Exhibit 10.5
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Pledge Agreement"), dated as of December
21, 2001, is by and among the parties identified as "PLEDGORS" on the signature
pages hereto and such other parties as may become Pledgors hereunder after the
date hereof (individually a "Pledgor", and collectively the "Pledgors") and BANK
OF AMERICA, N.A., as collateral agent (in such capacity, the "Collateral Agent")
for the holders of the Secured Obligations referenced below.
W I T N E S S E T H
WHEREAS, a $600 million credit facility has been established in favor
of Loral SpaceCom Corporation, a Delaware corporation (the "Company"), pursuant
to the terms of that Amended and Restated Credit Agreement dated as of the date
hereof (as amended, modified, increased, extended, renewed or replaced, the
"SpaceCom Credit Agreement") among the Company, as borrower, the lenders
identified therein and Bank of America, N.A., as Administrative Agent;
WHEREAS, a $494 million credit facility has been established in favor
of Loral Satellite, Inc., a Delaware corporation ("Satellite") pursuant to the
terms of that Credit Agreement dated as of November 17, 2000 (as amended,
modified, extended, increased, renewed or replaced, the "Satellite Credit
Agreement") among Satellite, as borrower, the lenders identified therein and
Bank of America, N.A., as Administrative Agent; and
WHEREAS, the Company has agreed to provide, and to cause its Domestic
Subsidiaries to provide, a pledge of and security interest in substantially all
of the personal property of the Company and its Domestic Subsidiaries, subject
only to certain exceptions and qualifications identified herein and in the
Collateral Documents, to secure the loans and obligations owing under both the
SpaceCom Credit Agreement and the Satellite Credit Agreement as hereafter more
particularly described;
NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Definitions. Capitalized terms used and not otherwise defined herein
shall have the meanings provided in the Credit Agreement. In addition, the
following terms, which are defined in the UCC as in effect in the State of New
York on the date hereof, are used herein as so defined: Accession, Financial
Asset, Proceeds and Security. As used herein:
"Collateral Documents" means any and all security agreements,
pledge agreements, deeds of trust, security deeds, mortgages or like
instruments establishing or otherwise giving effect to the liens and
security interests in the collateral, including UCC financing
statements and notice filings in respect of intellectual property, in
each case as amended and modified.
"Credit Agreement" means the SpaceCom Credit Agreement, or if
the SpaceCom Credit Agreement has expired or been terminated and all
amounts owing thereunder paid in full, the Satellite Credit Agreement.
"Credit Documents" means the SpaceCom Credit Documents and the
Satellite Credit Documents.
"Event of Default" has the meaning provided in Section 8
hereof.
"Pledged Collateral" has the meaning provided in Section 2
hereof.
"Pledged Shares" has the meaning provided in Section 2 hereof.
"Satellite Credit Documents" means (i) the Satellite Credit
Agreement, the notes issued thereunder and the other credit documents
referenced therein relating thereto, as amended, modified, extended or
replaced, and (ii) the Collateral Documents.
"Satellite Creditors" means the holders of the Satellite
Indebtedness.
"Satellite Indebtedness" means all of the following, whether
now or hereafter outstanding or incurred: (i) the principal of and
interest (including interest accruing after commencement of a
proceeding in bankruptcy, reorganization or insolvency, whether or not
allowable as a claim) on the loans and obligations, and all other
amounts (including, without limitation, all fees, indemnities, charges,
expenses and other monetary obligations), owing from time to time under
the Satellite Credit Agreement or any of the other Satellite Credit
Documents; (ii) subject to Section 26 hereof, all guaranty obligations
given in respect of the Satellite Indebtedness; and (iii) all renewals,
extensions, refinancings, refundings, amendments and modifications of
any of the foregoing Satellite Indebtedness, whether in whole or in
part.
"Secured Obligations" means the SpaceCom Indebtedness and the
Satellite Indebtedness.
"SpaceCom Credit Documents" means (i) the SpaceCom Credit
Agreement, the notes issued thereunder and the other credit documents
referenced therein relating thereto, as amended, modified, extended or
replaced, (ii) the interest rate protection or foreign currency
exchange agreements, the obligations under which constitute SpaceCom
Indebtedness hereunder, and (iii) the Collateral Documents.
"SpaceCom Indebtedness" means all of the following, whether
now or hereafter outstanding or incurred: (i) the principal of and
interest (including interest accruing after commencement of a
proceeding in bankruptcy, reorganization or insolvency, whether or not
allowable as a claim) on the loans and obligations, and all other
amounts (including, without limitation, all reimbursement obligations,
fees, indemnities, charges, expenses and other monetary obligations),
owing from time to time under the SpaceCom Credit Agreement and the
other SpaceCom Credit Documents; (ii) subject to Section 26 hereof, the
guaranty obligations of the guarantors under the SpaceCom Credit
Agreement and the other SpaceCom Credit Documents; (iii) the
obligations owing by the Company, or a subsidiary or affiliate of the
Company, to any lender or affiliate of a lender under the SpaceCom
Credit Agreement arising under any interest rate protection or foreign
currency exchange agreement or any guaranty given in respect thereof;
and (iv) all amendments, modifications, renewals, extensions,
refinancings, refundings and restructurings of any of the foregoing
SpaceCom Indebtedness, whether in whole or in part, and the agreements
governing such SpaceCom Indebtedness; provided, however, that under no
circumstances shall the obligations owing under the Collateral
Documents to the lenders and the administrative agent under the
Satellite Credit Agreement be considered SpaceCom Indebtedness.
