1
EXECUTION COPY
PURCHASE AGREEMENT
BY AND AMONG
LORAL SPACE & COMMUNICATIONS LTD.
AND
DACOM CORPORATION
DACOM INTERNATIONAL, INC.
HYUNDAI CORPORATION
HYUNDAI ELECTRONICS INDUSTRIES CO., LTD.
SAN GIORGIO, X.X.
XXXXX
VODAFONE CELLULAR LIMITED
VODAFONE SATELLITE SERVICES LIMITED
DATED AS OF MAY 20, 1998
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PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (the "AGREEMENT") is made and entered
into as of May 20, 1998, by and among Loral Space & Communications Ltd., a
Bermuda company ("LORAL"), and DACOM Corporation, DACOM International, Inc.,
Hyundai Corporation, Hyundai Electronics Industries Co., Ltd., San Giorgio,
S.A., TESAM, Vodafone Cellular Limited and Vodafone Satellite Services Limited
(each a "Seller" and collectively, the "SELLERS").
RECITALS
WHEREAS, each Seller is a limited partner in Globalstar, L.P.,
a Delaware limited partnership ("Globalstar") and owns limited partnership
interests therein; and
WHEREAS, Loral wishes to purchase from each Seller the limited
partnership interests in Globalstar held by such Seller as set forth on Schedule
I hereto (the "Interests") and each Seller desires to sell its Interests to
Loral, in each case upon the terms and subject to the conditions set forth in
this Agreement.
NOW, THEREFORE, in consideration of the premises, the mutual
covenants and agreements contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.1. DEFINITIONS. In addition to the terms defined
elsewhere herein, the terms defined in the introductory paragraph and the
Recitals to this Agreement shall have the respective meanings specified therein,
and the following terms shall have the meanings specified below when used herein
with initial capital letters:
"AFFILIATE" means any Person that directly or indirectly
controls, is controlled by, or is under common control with the Person
in question. As used in this definition of "Affiliate," the term
"control" means the possession, whether directly or indirectly, of the
power to direct or cause the direction of the management and policies
of a Person, whether through the ownership of voting
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securities, by contract or otherwise. The terms "controlled" and
"common control" shall have correlative meanings.
"AGREEMENT" has the meaning set forth in the preamble.
"BUSINESS DAY" means a day, other than a Saturday or a Sunday,
on which commercial banks are not required or authorized to close in
the City of New York.
"CLOSING" means the closing of the purchase and sale of
Interests described herein.
"CLOSING DATE" means the date that is one Business Day
following the date on which all the conditions set forth in Article VI
(other then the condition set forth in Section 6.1(d) which shall occur
simultaneously with the Closing) shall be satisfied (or waived) but
which shall in any event not be earlier than the day that is three
Business Days following the closing of the Loral Equity Offering.
"CONSENT" means any consent, approval, authorization, waiver,
permit, agreement, license, certificate, exemption, order,
registration, declaration or filing of, with or to any Person.
"ESCROW AGENT" has the meaning set forth in the Escrow
Agreement.
"ESCROW AGREEMENT" means any Escrow Agreement substantially in
the form attached hereto as Exhibit A, to be entered into on the
Closing Date by Loral, the Escrow Agent, Globalstar and a Seller.
"GLOBALSTAR" has the meaning set forth in the Recitals.
"GLOBALSTAR PARTNERSHIP AGREEMENT" means the Amended and
Restated Agreement of Limited Partnership of Globalstar, L.P. dated as
of March 6, 1996, as amended on April 8, 1998.
"GOVERNMENTAL AGENCY" means (a) any international, foreign,
federal, state, county, local or municipal government or administrative
agency or political subdivision thereof, (b) any governmental agency,
authority, board, bureau, commission, department or instrumentality,
(c) any
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court or administrative tribunal, (d) any non-governmental agency,
tribunal or entity that is vested by a governmental agency with
applicable jurisdiction, or (e) any arbitration tribunal or other
non-governmental authority with applicable jurisdiction.
"GOVERNMENTAL APPROVAL" means any Consent of or filing with
any Governmental Agency.
"HYUNDAI" means Hyundai Corporation and Hyundai Electronics
Industries Co., Ltd.
"INTERESTS" has the meaning set forth in the Recitals.
"LEGAL REQUIREMENTS" in respect of any Person means all (a)
constitutions, treaties, statutes, laws, ordinances, codes, rules,
regulations, judgments, decrees, writs, rulings, injunctions, orders
and other requirements of any Governmental Agency, (b) Governmental
Approvals and (c) orders, decisions, injunctions, judgments, awards and
decrees of or agreements with any Governmental Agency, in each case,
binding upon such Person.
"LIEN" means any lien, encumbrance, charge, mortgage, pledge,
security interest, hypothecation, title defect, title retention
agreement, claim, restriction, option, right of first offer or refusal
or similar right.
"LORAL" has the meaning set forth in the preamble hereto.
"LORAL EQUITY OFFERING" means the public offering by Loral of
common stock, par value $.01 per share, as described in the
Registration Statement on Form S-3 initially filed with the Securities
and Exchange Commission on April 28, 1998.
"PERMIT" means any permit, approval, consent, authorization,
license, variance, or permission required by a Governmental Agency
under any applicable laws.
"PERSON" means any individual, partnership, corporation,
trust, association, limited liability company, Governmental Agency or
any other entity.
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"PURCHASE PRICE" means, with respect to each Seller, the
amount set forth opposite its name under the caption "Purchase Price"
on Schedule I hereto.
"SELLER" and "SELLERS" has the meaning set forth in the
preamble hereto.
"XXXXX TRANSACTION" shall mean the purchase by Xxxxx Fund
Management L.L.C. or its Affiliates or Persons associated with or
advised by Xxxxx Fund Management L.L.C. from Loral of 4,200,000 shares
(or 8,400,000 shares on a post Stock Split basis) of common stock of
Globalstar Telecommunications Limited, par value $1.00 per share, at a
purchase price of $58 1/3 per share.
"STOCK SPLIT" means the stock dividend to be paid by
Globalstar Telecommunications Limited to stockholders of record on May
29, 1998, which dividend will be paid on June 8, 1998.
ARTICLE II.
SALE AND PURCHASE
SECTION 2.1. AGREEMENT TO SELL AND TO PURCHASE. On the terms
and subject to the conditions set forth in this Agreement, on the Closing Date,
Loral shall purchase from each Seller, and each Seller shall sell, transfer,
assign, convey and deliver to Loral, the Interests.
SECTION 2.2. PURCHASE AND SALE OF INTERESTS. On the terms and
subject to the conditions set forth in this Agreement, on the Closing Date:
(a) Loral shall deliver to each Seller, by wire transfer of
next day funds, an amount equal to 50% of the Purchase Price;
(b) Loral shall deliver to the Escrow Agent, by wire transfer
of next day funds, with respect to each Seller, an amount equal to the
remaining 50% of the Purchase Price;
(c) Loral, the Escrow Agent, Globalstar and each Seller shall
execute and deliver to each other an Escrow Agreement provided that if
one or more Sellers still be
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Affiliates of each other, then such Sellers may, at their option, elect
to enter into only one Escrow Agreement;
(d) Each Seller shall deliver to Loral an Assignment of
Partnership Interests in the form attached hereto as Exhibit B; and
(e) Schedule A to the Globalstar Partnership Agreement shall
be amended (i) to reduce the amount of partnership interests held by
each Seller by the amount of Interests set forth opposite its name on
Schedule I and (ii) to increase the amount of partnership interests
held by Loral by 3,900,000.
SECTION 2.3. EXECUTION AND CLOSING. The parties hereto agree
that the Closing shall take place at a location outside the United States of
America, to be designated by Loral no later than five Business Days prior to the
Closing Date.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF SELLERS
Each Seller hereby severally and not jointly, represents and
warrants to Loral as follows:
SECTION 3.1. AUTHORITY OF SELLER.
(a) Seller is duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization.
(b) Seller has all requisite power and authority to execute
and deliver this Agreement and the Escrow Agreement and to perform its
obligations hereunder and thereunder. The execution and delivery by
Seller of this Agreement and the Escrow Agreement and the consummation
of the transactions contemplated hereby and thereby have been duly and
validly authorized by all necessary action (corporate or otherwise) on
the part of Seller. This Agreement has been, and the Escrow Agreement
will be, duly executed and delivered by Seller and this Agreement
constitutes, and the Escrow Agreement will constitute, the legal, valid
and binding obligation of Seller enforceable against Seller in
accordance with its terms, except as such enforcement may be
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limited by applicable bankruptcy, reorganization, insolvency,
moratorium, or similar laws from time to time in effect which affect
creditors' rights generally and by legal and equitable limitations on
the enforceability of specific remedies.
SECTION 3.2. TITLE TO THE INTERESTS. Seller has valid and
marketable title to the Interests to be sold by it hereunder, free and clear of
any Liens, except for the applicable restrictions set forth under Sections 10.1
and 10.3 of the Globalstar Partnership Agreement.
