FORM OF CASH COLLATERAL AGREEMENT



 





EXHIBIT 10.44




EXECUTION COPY




CASH COLLATERAL AGREEMENT




     CASH COLLATERAL AGREEMENT dated as of April 2, 2004 (this “Agreement”),
between Space Systems/Loral, Inc. (the “Pledgor”), a corporation existing under
the laws of the State of Delaware and a debtor and debtor-in-possession in a
case pending under Chapter 11 of the Bankruptcy Code in the United States
Bankruptcy Court for the Southern District of New York, and JPMorgan Chase
Bank, a New York banking corporation (the “Bank”).



W I T N E S S E T H




     WHEREAS, pursuant to the Letter of Credit Reimbursement Agreement, dated
as of even date herewith (as amended, supplemented or otherwise modified from
time to time, the “Reimbursement Agreement”), between the Pledgor and the Bank,
the Bank may issue from time to time at the request of, and for the account of,
the Pledgor letters of credit (collectively, the “Letters of Credit”) in an
aggregate face amount not to exceed $20,000,000; and



     WHEREAS, the Bank and the Pledgor agree that a condition to the issuance
of any Letter of Credit is that each such Letter of Credit be secured fully by
cash collateral in accordance with the terms of the Reimbursement Agreement and
this Agreement;



     NOW, THEREFORE, in consideration of the premises, the Pledgor hereby
agrees 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 hereby
irrevocably assigns and pledges to the Bank, and hereby grants to the Bank, (i)
pursuant to Section 364(c)(1) of the Bankruptcy Code, an allowed superpriority
administrative expense claim in the Bankruptcy Proceeding and (ii) pursuant to
Section 364(c)(2) of the Bankruptcy Code a first priority security interest in
(w) 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,
(x) all cash from time to time deposited into the Cash Collateral Account, (y)
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 (z) to the extent not covered by clauses (w) through (y)
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, whether pursuant to Section 363 of the
Bankruptcy Code or otherwise.


 









 






     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), without further order of or
application to the Bankruptcy Court, the Bank may, by giving five (5) Business
Days’ notice to the Pledgor (with a copy to counsel for the Committee and to
the Office of the United States Trustee for the Southern District of New York):
(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 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
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 without
further order of or application to the Bankruptcy Court 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 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


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relating to such Alternative Currency Letters of Credit. In the event
that the Collateral maintained in the Cash Collateral Account in respect of any
outstanding Alternative Currency Letters of Credit is more than 110% of the
then Dollar Equivalent of the LC Exposure relating to such Alternative Currency
Letter of Credit, or in the event that the Collateral maintained in the Cash
Collateral Account in respect of any other Letter of Credit is more than 105%
of the LC Exposure relating to such other Letter of Credit, so long as no
Default or Event of Default has occurred and is continuing, the Bank will, no
more often than one time per each fiscal quarter, upon request from the
Borrower, transfer such excess, as determined by the Bank in Good Faith, to the
account of the Borrower.



     Section 5. Investing Amounts in the Accounts. If requested by the
Pledgor, the Bank will, from time to time, (a) invest amounts on deposit in the
Cash Collateral Account in such deposits, commercial paper and securities (the
“Investments”) as the Pledgor may select and the Bank may approve in its
reasonable discretion and (b) invest interest or dividends paid on the
Investments and reinvest other proceeds of such Investments which may mature or
be sold in new deposits, commercial paper or securities as the Pledgor may
select and the Bank may approve in its discretion. Interest and proceeds which
are not invested or reinvested shall be deposited and held in the Cash
Collateral Account; provided that the Pledgor may at any time or from time to
time request release of such interest and proceeds in accordance with Section 4
hereof. The Bank will only approve Investments in which it can obtain a
first-priority, perfected security interest, which may require the Pledgor to
execute necessary documents.



