the forms set forth in
Article 11, the terms of which are incorporated in and made a part of this
Indenture. The Notes and the Guarantees of the Notes by the Guarantors may
have notations, legends or endorsements approved as to form by the Company or
the Guarantors, as the case may be, and required by law, stock exchange rule,
agreements to which the Company or the Guarantors, as the case may be, are
subject or usage. Each Note shall be dated the date of its authentication.
The Notes shall be issuable only in denominations of $1,000 and integral
multiples thereof.
The Notes shall be issued in the form of Global Notes and the Depository
Trust Company, its nominees, and their respective successors, shall act as
the Depositary with respect thereto. Each Global Note shall (i) be
registered in the name of the Depositary for such Global Note or the nominee
of such Depositary, (ii) shall be delivered by the Trustee to such Depositary
or pursuant to such Depositary's instructions, and (iii) shall bear a legend
substantially to the following effect: Unless this certificate is presented
by an authorized representative of The Depository Trust Company, a New York
Corporation ("DTC"), to Company or its agent for registration of transfer,
exchange, or payment, and any certificate issued is registered in the name of
Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
Any Note not registered under the Securities Act shall bear the
following legend on the face thereof:
"THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT")
AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST
HEREIN, THE HOLDER (1) REPRESENTS THAT IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT)(A "QIB"), (2) AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD
REFERRED TO UNDER RULE 144(k) (TAKING INTO ACCOUNT THE PROVISIONS
OF RULE 144(d) UNDER THE SECURITIES ACT, IF APPLICABLE) UNDER THE
SECURITIES ACT AS IN EFFECT ON THE DATE OF THE TRANSFER OF
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THIS NOTE, RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE
COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A PERSON WHOM THE HOLDER
REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QIB IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (D)
IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL ACCEPTABLE TO THE COMPANY) OR (E) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE,
IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, AND (3) AGREES
THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN
INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT
OF THIS LEGEND. THE INDENTURE CONTAINS A PROVISION REQUIRING THE
TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN
VIOLATION OF THE FOREGOING RESTRICTIONS."
The Trustee must refuse to register any transfer of a Note bearing such legend
that would violate the restrictions described in such legend.
SECTION 2.02. FORM OF EXECUTION AND AUTHENTICATION.
Two Officers of the Company shall sign the Notes for the Company by
manual or facsimile signature. The Company's seal shall be reproduced on the
Notes.
If an Officer whose signature is on a Note no longer holds that office
at the time the Note is authenticated, the Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature of
the Trustee. The signature of the Trustee shall be conclusive evidence that
the Note has been authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed by two
Officers of the Company, authenticate Notes for original issue up to an
aggregate principal amount of $375,000,000 of the Notes exchanged therefor.
The aggregate principal amount of Notes outstanding at any time shall not
exceed the amount set forth herein except as provided in Section 2.07.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Notes whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating
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agent has the same rights as an Agent to deal with the Company or any
Affiliate of the Company.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain (i) an office or agency where Notes may be
presented for registration of transfer or for exchange (including any
co-registrar, the "REGISTRAR") and (ii) an office or agency where Notes may
be presented for payment ("PAYING AGENT"). The Registrar shall keep a
register of the Notes and of their transfer and exchange. The Company may
appoint one or more co-registrars and one or more additional paying agents.
The term "Paying Agent" includes any additional paying agent. The Company
may change any Paying Agent, Registrar or co-registrar without prior notice
to any Holder of a Note. The Company shall notify the Trustee and the Trustee
shall notify the-Holders of the Notes of the name and address of any Agent
not a party to this Indenture. The Company or any Guarantor may act as Paying
Agent, Registrar or co-registrar. The Company shall enter into an appropriate
agency agreement with any Agent not a party to this Indenture, which shall
incorporate the provisions of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall
notify the Trustee of the name and address of any such Agent. If the Company
fails to maintain a Registrar or Paying Agent, or fails to give the foregoing
notice, the Trustee shall act as such, and shall be entitled to appropriate
compensation in accordance with Section 7.07.
The Company initially appoints the Trustee as Registrar, Paying Agent
and agent for service of notices and demands in connection with the Notes.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent shall hold in trust for the benefit of
the Holders of the Notes or the Trustee all money held by the Paying Agent
for the payment of principal of, premium, if any, and interest on the Notes,
and shall notify the Trustee of any Default by the Company or any Guarantor
in making any such payment. While any such Default continues, the Trustee
may require a Paying Agent to pay all money held by it to the Trustee. The
Company at any time may require a Paying Agent to pay all money held by it to
the Trustee. Upon payment over to the Trustee, the Paying Agent (if other
than the Company or a Guarantor) shall have no further liability for the
money delivered to the Trustee. If the Company or a Guarantor acts as Paying
Agent, it shall segregate and hold in a separate trust fund for the benefit
of the Holders of the Notes all money held by it as Paying Agent.
SECTION 2.05. LISTS OF HOLDERS OF THE NOTES.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses
of Holders of the Notes and shall otherwise comply with TIA Section 312(a).
If the Trustee is not the Registrar, the Company shall furnish to the
Trustee at least seven Business Days before each interest payment date and at
such other times as the Trustee may request in writing a list in such form
and as of such date as the Trustee may reasonably require of the names and
addresses of Holders of the Notes, including the aggregate principal amount
of the Notes held by each thereof, and the Company and each Guarantor shall
otherwise comply with TIA Section 312(a).
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SECTION 2.06. TRANSFER AND EXCHANGE.
When Notes are presented to the Registrar with a request to register the
transfer or to exchange them for an equal principal amount of Notes of other
denominations, the Registrar shall register the transfer or make the exchange
if its requirements for such transactions are met; PROVIDED, HOWEVER, that
any Note presented or surrendered for registration of transfer or exchange
shall be duly endorsed or accompanied by a written instruction of transfer in
form satisfactory to the Registrar and the Trustee duly executed by the
Holder thereof or by his attorney duly authorized in writing. To permit
registrations of transfer and exchanges, the Company shall issue and the
Trustee shall authenticate Notes at the Registrar's request, subject to such
rules as the Trustee may reasonably require.
Neither the Company nor the Registrar shall be required to (i) issue,
register the transfer of or exchange Notes during a period beginning at the
opening of business on a Business Day 15 days before the day of any selection
of Notes for redemption under Section 3.02 or (ii) register the transfer of
or exchange any Note so selected for redemption in whole or in part, except
the unredeemed portion of any Note being redeemed in part.
No service charge shall be made to any Holder of a Note for any
registration of transfer or exchange (except as otherwise expressly permitted
herein), but the Company may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection therewith
(other than such transfer tax or similar governmental charge payable upon
exchanges pursuant to Sections 2.10, 3.06, 3.09 or 9.05, which shall be paid
by the Company).
Prior to due presentment to the Trustee for registration of the transfer
of any Note, the Trustee, any Agent and the Company may deem and treat the
Person in whose name any Note is registered as the absolute owner of such
Note for the purpose of receiving payment of principal of, premium, if any,
and interest on such Note and for all other purposes whatsoever, whether or
not such Note is overdue, and neither the Trustee, any Agent nor the Company
shall be affected by notice to the contrary.
SECTION 2.07. REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee, or the Company and
the Trustee receive evidence to their satisfaction of the destruction, loss
or theft of any Note, the Company shall issue and the Trustee, upon the
written order of the Company signed by two Officers of the Company, shall
authenticate a replacement Note if the Trustee's requirements for
replacements of Notes are met. If required by the Trustee or the Company, an
indemnity bond must be supplied by the Holder that is sufficient in the
judgment of the Trustee and the Company to protect the Company, the Trustee,
any Agent or any authenticating agent from any loss which any of them may
suffer if a Note is replaced. Each of the Company and the Trustee may charge
for its expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and
the Guarantors.
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SECTION 2.08 OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes authenticated by the
Trustee except for those canceled by it, those delivered to it for
cancellation and those described in this Section as not outstanding.
If a Note is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section
4.01, it ceases to be outstanding and interest on it ceases to accrue.
Subject to Section 2.09, a Note does not cease to be outstanding because
the Company, a Subsidiary of the Company or an Affiliate of the Company holds
the Note.
SECTION 2.09. TREASURY NOTES.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, any Subsidiary of the Company or any Affiliate of the Company shall
be considered as though not outstanding, except that for purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes which a Responsible Officer knows to
be so owned shall be so considered. Notwithstanding the foregoing, Notes
that are to be acquired by the Company, any Subsidiary of the Company or an
Affiliate of the Company pursuant to an exchange offer, tender offer or other
agreement shall not be deemed to be owned by the Company, a Subsidiary of the
Company or an Affiliate of the Company until legal title to such Notes passes
to the Company, such Subsidiary or such Affiliate, as the case may be.
SECTION 2.10. TEMPORARY NOTES.
Until definitive Notes are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Notes. Temporary Notes shall be
substantially in the form of definitive Notes but may have variations that
the Company and the Trustee consider appropriate for temporary Notes.
Without unreasonable delay, the Company shall prepare and the Trustee, upon
receipt of the written order of the Company signed by two Officers of the
Company, shall authenticate definitive Notes in exchange for temporary Notes.
Until such exchange, temporary Notes shall be entitled to the same rights,
benefits and privileges as definitive Notes.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment.
The Trustee shall cancel all Notes surrendered for registration of transfer,
exchange, payment, replacement or cancellation and shall destroy canceled
Notes (subject to the record retention requirement of the Exchange Act),
unless the Company directs canceled Notes to be returned to it. The Company
may not issue new Notes
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to replace Notes that it has redeemed or paid or that have been delivered to
the Trustee for cancellation. All canceled Notes held by the Trustee shall
be destroyed and certification of their destruction delivered to the Company,
unless by a written order, signed by two Officers of the Company, the Company
shall direct that canceled Notes be returned to it.
SECTION 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Notes, it shall
pay the defaulted interest in any lawful manner plus, to the extent lawful,
interest payable on the defaulted interest, to the Persons who are Holders of
the Notes on a subsequent special record date, which date shall be at the
earliest practicable date but in all events at least five Business Days prior
to the payment date, in each case at the rate provided in the Notes. The
Company shall, with the consent of the Trustee, fix or cause to be fixed each
such special record date and payment date. At least 15 days before the
special record date, the Company (or the Trustee, in the name of and at the
expense of the Company) shall mail to Holders of the Notes a notice that
states the special record date, the related payment date and the amount of
such interest to be paid.
SECTION 2.13. RECORD DATE.
The record date for purposes of determining the identity of Holders of
the Notes entitled to vote or consent to any action by vote or consent
authorized or permitted under this Indenture shall be determined as provided
for in TIA Section 316(c).
SECTION 2.14. CUSIP NUMBER.
The Company in issuing the Notes may use a "CUSIP" number and, if it
does so, the Trustee shall use the CUSIP number in notices of redemption or
exchange as a convenience to Holders; PROVIDED that any such notice may state
that no representation is made as to the correctness or accuracy of the CUSIP
number printed in the notice or on the Notes and that reliance may be placed
only on the other identification numbers printed on the Notes. The Company
will promptly notify the Trustee of any change in the CUSIP number.
ARTICLE 3.
REDEMPTION
SECTION 3.01. NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07, it shall furnish to the Trustee, at
least 45 days (unless a shorter period is acceptable to the Trustee) but not
more than 60 days before a redemption date, an Officers' Certificate setting
forth (i) the redemption date, (ii) the principal amount of Notes to be
redeemed and (iii) the redemption price.
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed at any time, the
selection of Notes for redemption will be made by the Trustee in compliance
with the requirements of the principal
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national securities exchange, if any, on which the Notes are listed, or if
the Notes are not so listed on a PRO RATA basis, by lot or in accordance with
any other method the Trustee considers fair and appropriate, PROVIDED that no
Notes with a principal amount of $1,000 or less shall be redeemed in part.
In the event of partial redemption by lot, the particular Notes to be
redeemed shall be selected, unless otherwise provided herein, not less than
30 nor more than 60 days prior to the redemption date by the Trustee from the
outstanding Notes not previously called for redemption.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions
of them selected shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
SECTION 3.03. NOTICE OF REDEMPTION.
Subject to the provisions of Section 3.09, at least 30 days but not more than
60 days before a redemption date, the Company shall mail or cause to be
mailed, by first class mail, a notice of redemption to each Holder whose
Notes are to be redeemed at its registered address.
The notice shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part only, the portion of the
principal amount of such Note to be redeemed and that, after the
redemption date upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion shall be issued;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the redemption date;
(g) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and
(h) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed on
the Notes.
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At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; PROVIDED, HOWEVER, that
the Company shall have delivered to the Trustee, at least 45 days (unless a
shorter period is acceptable to the Trustee) prior to the redemption date, an
Officers' Certificate requesting that the Trustee give such notice and
setting forth the information to be stated in such notice as provided in the
preceding paragraph.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.03, Notes
called for redemption become due and payable on the redemption date at the
redemption price.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
On or prior to any redemption date, the Company shall deposit with the
Trustee or with the Paying Agent money sufficient to pay the redemption price
of and accrued interest on all Notes to be redeemed on that date. The
Trustee or the Paying Agent shall promptly return to the Company any money
deposited with the Trustee or the Paying Agent by the Company in excess of
the amounts necessary to pay the redemption price of, and accrued interest
on, all Notes to be redeemed.
On and after the redemption date, interest shall cease to accrue on the
Notes or the portions of Notes called for redemption. If a Note is redeemed
on or after an interest record date but on or prior to the related interest
payment date, then any accrued and unpaid interest shall be paid to the
Person in whose name such Note was registered at the close of business on
such record date. If any Note called for redemption shall not be so paid
upon surrender for redemption because of the failure of the Company to comply
with the preceding paragraph, interest shall be paid on the unpaid principal,
from the redemption date until such principal is paid, and to the extent
lawful on any interest not paid on such unpaid principal, in each case at the
rate provided in the Notes.
SECTION 3.06. NOTES REDEEMED IN PART.
Upon surrender and cancellation of a Note that is redeemed in part, the
Company shall issue and the Trustee shall authenticate for the Holder of the
Notes at the expense of the Company a new Note equal in principal amount to the
unredeemed portion of the Note surrendered.
SECTION 3.07. OPTIONAL REDEMPTION.
Except as provided in the next paragraph, the Company shall not have the
option to redeem the Notes prior to July 1, 2000. Thereafter, the Company
shall have the option to redeem the Notes, in whole or in part, upon not less
than 30 nor more than 60 days' notice, at the redemption prices (expressed as
percentages of principal amount) set forth below, together with accrued and
unpaid interest thereon to the applicable redemption date, if redeemed during
the 12-month period beginning on July 1 of the years indicated below:
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YEAR PERCENTAGE
---- ----------
2000 . . . . . . . . . . . . . . . . . . . . . 106.250%
2001 . . . . . . . . . . . . . . . . . . . . . 103.125%
2002 . . . . . . . . . . . . . . . . . . . . . 100.000%
---------------------------------------------------------
---------------------------------------------------------
Notwithstanding the foregoing, at any time prior to July 1, 2000, the
Company may redeem Notes at a redemption price equal to 112.50% of the
principal amount thereof on the repurchase date with the net proceeds of one
public or private sale of Equity Interests (other than Disqualified Stock) of
EchoStar, the Company or any of their Subsidiaries (other than proceeds from
a sale to EchoStar, the Company or any of their Subsidiaries); PROVIDED that
(a) at least two-thirds in aggregate principal amount of the Notes originally
issued remain outstanding immediately after the occurrence of such redemption
and (b) such redemption occurs within 120 days of the date of the closing of
any such sale.
SECTION 3.08. MANDATORY REDEMPTION.
The Notes will not be subject to any mandatory redemption or sinking
fund provisions.
SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
When the cumulative amount of Excess Proceeds that have not been applied
in accordance with Section 4.10 and 4.16 herein or this Section 3.09, exceeds
$5 million, the Company shall be obligated to make an offer to all Holders of
the Notes (an "EXCESS PROCEEDS OFFER") to purchase the maximum principal
amount of Notes that may be purchased out of such Excess Proceeds at an offer
price in cash in an amount equal to 101% of the principal amount thereof,
together with accrued and unpaid interest to the date fixed for the closing
of such offer in accordance with the procedures set forth in this Indenture.
If the aggregate principal amount of Notes surrendered by Holders thereof
exceeds the amount of such Excess Proceeds, the Trustee shall select the
Notes to be purchased on a PRO RATA basis.
