EXHIBIT 10.10
EXECUTION VERSION
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$20,000,000
AMENDED AND RESTATED
LETTER OF CREDIT REIMBURSEMENT AGREEMENT
between
SPACE SYSTEMS/LORAL, INC.,
as Borrower,
and
JPMORGAN CHASE BANK, N.A.
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Dated as of November 21, 2005
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS AND PRINCIPLES OF CONSTRUCTION.................. 1
1.01. Defined Terms.............................................. 2
1.02. Terms Generally............................................ 8
1.03. Accounting Terms; GAAP..................................... 8
Section 2. LETTERS OF CREDIT........................................... 8
2.01. General.................................................... 9
2.02. Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions......................................................... 9
2.03. Expiration Date............................................ 9
2.04. Transfer of Existing Letters of Credit..................... 10
2.05. Reimbursement.............................................. 10
2.06. Obligations Absolute; Limitation of Liability.............. 11
2.07. Practices.................................................. 13
2.08. Disbursement Procedures.................................... 13
2.09. Termination and Reduction of Commitment.................... 13
2.10. Fees....................................................... 13
2.11. Default Rate of Interest................................... 14
2.12. Increased Costs............................................ 14
2.13. Taxes...................................................... 15
2.14. Payments Generally; Treatment.............................. 16
Section 3. COLLATERAL.................................................. 16
3.01. Cash Collateral............................................ 16
3.02. Currency Exchange Rate Fluctuations........................ 16
Section 4. CONDITIONS PRECEDENT........................................ 17
4.01. Conditions to Closing Date................................. 17
4.02. Conditions to Each Credit Event............................ 18
Section 5. REPRESENTATIONS, WARRANTIES AND AGREEMENTS.................. 19
5.01. Corporate Status........................................... 19
5.02. Corporate Power and Authority.............................. 19
5.03. No Violation............................................... 19
5.04. Governmental Approvals..................................... 20
5.05. Litigation................................................. 20
5.06. True and Complete Disclosure............................... 20
5.07. Tax Returns and Payments................................... 20
5.08. Compliance with Statutes, etc.............................. 21
5.09. Investment Company Act..................................... 21
5.10. Properties................................................. 21
5.11. Financial Condition; No Material Adverse Change............ 21
5.12. Use of Proceeds............................................ 21
5.13. The Confirmation Order..................................... 22
5.14. Security Interests......................................... 22
Section 6. AFFIRMATIVE COVENANTS....................................... 22
6.01. Financial Statements....................................... 22
6.02. Certificates; Other Information............................ 23
6.03. Maintenance of Existence; Compliance....................... 23
6.04. Notices.................................................... 23
6.05. Books, Records and Inspections............................. 24
6.06. Taxes...................................................... 24
Section 7. NEGATIVE COVENANTS.......................................... 24
7.01. Amendment to Plan.......................................... 24
7.02. Liens...................................................... 24
7.03. Collateral Requirement..................................... 25
Section 8. EVENTS OF DEFAULT........................................... 25
Section 9. MISCELLANEOUS............................................... 26
9.01. Right of Setoff............................................ 26
9.02. Notices.................................................... 27
9.03. Expenses; Indemnity........................................ 28
9.04. Benefit of Agreement....................................... 29
9.05. No Waiver; Remedies Cumulative............................. 29
9.06. Calculations; Computations................................. 29
9.07. Governing Law; Submission to Jurisdiction; Venue; Waiver of
Jury Trial......................................................... 30
9.08. Confidentiality............................................ 30
9.09. Counterparts............................................... 30
9.10. Headings Descriptive....................................... 30
9.11. Amendment or Waiver........................................ 30
9.12. Survival................................................... 30
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EXHIBITS
Exhibit A - Form of Officers' Certificate of the Borrower (Plan Effective
Date)
Exhibit B - Form of Officers' Certificate of the Borrower (Corporate
Documents)
SCHEDULE
Schedule 1 - Existing Letters of Credit
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AMENDED AND RESTATED LETTER OF CREDIT REIMBURSEMENT AGREEMENT (this
"Agreement"), dated as of November 21, 2005, between Space Systems/Loral, Inc.
(the "Borrower"), a corporation existing under the laws of the State of Delaware
and successor in interest to the DIP Borrower referenced below, and JPMorgan
Chase Bank, N.A. (formerly known as JPMorgan Chase Bank) (the "Bank").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, on July 15, 2003 (the "Petition Date"), Space
Systems/Loral, Inc. and certain of its affiliates (collectively, the "Debtors")
filed voluntary petitions for relief in the United States Bankruptcy Court for
the Southern District of New York (the "Bankruptcy Court") under Chapter 11 of
the Bankruptcy Code (as defined below), Case No.
03-41710 (RDD) (the "Bankruptcy Proceeding");
WHEREAS, on August 1, 2005, the Bankruptcy Court entered the
Confirmation Order (as defined below) confirming the Debtors' Fourth Amended
Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code, dated as
of June 3, 2005 (as in effect on the date of confirmation thereof pursuant to
the Confirmation Order, the "Plan");
WHEREAS, pursuant to (i) the Letter of Credit Reimbursement
Agreement, dated as of April 2, 2004 (as amended, supplemented or otherwise
modified, the "Existing L/C Agreement") between Space Systems/Loral, Inc., as a
debtor and a debtor-in-possession (the "DIP Borrower"), and the Bank and (ii)
the Orders, the Bank has issued Letters of Credit for the account of the DIP
Borrower during the Bankruptcy Proceeding, and the DIP Borrower granted to the
Bank a first priority perfected security interest in the Collateral and a
Superpriority Claim to secure repayment of the obligations under the Existing
L/C Agreement;
WHEREAS, the DIP Borrower and the Borrower have requested that the
Existing L/C Agreement be amended and restated in its entirety such that any
Existing Letters of Credit issued and outstanding as of the Effective Date of
the Plan will become Letters of Credit issued and outstanding under this
Agreement and, pursuant to the Plan and the Confirmation Order, the letter of
credit facility described herein shall continue to be available to the Borrower,
as a reorganized Debtor, for the issuance of Letters of Credit after the Plan
Effective Date;
WHEREAS, the Bank is willing to amend and restate the Existing L/C
Agreement as provided in this Agreement; and
WHEREAS, it is the intent of the parties hereto that (i) this
Agreement amend and restate in its entirety the Existing L/C Agreement and
effect the assumption by the Borrower of the obligations of the DIP Borrower
outstanding under the Existing L/C Agreement and (ii) all liens and security
interests created under the Credit Documents will not be cancelled or discharged
and will secure the obligations of the Borrower under this Agreement;
NOW, THEREFORE, in consideration of the above premises, the Borrower
and the Bank hereby agree to amend and restate the Existing L/C Agreement in its
entirety as follows:
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Section 1. DEFINITIONS AND PRINCIPLES OF CONSTRUCTION.
1.01. Defined Terms.
As used in this Agreement, the following terms shall have the
following meanings (such meanings to be equally applicable to both the singular
and plural forms of the terms defined):
"Affiliate" shall mean, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified.
"Agreement" shall mean this Amended and Restated Letter of Credit
Reimbursement Agreement, as amended, supplemented or otherwise modified from
time to time.
"Alternative Currency" shall mean Euros or Yen.
"Alternative Currency Letter of Credit" shall mean any Letter of
Credit having a face amount denominated in an Alternative Currency.
"Availability Period" shall mean the period from and including the
Closing Date to but excluding the earlier of the Maturity Date and the date of
termination of the Commitment.
"Bank" shall have the meaning provided in the preamble.
"Bankruptcy Code" shall mean Title 11 of the United States Code, 11
U.S.C.Sections 101 et seq., as now or hereafter in effect, or any successor
thereto.
"Bankruptcy Court" shall have the meaning provided in the recitals
hereto.
"Bankruptcy Proceeding" shall have the meaning provided in the
recitals hereto.
"Bid Bonds" shall mean bonds or other credit support provided by the
Borrower in respect of bids made by the Borrower for contracts to build
satellites and related components.
"Borrower" shall have the meaning provided in the preamble.
"Business Day" shall mean any day that is not a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
by law to remain closed.
"Cash Collateral Account" shall have the meaning provided in the
Cash Collateral Agreement.
"Cash Collateral Agreement" shall mean the Amended and Restated Cash
Collateral Agreement, dated as of even date herewith, between the Borrower and
the Bank, as amended, supplemented or otherwise modified from time to time.
"Change in Law" shall mean (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation
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or application thereof by any Governmental Authority after the date of this
Agreement or (c) compliance by the Bank (or, for purposes of Section 2.13(b), by
any lending office of the Bank's holding company, if any) with any request,
guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.
"Closing Date" shall mean the date on which all of the conditions
set forth in Section 4.01 shall have been satisfied.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated thereunder and the rulings based
thereon. Section references to the Code are to the Code, as in effect at the
date of this Agreement, and to any subsequent provisions of the Code, amendatory
thereof, supplemental thereto or substituted therefor.
"Collateral" shall have the meaning assigned thereto in the Cash
Collateral Agreement.
"Commitment" shall mean the commitment of the Bank hereunder to
issue Letters of Credit, as it may be reduced from time to time pursuant to
Section 2.09. The amount of the Commitment on the Closing Date is $20,000,000.
