EXHIBIT E
CONFORMED COPY
WARRANT ACCELERATION AND REGISTRATION RIGHTS AGREEMENT
Warrant Acceleration and Registration Rights Agreement (this
"Agreement"), dated as of February 12, 1997, among Globalstar Telecommunications
Limited, a Bermuda company ("the Company"), Globalstar, L.P., a Delaware limited
partnership ("Globalstar"), Loral/Qualcomm Satellite Services, L.P., a Delaware
limited partnership ("LQSS"), Loral Space & Communications Ltd., a Bermuda
company ("Loral"), Space Systems/Loral, Inc., a Delaware corporation ("SS/L",
and, together with Loral, the "LSS/L Warrant Holders"), Lockheed Xxxxxx Tactical
Systems, Inc. (f/k/a Loral Corporation), a New York corporation ("Lockheed"),
QUALCOMM China, Inc. (f/k/a QUALCOMM Limited Partner, Inc.), a California
corporation ("QUALCOMM") and DASA Globalstar Limited Partner, Inc., a Delaware
corporation ("DASA" and together with Lockheed and QUALCOMM, the "LQD Warrant
Holders" and, together with the LSS/L Warrant Holders, the "Warrant Holders").
WITNESSETH:
WHEREAS, Globalstar, the Company, Loral, SS/L, Lockheed,
QUALCOMM and DASA are parties to an Agreement dated April 19, 1996 (the "Fee
Agreement"), a copy of which is attached hereto as Exhibit A;
WHEREAS, the Warrant Holders are the registered holders of
Warrants expiring April 19, 2003 (the "Warrants") to purchase an aggregate of
4,185,318 shares of Common Stock, $1.00 par value (the "Common Stock"), of the
Company and the Warrants are represented by physical certificates, copies of
which are attached hereto as Exhibits B-1 through B-5, that were issued pursuant
to the Fee Agreement;
WHEREAS, the LQD Warrant Holders collectively hold Warrants to
purchase up to 3,047,796 shares of Common Stock (collectively, the "LQD
Warrants") and the LSS/L Warrant Holders collectively hold Warrants to purchase
up to 1,137,522 shares of Common Stock (collectively, the "LSS/L Warrants")
WHEREAS, subject to the terms and conditions specified herein,
the Company and LQSS agree to accelerate the vesting and exercisability of the
Warrants;
WHEREAS, subject to the terms and conditions specified herein,
including payment of the exercise price of $26.50 per
share of the Common Stock (the "Warrant Exercise Price"), the LQD Warrant
Holders agree to exercise their respective Warrants in full on the LQD Closing
Date (as defined herein) and the LSS/L Warrant Holders agree to exercise their
respective Warrants in full on the LSS/L Closing Date (as defined herein);
WHEREAS, in conjunction with the acceleration of the vesting
and exercisability of the Warrants, the Company will offer to the holders of its
outstanding Common Stock rights to subscribe for and purchase shares of the
Common Stock (the "Rights Offering");
WHEREAS, the exercise price per share of the Common Stock in
the Rights Offering will equal the Warrant Exercise Price; and
WHEREAS, the Company agrees to file and, to the extent
specified herein, to maintain the effectiveness of a registration statement or
statements covering the Warrant Shares (as defined herein) as hereinafter
provided;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties hereto hereby agree as follows:
1. ACCELERATION OF LQD WARRANTS.
(a) Vesting and Exercise of the LQD Warrants. Notwithstanding
any terms of the LQD Warrants or the Fee Agreement to the contrary, each of the
parties hereto agrees that (i) the LQD Warrants shall vest in full and become
exercisable at the opening of business on the LQD Closing Date (as defined
herein) as hereinafter provided and (ii) each LQD Warrant Holder's respective
LQD Warrants shall be deemed to be exercised in full on that date. The parties
agree that Schedule 1A hereto sets forth for each LQD Warrant the number of
shares of Common Stock issuable upon exercise thereof (the "LQD Warrant Shares")
giving effect to all of the transactions contemplated hereby.
