Exhibit 10.5

 

EXECUTION VERSION

 

FULL AND FINAL RELEASE AND AMENDMENT OF TOLLING AGREEMENT

 

Dated as of November 23, 2020

 

Reference is hereby made to (i) that certain Transaction Agreement and Plan of
Merger by and among Public Sector Pension Investment Board (“PSP”), Red Isle
Private Investments Inc. (“Red Isle”), Loral Space & Communications Inc.
(“Loral”), Loral Holdings Corporation (“Holdco”), Telesat Canada (“Telesat”),
Telesat Corporation, Telesat Partnership LP, Telesat CanHold Corporation and
Lion Combination Sub Corporation, dated as of the date hereof (the “Integration
Agreement”) and (ii) that certain Tolling Agreement by and among PSP, Red Isle,
Loral, Holdco and Telesat dated May 5, 2016 (as amended, the “Tolling
Agreement”). Capitalized terms used but not defined herein shall have the
meanings ascribed to them in the Integration Agreement.

 

FOR GOOD AND VALUABLE CONSIDERATION, including PSP, Red Isle, Loral, Holdco and
Telesat agreeing to enter into the Integration Agreement, the receipt and
sufficiency of which is hereby acknowledged, each of

 

(i)PSP and Red Isle, on their own behalf and on behalf of their respective
parents, Subsidiaries and Affiliates and their respective current and former
officers, directors, employees, agents, shareholders, beneficiaries, trustees,
predecessors, successors and assigns (collectively, the “PSP Entities,” and
which term includes any one or more of them), provided, the “PSP Entities” shall
not include (i) any portfolio company of any investment vehicle or holding
company that is directly or indirectly managed by PSP, or (ii) any Telesat
Entity, MHR Entity or Loral Entity;

 

(ii)MHR Fund Management LLC (“MHR”), on its own behalf and on behalf of its
Subsidiaries and Affiliates (other than Loral and its Subsidiaries) and their
respective current and former officers, directors, employees, agents,
shareholders, beneficiaries, trustees, predecessors, successors and assigns
(collectively, the “MHR Entities,” and which term includes any one or more of
them); provided, the “MHR Entities” shall not include (i) any Telesat Entity,
Loral Entity or PSP Entity, or (ii) any portfolio company of any investment
vehicle or holding company that is directly or indirectly managed by MHR;

 

 

 

(iii)Loral and Holdco, each on their own behalf, and Loral on behalf of its
Subsidiaries and Affiliates and their respective current and former officers,
directors, employees, agents, beneficiaries, trustees, predecessors, successors
and assigns (collectively, the “Loral Entities,” and which term includes any one
or more of them, and which, for the avoidance of doubt, does not include any
Telesat Entity, PSP Entity or MHR Entity); and

 

(iv)Telesat, on its own behalf and on behalf of its Subsidiaries and its
controlled Affiliates and their respective current and former officers,
directors, employees, agents, beneficiaries, trustees, predecessors, successors,
and assigns (collectively, the “Telesat Entities,” and which term includes any
one or more of them and which, for the avoidance of doubt, does not include any
PSP Entity, MHR Entity or Loral Entity) (the PSP Entities, the MHR Entities, the
Loral Entities and the Telesat Entities are collectively referred to herein as
the “Parties” and, each, a “Party”);

 

hereby agree as follows:

 

1.Full and Final Release.

 

Effective as of the Release Effective Date, each of the Parties does hereby
release and forever discharge each other Party from any and all actions, causes
of action, applications, debts, dues, accounts, bonds, covenants, contracts,
complaints, obligations, duties, breaches of contract, breaches of duty or any
relationship, acts, omissions, compensations, promises, damages, costs, losses,
expenses, claims for interest or disbursements, remedies for losses, choses in
action, entitlements, liabilities, demands, rights of indemnity and all other
claims and rights (the “Claims”), whether or not known or anticipated, which it
ever had, now has or may in the future have against the other Parties, in each
case solely to the extent arising out of or relating to the following specified
matters:

 

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(1)the Claims alleged in each of (A) the letter from Andrew Rossman and Geoff
Hall addressed to Frank Arnone and Doug Warner dated April 22, 2016, (B) the
letter from Jeff Galway and Greg Danilow addressed to Andrew Rossman and Geoff
Hall dated May 11, 2016, and (C) a subsequent letter from Andrew Rossman and
Geoff Hall to Jeff Galway and Greg Danilow dated May 20, 2016;

 

(2)Claims of oppression of or breach of any duty owed to any Party in its
capacity as a shareholder of Telesat; and

 

(3)Claims for breach of the Shareholders Agreement of Telesat dated October 31,
2007 (the “Telesat Shareholders Agreement”).