"Confirmation Order" shall mean any order of the Bankruptcy Court
confirming a Plan pursuant to Section 1129 of the Bankruptcy Code, which shall
be in form and substance satisfactory to the Bank and otherwise satisfy the
conditions set forth in Section 4.01(b).
"Control" shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise. "Controlling" and "Controlled" have meanings correlative thereto.
"Credit Documents" shall mean this Agreement and the Cash Collateral
Agreement.
"Credit Event" shall mean the issuance, amendment, renewal or
extension of any Letter of Credit.
"Debtors" shall have the meaning provided in the recitals hereto.
"Default" shall mean any event, act or condition specified in
Section 8, which with notice or lapse of time, or both, would, unless cured or
waived, constitute an Event of Default.
"DIP Borrower" shall have the meaning provided in the recitals
hereto.
"Dollars" and the symbol "$" shall each mean freely transferable
lawful money of the United States.
4
"Dollar Equivalent" shall mean of any amount, at the time of
determination thereof, (a) if such amount is expressed in Dollars, such amount,
and (b) if such amount is expressed in an Alternative Currency, (i) for purposes
of determining the amount of a Reimbursement Obligation, such amount shall be
determined at the time that the Bank makes the LC Disbursement giving rise to
such Reimbursement Obligation and (ii) in all other cases, the equivalent of
such amount in Dollars determined using the rate of exchange quoted by JPMorgan
Chase Bank, N.A. in New York, New York at 11:00 a.m. (New York time) on the date
of determination to prime banks in New York for the spot purchase in the New
York foreign exchange market of such amount of Dollars with such Alternative
Currency.
"Drawing Document" shall mean any draft or other document presented
for purposes of demanding payment under a Letter of Credit.
"EMU Legislation" shall mean the legislative measures of the
European Union for introduction of, changeover to or operation of the euro in
one or more Participating Member States.
"Euro" and the symbol "E" shall mean the single currency of
Participating Member States introduced in accordance with the provision of
Article 123 of the Treaty and, in respect of all payments to be made under this
Agreement in Euro, means immediately available, freely transferable funds in
such currency.
"Event of Default" shall have the meaning provided in Section 8.
"Excluded Taxes" shall mean, with respect to the Bank, (a) Taxes
that are imposed on its overall net income by the United States, Taxes that are
imposed on its overall net income (and franchise taxes imposed in lieu thereof)
by the jurisdiction under the laws of which the Bank is organized, Taxes that
are imposed on its overall net income (and franchise taxes imposed in lieu
thereof) by the jurisdiction in which the Bank's Payment Office is located or
(b) in the event that payments are made under the Credit Documents to a
jurisdiction outside the United States, any United States withholding taxes
payable with respect to such payments under the Credit Documents under laws
(including any statute, treaty or regulation) in effect on the Closing Date (but
excluding any United States withholding taxes payable as a result of any Change
in Law occurring after the Closing Date) and any similar tax imposed by any
other jurisdiction in which the Bank is located.
"Existing Letters of Credit" shall mean the collective reference to
the Letters of Credit issued and outstanding under this Agreement as of the
Closing Date for the account of the Borrower and identified on Schedule 1
hereto.
"Federal Funds Effective Rate" shall mean, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight federal funds transactions with members of the Federal Reserve System
arranged by federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Bank from three federal funds brokers of recognized
standing selected by it.
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"Fees" shall mean all amounts payable pursuant or referred to in
Section 2.10.
"Final Order" shall mean the Final Order Authorizing Space
Systems/Loral, Inc. to Obtain Post-Petition Financing Pursuant to 11 U.S.C.
Sections 105, 363, 364(c)(1), 364(c)(2) and 364(e), entered by the
Bankruptcy Court on or about April 13, 2004.
"Good Faith" shall mean honesty in fact in the conduct of the
transaction concerned.
"Governmental Authority" shall mean the government of the United
States of America, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"Indemnified Taxes" shall mean Taxes other than Excluded Taxes.
"Instructions" has the meaning given to it in Section 2.02.
"Interim Order" shall mean the Interim Order (A) Authorizing Space
Systems/Loral, Inc. to Obtain Post-Petition Financing Pursuant to 11 U.S.C.
Sections 105, 362, 364(c)(1), 364(c)(2) and 364(e) and (B) Scheduling a
Final Hearing Pursuant to Bankruptcy Rule 4001(c), entered by the Bankruptcy
Court on or about April 1, 2004.
"ISP" shall mean International Standby Practices 1998 (International
Chamber of Commerce Publication Number 590) and any subsequent revision thereof
adhered to by the Bank.
"LC Disbursement" shall mean a payment made by the Bank pursuant to
a Letter of Credit.
"LC Exposure" shall mean, at any time, the Dollar Equivalent of the
sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at
such time plus (b) the aggregate amount of all LC Disbursements that have not
yet been reimbursed by or on behalf of the Borrower at such time.
"Letter of Credit" shall mean any letter of credit issued for the
account of the Borrower pursuant to Section 2.01, which letter of credit shall
be (i) a standby letter of credit, (ii) issued for the purposes permitted by
Section 5.12, (iii) denominated in Dollars or an Alternative Currency, and (iv)
otherwise in such form as may be approved by the Bank.
"Letter of Credit Application" shall mean an application submitted
to the Bank by the Applicant requesting the opening of a Letter of Credit.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), preference,
priority or other security agreement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement, any financing or similar statement or notice filed under the
6
UCC or any other similar recording or notice statute, and any lease having
substantially the same effect as any of the foregoing).
"Material Adverse Effect" shall mean a material adverse effect on
(a) the business, assets, operations, prospects or condition, financial or
otherwise, of the Borrower and the Subsidiaries taken as a whole, (b) the
ability of the Borrower to perform any of its obligations under this Agreement
or (c) the rights of or benefits available to the Bank under this Agreement or
the Credit Documents.
"Maturity Date" shall mean December 31, 2006.
"Notice Office" shall mean the collective reference to the following
three offices or such other office as the Bank may hereafter designate in
writing: (i) JPMorgan Chase Bank, N.A., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇; (ii) JPMorgan Treasury Services, Global Trade
Services, Standby Production, 10420 Highland Manor Dr. (Bl. 2, Floor 4), ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇ ▇▇▇▇▇▇; and (iii) JPMorgan Chase Bank, N.A.,
Global Credit Operations, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, Attn: ▇▇▇▇▇▇▇ ▇▇▇▇.
"Obligations" shall mean the collective reference to the unpaid
amount of Reimbursement Obligations and all other obligations and liabilities of
the Borrower (including, without limitation, interest accruing at the then
applicable rate provided in this Agreement after the maturity of the
Reimbursement Obligations and interest accruing at the then applicable rate
provided in this Agreement after the filing of any petition in bankruptcy, or
the commencement of any insolvency, reorganization or like proceeding, relating
to the Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) to the Bank, whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, this Agreement,
or the other Credit Documents, or any Letter of Credit, or any other document
made, delivered or given in connection therewith, in each case whether on
account of principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses or otherwise (including, without limitation, all fees and
disbursements of counsel to the Bank that are required to be paid by the
Borrower pursuant to the terms of any of the foregoing agreements, and all
Fees).
"Orders" shall mean the collective reference to the Interim Order
and the Final Order.
"Other Taxes" shall mean any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement.
"Participating Member State" shall mean a member of the European
Communities that adopts or has adopted the Euro as its currency in accordance
with EMU Legislation.
"Payment Office" shall mean the Bank's office located at JPMorgan
Treasury Services, Global Trade Services, Standby Production, 10420 Highland
Manor Dr. (Bl. 2, Floor 4), ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇ ▇▇▇▇▇▇.
7
"Person" shall mean any natural person, corporation, limited
liability company, trust, joint venture, association, company, partnership,
Governmental Authority or other entity.
"Plan" shall have the meaning provided in the recitals.
"Plan Effective Date" shall mean the date as of which the conditions
precedent to effectiveness set forth in the Plan have been satisfied or waived
in accordance therewith.
"Quarterly Payment Date" shall mean the last Business Day of each
March, June, September and December.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.
"Reimbursement Obligation" shall mean the obligation of the Borrower
to reimburse to the Bank any LC Disbursements pursuant to Section 2.05.
"Requirement of Law" shall mean as to any Person, the Articles of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Standard Letter of Credit Practice" shall mean, for the Bank, any
domestic or foreign law or letter of credit practices applicable in the city in
which the Bank issued the Letter of Credit or for its branch or correspondent,
such laws and practices applicable in the city in which it has advised or
negotiated the Letter of Credit, as the case may be. Such practices shall be
those of (i) banks that regularly issue letters of credit in the particular city
and (ii) required or permitted under the ISP or the UCP, as applicable.
"subsidiary" shall mean, with respect to any Person (the "parent")
at any date, any corporation, limited liability company, partnership,
association or other entity the accounts of which would be consolidated with
those of the parent in the parent's consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership,
association or other entity (a) of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary voting
power or, in the case of a partnership, more than 50% of the general partnership
interests are, as of such date, owned, controlled or held, or (b) that is, as of
such date, otherwise Controlled, by the parent or one or more subsidiaries of
the parent or by the parent and one or more subsidiaries of the parent.
"Subsidiary" shall mean any subsidiary of the Borrower.