"UCC" means the Uniform Commercial Code.
2. Pledge and Grant of Security Interest. To secure the prompt payment
and performance in full when due, whether by lapse of time, acceleration,
mandatory prepayment or otherwise, of the Secured Obligations, each Pledgor
hereby grants, pledges and assigns to the Collateral Agent, for the benefit of
the
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holders of the Secured Obligations, a continuing security interest in, and a
right to set-off against, any and all right, title and interest of such Pledgor
in and to the following, whether now owned or existing or owned, acquired, or
arising hereafter (collectively, the "Pledged Collateral"):
(a) Pledged Shares. Except for the Subsidiaries excluded by
Borrower in accordance with Section 8.9 of the Credit Agreement, (i)
one hundred percent (100%) (or, if less, the full amount owned by such
Pledgor) of the issued and outstanding Capital Stock owned by such
Pledgor of each Domestic Subsidiary set forth on Schedule 2(a) attached
hereto and (ii) sixty-five percent (65%) (or, if less, the full amount
owned by such Pledgor) of the issued and outstanding shares of Capital
Stock entitled to vote (within the meaning of Treas. Reg. Section
1.956-2(c)(2)) ("Voting Equity") and one hundred percent (100%) (or, if
less, the full amount owned by such Pledgor) of the issued and
outstanding Capital Stock not entitled to vote (within the meaning of
Treas. Reg. Section 1.956-2(c)(2)) ("Non-Voting Equity") owned by such
Pledgor of each first-tier Foreign Subsidiary set forth on Schedule
2(a) attached hereto, in each case together with the certificates (or
other agreements or instruments), if any, representing such Capital
Stock, and all options and other rights, contractual or otherwise, with
respect thereto (collectively, together with the Capital Stock
described in Section 2(b) and 2(c) below, the "Pledged Shares"),
including, but not limited to, the following:
(A) all shares, securities, membership interests or
other equity interests representing a dividend on any of the
Pledged Shares, or representing a distribution or return of
capital upon or in respect of the Pledged Shares, or resulting
from a stock split, revision, reclassification or other
exchange therefor, and any subscriptions, warrants, rights or
options issued to the holder of, or otherwise in respect of,
the Pledged Shares; and
(B) without affecting the obligations of the Pledgors
under any provision prohibiting such action hereunder or under
the Credit Agreement, in the event of any consolidation or
merger involving the issuer of any Pledged Shares and in which
such issuer is not the surviving entity, all Capital Stock (in
the applicable percentage specified in Section 2(a) above) of
the successor entity formed by or resulting from such
consolidation or merger.
(b) Additional Shares. Except for the Subsidiaries excluded by
Borrower in writing in accordance with Section 8.9 of the Credit
Agreement, (i) one hundred percent (100%) (or, if less, the full amount
owned by such Pledgor) of the issued and outstanding Capital Stock
owned by such Pledgor of any Person which hereafter becomes a Domestic
Subsidiary and (ii) sixty-five percent (65%) (or, if less, the full
amount owned by such Pledgor) of the Voting Equity and one hundred
percent (100%) (or, if less, the full amount owned by such Pledgor) of
the Non-Voting Equity owned by such Pledgor of any Person which
hereafter becomes a first-tier Foreign Subsidiary, including, without
limitation, the certificates (or other agreements or instruments), if
any, representing such Capital Stock.
(c) Accessions and Proceeds. All Accessions and all Proceeds
of any and all of the foregoing.
Without limiting the generality of the foregoing, it is hereby
specifically understood and agreed that a Pledgor may from time to time
hereafter deliver additional Capital Stock to the Collateral Agent as collateral
security for the Secured Obligations. Upon delivery to the Collateral Agent,
such additional Capital Stock shall be deemed to be part of the Pledged
Collateral of such Pledgor and shall be subject to
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the terms of this Pledge Agreement whether or not Schedule 2(a) is amended to
refer to such additional Capital Stock.
3. Security for Secured Obligations. The security interest created
hereby in the Pledged Collateral of each Pledgor constitutes continuing
collateral security for all of the Secured Obligations.
4. Delivery of the Pledged Collateral. Each Pledgor hereby agrees that:
(a) Each Pledgor shall deliver to the Collateral Agent (i)
simultaneously with or prior to the execution and delivery of this
Pledge Agreement, all certificates representing the Pledged Shares of
such Pledgor and (ii) promptly upon the receipt thereof by or on behalf
of a Pledgor, all other certificates and instruments constituting
Pledged Collateral of a Pledgor. Prior to delivery to the Collateral
Agent, all such certificates and instruments constituting Pledged
Collateral of a Pledgor shall be held in trust by such Pledgor for the
benefit of the Collateral Agent pursuant hereto. All such certificates
shall be delivered in suitable form for transfer by delivery or shall
be accompanied by duly executed instruments of transfer or assignment
in blank, substantially in the form provided in Schedule 4(a) attached
hereto.
(b) Additional Securities. If such Pledgor shall receive by
virtue of its being or having been the owner of any Pledged Collateral,
any (i) certificate, including without limitation, any certificate
representing a dividend or distribution in connection with any increase
or reduction of capital, reclassification, merger, consolidation, sale
of assets, combination of shares or other equity interests, stock
splits, spin-off or split-off, promissory notes or other instruments;
(ii) option or right, whether as an addition to, substitution for, or
an exchange for, any Pledged Collateral or otherwise; (iii) dividends
payable in securities; or (iv) distributions of securities or other
equity interests in connection with a partial or total liquidation,
dissolution or reduction of capital, capital surplus or paid-in
surplus, then (subject to the percentage limitations set forth in
Section 2(a) hereof) such Pledgor shall receive such certificate,
instrument, option, right or distribution in trust for the benefit of
the Collateral Agent, shall segregate it from such Pledgor's other
property and shall deliver it forthwith to the Collateral Agent in the
exact form received together with any necessary endorsement and/or
appropriate stock power duly executed in blank, substantially in the
form provided in Schedule 4(a), to be held by the Collateral Agent as
Pledged Collateral and as further collateral security for the Secured
Obligations.