SECTION 3.3. NO CONFLICT OR VIOLATION; CONSENTS. Neither the
execution or delivery of this Agreement or the Escrow Agreement by Seller, nor
the consummation by Seller of the transactions contemplated hereby or thereby,
nor the fulfillment by Seller of the terms and compliance with the provisions
hereof or thereof, will conflict with, or result in a breach of the terms,
conditions or provisions of, or constitute a default under, or result in any
violation of, or result in the creation of any Lien upon any of the properties
or assets of Seller pursuant to (i) the organizational documents (including
certificate of incorporation and by-laws, if applicable) of Seller, (ii) any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which Seller is a party or by which it is bound or to which any of
the properties or assets of Seller is subject, or (iii) any award of any
arbitrator or any agreement, instrument, order, judgment, decree, statute, law,
rule or regulation of any Governmental Agency to which Seller is subject or by
which any of Seller's properties or assets are bound. Except as set forth in the
Globalstar Partnership Agreement, no Consent is required to be obtained or made
by or with respect to Seller in connection with the execution and delivery of
this Agreement or the Escrow Agreement by Seller or the performance by Seller of
the transactions contemplated hereby or thereby to be performed by it.
SECTION 3.4. BROKERS. All negotiations relative to this
Agreement and the transactions contemplated hereby have been carried on by
Seller without the intervention of any other Person acting on its behalf in such
manner as to give rise to any valid claim by any such Person against Loral,
Globalstar or any other Person for a finder's fee, brokerage commission or other
similar payment based on an arrangement with Seller.
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ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF LORAL
Loral represents and warrants to each Seller as follows:
SECTION 4.1. AUTHORITY OF LORAL.
(a) Loral is duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization.
(b) Loral has all requisite power and authority to execute and
deliver this Agreement and the Escrow Agreement and to perform its
obligations hereunder and thereunder. The execution and delivery by
Loral of this Agreement and the Escrow Agreement and the consummation
of the transactions contemplated hereby and thereby have been duly and
validly authorized by all necessary action (corporate or otherwise) on
the part of Loral. This Agreement has been, and the Escrow Agreement
will be, duly executed and delivered by Loral and this Agreement
constitutes, and the Escrow Agreement will constitute, the legal, valid
and binding obligation of Loral enforceable against Loral in accordance
with its terms, except as such enforcement may be limited by applicable
bankruptcy, reorganization, insolvency, moratorium, or similar laws
from time to time in effect which affect creditors' rights generally
and by legal and equitable limitations on the enforceability of
specific remedies.
SECTION 4.2. NO CONFLICT OR VIOLATION; CONSENTS. Neither the
execution or delivery of this Agreement or the Escrow Agreement by Loral, nor
the consummation by Loral of the transactions contemplated hereby or thereby,
nor the fulfillment by Loral of the terms and compliance with the provisions
hereof or thereof, will conflict with, or result in a breach of the terms,
conditions or provisions of, or constitute a default under, or result in any
violation of, or result in the creation of any Lien upon any of the properties
or assets of Loral pursuant to (i) the Memorandum of Association and bye-laws of
Loral, (ii) any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which Loral is a party or by which it is bound or to
which any of the properties or assets of Loral is subject, or (iii) any award of
any
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arbitrator or any agreement, instrument, order, judgment, decree, statute,
law, rule or regulation of any Governmental Agency to which Loral is subject or
by which any of Loral's properties or assets are bound. Except as set forth in
the Globalstar Partnership Agreement, no Consent is required to be obtained or
made by or with respect to Loral in connection with the execution and delivery
of this Agreement or the Escrow Agreement by Loral or the performance by Loral
of the transactions contemplated hereby or thereby to be performed by it.
SECTION 4.3. BROKERS. All negotiations relative to this
Agreement and the transactions contemplated hereby have been carried on by Loral
without the intervention of any other Person acting on its behalf in such manner
as to give rise to any valid claim by any such Person against any of the Seller
or its Affiliates for a finder's fee, brokerage commission or other similar
payment based on an arrangement with Loral.
SECTION 4.4. VALUE OF GLOBALSTAR REAL ESTATE. To the best
knowledge of Loral, the value of the real estate owned by Globalstar is less
than 50% of the total value of Globalstar.
ARTICLE V.
CERTAIN COVENANTS AND AGREEMENTS
SECTION 5.1. TAXES. Any taxes, including but not limited to,
sales, recording, transfer, stamp, conveyance, value added, use, capital,
income, duties, excise, governmental charges or fees, as well as any associated
interest and related penalties thereto ("Taxes"), imposed as a result of or in
connection with the sale of the Interests by a Seller to Loral pursuant to this
Agreement or the ownership of the Interests by a Seller prior to the Closing
Date shall in each case be borne by such Seller. Loral shall assume similar
responsibility for any Taxes associated with the ownership of Interests after
the Closing Date.
SECTION 5.2. APPROVAL AND WAIVER. The parties hereto agree
that the execution and delivery of this Agreement by a Seller shall constitute
(i) approval by such Seller of any and all amendments to the Globalstar
Partnership Agreement reasonably determined by Loral to be necessary or
advisable to permit the transactions contemplated hereunder and under the Xxxxx
Transaction and (ii) waiver by such Seller of its rights of first offer under
Section 10.3 of the Globalstar Partnership Agreement
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with respect to any offer or sale of partnership interests made during the
period commencing on the date hereof and ending on the sixth month anniversary
thereof.
SECTION 5.3. COMPLIANCE WITH GLOBALSTAR PARTNERSHIP AGREEMENT.
If Loral shall assign its rights under the Agreement pursuant to Section 7.4
hereof to a Person that is not then a limited partner in Globalstar, then Loral
will on the Closing Date, furnish Globalstar with an agreement, in form
reasonably satisfactory to Globalstar, executed by such assignee pursuant to
which the assignee agrees to be bound by the Globalstar Partnership Agreement
and such other documents or instruments as may be required by Globalstar
pursuant to Section 11.1(a) of the Globalstar Partnership Agreement in order to
effect its admission as a limited partner therein.
SECTION 5.4. HYUNDAI'S SERVICED TERRITORIES. Each of Loral and
Hyundai hereby mutually acknowledge and agree that effective at closing of
Loral's purchase of Interests from Hyundai, Hyundai will have withdrawn as a
Globalstar service provider in Brunei, Finland, Hungary, India, Nepal, New
Zealand, Pakistan, Singapore, Sri Lanka, Taiwan and Thailand and accordingly
Hyundai shall have relinquished at such closing all of its rights and claims
with respect thereto under the Founding Service Provider Agreement dated as of
January 1, 1995 between Hyundai/DACOM and Globalstar.
SECTION 5.5. AMENDMENT TO PURCHASE AGREEMENT. Each of Loral
and the Sellers hereby agree that if the right of first offer set forth in
Section 10.3 of the Globalstar Partnership Agreement shall be exercised by any
partner with respect to any of the Interests to be sold hereunder (other than a
Seller hereto who shall have waived such right under Section 5.2 above), the
parties hereto shall enter into an amendment to this Agreement to adjust for any
such exercise by amending (i) the number of Interests to be sold by the Sellers
and purchased by Loral, (ii) the Purchase Price and (iii) the definition of the
Xxxxx Transaction to reflect a proportionate diminution in the number of shares
of GTL common stock to be acquired by Xxxxx.
ARTICLE VI.
CONDITIONS TO CLOSING
SECTION 6.1. CONDITIONS TO OBLIGATIONS OF LORAL. The
obligation of Loral to perform its obligations hereunder with
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respect to each Seller is subject to the satisfaction (or waiver by Loral) of
the following conditions:
(a) Representations and Warranties. The representations and
warranties of each Seller made in this Agreement shall be true and
correct on and as of the date hereof and as of the Closing Date, as
though made on and as of the Closing Date; and each Seller shall have
delivered to Loral a certificate dated the Closing Date and signed by
an authorized officer of Seller confirming the foregoing.
(b) No Proceedings. No Legal Requirement shall have been
enacted, entered, promulgated or enforced by any Governmental Agency
that prohibits the consummation of the transactions contemplated by
this Agreement and the Escrow Agreement.
(c) Loral Equity Offering. The closing of the Loral Equity
Offering shall have occurred on or prior to July 31, 1998 and shall
have yielded net proceeds of at least $225 million to Loral.
(d) Xxxxx Transaction. The closing of the Xxxxx Transaction
shall have occurred simultaneously with the Closing.
(e) Amendment to Globalstar Partnership Agreement. The
Globalstar Partnership Agreement shall have been amended as
contemplated under Section 5.2 hereto to permit the transactions
contemplated hereunder and under the Xxxxx Transaction.
(f) Waiver of Rights of First Offer. The partners of
Globalstar shall have waived their rights of first offer under Section
10.3 of the Globalstar Partnership Agreement (or the applicable offer
period shall have expired) in respect of the Interests to be sold and
purchased hereunder.
