Exhibit 2.5.6
PLEDGE AND SECURITY AGREEMENT
PLEDGE AND SECURITY AGREEMENT, dated as of March __, 2004 (this
"Agreement") among: SPACE SYSTEMS/LORAL, INC., a corporation organized under the
laws of the State of Delaware and operating for the time being as a debtor and
debtor-in possession (the "Seller" or "SS/L"; each of the affiliates of the
Seller identified under the caption "AFFILIATE PLEDGORS" on the signature pages
hereof (individually, an "Affiliate Pled" and, collectively, the "Affiliate
Pledgors" and, together with the Seller, the "Obligors and INTELSAT LLC, as the
Purchaser under the Procurement Agreement referred to below (the "Buyer" or
"Secured Party").
The Seller and the Buyer have executed and delivered Contract No.
Intelsat-6770, as of even date herewith for Intelsat Sigmasat Spacecraft and
Associated Equipment and Services (the "Procurement Agreement"), providing,
subject to the terms and conditions thereof, for the construction of a
geosynchronous telecommunications satellite (the "Purchased Satellite") and, in
connection therewith, the delivery of a $50 million cash deposit (the "Deposit")
from the Buyer to Seller on terms and conditions described in the Procurement
Agreement (as defined below).
It is a condition precedent to Buyer's obligation to pay the Deposit to
the Seller under the Procurement Agreement that certain obligations of the
Seller under the Procurement Agreement be secured by a first priority, perfected
security interest in all right, title and interest of the Obligors in certain
collateral in the manner and to the extent described herein.
To induce the Buyer to deliver its Deposit and thereby extend credit to
Seller under the Procurement Agreement and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Obligors have agreed to pledge, charge and grant a security interest in their
respective existing and future right, title and interest in the Collateral (as
hereinafter defined) to the extent described herein until terminated in
accordance with the terms of this Agreement.
Accordingly, the parties hereto agree as follows:
ARTICLE I DEFINITIONS
SECTION 1.01. Defined Terms. As used herein:
"Accounts" has the meaning assigned to such term in paragraph (e) of
Article III.
"ANATEL" means the National Agency of Telecommunications.
"ANATEL Concession" means the license issued by ANATEL to SkynetBrazil for
the provision of EDS Satellite capacity pursuant to the ANATEL Concession
Agreement.
"ANATEL Concession Agreement" means the Agreement of Exploitation of
Rights of Brazilian Satellite for Telecommunications Signals Transport (ANATEL
Concession Agreement), between ANATEL and SkynetBrazil, dated May 5, 1999, as
amended.
"APA" means the Asset Purchase Agreement, dated as of July 15, 2003,
as amended, among Intelsat, Ltd., Intelsat (Bermuda), Ltd., Loral Space &
Communications Corporation, as debtor and debtor-in-possession, SpaceCom
and Loral Satellite, Inc., as debtor and debtor-in-possession.
"Assigned Agreement" has the meaning assigned to such term in paragraph ()
of Article III.
"Boeing Contract" means the Agreement, dated as of October 19, 2000 by and
between The Boeing Company and Skynet/Brazil, as amended.
"Capacity Contracts" means all present and future contracts providing for
sale of EDS Satellite capacity, including the Boeing Contract.
"Cash Equivalents" means (i) securities issued or directly and fully
guaranteed or insured by the United States Government or any agency or
instrumentality thereof having maturities of not more than 12 months from the
date of acquisition, (ii) time deposits, banker's acceptances and certificates
of deposit having maturities of not more than 12 months from the date of
acquisition of any domestic or foreign commercial bank having capital and
surplus in excess of
$500,000,000, which has, or the holding company of which has, a commercial paper
rating meeting the requirements specified in clause (iv) below, (iii) repurchase
obligations with a term of not more than 30 days for underlying securities of
the types described in clauses (i) and (ii) entered into with any bank meeting
the qualifications specified in clause (ii) above, (iv) commercial paper rated
at least A-2 or the equivalent thereof by Standard & Poor's Ratings Group
("S&P") or P-2 or the equivalent thereof by ▇▇▇▇▇'▇ Investors Service, Inc.
("Moody's") and in either case maturing within 270 days after the date of
acquisition, (v) senior corporate obligations rated at least BBB or the
equivalent thereof by S&P or Baa or the equivalent thereof by Moody's and in
either case maturing within 2 years of the date of acquisition and (vi) any
money market fund registered under the Investment Company Act of 1940, as
amended, which invests solely in underlying securities of the types described in
clauses (i) through (iv) above, provided that no more than 25% of the aggregate
amount of Cash Equivalents at any time may be rated lower than A-1 or P-1 or A-
or A3, as the case may be.
"Collateral" has the meaning assigned to such term in Article III.
"Copyrights" has the meaning assigned to such term in paragraph (j) of
Article Ill.
"Documents" has the meaning assigned to such term in paragraph (i) of
Article Ill.
"EDS Contract" means the Estrela do Sul Contract No. LS 130A between
Skynet and SS/L entered into as of 22 February 2000, as amended.
"EDS Satellite" means the satellite described in, constructed under and to
be delivered pursuant to the terms of the EDS Contract, together with all
Deliverable Items (as defined in the EDS Contract) and including, without
limitation, the Intellectual Property.
"Encumbrance" has the meaning assigned to such term in the APA.
"Instruments" has the meaning assigned to such term in paragraph (f) of
Article III.
"Insurance Policies" has the meaning assigned to such term in paragraph
(f) of Section 4.01.
"Intellectual Property" 'means, collectively, all Copyrights, all Patents
and all Trademarks.
"Inventory" has the meaning assigned to such term in paragraph (g) of
Article III.
"Loral Ltd." means Loral Space & Communications Ltd., a company
organized under the laws of Bermuda and operating as a debtor and
debtor-in-possession.
"Launch Insurance" has the meaning assigned to such term in paragraph (i)
of Article II.
"LHL" means Loral Holdings Ltd., a company organized under the laws
of Bermuda.
"LHL Transfer" means the transfer of ownership of LHL from Loral
Ltd. to SpaceCom.
"Patents" has the meaning assigned to such term in paragraph (k) of
Article III.
"Permitted liens" means (i) liens junior and subordinate to the liens
created hereunder provided that the junior secured party agrees in writing in
form and substance satisfactory to Secured Party with Secured Party that (X) it
will not take any action in respect of the Collateral without giving the Secured
Party 180 days' prior written notice, (Y) any proceeds from the Collateral will
be applied first as set forth in Section 5.05 and only thereafter as set forth
in the instruments, agreements or documents governing such junior lien, and (Z)
providing for reasonable and customary provisions for non-interference and
cooperation with the exercise of remedial provisions by the Secured Party; (ii)
liens of record purported to be created by filings under the Uniform Commercial
Code or other applicable law that are not authorized by any Obligor; (iii) liens
for taxes not yet due and payable; and (iv) transfers permitted under the Annex
1.
"Permitted Transactions" means the transactions described in Annex 1
hereto.
"Person" has the meaning assigned to such term in the APA.
"Pledged Collateral" has the meaning assigned to such term in paragraph
(c) of Article III.
"Pledged Stock" has the meaning assigned to such term in paragraph (a) of
Article III.
"Satellite Agreements" means the EDS Contract and the SkynetBrazil EDS
Contract.
"Secured Obligations" means the payment and performance of (x) the
obligation of Seller to refund to Buyer all or any remaining portion of the
unearned Deposit under Articles 20 and 21 of the Procurement Agreement, plus (y)
all obligations of the Seller under Section 6.03 (a) hereof. From and after the
earlier of (i) such payment and performance and (ii) such time as Seller shall
have earned $50 million of payments under the Procurement Agreement, , the
amount of Secured Obligations shall be zero. For clarity, the maximum amount of
Secured Obligations under clause (x) of the first sentence of this definition
shall not exceed $50,000,000 and shall be reduced dollar for dollar as payments
are earned under the Procurement Agreement.
"Security Documents" means this Agreement, the Quota Pledge Agreement,
made as of the date hereof, by and among LHL, Loral Skynet International LLC,
Space/Brazil, and Intelsat (Bermuda), Ltd. (the "Space Quota Agreement"), the
Quota Pledge Agreement, made as of the date hereof, by and among Space/Brazil,
Loral Skynet International LLC, Skynet/Brazil, and Intelsat (Bermuda), Ltd. (the
"Skynet Quota Agreement", and together with the Space Quota Agreement, the
"Quota Agreements"), all financing statements filed and other filings made in
respect thereof, and any other document delivered by any Obligor to confirm or
perfect the security interests intended to be created hereby.