"Superpriority Claim" shall mean a claim against the Borrower in the
Bankruptcy Proceeding which is an administrative expense claim having priority
over any or all administrative expenses of the kind in Sections 503(b) or 507(b)
of the Bankruptcy Code, including a claim pursuant to Section 364(c)(1) of the
Bankruptcy Code.
8
"Taxes" shall mean any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"UCC" shall mean the Uniform Commercial Code as from time to time in
effect in the relevant jurisdiction.
"UCP" shall mean the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No. 500
and any subsequent revision thereof adhered to by the Bank.
"United States" and "U.S." shall each mean the United States of
America.
"Yen" and the symbol "Y" shall mean freely transferable and lawful
money of Japan.
1.02. Terms Generally.
The definitions of terms herein shall apply equally to the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words "include", "includes" and "including" shall be deemed to
be followed by the phrase "without limitation". The word "will" shall be
construed to have the same meaning and effect as the word "shall". Unless the
context requires otherwise (a) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
1.03. Accounting Terms; GAAP.
Except as otherwise expressly provided herein, all terms of an
accounting or financial nature shall be construed in accordance with GAAP, as in
effect from time to time; provided that, if the Borrower notifies the Bank that
the Borrower requests an amendment to any provision hereof to eliminate the
effect of any change occurring after the date hereof in GAAP or in the
application thereof on the operation of such provision (or if the Bank notifies
the Borrower that the Bank requests an amendment to any provision hereof for
such purpose), regardless of whether any such notice is given before or after
such change in GAAP or in the application thereof, then such provision shall be
interpreted on the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
Section 2. LETTERS OF CREDIT.
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2.01. General.
Subject to the terms and conditions set forth herein, the Borrower
may request the issuance of Letters of Credit denominated in Dollars or an
Alternative Currency in support of its obligations by delivering a Letter of
Credit Application, at any time and from time to time during the Availability
Period and, subject to the terms and conditions set forth herein and any other
legal or regulatory requirements applicable to the Bank, the Bank shall issue
such Letters of Credit; provided that no Letter of Credit shall be issued if
after giving effect to such issuance (i) the aggregate LC Exposure would exceed
the Commitments and (ii) the aggregate LC Exposure in respect of Letters of
Credit denominated in an Alternative Currency would exceed $12,000,000. For
purposes of determining compliance with this Section 2.01, the LC Exposure for
each Alternative Currency Letter of Credit shall be at the time of issuance
thereof the amount equal to 110% of the Dollar Equivalent of the face amount of
such Alternative Currency Letter of Credit. In the event of any inconsistency
between the terms and conditions of this Agreement and the terms and conditions
of any Letter of Credit Application or other agreement submitted by the Borrower
to, or entered into by the Borrower with, the Bank relating to any Letter of
Credit, the terms and conditions of this Agreement shall control.
2.02. Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions.
To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower shall
deliver (or transmit by electronic communication, if arrangements for doing so
have been approved by the Bank) to the Bank two (2) Business Days in advance of
the requested date of issuance, amendment, renewal or extension) a Letter of
Credit Application requesting the issuance of a Letter of Credit, or a notice
identifying the Letter of Credit to be amended, renewed or extended, and
specifying the requested date of issuance, amendment, renewal or extension
(which shall be a Business Day), of the date on which such Letter of Credit is
to expire (which shall comply with Section 2.03), the face amount of such Letter
of Credit, the name and address of the beneficiary thereof, a description of the
transaction to be supported by such Letter of Credit and such other information
(collectively, the "Instructions") as shall be necessary to prepare, amend,
renew or extend such Letter of Credit. Absent manifest error, the Bank's records
of the content of any Instruction shall be conclusive. A Letter of Credit shall
be issued, amended, renewed or extended only if (and upon issuance, amendment,
renewal or extension of each Letter of Credit the Borrower shall be deemed to
represent and warrant that), after giving effect to such issuance, amendment,
renewal or extension, the aggregate LC Exposure shall not exceed any of the
limits specified in the proviso in Section 2.01 and the conditions specified in
Section 4.02, as applicable, are satisfied. Promptly after issuing any Letter of
Credit, the Bank will provide the Borrower with a copy thereof. Each request for
an issuance, amendment, renewal or extension of a Letter of Credit shall be
irrevocable unless modified or rescinded by the Borrower prior to 10:00 a.m.
(New York City time) on the proposed date of issuance, amendment, renewal or
extension specified in the Borrower's request.
2.03. Expiration Date.
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(a) Each Letter of Credit shall expire at or prior to the close of
business on the earlier of (i) the date one year after the date of the issuance
of such Letter of Credit (or, in the case of any renewal or extension thereof,
one year after such renewal or extension) and (ii) the date that is five
Business Days prior to the Maturity Date; provided that any Letter of Credit
with a one-year term may provide for an annual renewal if such renewal is
consented to by the Bank and all conditions precedent specified in Section 4 are
met at the time of such renewal.
(b) If the Maturity Date occurs prior to the expiration of any
Letter of Credit, such Letter of Credit shall be replaced and returned to the
Bank undrawn and marked "cancelled" on or prior to the Maturity Date.
2.04. Transfer of Existing Letters of Credit. Each party hereto
agrees that, on and at all times after the Plan Effective Date, each of the
Existing Letters of Credit shall be deemed to be a Letter of Credit issued
pursuant hereto by the Bank for the account of the Borrower for all purposes
hereunder and under the other Credit Documents; provided that nothing in this
Section 2.04 shall extend, modify or otherwise affect the existing expiration
date of any such Existing Letter of Credit.
2.05. Reimbursement.
(a) If the Bank shall make any LC Disbursement in respect of a
Letter of Credit, the Borrower shall reimburse the Bank for such LC Disbursement
by paying directly to the Bank in immediately available funds an amount in
Dollars, equal to such LC Disbursement or, in the case of an LC Disbursement in
respect of an Alternative Currency Letter of Credit, in the Dollar Equivalent
thereof, plus any taxes, fees, charges or other costs or expenses incurred by
the Bank in connection with such payment which are obligations of the Borrower
hereunder (the amounts described in the foregoing clauses (a) and (b) in respect
of any drawing, collectively, the "Payment Amount") on (i) the Business Day on
which the Borrower receives notice from the Bank of an LC Disbursement, if such
notice is received on such Business Day prior to 10:00 A.M., New York City time,
or (ii) if clause (i) above does not apply, the Business Day immediately
following the day on which the Borrower receives such notice. Each such payment
shall be made to the Bank at the Payment Office. Interest shall be payable on
each Payment Amount from the date of the applicable drawing until the Business
Day next succeeding the date of the relevant notice at the Federal Funds
Effective Rate and, thereafter until payment in full of the Payment Amount, at
the rate set forth in Section 2.11.
(b) Unless the Borrower has reimbursed the Bank in accordance with
clause (a) above or otherwise advised the Bank in writing, prior to 3:00 P.M,
New York City time on the date that any Reimbursement Obligation is due, that
the Borrower will satisfy such Reimbursement Obligation by making a payment to
the Bank prior to 10:00 a.m. (New York City time) of the next Business Day in
accordance with Section 2.05(a) above, the Borrower authorizes the Bank upon any
drawing under any Letter of Credit, and the Bank is hereby authorized and
directed, without notice to any Person, to withdraw Collateral from the Cash
Collateral Account in an amount equal to such Reimbursement Obligation in
satisfaction thereof
11
(with any losses upon liquidation of any investments required to make such
transfer being for the account of the Borrower).
2.06. Obligations Absolute; Limitation of Liability.
(a) The Borrower's obligation to reimburse LC Disbursements, and
the Bank's rights to apply Collateral to such Obligations, as provided in
Section 2.05 and in the Cash Collateral Agreement shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement and the Cash Collateral Agreement under any and
all circumstances whatsoever and irrespective of (i) any lack of validity or
enforceability of any Letter of Credit, this Agreement or the Cash Collateral
Agreement, or any term or provision therein, (ii) any draft or other document
presented under a Letter of Credit proving to be forged, fraudulent or invalid
in any respect or any statement therein being untrue or inaccurate in any
respect, (iii) payment by the Bank under a Letter of Credit against presentation
of a draft or other document that does not comply with the terms of such Letter
of Credit, (iv) payment against presentation of any Drawing Document which is
signed, issued or presented by a Person (or a transferee of such Person)
purporting to be a successor or transferee of the beneficiary of the Letter of
Credit; (v) the Bank or any of its branches or affiliates being the beneficiary
of the Letter of Credit; (vi) the Bank or any correspondent honoring a drawing
against a Drawing Document up to the amount available under the Letter of Credit
even if such Drawing Document claims an amount in excess of the amount available
under the Letter of Credit; (vii) the existence of any claim, set-off, defense
or other right that the Borrower or any other Person may have at any time
against any beneficiary, any assignee of proceeds, the Bank or any other Person;
(viii) the Bank or any correspondent having previously paid against fraudulently
signed or presented Drawing Documents (whether or not the Borrower reimbursed
the Bank for such drawing); or (ix) any other event or circumstance whatsoever,
whether or not similar to any of the foregoing, that might, but for the
provisions of this Section 2.06, constitute a legal or equitable discharge of,
or provide a right of setoff against, the Borrower's obligations hereunder.