The Excess Proceeds Offer shall remain open for a period of 20 Business
Days following its commencement and no longer, except to the extent that a
longer period is required by applicable law (the "OFFER PERIOD"). No later
than five Business Days after the termination of the Offer Period (the
"PURCHASE DATE"), the Company shall purchase the maximum principal amount of
Notes that may be purchased with such Excess Proceeds (which maximum
principal amount of Notes shall be the "OFFER AMOUNT") or, if less than the
Offer Amount has been tendered, all Notes tendered in response to the Excess
Proceeds Offer.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued interest shall be paid
to the Person in whose name a Note is registered at the close of business on
such record date, and no additional interest shall be payable to Holders who
tender Notes pursuant to the Excess Proceeds Offer.
Upon the commencement of any Excess Proceeds Offer, the Company shall
send, by first class mail, a notice to each of the Holders of the Notes, with
a copy to the Trustee. The notice shall contain all instructions and
materials necessary to enable such Holders to tender
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Notes pursuant to the Excess Proceeds Offer. The notice, which shall govern
the terms of the Excess Proceeds Offer, shall state:
(a) that the Excess Proceeds Offer is being made pursuant to
this Section 3.09 and the length of time the Excess Proceeds Offer
shall remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment shall
continue to accrue interest;
(d) that any Note accepted for payment pursuant to the Excess
Proceeds Offer shall cease to accrue interest after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to any
any Excess Proceeds Offer shall be required to surrender the Note, with
the form entitled "Option of Holder to Elect Purchase" on the reverse of
the Note completed, to the Company, a depositary, if appointed by the
Company, or a Paying Agent at the address specified in the notice at least
three business days before the Purchase Date;
(f) that Holders shall be entitled to withdraw their election if the
Company, depositary or Paying Agent, as the case may be, receives, not
later than the expiration of the Offer Period, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Note the Holder delivered for purchase and a statement that
such Holder is withdrawing his election to have the Note purchased;
(g) that, if the aggregate principal amount of Notes surrendered by
Holders exceeds the Offer Amount, the Company shall select the Notes to be
purchased on a PRO RATA basis (with such adjustments as may be deemed
appropriate by the Company so that only Notes in denominations of $1,000,
or integral multiples thereof, shall be purchased); and
(h) that Holders whose Notes were purchased only in part shall be
issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered.
On or before the Purchase Date, the Company shall, to the extent lawful,
accept for payment, on a PRO RATA basis to the extent necessary, the Offer
Amount of Notes or portions thereof tendered pursuant to the Excess Proceeds
Offer, or if less than the Offer Amount has been tendered, all Notes or
portion thereof tendered, and deliver to the Trustee an Officers' Certificate
stating that such Notes or portions thereof were accepted for payment by the
Company in accordance with the terms of this Section 3.09. The Company,
depositary or Paying Agent, as the case may be, shall promptly (but in any
case not later than five days after the Purchase Date) mail or deliver to
each tendering Holder an amount equal to the purchase price of the Note
tendered by such Holder and accepted by the Company for purchase, and the
Company shall promptly issue a new Note, and the Trustee shall authenticate
and mail or deliver such new Note, to such Holder equal in principal amount
to any unpurchased portion of the Note surrendered. Any Note not so accepted
shall be promptly mailed or delivered by the Company to the Holder thereof.
The Company shall publicly announce the results of the
-27-
Excess Proceeds Offer on the Purchase Date. To the extent that the aggregate
principal amount of Notes tendered pursuant to an Excess Proceeds Offer is
less than the amount of such Excess Proceeds, the Company may use any
remaining Excess Proceeds for general corporate purposes. Upon completion of
an Excess Proceeds Offer, the amount of Excess Proceeds shall be reset at
zero.
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06.
ARTICLE 4.
COVENANTS
SECTION 4.01. PAYMENT OF NOTES.
The Company shall pay or cause to be paid the principal of, premium, if
any, and interest on the Notes on the dates and in the manner provided in the
Notes. Principal, premium, if any, and interest shall be considered paid on
the date due if the Paying Agent, if other than the Company, holds as of
10:00 a.m. Eastern Time on the due date money deposited by the Company in
immediately available funds and designated for and sufficient to pay all
principal, premium, if any, and interest then due.
The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal
to the then applicable interest rate on the Notes to the extent lawful; it
shall pay interest (including post-petition interest in any proceeding under
any Bankruptcy Law) on overdue installments of interest (without regard to
any applicable grace period) at the same rate to the extent lawful.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain an office or agency (which may be an office
of the Trustee or an affiliate of the Trustee, Registrar or co-registrar)
where Notes may be surrendered for registration of transfer or exchange and
where notices and demands to or upon the Company in respect of the Notes and
this Indenture may be served. The Company shall give prompt written notice
to the Trustee of the location, and any change in the location, of such
office or agency. If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be
made or served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
PROVIDED, HOWEVER, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency for
such purposes. The Company shall give prompt written notice to the Trustee
of any such designation or rescission and of any change in the location of
any such other office or agency.
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The Company hereby designates the Corporate Trust Office of the Trustee
as one such office or agency of the Company in accordance with Section 2.03.
SECTION 4.03. REPORTS.
(a) Whether or not required by the rules and regulations of the SEC, so
long as any of the Notes remain outstanding, the Company shall cause copies
of all quarterly and annual financial reports and of the information,
documents, and other reports (or copies of such portions of any of the
foregoing as the SEC may by rules and regulations prescribe) which the
Company is required to file with the SEC pursuant to Section 13 or 15(d) of
the Exchange Act (including all information that would be required to be
contained in Forms 10-Q and 10-K) to be filed with the SEC and the Trustee
and mailed to the Holders at their addresses appearing in the register of
Notes maintained by the Registrar, in each case, within 15 days of filing
with the SEC. If the Company is not subject to the requirements of such
Section 13 or 15(d) of the Exchange Act, the Company shall nevertheless
continue to cause the annual and quarterly financial statements, including
any notes thereto (and, with respect to annual reports, an auditors' report
by an accounting firm of established national reputation) and a "Management's
Discussion and Analysis of Financial Condition and Results of Operations,"
comparable to that which would have been required to appear in annual or
quarterly reports filed under Section 13 or 15(d) of the Exchange Act
(including all information that would be required to be contained in Forms
10-Q and 10-K), to be so filed with the SEC for public availability and the
Trustee and mailed to the Holders within 120 days after the end of the
Company's fiscal years and within 60 days after the end of each of the first
three quarters of each such fiscal year. The Company and the Guarantors
shall also comply with the provisions of TIA Section 314(a).
(b) The Company shall provide the Trustee with a sufficient number of
copies of all reports and other documents and information that the Trustee
may be required to deliver to the Holders of the Notes under this Section
4.03.
SECTION 4.04. COMPLIANCE CERTIFICATE.
(a) The Company shall deliver to the Trustee, within 120 days after the
end of each fiscal year, an Officers' Certificate stating that a review of
the activities of the Company and its Subsidiaries during the preceding
fiscal year has been made under the supervision of the signing Officers with
a view to determining whether each has kept, observed, performed and
fulfilled its obligations under this Indenture and the Collateral Documents,
and further stating, as to each such Officer signing such certificate, that
to the best of his or her knowledge each entity has kept, observed, performed
and fulfilled each and every covenant contained in this Indenture and the
Collateral Documents and is not in default in the performance or observance
of any of the terms, provisions and conditions of this Indenture or the
Collateral Documents, including, without limitation, a default in the
performance or breach of Section 4.07, Section 4.09, Section 4.10, Section
4.15 or Section 4.20 (or, if a Default or Event of Default shall have
occurred, describing all such Defaults or Events of Default of which he or
she may have knowledge and what action each is taking or proposes to take
with respect thereto) and that to the best of his or her knowledge no event
has occurred and remains in existence by reason of which payments on account
of the principal of or interest, if any, on the Notes is prohibited or if
such event has occurred, a description of the event and what action each is
taking or proposes to take with respect thereto.
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(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03 above shall be accompanied by a
written statement of the Company's independent public accountants (who shall
be a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention which would lead them to believe that the Company or any of
its Affiliates has violated any provisions of Article Four or Article Five of
this Indenture or, if any such violation has occurred, specifying the nature
and period of existence thereof, it being understood that such accountants
shall not be liable directly or indirectly to any Person for any failure to
obtain knowledge of any such violation. The Trustee has no duty to review
these statements or any other financial statements for purposes of
determining compliance with this or any other provision of this Indenture.
(c) The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith upon any Officer becoming aware of (i) any
Default or Event of Default, (ii) any default under any of the Collateral
Documents or (iii) any default under any Indebtedness referred to in Section
6.01(g) or (h), an Officers' Certificate specifying such Default, Event of
Default or default and what action the Company or any of its Affiliates is
taking or proposes to take with respect thereto.
SECTION 4.05. TAXES.
The Company shall pay, and shall cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental
levies except as contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material
respect to the Holders of the Notes.
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.
The Company and each Guarantor covenants (to the extent that it may
lawfully do so) that it shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law wherever enacted, now or at any time hereafter in
force, that may affect the covenants or the performance of this Indenture;
and the Company and each Guarantor (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law, and
covenants that it shall not, by resort to any such law, hinder, delay or
impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though no such law has
been enacted.
SECTION 4.07. RESTRICTED PAYMENTS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries, to, directly or indirectly, (a) declare or pay any dividend or
make any distribution on account of any Equity Interests of the Company or
any of its Subsidiaries, other than dividends or distributions payable in
Equity Interests (other than Disqualified Stock) of the Company or dividends
or distributions payable to any Wholly Owned Subsidiary of the Company (other
than Unrestricted Subsidiaries of the Company), (b) purchase, redeem or
otherwise acquire or retire for value any outstanding Equity Interests of
EchoStar, any of its Subsidiaries or any other Affiliate of EchoStar, other
than any such Equity Interests owned by the Company or
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any of its Wholly Owned Subsidiaries (other than Unrestricted Subsidiaries of
the Company), (c) voluntarily purchase, redeem, defease or otherwise acquire
or retire for value any Indebtedness that is expressly subordinated in right
of payment to the Notes, except in accordance with the scheduled mandatory
redemption or repayment provisions set forth in the original documentation
governing such Indebtedness or (d) make any Restricted Investment (all such
prohibited payments and other actions set forth in clauses (a) through (d)
above being collectively referred to as "RESTRICTED PAYMENTS"), unless, at
the time of such Restricted Payment:
(i) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;
(ii) after giving effect to such Restricted Payment and the
incurrence of any Indebtedness the net proceeds of which are used to
finance such Restricted Payment, the Indebtedness to Cash Flow Ratio of
the Company would not have exceeded 6.0 to 1; and
(iii) such Restricted Payment, together with the aggregate of all
other Restricted Payments made by the Company after the date of this
Indenture, is less than the sum of: (A) the difference of cumulative (x)
Consolidated Cash Flow determined at the time of such Restricted Payment
(or, in case such Consolidated Cash Flow shall be a deficit, minus 100% of
such deficit) minus (y) 150% of Consolidated Interest Expense of the
Company, each as determined for the period (taken as one accounting period)
from July 1, 1997 to the end of the Company's most recently ended fiscal
quarter for which internal financial statements are available at the time
of such Restricted Payment; plus (B) an amount equal to 100% of the
aggregate net cash proceeds received by the Company and its Subsidiaries
from the issue or sale of Equity Interests (other than Disqualified Stock)
of the Company or EchoStar (other than Equity Interests sold to a
Subsidiary of the Company or EchoStar, and provided that any sale of Equity
Interests of EchoStar shall only be included in such calculation to the
extent that the proceeds thereof are contributed to the capital of the
Company other than as Disqualified Stock or Indebtedness), since the date
of the Indenture.
The foregoing provisions will not prohibit:
(1) the payment of any dividend within 60 days after the date of
declaration thereof, if at such date of declaration such payment would have
complied with the provisions of this Indenture;
(2) the redemption, repurchase, retirement or other acquisition of
any Equity Interests of the Company in exchange for, or out of the net
proceeds of, the substantially concurrent sale (other than to a Subsidiary
of the Company) of other Equity Interests of the Company (other than
Disqualified Stock);
(3) the payment of dividends on, or the redemption of, the Dish
Preferred Stock;
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(4) Investments in an aggregate amount not to exceed $20 million;
PROVIDED that such Investments are in businesses of the type described in
Section 4.18;
(5) Investments to fund the financing activity of DNCC in the ordinary
course of its business in an amount not to exceed, as of the date of
determination, the sum of (A) $25.0 million plus (B) 30% of the aggregate
cost to DNCC for each Satellite Receiver purchased by DNCC and leased by
DNCC to a retail consumer in excess of 100,000 units;
(6) the purchase of employee stock options, or capital stock issued
pursuant to the exercise of employee stock options, in an aggregate amount
not to exceed $2 million in any calendar year and in an aggregate amount
not to exceed $10 million since the date of this Indenture;
(7) a Permitted Refinancing as defined in Section 4.09 of this
Indenture;
(8) Investments in an amount equal to the net proceeds received by
the Company or any of its Restricted Subsidiaries from the issue and sale
of Equity Interests of EchoStar (other than Equity Interests sold to a
Subsidiary of EchoStar and other than Disqualified Stock), since the date
of this Indenture; provided that the entity making such Investment (if
other than the Company) receives a capital contribution from EchoStar in an
amount greater than or equal to the amount of such Investment;
(9) the purchase of odd-lots of Equity Interests of EchoStar, in an
amount not to exceed $1 million in the aggregate;
(10) Investments in ExpressVu Inc. or an Affiliate thereof, in an
amount not to exceed the amount necessary to exercise the purchase options
granted, through the date of this Indenture, to EchoStar or its
Subsidiaries with respect to ExpressVu, Inc.;
(11) Investments in ABCN, Inc. or an Affiliate thereof, in an amount
not to exceed the amount necessary to exercise the purchase options
granted, through the date of this Indenture, to EchoStar or its
Subsidiaries with respect to ABCN, Inc.; or
(12) the payment of any dividend, or making of any distribution or
Investment, the proceeds of which are, within five Business Days of receipt
thereof, used to pay for the construction, launch, operation or insurance
of EchoStar III, provided that at the time of any such payment,
distribution or Investment, EchoStar III shall be owned by EchoStar or any
Wholly Owned Subsidiary of EchoStar.
The amounts referred to in clauses (1) and (8) shall be included as
Restricted Payments in any computation made pursuant to clause (iii) of this
Section 4.07.
Not later than the date of making any Restricted Payment, the Company
shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by this Section 4.07 were computed, which calculations
shall be based upon the Company's latest available financial statements.
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SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES.
The Company shall not, and the Company shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause
or suffer to exist or become effective any encumbrance or restriction on the
ability of any Restricted Subsidiary to (a) pay dividends or make any other
distributions to the Company or any of its Restricted Subsidiaries on its
Capital Stock or with respect to any other interest or participation in, or
measured by, its profits, or pay any Indebtedness owed to the Company or any
of its Subsidiaries, (b) make loans or advances to the Company or any of its
Subsidiaries or (c) transfer any of its properties or assets to the Company
or any of its Subsidiaries, except for such encumbrances or restrictions
existing under or by reasons of (i) Existing Indebtedness and existing
agreements as in effect on the date of this Indenture, (ii) any Credit
Agreement containing any encumbrances or restrictions that are no more
restrictive with respect to the provisions set forth in clauses (a), (b) and
(c) above than the 1994 Credit Agreement as in effect on the date of its
expiration, (iii) applicable law or regulation, (iv) any instrument governing
Acquired Debt as in effect at the time of acquisition (except to the extent
such Indebtedness was incurred in connection with, or in contemplation of,
such acquisition), which encumbrance or restriction is not applicable to any
Person, or the properties or assets of any Person, other than the Person, or
the property or assets of the Person, so acquired, PROVIDED that the
Consolidated Cash Flow of such Person shall not be taken into account in
determining whether such acquisition was permitted by the terms of this
Indenture, (v) by reason of customary non-assignment provisions in leases
entered into in the ordinary course of business and consistent with past
practices, or (vi) Refinancing Indebtedness, as defined in Section 4.09
herein, PROVIDED that the restrictions contained in the agreements governing
such Refinancing Indebtedness are no more restrictive than those contained in
the agreements governing the Indebtedness being refinanced.
SECTION 4.09. INCURRENCE OF INDEBTEDNESS, ISSUANCE OF DISQUALIFIED STOCK
AND ISSUANCE OF PREFERRED EQUITY INTERESTS OF SUBSIDIARIES.