"Security Event of Default" means (i) the termination of the Procurement
Agreement pursuant Article 20.B, 21.A, or 21.B thereof and the failure of Seller
to repay the Deposit (or portion thereof) in the amount and within the time
period specified in the Procurement Agreement, and (ii) any Obligor fails to
observe, perform or comply with any of the provisions or terms contained in any
Security Document or shall be in breach of any representation or warranty
contained herein and such failure or breach could reasonably be expected to have
a material adverse effect on the Collateral, taken as a whole, or the ability or
such Obligor to perform its obligations under this Agreement, taken as a whole,
or the other Security Documents and such failure or breach shall continue for a
period of thirty (30) days (or, if such failure cannot be reasonably cured
within such thirty (30) day period but is capable of being cured within ninety
(90) days, then for a period of ninety (90) days, provided such Obligor
continues to exercise diligence to effect such cure throughout such period)
after written notice of such failure has been given by Purchaser to Seller.
"Skynet" means Loral Skynet, a division of SpaceCom.
"SkynetBrazil" means Loral Skynet do Brasil Ltda., a company
organized under the laws of Brazil.
"Skynet/Brazil EDS Contract" means the Contract between SkynetBrazil and
Loral Skynet, a division of SpaceCom, dated March 10, 2003, for the sale and
purchase of the EDS Satellite.
"SpaceCom" means Loral SpaceCom Corporation, a corporation organized under
the laws of the State of Delaware and operating as a debtor and
debtor-in-possession.
"Space/Brazil"means Loral Space do Brasil Ltda., a company organized
under the laws of Brazil and the 99.99997% share holder of Skynet/Brazil.
"Trademarks" has the meaning assigned to such term in paragraph (1) of
Article III.
"Uniform Commercial Code" means the Uniform Commercial Code as in effect
from time to time in the State of New York.
SECTION 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, including an amendment
and restatement thereof, but 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 or, in
the case of any Governmental Authority, any entity succeeding to any or all of
the functions of such Governmental Authority, (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 Sections and Annexes shall be construed to refer to
Sections of, and Annexes 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.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Each Obligor represents and warrants to the Secured Party that as of the
date hereof:
(a) Such Obligor (i) is a company validly existing and in good standing
under the laws of the jurisdiction of its organization, (ii) has all
requisite power and authority to own its property and to carry on its
business as now conducted and as proposed to be conducted, (iii) is
qualified to do business in, and is in good standing in, every
jurisdiction where such qualification is required, except where the
failure to so qualify could not reasonably be expected to have a material
adverse effect on the Collateral or the ability of such Obligor to perform
its obligations under this Agreement and the other Security Documents to
which it is a party, and (iv) has the power and authority to execute,
deliver and perform its obligations under the Satellite Agreements to
which it is a party, this Agreement and the other Security Documents to
which it is a party.
(b) The execution, delivery and performance of the Satellite Agreements
and Security Documents to which it is a party (i) have been duly
authorized by all requisite company action and (ii) will not (A) violate
(x) any provision of the certificate or articles of incorporation or other
constitutive documents or by-laws (or bye-laws) of such Obligor or of any
provision of any material law, statute, rule or regulation, (y) any
judgment, writ, injunction, decree of order applicable to such Obligor or
(z) any provision of any material indenture, material agreement or other
material instrument to which such Obligor is a party or by which the
Collateral is bound (other than prohibitions against the pledge and
assignment of Capacity Contracts to the extent such prohibitions are not
rendered ineffective under the Uniform Commercial Code), in each case in a
manner which could reasonably be expected to have a material adverse
effect on the Collateral or the ability of such Obligor to perform its
obligations under this Agreement or the other Security Documents to which
it is a party (other than the approvals described in the proviso set forth
in paragraph (d) below) or (B) result in the creation or imposition of any
Encumbrance upon or with respect to any Collateral now owned or hereafter
acquired by such Obligor (other than any Encumbrance created pursuant to
or permitted by any Security Document or created pursuant to the Satellite
Agreements).
(c) Each of the Satellite Agreements and Security Documents to which it is
a party has been duly executed and delivered by such Obligor and
constitutes a legal, valid and binding obligation of such Obligor
enforceable against such Obligor in accordance with its terms.
(d) No action, consent or approval of, registration or filing with or any
other action by any governmental authority is or will be required in
connection with the execution, delivery and performance of the Satellite
Agreements or Security Documents, except for (i) the filing of Uniform
Commercial Code financing statements, (ii) approvals that may be required
pursuant to the terms of the ANATEL Concession Agreement, (iii) as
contemplated in Section 4.05 hereof, (iv) the registration of security
interests granted hereunder by Loral Ltd. under the laws of Bermuda, (v)
the consent of the Bermuda Monetary Authority to certain. of the Permitted
Transactions contemplated hereby, (vi) other immaterial approvals,
registrations and filings, (vii) the registration of the Security
Documents before the Registry of Deeds and Documents in Brazil and (viii)
such other actions consents, approvals, registrations or filings that have
been taken, obtained or made.
(e) Such Obligor is the sole beneficial owner of the Collateral in which
it purports to grant a security interest pursuant to Article III and no
Encumbrance exists or will exist upon such Collateral at any time (and no
right or
option to acquire the same exists in favor of any other Person), except
for: (i) Encumbrances permitted under the Security Documents, (ii)
Encumbrances created or provided for by the Satellite Agreements or the
agreements governing the LHL Transfer in favor of an Obligor, and (iii)
the pledges, charges and security interests in favor of the Secured Party
created or provided for in the Security Documents, which pledges, charges
and security interests constitute first priority perfected pledges,
charges, and security interests in and to all of such Collateral.
(f) The Pledged Stock under the name of such Obligor in Annex 2 is duly
authorized, validly issued, and non-assessable and none of the Pledged
Stock is or will be subject to any contractual restriction, or any
restriction under the charter, by-laws (or bye-laws) or other
organizational documents of the respective issuer thereof, upon the
transfer of such Pledged Stock (except for any such restriction in the
Security Documents or in the agreements governing the LHL Transfer or as
required by law or the ANATEL Concession Agreement).
(g) Except as indicated on Annex 2, the Pledged Stock identified in Annex
2 constitutes all of the issued and outstanding ownership interests of the
issuer thereof on the date hereof (whether or not registered in the name
of any Obligor) and said Annex 2 correctly identifies, as at the date
hereof, the respective issuers thereof, the type or class and par value of
such ownership interests (if any), the respective number of shares or
units thereof, and registered owners thereof.
(h) Seller has delivered to Buyer true and correct and complete copies of
each of the Satellite Agreements, the ANATEL Concession Agreement and the
Boeing Contract as in effect on the date hereof.
(i) Seller has obtained launch insurance (the "Launch Insurance") for the
EDS Satellite a true and correct copy of which has previously been
delivered to the Secured Party together with appropriate certificates of
insurance and endorsements designating the Secured Party as a loss payee
and providing for direct payment of proceeds as provided in Section
4.04(e) hereof; the Launch Insurance is in full force and effect; and no
material dispute exists between the Obligors and the insurers of the
Launch Insurance with respect to the provision of coverage pursuant to the
terms of the Launch Insurance policy.
(j) Except as noted on Annex 3 hereto, no Obligor has received written
notice from a counterparty to the ANATEL Concession or the Boeing Contract
asserting that such Obligor has failed to comply, in any material respect,
with such agreements.
(k) The Collateral in Article III, sections (j) - (m) includes all rights
to use intellectual property as are necessary to be conveyed by a
satellite manufacturer to a purchaser of a satellite to enable such
purchaser to control and operate the EDS Satellite in a commercially
appropriate and lawful manner.