(b) Neither the Bank nor any of its Affiliates, shall have any
liability or responsibility by reason of or in connection with the issuance or
transfer of any Letter of Credit or any payment or failure to make any payment
thereunder (irrespective of any of the circumstances referred to in clause (a)
above), or for any error, omission, interruption, loss or delay in transmission
or delivery of any draft, notice or other communication under or relating to any
Letter of Credit (including any document required to make a drawing thereunder),
any error in interpretation of technical terms or any consequence arising from
causes beyond the control of the Bank; provided that the foregoing shall not be
construed to excuse the Bank from liability to the Borrower to the extent of any
direct damages (as opposed to consequential damages, claims in respect of which
are hereby waived by the Borrower to the extent permitted by applicable law)
suffered by the Borrower that are caused by the Bank's failure to exercise care
when determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. The parties hereto expressly agree that,
in the absence of gross negligence or willful misconduct on the part of the Bank
(as finally determined by a court of competent jurisdiction), the Bank shall be
deemed to have exercised care in each such determination. In furtherance of the
foregoing and without limiting the generality thereof, the parties agree that,
with respect to documents presented which appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the Bank may, in
its sole discretion, either accept and make payment upon such documents without
responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon
12
such documents if such documents are not in strict compliance with the terms of
such Letter of Credit.
(c) Without limiting any other provision of this Agreement, the
Bank: (i) may (but shall not be obligated to) honor a presentation under a
Letter of Credit which on its face substantially complies with the terms of the
Letter of Credit; (ii) may honor a presentation of any Drawing Documents which
appear on their face to have been signed, presented or issued (X) by any
purported successor or transferee of any beneficiary or other party required to
sign, present or issue the Drawing Documents or (Y) under a new name of the
beneficiary; (iii) shall not be responsible for the identity or authority of any
presenter or signer of any Drawing Document or the form, accuracy, genuineness,
or legal effect of any presentation under any Letter of Credit or of any Drawing
Documents; (iv) may (but shall not be obligated to) disregard any
non-documentary conditions stated in any Letter of Credit; (v) may act upon any
Instruction which it, in Good Faith believes to have been given by a Person or
entity authorized to give such Instruction; (vi) shall not be responsible for
any errors, omissions, interruptions or delays in transmission or delivery of
any message, advice or document, (regardless of how sent or transmitted) or for
errors in interpretation of technical terms or in translation; (vii) shall not
be responsible for any acts, omissions or fraud by, or the solvency of, any
beneficiary, any nominated Person or any other Person; (viii) may assert or
waive any provision of the UCP or ISP which primarily benefits an issuing bank
of a letter of credit, including, any requirement that any Drawing Document be
presented to it at a particular hour or place; (ix) may pay any paying or
negotiating bank (designated or permitted by the terms of any Letter of Credit)
claiming that it rightfully honored or is entitled to reimbursement or indemnity
under the Standard Letter of Credit Practice applicable to it; and (x) may act
or not act as required or permitted under Standard Letter of Credit Practice
applicable to it where it has issued, confirmed, advised or negotiated the
Letter of Credit, as the case may be.
(d) The Borrower shall notify the Bank of (i) any noncompliance with
any Instruction, any other irregularity with respect to the text of the Letter
of Credit or any amendment thereto or any claim of an unauthorized, fraudulent
or otherwise improper Instruction, within one (1) Business Day prior to the
issuance or amendment of any Letter of Credit and (ii) subject to the
limitations of liability of the Bank in Section 5-109 of the UCC, any objection
the Borrower may have to the Bank's honor or dishonor of any presentation under
the Letter of Credit or any other action or inaction taken or proposed to be
taken by the Bank under or in connection with this Agreement or any Letter of
Credit, within three (3) Business Days after the Borrower receives notice of the
objectionable action or inaction. The failure to so notify the Bank within said
times shall discharge the Bank from any loss or liability that the Bank could
have avoided or mitigated had it received such notice, to the extent that the
Bank could be held liable for damages hereunder; provided that, if the Borrower
shall not provide such notice to the Bank within three (3) Business Days of the
date of receipt in the case of clause (i) or ten (10) Business Days from the
date of receipt of clause (ii), then the Bank shall have no liability whatsoever
for such noncompliance, irregularity, action or inaction and the Borrower shall
be precluded from raising such noncompliance, irregularity or objection as a
defense or claim against the Bank. The Borrower's acceptance or retention of any
Drawing Documents presented under or in connection with a Letter of Credit
(whether or not the document is genuine) shall ratify the Bank's honor of the
presentation and preclude the Borrower from raising
13
a defense, set-off or claim with respect to the Bank's honor of the Letter of
Credit. The Bank shall not be required to seek any waiver of discrepancies from
the Borrower or to grant any waiver of discrepancies that the Borrower approves
or Instructions.
2.07. Practices.
Letters of Credit shall be subject to the ISP, or, if specified in
Part I of the Letter of Credit Application, the UCP.
2.08. Disbursement Procedures.
The Bank shall, following its receipt thereof, examine all documents
purporting to represent a demand for payment under a Letter of Credit. The Bank
shall promptly notify the Borrower by telephone (confirmed by telecopy) of such
demand for payment and whether the Bank has made or will make an LC Disbursement
thereunder; provided that any failure to give or delay in giving such notice
shall not relieve the Borrower of its obligation to reimburse the Bank with
respect to any such LC Disbursement.
2.09. Termination and Reduction of Commitment.
(a) Unless previously terminated, the Commitment shall terminate on
the Maturity Date.
(b) The Borrower may at any time terminate, or from time to time
reduce, the Commitment; provided that (i) each reduction of the Commitment shall
be in an amount that is an integral multiple of $1,000,000 and not less than
$5,000,000 and (ii) the Borrower shall not terminate or reduce the Commitment if
the then current LC Exposure or any of the sublimits set forth in Section 2.01
would exceed the Commitment.
(c) The Borrower shall notify the Bank of any election to terminate
or reduce the Commitment under paragraph (b) of this Section 2.09 at least three
Business Days prior to the effective date of such termination or reduction,
specifying such election and the effective date thereof. Each notice delivered
by the Borrower pursuant to this Section 2.09 shall be irrevocable. Any
termination or reduction of the Commitment shall be permanent.
2.10. Fees.
(a) The Borrower agrees to pay to the Bank a facility fee, which
shall accrue at the rate of 0.05% per annum on the daily amount of the
Commitment (whether used or unused) during the period from and including the
date hereof to but excluding the date on which the Obligations are paid in full.
Accrued facility fees shall be payable in arrears on each Quarterly Payment Date
and on the date on which the Commitment terminates, commencing on the first such
date to occur after the date hereof; provided that any facility fees accruing
after the date on which the Commitment terminates shall be payable on demand.
All facility fees shall be computed on the basis of a year of 360 days and shall
be payable for the actual number of days elapsed (including the first day but
excluding the last day).
14
(b) The Borrower shall pay to the Bank a fee for the issuance,
renewal, extension or amendment of a Letter of Credit in an amount equal to
0.25% or, in the case of a Letter of Credit issued, renewed, extended or amended
at any time after June 30, 2006, 0.30% of the face amount of such Letter of
Credit, to be paid upon the date of issuance, renewal, extension or amendment of
each Letter of Credit.
(c) On or before the Closing Date, the Borrower shall pay to the
Bank an amendment fee of $25,000.
(d) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Bank. Fees paid shall not be refundable
under any circumstances.
2.11. Default Rate of Interest.
If any fee or other amount payable by the Borrower hereunder is not
paid when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to 2% plus the Federal Funds Effective Rate.
2.12. Increased Costs.
(a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit
or similar requirement against assets of, deposits with or for the account
of, or credit extended by the Bank; or
(ii) impose on the Bank any other condition affecting this Agreement
or any Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to the Bank
of issuing or maintaining any Letter of Credit or to reduce the amount of any
sum received or receivable by the Bank hereunder (whether of principal, interest
or otherwise), then the Borrower will pay to the Bank such additional amount or
amounts as will compensate the Bank for such additional costs incurred or
reduction suffered.
(b) If the Bank shall determine that any Change in Law regarding
capital requirements has or would have the effect of reducing the rate of return
on the Bank's capital or on the capital of the Bank's holding company as a
consequence of this Agreement or the Letters of Credit issued by the Bank, to a
level below that which the Bank or the Bank's holding company could have
achieved but for such Change in Law (taking into consideration the Bank's
policies and the policies of the Bank's holding company with respect to capital
adequacy), then from time to time the Borrower will pay to the Bank, such
additional amount or amounts as will compensate the Bank or the Bank's holding
company for any such reduction suffered.
(c) A certificate of the Bank setting forth the amount or amounts
necessary to compensate the Bank or its holding company as specified in
paragraph (a) or (b) of this Section 2.12 shall be delivered to the Borrower and
shall be conclusive absent manifest error. The
15
Borrower shall pay the Bank the amount shown as due on any such certificate
within 20 days after receipt thereof.
(d) Failure or delay on the part of the Bank to demand compensation
pursuant to this Section 2.12 shall not constitute a waiver of the Bank's right
to demand such compensation; provided that the Borrower shall not be required to
compensate the Bank pursuant to this Section 2.12 for any increased costs or
reductions incurred more than 270 days prior to the date that the Bank notifies
the Borrower of the Change in Law giving rise to such increased costs or
reductions and of the Bank's intention to claim compensation therefor; provided
further that, if the Change in Law giving rise to such increased costs or
reductions is retroactive, then the 270-day period referred to above shall be
extended to include the period of retroactive effect thereof.