The Company shall not, and the Company shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, issue,
assume, guaranty or otherwise become directly or indirectly liable with
respect to (collectively, "INCUR") any Indebtedness (including Acquired Debt)
and the Company shall not, and the Company shall not permit any of its
Restricted Subsidiaries to, issue any Disqualified Stock or any Preferred
Equity Interest; PROVIDED, HOWEVER, that notwithstanding the foregoing the
Company and each of its Restricted Subsidiaries may incur Indebtedness or
issue Disqualified Stock if, after giving effect to the incurrence of such
Indebtedness or the issuance of such Disqualified Stock and the application
of the net proceeds thereof, the Indebtedness to Cash Flow Ratio of the
Company would not have exceeded 6.0 to 1.
The foregoing limitation will not apply to:
(i) the incurrence of the Deferred Payments and letters of credit
with respect thereto;
(ii) the incurrence of Bank Debt;
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(iii) the incurrence of Indebtedness in an aggregate amount not to
exceed $15 million upon a finding by the Company (evidenced by a resolution
of the Board of Directors of EchoStar set forth in an Officers' Certificate
delivered to the Trustee) that such Indebtedness is necessary to finance
costs in connection with the development, construction, launch or insurance
of EchoStar III or IV (or any permitted replacements thereof), PROVIDED
that such Indebtedness is subordinated by its terms in right and priority
of payment to the Notes;
(iv) Indebtedness between and among the Company and each of its
Restricted Subsidiaries;
(v) Acquired Debt of a person incurred prior to the date upon which
such person was acquired by the Company or any of its Subsidiaries
(excluding Indebtedness incurred by such entity other than in the ordinary
course of its business in connection with, or in contemplation of, such
entity being so acquired) in an aggregate principal amount not to exceed
$15 million, PROVIDED that such Indebtedness and the holders thereof do not
at any time have direct or indirect recourse to any property or assets of
the Company or any of its Subsidiaries other than the property and assets
of such acquired entity and its Subsidiaries;
(vi) Existing Indebtedness;
(vii) additional Indebtedness in an aggregate amount not to exceed
$15 million at any one time outstanding;
(viii) the incurrence of Purchase Money Indebtedness by the Company
and any Restricted Subsidiary in an aggregate amount not to exceed
$30 million at any one time outstanding; or
(ix) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness issued in exchange for, or the proceeds of
which are used to extend, refinance, renew, replace, substitute or refund
Indebtedness referred to in clauses (i), (iii), (v), (vi), (vii) and (viii)
above ("REFINANCING INDEBTEDNESS"); PROVIDED, HOWEVER, that (A) the
principal amount of such Refinancing Indebtedness shall not exceed the
principal amount and accrued interest of the Indebtedness so extended,
refinanced, renewed, replaced, substituted or refunded; (B) the Refinancing
Indebtedness shall have a final maturity later than, and a Weighted Average
Life to Maturity equal to or greater than; the final maturity and Weighted
Average Life to Maturity of the Indebtedness being extended, refinanced,
renewed, replaced or refunded; and (C) the Refinancing Indebtedness shall
be subordinated in right of payment to the Notes, if at all, on terms at
least as favorable to the Holders of Notes as those contained in the
documentation governing the Indebtedness being extended, refinanced,
renewed, replaced or refunded (a "PERMITTED REFINANCING").
SCTION 4.10. ASSET SALES; TRANSFER OF ECHOSTAR IV.
If the Company or any of its Restricted Subsidiaries, in a single
transaction or a series of related transactions, (a) sell, lease, convey or
otherwise dispose of any assets (including by way of a sale-and-leaseback
transaction), other than (i) sales of inventory in the ordinary
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course of business, (ii) sales to the Company or a Wholly Owned Restricted
Subsidiary of the Company by any Restricted Subsidiary of the Company, (iii)
sales of accounts receivable by EAC or DNCC for cash in an amount at least
equal to the fair market value of such accounts receivable or (iv) sales of
rights to satellite launches (PROVIDED that the sale, lease, conveyance or
other disposition of all or substantially all of the assets of the Company
shall be governed by Section 5.01 of this Indenture); (b) issue or sell
equity securities of any Restricted Subsidiary of the Company, in the case of
either (a) or (b) above, which assets or securities (i) have a fair market
value (as determined in good faith by the Board of Directors of EchoStar
evidenced by a resolution of the Board of Directors of EchoStar and set forth
in an Officers' Certificate delivered to the Trustee; PROVIDED, HOWEVER, that
if the fair market value of such assets exceeds $20 million, the fair market
value shall be determined by an investment banking firm of national standing
selected by the Company) in excess of $10 million or (ii) are sold or
otherwise disposed of for net proceeds in excess of $10 million (each of the
foregoing, an "ASSET SALE") then:
(A) The Company or such Restricted Subsidiary, as the case may be,
must receive consideration at the time of such Asset Sale at least equal to
the fair market value (as determined in good faith by the Board of
Directors of EchoStar evidenced by a resolution of the Board of Directors
of EchoStar and set forth in an Officers' Certificate delivered to the
Trustee; PROVIDED, HOWEVER, that if the fair market value of such assets
exceeds $20 million, the fair market value shall be determined by an
investment banking firm of national standing selected by the Company) of
the assets sold or otherwise disposed of; and
(B) at least 80% of the consideration therefor received by the
Company or such Restricted Subsidiary, as the case may be, is in the form
of cash or Cash Equivalents; PROVIDED, HOWEVER, that the Company may
consider up to $15 million of non-cash assets at any one time to be cash
for purposes of this clause (B), PROVIDED that the provisions of the
next paragraph are complied with as such non-cash assets are converted to
cash.
The Net Proceeds from such Asset Sale shall be placed in the Satellite Escrow
Account, and shall be disbursed only: (i) to make Receiver Subsidies, to buy
or lease satellite frequencies at orbital slots or to purchase tangible
assets to be used in the business of EchoStar as described in Section 4.18 or
if any satellite is sold after launch, only to purchase a replacement
satellite or (ii) as set forth in the next sentence. Any Net Proceeds from
any Asset Sale that are not applied or invested as provided in the preceding
sentence within 180 days after such Asset Sale, and not applied to an offer
to repurchase 1994 Notes required by the 1994 Notes Indenture or 1996 Notes
required by the 1996 Notes Indenture, shall constitute "Excess Proceeds" and
shall be applied to an offer to purchase Notes as set forth in Section 3.09.
Notwithstanding the foregoing or any other provision of this Indenture
to the contrary, (i) any of DBSC, EchoStar Satellite Corporation or DirectSat
Corporation may transfer its right and interest in any permits and licenses
relating to the use of channels at the 166DEG. West Longitude or 175DEG.
West Longitude orbital slot, or any portions thereof, without receiving any
consideration and (ii) the Company may lease EchoStar IV to any Wholly Owned
Subsidiary of EchoStar (other than an Unrestricted Subsidiary of the Company)
without receiving any consideration provided (A) either (1) such Subsidiary
has the right to operate at a full-CONUS orbital slot and EchoStar IV is used
in such orbital slot or
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(2)(x) there has been a full or partial launch or in-orbit failure of
EchoStar III, (y) such Subsidiary has the right to operate at the 61.5DEG.
West Longitude orbital slot and (z) EchoStar IV is used in such orbital slot
and (B) prior to or contemporaneously with executing such lease, the Company
delivers to the Trustee an Opinion of Counsel (which Opinion of Counsel may
be subject to customary qualifications and exceptions), substantially to the
effect that (i) such lease is not prohibited by applicable laws, rules or
regulations (or any required consents, approvals or filings have been
obtained or made, as the case may be), (ii) such lease will not result in a
default or breach under any indenture or under any material contract,
agreement or understanding to which the Company is a party or by which it or
its properties is bound, and (iii) immediately following such lease, the
Trustee for the benefit of the Holders of the Notes will maintain its
security interest in EchoStar IV and all other collateral which, immediately
prior to such lease, secured the Company's or any Guarantor's obligations
under the Notes or Guarantee, as the case may be.
The Company will not launch, move or otherwise assign (collectively,
"Transfer") EchoStar IV into an orbital slot other than 148DEG. West
Longitude unless prior to or contemporaneously with such Transfer the Company
delivers to the Trustee an Opinion of Counsel (which Opinion of Counsel may
be subject to customary qualifications and exceptions) substantially to the
effect that (i) such Transfer is not prohibited by applicable laws, rules or
regulations (or any required consents, approvals or filings have been
obtained or made, as the case may be), (ii) such Transfer will not result in
a default or breach under any indenture or under any material contract,
agreement or understanding to which the Company is a party or by which it or
its properties is bound, and (iii) immediately following such Transfer, the
Trustee for the benefit of the Holders of the Notes will maintain its
security interest in EchoStar IV and all other collateral which, immediately
prior to such Transfer, secured the Company's or any Guarantor's Obligations
under the Notes or Guarantee, as the case may be; PROVIDED HOWEVER, that in
the event the Transfer constitutes an "Asset Sale", then the Company (i)
shall not be obligated to comply with the requirements of this paragraph but
(ii) shall otherwise be required to comply with this Section 4.10 (subject to
the immediately preceding paragraph) and all other applicable provisions of
the Indenture.
SECTION 4.11. TRANSACTIONS WITH AFFILIATES.
EchoStar shall not, and shall not permit any of its Subsidiaries to,
sell, lease, transfer or otherwise dispose of any of its properties or assets
to, or purchase any property or assets from, or enter into any contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate (including any Unrestricted Subsidiary) (each of the
foregoing, an "AFFILIATE TRANSACTION"), unless (a) such Affiliate Transaction
is on terms that are no less favorable to the Company or its Subsidiaries
than those that would have been obtained in a comparable transaction by the
Company or such Subsidiaries with an unrelated Person, (b) if such Affiliate
Transaction involves aggregate payments in excess of $500,000, the Company
delivers to the Trustee a resolution of the Board of Directors of the Company
set forth in an Officers' Certificate certifying that such Affiliate
Transaction complies with clause (a) above and such Affiliate Transaction is
approved by a majority of disinterested members of the Board of Directors of
EchoStar and (c) if such Affiliate Transaction involves aggregate payments in
excess of $15 million, the Company delivers to the Trustee an opinion as to
the fairness to the Company or such Subsidiaries from a financial point of
view of such Affiliate Transaction issued by an investment banking firm of
national standing; PROVIDED, HOWEVER, that (i) the payment of compensation to
directors and management of EchoStar in
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amounts approved by the Compensation Committee of the Board of Directors of
EchoStar (which shall consist of a majority of outside directors); (ii)
transactions between or among the Company and its Wholly Owned Subsidiaries
(other than Unrestricted Subsidiaries of the Company); (iii) the transfer of
rights and interests in any permits or licenses relating to the use of
channels at the 166DEG. West Longitude or 175DEG. West Longitude orbital
slot; (iv) transactions permitted by the provisions of this Indenture
described above under clauses (1), (3), (5), (6), (7), (9) and (12) of the
second paragraph of Section 4.07 of this Indenture; and (v) any transactions
between or among EchoStar and any Subsidiary of EchoStar which is not also a
Subsidiary of the Company, shall, in each case, not be deemed Affiliate
Transactions.
SECTION 4.12. LIENS.
None of the Company or any Restricted Subsidiary of the Company may
directly or indirectly create, incur, assume or suffer to exist any Lien on
any asset now owned or hereafter acquired, or on any income or profits
therefrom or assign or convey any right to receive income therefrom, except
Permitted Liens.
SECTION 4.13. ADDITIONAL SUBSIDIARY GUARANTEES.
If the Company or any Guarantor transfers or causes to be transferred,
in one or a series of related transactions, property or assets (including,
without limitation, businesses, divisions, real property, assets or
equipment) having a fair market value (as determined in good faith by the
Board of Directors of EchoStar evidenced by a resolution of the Board of
Directors of EchoStar and set forth in an Officers' Certificate delivered to
the Trustee; PROVIDED, HOWEVER that if the fair market value exceeds $10
million, the fair market value shall be determined by an investment banking
firm of national standing selected by the Company) exceeding $500,000 to any
Restricted Subsidiary of the Company that is neither a Subsidiary of ESBC nor
a Guarantor, EchoStar, to the extent not otherwise precluded by obligations
set forth in the 1996 Notes Indenture or the 1994 Notes Indenture, shall, or
shall cause the owner of such Subsidiary to: (a) enter into a pledge
agreement in order to pledge all of the issued and outstanding Capital Stock
of such Subsidiary as security to the Trustee for the benefit of the Holders
of the Notes; and (b) cause such Subsidiary to: (i) execute and deliver to
the Trustee a Supplemental Indenture in form and substance reasonably
satisfactory to the Trustee pursuant to which such Subsidiary shall
unconditionally Guarantee all of the Company's obligations under the Notes
and execute a notation in form and substance reasonably satisfactory to the
Trustee; and (ii) deliver to the Trustee an Opinion of Counsel reasonably
satisfactory to the Trustee that such pledge agreement and such Supplemental
Indenture have been duly authorized, executed and delivered by and are valid
and binding obligations of such Subsidiary or such owner, as the case may be;
PROVIDED, HOWEVER, that the foregoing provisions shall not apply to transfers
of property or assets (other than cash) by the Company or any Guarantor in
exchange for cash or Cash Equivalents in an amount equal to the fair market
value (as determined in good faith by the Board of Directors of EchoStar
evidenced by a resolution of the Board of Directors of EchoStar and set forth
in an Officers' Certificate delivered to the Trustee; PROVIDED, HOWEVER, that
if the fair market value exceeds $10 million, the fair market value shall be
determined by an investment banking firm of national standing selected by the
Company) of such property or assets.
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SECTION 4.14. CORPORATE EXISTENCE.
Subject to Article 5 and the next succeeding paragraph of this
Section 4.14, EchoStar shall do or cause to be done all things necessary
to preserve and keep in full force and effect (i) its existence as a
corporation, and the corporate, partnership or other existence of the
Company and any Restricted Subsidiary of the Company, in accordance with
the respective organizational documents (as the same may be amended from
time to time) of EchoStar, the Company or any Restricted Subsidiary and
(ii) the rights (charter and statutory), licenses and franchises of
EchoStar, the Company and its Restricted Subsidiaries; PROVIDED, HOWEVER,
that EchoStar shall not be required to preserve any such right, license
or franchise, or the corporate, partnership or other existence of any
Restricted Subsidiary of the Company (other than the Company, itself) if
the Board of Directors shall determine that the preservation thereof is
no longer desirable in the conduct of the business of EchoStar and its
Subsidiaries, taken as a whole, and that the loss thereof is not adverse
in any material respect to the Holders of the Notes.
Subject to Article 5, EchoStar and the Company shall do or cause to
be done all things necessary to preserve and keep in full force and
effect their corporate existence.
SECTION 4.15. OFFER TO PURCHASE UPON CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, the Company shall
make an offer (a "CHANGE OF CONTROL OFFER") to each Holder of Notes to
repurchase all or any part (equal to $1,000 or an integral multiple
thereof) of such Holder's Notes at a purchase price equal to 101% of the
aggregate principal amount thereof, together with accrued and unpaid
interest thereon to the date of repurchase (the "CHANGE OF CONTROL
PAYMENT"), PROVIDED that if the date of purchase is on or after an
interest record date and on or before the related interest payment date,
any accrued interest shall be paid to the Person in whose name a Note is
registered at the close of business on such record date, and no
additional interest shall be paid or payable to Holders who tender Notes
pursuant to the Change of Control Offer. Within 15 days following any
Change of Control, the Company shall mail a notice to the Trustee and
each Holder stating: (1) that the Change of Control Offer is being made
pursuant to this Section 4.15 and that all Notes tendered will be
accepted for payment; (2) the purchase price and the purchase date, which
shall be no earlier than 30 days nor later than 40 days after the date
such notice is mailed (the "CHANGE OF CONTROL PAYMENT DATE"); (3) that
any Note not tendered will continue to accrue interest in accordance with
its terms; (4) that, unless the Company defaults in the payment of the
Change of Control Payment, all Notes accepted for payment pursuant to the
Change of Control Offer shall cease to accrue interest after the Change
of Control Payment Date; (5) that Holders electing to have any Notes
purchased pursuant to a Change of Control Offer will be required to
surrender the Notes, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Notes completed, to the Paying Agent at
the address specified in the notice prior to the close of business on the
third Business Day preceding the Change of Control Payment Date; (6) that
Holders will be entitled to withdraw their election if the Paying Agent
receives, not later than the close of business on the second Business Day
preceding the Change of Control Payment Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder,
the principal amount of Notes delivered for purchase, and a statement
that such Holder is withdrawing his election to have such Notes
purchased; (7) that Holders whose Notes are being purchased only in part
will be issued new Notes equal in principal amount to the
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unpurchased portion of the Notes surrendered, which unpurchased portion
must be equal to $1,000 in principal amount or an integral multiple
thereof; and (8) any other information material to such Holder's decision
to tender Notes. The Company shall comply with the requirements of Rule
14e-1 under the Exchange Act and any other securities laws and
regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of the Notes in connection
with a Change of Control.