The parties hereto agree that the conditions set forth in this Section 6.1 shall
be several with respect to each Seller.
SECTION 6.2. CONDITIONS TO OBLIGATIONS OF SELLER. The
obligation of each Seller to perform its obligations hereunder is subject to the
satisfaction (or waiver by such Seller) of the following conditions:
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(a) Representations and Warranties. The representations and
warranties of Loral made in this Agreement shall be true and correct on
and as of the date hereof and as of the Closing Date, as though made on
and as of the Closing Date; and Loral shall have delivered to such
Seller a certificate dated the Closing Date and signed by an authorized
officer of Loral confirming the foregoing.
(b) No Proceedings. No Legal Requirement shall have been
enacted, entered, promulgated or enforced by any Governmental Agency
that prohibits the consummation by such Seller or Loral of the
transactions contemplated by this Agreement and the Escrow Agreement.
(c) Waiver of Rights of First Offer. The partners of
Globalstar shall have waived their rights of first offer under Section
10.3 of the Globalstar Partnership Agreement (or the applicable offer
period shall have expired) in respect of the Interests to be sold by
such Seller.
ARTICLE VII.
MISCELLANEOUS PROVISIONS
SECTION 7.1. NOTICES. All notices, demands or other
communications to be given or delivered under or by reason of the provisions of
this Agreement shall be in writing and shall be deemed to have been given (a)
when delivered personally to the recipient, (b) when sent to the recipient by
telecopy (receipt electronically confirmed by sender's telecopy machine) if
during normal business hours of the recipient, otherwise on the next Business
Day, (c) two (2) Business Days after the date when sent to the recipient by
reputable express courier service (charges prepaid), or (d) seven (7) Business
Days after the date when mailed to the recipient by certified or registered
mail, return receipt requested and postage prepaid. Such notices, demands and
other communications will be sent to Sellers and to Loral at the addresses
indicated below:
(a) If to Loral, to:
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Loral Space & Communications Ltd.
c/o Loral SpaceCom Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: 000-000-0000
Attention: Xxxx X. Xxxxxx
(b) If to Sellers, to their respective addresses set
forth on Schedule I hereto:
SECTION 7.2. AMENDMENTS; NO WAIVERS. The terms, provisions and
conditions of this Agreement may not be changed, modified or amended in any
manner except by an instrument in writing duly executed by all parties hereto.
No failure or delay on the part of any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.
SECTION 7.3. SURVIVAL OF PROVISIONS. The representations,
warranties, covenants and agreements contained in this Agreement shall survive
and remain in full force and effect, regardless of any investigation made by or
on behalf of Seller, or by or on behalf of Loral, and shall survive delivery of
the Interests.
SECTION 7.4. ASSIGNMENT AND PARTIES IN INTEREST.
(a) Neither this Agreement nor any of the rights, duties, or
obligations of any party hereunder may be assigned or delegated (by
operation of law or otherwise) by Loral except with the prior written
consent of each Seller (except that Loral may freely assign to an
Affiliate thereof), or by any Seller except with the prior written
consent of Loral.
(b) This Agreement shall not confer any rights or remedies
upon any person or entity other than the parties hereto and their
respective permitted successors and assigns.
SECTION 7.5. EXPENSES. Except as expressly set forth in this
Agreement, each party to this Agreement shall bear all of its legal, accounting,
investment banking, and other expenses
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incurred by it or on its behalf in connection with the transactions contemplated
by this Agreement, whether or not such transactions are consummated.
SECTION 7.6. FURTHER ASSURANCE. Each of the parties hereto
agree to execute, deliver and file or cause to be executed, delivered and filed
such further documents and instruments as may be necessary or as may be
reasonably requested in order to fully effectuate the purposes, terms and
conditions of this Agreement, whether before or after the Closing Date.
SECTION 7.7. ENTIRE AGREEMENT. This Agreement and the Exhibits
and Schedules hereto constitute the entire agreement among the parties hereto
with respect to the subject matter hereof, supersede and are in full
substitution for any and all prior agreements and understandings among them
relating to such subject matter, and no party shall be liable or bound to the
other party hereto in any manner with respect to such subject matter by any
warranties, representations, indemnities, covenants, or agreements except as
specifically set forth herein.
SECTION 7.8. DESCRIPTIVE HEADINGS. The descriptive headings of
the several sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the provisions
hereof.
SECTION 7.9. COUNTERPARTS. For the convenience of the parties,
any number of counterparts of this Agreement may be executed by the parties
hereto, and each such executed counterpart shall be, and shall be deemed to be,
an original, but all of which shall constitute, and shall be deemed to
constitute, in the aggregate one and the same instrument.
SECTION 7.10. GOVERNING LAW. This Agreement and the legal
relations between the parties hereto shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and performed therein without regard to principles of conflicts of law.
SECTION 7.11. CONSTRUCTION. The language used in this
Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rule of strict construction will be applied against
any party. Any references to any federal, state, local or foreign statute or law
will also refer to all rules and regulations promulgated thereunder, unless
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the context requires otherwise. Unless the context otherwise requires: (a) a
term has the meaning assigned to it by this Agreement; (b) "or" is disjunctive
but not exclusive; (c) words in the singular include the plural, and in the
plural include the singular; (d) provisions apply to successive events and
transactions; and (e) "$" means the currency of the United States of America.
SECTION 7.12. SEVERABILITY. In the event that any one or more
of the provisions contained in this Agreement or in any other instrument
referred to herein, shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, then to the maximum extent permitted by law, such
invalidity, illegality or unenforceability shall not affect any other provision
of this Agreement or any other such instrument. Furthermore, in lieu of any such
invalid or unenforceable term or provision, the parties hereto intend that there
shall be added as a part of this Agreement a provision as similar in terms to
such invalid or unenforceable provision as may be possible and be valid and
enforceable. Furthermore, this Agreement shall be deemed to be a severable and
separable series of agreements, one between Loral and each of the Sellers so
that the failure of any one or more Sellers to close this Agreement shall not
affect the Closing of this Agreement by one or more of the other Sellers.
SECTION 7.13. SPECIFIC PERFORMANCE. Without limiting or
waiving in any respect any rights or remedies of the parties under this
Agreement now or hereinafter existing at law or in equity or by statute, each of
the parties hereto shall be entitled to seek specific performance of the
obligations to be performed by the others in accordance with the provisions of
this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement as of the day and year first written above.
LORAL SPACE & COMMUNICATIONS LTD.
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Senior Vice President
SELLERS:
DACOM CORPORATION
By: /s/ Xxx Xxxxx Xxxx
Name: Xxx Xxxxx Xxxx
Title: President and CEO
DACOM INTERNATIONAL, INC.
By: /s/ Xxxxxx X.X. Xxx
Name: Xxxxxx X.X. Xxx
Title: President and CEO
HYUNDAI CORPORATION
By: /s/ Xxxx Xx Xxxx
Name: Xxxx Xx Xxxx
Title: Executive Vice President
HYUNDAI ELECTRONICS INDUSTRIES CO., LTD.
By: /s/ X.X. Xxx
Name: X.X. Xxx
Title: Vice President
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SAN GIORGIO, S.A.
By: /s/ Enrico Albareto
Name: Enrico Albareto
Title: PDG
TESAM
By: /s/ Xxxx Xxxxxxx XxXxxxx
Name: Xxxx Xxxxxxx XxXxxxx
Title: Directeur General
VODAFONE CELLULAR LIMITED
By: /s/ Vodafone Cellular Limited
Name:
Title:
VODAFONE SATELLITE SERVICES LIMITED
By: /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: Director
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SCHEDULE I
SELLERS AND
ADDRESS FOR NOTICE INTERESTS PURCHASE PRICE (US$)
------------------ --------- --------------------
DACOM Corporation 175,500 $ 17,550,000
DACOM Xxxxxxxx
00-000
0 Xx. Xxxxxxx-Xx
Xxxxxxx-xx
Xxxxx, Xxxxx
Fax: 000-000-0000
Attn: II Xxx
58,500 $ 5,850,000
DACOM International
DACOM Building
Kukje Elec. Center
Xxxxxx Xx,
Xxxxx 000 000
Xxxxx
Fax: 00 000000000
Attn: H.S. Song
Hyundai Corporation 117,000 $ 11,700,000
Hyundai-Jeonja Building #1003
00 Xxxxxxxxx-Xxxx, Xxxxxxx-Xx
Xxxxx, Xxxxx 110-052
Fax: 00-0000-0000
Attn: X.X. Xxxx
Hyundai Electronics Industries Co., 819,000 $ 81,900,000
Ltd.
Hyundai-Jeonja Building #1003
00 Xxxxxxxxx-Xxxx, Xxxxxxx-Xx
Xxxxx, Xxxxx 110-052
Fax: 00-0000-0000
Attn: X.X. Xxxx
San Giorgio, S.A. 390,000 $ 39,000,000
c/o Elsacom
Xxx Xx Xxxxx
XX-0
00
Xxxxxxxx, 000
00000 Xxxx, Xxxxx
Fax: 00-00000000
Attn: Xxxxx Xxxxxxxxxx
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TESAM 1,170,000 $117,000,000
00, Xxxxxx xx Xxxxx
00000 Xxxxx, Xxxxxx
Fax: 00-000000000
Attn: Xxxxxxx Xxxxxxxxx
Vodafone Cellular Limited 800,000 $ 80,000,000
Xxx Xxxxxxxxx, 0-0 Xxxxxx Xxxx
Xxxxxxx, Xxxxxxxxx XX00 0XX
Xxxxxxx
Fax: 00-0000000000
Attn: Company Secretary
Vodafone Satellite Services Ltd. 370,000 $ 37,000,000
Xxx Xxxxxxxxx, 0-0 Xxxxxx Xxxx
Xxxxxxx, Xxxxxxxxx XX00 0XX
Xxxxxxx
Fax: 00-0000000000
Attn: Company Secretary
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EXHIBIT A-1
ESCROW AGREEMENT
This Escrow Agreement, dated as of ____ __, 1998 (the "Closing
Date"), among ______________, a ________ company (the "Limited Partner"); Loral
Space & Communications Ltd., a Bermuda company ("Loral"); Globalstar, L.P., a
Delaware limited partnership ("Globalstar") and The Bank of New York, a New York
banking corporation, as escrow agent ("Escrow Agent").
This is the Escrow Agreement referred to in the Purchase
Agreement, dated May 20, 1998 (the "Purchase Agreement") by and among Loral,
Limited Partner and the other Persons named as Sellers therein. Capitalized
terms used in this agreement without definition shall have the respective
meanings given to them in the Purchase Agreement.
The parties, intending to be legally bound, hereby agree as
follows:
Section 4. Establishment of Escrow.
(a) Escrow Agent has established an escrow account in the name
of Limited Partner (the "Escrow Account").
(b) Loral is depositing in the Escrow Account an amount equal
to $_________ (representing 50% of the total Purchase Price) in
immediately available funds (as increased by any earnings thereon and
as reduced by any disbursements, amounts withdrawn under Section 6(j),
or losses on investments, the "Escrow Fund"). Escrow Agent acknowledges
receipt thereof.
(c) Escrow Agent hereby agrees to act as escrow agent and to
hold, safeguard and disburse the Escrow Fund pursuant to the terms and
conditions hereof.
Section 2. Investment of Funds. Escrow Agent shall invest the
Escrow Fund as directed by Limited Partner in writing from time to time;
provided that the Escrow Fund must at all times be invested in Eligible
Investments. For purposes of this Section 2, "Eligible Investments" shall mean
any of the following: (a) marketable direct obligations issued by, or
23
unconditionally guaranteed by, the United States Government or issued by any
agency or instrumentality thereof and backed by the full faith and credit of the
United States, in each case maturing within one year from the date of
acquisition; (b) certificates of deposit, time deposits, eurodollar deposits or
bank deposits having maturities of six months or less from the date of
acquisition issued by any commercial bank organized under the laws of the United
States of America or any state thereof having combined capital and surplus of
not less than $500,000,000; (c) commercial paper of an issuer, rated at least
A-2 by Standard & Poor's Ratings Services ("S&P") or P-2 by Xxxxx'x Investors
Service, Inc. ("Moody's"); (d) securities with maturities of one year or less
from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States, by any political subdivision or
taxing authority of any such state, commonwealth or territory or by any foreign
government, the securities of which state, commonwealth, territory, political
subdivision, taxing authority or foreign government (as the case may be) are
rated at least A by S&P or A by Moody's; or (e) shares of money market mutual or
similar funds (which may be based outside of the United States) which invest
primarily in assets satisfying the requirements of clauses (a) through (d) of
this definition or otherwise in assets having a credit quality comparable to
those set forth in clauses (a) through (d) above and the shares of which are
repriced daily to provide a constant net asset value of $1.00 per share. In the
instruction letter provided by Limited Partner to Escrow Agent as described
above, Limited Partner shall further certify that the investment described
therein is an Eligible Investment within the meaning of this Agreement. Escrow
Agent is authorized to liquidate in accordance with its customary procedures any
portion of the Escrow Fund consisting of investments to provide for payments
required to be made under this Agreement.
Section 3. Distribution of Funds. (a) Escrow Agent will
disburse monies from the Escrow Fund upon presentation by Limited Partner to
Escrow Agent of any of the following: (i) a Globalstar invoice submitted under
gateway purchase contracts between Limited Partner (or its service provider
Affiliate) and Globalstar with respect to the purchase by Limited Partner (or
its service provider Affiliate) of Globalstar gateways and related equipment,
(ii) an invoice submitted under gateway purchase contracts between Limited
Partner (or its service provider Affiliate) and XXXXXXXX Xxxxxxxxxxxx
("Qualcomm") with respect to the purchase by Limited Partner (or its service
II-2
24
provider Affiliate) of Globalstar gateways and related equipment, which invoice
has been acknowledged and countersigned by Globalstar,(iii) an invoice from
Qualcomm, Ericsson, Telital or such other qualified vendor as shall have been
previously approved in writing to the Escrow Agent by Globalstar (collectively,
the "Qualified Vendors"), for the purchase (including through an underwriting
arrangement) by Limited Partner (or its service provider Affiliate) of
Globalstar user terminals, which invoice has been acknowledged and countersigned
by Globalstar (each of the invoices described in clause (i), (ii) or (iii) above
being defined herein as an "Eligible Globalstar Invoice"),(iv) evidence of
payment by Limited Partner or its service provider Affiliate to its
distributor(s) in the Serviced Territories (as such term is defined in the
Founding Service Provider Agreement dated January 1, 1995 between Globalstar and
Limited Partner (the "Founding Service Provider Agreement")) made to secure the
procurement by such distributor(s) of Globalstar user terminals in the Serviced
Territories, which receipt has been acknowledged and countersigned by Globalstar
(a "Payment Receipt") or (v) evidence of irrevocable sale by distributor(s) of
Limited Partner or its service provider Affiliate in the Serviced Territories of
Globalstar user terminals to end-users, which evidence of sale has been
acknowledged and countersigned by Globalstar (a "Distribution Notice"). Limited
Partner and Globalstar shall mutually agree upon what shall constitute an
appropriate evidence of payment of such sale by a distributor based upon the
rollout and the distributor arrangements in a Serviced Territory. In addition,
the Distribution Notice shall indicate the number of user terminals so
distributed and the purchase price paid by the distributor(s) in respect of such
user terminals to the Qualified Vendor(s)(the "Distribution Cost"), and if the
information regarding the actual purchase price shall not be available, then the
Distribution Cost shall be mutually agreed between Limited Partner and
Globalstar based upon the Qualified Vendor's sale price for user terminals (the
"Distribution Cost"). Within five Business Days from the date of Escrow Agent's
receipt of an Eligible Globalstar Invoice from Limited Partner, Escrow Agent
shall disburse to the vendor named on the Eligible Globalstar Invoice funds from
the Escrow Fund in an amount equal to the unpaid amount set forth on the
Eligible Globalstar Invoice. As promptly as practicable following such
disbursement, but in any event no later than three Business Days thereafter,
Escrow Agent shall send to Limited Partner and Globalstar a written notice
specifying the date and amount of such disbursement, together with the name of
the vendor paid in
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respect thereof. Within five Business Days from the date of Escrow Agent's
receipt of a Payment Receipt or Distribution Notice, Escrow Agent shall disburse
to Limited Partner funds from the Escrow Fund, in the case of a Payment Receipt,
in an amount equal to the payment amount set forth in the Payment Receipt, and
in the case of a Distribution Notice, in an amount equal to the Distribution
Cost. Where any acknowledgement or countersignature is required under this
Section 3(a) to be given by Globalstar, Globalstar hereby agrees that it shall
not unreasonably withhold or delay such acknowledgement or countersignature.
(b) In addition to the disbursements set forth in Section 3(a) above,
Escrow Agent shall disburse the Escrow Fund in full to Limited Partner upon the
bankruptcy, liquidation or dissolution of Globalstar (other than a liquidation
or dissolution in connection with a reorganization or restructuring of
Globalstar).
(c) Escrow Agent shall deliver to Limited Partner, Loral and Globalstar
no later than thirty days preceding the fifth anniversary of the Closing Date
(the "Termination Date") a written notice stating the date on which the
Termination Date shall occur and requesting a Globalstar Certification (as
defined below). If, on the Termination Date, Escrow Agent has not fully
disbursed the Escrow Fund in accordance with Section 3(a) or 3(b) above and
Escrow Agent has received a certification (the "Globalstar Certification") from
Globalstar, which certification will not be unreasonably withheld or delayed,
that neither Limited Partner nor any of its service provider Affiliates has
breached any of its material obligations under the service provider agreement
applicable to Limited Partner's Serviced Territories, then Escrow Agent shall
disburse the Escrow Fund in full to Limited Partner on the Termination Date. In
addition, on the sixtieth day following the Termination Date, Escrow Agent shall
disburse all remaining funds in the Escrow Account to Limited Partner,
notwithstanding its lack of receipt of the Globalstar Certification, if
Globalstar shall not have initiated, on or before such date, an arbitration
proceeding alleging breach by Limited Partner (or its service provider
Affiliate) of its material obligations under the service provider agreement (the
"Globalstar Arbitration"). However, if a Globalstar Arbitration shall have been
initiated on or before the sixtieth day following the Termination Date, then
Escrow Agent shall not disburse the Escrow Fund until the date (the "Resolution
Date") that a final non-appealable award shall have been determined in respect
of
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such proceeding and judicially upheld. On such date, if Globalstar shall have
been awarded damages in the arbitration proceeding, Escrow Agent shall disburse
to Globalstar from the Escrow Fund an amount equal to the amount of such
damages, and the remainder, if any, of the Escrow Fund shall be disbursed to
Limited Partner. If Globalstar shall not have been awarded damages in the
arbitration proceeding, then on the Resolution Date, Escrow Agent shall disburse
the Escrow Fund in full to Limited Partner.
Section 4. Assignment of Escrow Fund. Limited Partner may
freely assign and transfer all or any portion of the Escrow Account to a
Qualified Successor (as defined in the Founding Service Provider Agreement) upon
presentation to Escrow Agent of a certification from Limited Partner setting
forth the amount of the Escrow Fund to be assigned and transferred and
certifying that it has assigned its service provider rights with respect to the
territories named therein (which may be any or all of Limited Partner's Serviced
Territories) to the Qualified Successor (the "Transfer Certification"). As
promptly as practicable following receipt thereof by Escrow Agent, Escrow Agent
shall either (i) establish a new escrow account in favor of the Qualified
Successor by transferring the amount of the funds set forth in the Transfer
Certification from the Escrow Account to such new escrow account (if the
Transfer Certification shall provide for the transfer of less than the full
amount of the Escrow Fund) or (ii) change the beneficiary of the Escrow Account
from Limited Partner to the Qualified Successor (if the Transfer Certification
shall provide for the transfer of the full amount of the Escrow Fund) provided
that in the case of a creation of a new escrow fund pursuant to clause (i), the
Qualified Successor shall pay to the Escrow Agent fees in respect of the new
escrow fund consistent with the fees payable under this Agreement.
Notwithstanding the foregoing, Escrow Agent shall not effect any transfer of
funds under this Section 4 until the Qualified Successor shall have delivered to
Escrow Agent, Loral and Globalstar a letter agreement reasonably satisfactory to
Loral, pursuant to which the Qualified Successor agrees, for the benefit of
Escrow Agent, Loral and Globalstar, that it shall be fully bound by the terms of
this Escrow Agreement as if it was Limited Partner and was a party hereto.
Section 5. Termination of Escrow. This Agreement shall
terminate upon the disbursement of all funds in the Escrow Fund in accordance
with Section 3.
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Section 6. Duties of Escrow Agent.
(a) Escrow Agent shall not be under any duty to give the
Escrow Fund held by it hereunder any greater degree of care than it
gives its own similar property and shall not be required to invest any
funds held hereunder except as directed in writing pursuant to this
Agreement. Uninvested funds held hereunder shall not earn or accrue
interest.
(b) Escrow Agent shall not be liable for, except for its own
gross negligence or willful misconduct and, except with respect to
claims based upon such gross negligence or willful misconduct that are
successfully asserted against Escrow Agent, the other parties hereto
shall jointly and severally indemnify and hold harmless Escrow Agent
(and any successor Escrow Agent) from and against, any and all losses,
liabilities, claims, actions, damages and expenses, including
reasonable attorneys' fees and disbursements, arising out of and in
connection with this Agreement. Without limiting the foregoing, Escrow
Agent shall in no event be liable in connection with its investment or
reinvestment of any cash held by it hereunder in good faith, in
accordance with the terms hereof, including, without limitation, any
liability for any delays (not resulting from its gross negligence or
willful misconduct) in the investment or reinvestment of the Escrow
Fund, or any loss of interest incident to any such delays.
(c) Escrow Agent shall be entitled to rely upon any order,
judgment, certification, demand, notice, instrument or other writing
delivered to it hereunder without being required to determine the
authenticity or the correctness of any fact stated therein. Escrow
Agent may act in reliance upon any instrument or signature reasonably
believed by it to be genuine and may assume that the person purporting
to give receipt or advice or make any statement or execute any document
in connection with the provisions hereof has been duly authorized to do
so. Escrow Agent may conclusively presume that the undersigned
representative of any party hereto which is an entity other than a
natural person has full power and authority to instruct Escrow Agent on
behalf of that party unless written notice to the contrary is delivered
to Escrow Agent.
II-6
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(d) Escrow Agent may act pursuant to the advice of counsel
with respect to any matter relating to this Agreement and shall not be
liable for any action taken or omitted by it in good faith in
accordance with such advice.
(e) Escrow Agent does not have any interest in the Escrow Fund
deposited hereunder but is serving as escrow holder only and having
only possession thereof. Any payments of income from this Escrow Fund
shall be subject to withholding regulations then in force with respect
to United States taxes. The parties hereto will provide Escrow Agent
with appropriate Internal Revenue Service Forms W-9 for tax
identification number certification or Forms W-8 for foreign status
certification, and Limited Partner shall pay or reimburse the Escrow
Agent upon request for any transfer taxes or other taxes relating to
the Escrow Fund incurred in connection herewith and shall indemnify and
hold harmless the Escrow Agent from any amounts that it is obligated to
pay in the way of such taxes. This Section 6(e) and Section 6(b) shall
survive notwithstanding any termination of this Agreement or the
resignation of Escrow Agent.
(f) Escrow Agent makes no representation as to the validity,
value, genuineness or the collectability of any security or other
document or instrument held by or delivered to it.
(g) Escrow Agent shall not be called upon to advise any party
as to the wisdom in selling or retaining or taking or refraining from
any action with respect to any securities or other property deposited
hereunder.
(h) Escrow Agent (and any successor Escrow Agent) may at any
time resign as such by delivering the Escrow Fund to any successor
Escrow Agent jointly designated by the other parties hereto in writing,
or to any court of competent jurisdiction, whereupon Escrow Agent shall
be discharged of and from any and all further obligations arising in
connection with this Agreement. The resignation of Escrow Agent will
take effect on the earlier of (a) the appointment of a successor
(including a court of competent jurisdiction) or (b) the day which is
30 days after the date of delivery of its written notice of resignation
to the other parties hereto. If at that time Escrow Agent has not
received a designation of a successor Escrow Agent, Escrow Agent's sole
II-7
29
responsibility after that time shall be to retain and safeguard the
Escrow Fund until receipt of a designation of successor Escrow Agent or
a joint written disposition instruction by the other parties hereto or
a final non-appealable order of a court of competent jurisdiction.
(i) In the event of any disagreement between the other parties
hereto resulting in adverse claims or demands being made in connection
with the Escrow Fund or in the event that Escrow Agent is in doubt as
to what action it should take hereunder, Escrow Agent shall be
entitled, in its sole discretion, to refrain from taking any action
other than retaining the Escrow Fund until Escrow Agent shall have
received (i) a final non-appealable order of a court of competent
jurisdiction directing delivery of the Escrow Fund or (ii) a written
agreement executed by the other parties hereto directing delivery of
the Escrow Fund, in which event Escrow Agent shall disburse the Escrow
Fund in accordance with such order or agreement. Escrow Agent shall be
entitled to act, and shall be fully protected in acting upon, such
court order without further question. Escrow Agent may, in addition,
elect, at its sole discretion, to commence an interpleader action or
seek other judicial relief or orders as it may deem, in its sole
discretion, necessary. The costs and expenses (including reasonable
attorneys' fees and expenses) incurred in connection with such
proceeding shall be paid by, and shall be deemed a joint and several
obligation of, the other parties.
(j) In consideration for its services hereunder, the Escrow
Agent shall be paid at Closing an acceptance fee of $1,500 and an
annual administration fee of $5,000, which amount shall be disbursed by
Escrow Agent from the Escrow Fund. Thereafter, the administration fee
shall be payable on each anniversary of the Closing Date (a "Payment
Date") until the termination of this Agreement by disbursement from the
Escrow Fund. As promptly as practicable after such disbursement, but in
any event no later than three Business Days thereafter, Escrow Agent
shall send to Limited Partner and Loral notice of such disbursement.
Escrow Agent shall also be entitled to disbursements from the Escrow
Fund to reimburse it for reasonable expenses incurred by it in
connection with its performance under this Agreement provided that
prior to any such disbursement, Escrow Agent
II-8
30
shall have provided Limited Partner and Loral with an invoice
documenting such expenses.
(k) The other parties hereto authorize Escrow Agent, for any
securities held hereunder, to use the services of any United States
central securities depository it reasonably deems appropriate,
including, without limitation, The Depository Trust Company and the
Federal Reserve Book Entry System.
Section 7. Limited Responsibilities. This Agreement expressly
sets forth all the duties of Escrow Agent with respect to any and all matters
pertinent hereto. No implied duties or obligations shall be read into this
agreement against Escrow Agent. Escrow Agent shall not be bound by the
provisions of any agreement among the other parties hereto except this Agreement
even though reference thereto may be made herein, or to comply with any
direction or instruction (other than those contained herein or delivered in
accordance with this Escrow Agreement) from any party hereto or any entity
acting on its behalf. Escrow Agent shall not be required to, and shall not,
expend or risk any of its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder.
Section 8. Ownership for Tax Purposes. For purposes of federal
and other taxes based on income, Limited Partner will be deemed to own the
Escrow Fund.
Section 9. Dispute Resolution. Any dispute, controversy or
claim arising out of or relating to this Agreement shall be exclusively and
finally settled by arbitration in accordance with the Rules of Conciliation and
Arbitration of the International Chamber of Commerce (the "Rules"), as at
present in force, by three arbitrators appointed according to the Rules. The
language of the arbitration proceedings shall be English. The place of
arbitration shall be New York, New York. Arbitral awards under this Section 9
shall be final and binding and shall be enforceable in any court having
jurisdiction.
Section 10. Notices. All notices and other communications
given or made pursuant hereto shall be in writing and shall be deemed to have
been given or made if in writing and delivered personally or sent by facsimile
or registered or certified mail (postage prepaid, return receipt requested) to
the parties at the following addresses:
II-9
31
(a) If to Limited Partner, to:
[address]
Fax:
Attention:
(b) If to Loral, to:
Loral Space & Communications Ltd.
c/o Loral SpaceCom Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: 000-000-0000
Attention: Xxxx X. Xxxxxx
(c) If to the Escrow Agent, to:
[address]
Fax:
Attention:
or to such other persons or at such other addresses as shall be furnished by
either party by like notice to the other, and such notice or communication shall
be deemed to have been given or made as of the date so faxed, delivered or
mailed.
Section 11. Counterparts. This Agreement may be executed in
one or more counterparts, each of which will be deemed to be an original and all
of which, when taken together, will be deemed to constitute one and the same.
Section 12. Section Headings. The headings of sections in this
Agreement are provided for convenience only and will not affect its construction
or interpretation.
Section 13. Waiver. The rights and remedies of the parties to
this Agreement are cumulative and not alternative. Neither the failure nor any
delay by any party in exercising any right, power, or privilege under this
Agreement or the documents referred to in this Agreement will operate as a
waiver of such right, power, or privilege, and no single or partial exercise of
any such right, power, or privilege will preclude any other or further exercise
of such right, power, or privilege or the exercise of any other right, power, or
privilege. To the maximum extent permitted by applicable law, (a) no claim or
right arising out of this Agreement or the documents referred to in this
Agreement can be discharged by one party, in whole or in part, by
II-10
32
a waiver or renunciation of the claim or right unless in writing signed by the
other party; (b) no waiver that may be given by a party will be applicable
except in the specific instance for which it is given; and (c) no notice to or
demand on one party will be deemed to be a waiver of any obligation of such
party or of the right of the party giving such notice or demand to take further
action without notice or demand as provided in this Agreement or the documents
referred to in this Agreement.
Section 14. Exclusive Agreement and Modification. This
Agreement supersedes all prior agreements among the parties with respect to its
subject matter and constitutes (along with the documents referred to in this
Agreement) a complete and exclusive statement of the terms of the agreement
between the parties with respect to its subject matter. This Agreement may not
be amended except by a written agreement executed by Limited Partner, Loral,
Globalstar and Escrow Agent.
Section 15. Specific Performance. In addition to any other
rights or remedies under this Agreement now or hereinafter existing at law or in
equity or by statute, each of the parties hereto shall have the right to have
specifically performed any and all obligations, undertakings, agreements and
covenants of the other parties hereto pursuant to this Agreement.
Section 16. Governing Law. This Agreement shall be governed by
the laws of the State of New York, without regard to conflicts of law
principles.
IN WITNESS WHEREOF, the parties have executed and delivered
this Agreement as of the date first written above.
[LIMITED PARTNER]
By:_________________________
Name:
Title:
LORAL SPACE & COMMUNICATIONS LTD.
By:_________________________
Name:
Title:
II-11
00
XX-00
00
XXX XXXX XX XXX XXXX
By:_________________________
Name:
Title:
GLOBALSTAR, L.P.
By:_________________________
Name:
Title:
II-13
35
EXHIBIT A-2
ESCROW AGREEMENT
This Escrow Agreement, dated as of ____ __, 1998 (the "Closing
Date"), among ______________, a ________ company (the "Limited Partner"); Loral
Space & Communications Ltd., a Bermuda company ("Loral"); Globalstar, L.P., a
Delaware limited partnership ("Globalstar") and The Bank of New York, a New York
banking corporation, as escrow agent ("Escrow Agent").
This is the Escrow Agreement referred to in the Purchase
Agreement, dated May 20, 1998 (the "Purchase Agreement") by and among Loral,
Limited Partner and the other Persons named as Sellers therein. Capitalized
terms used in this agreement without definition shall have the respective
meanings given to them in the Purchase Agreement.
The parties, intending to be legally bound, hereby agree as
follows:
Section 4. Establishment of Escrow.
(a) Escrow Agent has established an escrow account in the name
of Limited Partner (the "Escrow Account").
(b) Loral is depositing in the Escrow Account an amount equal
to $_________ (representing 50% of the total Purchase Price) in
immediately available funds (as increased by any earnings thereon and
as reduced by any disbursements, amounts withdrawn under Section 6(j),
or losses on investments, the "Escrow Fund"). Escrow Agent acknowledges
receipt thereof.
(c) Escrow Agent hereby agrees to act as escrow agent and to
hold, safeguard and disburse the Escrow Fund pursuant to the terms and
conditions hereof.
Section 5. Investment of Funds. Escrow Agent shall invest the
Escrow Fund as directed by Limited Partner in writing from time to time;
provided that the Escrow Fund must at all times be invested in Eligible
Investments. For purposes of this Section 2, "Eligible Investments" shall mean
any of the following: (a) marketable direct obligations issued by, or
36
unconditionally guaranteed by, the United States Government or issued by any
agency or instrumentality thereof and backed by the full faith and credit of the
United States, in each case maturing within one year from the date of
acquisition; (b) certificates of deposit, time deposits, eurodollar deposits or
bank deposits having maturities of six months or less from the date of
acquisition issued by any commercial bank organized under the laws of the United
States of America or any state thereof having combined capital and surplus of
not less than $500,000,000; (c) commercial paper of an issuer, rated at least
A-2 by Standard & Poor's Ratings Services ("S&P") or P-2 by Xxxxx'x Investors
Service, Inc. ("Moody's"); (d) securities with maturities of one year or less
from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States, by any political subdivision or
taxing authority of any such state, commonwealth or territory or by any foreign
government, the securities of which state, commonwealth, territory, political
subdivision, taxing authority or foreign government (as the case may be) are
rated at least A by S&P or A by Moody's; or (e) shares of money market mutual or
similar funds (which may be based outside of the United States) which invest
primarily in assets satisfying the requirements of clauses (a) through (d) of
this definition or otherwise in assets having a credit quality comparable to
those set forth in clauses (a) through (d) above and the shares of which are
repriced daily to provide a constant net asset value of $1.00 per share. In the
instruction letter provided by Limited Partner to Escrow Agent as described
above, Limited Partner shall further certify that the investment described
therein is an Eligible Investment within the meaning of this Agreement. Escrow
Agent is authorized to liquidate in accordance with its customary procedures any
portion of the Escrow Fund consisting of investments to provide for payments
required to be made under this Agreement.
Section 6. Distribution of Funds. (a) Escrow Agent will disburse monies
from the Escrow Fund to Limited Partner upon its receipt of a certification (a
"Payment Certification") from Globalstar that a Qualified Successor (as defined
herein) shall have made payments (other than payments from an escrow fund
established under Section 4(a)) for any of the following with respect to one or
more Hyundai Territories: Globalstar gateways or related equipment or Globalstar
user terminals (collectively, the "Eligible Equipment"). The Payment
Certification shall specify the amount of the payment for Eligible Equipment
made by the Qualified Successor. Within five Business Days from the date
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37
of Escrow Agent's receipt of a Payment Certification, Escrow Agent shall
disburse to Limited Partner funds from the Escrow Fund in an amount equal to the
payment amount set forth in the Payment Certification. Globalstar hereby agrees
that at Limited Partner's request, which shall in any event not be made by
Limited Partner more frequently than quarterly, Globalstar will provide Limited
Partner with information that it has regarding the amount, if any, paid in the
immediately preceding quarter with respect to Eligible Equipment by Qualified
Successors in the Hyundai Territories and, if such information shall indicate
that a Qualified Successor shall have made payment in such quarter for which
Limited Partner is entitled to reimbursement under this Section 3(a), then
Globalstar shall, promptly upon the request of Limited Partner, deliver to
Escrow Agent a Payment Certification in respect of such payment. Globalstar
hereby represents and warrants to Limited Partner that it currently has no plans
to finance (other than with respect to any financing of gateways and user
terminals made by it prior to the date hereof) or subsidize for the benefit of a
Qualified Successor the purchase of gateways or user terminals in the Hyundai
Territories.
(b) Escrow Agent shall disburse the Escrow Fund in full to Limited
Partner upon the bankruptcy, liquidation or dissolution of Globalstar (other
than a liquidation or dissolution in connection with a reorganization or
restructuring of Globalstar).
(c) Escrow Agent shall deliver to Limited Partner, Loral and Globalstar
no later than thirty days preceding the fifth anniversary of the Closing Date
(the "Termination Date") a written notice stating the date on which the
Termination Date shall occur and requesting a Globalstar Certification (as
defined below). If, on the Termination Date, Escrow Agent has not fully
disbursed the Escrow Fund in accordance with Section 3(a) or 3(b) above or
assigned the Escrow Fund in full under Section 4(a) below and Escrow Agent has
received a certification (the "Globalstar Certification") from Globalstar, which
certification will not be unreasonably withheld or delayed, that Limited Partner
has not breached its covenants set forth in Section 4(b) below, then Escrow
Agent shall disburse the Escrow Fund in full to Limited Partner on the
Termination Date. In addition, on the sixtieth day following the Termination
Date, Escrow Agent shall disburse all remaining funds in the Escrow Account to
Limited Partner, notwithstanding its lack of receipt of the Globalstar
Certification, if Globalstar shall not have initiated, on or before such date,
an arbitration proceeding alleging breach by
II-3
38
Limited Partner of its obligations under Section 4(b) below (the "Globalstar
Arbitration"). However, if a Globalstar Arbitration shall have been initiated on
or before the sixtieth day following the Termination Date, then Escrow Agent
shall not disburse the Escrow Fund until the date (the "Resolution Date") that a
final non-appealable award shall have been determined in respect of such
proceeding and judicially upheld. On such date, if Globalstar shall have been
awarded damages in the arbitration proceeding, Escrow Agent shall disburse to
Globalstar from the Escrow Fund an amount equal to the amount of such damages,
and the remainder, if any, of the Escrow Fund shall be disbursed to Limited
Partner. If Globalstar shall not have been awarded damages in the arbitration
proceeding, then on the Resolution Date, Escrow Agent shall disburse the Escrow
Fund in full to Limited Partner.
Section 4. Assignment of Escrow Fund; Certain Covenants. (a)
Limited Partner may freely assign and transfer all or any portion of the Escrow
Account to a Qualified Successor who shall have assumed Limited Partner's rights
in any one or more of the following territories: Brunei, Finland, Hungary,
India, Nepal, New Zealand, Pakistan, Singapore, Sri Lanka, Taiwan and Thailand
(each a "Hyundai Territory" and collectively, the "Hyundai Territories") upon
presentation to Escrow Agent of a certification from Limited Partner certifying
that a Qualified Successor has so succeeded Hyundai in such territories (the
"Transfer Certification"), which certification has been acknowledged and
countersigned by Globalstar, such acknowledgement and countersignature not to be
unreasonably withheld or delayed. As promptly as practicable following receipt
thereof by Escrow Agent, Escrow Agent shall either (i) establish a new escrow
account in favor of the Qualified Successor by transferring the amount of the
funds set forth in the Transfer Certification from the Escrow Account to such
new escrow account (if the Transfer Certification shall provide for the transfer
of less than the full amount of the Escrow Fund) or (ii) change the beneficiary
of the Escrow Account from Limited Partner to the Qualified Successor (if the
Transfer Certification shall provide for the transfer of the full amount of the
Escrow Fund) provided that in the case of a creation of a new escrow fund
pursuant to clause (i), the Qualified Successor shall pay to the Escrow Agent
fees in respect of the new escrow fund consistent with the fees payable under
this Agreement. Notwithstanding the foregoing, Escrow Agent shall not effect any
transfer of funds under this Section 4(a) until the Qualified
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Successor shall have delivered to Escrow Agent, Loral and Globalstar an Escrow
Agreement, substantially in the form set forth as Exhibit A-1 to the Purchase
Agreement.
(b) Limited Partner agrees to cooperate and work in good faith
with Globalstar to effect the transition of the Hyundai Territories to a
Qualified Successor (as defined in the Founding Service Provider Agreement dated
as of January 1, 1995 between Globalstar and Hyundai/DACOM), which shall include
negotiating in good faith with the Qualified Successor with regard to the
assignment for some or all of the Escrow Fund to the Qualified Successor.
Nothing in this Section 4(b) shall be deemed to obligate Limited Partner to
assign to a Qualified Successor some or all of the Escrow Fund otherwise than on
terms that Limited Partner and the Qualified Successor shall mutually agree.
(c) Globalstar agrees to keep Hyundai generally informed about
the status of its discussions with potential Qualified Successors for the
Hyundai Territories. In addition, at Hyundai's request, Globalstar will discuss
with such specific Qualified Successors as Hyundai may identify, the possibility
of a purchase of some or all of the Escrow Fund by such Qualified Successors
from Limited Partner. Globalstar agrees to act in good faith to facilitate any
such discussions between Limited Partner and any such Qualified Successor.
Section 5. Termination of Escrow. This Agreement shall
terminate upon the disbursement of all funds in the Escrow Fund in accordance
with Section 3 or the assignment in full of the Escrow Fund under Section 4(a).
Section 6. Duties of Escrow Agent.
(a) Escrow Agent shall not be under any duty to give the
Escrow Fund held by it hereunder any greater degree of care than it
gives its own similar property and shall not be required to invest any
funds held hereunder except as directed in writing pursuant to this
Agreement. Uninvested funds held hereunder shall not earn or accrue
interest.
(b) Escrow Agent shall not be liable for, except for its own
gross negligence or willful misconduct and, except with respect to
claims based upon such gross negligence or willful misconduct that are
successfully asserted against
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Escrow Agent, the other parties hereto shall jointly and severally
indemnify and hold harmless Escrow Agent (and any successor Escrow
Agent) from and against, any and all losses, liabilities, claims,
actions, damages and expenses, including reasonable attorneys' fees and
disbursements, arising out of and in connection with this Agreement.
Without limiting the foregoing, Escrow Agent shall in no event be
liable in connection with its investment or reinvestment of any cash
held by it hereunder in good faith, in accordance with the terms
hereof, including, without limitation, any liability for any delays
(not resulting from its gross negligence or willful misconduct) in the
investment or reinvestment of the Escrow Fund, or any loss of interest
incident to any such delays.
(c) Escrow Agent shall be entitled to rely upon any order,
judgment, certification, demand, notice, instrument or other writing
delivered to it hereunder without being required to determine the
authenticity or the correctness of any fact stated therein. Escrow
Agent may act in reliance upon any instrument or signature reasonably
believed by it to be genuine and may assume that the person purporting
to give receipt or advice or make any statement or execute any document
in connection with the provisions hereof has been duly authorized to do
so. Escrow Agent may conclusively presume that the undersigned
representative of any party hereto which is an entity other than a
natural person has full power and authority to instruct Escrow Agent on
behalf of that party unless written notice to the contrary is delivered
to Escrow Agent.
(d) Escrow Agent may act pursuant to the advice of counsel
with respect to any matter relating to this Agreement and shall not be
liable for any action taken or omitted by it in good faith in
accordance with such advice.
(e) Escrow Agent does not have any interest in the Escrow Fund
deposited hereunder but is serving as escrow holder only and having
only possession thereof. Any payments of income from this Escrow Fund
shall be subject to withholding regulations then in force with respect
to United States taxes. The parties hereto will provide Escrow Agent
with appropriate Internal Revenue Service Forms W-9 for tax
identification number certification or Forms W-8 for foreign status
certification, and Limited Partner shall pay or
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reimburse the Escrow Agent upon request for any transfer taxes or other
taxes relating to the Escrow Fund incurred in connection herewith and
shall indemnify and hold harmless the Escrow Agent from any amounts
that it is obligated to pay in the way of such taxes. This Section 6(e)
and Section 6(b) shall survive notwithstanding any termination of this
Agreement or the resignation of Escrow Agent.