2.13. Taxes.
(a) Any and all payments by or on account of any obligation of the
Borrower hereunder shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes; provided that if the Borrower shall be
required to deduct any Indemnified Taxes or Other Taxes from such payments, then
(i) the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 2.13) the Bank receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the Borrower shall make
such deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Bank within 10 days after
written demand therefor, for the full amount of any Indemnified Taxes or Other
Taxes paid by the Bank on or with respect to any payment by or on account of any
obligation of the Borrower hereunder (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section
2.13) and any penalties, interest and reasonable expenses arising therefrom or
with respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability delivered to the
Borrower by the Bank shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Borrower to a Governmental Authority, the Borrower shall
deliver to the Bank the original or a certified copy of a receipt issued by such
Governmental Authority evidencing such payment, a copy of the return reporting
such payment or other evidence of such payment reasonably satisfactory to the
Bank.
(e) If the Bank determines, in its sole discretion, that it has
received a refund of any Taxes or Other Taxes as to which it has been
indemnified by the Borrower or with respect to which the Borrower has paid
additional amounts pursuant to this Section 2.13, it shall pay
16
over such refund to the Borrower (but only to the extent of indemnity payments
made, or additional amounts paid, by the Borrower under this Section 2.13 with
respect to the Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of the Bank and without interest (other than any interest
paid by the relevant Governmental Authority with respect to such refund);
provided that the Borrower, upon the request of the Bank, agrees to repay the
amount paid over to the Borrower (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) to the Bank in the event the
Bank is required to repay such refund to such Governmental Authority. This
Section shall not be construed to require the Bank to make available its Tax
returns (or any other information relating to its Taxes which it deems
confidential) to the Borrower or any other person.
2.14. Payments Generally; Treatment.
(a) The Borrower shall make each payment required to be made by it
hereunder (whether of, fees or reimbursement of LC Disbursements, or of any
other amounts payable hereunder, or otherwise) in immediately available funds,
without set-off or counterclaim. Any amounts received after 12:00 noon, New York
City time on any date may, in the discretion of the Bank, be deemed to have been
received on the next succeeding Business Day for purposes of calculating
interest thereon. All such payments shall be made to the Bank at its offices at
the Payment Office. If any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding
Business Day, and, in the case of any payment accruing interest, interest
thereon shall be payable for the period of such extension. All payments
hereunder shall be made in Dollars.
(b) If at any time insufficient funds are received by and available
to the Bank to pay fully the aggregate amount of unreimbursed LC Disbursements
plus interest and fees then due hereunder, such funds shall be applied (i)
first, towards payment of interest and fees, and (ii) second, towards payment of
unreimbursed LC Disbursements then due hereunder.
(c) Subject to the provision of Section 8, upon the maturity
(whether by acceleration or otherwise) of any of the Obligations under this
Agreement or any Credit Document, the Bank shall be entitled to immediate cash
payment of such Obligations.
Section 3. COLLATERAL.
3.01. Cash Collateral.
To secure the prompt payment and performance to the Bank of the
Obligations of the Borrower under the Letters of Credit, the Borrower has
simultaneously herewith entered into the Cash Collateral Agreement pursuant to
which the Borrower grants to the Bank a continuing first priority security
interest, senior to all other Liens, if any, in the Collateral. Collateral held
in the Cash Collateral Account shall not be available for use by the Borrower or
any of its subsidiaries or Affiliates for any purpose.
3.02. Currency Exchange Rate Fluctuations.
(a) In the event that at any time the Borrower determines that by
reason of currency exchange rates any aggregate or individual limits or
sublimits set forth in Section 2.01
17
have been breached, in each case, by more than 5%, the Borrower shall
immediately notify the Bank (which notice shall promptly be confirmed in
writing). Nothing herein shall obligate the Borrower to monitor currency
exchange rates so as to make such determination but shall comply with this
Section 3.02 and Section 4 of the Cash Collateral Agreement if, nonetheless, any
such determination has been made.
(b) The Bank will calculate the LC Exposure (including any portion
made in any Alternative Currency) and in any event on each date of receipt of a
Letter of Credit Application or request to amend, renew or extend an outstanding
Letter of Credit and otherwise not less frequently than once each calendar
month.
In the event that on any date the Bank calculates that by reason of
currency exchange rates any limits set forth in the proviso in Section 2.01 have
been breached, in each case, by more than 5%, the Bank shall give notice to such
effect to the Borrower.
Section 4. CONDITIONS PRECEDENT.
4.01. Conditions to Closing Date. The effectiveness of this
Agreement and the agreement of the Bank to permit the issuance of any Letter of
Credit hereunder from and after the Plan Effective Date is subject to
satisfaction of the following conditions precedent:
(a) Execution and Delivery. The Bank shall have received duly
executed counterparts from the Borrower, in its capacity as a reorganized
Debtor, and the Bank to this Agreement and the Cash Collateral Agreement;
(b) Confirmation of the Plan. The Bank shall have received a copy of
the Confirmation Order entered by the Bankruptcy Court approving the Plan, which
Confirmation Order shall (i) be in form and substance satisfactory to the Bank,
(ii) authorize the Borrower, as a reorganized Debtor, to enter into this
Agreement and the other Credit Documents, pay the fees and expenses required
thereunder and perform its obligations thereunder, (iii) provide that
notwithstanding anything to the contrary in the Plan or the Confirmation Order
the Obligations shall not be discharged (and the Pledgor, pursuant to Section
1141(d)(4) of the Bankruptcy Code, shall waive any such discharge), (iv) provide
that the Credit Documents shall constitute legal, valid, binding and authorized
obligations of the Borrower, as a reorganized Debtor, (v) provide that Liens
granted under the Credit Documents shall continue in full force and effect and
shall remain binding, enforceable first priority Liens on and security interests
in the Collateral to secure the Obligations and (vi) have become a Final Order
(as defined in the Plan in effect on the date hereof);
(c) Occurrence of the Plan Effective Date. The Plan Effective Date
shall have occurred, and the Bank shall have received a certificate, dated the
Closing Date, signed by the Secretary or any Assistant Secretary, and attested
to by the President, any Vice President or the Treasurer of the Borrower, in the
form of Exhibit A hereto;
(d) Corporate Documents; Proceedings.
The Bank shall have received (i) a certificate, dated the Closing
Date, signed by the Secretary or any Assistant Secretary, and attested to by the
President, any Vice President or
18
the Treasurer of the Borrower, in the form of Exhibit B hereto with appropriate
insertions, together with copies of the Certificate of Incorporation and
By-Laws, as each may have been amended and restated, of the Borrower and the
resolutions of the Borrower referred to in such certificate and (ii) a
certificate of the Secretary of State of the State of Delaware certifying the
good standing of the Borrower in such jurisdiction and listing all charter
documents of the Borrower on file therewith.
(e) Opinion of Counsel. The Bank shall have received from counsel to
the Borrower an opinion addressed to the Bank and dated the Closing Date in
form, scope and substance satisfactory to the Bank;
(f) Payment of Fees. The Borrower shall have paid all costs, fees
and expenses due to the Bank on or prior to the Closing Date (including, without
limitation, reasonable legal fees and expenses due pursuant to Section 9.03) to
the extent due; and
(g) Existing Letters of Credit. The Cash Collateral Account shall
have Collateral in an amount equal to (x) in the case of Existing Letters of
Credit or Obligations denominated in Dollars, at least one hundred five (105%)
of the LC Exposure in respect of such Existing Letters of Credit and (y) in the
case of Existing Letters of Credit denominated in an Alternative Currency, at
least one hundred ten percent (110%) of the LC Exposure in respect of such
Existing Letters of Credit.
4.02. Conditions to Each Credit Event. Each Credit Event is subject
to the satisfaction of the following conditions:
(a) Sufficient Collateral.
The Bank shall have received sufficient Collateral in respect of
such Credit Event in accordance with the terms of the Cash Collateral Agreement;
(b) No Default. No Default or Event of Default shall have occurred
and be continuing on such date, either before or immediately after giving effect
to such Credit Event requested to be made on such date;
(c) Representations and Warranties.
All representations and warranties contained herein and in the other
Credit Documents shall be true and correct in all material respects with the
same effect as though such representations and warranties had been made on and
as of the date of such Credit Event, except to the extent such representations
and warranties expressly relate to an earlier date, in which case such
representations and warranties shall be true and correct in all material
respects as of such earlier date; and
(d) Letter of Credit Request. The Bank shall have received a request
for the extension, amendment or renewal of any Letter of Credit meeting the
requirements of Section 2.02 or a Letter of Credit Application, such request or
Letter of Credit Application to include a certification by the Borrower, that
after giving effect to the issuance, renewal, amendment or
19
extension of the requested Letter of Credit and the proposed use of any proceeds
thereof, that the conditions precedent in this Section 4.02 shall have been
satisfied.