(b) On the Change of Control Payment Date, the Company shall, to
the extent lawful, (1) accept for payment Notes or portions thereof
tendered pursuant to the Change of Control Offer, (2) deposit with the
Paying Agent an amount equal to the Change of Control Payment in respect
of all Notes or portions thereof so tendered and (3) deliver or cause to
be delivered to the Trustee the Notes so accepted together with an
Officers' Certificate stating the Notes or portions thereof tendered to
the Company. The Paying Agent shall promptly mail to each Holder of
Notes so accepted payment in an amount equal to the purchase price for
such Notes, and the Trustee shall promptly authenticate and mail to each
Holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered, if any; PROVIDED, that each such new Note shall be
in a principal amount of $1,000 or an integral multiple thereof. The
Company shall publicly announce the results of the Change of Control
Offer on or as soon as practicable after the Change of Control Payment
Date.
SECTION 4.16. MAINTENANCE OF INSURANCE.
(a) Prior to the launch of EchoStar IV (and any permitted replacement
thereof, including any satellite purchased with the proceeds of an Asset
Sale), the Company shall obtain or cause to be obtained Launch Insurance
with respect to each such satellite; and
(b) at all times subsequent to the expiration of Launch Insurance on
EchoStar IV (and any permitted replacement thereof, including any satellite
purchased with the proceeds of an Asset Sale), the Company shall maintain
In-orbit Insurance with respect to each such satellite.
EchoStar IV (or any replacement thereof) may not be launched unless Launch
Insurance covering such satellite has been obtained.
In the event that the Trustee, EchoStar, the Company or any of their
Subsidiaries (or a named loss payee) receives proceeds from any Launch Insurance
or In-orbit Insurance covering EchoStar IV (or any replacement thereof), or in
the event that EchoStar, the Company or any of their Subsidiaries receives
proceeds from any insurance maintained by Lockheed Xxxxxx or any launch provider
covering EchoStar IV (or any replacement thereof), all such proceeds (including
any cash or Cash Equivalents deemed to be proceeds of Launch Insurance or
In-orbit Insurance pursuant to the respective definition thereof) shall be
placed in the Satellite Escrow Account and shall be disbursed only: (i) to
purchase a replacement satellite, provided that if such replacement satellite is
of lesser value compared to the insured satellite, any insurance proceeds
remaining after purchase of such replacement satellite must be applied to the
construction, launch and insurance of a satellite of equal or greater value as
compared to the insured satellite (or in accordance with (ii) below); or (ii) to
the extent that such proceeds are not applied or contractually committed to be
applied as described in (i)
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above within 180 days of the receipt of such proceeds as "Excess
Proceeds" to be applied to an offer to purchase Notes as set forth in
Section 3.09 herein.
The Company shall grant or cause to be granted to the Trustee on
behalf of the Holders of the Notes (i) a first priority security interest
in each satellite constructed, launched or insured with any portion of
the proceeds of Launch or In-orbit Insurance covering EchoStar IV (or any
replacement thereof); and (ii) a collateral assignment of all contracts
relating to the construction, launch, insurance and TT&C of each such
satellite. As soon as practicable, the Company shall execute or cause to
be executed a security agreement relating to such Liens. The Company
shall take or cause to be taken all actions necessary to record, register
and file any documents or instruments necessary to make effective such
Lien and shall provide an Opinion of Counsel prepared in accordance with
Section 10.03(a) with respect to such Lien.
SECTION 4.17. CONSTRUCTION.
EchoStar and the Company shall cause the construction and launch of
EchoStar IV (and any permitted replacements thereof) to be prosecuted
with diligence and continuity in a good and workmanlike manner in
accordance with the Satellite Contracts and the Launch Contracts.
SECTION 4.18. ACTIVITIES OF ECHOSTAR.
Neither EchoStar nor any of its Subsidiaries may engage in any
business other than developing, owning, engaging in and dealing with all
or any part of the business of domestic and international satellite
communications, and reasonably related extensions thereof, including but
not limited to the purchase, ownership, operation, leasing and selling
of, and generally dealing in or with, one or more communications
satellites and the transponders thereon, the acquisition, transmission,
broadcast, production and other provision of programming therewith and
the manufacturing, distribution and financing of equipment (including
consumer electronic equipment) relating thereto.
SECTION 4.19. INTENTIONALLY OMITTED.
SECTION 4.20. DISBURSEMENT OF FUNDS-ESCROW ACCOUNTS.
The Company shall initially place $109.0 million of the net proceeds
realized from the sale of the Notes in the Interest Escrow Account held
by the Escrow Agent for the benefit of the Holders of the Notes. The
disbursement of such funds shall be governed by the Interest Escrow
Agreement. Such funds, together with the proceeds from the investment
thereof, will secure, and will be sufficient (and shall be applied) to
pay, the first five semi-annual interest payments on the Notes. Funds
will be released from the Interest Escrow Account, pro rata, to reflect
any reduction in the outstanding principal amount of Notes prior to the
fifth semi-annual interest payment date.
The Company will place $112.0 million of the net proceeds realized
from the sale of the Notes into a Satellite Escrow Account to be held by
the Escrow Agent for the benefit of the Holders of the Notes. The
disbursement of such funds shall be governed by the Satellite Escrow
Agreement. The Escrow Agent will not be permitted to disburse any
proceeds from
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the Satellite Escrow Account unless the Company delivers an Officers'
Certificate, prior to such disbursement, to the Trustee and the Escrow
Agent certifying that such funds will be applied toward required payments
under the Satellite Contract or Launch Contract relating to EchoStar IV
or toward a payment on Launch Insurance or In-Orbit Insurance for
EchoStar IV. Funds from the Satellite Escrow Account will be released
therefrom, on a dollar-for-dollar basis, to the extent that the
Additional Payment Obligations of the Company, EchoStar or any of the
Company's Subsidiaries are contractually deferred to a date after the
launch date of EchoStar IV as evidenced by an Officers' Certificate
delivered to the Trustee and Escrow Agent.
Pending disbursement, funds maintained in the Interest Escrow
Account and the Satellite Escrow Account will be invested in Marketable
Securities.
SECTION. 4.21 OFFER TO PURCHASE UPON THE OCCURRENCE OF CERTAIN EVENTS.
In the event that:
(a) EchoStar and its Subsidiaries do not have the right to use
orbital slot authorizations granted by the FCC covering a minimum of 21
transponders at a single Full-CONUS Orbital Slot; or
(b) EchoStar and its Subsidiaries at any time fail to timely obtain
or maintain any material license or permit that is necessary to operate
EchoStar I or EchoStar II in the manner and in accordance with the plan of
operations described in the Offering Memorandum (unless (i) EchoStar or any
of its Subsidiaries is contesting the loss of such license or permit in
good faith at the FCC and has not exhausted its remedies at the FCC and
(ii) EchoStar (together with any Subsidiary) continue to have the right to
use such license or permit if previously obtained);
the Company will be required to make an offer (an "Offer to Purchase")
(i) in the case of clause (a), to repurchase one-half of all outstanding
Notes and (ii) in the case of clause (b), to repurchase all or any part
(equal to $1,000 or an integral multiple thereof) of each Holder's Notes,
in each case at a purchase price (the "Offer Payment") equal to 101% of
the aggregate principal amount thereof, together with accrued and unpaid
interest thereon to the date of purchase.
Within 15 days following any event described above, the Company
shall mail a notice to each Holder stating, among other things:
(i) that the Offer to Purchase is being made pursuant to this Section
4.21;
(ii) the purchase price and the purchase date, which shall be no
earlier than 30 days nor later than 40 days after the date such notice is
mailed (the "Offer Payment Date");
(iii) that any Notes not tendered will continue to accrue interest
in accordance with the terms of this Indenture;
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(iv) that, unless the Company defaults in the payment of the Offer
Payment, all Notes accepted for payment pursuant to the Offer to Purchase
shall cease to accrue interest after the Offer Payment Date;
(v) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than the close of business on the
second Business Day preceding the Offer Payment Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder,
the principal amount of Notes delivered for purchase, and a statement
that such Holder is withdrawing his election to have such Notes
purchased;
(vi) that Holders whose Notes are being purchased only in part will
be issued new Notes equal in principal amount to the unpurchased portion
of the Notes surrendered, which unpurchased portion must be equal to
$1,000 in principal amount or an integral multiple thereof; and
(vii) any other information material to such Holder's decision to
tender Notes.
The Company will comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder
to the extent such laws and regulations are applicable in connection with
the repurchase of the Notes in connection with an Offer to Purchase.
SECTION 4.22. SIGNIFICANT TRANSACTIONS.
EchoStar or any of its Subsidiaries may enter into a transaction or
series of transactions (a "SIGNIFICANT TRANSACTION") with another entity
(a "STRATEGIC PARTNER"), notwithstanding the fact that such Significant
Transaction would otherwise be prohibited under the terms of this
Indenture, in which EchoStar or any such Subsidiary (i) sells, leases,
conveys or otherwise disposes of any of its assets (including by way of a
sale-and-leaseback transaction) to such Strategic Partner or (ii) makes
an Investment in or receives an Investment from such Strategic Partner;
PROVIDED that: (i) EchoStar or such Subsidiary receives fair market
value for any property or assets (including capital stock) transferred in
such Significant Transaction in the opinion of a majority of the Board of
Directors of EchoStar as evidenced by an Officers' Certificate delivered
to the Trustee and an investment banking firm of national standing
selected by the Company; and (ii) prior to the consummation of such
Significant Transaction, the Company makes an offer (a "SPECIAL OFFER TO
PURCHASE") to each Holder of Notes to repurchase, within 15 days
following the consummation of such Significant Transaction, all or any
part (equal to $1,000 or an integral multiple thereof) of such Holder's
Notes at a purchase price equal to 101% of the aggregate principal amount
thereof, together with accrued and unpaid interest thereon to the date of
purchase (in either case, the "SPECIAL OFFER PAYMENT"). At least 30 days
prior to the consummation of such Significant Transaction, the Company
shall mail a notice to each Holder stating:
(a) that the Special Offer to Purchase is being made pursuant to this
Section 4.22 of this Indenture;
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(b) the purchase price and the purchase date, which shall be no
earlier than 30 days nor later than 60 days after the date such notice is
mailed (the "SPECIAL OFFER PAYMENT DATE");
(c) that any Notes tendered will only be repurchased in the event
that such Significant Transaction is consummated;
(d) that any Notes not tendered or not repurchased will continue to
accrue interest in accordance with the terms of this Indenture;
(e) that, if such Significant Transaction is consummated, unless the
Company defaults in the payment of the Special Offer Payment, all Notes
accepted for payment pursuant to the Special Offer to Purchase shall cease
to accrue interest after the Special Offer Payment Date;
(f) that Holders electing to have any Notes purchased pursuant to
an Offer to Purchase will be required to surrender the Notes, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the
Notes completed, to the Paying Agent at the address specified in the
notice prior to the close of business on the third Business Day
preceding the Special Offer Payment Date;
(g) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than the close of business on the second
Business Day preceding the Special Offer Payment Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of Notes delivered for purchase, and a statement that
such Holder is withdrawing his election to have such Notes purchased;
(h) that Holders whose Notes are being purchased only in part will be
issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered, which unpurchased portion must be equal to $1,000
in principal amount or an integral multiple thereof; and
(i) a description of such Significant Transaction, as well as any
other information material to such Holder's decision to tender Notes.
The Company will comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder
to the extent such laws and regulations are applicable in connection with
the repurchase of Notes pursuant to a Special Offer to Purchase. If a
Significant Transaction is consummated and the Company fails to
repurchase all of the Notes tendered for purchase, such failure will
constitute an Event of Default.
SECTION 4.23. ACCOUNTS RECEIVABLE SUBSIDIARY.
The Company:
(a) may, and may permit any of its Subsidiaries to, notwithstanding
Section 4.07 herein, make Investments in an Accounts Receivable
Subsidiary: (i) the
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proceeds of which are applied within five Business Days of the making
thereof solely to finance: (A) the purchase of accounts receivable of
the Company and its Subsidiaries or (B) payments required in connection
with the termination of all then existing arrangements relating to the
sale of accounts receivable or participation interests therein by an
Accounts Receivable Subsidiary (provided that the Accounts Receivable
Subsidiary shall receive cash, Cash Equivalents and accounts receivable
having an aggregate fair market value not less than the amount of such
payments in exchange therefor) and (ii) in the form of Accounts
Receivable Subsidiary Notes to the extent permitted by clause (b) below;
(b) shall not, and shall not permit any of its Subsidiaries to,
sell accounts receivable to an Accounts Receivable Subsidiary except for
consideration in an amount not less than that which would be obtained in
an arm's length transaction and solely in the form of cash or Cash
Equivalents; provided that an Accounts Receivable Subsidiary may pay the
purchase price for any such accounts receivable in the form of Accounts
Receivable Subsidiary Notes so long as, after giving effect to the
issuance of any such Accounts Receivable Subsidiary Notes, the aggregate
principal amount of all Accounts Receivable Subsidiary Notes outstanding
shall not exceed 20% of the aggregate purchase price paid for all
outstanding accounts receivable purchased by an Accounts Receivable
Subsidiary since the date of this Indenture (and not written-off or
required to be written off in accordance with the normal business
practice of an Accounts Receivable Subsidiary);
(c) shall not permit an Accounts Receivable Subsidiary to sell any
accounts receivable purchased from the Company and its Subsidiaries or
participation interests therein to any other Person except on an arm's
length basis and solely for consideration in the form of cash or Cash
Equivalents or certificates representing undivided interests of a
Receivables Trust; provided an Accounts Receivable Subsidiary may not sell
such certificates to any other Person except on an arm's length basis and
solely for consideration in the form of cash or Cash Equivalents;
(d) shall not, and shall not permit any of its Subsidiaries to,
enter into any Guarantee, subject any of their respective properties or
assets (other than the accounts receivable sold by them to an Accounts
Receivable Subsidiary) to the satisfaction of any liability or
obligation or otherwise incur any liability or obligation (contingent or
otherwise), in each case, on behalf of an Accounts Receivable Subsidiary
or in connection with any sale of accounts receivable or participation
interests therein by or to an Accounts Receivable Subsidiary, other than
obligations relating to breaches of representations, warranties,
covenants and other agreements of the Company or any of its Subsidiaries
with respect to the accounts receivable sold by the Company or any of
its Subsidiaries to an Accounts Receivable Subsidiary or with respect to
the servicing thereof; provided that neither the Company nor any of its
Subsidiaries shall at any time guarantee or be otherwise liable for the
collectibility of accounts receivable sold by them;
(e) shall not permit an Accounts Receivable Subsidiary to engage in
any business or transaction other than the purchase and sale of accounts
receivable or participation interests therein of the Company and its
Subsidiaries and activities incidental thereto;
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(f) shall not permit an Accounts Receivable Subsidiary to incur any
Indebtedness other than the Accounts Receivable Subsidiary Notes,
Indebtedness owed to the Company and Non-Recourse Indebtedness; provided
that the aggregate principal amount of all such Indebtedness of an
Accounts Receivable Subsidiary shall not exceed the book value of its
total assets as determined in accordance with GAAP;
(g) shall cause any Accounts Receivable Subsidiary to remit to the
Company or a Subsidiary of the Company on a monthly basis as a
distribution all available cash and Cash Equivalents not held in a
collection account pledged to acquirors of accounts receivable or
participation interests therein, to the extent not applied to (i) pay
interest or principal on the Accounts Receivable Subsidiary Notes or any
Indebtedness of such Accounts Receivable Subsidiary owed to the Company,
(ii) pay or maintain reserves for reasonable operating expenses of such
Accounts Receivable Subsidiary or to satisfy reasonable minimum
operating capital requirements or (iii) to finance the purchase of
additional accounts receivable of the Company and its Subsidiaries; and
(h) shall not, and shall not permit any of its Subsidiaries to,
sell accounts receivable to, or enter into any other transaction with or
for the benefit of, an Accounts Receivable Subsidiary (i) if such
Accounts Receivable Subsidiary pursuant to or within the meaning of any
Bankruptcy Law (A) commences a voluntary case, (B) consents to the entry
of an order for relief against it in an involuntary case, (C) consents
to the appointment of a Custodian of it or for all or substantially all
of its property, (D) makes general assignment for the benefit of its
creditors, or (E) generally is not paying its debts as they become due;
or (ii) if a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that (A) is for relief against such Accounts
Receivable Subsidiary in an involuntary case, (B) appoints a Custodian
of such Accounts Receivable Subsidiary or for all or substantially all
of the property of such Accounts Receivable Subsidiary, or (C) orders
the liquidation of such Accounts Receivable Subsidiary, and, with
respect to clause (ii) hereof, the order or decree remains unstayed and
in effect for 60 consecutive days.