     Section 6. Representations and Warranties. The Pledgor hereby represents
to the Bank that: (a) the execution, delivery and performance by it of this
Agreement have been duly authorized by all necessary corporate action, and do
not and will not violate any law or regulation applicable to it or will not
violate any law or regulation applicable to it or contravene any loan, credit
or other agreement to which it is a party or by which it or its properties are
bound, (b) it is the legal and beneficial owner of the Collateral free and
clear of any lien, security interest or other charge or encumbrance except for
the security interest created by this Agreement, (c) this Agreement constitutes
a legal, valid and binding obligation of the Pledgor enforceable in accordance
with its terms, except as the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization or other similar laws
affecting creditors’ rights generally and by general equitable principles
(regardless of whether the issue of enforceability is considered in a
proceeding in equity or at law), and creates in favor of the Bank a perfected,
first priority security interest in the Collateral, enforceable in accordance
with its terms, (d) no consent of any other person (including, without
limitation, stockholders or creditors of the Pledgor or any of its subsidiaries
or of any parent company of the Pledgor), and no consent, license, permit,
approval or authorization of, exemption by, or registration, filing or
declaration with, any governmental authority is required in connection with the
execution, delivery, performance, validity or enforceability of this Agreement
by or against the Pledgor, other than consents that have already been obtained
and which remain in full force and effect, (e) the execution, delivery and
performance of this Agreement will not result in the creation or imposition of
any lien (other than the Liens in favor of the Bank under this Agreement) on
any of its properties or assets pursuant to the provisions of any contractual
obligation, and (f) there is no litigation, suit, action, investigation,
inquiry or other proceeding presently pending (other than the Bankruptcy
Proceeding) which could reasonably be expected to affect the value of the
Collateral


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or, to the knowledge of the Pledgor, threatened against the Pledgor or any
of its subsidiaries or any of their properties or assets, by or before any
arbitrator or any governmental authority and no preliminary or permanent
injunction or order by a state or Federal court has been entered in connection
with this Agreement.



     Section 7. Covenants. The Pledgor covenants and agrees with the Bank
that:



     (a) The Pledgor will not (1) sell, assign, transfer, exchange, or
otherwise dispose of, or grant any option with respect to, the Collateral, or
(2) create, incur or permit to exist any lien or option in favor of, or any
claim of any person with respect to, any of the Collateral, or any interest
therein, except for the security interest created by this Agreement.



     (b) The Pledgor will maintain the security interest created by this
Agreement as a first priority, perfected security interest and defend the
right, title and interest of the Bank in and to the Collateral against the
claims and demands of all persons whomsoever. At any time and from time to
time, upon the written request of the Bank, and at the sole expense of the
Pledgor, the Pledgor will promptly and duly execute and deliver such further
instruments and documents and take such further actions as the Bank reasonably
may request for the purposes of obtaining or preserving the full benefits of
this Agreement and of the rights and powers herein granted.



     Section 8. No Discharge; Survival of Claims. The Pledgor agrees that (i)
the Obligations shall not be discharged by the Confirmation Order (and the
Pledgor, pursuant to Section 1141(d)(4) of the Bankruptcy Code, hereby waives
any such discharge) and (ii) the Liens and claims granted to the Bank pursuant
to the Order and described herein shall not be adversely affected in any manner
by the Confirmation Order or the occurrence of the Plan Effective Date.



     Section 9. Waiver. The Pledgor hereby waives presentation of any
instrument or document evidencing any indebtedness or liability to the Bank,
demand of payment, protest and notice of non-payment or protest.



     Section 10. Expenses. The Pledgor further agrees that it will pay the
Bank upon written demand any and all reasonable expenses (including reasonable
fees and expenses of its counsel) which the Bank may incur in connection with
the exercise or enforcement of any of the rights of the Bank hereunder.



     Section 11. Continuing Security Interest. This Agreement shall create a
continuing security interest in the Collateral and shall, notwithstanding the
entry of the Confirmation Order or, subject to Section 2.15(a) of the
Reimbursement Agreement, the occurrence of the Plan Effective Date, (a) remain
in full force and effect until the payment in full (after the expiration of all
Letters of Credit) of the Obligations, (b) be binding upon the Pledgor and its
successors and assigns (provided that any assignment by the Pledgor must be
made only with the prior written consent of the Bank), and (c) inure to the
benefit of the Bank and its successors, transferees and assigns. Upon the
payment in full (after the expiration of all Letters of Credit) of the
Obligations, the Pledgor shall be entitled to the return, upon its request and
at its expense, of such of the Collateral as shall not have been applied
pursuant to the terms of this


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Agreement. It is the intention of the parties hereto that the security
interests created hereby in favor of the Bank shall continue from and after the
Plan Effective Date to constitute continuing, perfected first priority security
interests in the Collateral, as security for the Obligations. Accordingly,
effective on the Plan Effective Date, the Pledgor confirms that it has granted,
and does hereby grant, to the Bank, a security interest in all right, title and
interest of the Pledgor in and to the Collateral Account and in all Cash,
Investments, security entitlements and other investments held or carried at any
time in the Collateral Account, as security for the Obligations.



