Exhibit 3.20
Execution
Copy
THIS MONITORING FEE
AGREEMENT is dated as of
January 28, 2005 (this “ Agreement ”) and
is among Zeus Merger Two Limited, a Bermuda company (the “
Company ”), Apax Europe V GP Co. Limited and
Apax Partners, Inc. (collectively, “ Apax
”), Apollo Management V, L.P. (“ Apollo
”), MDP Global Investors Limited (“ MDP
”), and Permira Advisers, LLC (“ Permira
”) (each of Apax, Apollo, MDP and Permira, a “
Sponsor ”).
RECITALS
WHEREAS , the Company has entered into a Transaction
Agreement and Plan of Amalgamation (as amended from time to time,
the “ Acquisition Agreement ”) dated as
of August 16, 2004 among Intelsat, Ltd., a Bermuda Company (“
Intelsat ”), Intelsat (Bermuda), Ltd., a
Bermuda Company and a wholly owned subsidiary of Intelsat (“
Intelsat Bermuda ”), Zeus Holdings Limited
(“ Parent ”), Zeus Merger One Limited, a
Bermuda company and a wholly owned subsidiary of Parent (“
Amalgamation Sub ”), and the Company, a wholly
owned subsidiary of Amalgamation Sub.
WHEREAS , on the terms and subject to the conditions of
the Acquisition Agreement, the Company will amalgamate (the “
Amalgamation ”) under the Laws of Bermuda with
Intelsat Bermuda and continue as a Bermuda exempted Company. All
references to the Company from and after the Amalgamation are
references to the company continuing as a result of the
Amalgamation.
WHEREAS , funds advised or represented by the Sponsors
(each such fund, an “ Investor ”) are
making an investment in Parent and will enter into a Shareholders
Agreement dated January 27, 2005 (the “ Shareholders
Agreement ”);
WHEREAS , the Sponsors have expertise in the areas of
finance, strategy, investment, acquisitions and other matters
relating to the Company and its business.
WHEREAS , the Company desires to avail for itself and
its subsidiaries, for the term of this Agreement, of the
Sponsors’ expertise in providing financial and structural
analysis, due diligence investigations, corporate strategy, other
advice and negotiation assistance, which the Company believes will
be beneficial to it and its subsidiaries, and the Sponsors wish to
provide the services to the Company as set forth in this Agreement
in consideration of the payment of the fees described
below.
NOW, THEREFORE
, in consideration of the premises
and agreements contained herein and of other good and valuable
consideration, the sufficiency of which are hereby acknowledged,
the parties agree as follows:
AGREEMENT
SECTION 1.
Appointment . The
Company hereby engages the Sponsors to provide the services
described in Section 2 (the “ Services ”)
for the term of this Agreement on the terms and subject to the
conditions of this Agreement.
SECTION 2. Services
. The Sponsors agree that
during the term of this Agreement, they will provide to the
Company, by and through themselves, their affiliates and such
respective officers, employees, representatives and third parties
(collectively hereinafter
referred to as the “Sponsor
Designees”) as the Sponsors in their sole discretion may
designate from time to time, monitoring, advisory and consulting
services in relation to the affairs of the Company and its
subsidiaries, including, without limitation, (a) advice regarding
the structure, terms, conditions and other provisions, distribution
and timing of debt and equity offerings and advice regarding
relationships with the Company’s and its subsidiaries’
lenders and bankers, (b) advice regarding the strategy of the
Company, (c) advice regarding dispositions and/or acquisitions and
(d) such other advice directly related or ancillary to the above
financial advisory services as may be reasonably requested by the
Company; provided that the responsibilities of any Sponsor
shall not be substantially disproportionate to the responsibilities
of the other Sponsors. It is expressly agreed that the services to
be performed hereunder will not include investment banking or other
financial advisory services which may be provided by the Sponsors
or any of their affiliates or Sponsor Designees to the Company in
connection with any specific acquisition, divestiture, refinancing
or recapitalization by the Company or any of its subsidiaries. The
Sponsors or their Sponsor Designees may be entitled to receive
additional compensation for providing services of the type
specified in the preceding sentence by mutual agreement of the
Company or such subsidiary, on the one hand, and one or more of the
Sponsors or their relevant affiliates or Sponsor Designees, on the
other hand.
SECTION 3. Fees
.