ARTICLE III
COLLATERAL
As collateral security for the prompt payment in full when due (whether at
stated maturity, by acceleration or otherwise) of the Secured Obligations, (i)
each of the Seller and SpaceCom hereby pledges, assigns, charges, hypothecates
and transfers to the Secured Party, and grants to, and charges in favor of, the
Secured Party a charge, lien on and security interest in, all of Seller's and
SpaceCom's right, title and interest in the EDS Satellite wherever located, and
whether on earth or in orbit, and (ii) each Obligor hereby pledges, assigns,
charges, hypothecates and transfers to the Secured Party, and grants to, and
charges in favor of, the Secured Party a charge, lien on and security interest
in, all of such Obligor's right, title and interest in the following additional
property, whether now owned by such Obligor or hereafter acquired and whether
now existing or hereafter coming into existence (such property, together with
the EDS Satellite, all being collectively referred to herein as "Collateral"):
(a) all shares of capital stock, share capital or other evidence of
beneficial interest of whatever class of each corporation or company
identified in Annex 2 in each case together with the certificates
evidencing the same if such shares are in certificated form (collectively,
the "Pledged Stock");
(b) all shares, interests, securities, moneys or other property
representing a dividend on any of the Pledged Stock, or representing a
distribution or return of capital upon or in respect of the Pledged Stock,
or resulting from a split-up, revision, consolidation, reclassification or
other like change of the Pledged Stock or otherwise received in exchange
therefor, and all options, warrants and similar rights issued to the
holders of, or otherwise in respect of, the Pledged Stock;
(c) without affecting the obligations of such Obligor under any provision
prohibiting such action hereunder, in the event of any consolidation,
amalgamation or merger of a subsidiary identified in Annex 2 in which such
subsidiary is not the surviving entity, all ownership interests of
whatever class owned by such Obligor of the successor entity formed by or
resulting from such consolidation, amalgamation or merger (the Pledged
Stock, together with all shares, interests, securities, moneys or property
as may from time to time be pledged or charged hereunder pursuant to
clause (a) or (b) above and this clause (c) being herein, and the proceeds
of and to any such property and, to the extent related to any such
property or such proceeds, all books, correspondence, credit files,
records, invoices and other papers, collectively called the "Pledged
Collateral");
(d) the following contracts and agreements to which such Obligor is a
party:
(i) the Boeing Contract;
(ii) the Satellite Agreements; and
(iii) all other agreements providing for sale of EDS Satellite capacity;
(said contracts, agreements and obligations, as so amended, supplemented
renewed or modified, including any such replacement or substitution
contracts, agreements and obligations, being, individually, an "Assigned
Agreement", and, collectively, the "Assigned Agreements"), including,
without limitation, (1) all rights of such Obligor to receive moneys due
and to become due under or pursuant to the Assigned Agreements, (2) all
rights to receive property, assets, services or other performance
thereunder, (3) all rights of such Obligor under the Assigned Agreements
to which it is a party to receive return of any premiums for or proceeds
of any insurance, payment and/or performance bond, indemnity, warranty or
guaranty or to receive condemnation proceeds thereof, (4) all claims of
such Obligor for damages arising out of or for breach of or default under
the Assigned Agreements and (5) all rights of such Obligor to terminate,
amend, supplement, modify or waive performance under the Assigned
Agreements, to perform thereunder and to compel performance and otherwise
to exercise all remedies thereunder, in each case as such contract,
agreement and obligation may be amended, supplemented, renewed or
otherwise modified, including, without limitation, any agreement, contract
or document replacing or substituting for such contract, agreement or
obligation from time to time;
(e) subject to the final paragraph of this Article III, all accounts and
general intangibles (each as defined in the Uniform Commercial Code, but
excluding all intellectual property of every type (including patents,
trademarks and copyrights) other than Intellectual Property) constituting
any right of such Obligor to the payment of money under or in respect of
the Assigned Agreements, whether at law or in equity (whether or not
earned by performance and whether arising directly or indirectly and
including claims for reimbursement, contribution, indemnity and
subrogation) (such accounts and general intangibles being herein called
collectively "Accounts");
(f) all instruments, chattel paper or letters of credit (each as defined
in the Uniform Commercial Code) of such Obligor evidencing, representing,
arising from or existing in respect of, relating to, securing or otherwise
supporting the payment of, any of the Accounts, including (but not limited
to) promissory notes, drafts, bills of exchange and trade acceptances
(herein collectively called "Instruments");
(g) all spare parts inventory, consumable supplies inventory and
maintenance materials inventory and raw materials and work in progress
therefor, finished goods thereof, and materials used or consumed in the
manufacture or production thereof relating to the EDS Satellite and
delivered to Skynet pursuant to the EDS Contract (herein collectively
called "Inventory");
(h) all rights, claims and benefits of such Obligor in, and against any
Person arising out of, relating to or in connection with, the EDS
Satellite purchased by such Obligor, including, without limitation, any
such rights, claims or benefits against any Person storing or transporting
the EDS Satellite but excluding any rights, title, claims
and benefits under any insurance policies, whether owned by or payable to
such Obligor, other than the Insurance Policies (as hereinafter defined);
(i) all documents of title (as defined in the Uniform Commercial Code) or
other receipts of such Obligor covering, evidencing or representing the
EDS Satellite or Inventory (herein collectively called "Documents");
(j) all copyrights, copyright registrations and applications for copyright
registrations, including, without limitation, all renewals and extensions
thereof, the right to recover for all past, present and future
infringements thereof, and all other rights of any kind whatsoever
accruing thereunder or pertaining thereto, in each case, only to the
extent that such copyrights, copyright registrations, applications for
copyright registrations and other rights are actually included in the sale
of the EDS Satellite pursuant to the EDS Contract and then only to the
extent so included in the EDS Contract (herein collectively called
"Copyrights");
(k) all patents and patent applications, including, without limitation,
the inventions and improvements described and claimed therein together
with the reissues, divisions, continuations, renewals, extensions and
continuations-in-part thereof, all income, royalties, damages and payments
now or hereafter due and/or payable under and with respect thereto,
including, without limitation, damages and payments for all past, present
and future infringements thereof, the right to ▇▇▇ for past, present and
future infringements thereof, and all rights corresponding thereto
throughout the world, in each case, only to the extent that such patents,
patent applications and the rights to such income, royalties, damages and
payments and other rights are actually included in the sale of the EDS
Satellite pursuant to the EDS Contract and then only to the extent so
included in the EDS Contract (herein collectively called "Patents");
(1) all trade names, trademarks and service marks, logos, trademark and
service ▇▇▇▇ registrations, and applications for trademark and service
▇▇▇▇ registrations (including, without limitation, all renewals of
trademark and service ▇▇▇▇ registrations, and all rights corresponding
thereto throughout the world relating to the ownership, operation,
exploitation or use, but excluding any such registration that would be
rendered invalid, abandoned, void or unenforceable by reason of its being
included as part of the Collateral), the right to recover for all past,
present and future infringements thereof, all other rights of any kind
whatsoever accruing thereunder or pertaining thereto, in each case, only
to the extent that such trade names, trademarks, service marks, logos,
registrations, applications and other rights are actually included in the
sale of the EDS Satellite pursuant to the EDS Contract and then only to
the extent so included in the EDS Contract (herein collectively called
"Trademarks");
(m) all information, identification of suppliers, data, plans, blueprints,
designs, models, recorded knowledge, surveys, architectural, structural,
mechanical and engineering plans and specifications, studies, reports and
drawings, test reports, manuals, material standards, processing standards,
performance standards, catalogs, computer and automatic machinery software
and programs, all accounting information and all media in which or on
which any information or knowledge or data or records may be recorded or
stored and all computer programs used for the compilation or printout of
such information, knowledge, records or data, prepared by or on behalf of
such Obligor for the operation of the EDS Satellite, in each case, only to
the extent that such items are actually included in the sale of the EDS
Satellite pursuant to the EDS Contract and then only to the extent so
included in the EDS Contract;
(n) the Insurance Policies, whether owned by or payable to such Obligor,
all loss proceeds and other amounts payable to such Obligor thereunder,
any indemnity, warranty or guaranty in respect of the property insured
thereby, and all eminent domain or similar proceeds or awards with respect
thereto and all other rights of such Obligor with respect thereto;
(o) all books, correspondence, credit files, records, invoices, ledgers
and other papers of every kind and nature, including without limitation
all tapes, cards, computer runs and other papers and documents in the
possession or under the control of such Obligor or any computer bureau or
service company from time to time acting for such
Obligor relating to the ownership, lease, sale, construction, use,
operation or exploitation of the EDS Satellite necessary for the operation
of the EDS Satellite, provided that, solely with respect to the Seller,
SpaceCom and Loral Ltd., the items set forth in this clause (o) shall be
limited to include only such items as are actually included in the sale of
the EDS Satellite pursuant to the EDS Contract and then only to the extent
so included in the EDS Contract; and
(p) all proceeds, products, offspring, rents, profits, royalties,
revenues, issues, income, benefits, accessions, additions, substitutions
and replacements of and to any of the property of such Obligor
constituting Collateral under the preceding clauses of this Section
(including, without limitation, all causes of action, claims and
warranties now or hereafter held by any Obligor in respect of any of the
Collateral listed above).
