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EXECUTION COPY
PURCHASE AGREEMENT
BY AND BETWEEN
LORAL SPACE & COMMUNICATIONS LTD.
AND
DASA GLOBALSTAR LIMITED PARTNER, INC.
DATED AS OF JUNE 9, 1998
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PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (the "AGREEMENT") is made and entered into
as of June 9, 1998, by and between Loral Space & Communications Ltd., a Bermuda
company ("LORAL"), and DASA Globalstar Limited Partner, Inc., a Delaware
corporation (the "Seller").
RECITALS
WHEREAS, the Seller is a limited partner in Loral/Qualcomm Satellite
Services, L.P., a Delaware limited partnership ("LQSS ") and owns limited
partnership interests therein; and
WHEREAS, Loral wishes to purchase from the Seller the limited
partnership interests in LQSS held by the Seller as set forth on Schedule I
hereto (the "Interests") and the 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 securities, by contract or otherwise. The
terms "controlled" and "common control" shall have correlative meanings.
"AGREEMENT" has the meaning set forth in the preamble.
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"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 the Escrow Agreement substantially in the
form attached hereto as Exhibit A, to be entered into on the Closing Date
by Loral, the Escrow Agent, Loral/DASA and the Seller.
"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 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.
"INTERESTS" has the meaning set forth in the Recitals.
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"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/DASA" means Loral/DASA Globalstar, L.P., a Delaware
limited partnership.
"LORAL/DASA PARTNERSHIP AGREEMENT" means the Amended and Restated
Agreement of Limited Partnership of Loral/DASA Globalstar, L.P. dated
as of December 22, 1994.
"LQSS PARTNERSHIP AGREEMENT" means the Amended and Restated
Agreement of Limited Partnership of Loral/Qualcomm Satellite Services,
L.P., dated as of March 23, 1994, as amended on April 15, 1997 and June
19, 1997.
"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.
"PURCHASE PRICE" means the amount set forth under the caption
"Purchase Price" on Schedule I hereto.
"RELATED PURCHASE" means the purchase of partnership interests of
Globalstar, L.P. contemplated under that certain Purchase Agreement,
dated as of May 20, 1998 by and
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among Loral and certain limited partners signatories thereto.
"SELLER" 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 the Seller, and the 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 the Seller or to such other Person as may
be designated by Seller to Loral three Business Days prior to the Closing
Date, 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 the Seller, an amount equal to the
remaining 50% of the Purchase Price;
(c) Loral, the Escrow Agent, Loral/DASA and the Seller shall execute
and deliver to each other an Escrow Agreement;
(d) The Seller shall deliver to Loral an Assignment of Partnership
Interests in the form attached hereto as Exhibit B; and
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(e) Schedule A to the LQSS Partnership Agreement shall be amended
(i) to reduce the amount of partnership interests held by the Seller by
300,000 and (ii) to increase the amount of partnership interests held by
Loral or its Affiliate by 300,000.
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 SELLER
The Seller hereby 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 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 10.01 and 10.03
of the LQSS Partnership Agreement.
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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
LQSS 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, LQSS or any other
Person for a finder's fee, brokerage commission or other similar payment based
on an arrangement with Seller. Accordingly, Seller hereby agrees to indemnify
Loral and its Affiliates with respect to any such finder's fee, brokerage
commission or similar payment.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF LORAL
Loral represents and warrants to 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
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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 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 LQSS 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. Accordingly, Loral hereby agrees to
indemnify Seller and its Affiliates with respect to any such finder's fee,
brokerage commission or similar payment.
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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 the Seller to Loral pursuant to this Agreement
or the ownership of the Interests by the Seller prior to the Closing Date shall
in each case be borne by the 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 the Seller shall constitute (i)
approval by the Seller of any and all amendments to the Globalstar Partnership
Agreement and the LQSS Partnership Agreement (collectively the "Applicable
Partnership Agreements") reasonably determined by Loral to be necessary or
advisable to permit the transactions contemplated hereunder, under the Related
Purchase and under the Xxxxx Transaction and (ii) waiver by such Seller of its
rights of first refusal under Section 10.03 of the LQSS Partnership Agreement
and 10.04 of the Loral/DASA Partnership Agreement 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 LQSS 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 LQSS, then Loral will on the
Closing Date, furnish LQSS with an agreement, in form reasonably satisfactory to
LQSS, executed by such assignee pursuant to which the assignee agrees to be
bound by the LQSS Partnership Agreement and such other documents or instruments
as may be required by LQSS pursuant to Section 11.01(a) of the LQSS Partnership
Agreement in order to effect its admission as a limited partner therein.
SECTION 5.4. [RESERVED].
SECTION 5.5. AMENDMENT TO PURCHASE AGREEMENT. Each of Loral and the
Seller hereby agrees 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 partnership interests to be sold in the Related Purchase,
Loral and the Seller shall enter into an amendment to this
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Agreement to adjust for any such exercise by amending (i) the number of
Interests to be sold by the Seller and purchased by Loral (to reflect a
proportionate reduction in the amount of Interests purchased hereunder), (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 is subject to the satisfaction
(or waiver by Loral) of the following conditions:
(a) Representations and Warranties. The representations and
warranties of the 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 the 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 Applicable Partnership Agreement. The Applicable
Partnership Agreements shall have been amended as contemplated under
Section 5.2 hereto to permit the transactions contemplated hereunder,
under the Related Purchase and under the Xxxxx Transaction.
(f) Waiver of Rights of First Refusal and 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 partnership
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interests to be sold and purchased under the Related Purchase and the
partners of LQSS shall have waived their rights of first refusal under
Section 10.03 of the LQSS Partnership Agreement (or the applicable offer
period shall have expired)in respect of the Interests to be sold and
purchased hereunder.
SECTION 6.2. CONDITIONS TO OBLIGATIONS OF SELLER. The obligation of
the Seller to perform its obligations hereunder is subject to the satisfaction
(or waiver by such Seller) of the following conditions:
(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 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 Seller or Loral of the transactions contemplated by
this Agreement and the Escrow Agreement.
(c) Waiver of Rights of First Refusal. The partners of LQSS shall
have waived their rights of first refusal under Section 10.03 of the LQSS
Partnership Agreement (or the applicable offer period shall have expired)
in respect of the Interests to be sold by the 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 Seller and to Loral at the addresses indicated below:
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(a) 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
(b) If to Seller, to its address
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 the Seller (except that Loral may freely assign to an Affiliate
thereof provided that such Affiliate delivers a letter agreement to Seller
pursuant to which it agrees to be fully bound by the terms of this
Agreement (including without limitation, the representations and
warranties set forth herein) as if it had been a party hereto), or by the
Seller except with the prior written consent of Loral (except that Seller
may freely assign to an Affiliate but only if Seller shall have previously
assigned to such Affiliate the Interests and such Affiliate delivers a
letter agreement to Loral pursuant to which it agrees to be fully bound by
the terms of this Agreement (including without limitation, the
representations and warranties set forth herein) as if it had been a party
hereto).
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(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 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
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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 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.
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
DASA GLOBALSTAR LIMITED PARTNER, INC.
By: /s/Xxxxxx Xxxxxxxx
-----------------------------------
Name:
Title:
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SCHEDULE I
SELLER AND
ADDRESS FOR NOTICE INTERESTS PURCHASE PRICE (US$)
------------------ --------- --------------------
DASA Globalstar Limited 300,000 $ 30,000,000
Partner, Inc.
Betrieb & Dienste
Telekommunikation
Postfach 801169
81663 Muenchen Germany
Fax: (00)0000000000 or
(000)000-0000
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EXHIBIT A
ESCROW AGREEMENT
This Escrow Agreement, dated as of ___ __, 1998 (the "Closing
Date"), among DASA Globalstar Limited Partner, Inc., a Delaware corporation(the
"Limited Partner"); Loral Space & Communications Ltd., a Bermuda company
("Loral"), Loral/DASA Globalstar, L.P., a Delaware limited partnership
("Loral/DASA") 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 June 9, 1998 (the "Purchase Agreement") by and between Loral and Limited
Partner. 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 1. 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 7(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 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)
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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) Upon any of (i) receipt by
Loral/DASA of a capital call notice from Globalstar do Brasil, S.A. or any other
Globalstar joint venture providing Globalstar service in Brazil in which
Loral/DASA has an interest (the "Brazilian Service Provider"), the purpose of
which is to fund purchases by the Brazilian Service Provider of Globalstar
gateways and/or user terminals (the "Brazilian Capital Call Requirement"),(ii) a
capital call to partners of Loral/DASA, the purpose of which is to fund
purchases by Loral/DASA of Globalstar gateways and/or user terminals (the
"Loral/DASA Capital Call Requirement") or (iii) a loan (the "Loan Requirement")
made by Loral/DASA to the Brazilian Service Provider to fund the purchase of
Globalstar gateways and/or user terminals (the "Brazilian Loan Requirement"),
Loral/DASA shall promptly present to Escrow Agent a capital call notice (a
"Capital Call Notice") in the case of a capital call under either clause (i) or
(ii) above or a loan notice (a "Loan Notice") in the case of a loan under clause
(iii) above, in each case to fund Limited Partner's portion of the Brazilian
Capital Call Requirement, the Loral/DASA Capital Call Requirement or the
Brazilian Loan Requirement, as the case may be. Loral/DASA shall, concurrently
with the presentation of a Capital Call Notice or a Loan Notice to Escrow Agent,
deliver a copy of the Capital Call Notice or Loan Notice to Limited Partner.
Within Five Business Days from the date of its receipt of a Capital Call Notice
or a Loan Notice, as the case may be, Escrow Agent shall disburse monies from
the Escrow Fund to fund the Capital Call Notice or the Loan Notice, as the case
may be. As promptly as practicable following any disbursement of funds
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under this Section 3(a), but in any event no later than three Business Day
thereafter, Escrow Agent shall send to Limited Partner, Loral/DASA and Loral a
written notice specifying the date and amount of any such disbursement.
(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 Loral/DASA (other than a liquidation
or dissolution in connection with a reorganization or restructuring of
Loral/DASA).
(c) Escrow Agent shall deliver to Limited Partner, Loral and Loral/DASA 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 Loral 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 "Loral Certification") from Loral, which certification will
not be unreasonably withheld or delayed, that Limited Partner or its Affiliate
has not breached any of its material obligations under the Amended and Restated
Agreement of Limited Partnership of Loral/DASA Globalstar, L.P. (the "Loral/DASA
Partnership Agreement"), 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 Loral Certification, if Loral shall not have initiated, on or
before such date, an arbitration proceeding under Section 15.10 (or successor
provision) of the Loral/DASA Partnership Agreement alleging breach by Limited
Partner or its Affiliate of its material obligations under the Loral/DASA
Partnership Agreement (the "Loral Arbitration"). However, if a Loral 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 "Final Resolution Date") that a final non-appealable award shall have
been determined in respect of such proceeding and judicially upheld. On such
date, if Loral shall have been awarded damages in the arbitration proceeding,
Escrow Agent shall disburse to Loral 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 Loral shall not have been awarded damages in
the arbitration proceeding on the Final Resolution Date, Escrow Agent shall
disburse the Escrow Fund in full to Limited Partner.
Section 4. Covenants of Loral/DASA. Loral/DASA hereby covenants and
agrees with Limited Partner as follows:
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(a) to use its commercially reasonable efforts to cause the
Brazilian Service Provider to purchase the gateways and user terminals necessary
to enable the Brazilian Service Provider to provide Globalstar service in
Brazil; and
(b) promptly upon receipt of funds from Escrow Agent under Section
3(a) above, in the case of a Brazilian Capital Call Requirement or a Brazilian
Loan Requirement, to fund such monies to the Brazilian Service Provider, and in
the case of a Loral/DASA Capital Call Requirement, to fund the purchase of
Globalstar gateways and/or user terminals.
Section 5. Assignment of Escrow Fund. Limited Partner may freely
assign and transfer all or any portion of the Escrow Account to a successor
limited partner in Loral/DASA ("Successor Partner") 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 Limited Partner
has transferred some or all of its partnership interests in Loral/DASA to the
Successor Partner (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 Successor Partner 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 Successor
Partner (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 Successor Partner 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 5 until the Successor
Partner shall have delivered to Escrow Agent, Loral and Loral/DASA a letter
agreement reasonably satisfactory to Loral, pursuant to which the Successor
Partner agrees, for the benefit of Escrow Agent, Loral and Loral/DASA, 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 6. Termination of Escrow. This Agreement shall
terminate upon the disbursement of all funds in the Escrow Fund in accordance
with Section 3.
Section 7. 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
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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.
(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
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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
7(e) and Section 7(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 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
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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 8. 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 9. 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 10. 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
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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 10 shall be final and binding
and shall be enforceable in any court having jurisdiction.
Section 11. 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:
(l) 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 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 12. 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 13. Section Headings. The headings of sections in this
Agreement are provided for convenience only and will not affect its
construction or interpretation.
Section 14. 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
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25
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 15. 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, Loral/DASA and
Escrow Agent.
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.
Section 17. 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.
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26
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
DASA GLOBALSTAR LIMITED PARTNER, INC.
By:_________________________
Name:
Title:
LORAL SPACE & COMMUNICATIONS LTD.
By:_________________________
Name:
Title:
THE BANK OF NEW YORK
By:_________________________
Name:
Title:
LORAL/DASA GLOBALSTAR, L.P.
By:_________________________
Name:
Title:
27
EXHIBIT B
ASSIGNMENT OF PARTNERSHIP INTERESTS
ASSIGNMENT OF PARTNERSHIP INTERESTS dated as of ________, 1998 by
DASA GLOBALSTAR LIMITED PARTNER, INC., a company organized under the laws of the
State of Delaware ("Seller "), in favor of LORAL SPACE & COMMUNICATIONS LTD., a
Bermuda company ("Loral").
WHEREAS, pursuant to that certain Purchase Agreement dated as of
June __, 1998 between Loral and Seller (the "Purchase Agreement"), Seller has
agreed to transfer to Loral, and Loral has agreed to accept, 300,000 limited
partnership interests (the "Interests") in Loral/Qualcomm Satellite Services,
L.P., a Delaware limited partnership ("LQSS");
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_______________________________
DASA GLOBALSTAR LIMITED PARTNER, INC.
By_______________________________