 

The Claims identified in the foregoing subsections (1) through (3) are referred
to herein as the “Released Claims”; provided, however, that the term “Released
Claims” includes the Claims specified in the foregoing subsections (2) and
(3) only to the extent that any such Claim arises from or relates to the facts
and circumstances forming the basis of any such Claim identified in the
foregoing subsection (1), and any Claim identified in the foregoing subsection
(2) or (3) shall not constitute a “Released Claim” with respect to the release
and discharge to the extent that such Claim does not arise from or relate to the
facts and circumstances forming the basis of a Claim identified in the foregoing
subsection (1) (the claims excluded from the term “Released Claims” pursuant to
this proviso, the “Telesat Excluded Claims”).

 

THIS RELEASE shall, notwithstanding the foregoing, not affect any:

 

(i)rights or remedies under the Integration Agreement or the Transaction
Documents or otherwise arising out of the preparation, due diligence,
negotiation, performance or enforcement of the Integration Agreement or the
Transaction Documents (including, for the avoidance of doubt, the right of any
Party to indemnification or other payments under the Integration Agreement) or
the consummation of the transactions contemplated thereby;

 

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(ii)rights or remedies of any director or officer of any member of the Transit
Group or the Leo Group for indemnification, advancement of expenses or expense
reimbursement under (1) the organizational documents of any member of the
Transit Group or the Leo Group, (2) any director & officer or other insurance
policy of any member of the Transit Group or the Leo Group, (3) any director
services agreement or other agreement with any member of the Transit Group or
the Leo Group, (4) the Telesat Shareholders Agreement or (5) applicable law;

 

(iii)rights or remedies of the PSP Entities or the Loral Entities for
indemnification, advancement of expenses or expense reimbursement under (1) the
Telesat Shareholders Agreement, (2) the organizational documents of any member
of the Transit Group or the Leo Group or (3) any indemnification agreement with
any present or former officer or director of any member of the Transit Group or
the Leo Group;

 

(iv)Claims that any PSP Entity, in its capacity as a limited partner of any MHR
Entity, may have against a MHR Entity or Claims that a MHR Entity may have
against a PSP Entity in such capacity;

 

(v)rights or remedies of the Parties under any confidentiality or restrictive
covenants under the Telesat Shareholders Agreement, including under Articles
2.04, 4.04, 4.05, 4.06 or any non-disclosure agreement or confidentiality
agreement between or among the Parties;

 

(vi)rights or remedies of the Parties under Articles 7 and 8 of the Telesat
Shareholders Agreement;

 

(vii)any entitlement of the PSP Entities or the Loral Entities to dividends
accrued but not yet paid by the Telesat Entities;

 

(viii)Claims which are caused by or relate to fraud to the extent that such
claims cannot be waived or released under applicable law;

 

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(ix)Claims that any Leo Entity may have against any MHR Entity or that any MHR
Entity may have against any Leo Entity;

 

(x)rights or remedies under that certain Consulting Services Agreement, by and
between Loral Space & Communications Inc., and Telesat Canada, dated October 31,
2007;

 

(xi)rights or remedies in connection with any Telesat Excluded Claim; or

 

(xii)Claims arising out of or related to any cause, matter, thing, state of
facts or event first occurring from and after the date hereof.

 

IT IS UNDERSTOOD AND AGREED that for the aforesaid consideration, each Party
undertakes and agrees not to, directly or indirectly, assert any Released Claim
against another Party or against any person entitled to claim contribution,
indemnification or other relief from such Party under the provisions of any
statute or Contract, including the Negligence Act, R.S.O. 1990, c. N.1 and any
amendments and successor legislation thereto, with respect to any Released
Claim.

 

AND IT IS UNDERSTOOD AND AGREED that in the event that any Party should
hereafter commence any proceedings involving any Released Claims against any
other Party, this document may be raised as an estoppel to any such Released
Claims in the proceedings. In the event that a Party commences any such
proceedings, the Party commencing the proceedings undertakes and agrees to
indemnify the Party against whom the proceedings are commenced, on a full
indemnity basis, in respect of any legal fees incurred in relation to any such
proceedings.

 

AND IT IS UNDERSTOOD AND AGREED that for the aforesaid consideration, each Party
represents and warrants to the other Parties that they have not assigned or
transferred, or purported to assign or transfer, to any person, partnership,
corporation, or other entity any rights to any Claim that is a Released Claim.

 

AND IT IS UNDERSTOOD AND AGREED that for the aforesaid consideration, each Party
represents and warrants to the other Parties that no consent, approval, waiver
or other intervention is required for the effective release of the Released
Claims or the effective execution of this release.

 

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AND IT IS UNDERSTOOD AND AGREED that the aforesaid consideration is deemed to be
no admission whatsoever of liability on the part of any Party and that such
liability is denied.

 

AND FOR THE AFORESAID CONSIDERATION the Parties hereby acknowledge, declare and
agree that they are satisfied with the information provided and have no
outstanding requests for information, that they have had sufficient time and
opportunity to seek independent legal and other professional advice with respect
to the terms of this release, that they understand the terms of this release and
voluntarily accept the consideration referred to above for the purpose of making
full and final compromise, adjustment and settlement of all Released Claims as
aforesaid, and each Party represents and warrants to the other Parties that they
have not been induced to enter into this release by reason of any representation
or warranty of any nature of kind whatsoever and that there is no condition,
express or implied, or collateral agreement affecting the said settlement.