Notwithstanding the foregoing, (i) the Collateral does not include (1) any
account (as defined in the Uniform Commercial Code), contract or general
intangible (as defined in the Uniform Commercial Code) which contains, after
taking into account Sections 9-406 through 9-408 of the applicable Uniform
Commercial Code or other applicable law, a valid and enforceable prohibition on
the creation, perfection or enforcement of a security interest, but only to the
extent and for the duration of such prohibition, or (2) with respect to any
property pledged by an Obligor organized under the laws of Brazil, any equipment
required to be excluded for SkynetBrazil to comply with its obligation under
Brazilian laws, regulations and/or the ANATEL Concession Agreement, and (ii)
nothing herein shall create an obligation on the part of any Obligor to pay or
transfer to the Secured Party, or a restriction on the Obligors' use of, any
cash Collateral (other than cash proceeds from the Insurance Policies, which
shall be governed by Section 4.04(e)) of this Agreement, other than during a
period during which a Security Event of Default has occurred and is continuing.
ARTICLE IV
COVENANTS AND OTHER AGREEMENTS
In furtherance of the grant of the pledge, charge and security interest pursuant
to Article III and subject to Article V, the Obligors hereby jointly and
severally agree with the Secured Party as follows:
SECTION 4.01. Delivery and Other Perfection. Each Obligor shall:
(a) if any of the shares, interests, securities, moneys or property
required to be pledged or charged by such Obligor under clauses (a), (b)
and (c) of Article III are received by such Obligor, promptly either (i)
transfer and deliver to the Secured Party such shares or securities so
received by such Obligor (together with the certificates for any such
shares and securities duly endorsed in blank or accompanied by undated
stock powers or share transfer forms duly executed in blank), all of which
thereafter shall be held by the Secured Party pursuant to the terms of
this Agreement, as part of the Collateral, (ii) with respect to any
Pledged Collateral that is not evidenced by a certificate, execute and
deliver written instructions to the issuer thereof to register the
security interest created hereunder in such Pledged Collateral in the
registration books maintained by such issuer for such purpose and cause
the respective Obligor to execute and deliver to the Secured Party a
written confirmation to the effect that the security interest created
hereunder in such Pledged Collateral has been duly registered in such
registration books, all in form and substance satisfactory to the Secured
Party or (iii) take such other action as the Secured Party shall
reasonably deem necessary or appropriate to duly perfect the security
interest created hereunder in such shares, interests, securities, moneys
or property in said clauses (a), (b) and (c);
(b) deliver, assign and pledge to the Secured Party any and all
Instruments included in the Collateral, endorsed and/or accompanied by
such instruments of assignment and transfer in such form and substance as
the Secured Party may reasonably request; provided that so long as no
Security Event of Default shall have occurred and be continuing, such
Obligor may retain for collection in the ordinary course any Instruments,
Accounts or General Intangibles received by such Obligor and the Secured
Party shall, promptly upon request of such Obligor, make appropriate
arrangements for making any Instrument pledged or assigned by such Obligor
available to such Obligor for purposes of presentation, collection or
renewal (any such arrangement to be effected, to the extent reasonably
deemed appropriate by the Secured Party, against a trust receipt or like
document);
(c) give, execute, deliver, file and/or record any financing statement,
form, notice, instrument, document, agreement or other papers that may be
necessary or desirable (in the reasonable judgment of the Secured Party)
to create, preserve, perfect or validate the security interest granted
pursuant hereto or to enable the Secured Party to
ensure the priority of, or exercise and enforce its rights hereunder with
respect to, such pledge, charge and security interest (it being understood
that the provisions of this Section will apply to all Collateral, whether
personal property or real property, whether tangible or intangible, and
wherever located and whenever acquired, including, without limitation,
Collateral located outside the United States or in space), including,
without limitation, when a Security Event of Default has occurred and is
continuing, but subject to receipt of required regulatory approvals (which
each Obligor shall use its best efforts to obtain and maintain in effect)
causing any or all of the Pledged Collateral to be transferred of record
into the name of the Secured Party or its nominee (and the Secured Party
agrees that if any Pledged Collateral is transferred into its name or the
name of its nominee, the Secured Party will thereafter promptly give to
the respective Obligor copies of any notices and communications received
by it with respect to the Pledged Collateral pledged or charged by such
Obligor hereunder), provided that notices to account debtors or
unaffiliated parties in respect of any Accounts, Instruments or other
Collateral referred to in clause (i) of Article III shall be subject to
the provisions of clause (h) below;
(d) keep full and accurate books and records in accordance with generally
accepted business practices relating to the Collateral, and stamp or
otherwise ▇▇▇▇ such books and records in such manner as the Secured Party
may reasonably require in order to reflect the security interests granted
by this Agreement;
(e) upon reasonable notice, at any time during normal business hours,
permit representatives of the Secured Party to (i) inspect and make
abstracts from its books and records pertaining to the Collateral, and
(ii) be present at such Obligor's place of business to receive copies of
all communications and remittances relating to the Collateral, and forward
copies of any material notices or. material communications received by
such Obligor with respect to the Collateral, all in such manner as the
Secured Party may reasonably require; provided, however that no Obligor
shall be obligated to disclose any competitively sensitive information
other than during the period in which a Security Event of Default has
occurred and is continuing;
(f) (i) maintain the Launch Insurance in full force and effect, (ii) upon
the expiry of Launch Insurance, cause "in orbit" coverage (with such
exclusions as the Obligors deem in good faith to be appropriate) to be
maintained on the EDS Satellite at least equal to the amount of the
Secured Obligations, if such coverage is available on commercially
reasonable terms as determined in good faith by the Obligors (such "in
orbit" coverage, together with the Launch Insurance, the "Insurance
Policies"), and (iii) designate prior to the date hereof and thereafter
maintain (pursuant to endorsements or other documents appropriate for the
purpose) the Secured Party as a loss payee in respect of all Insurance
Policies (to the extent of its interest therein with respect to the
Secured Obligations) and, in connection therewith, providing that the
first $50 million (or such lesser- amount as may then constitute Secured
Obligations) be paid directly and solely to the Secured Party as set forth
in Section 4.04(e) of this Agreement; provided that at any time when the
Secured Obligation shall be less than the amount for which the Secured
Party has been so designated a loss payee, the Secured Party will
cooperate with the Obligors to amend such endorsements or other documents
to reduce such amount to an amount equal to the then outstanding Secured
Obligations;
(g) within twenty (20) days after the end of each calendar quarter,
provide health status reports for the EDS Satellite to the Secured Party
as of the last day of such quarter, summarizing all spacecraft related
incidents and anomalies known to the Obligors and the status of the
subsystems on the EDS Satellite; and
(h) upon the occurrence and during the continuance of any Security Event
of Default, upon request of the Secured Party, promptly notify (and such
Obligor hereby authorizes the Secured Party so to notify) each account
debtor in respect of any Accounts or Instruments that such Collateral has
been assigned to the Secured Party hereunder, and that any payments due or
to become due in respect of such Collateral are to be made directly to the
Secured Party to be applied to the payment of the Secured Obligations.
SECTION 4.02. Other Financing Statements and Encumbrances. Without the
prior written consent of the Secured Party, no Obligor shall authorize to be
filed, in any jurisdiction, any financing statement or like instrument with
respect to the Collateral in which the Secured Party is not named as the sole
secured party except as to Permitted Liens.
SECTION 4.03. Preservation of Rights. The Secured Party shall not be
required to take steps necessary to preserve any rights against prior
parties to any of the Collateral.
SECTION 4.04. Special Provisions Relating to Certain Collateral.
(a) Pledged Collateral.
(i) So long as no Security Event of Default shall have occurred and be
continuing, the Obligors shall have the right to exercise all voting, consensual
and other powers of ownership pertaining to the Pledged Collateral, provided
that each Obligor agrees that it will not vote the Pledged Collateral pledged or
charged by it hereunder in any manner that is in violation of the terms of the
Security Documents; and the Secured Party shall execute and deliver to the
Obligors or cause to be executed and delivered to the Obligors all such proxies,
powers of attorney, dividend and other orders, and all such instruments, without
recourse, as the Obligors may reasonably request for the purpose of enabling the
Obligors to exercise the rights and powers that they are entitled to exercise
pursuant to this paragraph (a)(i).
