EXHIBIT 10.40.2
SECOND AMENDED AND RESTATED PLEDGE AGREEMENT
THIS SECOND AMENDED AND RESTATED PLEDGE AGREEMENT (this "Pledge
Agreement"), dated as of March 31, 2003, is by and among LORAL SPACE &
COMMUNICATIONS CORPORATION, a Delaware corporation (the "Pledgor"), 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 $494 million credit facility has been established in favor
of Loral Satellite, Inc., a Delaware corporation (the "Company") pursuant to the
terms of the Credit Agreement dated as of November 17, 2000 (as amended from
time to time, the "Satellite Credit Agreement") among the Company, as borrower,
the lenders identified therein and Bank of America, N.A., as Administrative
Agent;
WHEREAS, a $600 million credit facility has been established in favor
of Loral SpaceCom Corporation, a Delaware corporation ("SpaceCom"), pursuant to
the terms of the Amended and Restated Credit Agreement dated as of December 21,
2001 (as amended from time to time, the "SpaceCom Credit Agreement") among
SpaceCom, as borrower, the lenders identified therein and Bank of America, N.A.,
as Administrative Agent;
WHEREAS, the Company has previously arranged for the Pledgor to provide
a pledge of and security interest in the Company's Capital Stock to secure the
loans and obligations owing under the Satellite Credit Agreement;
WHEREAS, such pledge and security interest was previously granted to
Bank of America, N.A., as collateral agent for the several lenders from time to
time parties to the Satellite Credit Agreement, pursuant to the Amended and
Restated Pledge Agreement, dated as of November 17, 2000 (as amended from time
to time up to the date hereof, the "Existing Pledge Agreement") between the
Pledgor and Bank of America, N.A.;
WHEREAS, SpaceCom has agreed to arrange for the Pledgor to provide a
pledge of and security interest in the Company's Capital Stock to secure the
loans and obligations owing under both the Satellite Credit Agreement and the
SpaceCom Credit Agreement on the terms and conditions set forth herein; and the
parties intend for this Pledge Agreement to be given in amendment to,
restatement of, and replacement for the Existing Pledge Agreement;
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:
"Capital Stock" means any and all shares, interests,
participations or other equivalents (however designated) of capital
stock of a corporation, any and all equivalent ownership interests
in a Person (other than a corporation) and any and all warrants or
options to purchase any of the foregoing.
"Collateral Documents" means the Pledge Agreement and any and
all other 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 Pledged
Collateral, including UCC financing statements and notice filings in
respect of intellectual property, in each case as amended and modified.
"Credit Agreement" means the Satellite Credit Agreement, or if
the Satellite Credit Agreement has expired or been terminated and all
amounts owing thereunder paid in full, the SpaceCom Credit Agreement.
"Credit Documents" means the Satellite Credit Documents and
the SpaceCom 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) the Pledgor's guaranty obligations in respect of the
Satellite Credit Agreement and the other Satellite Credit Documents;
and (iii) all renewals, extensions, refinancings, refundings,
amendments and modifications of any of the foregoing Satellite
Indebtedness, whether in whole or in part and the agreements governing
such Satellite Indebtedness; provided, however, that under no
circumstances shall the obligations owing under the Collateral
Documents to the lenders and the administrative agent under the
SpaceCom Credit Agreement be considered Satellite Indebtedness.
"Secured Obligations" means the Satellite Indebtedness and the
SpaceCom 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.
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"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) the obligations owing by
SpaceCom, or a subsidiary or affiliate of SpaceCom, 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; (iii) the Pledgor's guaranty
obligations in respect of the SpaceCom Credit Agreement and the other
SpaceCom Credit Documents; 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, the
Pledgor hereby grants, pledges and assigns to the Collateral Agent, for the
benefit of the 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 the Pledgor in and to the following, whether now owned or existing
or owned, acquired, or arising hereafter (collectively, the "Pledged
Collateral"):
(a) Pledged Shares. One hundred percent (100%) of the
issued and outstanding Capital Stock of the Company, all of which is
owned by the Pledgor (as set forth on Schedule 2(a) attached hereto),
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) 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
Pledgor under any provision prohibiting such action hereunder
or under the Credit Agreement, in the event of any
consolidation or merger involving the Company and in which the
Company is not the surviving entity, all Capital Stock of the
successor entity formed by or resulting from such
consolidation or merger.
(b) Accessions and Proceeds. All Accessions and all
Proceeds of any and all of the foregoing.
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Without limiting the generality of the foregoing, it is hereby
specifically understood and agreed that the Pledgor may from time to time
hereafter deliver additional Capital Stock of the Company 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 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 constitutes continuing collateral
security for all of the Secured Obligations.
4. Delivery of the Pledged Collateral. The Pledgor hereby agrees
that:
(a) The 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 and
(ii) promptly upon the receipt thereof by or on behalf of the Pledgor,
all other certificates and instruments constituting Pledged Collateral.
Prior to delivery to the Collateral Agent, all such certificates and
instruments constituting Pledged Collateral shall be held in trust by
the 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 the 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 the Pledgor shall receive such certificate,
instrument, option, right or distribution in trust for the benefit of
the Collateral Agent, shall segregate it from the 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. The 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.
5. Representations and Warranties. The 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:
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(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. The Pledgor has good and indefeasible title to
the Pledged Collateral and will at all times be the legal and
beneficial owner of such Pledged Collateral 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.