     Section 12. Further Assurances. At the cost and expense of the Borrower,
the Borrower shall execute and file all such further documents and instruments,
and perform such other acts, as the Bank may request to maintain the Liens
granted to the Bank in connection with this Agreement, the Reimbursement
Agreement and the Interim Order (or the Final Order, as applicable) and to
maintain the priority of such Liens to be granted pursuant to this Agreement,
the Reimbursement Agreement and the Interim Order (or the Final Order, as
applicable). Pursuant to Section 9-402 of the New York UCC and any other
applicable law, the Borrower authorizes the Bank to file or record financing
statements and other filing or recording documents or instruments with respect
to the Collateral without the signature of the Borrower in such form and in
such offices the Bank reasonably determines appropriate to perfect the security
interests of the Bank under this Agreement, the Reimbursement Agreement and the
Interim Order (or the Final Order, as applicable). A photographic or other
reproduction of this Agreement shall be sufficient as a financing statement or
other filing or recording document or instrument for filing or recording in any
jurisdiction.



     Section 13. Amendments, Etc. No amendment or waiver of any provision of
this Agreement nor consent to departure by the Pledgor herefrom shall in any
event by effective unless the same shall be in writing and signed by the Bank,
and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.



     Section 14. Notices. All notices, requests and demands to or upon the
Bank or the Pledgor to be effective shall be in writing (or by telex, fax or
similar electronic transfer) and shall be deemed to have been duly given or
made (1) when delivered by hand or (2) if given by mail, when deposited in the
mails by certified mail, return receipt requested, or (3) if by telex, fax or
similar electronic transfer, when sent and receipt has been confirmed,
addressed to the Bank or the Pledgor at its address or transmission number for
notices set forth below its signature hereto. The Bank and the Pledgor may
change their addresses and transmission numbers for notices by notice in the
manner provided in this paragraph.



     Section 15. Governing Law; Submission to Jurisdiction; Jury Trial. (a)
This Agreement and the rights and obligations of the parties hereunder shall be
construed in accordance with and be governed by the law of the State of New
York. Any legal action or proceeding between the Pledgor and any other party
to this Agreement arising out of or with respect to this Agreement may be
brought (a) prior to the Plan Effective Date, in the Bankruptcy Court and (b)
at any time thereafter, in the state courts of the State of New York, located
in the County of New York, or in the courts of the United States for the
Southern District of New York, and the Pledgor submits to the non-exclusive
jurisdiction of such courts for the purpose of any such suit, action or
proceeding or judgment. Each party to this Agreement irrevocably consents


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to service of process in the manner provided for notices in Section 14,
such service to become effective 30 days after such mailing. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law. Nothing herein shall affect the right of
the Bank to bring any legal action or proceeding against the Pledgor in any
court having jurisdiction with respect thereto but actions and proceedings
initiated prior to the Plan Effective Date shall be brought in the Bankruptcy
Court.



     (a) Each of the Bank and the Pledgor hereby irrevocably 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 of the aforesaid actions or
proceedings arising out of or in connection with this Agreement brought in the
courts referred to in Section 15(a). Each of the Plegdor and the Bank hereby
further irrevocably waive and agree 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.



     (b) Each of the Pledgor and the Bank waives, to the fullest extent it may
legally and effectively do so, any right it may have to jury trial in any legal
proceeding directly or indirectly arising out of or relating to each of the
Pledgor’s and the Bank’s rights and obligations under this Agreement or
transactions contemplated hereby (whether based on contract, tort or any other
theory).



     Section 16. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Delivery of an executed
counterpart of a signature page of this Agreement by telecopy shall be
effective as delivery of a manually executed counterpart of this Agreement.


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     IN WITNESS WHEREOF, the undersigned has caused its duly authorized officer
to execute and deliver this Agreement as of the date first above written.



	 	 	 	 	 	 	 
	 	 	 	 	SPACE SYSTEMS/LORAL, INC.
	 
	 	 	 	 	 	 
	

	 	 	 	By:	 	 
	

	 	 	 	 	 	
 
	

	 	 	 	 	 	Name:
	

	 	 	 	 	 	Title:
	 
	 	 	 	 	 	 
	 	 	 	 	Address:
	 
	 	 	 	 	 	 
	 	 	 	 	Attention:
	 	 	 	 	Fax number:
	 	 	 	 	Telephone:
	 
	 	 	 	 	 	 
	Agreed and Accepted:	 	 	 	 
	 
	 	 	 	 	 	 
	JPMORGAN CHASE BANK	 	 	 	 
	 
	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	

	 	
 	 	 	 	 
	

	 	Name: Anna Marie Greer	 	 	 	 
	

	 	Title: Vice President	 	 	 	 







JPMorgan Chase Bank

270 Park Avenue

New York, New York 10017

Attention: Anna Marie Greer

Fax number: (212) 270-0427

Telephone: (212) 270-0332