(ii) Nothing in this Agreement shall restrict any Subsidiary of any
Obligor set forth in Annex 2 from declaring and paying to any Obligor any
dividends or distributions in respect of its ownership interests held by the
Obligor, provided that following the occurrence and during the continuance of a
Security Event of Default all such dividends and distributions shall be paid
directly to a segregated interest-bearing cash collateral account established by
and in the name of the Secured Party (for the benefit of such Obligor) and shall
be held therein as additional Collateral hereunder. If, notwithstanding the
foregoing, such dividends or distributions shall be paid to any Obligor
following the occurrence and during the continuance of a Security Event of
Default, the same shall be held by such Obligor in trust for the Secured Party
and the other Secured Party, segregated from the other funds of such Obligor,
and promptly turned over to the Secured Party for deposit into the aforesaid
account.
(b) Assigned and Other Agreements. Anything herein to the contrary
notwithstanding, each Obligor party to any Assigned Agreement or other relevant
agreement shall remain liable under such Assigned Agreement or other agreement
to the extent set forth therein to perform all of its duties and obligations
thereunder to the same extent as if this Agreement had not been executed. The
exercise by the Secured Party of any of the rights hereunder shall not release
any Obligor from any of its duties or obligations under any Assigned Agreement
or any such other agreement, except to the extent provided therein or any
consent and agreement relating thereto and upon foreclosure and assignment of
such Assigned Agreement. The Secured Party shall have no obligation or liability
under any Assigned Agreement or such other agreement, by reason of the existence
of this Agreement, nor shall the Secured Party be obligated to perform any of
the obligations or duties of any Obligor thereunder or to take action to collect
or enforce any claim for payment assigned hereunder, except to the extent
provided therein or any such consent and agreement. If any Obligor fails to
perform any agreement contained herein or in any of the Assigned Agreements or
other agreements constituting part of the Collateral required to be performed by
such Obligor, within 30 days after receipt by the Seller of written notice from
the Secured Party informing it of such failure, the Secured Party may itself
perform, or cause the performance of, such agreement, and the expenses of the
Secured Party incurred in connection therewith shall be payable by the Company
and shall be Secured Obligations entitled to the benefits of the collateral
security provided pursuant to Article III.
(c) Intellectual Property.
(i) For the purpose of enabling the Secured Party to exercise rights and
remedies under Section 5.01 at such time as the Secured Party shall be lawfully
entitled to exercise such rights and remedies, and for no other purpose, each
Obligor hereby grants to the Secured Party, to the extent assignable, an
irrevocable, non-exclusive license (exercisable without payment of royalty or
other compensation to such Obligor) to use, assign, license or sublicense any of
the Intellectual Property now owned or hereafter acquired by such Obligor,
wherever the same may be located, including in such license reasonable access to
all media in which any of the licensed items may be recorded or stored and to
all computer programs used for the compilation or printout thereof.
(ii) Notwithstanding anything contained herein to the contrary, so long as
no Security Event of Default shall have occurred and be continuing, the Obligors
will be permitted to exploit, use, enjoy, protect, license, sublicense, assign,
sell, dispose of or take other actions with respect to the Intellectual Property
in the ordinary course of the business of the Obligors. In furtherance of the
foregoing, unless a Security Event of Default shall have occurred and be
continuing the Secured Party shall from time to time, upon the request of the
respective Obligor through the Company, execute and deliver any instruments,
certificates or other documents, in the form so requested, that such Obligor
through the Company shall have certified are appropriate (in their judgment) to
allow them to take any action permitted above (including relinquishment of the
license provided pursuant to paragraph (i) immediately above as to any specific
Intellectual Property). Further, upon the
payment in full of all of the Secured Obligations and cancellation or
termination of the Commitments or earlier expiration of this Agreement or
release of the Collateral, the Secured Party shall grant back to the Obligors
the license granted pursuant to said paragraph (i). The exercise of rights and
remedies under Section 5.01 by the Secured Party shall not terminate the rights
of the holders of any licenses or sublicenses theretofore granted by the
Obligors in accordance with the first sentence of this paragraph (ii).
(iii) The security interests granted by each Obligor hereunder in
Intellectual Property are intended to assure the ownership, operation,
exploitation and use of the EDS Satellite by Secured Party or any transferee
following foreclosure, and the Secured Party shall not have any right to sell or
otherwise transfer any Intellectual Property independently of a transfer of the
EDS Satellite to a buyer on foreclosure. In addition, so long as the foregoing
license to the Intellectual Property is available to assure the effective
ownership, operation, exploitation and use of the EDS Satellite, neither the
Secured Party nor any successor shall have any right to acquire ownership
thereof.
(d) EDS Satellite. Each Obligor agrees and acknowledges that (i) the
Collateral includes a pledge by the Seller of the EDS Satellite, (ii) that the
Secured Party intends to perfect its security interest in and security interest
on such satellite, (iii) that the Obligors anticipate that, in due course,
ownership of the EDS Satellite is expected to be sold by Seller to Skynet and by
Skynet to SkynetBrazil, and (iv) that any such sale of the EDS Satellite is and
shall at all times be permitted pursuant to the terms hereof, provided, however,
that any transfer thereof shall be fully subject, in all respects, to the
Secured Party's continuing security interest therein until released upon the
payment and performance in full of all Secured Obligations.
Without limiting in any respect any other provisions of this Agreement,
each Obligor agrees to assist the Secured Party in achieving and maintaining
perfection of its security interest in the EDS Satellite through whatever method
or methods the Secured Party may from time to time reasonably request, including
(i) filing UCC financing statements on the basis that satellites constitute
"mobile goods" under the Uniform Commercial Code, (ii) filing UCC financing
statements or other security interest perfection documents in each jurisdiction
in which the satellite is manufactured, integrated or processed, from where any
satellite is launched, from where it is controlled or in which it may from time
to time be deemed located to the extent such filing in such jurisdiction is
reasonably required in order to perfect and maintain the perfection of the
Secured Party's security interests therein and security interest thereon, or
priority (iii) taking all actions required to be consistent with present and
future practices of third-party creditors intending to perfect security
interests in satellites owned by United States persons launched from any
location and (iv) taking all actions reasonably required from time to time to
create, maintain, ensure the priority of, and perfect security interests in
satellites like the EDS Satellite (both before and after launch and while in
orbit and prior to and after any permitted sale) as specified in any United
States, foreign or international law, regulation, convention or treaty relating
to the creation, perfection and/or priority of security interests and security
interests in satellites.
(e) Insurance. All cash proceeds of Insurance Policies, up to the maximum
amount of the then outstanding Secured Obligations shall be paid to and held by
the Secured Party as cash collateral hereunder in an account in Seller's name
pursuant to a control agreement in customary form, pursuant to which Secured
Party has exclusive control thereof (including, for the avoidance of doubt and
without limitation, the right to make withdrawals in accordance with the terms
of this Agreement without consent of the Seller). The Secured Party agrees that
it will invest any such cash collateral only in Cash Equivalents. Proceeds of
such investments shall be held by the Secured Party as additional collateral
hereunder until it holds cash collateral (or investments thereof) equal to the
amount of the outstanding Secured Obligations, and thereafter the Secured Party
shall promptly pay such excess over to the Seller.
(f) Other Cash Collateral. Notwithstanding anything herein contained to
the contrary, so long as no Security Event of Default shall have occurred and be
continuing, the Obligors will be permitted without restriction to use any cash
Collateral (other than cash proceeds from the Insurance Policies, which shall be
governed by Section 4.04(e) of this Agreement) and nothing herein shall create
any obligation for an Obligor to transfer such cash Collateral to the Secured
Party.
SECTION 4.05. TT&C Deliverables. For the purpose of enabling the Secured
Party to exercise rights and remedies under Section 5.01, at such time as the
Secured Party shall be lawfully entitled to exercise such rights and remedies
the Obligors will furnish Buyer with the documentation, data and software
specified in Annex 4 hereto, one (1) set of encryption keys that are compatible
with the EDS spacecraft secure command system and one (1) command encryptor, in
each case which shall conform with the requirements of Exhibit A to the EDS
Contract (collectively, the "Deliverables"),
subject to all requisite government approvals and compliance with all
governmental procedures, and agree to use their respective commercially
reasonable efforts to assist the Secured Party in obtaining such approvals and
complying with such procedures.