(c) Financing Statements. Each Pledgor shall execute and
deliver to the Collateral Agent such UCC or other applicable financing
statements as may be reasonably requested by the Collateral Agent in
order to perfect and protect the security interest created hereby in
the Pledged Collateral of such Pledgor.
5. Representations and Warranties. Each Pledgor hereby represents and
warrants to the Collateral Agent, for the benefit of the holders of the Secured
Obligations (other than any such obligations that, by their terms, survive
termination of the Credit Documents), that so long as any of the Secured
Obligations remains outstanding and until all of the commitments relating
thereto have been terminated:
(a) Authorization of Pledged Shares. The Pledged Shares are
duly authorized and validly issued, are fully paid and, with respect to
any Pledged Shares consisting of stock of a corporation, nonassessable.
(b) Title. Each Pledgor has good and indefeasible title to the
Pledged Collateral of such Pledgor and will at all times be the legal
and beneficial owner of such Pledged Collateral
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free and clear of any Lien, other than Permitted Liens. There exists no
"adverse claim" within the meaning of Section 8-102 of the UCC with
respect to the Pledged Shares of such Pledgor.
(c) Exercising of Rights. The exercise by the Collateral Agent
of its rights and remedies hereunder will not violate any law or
governmental regulation or any material contractual restriction binding
on or affecting a Pledgor or any of its property (except as may be
required under state, federal or foreign communications laws).
(d) Pledgor's Authority. No authorization, approval or action
by, and no notice or filing with any Governmental Authority or with the
issuer of any Pledged Stock is required either (i) for the pledge made
by a Pledgor or for the granting of the security interest by a Pledgor
pursuant to this Pledge Agreement (except as have been already
obtained) or (ii) for the exercise by the Collateral Agent or the
holders of the Secured Obligations of their rights and remedies
hereunder (except as may be required under state, federal or foreign
communications laws).
(e) Security Interest/Priority. This Pledge Agreement creates
a valid security interest in favor of the Collateral Agent for the
benefit of the holders of the Secured Obligations, in the Pledged
Collateral. The taking of possession by the Collateral Agent of the
certificates, if any, representing the Pledged Shares and all other
certificates and instruments constituting Pledged Collateral will
perfect and establish the first priority of the Collateral Agent's
security interest in the Pledged Shares and, when properly perfected by
filing or registration, in all other Pledged Collateral represented by
such Pledged Shares and instruments securing the Secured Obligations.
Except as set forth in this Section 5(e), no action is necessary to
perfect or otherwise protect such security interest.
(f) Partnership and Membership Interests. Except as disclosed
to the Collateral Agent, none of the Pledged Shares consisting of
partnership or limited liability company interests (i) is dealt in or
traded on a securities exchange or in a securities market, (ii) by its
terms expressly provides that it is a security governed by Article 8 of
the UCC, (iii) is an investment company security, (iv) is held in a
securities account or (v) constitutes a Security or a Financial Asset.
(g) No Other Interests. As of the date hereof, except for the
Capital Stock of Non-Guarantor Subsidiaries and the Capital Stock of
the Foreign Subsidiaries (other than the 65% or less pledged pursuant
hereto), no Pledgor owns any Capital Stock other than as set forth on
Schedule 2(a) attached hereto.
6. Covenants. Each Pledgor hereby covenants, that so long as any of the
Secured Obligations (other than any such obligations that, by their terms,
survive termination of the Credit Documents) remains outstanding and until all
of the commitments relating thereto have been terminated, such Pledgor shall:
(a) Defense of Title. Warrant and defend title to and
ownership of the Pledged Collateral of such Pledgor at its own expense
against the claims and demands of all other parties claiming an
interest therein, keep the Pledged Collateral free from all Liens,
except for Permitted Liens, and not sell, exchange, transfer, assign,
lease or otherwise dispose of Pledged Collateral of such Pledgor or any
interest therein, except as permitted under the Credit Agreement and
the other Credit Documents.
(b) Further Assurances. Promptly execute and deliver at its
expense all further instruments and documents and take all further
action that may be necessary and desirable or that the Collateral Agent
may reasonably request in order to (i) perfect and protect the security
interest
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created hereby in the Pledged Collateral of such Pledgor (including,
without limitation, any and all action necessary to satisfy the
Collateral Agent that the Collateral Agent has obtained a first
priority perfected security interest in all Pledged Collateral); (ii)
enable the Collateral Agent to exercise and enforce its rights and
remedies hereunder in respect of the Pledged Collateral of such
Pledgor; and (iii) otherwise effect the purposes of this Pledge
Agreement, including, without limitation and if requested by the
Collateral Agent, delivering to the Collateral Agent irrevocable
proxies in respect of the Pledged Collateral of such Pledgor.
(c) Amendments. Not make or consent to any amendment or other
modification or waiver with respect to any of the Pledged Collateral of
such Pledgor or enter into any agreement or allow to exist any
restriction with respect to any of the Pledged Collateral of such
Pledgor other than pursuant hereto or as may be permitted under the
Credit Agreement.