ARTICLE 5.
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS.
The Company may not consolidate or merge with or into (whether or not the
Company is the surviving entity), or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its properties or assets in one
or more related transactions to, another Person unless (a) the Company is the
surviving Person or the Person formed by or surviving any such consolidation or
merger (if other than the Company) or to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made is a corporation
organized or existing under the laws of the United States, any state thereof or
the District of Columbia; (b) the Person formed by or surviving any such
consolidation or merger (if other than the Company) or the Person to which such
sale, assignment, transfer, lease, conveyance or other disposition shall have
been made assumes all the obligations of the Company, pursuant to a supplemental
indenture in a form reasonably satisfactory to the
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Trustee, under the Notes and this Indenture; (c) immediately after such
transaction no Default or Event of Default exists; and (d) the Company or
the Person formed by or surviving any such consolidation or merger (if
other than the Company), or to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made (i) shall
have Consolidated Net Worth immediately after the transaction (but prior
to any purchase accounting adjustments or accrual of deferred tax
liabilities resulting from the transaction) not less than the
Consolidated Net Worth of the Company immediately preceding the
transaction and (ii) would, at the time of such transaction after giving
pro forma effect thereto as if such transaction had occurred at the
beginning of the applicable four-quarter period, be permitted to incur at
least $1.00 of additional Indebtedness pursuant to the Indebtedness to
Cash Flow Ratio test set forth in Section 4.09.
Notwithstanding the foregoing, the Company may merge with another Person if
(a) the Company is the surviving Person; (b) the consideration issued or paid by
the Company in such merger consists solely of Equity Interests (other than
Disqualified Stock) of the Company; and (c) immediately after giving effect to
such merger, the Company's Indebtedness to Cash Flow Ratio does not exceed the
Company's Indebtedness to Cash Flow Ratio immediately prior to such merger.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, lease, conveyance or other
disposition of all or substantially all of the assets of the Company in
accordance with Section 5.01, the successor corporation formed by such
consolidation or into or with which the Company is merged or to which such sale,
lease, conveyance or other disposition is made shall succeed to, and be
substituted for (so that from and after the date of such consolidation, merger,
sale, lease, conveyance or other disposition, the provisions of this Indenture
referring to the Company shall refer instead to the successor corporation and
not to the Company), and may exercise every right and power of the Company under
this Indenture with the same effect as if such successor Person has been named
as the Company, herein.
ARTICLE 6.
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
Each of the following constitutes an "EVENT OF DEFAULT" (unless the
provisions of Section 4.22 are applicable and the Company complies with such
provisions):
(a) default for 30 days in the payment when due of interest on the
Notes;
(b) default in the payment when due of principal on the Notes at
maturity, upon redemption or otherwise;
(c) failure by EchoStar, the Company or any of their Subsidiaries to
comply with the provisions of Section 4.10, Section 4.11, Section 4.15,
Section 4.16, Section 4.20, or Section 4.21, Section 10.01 or Section
10.02;
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(d) default under Section 4.07 or Section 4.09 or under any of the
Collateral Documents, which default remains uncured for 15 days, or the
breach of any representation or warranty, or the making of any untrue
statement, in any certificate delivered by the Company pursuant to this
Indenture or the Collateral Documents;
(e) failure by the Company for 60 days after notice from the Trustee
or the Holders of at least 25% in principal amount of the Notes then
outstanding to comply with any of its other agreements in this Indenture
or the Notes;
(f) a continuing default after expiration of any applicable grace
periods by the Company or any of its Affiliates under any of the
Satellite Contracts or the Launch Contracts, which default would permit
a party other than the Company or its Affiliates to terminate its
obligations under such contract;
(g) default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by EchoStar or any of its Subsidiaries
(or the payment of which is guaranteed by EchoStar or any of its
Subsidiaries), other than any Credit Agreement, which default is caused
by a failure to pay when due principal or interest on such Indebtedness
within the grace period provided in such Indebtedness (a "PAYMENT
DEFAULT"), and the principal amount of any such Indebtedness, together
with the principal amount of any other such Indebtedness under which
there has been a Payment Default, aggregates $5.0 million or more;
(h) default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by EchoStar or any of its Subsidiaries
(or the payment of which is guaranteed by EchoStar or any of its
Subsidiaries), other than any Credit Agreement, which default results in
the acceleration of such Indebtedness prior to its express maturity and
the principal amount of any such Indebtedness, together with the
principal amount of any other Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated,
aggregates $5.0 million or more;
(i) failure by EchoStar, the Company (at any time at which the Notes
are secured by a pledge of all of the issued and outstanding Capital Stock
of the Company) or any of their Subsidiaries to pay final judgments (other
than any judgment as to which a reputable insurance company has accepted
full liability) aggregating in excess of $2.0 million, which judgments are
not stayed within 60 days after their entry;
(j) any Guarantee of the Notes or this Indenture shall be held in a
judicial proceeding to be unenforceable or invalid or shall cease for any
reason to be in full force and effect, or any Guarantor, or any Person
acting on behalf of any Guarantor, shall deny or disaffirm its obligations
under its Guarantee of any Notes or this Indenture;
(k) the Company, any Guarantor or any Significant Subsidiary of the
Company pursuant to or within the meaning of Bankruptcy Law: (i)
commences a
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voluntary case; (ii) consents to the entry of an order for relief
against it in an involuntary case; (iii) consents to the appointment of
a Custodian of it or for all or substantially all of its property; or
(iv) makes a general assignment for the benefit of its creditors; and
(l) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that: (i) is for relief against the Company,
any Guarantor or any Significant Subsidiary of the Company in an
involuntary case; (ii) appoints a Custodian of the Company, any
Guarantor or any Significant Subsidiary of the Company or for all or
substantially all of the property of the Company, any Guarantor or any
Significant Subsidiary of the Company; or (iii) orders the liquidation
of the Company, any Guarantor or any Significant Subsidiary of the
Company, and the order or decree remains unstayed and in effect for 60
consecutive days.
SECTION 6.02. ACCELERATION.
If an Event of Default (other than an Event of Default specified in clause
(k) or (l) of Section 6.01) occurs and is continuing, the Trustee by notice to
the Company, or the Holders of at least 25% in aggregate principal amount of the
then outstanding Notes by written notice to the Company and the Trustee, may
declare all the Notes to be due and payable immediately (plus, in the case of an
Event of Default that is the result of an action by EchoStar or any of its
Subsidiaries intended to avoid restrictions on or premiums related to
redemptions of the Notes contained in this Indenture or the Notes, an amount of
premium that would have been applicable pursuant to the Notes or as set forth in
this Indenture). Notwithstanding the foregoing, in the case of an Event of
Default specified in clause (k) or (l) of Section 6.01, with respect to EchoStar
or any of its Subsidiaries, all outstanding Notes shall become and be
immediately due and payable without further action or notice. Holders of the
Notes may not enforce this Indenture or the Notes except as provided in this
Indenture. Subject to certain limitations, Holders of a majority in principal
amount of the then outstanding Notes may direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from Holders of the Notes notice
of any continuing Default or Event of Default (except a Default or Event of
Default relating to the payment of principal or interest) if it determines that
withholding notice is in such Holders' interest. The Holders of a majority in
aggregate principal amount of the then outstanding Notes by written notice to
the Trustee may on behalf of all of the Holders rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default (except nonpayment of principal, interest
or premium that has become due solely because of the acceleration) have been
cured or waived.
In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company or its
Affiliates with the intention of avoiding payment of the premium that the
Company would have had to pay if the Company then had elected to redeem the
Notes pursuant to Section 3.07, an equivalent premium shall also become and be
immediately due and payable to the extent permitted by law.
The Company is required to deliver to the Trustee annually a statement
regarding compliance with this Indenture, and the Company is required upon
becoming aware of any
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Default or Event of Default to deliver to the Trustee a statement
specifying such Default or Event of Default.
All powers of the Trustee hereunder will be subject to applicable
provisions of the Communications Act, including without limitation, the
requirements of prior approval for transfer of control or assignment of Title
III licenses.
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy to collect the payment of principal, premium, if any, and
interest on the Notes or to enforce the performance of any provision of the
Notes, this Indenture and any of the Collateral Documents.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
Holders of not less than a majority in aggregate principal amount of Notes
then outstanding, by notice to the Trustee, may on behalf of the Holders of all
of the Notes waive an existing Default or Event of Default and its consequences
under this Indenture, except a continuing Default or Event of Default in the
payment of the principal of, premium, if any, or interest on, the Notes. Upon
any such waiver, such Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.
SECTION 6.05. CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then outstanding Notes may
direct the time, method and place of conducting any proceeding for exercising
any remedy available to the Trustee or exercising any trust or power conferred
on it. However, the Trustee may refuse to follow any direction that conflicts
with the law or this Indenture that the Trustee determines may be unduly
prejudicial to the rights of other Holders of Notes or that may involve the
Trustee in personal liability.
SECTION 6.06. LIMITATION ON SUITS.
A Holder of a Note may pursue a remedy with respect to this Indenture or
the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;
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(b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the
remedy;
(c) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee
against any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Notes do not give the Trustee a direction
inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of another
Holder of a Note or to obtain a preference or priority over another Holder of a
Note.
SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium, if any, and interest
on the Note, on or after the respective due dates expressed in the Note, or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of the Holder of
the Note.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(a) or (b) occurs and is
continuing, the Trustee is authorized to recover judgment in its own name and as
trustee of an express trust against the Company for the whole amount of
principal of, premium, if any, and interest remaining unpaid on the Notes and
interest on overdue principal and, to the extent lawful, interest and such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), the Company's creditors or the Company's
property and shall be entitled and empowered to collect, receive and distribute
any money or other property payable or deliverable on any such claims and any
custodian in any such judicial proceeding is hereby authorized by each Holder of
a Note to make such payments to the Trustee, and in the event that the Trustee
shall consent to the making of such payments directly to the Holders of the
Notes, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07. To the
extent that
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the payment of any such compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, and any other amounts due the Trustee
under Section 7.07 out of the estate in any such proceeding, shall be denied
for any reason, payment of the same shall be secured by a Lien on, and shall
be paid out of, any and all distributions, dividends, money, securities and
other properties which the Holders of the Notes may be entitled to receive in
such proceeding whether in liquidation or under any plan of reorganization or
arrangement or otherwise. Nothing herein contained shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt on behalf
of any Holder of a Note any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder of a Note thereof,
or to authorize the Trustee to vote in respect of the claim of any Holder of a
Note in any such proceeding.
SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article, it shall pay
out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due under
Section 7.07, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs
and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the Notes
for principal, premium, if any, and interest, ratably, without preference
or priority of any kind, according to the amounts due and payable on the
Notes for principal, premium, if any and interest, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as a
Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section does
not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to
Section 6.07, or a suit by Holders of more than 10% in principal amount of the
then outstanding Notes.
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ARTICLE 7.
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of his or her own
affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) this paragraph does not limit the effect of paragraph (b) of this
Section;
(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (a),
(b), and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or incur any liability. The Trustee shall be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders of Notes, unless such Holder shall have offered to the
Trustee security and indemnity satisfactory to the Trustee against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
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SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon any document believed by it to
be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the advice of such counsel or any Opinion of Counsel shall be full
and complete authorization and protection from liability in respect of any
action taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.
(c) The Trustee may act through its attorneys and agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Company or any Guarantor shall be
sufficient if signed by an Officer of the Company or such Guarantor.
(f) The Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities that might be
incurred by it in compliance with such request or direction.
(g) Except with respect to Section 4.04, the Trustee shall have no duty to
inquire as to the performance of the Company's covenants in Article 4. In
addition, the Trustee shall not be deemed to have knowledge of any Default or
Event of Default except (i) any Event of Default occurring pursuant to Sections
4.01, 4.03 and 4.04 or (ii) any Default or Event of Default of which the Trustee
shall have received written notification or obtained actual knowledge.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Notes and may otherwise deal with the Company or any Affiliate of the
Company with the same rights it would have if it were not Trustee. However, in
the event that the Trustee acquires any conflicting interest it must eliminate
such conflict within 90 days, apply to the SEC for permission to continue as
Trustee (if any of the Notes are registered pursuant to the Securities Act), or
resign. Any Agent may do the same with like rights and duties. The Trustee is
also subject to Sections 7.10 and 7.11.
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SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation as to
the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it is
known to a Responsible Officer of the Trustee, the Trustee shall mail to Holders
of Notes a notice of the Default or Event of Default within 90 days after it
occurs. Except in the case of a Default or Event of Default in payment of
principal of, premium, if any, or interest on any Note, the Trustee may withhold
the notice if and so long as a committee of its Responsible Officers in good
faith determines that withholding the notice is in the interests of the Holders
of the Notes.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
Within 60 days after each May 15 beginning with the May 15 following the
date of this Indenture, the Trustee shall mail to the Holders of the Notes a
brief report dated as of such reporting date that complies with TIA Section
313(a) (but if no event described in TIA Section 313(a) has occurred within the
twelve months preceding the reporting date, no report need be transmitted). The
Trustee also shall comply with TIA Section 313(b). The Trustee shall also
transmit by mail all reports as required by TIA Section 313(c).
A copy of each report at the time of its mailing to the Holders of Notes
shall be mailed to the Company and filed with the SEC and each stock exchange on
which any Notes are listed. The Company shall promptly notify the Trustee when
any Notes are listed on any stock exchange.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services. Such expenses
shall include the reasonable compensation, disbursements and expenses of the
Trustee's agents and counsel.
The Company shall indemnify the Trustee against any and all losses,
liabilities or expenses incurred by it arising out of or in connection with the
acceptance or administration of its duties under this Indenture, except any such
loss, liability or expense as may be attributable to the gross negligence,
willful misconduct or bad faith of the Trustee. The
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Trustee shall notify the Company promptly of any claim for which it may seek
indemnity. Failure by the Trustee to so notify the Company shall not relieve
the Company of its obligations hereunder. The Company shall defend the claim
and the Trustee shall cooperate in the defense. The Trustee may have separate
counsel and the Company shall pay the reasonable fees and expenses of such
counsel. The Company need not pay for any settlement made without its
consent, which consent shall not be unreasonably withheld.
The obligations of the Company under this Section 7.07 shall survive the
satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section, the Trustee
shall have a Lien prior to the Notes on all money or property held or collected
by the Trustee, except that held in trust to pay principal and interest on
particular Notes. Such Lien shall survive the satisfaction and discharge of
this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(k) or (l) occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from the
trust hereby created by so notifying the Company and obtaining the prior written
approval of the FCC, if so required by the Communications Act, including Section
310(d) and the rules and regulations promulgated thereunder. The Holders of at
least a majority in principal amount of the then outstanding Notes may remove
the Trustee by so notifying the Trustee and the Company in writing. The Company
may remove the Trustee (subject to the prior written approval of the FCC, if
required by the Communications Act, including Section 310(d), and the rules and
regulations promulgated thereunder) if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) the Trustee is no longer in compliance with the foreign ownership
provisions of Section 310 of the Communications Act and the rules and
regulations promulgated thereunder.
(d) a Custodian or public officer takes charge of the Trustee or its
property; or
(e) the Trustee becomes incapable of acting.
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If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of Notes of at least 10% in principal amount of the then outstanding
Notes may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee after written request by any Holder of a Note who has been a
Holder of a Note for at least six months fails to comply with Section 7.10, such
Holder of a Note may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon, the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
Holders of the Notes. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, provided all sums owing to the
Trustee hereunder have been paid and subject to the Lien provided for in Section
7.07. Notwithstanding replacement of the Trustee pursuant to this Section 7.08,
the Company's obligations under Section 7.07 shall continue for the benefit of
the retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
successor corporation without any further act shall be the successor Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America or of any state thereof authorized under such laws to exercise corporate
trustee power, shall be subject to supervision or examination by federal or
state authority and shall have a combined capital and surplus of at least $25
million as set forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the requirements
of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to TIA Section
310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
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ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, with respect to
the Notes, elect to have either Section 8.02 or 8.03 be applied to all
outstanding Notes upon compliance with the conditions set forth below in this
Article Eight.