The Buyer acknowledges that its access to certain of the Collateral will
be subject to U.S. laws ("Restricted Deliverables"), including without
limitation, U.S. export control laws. Accordingly, Buyer agrees that
notwithstanding anything contained herein to the contrary, Buyer shall not take
any action that would constitute a violation of applicable U.S. laws and shall
obtain all such approval and consent as may be necessary for it to obtain access
to the Restricted Deliverables, including without limitation, such approvals and
consents as may be required under U.S. export control laws.
Notwithstanding anything contained herein to the contrary, Buyer shall
also not take any action relating to the Deliverables that would constitute a
violation of applicable Brazilian laws and regulations or of the ANATEL
Concession Agreement; or (ii) permit early termination or cause forfeiture of
the ANATEL Concession.
ARTICLE V
EVENTS OF DEFAULT; REMEDIES
SECTION 5.01. Security Events of Default. During the period during
which a Security Event of Default shall have occurred and be continuing:
(a) each Obligor shall, at the request of the Secured Party, assemble the
Collateral owned by it at such place or places, reasonably convenient to both
the Secured Party and such Obligor, designated in its request;
(b) the Secured Party may make any reasonable compromise or settlement
deemed desirable with respect to any of the Collateral and may extend the time
of payment, arrange for payment in installments, or otherwise modify the terms
of, any of the Collateral;
(c) the Secured Party shall have all of the rights and remedies with
respect to the Collateral of a secured party under the Uniform Commercial Code
(whether or not said Code is in effect in the jurisdiction where the rights and
remedies are asserted) and such additional rights and remedies to which a
secured party is entitled under the laws in effect in any jurisdiction where any
rights and remedies hereunder may be asserted, including, without limitation,
the right, to the maximum extent permitted by law, to exercise all voting,
consensual and other powers of ownership pertaining to the Collateral as if the
Secured Party were the sole and absolute owner thereof (and each Obligor agrees
to take all such action as may be reasonably necessary to give effect to such
right) and the power of sale and other powers specified in the Conveyance ▇▇▇
▇▇▇▇ of Bermuda, as varied or amended by this Agreement;
(d) the Secured Party in its discretion may, in its name or in the name of
the Obligors or otherwise, demand, ▇▇▇ for, collect or receive any money or
property at any time payable or receivable on account of or in exchange for any
of the Collateral, but shall be under no obligation to do so; and
(e) the Secured Party may, upon 30 days' prior written notice to the
Obligors of the time and place, with respect to the Collateral or any part
thereof that shall then be or shall thereafter come into the possession, custody
or control of the Secured Party or any of their respective agents, sell,
transfer, lease, assign or otherwise dispose of all or any part of such
Collateral, at such place or places as the Secured Party deems best, and for
cash or for credit or for future delivery, at public or private sale, without
demand of performance or notice of intention to effect any such disposition or
of the time or place thereof (except such notice as is required above or by
applicable statute and cannot be waived), and any Secured Party or anyone else
may be the purchaser, transferee, lessee, assignee or recipient. of any or all
of the Collateral so disposed of at any public sale (or, to the extent permitted
by law, at any private sale) and thereafter hold the same absolutely, free from
any claim or right of whatsoever kind, including any right or equity of
redemption (statutory or otherwise), of the Obligors, any such demand, notice
and right or equity being hereby expressly waived and released. The Secured
Party may, without notice or publication, adjourn any public or private sale or
cause the same to be adjourned from time to time by announcement at the time and
place fixed for the sale, and such sale may be made at any time or place to
which the sale may be so adjourned.
Notwithstanding the foregoing, the Secured Party agrees that it will not
take, and will not require any Obligor to take, any action pursuant to this
Section 5.01 with respect to any Pledged Stock or other Collateral until such
time as any government approval or consent required in connection therewith,
including, without limitation, that of ANATEL has been granted or obtained and
will not take, and will not require any Obligor to take, any action pursuant to
this Section 5.01 with respect to any of the Deliverables in violation of any
applicable laws or regulations or of the ANATEL Concession Agreement. Following
the occurrence and during the continuance of any Security Event of Default the
Obligors shall at the request of the Secured Party use their reasonable best
efforts to assist the Secured Party in obtaining any governmental approval or
consent, including that of ANATEL, that may be necessary to allow for the
exercise remedies provided herein with respect to the Collateral.
The proceeds of each collection, sale or other disposition under this
Section, including by virtue of the exercise of the license granted to the
Secured Party in Section 4.04(c), shall be applied in accordance with Section
5.05. Any such sale or other disposition under this Section shall be conducted
in a commercially reasonable manner.
The Obligors recognize that, by reason of certain prohibitions contained
in the Securities Act of 1933, as amended, and applicable state securities laws,
the Secured Party may be compelled, with respect to any sale of all or any part
of the Collateral, to limit purchasers to those who will agree, among other
things, to acquire the Collateral for their own account, for investment and not
with a view to the distribution or resale thereof The Obligors acknowledge that
any such private sales may be at prices and on terms less favorable to the
Secured Party than those obtainable through a public sale without such
restrictions, and, notwithstanding such circumstances, agree that any such
private sale shall be deemed to have been made in a commercially reasonable
manner and that the Secured Party shall have no obligation to engage in public
sales and no obligation to delay the sale of any Collateral for the period of
time necessary to permit the respective issuer thereof to register it for public
sale.
SECTION 5.02. Deficiency. If the proceeds of sale, collection or other
realization of or upon the Collateral pursuant to Section 5.01 are insufficient
to cover the costs and expenses of such realization and the payment in full of
the Secured Obligations, SS/L (but not any other Obligor) shall remain liable
for any deficiency.
SECTION 5.03. Removals, Etc. Except upon at least 30 days' prior written
notice to the Secured Party, each Obligor shall not: (i) maintain the original
or "master" copies of any of its books and records with respect to the
Collateral at any office or maintain its principal place of business at any
place, or (except with respect to Collateral in the possession of the Secured
Party) permit any Collateral to be located anywhere other than at one of the
locations identified in Annex 5 under its name (other than the EDS Satellite in
orbit), or (ii) change its name from the name shown on the signature pages
hereto.
SECTION 5.04. Private Sale. No Secured Party shall incur any liability as
a result of the sale of the Collateral, or any part thereof, at any private sale
pursuant to Section 5.01(e) conducted in a commercially reasonable manner. Each
Obligor hereby waives any claims against the Secured Party arising by reason of
the fact that the price at which the Collateral may have been sold at such a
private sale was less than the price that might have been obtained at a public
sale or was less than the aggregate amount of the Secured Obligations, even if
the Secured Party accepts the first offer received and does not offer the
Collateral to more than one offeree.
SECTION 5.05. Application of Proceeds. Except as otherwise herein
expressly provided, the proceeds of any collection, sale or other realization of
all or any part of the Collateral pursuant hereto, and any other cash at the
time held by the Secured Party under this Agreement, shall be applied by the
Secured Party:
First, to the payment in full of the Secured Obligations; and
Thereafter, to the payment to the respective Obligor, or their respective
successors or assigns, or as a court of competent jurisdiction may direct, of
any surplus then remaining.
As used in this Article, "proceeds" of Collateral means cash, securities
and other property realized in respect of, and distributions in kind of,
Collateral, including any thereof received under any reorganization, liquidation
or adjustment of debt of the Obligors or any issuer of or obligor on any of the
Collateral.
SECTION 5.06. Attorney-in-Fact. Without limiting any rights or powers
granted by this Agreement to the Secured Party while no Security Event of
Default has occurred and is continuing, upon the occurrence and during the
continuance of any Security Event of Default the Secured Party is hereby
appointed the attorney-in-fact of each Obligor for the purpose of carrying out
the provisions hereof and taking any action and executing any instruments that
the Secured Party may reasonably deem necessary or advisable to accomplish the
purposes hereof, which appointment as attorney-in-fact is irrevocable and
coupled with an interest. Without limiting the generality of the foregoing, so
long as the Secured Party shall be entitled under this Article V to make
collections in respect of the Collateral, the Secured Party shall have the right
and power to receive, endorse and collect all checks made payable to the order
of any Obligor representing any dividend, payment or other distribution in
respect of the Collateral or any part thereof and to give full discharge for the
same.