(d) Issuance or Acquisition of Capital Stock. Not, without
executing and delivering, or causing to be executed and delivered, to
the Collateral Agent such agreements, documents and instruments as the
Collateral Agent may require, issue or acquire any Capital Stock
consisting of an interest in a partnership or a limited liability
company that (i) is dealt in or traded on a securities exchange or in a
securities market, (ii) by its terms expressly provides that it is a
security governed by Article 8 of the UCC, (iii) is an investment
company security, (iv) is held in a securities account or (v)
constitutes a Security or a Financial Asset.
7. Advances by Holders of the Secured Obligations. On failure of any
Pledgor to perform any of the covenants and agreements contained herein, the
Collateral Agent may, at its sole option and in its reasonable discretion,
perform the same (provided that the Collateral Agent shall promptly give the
Borrower notice of such performance after the fact) and in so doing may expend
such sums as the Collateral Agent may reasonably deem advisable in the
performance thereof, including, without limitation, the payment of any insurance
premiums, the payment of any taxes, a payment to obtain a release of a Lien or
potential Lien, expenditures made in defending against any adverse claim and all
other expenditures which the Collateral Agent or the holders of the Secured
Obligations may make for the protection of the security hereof or which may be
compelled to make by operation of law. All such sums and amounts so expended
shall be repayable by the Pledgors on a joint and several basis (subject to
Section 26 hereof) promptly upon timely notice thereof and demand therefor,
shall constitute additional Secured Obligations and shall bear interest from the
date said amounts are expended at the default rate specified in the Credit
Agreement for Revolving Loans that are Base Rate Loans. No such performance of
any covenant or agreement by the Collateral Agent or the holders of the Secured
Obligations on behalf of any Pledgor, and no such advance or expenditure
therefor, shall relieve the Pledgors of any default under the terms of this
Pledge Agreement, the other Credit Documents or any other documents relating to
the Secured Obligations. The holders of the Secured Obligations may make any
payment hereby authorized in accordance with any ▇▇▇▇, statement or estimate
procured from the appropriate public office or holder of the claim to be
discharged without inquiry into the accuracy of such ▇▇▇▇, statement or estimate
or into the validity of any tax assessment, sale, forfeiture, tax lien, title or
claim except to the extent such payment is being contested in good faith by a
Pledgor in appropriate proceedings and against which adequate reserves are being
maintained in accordance with GAAP.
8. Events of Default. The occurrence of an event which would constitute
an Event of Default under the Credit Agreement shall be an event of default
hereunder (an "Event of Default").
9. Remedies.
(a) General Remedies. Upon the occurrence of an Event of
Default and during the continuance thereof, the Collateral Agent and
the holders of the Secured Obligations shall have, in respect of the
Pledged Collateral, in addition to the rights and remedies provided
herein, in the
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Credit Documents, in any other documents relating to the Secured
Obligations, or by law (including, without limitation, levy of
attachment and garnishment), the rights and remedies of a secured party
under the UCC of the jurisdiction applicable to the affected Pledged
Collateral.
(b) Sale of Pledged Collateral. Upon the occurrence of an
Event of Default and during the continuance thereof, without limiting
the generality of this Section 9 and without notice, the Collateral
Agent may, in its sole discretion, sell or otherwise dispose of or
realize upon the Pledged Collateral, or any part thereof, in one or
more parcels, at public or private sale, at any exchange or broker's
board or elsewhere, at such price or prices and on such other terms as
the Collateral Agent may deem commercially reasonable, for cash, credit
or for future delivery or otherwise in accordance with applicable law.
To the extent permitted by law, any holder of the Secured Obligations
may in such event, bid for the purchase of such securities. Each
Pledgor agrees that, to the extent notice of sale shall be required by
law and has not been waived by such Pledgor, any requirement of
reasonable notice shall be met if notice, specifying the place of any
public sale or the time after which any private sale is to be made, is
personally served on or mailed, postage prepaid, to such Pledgor, in
accordance with the notice provisions of the Credit Agreement at least
ten days before the time of such sale. The Collateral Agent shall not
be obligated to make any sale of Pledged Collateral of such Pledgor
regardless of notice of sale having been given. The Collateral Agent
may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was
so adjourned.
(c) Private Sale. Upon the occurrence of an Event of Default
and during the continuance thereof, the Pledgors recognize that the
Collateral Agent may deem it impracticable to effect a public sale of
all or any part of the Pledged Shares or any of the securities
constituting Pledged Collateral and that the Collateral Agent may,
therefore, determine to make one or more private sales of any such
Pledged Collateral to a restricted group of purchasers who will be
obligated to agree, among other things, to acquire such Pledged
Collateral for their own account, for investment and not with a view to
the distribution or resale thereof. Each Pledgor acknowledges that any
such private sale may be at prices and on terms less favorable to the
seller than the prices and other terms which might have been obtained
at a public sale and, notwithstanding the foregoing, agrees that such
private sale shall be deemed to have been made in a commercially
reasonable manner and that the Collateral Agent shall have no
obligation to delay sale of any such Pledged Collateral for the period
of time necessary to permit the issuer of such Pledged Collateral to
register such Pledged Collateral for public sale under the Securities
Act of 1933. Each Pledgor further acknowledges and agrees that any
offer to sell such Pledged Collateral which has been (i) publicly
advertised on a bona fide basis in a newspaper or other publication of
general circulation in the financial community of New York, New York
(to the extent that such offer may be advertised without prior
registration under the Securities Act of 1933), or (ii) made privately
in the manner described above shall be deemed to involve a "public
sale" under the UCC, notwithstanding that such sale may not constitute
a "public offering" under the Securities Act of 1933, and the
Collateral Agent may, in such event, bid for the purchase of such
Pledged Collateral.