(b) LQD Closing. The closing of the transactions contemplated
by this Section 1 relating to the LQD Warrants (the "LQD Closing") shall take
place at the offices of Xxxxxxx Xxxx & Xxxxxxxxx, One Citicorp Center, 000 Xxxx
00xx Xx., Xxx Xxxx, Xxx Xxxx, at 10:00 a.m. local time, on a date to be
determined by the Company by written notice to each of the Warrant Holders,
which date shall be no earlier than five business days after the date hereof,
and which notice shall be given no less than five business days prior to the LQD
Closing (the "LQD Closing Date"). At the LQD Closing, (i) the Company will issue
and deliver to each LQD Warrant Holder the respective number of shares of Common
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Stock specified with respect to such LQD Warrant Holder in Schedule 1A hereto,
registered in the name of such LQD Warrant Holder or its nominee(s), and (ii)
each LQD Warrant Holder shall pay to the Company the aggregate Warrant Exercise
Price of such number of shares of Common Stock specified with respect to such
LQD Warrant Holder in Schedule 1A. Such payments shall be made in immediately
available funds by wire transfer on the LQD Closing Date to an account
designated in writing by the Company at least one business day prior to the LQD
Closing Date.
(c) Conditions to Closing by the Company. The obligations of
the Company to issue and sell the LQD Warrant Shares to any LQD Warrant Holder
on the LQD Closing Date shall be subject to the following conditions, any one or
more of which may be waived in writing by the Company in its sole discretion:
(i) such LQD Warrant Holder shall surrender to the
Company the certificates representing its LQD Warrants and such
certificates shall bear no stamp, writing or other indicia of transfer,
pledge or other disposition; and
(ii) such LQD Warrant Holder shall pay to the Company
the aggregate Warrant Exercise Price of the LQD Warrant Shares to be
purchased by such LQD Warrant Holder in immediately available funds;
and
(iii) no court or governmental or regulatory
authority or official of competent jurisdiction shall have (a) enacted,
issued, promulgated, enforced or entered any statute, rule, regulation,
judgment, decree, injunction or other order or action which is in
effect or (b) commenced or threatened any action or proceeding, which
in either case would prohibit or make illegal consummation of any of
the transactions contemplated by this Agreement.
(d) Conditions of Closing by LQD Warrant Holders. The
obligations of the LQD Warrant Holders to exercise the LQD Warrants and purchase
the LQD Warrant Shares on the LQD Closing Date shall be subject to the following
conditions, any one or more of which may be waived in writing by the respective
LQD Warrant Holder in its sole discretion:
(i) the Company shall deliver to the LQD Warrant
Holder a certificate or certificates representing the LQD Warrant
Shares issuable by the Company to such LQD Warrant Holder upon exercise
of such holder's LQD Warrant; and
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(ii) no court or governmental or regulatory authority
or official of competent jurisdiction shall have (a) enacted, issued,
promulgated, enforced or entered any statute, rule, regulation,
judgment, decree, injunction or other order or action which is in
effect or (b) commenced or threatened any action or proceeding, which
in either case would prohibit or make illegal consummation of any of
the transactions contemplated by this Agreement.
2. ACCELERATION OF LSS/L WARRANTS.
(a) Vesting and Exercise of the LSS/L Warrants.
Notwithstanding any terms of the LSS/L Warrants or the Fee Agreement to the
contrary, each of the parties hereto hereby agrees that if the Company
accelerates the LSS/L Warrants and at such time the Company has an effective
registration statement (the "LSS/L Trigger Date") covering the LSS/L Warrant
Shares (as defined herein), then (i) the LSS/L Warrants shall vest in full and
become exercisable at the opening of business on the LSS/L Closing Date (as
defined herein) as hereinafter provided and (ii) each LSS/L Warrant Holder's
respective LSS/L Warrants shall be deemed to be exercised in full on that date.
The parties agree that Schedule 1B hereto sets forth for each LSS/L Warrant the
number of shares of Common Stock issuable upon exercise thereof (the "LSS/L
Warrant Shares" and, together with the LQD Warrant Shares, the "Warrant Shares")
giving effect to all of the transactions contemplated hereby.