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.01 of the option applicable to
this Section 8.02, the Company shall be deemed to have been discharged from its
obligations with respect to all outstanding Notes on the date the conditions set
forth below are satisfied (hereinafter, "LEGAL DEFEASANCE"). For this purpose,
such Legal Defeasance means that the Company shall be deemed to have paid and
discharged the entire Indebtedness represented by the outstanding Notes, which
shall thereafter be deemed to be "outstanding" only for the purposes of Section
8.05 and the other Sections of this Indenture referred to in (a) and (b) below,
and to have satisfied all its other obligations under such Notes and this
Indenture (and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging the same), except for the
following which shall survive until otherwise terminated or discharged
hereunder: (a) the rights of Holders of outstanding Notes to receive payments
in respect of the principal of, premium, if any, and interest on such Notes when
such payments are due, or on the redemption date, as the case may be, (b) the
Company's obligations with respect to such Notes under Sections 2.05, 2.07,
2.08, 2.10, 2.11 and 4.02, (c) the rights, powers, trusts, duties and immunities
of the Trustee hereunder and the Company's obligations in connection therewith
and (d) this Article Eight. Subject to compliance with this Article Eight, the
Company may exercise its option under this Section 8.02 notwithstanding the
prior exercise of its option under Section 8.03 with respect to the Notes.
SECTION 8.03. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.01 of the option applicable to
this Section 8.03, the Company shall be released from its obligations under the
covenants contained in Sections 4.03, 4.04, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12,
4.13, 4.15, 4.16, 4.17, 4.18, 4.19, 4.20, 4.21 and 4.22 and Article Five with
respect to the outstanding Notes on and after the date the conditions set forth
below are satisfied (hereinafter, "COVENANT DEFEASANCE"), and the Notes shall
thereafter be deemed not "outstanding" for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
"outstanding" for all other purposes hereunder (it being understood that such
Notes shall not be deemed outstanding for accounting purposes). For this
purpose, such Covenant Defeasance means that, with respect to the outstanding
Notes, the Company may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such covenant,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such covenant or by reason of any reference in any such covenant to any
other provision herein or in any other document and such omission to comply
shall not constitute
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a Default or an Event of Default under Section 6.01(c), but, except as
specified above, the remainder of this Indenture and such Notes shall be
unaffected thereby. In addition, upon the Company's exercise under Section
8.01 of the option applicable to this Section 8.03 and Sections 6.01(d)
through 6.01(j) shall not constitute Events of Default.
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either Section
8.02 or Section 8.03 to the outstanding Notes:
(a) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 7.10 who shall agree to comply with the provisions of this
Article Eight applicable to it) as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such Notes, (i) cash in
U.S. Dollars, (ii) non-callable Government Notes which through the
scheduled payment of principal and interest in respect thereof in
accordance with their terms will provide, not later than one day before the
due date of any payment, cash in U.S. Dollars, or (iii) a combination
thereof, in such amounts, as will be sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and
discharge and which shall be applied by the Trustee (or other qualifying
trustee) to pay and discharge (A) the principal of, premium, if any, and
interest on the outstanding Notes on the stated maturity or on the
applicable redemption date, as the case may be, of such principal or
installment of principal, premium, if any, or interest and (B) any
mandatory sinking fund payments or analogous payments applicable to the
outstanding Notes on the day on which such payments are due and payable in
accordance with the terms of this Indenture and of such Notes; PROVIDED
that the Trustee shall have been irrevocably instructed to apply such money
or the proceeds of such non-callable Government Notes to said payments with
respect to the Notes;
(b) In the case of an election under Section 8.02, the Company shall
have delivered to the Trustee an Opinion of Counsel in the United States
reasonably satisfactory to the Trustee confirming that (i) the Company has
received from, or there has been published by, the Internal Revenue Service
a ruling or (ii) since the date hereof, there has been a change in the
applicable federal income tax law, in either case to the effect that, and
based thereon such opinion shall confirm that, the Holders of the
outstanding Notes will not recognize income, gain or loss for federal
income tax purposes as a result of such Legal Defeasance and will be
subject to federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such Legal Defeasance has
not occurred;
(c) In the case of an election under Section 8.03, the Company shall
have delivered to the Trustee an Opinion of Counsel reasonably satisfactory
to the Trustee in the United States to the effect that the Holders of the
outstanding Notes will not recognize income, gain or loss for Federal
income tax purposes as a result of such Covenant Defeasance and will be
subject to Federal income tax on the same amount, in the same manner and at
the same times as would have been the case if such Covenant Defeasance had
not occurred;
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(d) No Default or Event of Default with respect to the Notes shall
have occurred and be continuing on the date of such deposit or, in so far
as Section 6.01(k) or 6.01(l) is concerned, at any time in the period
ending on the 91st day after the date of such deposit (it being understood
that this condition shall not be deemed satisfied until the expiration of
such period);
(e) Such Legal Defeasance or Covenant Defeasance shall not result in
a breach or violation of, or constitute a default under, this Indenture or
any other material agreement or instrument to which EchoStar or the Company
is a party or by which EchoStar or the Company is bound;
(f) The Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit made by the Company pursuant to its
election under Section 8.02 or 8.03 was not made by the Company with the
intent of preferring the Holders over any other creditors of the Company or
with the intent of defeating, hindering, delaying or defrauding creditors
of the Company or others; and
(g) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel in the United States, each stating
that all conditions precedent provided for relating to either the Legal
Defeasance under Section 8.02 or the Covenant Defeasance under Section 8.03
(as the case may be) have been complied with as contemplated by this
Section 8.04.
SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT NOTES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.06, all money and Government Notes (including the
proceeds thereof) deposited with the Trustee (or other qualifying trustee,
collectively for purposes of this Section 8.05, the "Trustee") pursuant to
Section 8.04 in respect of the outstanding Notes shall be held in trust and
applied by the Trustee, in accordance with the provisions of such Notes and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company or a Guarantor, if any, acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium, if any, and interest, but
such money need not be segregated from other funds except to the extent required
by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or Government Notes
deposited pursuant to Section 8.04 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of the outstanding Notes.
Anything in this Article Eight to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon the request of the
Company any money or Government Notes held by it as provided in Section 8.04
which, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee (which may be the opinion delivered under Section 8.04(a)), are in
excess of the amount thereof which would then be required to be deposited to
effect an equivalent Legal Defeasance or Covenant Defeasance.
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SECTION 8.06. REPAYMENT TO COMPANY.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of, premium, if any, or
interest on any Note and remaining unclaimed for two years after such principal,
and premium, if any, or interest has become due and payable shall be paid to the
Company on its request or (if then held by the Company) shall be discharged from
such trust; and the Holder of such Note shall thereafter, as a secured creditor,
look only to the Company for payment thereof, and all liability of the Trustee
or such Paying Agent with respect to such trust money, and all liability of the
Company as trustees thereof, shall thereupon cease; PROVIDED, HOWEVER, that the
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once, in the New York
Times and The Wall Street Journal (national edition), notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
SECTION 8.07. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United States Dollars
or Government Notes in accordance with Section 8.02 or 8.03, as the case may be,
by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, then the
Company's obligations under this Indenture and the Notes shall be revived and
reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03
until such time as the Trustee or Paying Agent is permitted to apply all such
money in accordance with Section 8.02 or 8.03, as the case may be; PROVIDED,
HOWEVER, that, if the Company makes any payment of principal of, premium, if
any, or interest on any Note following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money held by the Trustee or Paying Agent.
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES.
Notwithstanding Section 9.02 of this Indenture, the Company and the Trustee
may amend or supplement this Indenture, the Notes or the Collateral Documents
without the consent of any Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in place of
certificated Notes;
(c) to provide for the assumption of the Company's obligations to the
Holders of the Notes in the case of a merger or consolidation pursuant to
Article 5;
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(d) to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the
legal rights hereunder of any Holder of the Note; or
(e) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA.
Upon the request of the Company accompanied by a resolution of the Board of
Directors of the Company authorizing the execution of any such amended or
supplemental Indenture, and upon receipt by the Trustee of the documents
described in Section 9.06, the Trustee shall join with the Company in the
execution of any amended or supplemental Indenture authorized or permitted by
the terms of this Indenture and to make any further appropriate agreements and
stipulations which may be therein contained, but the Trustee shall not be
obligated to enter into such amended or supplemental Indenture which affects its
own rights, duties or immunities under this Indenture or otherwise.
SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES.
The Company and the Trustee may amend or supplement this Indenture, the
Notes or the Collateral Documents or any amended or supplemental Indenture with
the written consent of the Holders of Notes of at least a majority in aggregate
principal amount of the Notes then outstanding (including consents obtained in
connection with a tender offer or exchange offer for the Notes), and any
existing Default and its consequences or compliance with any provision of this
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes (including consents
obtained in connection with a tender offer or exchange offer for the Notes).
Notwithstanding the foregoing, (a) Sections 3.09, 4.10, 4.15 and 4.21 of this
Indenture (including, in each case, the related definitions) may not be amended
or waived without the written consent of at least 66-2/3% in principal amount of
the Notes then outstanding (including consents obtained in connection with a
tender offer or exchange offer for the Notes) and (b) without the consent of
each Holder affected, an amendment or waiver may not (with respect to any Notes
held by a non-consenting Holder of Notes):
(i) reduce the aggregate principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver;
(ii) reduce the principal of or change the fixed maturity of any Note
or alter the provisions with respect to the redemption of the Notes;
(iii) reduce the rate of or change the time for payment of interest on
any Note;
(iv) waive a Default or Event of Default in the payment of principal
of or premium, if any, or interest on the Notes (except a rescission of
acceleration of the Notes by the Holders of at least a majority in
aggregate principal amount of the then outstanding Notes and a waiver of
the payment default that resulted from such acceleration);
(v) make any Note payable in money other than that stated in the
Notes;
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(vi) make any change in the provisions of this Indenture relating
to waivers of past Defaults or the rights of Holders of Notes to receive
payments of principal of or interest on the Notes;
(vii) waive a redemption payment with respect to any Note; or
(viii) make any change in the foregoing amendment and waiver
provisions.
Upon the request of the Company accompanied by a resolution of the Board
of Directors of the Company authorizing the execution of any such amended or
supplemental Indenture, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Holders of Notes as
aforesaid, and upon receipt by the Trustee of the documents described in
Section 9.06, the Trustee shall join with the Company in the execution of
such amended or supplemental Indenture unless such amended or supplemental
Indenture affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its discretion, but
shall not be obligated to, enter into such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of Notes under
this Section 9.02 to approve the particular form of any proposed amendment or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure
of the Company to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amended or
supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07, the
Holders of a majority in aggregate principal amount of the Notes then
outstanding may waive compliance in a particular instance by the Company with
any provision of this Indenture or the Notes.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Notes shall be
set forth in an amended or supplemental Indenture that complies with the TIA
as then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent to
it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the
same debt as the consenting Holder's Note, even if notation of the consent is
not made on any Note. However, any such Holder of a Note or subsequent
Holder of a Note may revoke the consent as to its Note if the Trustee
receives written notice of revocation before the date the waiver, supplement
or amendment becomes effective. An amendment, supplement or waiver becomes
effective in accordance with its terms and thereafter binds every Holder of a
Note.
The Company may fix a record date for determining which Holders of the
Notes must consent to such amendment, supplement or waiver. If the Company
fixes a record date, the
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record date shall be fixed at (i) the later of 30 days prior to the first
solicitation of such consent or the date of the most recent list of Holders
of Notes furnished to the Trustee prior to such solicitation pursuant to
Section 2.05 or (ii) such other date as the Company shall designate.
SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall authenticate new Notes
that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental Indenture authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The
Company may not sign an amendment or supplemental Indenture until the Board
of Directors approves it.
SECTION 9.07. PAYMENTS FOR CONSENTS.
Neither EchoStar, the Company nor any of their Subsidiaries may,
directly or indirectly, pay or cause to be paid any consideration, whether by
way of interest, fee or otherwise, to any Holder of a Note for or as an
inducement to any consent, waiver or amendment of any of the terms or
provisions of this Indenture or the Notes unless such consideration is
offered to be paid or agreed to be paid to all Holders of the Notes that
consent, waive or agree to amend in the time frame set forth in the
solicitation documents relating to such consent, waiver or agreement.
ARTICLE 10.
COLLATERAL AND SECURITY
SECTION 10.01. COLLATERAL DOCUMENTS.
The due and punctual payment of the principal of and interest on the
Notes when and as the same shall be due and payable, whether on an interest
payment date, at maturity, by acceleration, repurchase, redemption or
otherwise, and interest on the overdue principal of and interest (to the
extent permitted by law), if any, on the Notes and performance of all other
obligations of the Company and the Guarantors to the Holders of Notes or the
Trustee under this Indenture and the Notes, according to the terms hereunder
or thereunder, shall be secured as provided in the Collateral Documents which
the Company and the Guarantors shall enter into as provided in Section 10.02.
Each Holder of Notes, by its acceptance thereof, consents and agrees to the
terms of the Collateral Documents (including, without limitation, the
provisions providing for foreclosure and release of Collateral) as the same
may be in effect or may be amended from time to time in accordance with its
terms and authorizes and directs
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the Trustee to enter into the Collateral Documents and to perform its
obligations and exercise its rights thereunder in accordance therewith. The
Company shall deliver to the Trustee copies of all Collateral Documents, and
shall do or cause to be done all such acts and things as may be necessary or
proper, or as may be required by the provisions of the Collateral Documents,
to assure and confirm to the Trustee the security interest in the Collateral
contemplated hereby, by the Collateral Documents or any part thereof, as from
time to time constituted, so as to render the same available for the security
and benefit of this Indenture and of the Notes secured hereby, according to
the intent and purposes herein expressed. EchoStar shall take, or shall
cause its Subsidiaries to take, any and all actions reasonably required to
cause the Collateral Documents to create and maintain, as security for the
Obligations of the Company hereunder, a valid and enforceable perfected Lien
in and on all the Collateral, in favor of the Trustee for the benefit of the
Holders of Notes, superior to and prior to the rights of all third Persons
and subject to no other Liens than Permitted Liens, except for those Liens
with respect to which the Collateral Documents or this Indenture expressly
contemplate prior or PARI PASSU Liens.
SECTION 10.02. EXECUTION OF COLLATERAL DOCUMENTS.
(a) Simultaneously with the execution of this Indenture, the Company
shall execute (i) the Escrow Accounts Security Agreement, (ii) the EchoStar
IV Security Agreement, (iii) the Orbital Slot Security Agreement, (iv) the
Collateral Assignment, (v) the Interest Escrow Agreement and (vi) the
Satellite Escrow Agreement.
(b) Simultaneously with the execution of this Indenture, EchoStar shall
execute the Stock Pledge Agreement.
(c) Simultaneously with the execution of this Indenture, EchoStar Space
Corporation shall execute the Collateral Assignment.
(d) In connection with the Collateral Assignment, EchoStar, EchoStar
Space Corporation and the Company shall use their best efforts to obtain any
required consents necessary to effect a collateral assignment of (i) the
Launch Contract, the Satellite Contract and Launch Insurance relating to
EchoStar IV within 60 days after the date hereof, (ii) all TT&C contracts
relating to EchoStar IV at the time such TT&C contracts are entered into and
(iii) In-Orbit Insurance relating to EchoStar IV at the time such In-Orbit
Insurance is obtained.
SECTION 10.03. RECORDING AND OPINIONS.
(a) The Company shall furnish to the Trustee simultaneously with the
execution and delivery of any of the Collateral Documents an opinion of
Counsel either (i) stating that in the opinion of such counsel all action has
been taken with respect to the recording, registering and filing of this
Indenture, financing statements or other instruments necessary to make
effective the Lien intended to be created by such Collateral Document, and
reciting with respect to the security interests in the Collateral, the
details of such action, or (ii) stating that, in the opinion of such counsel,
no such action is necessary to make such Lien effective.
(b) The Company shall furnish to the Trustee on June 25 in each year
beginning with June 25, 1998, an Opinion of Counsel, dated as of such date,
either (i) (A) stating that,
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in the opinion of such counsel, action has been taken with respect to the
recording, registering, filing, re-recording, re-registering and refiling of
all supplemental indentures, financing statements, continuation statements or
other instruments of further assurance as is necessary to maintain the Lien
of the Collateral Documents and reciting with respect to the security
interests in the Collateral the details of such action or referring to prior
Opinions of Counsel in which such details are given and (B) based on relevant
laws as in effect on the date of such Opinion of Counsel, all financing
statements and continuation statements have been executed and filed that are
necessary as of such date and during the succeeding 12 months fully to
preserve and protect, to the extent such protection and preservation are
possible by filing, the rights of the Holders of Notes and the Trustee
hereunder and under the Collateral Documents with respect to the security
interests in the Collateral, or (ii) stating that, in the opinion of such
counsel, no such action is necessary to maintain such Lien and assignment.
SECTION 10.04. RELEASE OF COLLATERAL.