 

THE RELEASE EFFECTIVE DATE shall occur, and the Release shall be effective at
first to occur of (a) the Effective Time of the Merger, (b) termination of the
Integration Agreement pursuant to Section 11.1(b)(iv)(A)(2) of the Integration
Agreement (Willful Breach of Obligation to Hold the Leo Stockholder Meeting or
Exclusivity; Alternative Proposals), (c) termination of the Integration
Agreement in a circumstance where the “Willful Breach Fee” is payable pursuant
to Section 11.5(b)(i) of the Integration Agreement, or (d)  termination of the
Integration Agreement pursuant to Section 11.1(b)(iv)(B) of the Integration
Agreement (Uncured Breach of the Integration Agreement). Should the Integration
Agreement be terminated without the Closing having occurred and in a
circumstance other than those set forth in clauses (b), (c) or (d) of the
preceding sentence, then, without the need of any action on the part of any
Party, the release provided for in this Section 1 shall terminate and be of no
force or effect and be deemed null and void ab initio; provided, however, that
the Tolling Agreement as amended pursuant to Section 2 below shall take effect
on the date hereof and continue in effect until the Termination Date (as defined
therein).

 

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2.Amendment of Tolling Agreement.

 

In addition, notwithstanding anything herein to the contrary, PSP, Red Isle,
Loral, Holdco and Telesat, being the parties necessary to amend the Tolling
Agreement, hereby amend the Tolling Agreement to reflect the below modifications
to Paragraphs 2 and 3 thereof, with such changes having effect as of the date
hereof and continuing regardless of whether the Release Effective Date occurs or
the release provided for in Section 1 is terminated.

 

Paragraph 2 of the Tolling Agreement is hereby deleted in its entirety and
replaced with the following:

 

“This Tolling Agreement shall continue in effect through and including the
‘Termination Date.’ The Termination Date shall be the earlier of (a) the date of
the Effective Time of the Merger or (b) 30 calendar days following termination
of the Integration Agreement in accordance with its terms. The Termination Date
may be extended upon the written agreement of the Parties.”

 

Paragraph 3 of the Tolling Agreement is hereby deleted in its entirety and
replaced with the following:

 

“This period between the Effective Date (including the Effective Date) and the
Termination Date (including the Termination Date) shall be referred to herein as
the ‘Tolling Period.’”

 

3.General.

 

THIS FULL AND FINAL RELEASE AND AMENDMENT OF TOLLING AGREEMENT shall enure to
the benefit of the respective successors, heirs, executors, administrators
and/or legal or personal representatives of a Party.

 

THIS FULL AND FINAL RELEASE AND AMENDMENT OF TOLLING AGREEMENT may not be
modified, amended, supplemented or otherwise changed without the express written
consent from the Parties on whose interests the modifications would operate.

 

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THIS FULL AND FINAL RELEASE AND AMENDMENT OF TOLLING AGREEMENT is governed by
and interpreted in accordance with the laws of the Province of Ontario and the
applicable laws of Canada and the Parties submit to the exclusive jurisdiction
of the Ontario Superior Court of Justice in connection with any dispute relating
to or arising out of this release.

 

THIS FULL AND FINAL RELEASE AND AMENDMENT OF TOLLING AGREEMENT may be executed
in counterparts and exchanged in pdf format, each of which will be deemed to be
an original, and all of which taken together will constitute one instrument,
despite the date of actual execution.

 

[Remainder of this page intentionally left blank]

 

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  Loral Space & Communications Inc.

 

  By: /s/ Avi Katz

 

  Name: Avi Katz   Title: President, General Counsel and Secretary   Date:
November 23, 2020

 

  Loral Holdings Corporation       By: /s/ Avi Katz

 

  Name: Avi Katz   Title: President and Secretary   Date: November 23, 2020

 

  MHR Fund Management LLC       By: /s/ Janet Yeung

 

  Name: Janet Yeung   Title: Authorized Signatory   Date: November 23, 2020

 

[Signature Page to Release Agreement]

 

 

 

  Public Sector Pension Investment Board       Per: /s/ Guthrie Stewart

 

  Name: Guthrie Stewart   Title: Authorized Signatory   Date: November 23, 2020

 

  Per: /s/ David Morin

 

  Name: David Morin   Title: Authorized Signatory   Date: November 23, 2020

 

          Red Isle Private Investments Inc.       Per: /s/ Guthrie Stewart

 

  Name: Guthrie Stewart   Title: Authorized Signatory   Date: November 23, 2020

 

  Per: /s/ David Morin

 

  Name: David Morin   Title: Authorized Signatory   Date: November 23, 2020

 

[Signature Page to Release Agreement]

 

 

 

  Telesat Canada       Per: /s/ Christopher S. DiFrancesco

 

  Name: Christopher S. DiFrancesco   Title: Vice President, General Counsel and
Secretary   Date: November 23, 2020

 

[Signature Page to Release Agreement]