Section 5. REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
In order to induce the Bank to enter into this Agreement and issue
Letters of Credit, the Borrower makes the following representations and
warranties to, and agreements with, the Bank, all of which shall survive the
execution and delivery of this Agreement and the issuance of any Letter of
Credit, with the execution and delivery of this Agreement and the occurrence of
each Credit Event being deemed to constitute a representation and warranty that
the matters specified in this Section 5 are true and correct on and as of the
date of such execution and delivery and the date of each such Credit Event:
5.01. Corporate Status.
The Borrower, in its capacity as a reorganized Debtor, (i) is a duly
organized and validly existing corporation in good standing under the laws of
the jurisdiction of its formation or incorporation, (ii) has the power and
authority to own its property and assets and to transact the business in which
it is engaged and (iii) is duly qualified as a foreign company or corporation
and in good standing in each jurisdiction where the failure to so qualify or be
in good standing would have a material adverse effect on such corporation.
5.02. Corporate Power and Authority.
Upon the occurrence of the Plan Effective Date, pursuant to the
terms of the Plan and the Confirmation Order, the Borrower, in its capacity as a
reorganized Debtor, has the corporate power and authority to execute, deliver
and perform the terms and provisions of this Agreement, any Letter of Credit
Application or request for an amendment, renewal or extension of a Letter of
Credit, any Instructions and the Cash Collateral Agreement, and has taken all
necessary corporate action to authorize the execution, delivery and performance
by it of this Agreement and the Cash Collateral Agreement. Upon the occurrence
of the Plan Effective Date, the Borrower has duly executed and delivered this
Agreement and the Cash Collateral Agreement, and each of this Agreement, its
Reimbursement Obligations under all Letters of Credit and the Cash Collateral
Agreement constitutes, and any Letter of Credit Application or request for an
amendment, renewal or extension of a Letter of Credit will constitute, its
legal, valid and binding obligation enforceable in accordance with its terms,
except as the enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws affecting creditors' rights
generally and by general equitable principles (regardless of whether the issue
of enforceability is considered in a proceeding in equity or at law).
5.03. No Violation.
Upon the occurrence of the Plan Effective Date, neither the
execution, delivery or performance by the Borrower of this Agreement or the Cash
Collateral Agreement, nor compliance by it with the respective terms and
provisions thereof, (i) will contravene any provision of any law, statute, rule
or regulation or any order, writ, injunction or decree of any court or
governmental instrumentality, (ii) will conflict or be inconsistent with or
result in any
20
breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or the
obligation to create or impose) any Lien (other than pursuant to the Credit
Documents) upon any of the property or assets of the Borrower pursuant to the
terms of, any indenture, mortgage, deed of trust, credit agreement, loan
agreement or any other agreement, contract or instrument to which the Borrower
is a party or by which it or any of its property or assets is bound or to which
it may be subject, including the Plan or (iii) will violate any provision of the
by-laws or Certificate of Incorporation of the Borrower.
5.04. Governmental Approvals.
Upon the occurrence of the Plan Effective Date, no order, consent,
approval, license, authorization or validation of, or filing, recording or
registration with (except as have been obtained or made prior to the Closing
Date), or exemption by, any governmental or public body or authority, or any
subdivision thereof, is required to authorize, or is required in connection
with, (i) the execution, delivery and performance of this Agreement or the Cash
Collateral Agreement or (ii) the legality, validity, binding effect or
enforceability of this Agreement or the Cash Collateral Agreement.
5.05. Litigation.
Except as publicly or otherwise disclosed to the Bank prior to the
date hereof, there are no actions, suits or proceedings pending or, to the best
knowledge of the Borrower, threatened with respect to any Credit Document.
5.06. True and Complete Disclosure.
All factual information heretofore or contemporaneously furnished by
or on behalf of the Borrower in writing to the Bank (including, without
limitation, all information contained in the Credit Documents) for purposes of
or in connection with this Agreement or any transaction contemplated herein is
true and accurate in all material respects on the date as of which such
information is dated or certified and does not omit to state any fact necessary
to make such information not misleading at such time in light of the
circumstances under which such information was provided, it being understood
that any projections delivered were prepared in Good Faith on assumptions
believed by the Borrower to be appropriate but actual results may materially
differ from the projections.
5.07. Tax Returns and Payments.
The Borrower and its Subsidiaries have filed all Tax returns
required to be filed by it and has paid all income Taxes payable by it which
have become due pursuant to such Tax returns and all other Taxes and assessments
payable by it which have become due, other than those which (a) are not
material, (b) payment of which has been stayed as a result of the Bankruptcy
Proceeding or (c) are being contested in good faith and for which adequate
reserves have been established. Each of the Borrower and its Subsidiaries has
paid, or has provided adequate reserves (in the good faith judgment of the
management of the Borrower) for the payment of, all federal and state income
Taxes applicable for all prior fiscal years and for the current fiscal year to
the date hereof.
21
5.08. Compliance with Statutes, etc.
The Borrower is in compliance with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property (including applicable statutes,
regulations, orders and restrictions relating to environmental standards and
controls), except such noncompliance as would not, in the aggregate, have a
material adverse effect on the business, operations, property, assets or
financial condition of the Borrower.
5.09. Investment Company Act.
The Borrower is not an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
5.10. Properties.
(a) The Borrower has good title to, or valid leasehold interests
in, all its real and personal property material to its business, except for
minor defects in title that do not interfere with its ability to conduct its
business as currently conducted or to utilize such properties for their intended
purposes.
(b) The Borrower owns, or is licensed to use, all trademarks,
tradenames, copyrights, patents and other intellectual property material to its
business, and the use thereof by the Borrower does not infringe upon the rights
of any other Person, except for any such infringements that, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
5.11. Financial Condition; No Material Adverse Change.
(a) The Borrower has heretofore furnished to the Bank (i) the
consolidated balance sheet and statements of income, stockholders equity and
cash flows of Loral Space & Communications, Ltd. as of and for the fiscal year
ended December 31, 2003, reported on by Deloitte & Touche LLP, independent
public accountants and (ii) the Form 10-Qs filed by Loral Space &
Communications, Ltd. for the fiscal quarters ended March 31, 2004, June 30, 2004
and September 30, 2004. Such financial statements present fairly, in all
material respects, the financial position and results of operations and cash
flows of Loral Space & Communications, Ltd. and its consolidated Subsidiaries as
of such dates and for such periods in accordance with GAAP, and solely in the
case of the Form 10-Qs referenced in clause (ii) above, subject to year end
audit adjustments and the absence of footnotes.
(b) Except as may have been disclosed in the Form 10-Qs for the
fiscal quarters ended March 31, 2004, June 30, 2004 and September 30, 2004 of
Loral Space & Communications Ltd., since December 31, 2003, there has been no
material adverse change in the business, assets, operations, prospects or
condition, financial or otherwise, of the Borrower and its Subsidiaries, taken
as a whole.
5.12. Use of Proceeds.
22
The Letters of Credit requested hereunder shall be used only to
provide credit support (x) in connection with Bid Bonds and bids made by the
Borrower for contracts to build satellites and related components and (y) for
general corporate purposes, including, without limitation, workers' compensation
obligations.
5.13. The Confirmation Order.
As of the date of the submission of a Letter of Credit Application
or the request for a renewal, amendment or extension of a Letter of Credit, the
Confirmation Order has not been stayed, amended, vacated, reversed, rescinded or
otherwise modified in any respect (except in accordance with the terms hereof).
5.14. Security Interests.
The security interests and the Liens granted pursuant to this
Agreement and the Cash Collateral Agreement upon the occurrence of the Plan
Effective Date are (a) valid first priority security interests in all of the
Collateral and the Cash Collateral Account, as collateral security for the
Obligations, enforceable in accordance with the terms hereof against all
creditors of the Borrower and its affiliates and any Persons purporting to
purchase any Collateral from the Borrower and (b) prior to all other security
interests and Liens on the Collateral.
Section 6. AFFIRMATIVE COVENANTS.
The Borrower covenants and agrees that on and after the Closing
Date and until the Commitment has terminated, and all Letters of Credit have
terminated and, Fees and all other obligations incurred hereunder and under the
other Credit Documents, are paid in full, the Borrower shall:
6.01. Financial Statements.
Furnish to the Bank:
(a) as soon as available, but in any event within 75 days after the
end of each fiscal year of the Borrower, the annual report of Loral Space &
Communications Ltd. on Form 10-K, and for any financial statements and related
materials delivered after the Plan Effective Date, reported on without a "going
concern" or like qualification or exception, or qualification arising out of the
scope of the audit, by Deloitte & Touche LLP or other independent certified
public accountants of nationally recognized standing;
(b) as soon as available, but in any event not later than 40 days
after the end of each of the first three quarterly periods of each fiscal year
of the Borrower, the quarterly report of Loral Space & Communications Ltd.
reported on Form 10-Q;
(c) as soon as is available, but in any event not later than 10 days
after the Borrower furnishes its annual report on Form 10-K to the Bank pursuant
to clause (a) above, the Borrower's quarterly operating statements for the last
quarter in such fiscal year in the form of the Borrower's monthly operating
statements in the form previously provided to the Bank; and
23
(d) as soon as is available, but in any event not later than 10 days
after the Borrower furnishes its quarterly reports on Form 10-Q to the Bank
pursuant to clause (b) above, the Borrower's monthly operating statements in the
form previously provided to the Bank.