(a) Subject to subsections (b), (c) and (d) of this Section 10.04 and
to Section 10.05, Collateral may be released from the Lien and Security
interest created by the Collateral Documents at any time or from time to time
in accordance with the provisions of the Collateral Documents or as provided
hereby. In addition, upon the request of the Company pursuant to an
Officers' Certificate certifying that all conditions precedent hereunder have
been met and stating whether or not such release is in connection with an
Asset Sale (at the sole cost and expense of the Company), the Trustee shall
release Collateral which is sold, conveyed or disposed of in compliance with
the provisions of this Indenture; PROVIDED, that if such sale, conveyance or
disposition constitutes an Asset Sale, the Company shall apply the Net
Proceeds in accordance with Section 4.10. Upon receipt of such Officers'
Certificate the Trustee shall execute, deliver or acknowledge any necessary
or proper instruments of termination, satisfaction or release to evidence the
release of any Collateral permitted to be released pursuant to this Indenture
or the Collateral Documents.
(b) Except to the extent that any Lien on the proceeds of Collateral is
automatically released by operation of Section 9-306 of the Uniform
Commercial Code or other similar law, no Collateral shall be released from
the Lien and Security interest created by the Collateral Documents pursuant
to the provisions of the Collateral Documents unless there shall have been
delivered to the Trustee the certificate required by this Section 10.04.
(c) At any time when an Event of Default shall have occurred and be
continuing and the maturity of the Notes shall have been accelerated (whether
by declaration or otherwise), no Collateral shall be released pursuant to the
provisions of the Collateral Documents, and no release of Collateral in
contravention of this Section 10.04(c) shall be effective as against the
Holders of Notes.
(d) The release of any Collateral from the Liens and security interests
created by this Indenture and the Collateral Documents shall not be deemed to
impair the security under this Indenture in contravention of the provisions
hereof if and to the extent the Collateral is released pursuant to the terms
hereof or, subject to complying with the requirements of this Section 10.04,
pursuant to the terms of the Collateral Documents. To the extent applicable,
the Company shall cause TIA Section 314(d) relating to the release of
property or securities from the Lien and security interest of the Collateral
Documents and relating to the substitution therefor of any property or
securities to be subjected to the Lien and security interest of the
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Collateral Documents to be complied with. Any certificate or opinion
required by TIA Section 314(d) may be made by an Officer of the Company
except in cases where TIA Section 314(d) requires that such certificate or
opinion be made by an independent Person, which Person shall be an
independent engineer, appraiser or other expert selected or approved by the
Trustee in the exercise of reasonable care.
SECTION 10.05. SALE OF AND LIENS ON ECHOSTAR IV.
(a) The Company shall not and shall not permit any of its Subsidiaries
to sell, transfer or dispose of EchoStar IV (or any replacement thereof)
after it is launched, unless, upon such sale, transfer or disposition, the
Company grants or causes to be granted to the Trustee on behalf of the
Holders of the Notes (i) a first priority security interest in an operational
satellite in geosynchronous orbit of equal or greater value than EchoStar IV
(or such replacement); and (ii) a collateral assignment of all contracts
relating to the construction, launch, insurance and TT&C of such satellite.
Prior to such sale, transfer or disposition, the Company shall execute or
cause to be executed a security agreement relating to such Liens. The
Company shall take or cause to be taken all actions necessary to record,
register and file any documents or instruments necessary to make effective
such Lien, including the filing of any required applications with the FCC for
approval of any collateral assignment hereunder, and shall provide an Opinion
of Counsel prepared in accordance with Section 10.03(a) with respect to such
Lien.
(b) EchoStar and its Subsidiaries may not incur or suffer to exist
Liens on EchoStar IV (or any replacement thereof), except (i) prior to
launch, Liens in favor of satellite contractor; (ii) after launch, Liens not
to exceed $20 million securing the Deferred Payments, ranking PARI PASSU with
the Liens on EchoStar IV (or such replacement) in favor of the Holders of the
Notes; and (iii) additional Liens securing the Deferred Payments,
subordinated to the Liens on EchoStar IV (or such replacement) in favor of
the Holders of the Notes.
SECTION 10.06. CERTIFICATES OF THE COMPANY.
(a) The Company shall furnish to the Trustee, prior to each proposed
release of Collateral pursuant to the Collateral Documents, (i) all documents
required by Section 314(d) of the TIA and (ii) an Opinion of Counsel, which
may be rendered by internal counsel to the Company, to the effect that such
accompanying documents constitute all documents required by Section 314(d) of
the TIA. The Trustee may, to the extent permitted by Sections 7.01 and 7.02
hereof, accept as conclusive evidence of compliance with the foregoing
provisions the appropriate statements contained in such documents and such
Opinion of Counsel.
SECTION 10.07. AUTHORIZATION OF ACTIONS TO BE TAKEN BY THE TRUSTEE UNDER
THE COLLATERAL DOCUMENTS.
Subject to the provisions of Section 7.01 and 7.02 hereof, the Trustee
may, in its sole discretion and without the consent of the Holders of Notes,
on behalf of the Holders of Notes, take all actions it deems necessary or
appropriate in order to (a) enforce any of the terms of the Collateral
Documents and (b) collect and receive any and all amounts payable in respect
of the Obligations of the Company hereunder. The Trustee shall have power to
institute and maintain such suits and proceedings as it may deem expedient to
prevent any impairment of the Collateral by any acts that may be unlawful or
in violation of the Collateral Documents
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or this Indenture, and such suits and proceedings as the Trustee may deem
expedient to preserve or protect its interests and the interests of the
Holders of Notes in the Collateral (including power to institute and maintain
suits or proceedings to restrain the enforcement of or compliance with any
legislative or other governmental enactment, rule or order that may be
unconstitutional or otherwise invalid if the enforcement of, or compliance
with, such enactment, rule or order would impair the Security interest
hereunder or be prejudicial to the interests of the Holders of Notes or of
the Trustee).
SECTION 10.08. AUTHORIZATION OF RECEIPT OF FUNDS BY THE TRUSTEE UNDER THE
COLLATERAL DOCUMENTS.
The Trustee is authorized to receive any funds for the benefit of the
Holders of Notes distributed under the Collateral Documents, and to make
further distributions of such funds to the Holders of Notes according to the
provisions of this Indenture.
SECTION 10.09. TERMINATION OF SECURITY INTEREST.
Upon the payment in full of all Obligations of the Company under this
Indenture and the Notes, the Trustee shall, at the request of the Company,
release the Liens pursuant to this Indenture and the Collateral Documents.
SECTION 10.10. RELEASES FOLLOWING SALE OF ASSETS.
Concurrently with any sale of assets, any Liens in favor of the Trustee
in the assets sold thereby shall be released; PROVIDED, that in the event of
an Asset Sale, the Net Proceeds from such sale or other disposition are
applied in accordance with the provisions of Section 4.10. Upon delivery by
the Company to the Trustee of an Officers' Certificate and an Opinion of
Counsel to the effect that such sale or other disposition was made by the
Company in accordance with the provisions of this Indenture, including
without limitation Section 4.10, the Trustee shall execute any documents
reasonably required in order to evidence the release of any Guarantor from
its obligations under its Guarantee.
In the event that the Company or any of its Subsidiaries sells,
transfers or disposes of any property consisting partially or wholly of the
Collateral other than in accordance with the provisions of Section 4.10, the
Trustee shall have a first priority security interest in the pro rata portion
of the net proceeds of such sale, transfer or disposition attributable to
such Collateral as determined by an investment banking firm of national
standing selected by the Company.
SECTION 10.11. "TRUSTEE" TO INCLUDE PAYING AGENT.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Article 10 or in Article 11 shall in such case
(unless the context shall otherwise require) be construed as extending to and
including such Paying Agent within its meaning as fully and for all intents
and purposes as if such Paying Agent were named in this Article 10 or in
Article 11 in place of the Trustee.
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ARTICLE 11.
AFFILIATE GUARANTEES
SECTION 11.01. ECHOSTAR GUARANTEE.
EchoStar hereby unconditionally guarantees to each Holder of a Note
authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, irrespective of the validity and enforceability of
this Indenture, the Notes or the Obligations of the Company hereunder or
thereunder, that: (a) the principal of and interest on the Notes will be
promptly paid in full when due, whether at maturity, by acceleration,
redemption or otherwise, and interest on the overdue principal of and
interest on the Notes, if any, if lawful, and all other obligations of the
Company to the Holders or the Trustee hereunder or thereunder will be
promptly paid in full or performed, all in accordance with the terms hereof
and thereof; and (b) in case of any extension of time of payment or renewal
of any Notes or any of such other obligations, that same will be promptly
paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or
otherwise. Failing payment when due of any amount so guaranteed or any
performance so guaranteed for whatever reason, EchoStar will be obligated to
pay the same immediately. EchoStar hereby agrees that its obligations
hereunder shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Notes with
respect to any provisions hereof or thereof, the recovery of any judgment
against the Company, any action to enforce the same or any other circumstance
which might otherwise constitute a legal or equitable discharge or defense of
a guarantor. EchoStar hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against
the Company, protest, notice (except that the Trustee shall provide at least
ten days' prior written notice to EchoStar before taking any action for which
the Communications Act and/or the FCC rules require such notice and which
right to notice is not waivable by EchoStar) and all demands whatsoever and
covenant that this Guarantee will not be discharged except by complete
performance of the Obligations guaranteed hereby. If any Holder or the
Trustee is required by any court or otherwise to return to the Company or any
Guarantor, or any Custodian, Trustee, liquidator or other similar official
acting in relation to either the Company or any Guarantor, any amount paid by
either to the Trustee or such Holder, this Guarantee, to the extent
theretofore discharged, shall be reinstated in full force and effect.
EchoStar agrees that it shall not be entitled to any right of subrogation in
relation to the Holders in respect of any obligations guaranteed hereby.
EchoStar further agrees that, as between EchoStar, on the one hand, and the
Holders and the Trustee, on the other hand, (x) the maturity of the
Obligations guaranteed hereby may be accelerated as provided in Article 6 for
the purposes of this guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any declaration of acceleration of
such obligations as provided in Article 6, such obligations (whether or not
due and payable) shall forthwith become due and payable by EchoStar for the
purpose of this Guarantee.
Notwithstanding the foregoing, in the event that the EchoStar Guarantee
would constitute or result in a violation of any applicable fraudulent
conveyance or similar law of any relevant jurisdiction, the liability of
EchoStar under the EchoStar Guarantee shall be reduced to the maximum amount
permissible under such fraudulent conveyance or similar law.
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Anything in the Notes, the EchoStar Guarantee or the Indenture to the
contrary notwithstanding, the EchoStar Guarantee shall be subordinate and
junior in right of payment, to the extent and in the manner hereinafter set
forth, to all Senior EchoStar Indebtedness. As used herein, "SUBORDINATE AND
JUNIOR" shall mean the following: that (i) in the event of any insolvency or
bankruptcy proceedings, and any receivership, liquidation, reorganization or
other similar proceedings in connection therewith, relative to EchoStar or
its creditors or its property, and in the event of any proceedings for
voluntary liquidation, dissolution or other winding up of EchoStar, whether
or not involving insolvency or bankruptcy proceedings, then all principal,
premium, if any, and interest on all Senior EchoStar Indebtedness shall first
be paid in full, or such payment be provided for, before any payment on
account of principal, premium, if any, or interest, if any, is made by
EchoStar upon the EchoStar Guarantee, and in any such proceedings any payment
or distribution of assets of EchoStar of any kind or character, whether in
cash or property or securities, which may be payable or deliverable in
respect of the EchoStar Guarantee, (except for the provisions of this
Section) shall be paid or delivered directly to the holders of such Senior
EchoStar Indebtedness, or their representative or representatives or to the
trustee or trustees under any indenture pursuant to which any instruments
evidencing any such Senior EchoStar Indebtedness may have been issued, pro
rata, as their respective interests may appear, for application in payment
thereof, unless and until such Senior EchoStar Indebtedness shall have been
paid and satisfied in full (after giving effect to any concurrent payment or
distributions, or provisions therefor, to the holders of such Senior EchoStar
Indebtedness) or such payment and satisfaction shall have been provided for;
PROVIDED, HOWEVER, that in the event that payment or delivery of such cash,
property or securities to the Holders of the Notes is authorized by an order
or decree made by a court of competent jurisdiction in a reorganization
proceeding under any applicable law and giving effect to the provisions
hereinbefore set forth for the subordination of the Notes to the Senior
EchoStar Indebtedness, no payment or delivery of such cash, property or
securities shall be made to the holders of Senior EchoStar Indebtedness;
PROVIDED, FURTHER, that no such delivery shall be made to the holders of
Senior EchoStar Indebtedness of securities which are issued by EchoStar, as
reorganized, or by the corporation succeeding EchoStar or acquiring its
property and assets, pursuant to a plan of reorganization or upon the
dissolution or liquidation of EchoStar, and which are subordinate and junior
to the payment of all Senior EchoStar Indebtedness (or securities substituted
therefor) then outstanding; and PROVIDED, FURTHER, that the provisions of
this clause (i) shall not apply to a liquidation, dissolution, or other
winding up made in connection with a merger, consolidation, sale, lease,
transfer or other disposal not prohibited by Section 11.05 of this Indenture;
and (ii) in the event that pursuant to Article Six of this Indenture any Note
is declared due and payable because of the occurrence of an Event of Default
(under circumstances when the provisions of the foregoing clause (i) shall
not be applicable), the Holders of such Notes shall be entitled to payment
from EchoStar only after there shall first have been payment in full on the
Senior EchoStar Indebtedness outstanding at the time such Note so becomes due
and payable because of such Event of Default, or such payment shall have been
provided for.
In the event that, notwithstanding the provisions of this Section 11.01,
the Trustee or any Holders of Notes shall receive any payment or distribution
on the Notes that because of this Section 11.01 should not have been made to
them, then such payment shall be held in trust for the benefit of, and shall
be paid over and delivered to, the holders of the Senior EchoStar
Indebtedness or their representative or representatives or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing any
such Senior EchoStar Indebtedness may have been issued, pro rata as their
respective interests may appear, for
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application to the pro rata payment of all Senior EchoStar Indebtedness
remaining unpaid until all such Senior EchoStar Indebtedness shall have been
paid in full, after giving effect to any concurrent payment or distribution
to the holders of such Senior EchoStar Indebtedness.
No present or future holder of Senior EchoStar Indebtedness shall be
prejudiced in his right to enforce the subordination of the Notes by any act
or failure to act on the part of EchoStar. Each Holder of Notes by his
acceptance thereof authorizes the Trustee in his behalf to take such action
as may be necessary or appropriate to effectuate the subordination as
provided in this Section 11.01 and appoints the Trustee his attorney-in-fact
for any and all such purposes.
Nothing in this Section 11.01 shall apply to claims of, or payments to,
the Trustee under or pursuant to the provisions of Section 7.07.
The subordination provisions of this Section 11.01 are solely for the
purpose of defining the relative rights of the holders of Senior EchoStar
Indebtedness on the one hand, and the Holders of the Notes on the other hand,
and nothing contained in this Section 11.01 or elsewhere in this Indenture,
the Notes or the EchoStar Guarantee, shall impair, as between EchoStar and
the Holder of any Note, the obligation of EchoStar, which is unconditional
and absolute, to pay to the Holder thereof the principal of, premium, if any,
and interest on the Notes in accordance with their terms and the terms of the
EchoStar Guarantee and this Indenture, nor shall anything herein or therein
prevent the Trustee or the Holder of any Note from exercising all remedies
otherwise permitted by applicable law or hereunder or thereunder upon the
occurrence of an Event of Default, subject to the rights, if any, under this
Section 11.01 of holders of Senior EchoStar Indebtedness to receive cash,
property or securities of the Company otherwise payable or deliverable to the
Holders of the Notes.
SECTION 11.02. EXECUTION AND DELIVERY OF ECHOSTAR GUARANTEE.
To evidence its Guarantee set forth in Section 11.01, EchoStar hereby
agrees that a notation of such Guarantee substantially in the form of Exhibit
B shall be endorsed by an officer of EchoStar on each Note authenticated and
delivered by the Trustee and that this Indenture shall be executed on behalf
of EchoStar by its President or one of its Vice Presidents and attested to by
an Officer.
EchoStar hereby agrees that its Guarantee set forth in Section 11.01
shall remain in full force and effect notwithstanding any failure to endorse
on each Note a notation of such Guarantee.
If an officer or Officer whose signature is on this Indenture or on the
EchoStar Guarantee no longer holds that office at the time the Trustee
authenticates the Note on which an EchoStar Guarantee is endorsed, the
Guarantee shall be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the EchoStar Guarantee
set forth in this Indenture on behalf of EchoStar.