(d) Retention of Pledged Collateral. To the extent permitted
under applicable law, in addition to the rights and remedies hereunder,
upon the occurrence of an Event of Default, the Collateral Agent may,
after providing the notices required by Sections 9-620 and 9-621 of the
UCC or otherwise complying with the requirements of applicable law of
the relevant jurisdiction, accept or retain all or any portion of the
Pledged Collateral in satisfaction of the Secured Obligations. Unless
and until the Collateral Agent shall have provided such notices,
however, the
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Collateral Agent shall not be deemed to have accepted or retained any
Pledged Collateral in satisfaction of any Secured Obligations for any
reason.
(e) Deficiency. In the event that the proceeds of any sale,
collection or realization are insufficient to pay all amounts to which
the Collateral Agent or the holders of the Secured Obligations are
legally entitled, the Pledgors (subject to Section 26 hereof) shall be
jointly and severally liable for the deficiency, together with interest
thereon at the default rate specified in the Credit Agreement for
Revolving Loans that are Base Rate Loans, together with the costs of
collection and reasonable fees of attorneys employed by the Collateral
Agent to collect such deficiency. Any surplus remaining after the full
payment and satisfaction of the Secured Obligations shall be returned
to the Pledgors or to whomsoever a court of competent jurisdiction
shall determine to be entitled thereto.
10. Rights of the Collateral Agent.
(a) Power of Attorney. In addition to other powers of attorney
contained herein, each Pledgor hereby designates and appoints the
Collateral Agent, on behalf of the holders of the Secured Obligations,
and each of its designees or agents, as attorney-in-fact of such
Pledgor, irrevocably and with power of substitution, with authority to
take any or all of the following actions upon the occurrence and during
the continuance of an Event of Default:
(i) to demand, collect, settle, compromise and
adjust, and give discharges and releases concerning the
Pledged Collateral, all as the Collateral Agent may reasonably
deem appropriate;
(ii) to commence and prosecute any actions at any
court for the purposes of collecting any of the Pledged
Collateral and enforcing any other right in respect thereof;
(iii) to defend, settle or compromise any action
brought and, in connection therewith, give such discharge or
release as the Collateral Agent may reasonably deem
appropriate;
(iv) to pay or discharge taxes, liens, security
interests or other encumbrances levied or placed on or
threatened against the Pledged Collateral;
(v) to direct any parties liable for any payment in
connection with any of the Pledged Collateral to make payment
of any and all monies due and to become due thereunder
directly to the Collateral Agent or as the Collateral Agent
shall direct;
(vi) to receive payment of and receipt for any and
all monies, claims, and other amounts due and to become due at
any time in respect of or arising out of any Pledged
Collateral;
(vii) to sign and endorse any drafts, assignments,
proxies, stock powers, verifications, notices and other
documents relating to the Pledged Collateral;
(viii) to execute and deliver all assignments,
conveyances, statements, financing statements, renewal
financing statements, security and pledge agreements,
affidavits, notices and other agreements, instruments and
documents that the Collateral Agent may reasonably deem
appropriate in order to perfect and maintain the security
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interests and liens granted in this Pledge Agreement and in
order to fully consummate all of the transactions contemplated
therein;
(ix) to exchange any of the Pledged Collateral or
other property upon any merger, consolidation, reorganization,
recapitalization or other readjustment of the issuer thereof
and, in connection therewith, deposit any of the Pledged
Collateral with any committee, depository, transfer agent,
registrar or other designated agency upon such terms as the
Collateral Agent may reasonably deem appropriate;
(x) to vote for a shareholder or member resolution,
or to sign an instrument in writing, sanctioning the transfer
of any or all of the Pledged Collateral into the name of the
Collateral Agent or one or more of the holders of the Secured
Obligations or into the name of any transferee to whom the
Pledged Collateral or any part thereof may be sold pursuant to
Section 9 hereof; and
(xi) to do and perform all such other acts and things
as the Collateral Agent may reasonably deem appropriate or
convenient in connection with the Pledged Collateral.
This power of attorney is a power coupled with an interest and
shall be irrevocable for so long as any of the Secured Obligations
(other than any such obligations that by their terms, survive
termination of the Credit Documents) shall remain outstanding and until
all of the commitments relating thereto shall have been terminated. The
Collateral Agent shall be under no duty to exercise or withhold the
exercise of any of the rights, powers, privileges and options expressly
or implicitly granted to the Collateral Agent in this Pledge Agreement,
and shall not be liable for any failure to do so or any delay in doing
so. The Collateral Agent shall not be liable for any act or omission or
for any error of judgment or any mistake of fact or law in its
individual capacity or its capacity as attorney-in-fact except acts or
omissions resulting from its gross negligence or willful misconduct.
This power of attorney is conferred on the Collateral Agent solely to
protect, preserve and realize upon its security interest in the Pledged
Collateral.
(b) Performance by the Collateral Agent of Obligations. If any
Pledgor fails to perform any agreement or obligation contained herein,
the Collateral Agent itself may perform, or cause performance of, such
agreement or obligation, and the expenses of the Collateral Agent
incurred in connection therewith shall be payable by the Pledgors on a
joint and several basis pursuant to Section 26 hereof.