All such financial statements shall be complete and correct in all
material respects and shall be prepared in reasonable detail and in accordance
with GAAP applied (except as approved by such accountants or officer, as the
case may be, and disclosed in reasonable detail therein) consistently throughout
the periods reflected therein and with prior periods.
6.02. Certificates; Other Information.
Furnish to the Bank:
(a) concurrently with the delivery of any financial statements
pursuant to Section 6.01, a certificate of a responsible officer of the Borrower
stating that such responsible officer has obtained no knowledge of any Default
or Event of Default except as specified in such certificate;
(b) promptly, such additional financial and other information as the
Bank may from time to time reasonably request.
6.03. Maintenance of Existence; Compliance.
(a)(i) Preserve, renew and keep in full force and effect its
organizational existence and (ii) take all reasonable action to maintain all
rights, privileges and franchises necessary or desirable in the normal conduct
of its business except, in the case of clause (ii) above, to the extent that
failure to do so could not reasonably be expected to have a Material Adverse
Effect; and (b) comply with all Requirements of Law, the noncompliance with
which, in the aggregate, could reasonably be expected to have a Material Adverse
Effect of the type set forth in clauses (b) and (c) of the definition thereof,
except for any such Requirements of Law being contested in good faith by
appropriate proceedings.
6.04. Notices.
Promptly give notice to the Bank of:
(a) the occurrence of any Default or Event of Default;
(b) any litigation, or proceeding or, to the knowledge of the
Borrower, any investigation that, in each case, may exist at any time between
the Borrower or any of its Subsidiaries or Affiliates and any Governmental
Authority, that if adversely determined, could reasonably be expected to have a
Material Adverse Effect;
(c) any litigation or proceeding to which the Borrower or any of its
Subsidiaries or Affiliates is a party (i) the primary purpose of which is to
challenge the legality, validity or enforceability of the Credit Documents, or
(ii) seeks to prohibit the ownership or operation by the Borrower or any of its
Subsidiaries or Affiliates of all or a material portion of their respective
businesses or assets; or
24
(d) any development or event (other than any litigation or
proceeding) that has had or could reasonably be expected to have a Material
Adverse Effect.
6.05. Books, Records and Inspections.
(a) Keep proper books of record and account entries in conformity
with generally accepted accounting principles reflecting all dealings and
transactions in relation to its business and activities.
(b) Permit officers and designated representatives of the Bank to
visit and inspect, under guidance of officers of the Borrower or such
Subsidiary, any of the properties of the Borrower or such Subsidiary, and to
examine the books of record and account of the Borrower or such Subsidiary and
discuss the affairs, finances and accounts of the Borrower or such Subsidiary
with, and be advised as to the same by, its and their officers, all at such
reasonable times and intervals and to such reasonable extent as the Bank may
request.
6.06. Taxes.
Pay and discharge or cause to be paid and discharged when due all
Taxes, assessments and governmental charges or levies imposed upon it or upon
its income or profits or upon any of its property (real, personal or mixed), or
upon any part thereof; provided, however, that the failure of the Borrower to
pay any such Tax, assessment, charge, levy or claim shall not constitute a
breach of this covenant if (a) such payment is not material or (b) for so long
as the amount, applicability or validity thereof shall concurrently be contested
in good faith by appropriate and timely proceedings diligently conducted, and if
such reserve or other appropriate provision, if any, as shall be required by
generally accepted accounting principles shall have been made therefor, and
neither the Borrower's nor any such Subsidiary's title to or right to use of any
of its property is impaired in any material respect by reason of such contest.
Section 7. NEGATIVE COVENANTS.
The Borrower hereby agrees that, so long as the Commitments remain
in effect, any Letter of Credit remains outstanding or any other amount is owing
to the Bank, the Borrower shall not:
7.01. Amendment to Plan.
On or after the Plan Effective Date, make or consent to any
amendment to the Plan (as the same is in effect on the Plan Effective Date) that
could reasonably be expected to materially and adversely affect (i) the ability
of the Borrower to perform its obligations hereunder or under any of the Credit
Documents entered into on or as of the Plan Effective Date or (ii) the rights
and remedies of the Bank hereunder or under any of the Credit Documents or with
respect to the Collateral.
7.02. Liens.
25
Create, incur, assume or suffer to exist any Lien upon any
Collateral, whether now owned or hereafter acquired, except for Liens securing
the Borrower's obligations to the Bank under this Agreement and the other Credit
Documents.
7.03. Collateral Requirement.
Fail at any time to maintain the Collateral pursuant to the terms of
this Agreement and the Cash Collateral Agreement.
Section 8. EVENTS OF DEFAULT.
Upon the occurrence of any of the following specified events and the
continuance thereof beyond any applicable grace period (each an "Event of
Default")
(a) the Borrower shall (i) default, and such default shall continue
for one or more Business Days, in the payment of any Reimbursement Obligation in
respect of any LC Disbursement when and as the same shall become due and
payable, (ii) default, and such default shall continue unremedied for two or
more Business Days, in the payment when due of any interest on any such amounts
or (iii) default, and such default shall continue unremedied for five or more
Business Days, in payment when due of any Fees or any other amounts owing
hereunder; or
(b) any representation, warranty or statement made by the Borrower
in this Agreement or in any certificate delivered pursuant hereto or thereto
shall prove to be untrue in any material respect on the date as of which made or
deemed made; or
(c) the Borrower shall default in the due performance or observance
by it of any term, covenant or agreement contained in (i) this Agreement or the
Cash Collateral Agreement and such default shall continue unremedied for a
period of 30 days or (ii) Section 6.04(a), Section 7 or Section 4 of the Cash
Collateral Agreement; or
(d) any material provision of any Credit Document shall, for any
reason, cease to be valid and binding on the Borrower; or
(e) the Confirmation Order is stayed, reversed, vacated or otherwise
modified after the date hereof in any manner that could reasonably be expected
to materially and adversely affect the Borrower's ability to perform its
obligations under the Credit Documents; or
(f) (i) the Borrower shall commence any case, proceeding or other
action (A) under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to it, or
seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or
other relief with respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian, conservator or other similar official for it or
for all or any substantial part of its assets, or any of its Affiliates shall
make a general assignment for the benefit of its creditors; or (ii) there shall
be commenced against the Borrower in any case, proceeding or other action of a
nature referred to in clause (i) above that (A) results in the entry of an order
for relief or any such adjudication or appointment
26
or (B) remains undismissed, undischarged or unbonded for a period of 60 days; or
(iii) there shall be commenced against the Borrower any case, proceeding or
other action seeking issuance of a warrant of attachment, execution, distraint
or similar process against all or any substantial part of its assets that
results in the entry of an order for any such relief that shall not have been
vacated, discharged, or stayed or bonded pending appeal within 60 days from the
entry thereof; or (iv) the Borrower shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the acts set
forth in the foregoing clause (i), (ii), or (iii); or (v) the Borrower shall
generally not, or shall be unable to, or shall admit in writing its inability
to, pay its debts as they become due; or
(g) the Bank shall at any time cease to have a validly perfected,
first priority Lien on the Collateral;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and all amounts owing
under this Agreement and the other Credit Documents (including all amounts of
Reimbursement Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) shall immediately become due and payable and (B) if such event is
any other Event of Default, the Bank may take any or all of the following
actions, upon written notice to the Borrower: (i) declare the Commitment to be
terminated forthwith, whereupon the Commitment of the Bank to renew, amend or
issue any Letters of Credit shall forthwith terminate immediately; and/or (ii)
declare all amounts owing under this Agreement and the other Credit Documents
(including all amounts of Reimbursement Obligations, whether or not the
beneficiaries of the then outstanding Letters of Credit shall have presented the
documents required thereunder) to be immediately due and payable; and/or (iii)
terminate any Letter of Credit which may be terminated in accordance with its
terms and/or (iv) charge, set-off and otherwise apply all or any part of the
Collateral against unpaid Obligations then due or which subsequently become due.
With respect to all Letters of Credit with respect to which presentment for
honor shall not have occurred at the time of an acceleration pursuant to this
Section 8, amounts held in the Cash Collateral Account shall be applied by the
Bank to the payment of drafts drawn under such Letters of Credit, and the unused
portion thereof after all such Letters of Credit have expired or been fully
drawn upon, if any, shall be applied to repay other obligations of the Borrower
hereunder and under the other Credit Documents. After all such Letters of Credit
shall have expired or been fully drawn upon, all Reimbursement Obligations shall
have been satisfied and all other obligations of the Borrower hereunder and
under the other Credit Documents shall have been paid in full, the balance, if
any, in the Cash Collateral Account shall be returned to the Borrower (or such
other Person as may be lawfully entitled thereto). Except as expressly provided
above in this Section 8, presentment, demand, protest and all other notices of
any kind are hereby expressly waived by the Borrower.
Section 9. MISCELLANEOUS
9.01. Right of Setoff.
27
In addition to any rights now or hereafter granted under
applicable law or otherwise, and not by way of limitation of any such rights,
upon the occurrence of an Event of Default, the Bank is hereby authorized at any
time or from time to time, without presentment, demand, protest or other notice
of any kind to the Borrower or to any other Person (other than upon five (5)
Business Days' written notice to the Borrower), any such notice being hereby
expressly waived, to set off and to appropriate and apply any and all deposits
(general or special) and any other indebtedness at any time held or owing by the
Bank, including all deposits held in the Cash Collateral Account, in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by the Bank, or any branch or agency
thereof to or for the credit or the account of the Borrower against and on
account of the Obligations and liabilities of the Borrower to the Bank under
this Agreement or under any of the other Credit Documents, and all other claims
of any nature or description arising out of or connected with this Agreement or
any other Credit Document, irrespective of whether the Bank shall have made any
demand hereunder and although such Obligations, liabilities or claims, or any of
them, shall be contingent or unmatured.