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SECTION 11.03. SPRINGING GUARANTEES.
On the ESBC Guarantee Date, ESBC shall deliver to the Trustee a
Supplemental Indenture in form and substance reasonably satisfactory to the
Trustee including a provision substantially as follows: "ESBC hereby
unconditionally guarantees to each Holder of a Note authenticated and
delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of this Supplemental
Indenture, the Indenture, the Notes or the Obligations of the Company
hereunder or thereunder, that: (a) the principal of and interest on the
Notes will be promptly paid in full when due, whether at maturity, by
acceleration, redemption or otherwise, and interest on the overdue principal
of and interest on the Notes, if any, if lawful, and all other obligations of
the Company to the Holders or the Trustee hereunder or thereunder will be
promptly paid in full or performed, all in accordance with the terms hereof
and thereof; and (b) in case of any extension of time of payment or renewal
of any Notes or any of such other obligations, that same will be promptly
paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or
otherwise. Failing payment when due of any amount so guaranteed or any
performance so guaranteed for whatever reason, ESBC will be obligated to pay
the same immediately. ESBC hereby agrees that its obligations hereunder
shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes, the Indenture, or this Supplemental Indenture,
the absence of any action to enforce the same, any waiver or consent by any
Holder of the Notes with respect to any provisions hereof or thereof, the
recovery of any judgment against the Company, any action to enforce the same
or any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of a guarantor. ESBC hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of the Company, any right to require a proceeding
first against the Company, protest, notice (except that the Trustee shall
provide at least ten days' prior written notice to ESBC before taking any
action for which the Communications Act and/or the FCC rules require such
notice and which right to notice is not waivable by ESBC) and all demands
whatsoever and covenant that this Guarantee will not be discharged except by
complete performance of the Obligations guaranteed. If any Holder or the
Trustee is required by any court or otherwise to return to the Company or any
Guarantor, or any Custodian, Trustee, liquidator or other similar official
acting in relation to either the Company or any Guarantor, any amount paid by
either to the Trustee or such Holder, this Guarantee, to the extent
theretofore discharged, shall be reinstated in full force and effect. ESBC
agrees that it shall not be entitled to any right of subrogation in relation
to the Holders in respect of any obligations guaranteed hereby. ESBC further
agrees that, as between ESBC, on the one hand, and the Holders and the
Trustee, on the other hand, (x) the maturity of the Obligations guaranteed
hereby may be accelerated as provided in Article 6 of the Indenture for the
purposes of this Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any declaration of acceleration of
such obligations as provided in Article 6 of the Indenture, such obligations
(whether or not due and payable) shall forthwith become due and payable by
ESBC for the purpose of this Guarantee. Such Supplemental Indenture shall
not contain any terms or provisions expressly subordinating the Guarantee
contained therein to any other Indebtedness of ESBC. The ESBC Guarantee,
when effective, will rank pari passu with all senior unsecured Indebtedness
of ESBC.
On the Dish Guarantee Date, Dish shall deliver to the Trustee a
Supplemental Indenture with in form and substance reasonably satisfactory to
the Trustee, including a
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provision substantially as follows: "Dish hereby unconditionally guarantees
to each Holder of a Note authenticated and delivered by the Trustee and to
the Trustee and its successors and assigns, irrespective of the validity and
enforceability of this Supplemental Indenture, the Indenture, the Notes or
the Obligations of the Company hereunder or thereunder, that: (a) the
principal of and interest on the Notes will be promptly paid in full when
due, whether at maturity, by acceleration, redemption or otherwise, and
interest on the overdue principal of and interest on the Notes, if any, if
lawful, and all other obligations of the Company to the Holders or the
Trustee hereunder or thereunder will be promptly paid in full or performed,
all in accordance with the terms hereof and thereof; and (b) in case of any
extension of time of payment or renewal of any Notes or any of such other
obligations, that same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise. Failing payment when due of any
amount so guaranteed or any performance so guaranteed for whatever reason,
Dish will be obligated to pay the same immediately. Dish hereby agrees that
its obligations hereunder shall be unconditional, irrespective of the
validity, regularity or enforceability of the Notes, the Indenture or this
Supplemental Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any
action to enforce the same or any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of a guarantor. Dish
hereby waives diligence, presentment, demand of payment, filing of claims
with a court in the event of insolvency or bankruptcy of the Company, any
right to require a proceeding first against the Company, protest, notice
(except that the Trustee shall provide at least ten days' prior written
notice to Dish before taking any action for which the Communications Act
and/or the FCC rules require such notice and which right to notice is not
waivable by Dish) and all demands whatsoever and covenant that this Guarantee
will not be discharged except by complete performance of the Obligations
guaranteed hereby. If any Holder or the Trustee is required by any court or
otherwise to return to the Company or any Guarantor, or any Custodian,
Trustee, liquidator or other similar official acting in relation to either
the Company or any Guarantor, any amount paid by either to the Trustee or
such Holder, this Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect. Dish agrees that it shall not be
entitled to any right of subrogation in relation to the Holders in respect of
any obligations guaranteed hereby. Dish further agrees that, as between
Dish, on the one hand, and the Holders and the Trustee, on the other hand,
(x) the maturity of the Obligations guaranteed hereby may be accelerated as
provided in Article 6 of the Indenture for the purposes of this guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (y) in the
event of any declaration of acceleration of such obligations as provided in
Article 6 of the Indenture, such obligations (whether or not due and payable)
shall forthwith become due and payable by Dish for the purpose of this
Guarantee. Such Supplemental Indenture shall not contain any terms or
provisions expressly subordinating the Guarantee contained therein to any
other Indebtedness of Dish. The Dish Guarantee, when effective, will rank
pari passu with all senior unsecured Indebtedness of Dish.
Notwithstanding the foregoing, in the event that any Springing Guarantee
hereunder would constitute or result in a violation of any applicable
fraudulent conveyance or similar law of any relevant jurisdiction, the
liability of a Springing Guarantor under such Springing Guarantee shall be
reduced to the maximum amount permissible under such fraudulent conveyance or
similar law.
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SECTION 11.04. EXECUTION AND DELIVERY OF SPRINGING GUARANTEE.
To evidence each Springing Guarantee set forth in Section 11.03, each
Guarantor hereby agrees that a notation of such Springing Guarantee
substantially in the form of Exhibits C and D shall be endorsed by an officer
of such Springing Guarantor on each Note authenticated and delivered by the
Trustee with respect to which such Springing Guarantee has been effected
pursuant to Section 11.03, and that this Indenture and the Supplemental
Indenture executed pursuant to Section 11.03 relating thereto shall be
executed on behalf of such Springing Guarantor by its President or one of its
Vice Presidents and attested to by an Officer.
Each Springing Guarantor hereby agrees that any Springing Guarantee
effected pursuant to Section 11.03 shall remain in full force and effect
notwithstanding any failure to endorse on each Note to which it applies a
notation of such Springing Guarantee.
If an officer or Officer whose signature is on this Indenture, any
Supplemental Indenture or on the Springing Guarantee no longer holds that
office at the time the Trustee authenticates the Note on which a Springing
Guarantee is endorsed, the Springing Guarantee shall be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of any Springing Guarantee
set forth in this Indenture or any Supplemental Indenture which has been
effected pursuant to Section 11.03 with respect to such Note on behalf of the
Springing Guarantors.
SECTION 11.05. GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.
Subject to Section 10.10 and Section 11.07, EchoStar may not consolidate
or merge with or into (whether or not such Guarantor is the surviving
entity), or sell, assign, transfer, lease, convey or otherwise dispose of all
or substantially all of its properties or assets in one or more related
transactions to, another Person unless:
(a) such Guarantor is the surviving Person or the Person formed by or
surviving any such consolidation or merger (if other than such Guarantor)
or to which such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made is a corporation organized or existing
under the laws of the United States, any state thereof or the District of
Columbia;
(b) the Person formed by or surviving any such consolidation or merger
(if other than such Guarantor) or the Person to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have
been made assumes all the obligations of such Guarantor pursuant to a
supplemental indenture in form reasonably satisfactory to the Trustee,
under the Notes and this Indenture;
(c) immediately after such transaction no Default or Event of Default
exists; and
(d) such Guarantor or the Person formed by or surviving any such
consolidation or merger, or to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made (i) shall
have Consolidated Net Worth immediately
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after the transaction (but prior to any purchase accounting adjustments
or accrual of deferred tax liabilities resulting from the transaction) not
less than the Consolidated Net Worth of such Guarantor immediately
preceding the transaction and (ii) shall have an Indebtedness to Cash
Flow Ratio immediately after the transaction that does not exceed such
Guarantor's Indebtedness to Cash Flow Ratio immediately preceding the
transaction.
In case of any such consolidation, merger, sale or conveyance and upon
the assumption by the successor corporation, by Supplemental Indenture,
executed and delivered to the Trustee and satisfactory in form to the
Trustee, of any Guarantee previously signed by the Guarantor and the due and
punctual performance of all of the covenants and conditions of this Indenture
to be performed by the Guarantor, such successor corporation shall succeed to
and be substituted for the Guarantor with the same effect as if it had been
named herein as a Guarantor. Such successor corporation thereupon may cause
to be signed any or all of the Guarantees to be issuable hereunder by such
Guarantor and delivered to the Trustee. All the Guarantees so issued shall
in all respects have the same legal rank and benefit under this Indenture as
the Guarantees theretofore and thereafter issued in accordance with the terms
of this Indenture as though all of such Guarantees had been issued at the
date of the execution of such Guarantee by such Guarantor.
Except as set forth in Articles 4 and 5, nothing contained in this
Indenture shall prevent any consolidation or merger of a Guarantor with or
into the Company or shall prevent any sale or conveyance of the property of a
Guarantor as an entirety or substantially as an entirety to the Company.
SECTION 11.06. INTENTIONALLY OMITTED.
SECTION 11.07. RELEASES FROM GUARANTEES.
If pursuant to any sale of assets (including, if applicable, all of the
capital stock of any Guarantor which is a Subsidiary of the Company) or other
disposition by way of merger, consolidation or otherwise the assets sold
include all or substantially all of the assets of any Guarantor which is a
Subsidiary of the Company or all of the capital stock of any such Guarantor,
then such Guarantor (in the event of a sale or other disposition of all of
the capital stock of such Guarantor) or the Person acquiring the property (in
the event of a sale or other disposition of all or substantially all of the
assets of such a Guarantor) shall be released and relieved of its obligations
under its Guarantee or Section 11.05, as the case may be; PROVIDED that in
the event of an Asset Sale, the Net Proceeds from such sale or other
disposition are applied in accordance with the provisions of Section 4.10.
Upon delivery by the Company to the Trustee of an Officers' Certificate and
an Opinion of Counsel to the effect that such sale or other disposition was
made by the Company in accordance with the provisions of this Indenture,
including without limitation Section 4.10, the Trustee shall execute any
documents reasonably required in order to evidence the release of any such
Guarantor from its obligations under its Guarantee. Any such Guarantor not
released from its obligations under its Guarantee shall remain liable for the
full amount of principal of and interest on the Notes and for the other
obligations of such Guarantor under the Indenture as provided in this Article
11.
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ARTICLE 12.
MISCELLANEOUS
SECTION 12.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA Section 318(c), the imposed duties shall control.
SECTION 12.02. NOTICES.
Any notice or communication by the Company or the Trustee to the other
is duly given if in writing and delivered in Person or mailed by first class
mail (registered or certified, return receipt requested), telex, telecopier
or overnight air courier guaranteeing next day delivery, to the other's
address:
If to the Company:
EchoStar DBS Corporation
00 Xxxxxxxxx Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
With a copy to:
Xxxxx & Xxxxxxxxx
000 00xx Xxxxxx
Xxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx
If to the Trustee:
First Trust National Association
000 Xxxx Xxxxx Xxxxxx
Xxxxx Xxxx, Xxxxxxxxx 00000
Telecopier No: (000) 000-0000
Attention: Corporate Trust Administration
The Company or the Trustee, by notice to the other may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders of
Notes) shall be deemed to have been duly given: at the time delivered by
hand, if personally delivered; five Business Days after being deposited in
the mail, postage prepaid, if mailed; when answered back, if telexed; when
receipt acknowledged, if telecopied; and the next Business Day after timely
delivery to the courier, if sent by overnight air courier guaranteeing next
day delivery.
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Any notice or communication to a Holder of a Note shall be mailed by
first class mail, certified or registered, return receipt requested, or by
overnight air courier guaranteeing next day delivery to its address shown on
the register kept by the Registrar. Any notice or communication shall also
be so mailed to any Person described in TIA Section 313(c), to the extent
required by the TIA. Failure to mail a notice or communication to a Holder of
a Note or any defect in it shall not affect its sufficiency with respect to
other Holders of Notes.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders of Notes, it
shall mail a copy to the Trustee and each Agent at the same time.
SECTION 12.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF
NOTES.
Holders of the Notes may communicate pursuant to TIA Section 312(b) with
other Holders of Notes with respect to their rights under this Indenture or
the Notes. The Company, the Trustee, the Registrar and anyone else shall
have the protection of TIA Section 312(c).
SECTION 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the signers,
all conditions precedent and covenants, if any, provided for in this
Indenture relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably satisfactory
to the Trustee stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been satisfied.
SECTION 12.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA Section 314(a)(4)) shall include:
(a) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
satisfied; and
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(d) a statement as to whether or not, in the opinion of such Person, such
condition or covenant has been satisfied.
SECTION 12.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting of
Holders of Notes. The Registrar or Paying Agent may make reasonable rules
and set reasonable requirements for its functions.
SECTION 12.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES,
INCORPORATORS AND STOCKHOLDERS.
No director, officer, employee, incorporator or stockholder of EchoStar,
the Company or any of their Affiliates, as such, shall have any liability for
any obligations of EchoStar, the Company and any of their Affiliates under
the Notes or this Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder of the Notes by
accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Notes.
SECTION 12.08. GOVERNING LAW.
The internal law of the State of New York shall govern and be used to
construe this Indenture, the Notes and the Guarantees.
SECTION 12.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of EchoStar or its Subsidiaries. Any such indenture, loan or
debt agreement may not be used to interpret this Indenture.
SECTION 12.10. SUCCESSORS.
All agreements of the Company in this Indenture and the Notes shall bind
its successors. All agreements of the Trustee in this Indenture shall bind
its successor.
SECTION 12.11. SEVERABILITY.
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
SECTION 12.12. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
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SECTION 12.13. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall
in no way modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
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IN WITNESS WHEREOF, Grantor and the Trustee have caused this Indenture
to be duly executed as of the day and year first above written.
ECHOSTAR DBS CORPORATION,
a Colorado corporation
By: /s/ XXXXX X. XXXXXXXXX
----------------------------------------------------
Xxxxx X. Xxxxxxxxx
Senior Vice President, General Counsel and Secretary
ECHOSTAR COMMUNICATIONS CORPORATION,
a Nevada corporation
By: /s/ XXXXX X. XXXXXXXXX
----------------------------------------------------
Xxxxx X. Xxxxxxxxx
Senior Vice President, General Counsel and Secretary
ECHOSTAR SATELLITE BROADCASTING CORPORATION,
a Colorado corporation
By: /s/ XXXXX X. XXXXXXXXX
----------------------------------------------------
Xxxxx X. Xxxxxxxxx
Senior Vice President, General Counsel and Secretary
DISH, LTD.,
a Nevada corporation
By: /s/ XXXXX X. XXXXXXXXX
----------------------------------------------------
Xxxxx X. Xxxxxxxxx
Senior Vice President, General Counsel and Secretary
FIRST TRUST NATIONAL ASSOCIATION, a Trustee
By: /s/ XXXXXXX X. XXXXXXXX
----------------------------------------------------
Xxxxxxx X. Xxxxxxxx
Trust Officer Corporate Finance
EXHIBITS
--------
EXHIBIT A SENIOR SECURED NOTES
EXHIBIT B ECHOSTAR GUARANTEE
EXHIBIT C ESBC GUARANTEE
EXHIBIT D DISH LTD. GUARANTEE
EXHIBIT E INTEREST ESCROW ACCOUNT AGREEMENT
EXHIBIT F SATELLITE ESCROW ACCOUNT AGREEMENT
EXHIBIT G STOCK PLEDGE AGREEMENT
EXHIBIT H ESCROW SECURITY AGREEMENT
EXHIBIT I SECURITY AGREEMENT AND COLLATERAL ASSIGNMENT
EXHIBIT J ECHOSTAR IV SECURITY AGREEMENT
EXHIBIT K SECURITY INTEREST PLEDGE AGREEMENT
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