(a) Monitoring Fee . In
consideration of the Services being provided by the Sponsors and
their Sponsor Designees, the Company will pay to the Sponsors
(other than a Sponsor affiliated with a Non-Eligible Investor
Group) an annual monitoring fee in respect of each fiscal year from
and including fiscal 2004 in an amount equal to the greater of
$6.25 million or 1.25% of Adjusted EBITDA for such fiscal year (the
“ Monitoring Fee ”). A payment of $6.25
million in respect of the Monitoring Fee for fiscal 2004 shall be
paid on January 28, 2005 at or prior to the time of the
Amalgamation, and the Company will pay the Sponsors (other than a
Sponsor affiliated with a Non-Eligible Investor Group) an amount
equal to the excess, if any, of 1.25% of Adjusted EBITDA for fiscal
2004 over $6.25 million, such amount to be paid promptly upon the
determination of Adjusted EBITDA for fiscal 2004. On the first
business day on or after January 1 of each fiscal year, commencing
on January 2, 2006, the Company will make a payment of $6.25
million in respect of the Monitoring Fees in respect of such fiscal
year, and will promptly upon the earlier of March 31 of such fiscal
year or the determination of Adjusted EBITDA for the immediately
preceding fiscal year pay the Sponsors (other than a Sponsor
affiliated with a Non-Eligible Investor Group) the excess, if any,
of 1.25% of Adjusted EBITDA for the immediately preceding fiscal
year over $6.25 million. In the event the Termination Date occurs
prior to the last day of any fiscal year, the Monitoring Fee with
respect to such fiscal year shall be payable on the Termination
Date, such Monitoring Fee shall be calculated for purposes of this
sentence based upon the greater of (i) the highest Adjusted EBITDA
attained in any of the three most recent fiscal years or (ii) if
the Termination Date occurs subsequent to the 180
th
day of any fiscal year,
the extrapolated Adjusted EBITDA based upon the completed portion
of such fiscal year. Except as set forth in paragraph (c), any
amounts payable by the Company to the Sponsors pursuant to this
Section 3 shall be paid to each respective Sponsor, other than a
Sponsor affiliated with an Investor Group (as defined in the
Shareholders Agreement) which at such time is a Non-Eligible
Investor Group (as defined in the Shareholders Agreement), a
portion of the Monitoring Fee equal to the amount of the Monitoring
Fee for the applicable year multiplied by a quotient where the
numerator is the Value (as defined in the Shareholders Agreement)
of shares held by the Investor Group affiliated with such Sponsor,
and the denominator is the Value of all
shares held by all Investor Groups that at such
time are not Non-Eligible Investor Groups. All amounts paid by the
Company to the Sponsors pursuant to this Section 3 shall be made by
wire transfer in same-day funds to the respective bank accounts
designated by the Sponsors. The Monitoring Fee shall be payable
regardless of the level of Services provided during any fiscal year
and shall not be refundable under any circumstances. For purposes
of this Agreement, “ Termination Date ”
means the earliest of (i) the twelfth anniversary of the date
hereof, (ii) such time as the Sponsors and their affiliates then
owning beneficial economic interests in the Parent own less in the
aggregate than 5% of the beneficial economic interest of the Parent
and (iii) such earlier date as the Company and the Sponsors may
mutually agree upon. For purposes of this Section 3, “
Adjusted EBITDA ” shall have the meaning set
forth in the Indenture (as amended or supplemented, the “
Indenture ”) dated as of January 28, 2005 among
Amalgamation Sub, the Company and Wells Fargo Bank, National
Association, as Trustee,.
(b) Transaction Fee . In
consideration of the Services provided by the Sponsors or their
Sponsor Designees in connection with the transactions contemplated
by the Acquisition Agreement (the “
Transactions ”), on January 28, 2005 at or
prior to the time of the Amalgamation, the Company will pay the
Sponsors an aggregate transaction fee in the amount of $50,000,000
(the “ Transaction Fee ”), with each
Sponsor or its designee, as the case may be, receiving the portion
thereof of the Transaction Fee equal to the amount of the
Transaction Fee multiplied by a quotient where the numerator is the
Value of shares held by the Investor Group affiliated with such
Sponsor, and the denominator is the Value of all shares held by all
Investor Groups.
(c) Change of Control or Initial
Public Offering . The parties acknowledge and agree that an
objective of the Company is to maximize value for its shareholders
which may include consummating (or participating in the
consummation of) (i) a Change of Control (as defined below) or (ii)
a Qualified IPO (as defined below). The Services provided to the
Company by the Sponsors will help to facilitate the consummation of
a Change of Control or Qualified IPO, should the Company decide to
pursue such a transaction. In consideration of the agreements
contained herein, following the provision of notice to the Sponsors
by the Company of the Company’s intent to enter into a Change
of Control or Qualified IPO, the Sponsors may elect at any time in
connection with or in anticipation of such Change of Control or
Qualified IPO (or at any time thereafter) (which election can be
made by decision of any three of the Sponsors by the delivery of
written notice to the Company (such notice, the “
Notice ” and the date on which such Notice is
delivered to the Company, the “ Notice Date
”)) to receive the Lump Sum Payment (as defined below), in
lieu of annual payments of the Monitoring Fee, such amount to be
paid, unless prohibited by and subject to the terms of any
agreement or indenture governing indebtedness of the Company or any
of its subsidiaries