9.02. Notices.
Except as otherwise expressly provided herein, all notices and other
communications provided for hereunder shall be in writing (including telecopier)
or by telephone (but if by telephone, confirmed immediately by telecopier) and
mailed or telecopied: if to the Borrower, at its address specified opposite its
signature below; if to the Bank, at the Notice Office; or, as to the Borrower,
at such other address as shall be designated by such party in a written notice
to the other parties hereto and, as to each other party, at such other address
as shall be designated by such party in a written notice to the Borrower. No
such notice or communication shall be effective until received.
9.03. Expenses; Indemnity.
(a) The Borrower shall pay (i) all reasonable out-of-pocket expenses
incurred by the Bank and its Affiliates, including the reasonable fees, charges
and disbursements of counsel for the Bank, in connection with the preparation,
negotiation and administration of the Credit Documents or any amendments,
modifications or waivers of the provisions thereof (whether or not the
transactions contemplated hereby or thereby shall be consummated), (ii) all
reasonable out-of-pocket expenses paid to third parties by the Bank in
connection with the issuance, amendment, renewal or extension of any Letter of
Credit or any demand for payment thereunder and (iii) all out-of-pocket expenses
incurred by the Bank, including the reasonable fees, charges and disbursements
of any counsel for the Bank in connection with the enforcement or protection of
its rights in connection with this Agreement, including its rights under this
Section, or in connection with any Letters of Credit issued hereunder, including
all such out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Letters of Credit.
(b) The Borrower shall indemnify the Bank and each Affiliate of the
Bank (each such Person being called an "Indemnitee") against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses, including the fees,
28
charges and disbursements of any expert witness or counsel for any Indemnitee,
incurred by or asserted against any Indemnitee arising out of, in connection
with, or as a result of (i) the execution or delivery of this Agreement or any
agreement or instrument contemplated hereby, the performance by the parties
hereto of their respective obligations hereunder or the consummation of the
transactions contemplated hereby; (ii) any Letter of Credit or the use of the
proceeds therefrom (including any refusal by the Bank to honor a demand for
payment under a Letter of Credit if the documents presented in connection with
such demand do not strictly comply with the terms of such Letter of Credit);
(iii) any transfer, sale, delivery, surrender, or endorsement of any Drawing
Document at any time(s) held by any Indemnitee in connection with any Letter of
Credit; (iv) any independent undertakings issued by the beneficiary of any
Letter of Credit; (v) any unauthorized, fraudulent or improper Instructions or
error in computer transmission; (vi) the acts or omissions, whether rightful or
wrongful, of any present or future de jure or de facto governmental or
regulatory authority or cause or event beyond the control of such Indemnitee;
(vii) any actual or alleged presence or release of hazardous materials on or
from any property owned or operated by the Borrower or any of its Subsidiaries,
or any environmental liability related in any way to the Borrower or any of its
Subsidiaries; or (viii) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory and regardless of whether any Indemnitee is a
party thereto; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses are determined by a court of competent jurisdiction by final
and nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnitee.
(c) To the extent permitted by applicable law, the Borrower shall
not assert, and hereby waives, any claim against any Indemnitee, on any theory
of liability, for special, indirect, consequential or punitive damages (as
opposed to direct or actual damages) arising out of, in connection with, or as a
result of, this Agreement or any agreement or instrument contemplated hereby,
the transactions contemplated hereby, or Letter of Credit or the use of the
proceeds thereof.
(d) All amounts due under this Section 9.03 shall be payable not
later than 15 days after written demand therefor.
9.04. Benefit of Agreement.
This Agreement shall be binding upon and inure to the benefit of and
be enforceable by the respective successors and assigns of the parties hereto;
provided that the Borrower may not assign or transfer any of its rights or
obligations hereunder or under any other Credit Document without the prior
written consent of the Bank. The Bank may at any time grant participations in
any or all of its rights and/or obligations hereunder to another financial
institution; provided that in the case of any such participation, the
participant shall not have any rights under this Agreement or any of the other
Credit Documents (the participant's rights against such Bank in respect of such
participation to be those set forth in the agreement executed by such Bank in
favor of the participant relating thereto) and all amounts payable by the
Borrower hereunder shall be determined as if such Bank had not sold such
participation, except that the participant shall be entitled to receive the
additional amounts under Section 2.12 to, and only to, the extent that such Bank
would be entitled to such benefits if the participation had not
29
been entered into or sold; and provided further, that the Bank shall not
transfer, grant or assign any participation under which the participant shall
have rights to approve any amendment to or waiver of this Agreement or any other
Credit Document except to the extent such amendment or waiver would (i) reduce
the principal amount thereof, or increase such participant's participating
interest in any Commitment over the amount thereof then in effect (it being
understood that a waiver of any Default or Event of Default or of a mandatory
reduction in the Commitment shall not constitute a change in the terms of any
Commitment and that an increase in any Commitment shall be permitted without the
consent of any participant if such participant's participation is not increased
as a result thereof) or (ii) permit the assignment or transfer by the Borrower
of any of its rights and obligations under this Agreement except in accordance
with the terms hereof and thereof.
9.05. No Waiver; Remedies Cumulative.
No failure or delay on the part of the Bank in exercising any
right, power or privilege hereunder or under any other Credit Document and no
course of dealing between the Borrower or the Bank shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or under any other Credit Document preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights, powers and remedies herein or in any other
Credit Document expressly provided are cumulative and not exclusive of any
rights, powers or remedies which the Bank would otherwise have. No notice to or
demand on the Borrower in any case shall entitle the Borrower to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the Bank to any other or further action in any
circumstances without notice or demand.
9.06. Calculations; Computations.
All computations of interest in respect of Fees and interest
hereunder shall be made on the basis of a year of 360 days for the actual number
of days (including the first day but excluding the last day) occurring in the
period for which such interest or Fees are payable.
9.07. Governing Law; Submission to Jurisdiction; Venue; Waiver of
Jury Trial.
(a) This Agreement and the other Credit Documents and the rights
and obligations of the parties hereunder and thereunder shall be construed in
accordance with and be governed by the law of the State of New York. Any legal
action or proceeding between the Borrower and any other party to this Agreement
or any other Credit Document arising out of or with respect to this Agreement or
any other Credit Document must be brought in the state courts of the State of
New York located in the County of New York or in the courts of the United States
for the Southern District of New York, and the Borrower submits to the
non-exclusive jurisdiction of such courts for the purpose of any such suit,
action or proceeding or judgment. Each party to this Agreement irrevocably
consents to service of process in the manner provided for notices in Section
9.02, such service to become effective 30 days after such mailing. Nothing in
this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
30
(b) Each of the Bank and the Borrower hereby irrevocably waives, to
the fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any of the aforesaid actions
or proceedings arising out of or in connection with this Agreement or any other
Credit Document brought in the courts referred to in Section 9.07(a) and hereby
further irrevocably waives and agrees not to plead or claim in any such court
that any such action or proceeding brought in any such court has been brought in
an inconvenient forum.
(c) Each of the Borrower and the Bank waives, to the fullest extent
it may legally and effectively do so, any right it may have to jury trial in any
legal proceeding directly or indirectly arising out of or relating to each of
the Borrower's and the Bank's rights and obligations under this Agreement or
transactions contemplated hereby (whether based on contract, tort or any other
theory).
9.08. Confidentiality.
The Bank shall hold, and shall cause its participants and
prospective participants, if any, to agree to hold, all non-public information
obtained pursuant to the requirements of any Credit Document which has been
identified as such by the Borrower in accordance with its customary procedure
for handling confidential information of such nature and in accordance with safe
and sound banking practices and in any event may make disclosure reasonably
required by any bona fide assignee, transferee or participant or as legally
required or reasonably requested by any governmental agency or representative
thereof or pursuant to legal process.
9.09. Counterparts.
This Agreement may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument. A set of counterparts executed by all
the parties hereto shall be lodged with the Borrower and the Bank.
9.10. Headings Descriptive.
The headings of the several sections and subsections of this
Agreement are inserted for convenience only and shall not in any way affect the
meaning or construction of any provision of this Agreement.
9.11. Amendment or Waiver.
Neither this Agreement nor any other Credit Document nor any terms
hereof or thereof may be amended, waived, discharged or terminated unless such
amendment, waiver, discharge or termination is in writing signed by the Bank
and, in the case of any amendment, by the Borrower.
9.12. Survival.
31
All indemnities set forth herein including, without limitation, in
Sections 2.06 and 9.03 shall survive the execution and delivery of this
Agreement.
32
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
SPACE SYSTEMS/LORAL, INC.
By /s/ ▇▇▇ ▇▇▇▇
-------------------------------------
Name:
Title:
Address:
Attention:
Fax number:
Telephone:
JPMORGAN CHASE BANK, N.A.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President