SECTION 5.07. Perfection and Priority. Prior to or concurrently with the
execution and delivery of this Agreement, each Obligor shall (i) file such
financing statements and other documents in such offices as the Secured Party
may reasonably request to perfect or ensure the priority of the security
interests granted by Article III, (ii) take any action as the Secured Party may
reasonably request to perfect the pledge of any ownership interests for purposes
of Article 8 of the Uniform Commercial Code and/or (iii) deliver to the Secured
Party all certificates identified in Annex 2, accompanied by undated stock or
transfer powers or share transfer forms duly executed in blank.
SECTION 5.08. Release of Collateral Termination.
(a) Upon the earlier of (i) the performance and payment in full of all
Secured Obligations, (ii) prepayment by Seller to Secured Party of an amount
equal to $50 million less the sum of all milestone payments earned by Seller to
date pursuant to the Procurement Agreement, and (iii) the termination of the
Procurement Agreement by the Secured Party pursuant to Article 17 thereof, this
Agreement shall automatically terminate.
(b) At all times after the amount of cash Collateral (including
investments thereof) held by the Secured Party shall first equal the then
outstanding Secured Obligations, the sole Collateral under this Agreement shall,
subject to Section 5.08(c) below, be such cash Collateral, and the Obligors
shall be relieved from compliance with any and all obligations, representations
and warranties under this Agreement with respect to any other Collateral,
including, without limitation, those set forth in Article IV.
(c) If at any time the amount of cash Collateral (including investments
thereof) held by the Secured Party shall exceed the then outstanding Secured
Obligations, such excess cash Collateral shall cease to constitute Collateral
and the Obligors shall at all times thereafter be relieved from compliance with
any and all obligations, representations and warranties under this Agreement
with respect to such excess cash Collateral, including, without limitation,
those set forth in Article IV. The Secured Party shall promptly pay to Seller
such excess cash Collateral.
(d) At any time that any property of the Obligors shall cease to
constitute Collateral under this Agreement (including, for the avoidance of
doubt, upon termination of this Agreement), the Secured Party shall forthwith
cause to be assigned, transferred and delivered, against receipt but without any
recourse, warranty or representation whatsoever (except that the Secured Party
assigns, transfers and delivers free of any Lien created with its consent), any
such property and money received in respect thereof, to or on the order of the
respective Obligor and to be released and canceled all licenses and rights
referred to in Section 4.04(c) that cease to constitute Collateral. The Secured
Party shall also execute and deliver to the respective Obligor upon such release
of property of the Obligors such Uniform Commercial Code termination statements
and such other documentation as shall be reasonably requested by the respective
Obligor to effect the termination and release of the security interest on such
property. Nothing in the foregoing shall be deemed to require a release of
Buyer's security interest in all work-in-progress on the Purchased Satellite,
which shall continue in full force and effect pursuant to the terms of the
Procurement Agreement.
SECTION 5.09. Further Assurances. Each Obligor agrees that, from time to
time upon the written request of the Secured Party, such Obligor will execute
and deliver such further documents and do such other acts and things as the
Secured Party may reasonably request in order fully to effect the purposes of
this Agreement. Without limiting the foregoing, each Obligor hereby authorizes
the Secured Party to file one or more financing or continuation statements, and
amendments thereto, relative to all or any part of the Collateral without the
signature of such Obligor where permitted by law, provided that copies of any
such statement or amendment thereto shall promptly be delivered to the Company.
Notwithstanding the foregoing, nothing in this Agreement shall require any
Obligor to obtain any "control agreement" relating to accounts prior to the
occurrence and continuance of a Security Event of Default.
SECTION 5.10. Standstill. Notwithstanding any provision of this Agreement
to the contrary providing rights to the Secured Party or imposing obligations on
any Obligor which are expressly available only after a Security Event of Default
shall have occurred, the Secured Party shall not exercise any such rights and no
Obligor shall have any such obligation unless (i) the Secured Obligations are
due and unpaid pursuant to the terms of the Procurement Agreement, and (ii) the
Secured Party shall given to the Obligors at least 30 days' prior written notice
of intent to exercise such right or to bind the Obligor to such obligation.
ARTICLE VI
MISCELLANEOUS
SECTION 6.01. No Waiver. No failure on the part of the Secured Party or
any other- Secured Party to exercise, and no course of dealing with respect to,
and no delay in exercising, any right, power or remedy hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise by the Secured
Party or any other Secured Party of any right, power or remedy hereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. The remedies herein are cumulative and are not exclusive
of any remedies provided by law.
SECTION 6.02. Notices. All notices, requests, consents and demands
hereunder shall be in writing and telecopied or delivered to the intended
recipient at (i) in the case of each Obligor, c/o the Seller at the address
specified in the Procurement Agreement; and (ii) in the case of the Secured
Party at the address specified for it in the Procurement Agreement, and shall be
deemed to have been given at the times specified for such types of notices in
the Procurement Agreement.
SECTION 6.03. Expenses.
(a) Seller agrees to reimburse the Secured Party for all reasonable costs
and expenses of the Secured Party (including, without limitation, the
reasonable fees and expenses of legal counsel) in accordance with the
final sentence of this paragraph 6.03(a) in connection with (i) any
Security Event of Default and any enforcement or collection proceeding
resulting therefrom, including, without limitation, all manner of
participation in, or other involvement with (w) performance by the Secured
Party of any obligations of the Obligors in respect of the Collateral that
the Obligors have failed or refused to perform, (x) bankruptcy,
insolvency, receivership, foreclosure, winding up or liquidation
proceedings of any Obligor (other than those in existence on the date
hereof), or any actual or attempted sale, or any exchange, enforcement,
collection, compromise or settlement in respect of any of the Collateral,
and for the care of the Collateral and defending or asserting rights and
claims of the Secured Party in respect thereof, by litigation or
otherwise, including expenses of insurance, (y) judicial or regulatory
proceedings and (z) workout, restructuring or other negotiations or
proceedings (whether or not the workout, restructuring or transaction
contemplated thereby is consummated) and (ii) the enforcement of this
Section. Seller's obligation to reimburse the Secured Party for such
reasonable costs and expenses under this Section 6.03(a) shall be limited
as follows: (1) Seller shall reimburse up to the first $300,000 of the
reasonable costs and expenses of the Secured Party, (2) costs and expenses
of the Secured Party in excess of $300,000 and less than $800,000 shall be
for the Secured Party's own account, and (3) Seller shall reimburse the
reasonable costs and expenses of the Secured Party in excess of $800,000.
(b) The Seller will pay all filing, registration and recording fees or
refiling, re-registration and re-recording fees, and all expenses incident
to the execution and delivery of this Agreement, any agreement
supplemental hereto and any instruments of further assurance, and all
federal, state, county and municipal stamp taxes and other taxes, duties,
imposts, assessments and charges arising out of or in connection with the
execution and delivery of any Security Document.
(c) The Seller will pay, before any fine, penalty, interest or cost
attaches thereto, all taxes, assessments and other governmental or
non-governmental charges or levies now or hereafter assessed or levied
against the Collateral or upon the Security interests provided for herein
as well as pay, or cause to be paid, all claims for labor, materials or
supplies which, if unpaid, might by law become an Encumbrance thereon, and
will retain copies of, and, upon request, permit the Secured Party to
examine, receipts showing payment of any of the foregoing, in each case
only to the extent that nonpayment is reasonably likely to impair the
Collateral or the ability of the Obligors to perform their obligations
under this Agreement.
SECTION 6.04. Amendments, Etc. The terms of this Agreement may be waived,
altered or amended only by an instrument in writing duly executed by each
Obligor and the Secured Party. Any such amendment or waiver shall be binding
upon the Secured Party, each other Secured Party and each Obligor.
SECTION 6.05. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the respective successors and assigns of each
Obligor and the Secured Party provided, however, that no Obligor shall assign or
transfer its rights hereunder without the prior written consent of the Secured
Party.
SECTION 6.06. Captions. The caption and section headings used herein are
for convenience of reference only, are not part of this Agreement and shall not
affect the construction of, or be taken into consideration in interpreting, this
Agreement.
SECTION 6.07. Counterparts. This Agreement may be executed in counterparts
(and by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract.
SECTION 6.08. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF
PROCESS.