(c) The Collateral Agent's Duty of Care. Other than the
exercise of reasonable care to assure the safe custody of the Pledged
Collateral while being held by the Collateral Agent hereunder, the
Collateral Agent shall have no duty or liability to preserve rights
pertaining thereto, it being understood and agreed that the Pledgors
shall be responsible for preservation of all rights in the Pledged
Collateral, and the Collateral Agent shall be relieved of all
responsibility for the Pledged Collateral upon surrendering it or
tendering the surrender of it to the Pledgors. The Collateral Agent
shall be deemed to have exercised reasonable care in the custody and
preservation of the Pledged Collateral in its possession if such
Pledged Collateral is accorded treatment substantially equal to that
which the Collateral Agent accords its own property, which shall be no
less than the treatment employed by a reasonable and prudent agent in
the industry, it being understood that the Collateral Agent shall not
have responsibility for (i) ascertaining or taking action with respect
to calls, conversions, exchanges, maturities, tenders or other matters
relating to any Pledged Collateral, whether or not the Collateral Agent
has or is deemed to have
9
knowledge of such matters, or (ii) taking any necessary steps to
preserve rights against any parties with respect to any of the Pledged
Collateral.
(d) Voting Rights in Respect of the Pledged Collateral.
(i) So long as no Event of Default shall have
occurred and be continuing, to the extent permitted by law,
each Pledgor may exercise any and all voting and other
consensual rights pertaining to the Pledged Collateral of such
Pledgor or any part thereof for any purpose not in violation
of the terms of this Pledge Agreement or the Credit Agreement;
and
(ii) Upon the occurrence and during the continuance
of an Event of Default, all rights of a Pledgor to exercise
the voting and other consensual rights which it would
otherwise be entitled to exercise pursuant to paragraph (i) of
this subsection shall cease and all such rights shall
thereupon become vested in the Collateral Agent which shall
then have the sole right to exercise such voting and other
consensual rights.
(e) Dividend Rights in Respect of the Pledged Collateral.
(i) So long as no Event of Default shall have
occurred and be continuing and subject to Section 4(b) hereof,
each Pledgor may receive and retain any and all dividends
(other than stock dividends and other dividends constituting
Pledged Collateral addressed hereinabove), distributions or
interest paid in respect of the Pledged Collateral to the
extent they are allowed under the Credit Agreement.
(ii) Upon the occurrence and during the continuance
of an Event of Default:
(A) all rights of a Pledgor to receive the
dividends, distributions and interest payments which
it would otherwise be authorized to receive and
retain pursuant to paragraph (i) of this subsection
shall cease and all such rights shall thereupon be
vested in the Collateral Agent, which shall then have
the sole right to receive and hold as Pledged
Collateral such dividends, distributions and interest
payments; and
(B) all dividends, distributions and
interest payments which are received by a Pledgor
contrary to the provisions of paragraph (A) of this
subsection shall be received in trust for the benefit
of the Collateral Agent, shall be segregated from
other property or funds of such Pledgor, and shall be
forthwith paid over to the Collateral Agent as
Pledged Collateral in the exact form received, to be
held by the Collateral Agent as Pledged Collateral
and as further collateral security for the Secured
Obligations.
(f) Release of Pledged Collateral. The Collateral Agent may
release any of the Pledged Collateral from this Pledge Agreement or may
substitute any of the Pledged Collateral for other Pledged Collateral
to the extent permitted under, and on the terms and conditions set
forth in, the Credit Agreement, and such release or substitution shall
not alter, vary or diminish in any way the force, effect, lien, pledge
or security interest of this Pledge Agreement as to any Pledged
Collateral not expressly released or substituted, and this Pledge
Agreement shall continue as a first priority lien (subject to Permitted
Liens) on all Pledged Collateral not expressly released or substituted.
10
11. Rights of Required Lenders. All rights of the Collateral Agent
hereunder, if not exercised by the Collateral Agent, may be exercised by the
Required Lenders.
12. Application of Proceeds. Upon the occurrence and during the
continuance of an Event of Default, any payments in respect of the Secured
Obligations and any proceeds of the Pledged Collateral, when received by the
Collateral Agent or any of the holders of the Secured Obligations in cash or its
equivalent, will be applied in reduction of the Secured Obligations in the order
set forth in the Credit Agreement or other document relating to the Secured
Obligations, and each Pledgor irrevocably waives the right to direct the
application of such payments and proceeds and acknowledges and agrees that the
Collateral Agent shall have the continuing and exclusive right to apply and
reapply any and all such payments and proceeds in the Collateral Agent's sole
discretion, notwithstanding any entry to the contrary upon any of its books and
records.
13. Costs of Counsel. At all times hereafter, the Pledgors agree to
promptly pay upon demand any and all reasonable costs and expenses (including,
without limitation, reasonable attorneys' fees) of the Collateral Agent and the
holders of the Secured Obligations (a) as required under the Credit Agreement
and (b) as necessary to protect the Pledged Collateral or to exercise any rights
or remedies under this Pledge Agreement or with respect to any of the Pledged
Collateral. All of the foregoing costs and expenses shall constitute Secured
Obligations hereunder.
14. Continuing Agreement.
(a) This Pledge Agreement shall be a continuing agreement in
every respect and shall remain in full force and effect so long as any
of the Secured Obligations (other than any such obligations that, by
their terms, survive termination of the Credit Documents) remains
outstanding and until all of the commitments relating thereto have been
terminated. Upon such payment and termination, this Pledge Agreement
shall be automatically terminated and the Collateral Agent and the
holders of the Secured Obligations shall, upon the request and at the
expense of the Pledgors, (i) return all certificates and instruments
representing the Pledged Collateral and all instruments of transfer or
assignment delivered to the Collateral Agent pursuant to this Pledge
Agreement, and (ii) forthwith release all of its liens and security
interests hereunder and shall execute and deliver all UCC termination
statements and/or other documents reasonably requested by the Pledgors
evidencing such termination. Notwithstanding the foregoing, all
releases and indemnities provided hereunder shall survive termination
of this Pledge Agreement.
(b) This Pledge Agreement shall continue to be effective or be
automatically reinstated, as the case may be, if at any time payment,
in whole or in part, of any of the Secured Obligations is rescinded or
must otherwise be restored or returned by the Collateral Agent or any
holder of the Secured Obligations as a preference, fraudulent
conveyance or otherwise under any bankruptcy, insolvency or similar
law, all as though such payment had not been made; provided that in the
event payment of all or any part of the Secured Obligations is
rescinded or must be restored or returned, all reasonable costs and
expenses (including, without limitation, reasonable attorneys' fees and
disbursements) incurred by the Collateral Agent or any holder of the
Secured Obligations in defending and enforcing such reinstatement shall
be deemed to be included as a part of the Secured Obligations.
15. Amendments and Waivers. This Pledge Agreement and the provisions
hereof may not be amended, waived, modified, changed, discharged or terminated
except as set forth in the Credit Agreement.
16. Successors in Interest. This Pledge Agreement shall create a
continuing security interest in the Collateral and shall be binding upon each
Pledgor, its successors and assigns, and shall inure,
11
together with the rights and remedies of the Collateral Agent and the holders of
the Secured Obligations hereunder, to the benefit of the Collateral Agent and
the holders of the Secured Obligations and their successors and permitted
assigns; provided, however, that none of the Pledgors may assign its rights or
delegate its duties hereunder without the prior written consent of the requisite
Lenders under the Credit Agreement. To the fullest extent permitted by law, each
Pledgor hereby releases the Collateral Agent and each holder of the Secured
Obligations, and their respective successors and assigns, and any party acting
as attorney for the Collateral Agent or the holders of the Secured Obligations,
from any liability for any act or omission or for any error of judgment or
mistake of fact or law relating to this Pledge Agreement or the Collateral,
except for any liability arising from the gross negligence or willful misconduct
of the Collateral Agent or such holder, or their respective officers, employees
or agents.
17. Notices. All notices required or permitted to be given under this
Pledge Agreement shall be given as provided in the Credit Agreement.
18. Counterparts. This Pledge Agreement may be executed in any number
of counterparts, each of which where so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Pledge Agreement to produce or
account for more than one such counterpart.
19. Headings. The headings of the sections and subsections hereof are
provided for convenience only and shall not in any way affect the meaning or
construction of any provision of this Pledge Agreement.
20. Governing Law; Submission to Jurisdiction; Venue.
(a) THIS PLEDGE AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Any
legal action or proceeding with respect to this Pledge Agreement may be
brought in the state or federal courts located in New York, New York,
and, by execution and delivery of this Pledge Agreement, each Pledgor
hereby irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of such courts. Each
Pledgor further irrevocably consents to the service of process out of
any of the aforementioned courts in any such action or proceeding by
the mailing of copies thereof by registered or certified mail, postage
prepaid, to it at the address for notices pursuant to the terms of the
Credit Agreement, such service to become effective three days after
such mailing. Nothing herein shall affect the right of the Collateral
Agent to serve process in any other manner permitted by law or to
commence legal proceedings or to otherwise proceed against any Pledgor
in any other jurisdiction.
(b) Each Pledgor hereby irrevocably waives 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 Pledge Agreement brought in the courts referred to in subsection
(a) hereof 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.
21. Waiver of Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE LAW,
EACH OF THE PARTIES TO THIS PLEDGE AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS PLEDGE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
12
22. Severability. If any provision of this Pledge Agreement is
determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions.
23. Entirety. This Pledge Agreement, the other Credit Documents and the
other documents relating to the Secured Obligations represent the entire
agreement of the parties hereto and thereto, and supersede all prior agreements
and understandings, oral or written, if any, including any commitment letters or
correspondence relating to the Credit Documents, any other documents relating to
the Secured Obligations, or the transactions contemplated herein and therein.
24. Survival. All representations and warranties of the Pledgors
hereunder shall survive the execution and delivery of this Pledge Agreement, the
other Credit Documents and the other documents relating to the Secured
Obligations, the delivery of the Notes and the extension of credit thereunder or
in connection therewith.
25. Other Security. To the extent that any of the Secured Obligations
are now or hereafter secured by property other than the Pledged Collateral
(including, without limitation, real and other personal property owned by a
Pledgor), or by a guarantee, endorsement or property of any other Person, then
the Collateral Agent shall have the right to proceed against such other
property, guarantee or endorsement upon the occurrence of any Event of Default,
and the Collateral Agent shall have the right, in its sole discretion, to
determine which rights, security, liens, security interests or remedies the
Collateral Agent shall at any time pursue, relinquish, subordinate, modify or
take with respect thereto, without in any way modifying or affecting any of them
or the Secured Obligations or any of the rights of the Collateral Agent or the
holders of the Secured Obligations under this Pledge Agreement, under any of the
other Credit Documents or under any other document relating to the Secured
Obligations.