(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 the 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 the Pledgor or for the granting of the security interest
by the 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, the
Pledgor does not own any Capital Stock of the Company other than as set
forth on Schedule 2(a) attached hereto, and the Pledged Shares
represent 100% of the issued and outstanding Capital Stock of the
Company.
6. Covenants. The 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, the Pledgor
shall:
(a) Defense of Title. Warrant and defend title to and
ownership of the Pledged Collateral 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 Liens
permitted under
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the Credit Agreement, and not sell, exchange, transfer, assign, lease
or otherwise dispose of Pledged Collateral 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 created hereby in the Pledged Collateral (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; 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.
(c) Amendments. Not make or consent to any amendment or
other modification or waiver with respect to any of the Pledged Collateral or
enter into any agreement or allow to exist any restriction with respect to any
of the Pledged Collateral other than pursuant hereto or as may be permitted
under the Credit Agreement.
7. Advances by Holders of the Secured Obligations. On failure of
the 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 Pledgor 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 ABR Loans (or, in the case
of the SpaceCom Credit Agreement, Revolving Credit 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 the Pledgor, and no such
advance or expenditure therefor, shall relieve the Pledgor 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 xxxx,
statement or estimate procured from the appropriate public office or holder of
the claim to be discharged without inquiry into the accuracy of such xxxx,
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 the 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").
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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 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. The Pledgor
agrees that, to the extent notice of sale shall be required by law and
has not been waived by the 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 the 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 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 Pledgor recognizes 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. The 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. The 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.
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(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 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 Pledgor shall be liable for the deficiency,
together with interest thereon at the default rate specified in the
Credit Agreement for Revolving Loans that are ABR Loans (or, in the
case of the SpaceCom Credit Agreement, Revolving Credit 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
Pledgor 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, the 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 the 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;
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(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
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 the 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 Pledgor.
(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 Pledgor
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 Pledgor.
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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 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,
the Pledgor may exercise any and all voting and other
consensual rights pertaining to the Pledged Collateral 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 the 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,
the 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 the 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 the 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 the 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.
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(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 Liens permitted under the Credit Agreement) on all Pledged
Collateral not expressly released or substituted.
(g) Conflicts. If there is any conflict between this
Pledge Agreement and the Collateral Agency Agreement (as defined in the
Satellite Credit Agreement) regarding the actions to be taken by the
Collateral Agent with respect to the Pledged Collateral, the provisions
of this Pledge Agreement shall govern.
11. Rights of Majority Lenders. All rights of the Collateral Agent
hereunder, if not exercised by the Collateral Agent, may be exercised by the
Majority 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 the 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 Pledgor agrees
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 Pledgor, (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 Pledgor
evidencing such termination. Notwithstanding the foregoing, all
releases and indemnities provided hereunder shall survive termination
of this Pledge Agreement.
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(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 Pledged Collateral and shall be binding upon
each the Pledgor, its successors and assigns, and shall inure, 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 the Pledgor may not 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, the 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, the Pledgor
hereby irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of such courts. The
Pledgor further irrevocably consents to the service of process out of
any of the aforementioned courts in any such action or
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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 the
Pledgor in any other jurisdiction.
(b) The 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.
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 Pledgor
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 the 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. [Intentionally Omitted].
27. Regulatory Approvals.
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(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. Consent to Amendment and Restatement. The parties hereto
acknowledge and agree that this Pledge Agreement is given in amendment to,
restatement of and substitution for the Existing Pledge Agreement.
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29. Acknowledgement of the Company. The Company by its signature
below hereby agrees, for the benefit of the Collateral Agent, (i) to be bound by
the terms of this Pledge Agreement and will comply with such terms insofar as
such terms are applicable to the undersigned and (ii) to notify the Collateral
Agent promptly in writing of the occurrence of any of the events described in
Section 4(b).
[remainder of page intentionally left blank]
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.
PLEDGOR: LORAL SPACE & COMMUNICATIONS
CORPORATION, a Delaware corporation
By: _______________________________
Name:
Title:
Accepted and agreed to as of the date first above written.
BANK OF AMERICA, N.A.,
as Collateral Agent
By: ________________________________
Name:
Title:
LORAL SATELLITE, INC.
By: ________________________________
Name:
Title:
SCHEDULES
Schedule 2(a) Pledged Stock
Schedule 4(a) Form of Stock Power
Schedule 2(a)
to
Second Amended and Restated Pledge Agreement
dated as of March 31, 2003
in favor of Bank of America, N.A.
as Collateral Agent
PLEDGED STOCK
Number of Certificate Percentage
Pledgor Issuer Shares Number Ownership
------- ------ ------ ------ ---------
Loral Space & Communications Loral Satellite, Inc. 100 (par value 1 100%
Corporation $0.01 per share)
Schedule 4(a)
to
Second Amended and Restated Pledge Agreement
dated as of March 31, 2003
in favor of Bank of America, N.A.
as Collateral Agent
Irrevocable Stock Power
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers to
the following shares of capital stock of ____________________[ISSUER],
a ____________ corporation:
No. of Shares Certificate No.
and irrevocably appoints __________________________________ its agent and
attorney-in-fact to transfer all or any part of such capital stock and to take
all necessary and appropriate action to effect any such transfer. The agent and
attorney-in-fact may substitute and appoint one or more persons to act for him.
The effectiveness of a transfer pursuant to this stock power shall be subject to
any and all transfer restrictions referenced on the face of the certificates
evidencing such interest or in the certificate of incorporation or bylaws of the
subject corporation, to the extent they may from time to time exist.
[HOLDER]
By: ____________________________
Name:
Title:
