AMENDED AND RESTATED CASH COLLATERAL AGREEMENT

 

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                                                                   Exhibit 10.11

 

 

                 AMENDED AND RESTATED CASH COLLATERAL AGREEMENT

 

            AMENDED AND RESTATED CASH COLLATERAL AGREEMENT, dated as of November

21, 2005 (this "Agreement"), between Space Systems/Loral, Inc. (the "Pledgor"),

a corporation existing under the laws of the State of Delaware and successor in

interest to the DIP Pledgor referenced below, and JPMorgan Chase Bank, N.A.

(formerly known as JPMorgan Chase Bank) (the "Bank").

 

                               W I T N E S S E T H

 

            WHEREAS, pursuant to the Letter of Credit Reimbursement Agreement,

dated as of April 2, 2004 (as heretofore amended, supplemented or otherwise

modified, the "Existing L/C Agreement"), between Space Systems/Loral, Inc., as a

debtor and a debtor-in-possession (the "DIP Pledgor"), and the Bank, the Bank

has issued Letters of Credit at the request of, and for the account of, the DIP

Pledgor;

 

            WHEREAS, pursuant to the Cash Collateral Agreement, dated as of

April 2, 2004 (as heretofore amended, supplemented or otherwise modified, the

"Existing Cash Collateral Agreement"), between the DIP Pledgor and the Bank, the

DIP Pledgor granted to the Bank a first priority perfected security interest in

the Collateral and a Superpriority Claim (each as defined in the Existing L/C

Agreement) pursuant to Section 364(c) of the Bankruptcy Code to secure repayment

of the obligations under the Existing L/C Agreement; and

 

            WHEREAS, the Bank and the DIP Pledgor have agreed to amend and

restate the Existing L/C Agreement in its entirety and, concurrently therewith,

amend and restate the Existing Cash Collateral Agreement in its entirety such

that the Liens granted to the Bank will not be cancelled or discharged as a

result of the occurrence of the Plan Effective Date and such Liens will continue

to secure the obligations of the Borrower under the Amended and Restated Letter

of Credit Reimbursement Agreement, dated as of even date herewith (as amended,

supplemented or otherwise modified from time to time, the "Reimbursement

Agreement");

 

            NOW, THEREFORE, in consideration of the above premises, the Pledgor

and the Bank hereby agree to amend and restate the Existing Cash Collateral

Agreement in its entirety as follows:

 

            Section 1. DEFINITIONS. Capitalized terms used herein but not

otherwise defined shall have the meaning ascribed thereto in the Reimbursement

Agreement.

 

            Section 2. PLEDGE AND ASSIGNMENT. As security for the payment of all

Obligations of the Pledgor in respect of the Letters of Credit, under the

Reimbursement Agreement and under this Agreement, the Pledgor

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hereby irrevocably assigns and pledges to the Bank, and hereby grants to the

Bank, a first priority security interest in (i) the Pledgor's account, number

323-351832 (for credit to Space Systems Loral Inc.), with the Bank at its

offices at 270 Park Avenue, 20th Floor, New York, NY 10017 (hereinafter called

the "Cash Collateral Account") which Cash Collateral Account shall be under the

sole dominion and control of the Bank, (ii) all cash from time to time deposited

into the Cash Collateral Account, (iii) all Investments (as defined in Section 5

hereof) and certificates and instruments, if any, from time to time representing

or evidencing the Cash Collateral Account and (iv) to the extent not covered by

clauses (i) through (iii) above, all proceeds and products of any and all of the

foregoing (collectively, the "Collateral"). Cash, Investments, security

entitlements or other investments held or carried in the Cash Collateral Account

shall not be available for use by the Pledgor or any of its subsidiaries or

Affiliates for any purpose.

 

            Section 3. REMEDIES UPON DEFAULT.

 

            (a) The Pledgor hereby agrees that if any amount payable by it in

respect of the Obligations is not paid when due (whether upon demand, at stated

maturity, by acceleration or otherwise), the Bank may, by giving five (5)

Business Days' notice to the Pledgor: (i) charge, set-off and otherwise apply

all or any part of the Cash Collateral against the Obligations then due (or

which become due) or any part thereof or (ii) exercise in respect of the

Collateral, in addition to other rights and remedies provided for herein or

otherwise available to it, all the rights and remedies of a secured party under

the Uniform Commercial Code in effect in the State of New York at that time.

Without limiting the generality of clause (ii) above, the Bank may sell, redeem,

collect or otherwise realize on the Collateral or any portion thereof in one or

more parcels at a public or private sale, at its offices or elsewhere, for cash,

on credit or for future delivery and on such other terms as the Bank may deem

commercially reasonable and without notice or demand except to the extent

required by law (and if any such notice may be required by law the Pledgor

agrees that at least 5 Business Days' notice shall constitute reasonable

notification). The Bank shall not be obligated to make any such sale of

Collateral regardless of whether notice of such sale has been given and may

adjourn any such 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.

 

            (b) Any cash held by the Bank as Collateral and all cash proceeds

received by the Bank in respect of any sale of, collection from, or other

realization upon all or any part of the Collateral may, in the discretion of the

Bank, then or at any time thereafter be applied in whole or in part by the Bank

against all or any part of the Obligations then due (or which become due) in

such order as the Bank may elect. Any surplus of such cash or cash proceeds held

by the Bank and remaining after payment in full of all of the Obligations after

expiry or termination of all Letters of Credit shall be paid over to the Pledgor

or to whomsoever may be lawfully entitled to receive such surplus.

 

            Section 4. MAINTAINING THE CASH COLLATERAL ACCOUNT.

 

            (a) The Pledgor hereby further agrees that so long as any Letters

of Credit or Obligations are outstanding, it will deposit and maintain at all

times an amount in the Cash Collateral Account equal to (x) in the case of

Letters of Credit or Obligations denominated in Dollars at least one hundred

five percent (105%) of the LC Exposure in respect of such Letters of

 

 

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Credit, and (y) in the case of Letters of Credit denominated in an Alternative

Currency at least one hundred ten percent (110%) of the LC Exposure in respect

of such Letters of Credit.

 

            (b) If at any time the Collateral maintained in the Cash Collateral

Account in respect of any outstanding Alternative Currency Letters of Credit is

less than 110% of the then Dollar Equivalent of the LC Exposure relating to such

Alternative Currency Letters of Credit, then the Pledgor shall, within three (3)

Business Days after receipt of notice from the Bank delivered in accordance with

Section 3.02 of the Reimbursement Agreement, deposit an amount in Dollars in the

Cash Collateral Account equal to the amount required such that the Collateral in

the Cash Collateral Account is not less than 110% of the Dollar Equivalent of

the LC Exposure relating to such Alternative Currency Letters of Credit. In the

event that the Collateral maintained in the Cash Collateral Account in respect