(a) THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
(b) EACH OBLIGOR HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR
ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE SUPREME
COURT OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE
UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY
APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY
JUDGMENT, AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR, TO THE
EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO
AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT
SHALL AFFECT ANY RIGHT THAT THE SECURED PARTY MAY OTHERWISE HAVE TO BRING
ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AGAINST ANY OBLIGOR OR
ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.
(c) EACH OBLIGOR HEREBY IRREVOCABLY AND UNCONDITIONALLY 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 SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT IN ANY COURT
REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT.
(d) TO THE EXTENT THAT ANY OBLIGOR MAY BE OR BECOME ENTITLED, IN ANY
JURISDICTION IN WHICH JUDICIAL PROCEEDINGS MAY AT ANY TIME BE COMMENCED
WITH RESPECT TO THIS AGREEMENT, TO CLAIM FOR ITSELF OR ITS PROPERTY OR
REVENUES ANY IMMUNITY FROM SUIT, COURT JURISDICTION, ATTACHMENT PRIOR TO
JUDGMENT, ATTACHMENT IN AID OF EXECUTION OF A JUDGMENT, EXECUTION OF A
JUDGMENT OR FROM ANY OTHER LEGAL PROCESS OR REMEDY RELATING TO ITS
OBLIGATIONS UNDER THIS AGREEMENT AND TO THE EXTENT THAT IN ANY SUCH
JURISDICTION THERE MAY BE ATTRIBUTED SUCH AN IMMUNITY (WHETHER OR NOT
CLAIMED), SUCH OBLIGOR HEREBY
IRREVOCABLY AGREES NOT TO CLAIM AND HEREBY IRREVOCABLY WAIVES SUCH
IMMUNITY TO THE FULLEST EXTENT PERMITTED BY THE LAWS OF SUCH JURISDICTION.
SECTION 6.09. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 6.10. No Third Party Beneficiaries. The agreements of the
parties hereto are solely for the benefit of the Obligors and the Secured
Party, and no other Person shall have any rights hereunder.
SECTION 6.11. Aunts and Attorneys-in-Fact. The Secured Party may employ
agents and attorneys-in-fact in connection herewith and shall not be responsible
for the negligence or misconduct of any such agents or attorneys-in-fact
selected by it in good faith.
SECTION 6.12. Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 6.13. Overriding Transactions; Savings. The parties hereby consent
to the transactions listed on Annex 1, but only to the extent that any
transaction subject to such consent would not materially adversely affect the
continued validity, enforceability and perfection of the security interests
provided for herein. In addition, the Secured Party hereby acknowledges and
agrees that Skynet/Brazil does not purport to grant any security interest in the
EDS Satellite hereunder, but merely confirms that all right, title and interest
it may acquire therein is or will be acquired subject to any preexisting
security interest created by Seller pursuant to the terms hereof prior to the
EDS Satellite being transferred to SkynetBrazil.
SECTION 6.14. Conflicting Provisions. In the event of conflict or
inconsistency between the provisions of this Agreement and the provisions of the
Quota Pledge Agreement, the latter shall prevail.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
SELLER
SPACE SYSTEMS/LORAL, INC.,
as debtor and debtor in possession
By Name: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
Subscribed and sworn to before me by Space Systems/Loral, Inc.
this 17th day of March, 2004.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
NOTARY PUBLIC
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
AFFILIATE PLEDGORS
LORAL SPACE & COMMUNICATIONS LTD.,
as debtor and debtor in possession
Name: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
Subscribed and sworn to before me by Loral Space & Communications Ltd.
this 17th day of March, 2004.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
NOTARY PUBLIC
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Notary Public, State at New York
No. 01FE6097934
Qualified in New York County
Commission Expires Sept 2, 2007
LORAL SPACECOM CORPORATION,
as debtor and debtor in possession,
acting on its own behalf and on behalf of
LORAL SKYNET, its division.
By Name: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
of March 17th, 2004.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
NOTARY PUBLIC
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Notary Public, State at New York
No. 01FE6097934
Qualified in New York County
Commission Expires Sept 2, 2007
LORAL SKYNET DO BRASIL LTDA.
By
Name:
Title:
Subscribed and sworn to before me by Loral Skynet do Brasil Ltda. this
day of March, 2004.
NOTARY PUBLIC
LORAL SPACECOM CORPORATION, as debtor and debtor in possession, acting on its
own behalf and on behalf of LORAL SKYNET, its division.
By
Name:
Title:
Subscribed and sworn to before me
by Loral SpaceCom Corporation
this day of March, 2004.
NOTARY PUBLIC
LORAL SKYNET DO BRASIL LTDA.
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
Name:
Title: Office Manager
SECURED PARTY
INTELSAT LLC, as Secured Party
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------
Name:
Title:
Subscribed and sworn to before me by Intelsat LLC
this 16th day of March, 2004.
/s/ ▇▇▇▇▇▇ ▇▇ ZU HO
-------------------------------
NOTARY PUBLIC
▇▇▇▇▇▇ ▇▇ ZU HO
Notary Public, State of New York No. 01 HO6083178
Qualified in New York County
Commission Expires November 12, 2006
ANNEX 1
PERMITTED TRANSACTIONS
The LHL Transfer (provided that after giving effect thereto, all of the
outstanding ownership interests of LHL constitute Collateral hereunder).
The Satellite Agreements and the transaction contemplated thereby.
The redomiciliation of LHL as an entity organized under the laws of a State of
the United States of America.
Annex 1 to the Agreement
ANNEX 2
PLEDGED STOCK
Number of
Certificate Type or Shares or Interests
Nos. Registered Class of Ownership and Percentage of
Issuer (if any) Owner Interests Outstanding
------ ----------- ---------------- ------------------ ----------------------
Loral Holdings Ltd. Loral Space & 1,200,000 100.0000%
Communications Ltd.* ordinary shares
* Subject to the LHL Transfer.
COMPLIANCE NOTICES
Letter, dated March 9, 2004, from ANATEL to SkynetBrazil.
Annex 3 to the Agreement
ANNEX 4
DOCUMENTATION, DATA AND SOFTWARE
NO. TITLE QUANTITY
--- ----- --------
CONTRACT DOCUMENTS
1 Program Management Plan 5
2 Program Master Schedule 5
3 Satellite Configuration Data
a. Preliminary CIL 3
4 FCC and ITU Satellite Coordination Data 3
5 PDR DATA
a. Data Package 5
b. Presentation material As delivered
C. MinutesL
d. Close-out Report 4
e. Agenda 1
f. Invitation 1
6 CDR Data
a. Data Package 5
b. Presentation Material As delivered
c. Minutes/ Action Items 5
d. Close-out Report 5
e. Agenda 1
f. Invitation 1
7 System Test Procedure Satellite 5
8 System Test Report (Satellite) 2
9 Prelaunch Test Procedure 5
10 Mission Profile Description 5
11 In-Orbit Test "IOT"
a. IOT Description 5
b. IOT Procedures 5
c. In-Orbit Test Summary Report 5
d. Detailed In-Orbit Test Report 5
12 Monthly Progress Report 5
13 Telemetry and Command Databases As delivered
14 Mission Operation Plan 3
15 Satellite Orbital Operations Handbook "SOOH"
a. SOOH, Volume I, Satellite Technical Description 10
b. SOOH, Volume II, Satellite On-Orbit Operations 10
c. SOOH, Volume III, Operations Procedures 10
d. SOOH, Volume IV, Satellite Parameters 10
(Calibration Data)
16 Documentation Required by Launch Agencies 3
17 Major Non-conformance Report 3
18 Class I Waivers, Deviations, and Engineering 3
Change Proposals
19 Satellite End Item Data Package 2
20 a. Training Plan 5
b. Training Materials As delivered
21 Satellite to Launch Vehicle ICD 3
22 Design Analysis Reports: As delivered
a. Communication Subsystem Analysis Report
b. Thermal Analysis Report
c. Structural Analysis Report
d. EPS Analysis Report
e. Pointing Error Analysis Report
f. Propellant Requirements Analysis Report
Reliability Analysis Report
h. Mass Properties Analysis Report
i. Dynamics Analysis Report
Control Subsystem Analysis Report
k. Radiation and Electrostatic Discharge Analysis
Report
m. TT&C Subsystem Analysis Report
23 Satellite Acceptance Certificate 1
Annex 4 to the Agreement
LIST OF LOCATIONS
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Annex 5 to the Agreement