26. Joint and Several Obligations of Pledgors.
(a) Subject to clause (c) of this Section 26, each of the
Pledgors is accepting joint and several liability hereunder in
consideration of the financial accommodation to be provided by the
holders of the Secured Obligations, for the mutual benefit, directly
and indirectly, of each of the Pledgors and in consideration of the
undertakings of each of the Pledgors to accept joint and several
liability for the obligations of each of them.
(b) Subject to clause (c) of this Section 26, each of the
Pledgors jointly and severally hereby irrevocably and unconditionally
accepts, not merely as a surety but also as a co-debtor, joint and
several liability with the other Pledgors with respect to the payment
and performance of all of the Secured Obligations arising under this
Pledge Agreement, the other Credit Documents and any other documents
relating to the Secured Obligations, it being the intention of the
parties hereto that all the Secured Obligations shall be the joint and
several obligations of each of the Pledgors without preferences or
distinction among them.
(c) Notwithstanding any provision to the contrary contained
herein, in any other of the Credit Documents or in any other documents
relating to the Secured Obligations, the obligations of each Guarantor
under the Credit Agreement and the other Credit Documents shall be
limited to an aggregate amount equal to the largest amount that would
not render such obligations subject to avoidance under Section 548 of
the Bankruptcy Code or any comparable provisions of any applicable
state law.
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27. Regulatory Approvals.
(a) Any provision contained herein to the contrary
notwithstanding, except for the security interests expressly granted
herein or therein or upon the exercise by the Collateral Agent or the
Administrative Agent of rights and remedies in accordance herewith or
therewith and pursuant to clause (b), below, upon the occurrence and
continuation of an Event of Default, this Agreement, the Loan Documents
and the transactions contemplated hereby and thereby (i) do not and
will not constitute, create, or have the effect of constituting or
creating, directly or indirectly, actual or practical ownership of any
Loan Parties by the holders of the Secured Obligations, or control,
affirmative or negative, direct or indirect, by the holders of the
Secured Obligations over the management or any other aspect of the
operation of any Loan Party, which ownership and control remain
exclusively and at all times in such Loan Party or Loral, as the case
may be, and (ii) do not and will not constitute the transfer,
assignment, or disposition in any manner, voluntarily or involuntarily,
directly or indirectly, of any license, permit, certificate or
authorization at any time issued to any Loan Party by the Federal
Communications Commission (the "FCC"), any other federal, state or
local regulatory or governmental bodies applicable to or having
jurisdiction over the Pledgor or any Governmental Authority, or the
transfer of control of any such Loan Party within the meaning of the
Federal Communications Act of 1934, as amended, and the respective
rules and regulations thereunder and thereof, any other federal or
state laws, rules and regulations of other operating municipality
regulatory or governmental bodies applicable to or having jurisdiction
over the Pledgor as well as pursuant to the terms of any franchise,
license or similar operating right held by the Pledgor.
(b) Any provision contained herein to the contrary
notwithstanding, no action, including any foreclosure on, sale,
transfer or other disposition of, or the exercise of any right to vote
or consent, shall be taken hereunder by the Collateral Agent with
respect to any items of the Pledged Collateral unless and until all
applicable requirements (if any) of the FCC under the Federal
Communications Act of 1934, as amended, and the respective rules and
regulations thereunder and thereof, as well as any other federal or
state laws, rules and regulations of other operating municipality
regulatory or governmental bodies applicable to or having jurisdiction
over the Pledgor, have been satisfied with respect to such action and
there have been obtained such consents, approvals and authorizations
(if any) as may be required to be obtained from the FCC, any operating
municipality and any other Governmental Authority under the terms of
any franchise, license or similar operating right held by the Pledgor.
It is the intention of the parties hereto that the Liens in favor of
the Collateral Agent on the Pledged Collateral shall in all relevant
aspects be subject to and governed by said statutes, rules and
regulations as well as the terms of any franchise, license or similar
operating right held by the Pledgor and that nothing in this Agreement
shall be construed to diminish the control exercised by the Pledgor
except in accordance with the provisions of such statutory requirements
and rules and regulations as well as the terms of any franchise,
license or similar operating right held by the Pledgor and the
obtaining in advance of any necessary consents, approvals or
authorizations pursuant thereto. The Pledgor agrees that upon request
by the Collateral Agent from time to time after the occurrence and
during the continuance of an Event of Default it will use its
reasonable best efforts to obtain any governmental, regulatory or third
party consents, approvals or authorizations referred to in this Section
27.
28. Limitation. Notwithstanding anything herein to the contrary, (i)
the obligations of the Pledgors hereunder in respect of the Satellite
Indebtedness shall be limited to the Pledged Collateral hereunder, and (ii) the
obligations of Loral Space & Communications Corporation, a Delaware corporation,
as pledgor hereunder, in respect of all Secured Obligations shall be limited to
the Pledged Collateral hereunder.
14
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15
Each of the parties hereto has caused a counterpart of this Pledge
Agreement to be duly executed and delivered as of the date first above written.
PLEDGORS: LORAL SPACECOM CORPORATION,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
SPACE SYSTEMS/LORAL, INC.
a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
LORAL GROUND SERVICES, L.L.C.,
a Delaware limited liability company
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
LORAL SPACE & COMMUNICATIONS
CORPORATION, a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
LORAL COMMUNICATIONS SERVICES, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
LORAL SPACECOM CORPORATION
PLEDGE AGREEMENT
Accepted and agreed to as of the date first above written.
BANK OF AMERICA, N.A.,
as Collateral Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Managing Director
LORAL SPACECOM CORPORATION
PLEDGE AGREEMENT