(f) Escrow Agent makes no representation as to the validity,
value, genuineness or the collectability of any security or other
document or instrument held by or delivered to it.
(g) Escrow Agent shall not be called upon to advise any party
as to the wisdom in selling or retaining or taking or refraining from
any action with respect to any securities or other property deposited
hereunder.
(h) Escrow Agent (and any successor Escrow Agent) may at any
time resign as such by delivering the Escrow Fund to any successor
Escrow Agent jointly designated by the other parties hereto in writing,
or to any court of competent jurisdiction, whereupon Escrow Agent shall
be discharged of and from any and all further obligations arising in
connection with this Agreement. The resignation of Escrow Agent will
take effect on the earlier of (a) the appointment of a successor
(including a court of competent jurisdiction) or (b) the day which is
30 days after the date of delivery of its written notice of resignation
to the other parties hereto. If at that time Escrow Agent has not
received a designation of a successor Escrow Agent, Escrow Agent's sole
responsibility after that time shall be to retain and safeguard the
Escrow Fund until receipt of a designation of successor Escrow Agent or
a joint written disposition instruction by the other parties hereto or
a final non-appealable order of a court of competent jurisdiction.
(i) In the event of any disagreement between the other parties
hereto resulting in adverse claims or demands being made in connection
with the Escrow Fund or in the event that Escrow Agent is in doubt as
to what action it should take hereunder, Escrow Agent shall be
entitled, in its sole discretion, to refrain from taking any action
other than retaining the Escrow Fund until Escrow Agent shall have
received (i) a final non-appealable order of a court of
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competent jurisdiction directing delivery of the Escrow Fund or (ii) a
written agreement executed by the other parties hereto directing
delivery of the Escrow Fund, in which event Escrow Agent shall disburse
the Escrow Fund in accordance with such order or agreement. Escrow
Agent shall be entitled to act, and shall be fully protected in acting
upon, such court order without further question. Escrow Agent may, in
addition, elect, at its sole discretion, to commence an interpleader
action or seek other judicial relief or orders as it may deem, in its
sole discretion, necessary. The costs and expenses (including
reasonable attorneys' fees and expenses) incurred in connection with
such proceeding shall be paid by, and shall be deemed a joint and
several obligation of, the other parties.
(j) In consideration for its services hereunder, the Escrow
Agent shall be paid at Closing an acceptance fee of $1,500 and an
annual administration fee of $5,000, which amount shall be disbursed by
Escrow Agent from the Escrow Fund. Thereafter, the administration fee
shall be payable on each anniversary of the Closing Date (a "Payment
Date") until the termination of this Agreement by disbursement from the
Escrow Fund. As promptly as practicable after such disbursement, but in
any event no later than three Business Days thereafter, Escrow Agent
shall send to Limited Partner and Loral notice of such disbursement.
Escrow Agent shall also be entitled to disbursements from the Escrow
Fund to reimburse it for reasonable expenses incurred by it in
connection with its performance under this Agreement provided that
prior to any such disbursement, Escrow Agent shall have provided
Limited Partner and Loral with an invoice documenting such expenses.
(k) The other parties hereto authorize Escrow Agent, for any
securities held hereunder, to use the services of any United States
central securities depository it reasonably deems appropriate,
including, without limitation, The Depository Trust Company and the
Federal Reserve Book Entry System.
Section 7. Limited Responsibilities. This Agreement expressly
sets forth all the duties of Escrow Agent with respect to any and all matters
pertinent hereto. No implied duties or obligations shall be read into this
agreement against Escrow Agent. Escrow Agent shall not be bound by the
provisions of any
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agreement among the other parties hereto except this Agreement
even though reference thereto may be made herein, or to comply with any
direction or instruction (other than those contained herein or delivered in
accordance with this Escrow Agreement) from any party hereto or any entity
acting on its behalf. Escrow Agent shall not be required to, and shall not,
expend or risk any of its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder.
Section 8. Ownership for Tax Purposes. For purposes of federal
and other taxes based on income, Limited Partner will be deemed to own the
Escrow Fund.
Section 9. Dispute Resolution. Any dispute, controversy or
claim arising out of or relating to this Agreement shall be exclusively and
finally settled by arbitration in accordance with the Rules of Conciliation and
Arbitration of the International Chamber of Commerce (the "Rules"), as at
present in force, by three arbitrators appointed according to the Rules. The
language of the arbitration proceedings shall be English. The place of
arbitration shall be New York, New York. Arbitral awards under this Section 9
shall be final and binding and shall be enforceable in any court having
jurisdiction.
Section 10. Notices. All notices and other communications
given or made pursuant hereto shall be in writing and shall be deemed to have
been given or made if in writing and delivered personally or sent by facsimile
or registered or certified mail (postage prepaid, return receipt requested) to
the parties at the following addresses:
(1) If to Limited Partner, to:
[address]
Fax:
Attention:
(m) If to Loral, to:
Loral Space & Communications Ltd.
c/o Loral SpaceCom Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: 000-000-0000
Attention: Xxxx X. Xxxxxx
(n) If to the Escrow Agent, to:
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[address]
Fax:
Attention:
or to such other persons or at such other addresses as shall be furnished by
either party by like notice to the other, and such notice or communication shall
be deemed to have been given or made as of the date so faxed, delivered or
mailed.
Section 11. Counterparts. This Agreement may be executed in
one or more counterparts, each of which will be deemed to be an original and all
of which, when taken together, will be deemed to constitute one and the same.
Section 12. Section Headings. The headings of sections in this
Agreement are provided for convenience only and will not affect its construction
or interpretation.
Section 13. Waiver. The rights and remedies of the parties to
this Agreement are cumulative and not alternative. Neither the failure nor any
delay by any party in exercising any right, power, or privilege under this
Agreement or the documents referred to in this Agreement will operate as a
waiver of such right, power, or privilege, and no single or partial exercise of
any such right, power, or privilege will preclude any other or further exercise
of such right, power, or privilege or the exercise of any other right, power, or
privilege. To the maximum extent permitted by applicable law, (a) no claim or
right arising out of this Agreement or the documents referred to in this
Agreement can be discharged by one party, in whole or in part, by a waiver or
renunciation of the claim or right unless in writing signed by the other party;
(b) no waiver that may be given by a party will be applicable except in the
specific instance for which it is given; and (c) no notice to or demand on one
party will be deemed to be a waiver of any obligation of such party or of the
right of the party giving such notice or demand to take further action without
notice or demand as provided in this Agreement or the documents referred to in
this Agreement.
Section 14. Exclusive Agreement and Modification. This
Agreement supersedes all prior agreements among the parties with respect to its
subject matter and constitutes (along with the documents referred to in this
Agreement) a complete and exclusive statement of the terms of the agreement
0between the parties with respect to its subject matter. This Agreement may
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not be amended except by a written agreement executed by Limited Partner, Loral,
Globalstar and Escrow Agent.
Section 15. Specific Performance. In addition to any other
rights or remedies under this Agreement now or hereinafter existing at law or in
equity or by statute, each of the parties hereto shall have the right to have
specifically performed any and all obligations, undertakings, agreements and
covenants of the other parties hereto pursuant to this Agreement.
Section 16. Governing Law. This Agreement shall be governed by
the laws of the State of New York, without regard to conflicts of law
principles.
IN WITNESS WHEREOF, the parties have executed and delivered
this Agreement as of the date first written above.
[LIMITED PARTNER]
By:_________________________
Name:
Title:
LORAL SPACE & COMMUNICATIONS LTD.
By:_________________________
Name:
Title:
THE BANK OF NEW YORK
By:_________________________
Name:
Title:
GLOBALSTAR, X.X.
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By:_________________________
Name:
Title:
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EXHIBIT B
ASSIGNMENT OF PARTNERSHIP INTERESTS
ASSIGNMENT OF PARTNERSHIP INTERESTS dated as of ________, 1998
by [SELLER], a company organized under the laws of _________("Seller "), in
favor of LORAL SPACE & COMMUNICATIONS LTD., a Bermuda company ("Loral").
WHEREAS, pursuant to that certain Purchase Agreement dated as
of May 20, 1998 among Loral, Seller and the other selling partners parties
thereto (the "Purchase Agreement"), Seller has agreed to transfer to Loral, and
Loral has agreed to accept, _______ limited partnership interests (the
"Interests") in Globalstar, L.P., a Delaware limited partnership ("Globalstar");
NOW, THEREFORE, in consideration of good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
Seller and Loral agree as follows:
1. Assignment. Seller hereby sells, transfers, assigns and
conveys and delivers to Loral, in accordance with the respective terms hereof
and contained in the Purchase Agreement, all of Seller's rights, title and
interest in, to and under the Interests. The Interests are being delivered to
Loral free of any Lien (as defined in the Purchase Agreement).
2. Governing Law. This Assignment shall be governed by and
construed in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date set forth above.
LORAL SPACE & COMMUNICATIONS LTD.
By_______________________________
[SELLER]
By_______________________________