(b) LSS/L Closing. The closing of the transactions
contemplated by this Section 2 relating to the LSS/L Warrants (the "LSS/L
Closing") shall take place at the offices of Xxxxxxx Xxxx & Xxxxxxxxx, One
Citicorp Center, 000 Xxxx 00xx Xx., Xxx Xxxx, Xxx Xxxx xx the LSS/L Trigger Date
at 10:00 a.m. local time (the "LSS/L Closing Date"). At the LSS/L Closing, (i)
subject to Section 2(d)(i), the Company will issue and deliver to each LSS/L
Warrant Holder the respective number of shares of Common Stock specified with
respect to such LSS/L Warrant Holder in Schedule 1B hereto, registered in the
name of such LSS/L Warrant Holder or its nominee(s), and (ii) the Company will
apply the LSS/L Escrow Funds (as defined below) towards payment of the aggregate
Warrant Exercise Price of such number of shares of Common Stock specified with
respect to such LSS/L Warrant Holder in Schedule 1B. Pending the LSS/L Closing,
on the LQD Closing Date each LSS/L Warrant Holder shall pay to the Company the
aggregate Warrant Exercise Price of the number of shares of Common Stock
specified with respect to such LSS/L Warrant Holder in Schedule 1B, such funds
to be held in an escrow account maintained by the Company until the LSS/L
Closing, which account shall be interest bearing
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or the funds of which shall be invested in investment grade securities, and
which funds shall be released as provided above in this Section 2(b) (the "LSS/L
Escrow Funds"). All interest earned, if any, on the LSS/L Escrow Funds from and
after the LQD Closing Date shall inure to the benefit of the Company, and the
LSS/L Warrant Holders hereby waive any rights they may have in respect of any
such interest.
(c) Conditions to Closing by the Company. The obligations of
the Company to issue and sell the LSS/L Warrant Shares to each LSS/L Warrant
Holder on the LSS/L Closing Date shall be subject to the following conditions,
any one or more of which may be waived in writing by the Company in its sole
discretion:
(i) each LSS/L Warrant Holder shall surrender to the
Company the certificates representing its LSS/L Warrants and such
certificates shall bear no stamp, writing or other indicia of transfer,
pledge or other disposition, other than, in the case of the Warrants
registered in the name of Loral (the "Loral Warrants"), for a pledge in
favor of Lockheed pursuant to Section 4.4 of the Fee Agreement and the
provisions of the Distribution Agreement; and
(ii) no court or governmental or regulatory authority
or official of competent jurisdiction shall have (a) enacted, issued,
promulgated, enforced or entered any statute, rule, regulation,
judgment, decree, injunction or other order or action which is in
effect or (b) commenced or threatened any action or proceeding, which
in either case would prohibit or make illegal consummation of any of
the transactions contemplated by this Agreement.
(d) Conditions of Closing by LSS/L Warrant Holders. The
obligations of the LSS/L Warrant Holders to exercise the LSS/L Warrants and
purchase the LSS/L Warrant Shares on the LSS/L Closing Date shall be subject to
the following conditions, any one or more of which may be waived in writing by
the respective LSS/L Warrant Holder in its sole discretion:
(i) the Company shall deliver to the LSS/L Warrant
Holder a certificate or certificates representing the LSS/L Warrant
Shares issuable by the Company to such LSS/L Warrant Holder upon
exercise of such holder's LSS/L Warrant, provided, however, that,
except as otherwise provided in the proviso immediately below, the
certificate or certificates representing the LSS/L Warrant Shares
issuable to Loral (the "Loral
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Warrant Shares") shall be delivered to Lockheed in accordance with the
terms of the pledge of the LSS/L Warrants by Loral pursuant to Section
4.4 of the Fee Agreement and the terms of the Distribution Agreement,
provided, further, however, that if Loral elects, in its sole and
complete discretion, at any time prior to the LSS/L Closing Date (such
election to be effected by giving written notice to the Company and
Lockheed) (the "Loral Sale Election"), to pledge and deliver to
Lockheed all proceeds (whether the same are in cash or securities or
both) of any sale of the Loral Warrant Shares, in lieu of delivering
the Loral Warrant Shares to Lockheed under such pledge, then Loral
shall be permitted to sell its Loral Warrant Shares and pledge and
deliver the proceeds thereof to Lockheed, it being understood that in
the event of a Loral Sale Election, pending such sale, the Company
shall continue to hold the Loral Warrant Shares as agent for Lockheed
under the pledge contemplated by Section 4.4 of the Fee Agreement and
the terms of the Distribution Agreement;
(ii) the Company shall have accelerated the LSS/L
Warrants;
(iii) the Company shall have a registration statement
covering the Warrant Shares which has been declared effective by the
SEC and remains effective; and
(iv) no court or governmental or regulatory authority
or official of competent jurisdiction shall have (a) enacted, issued,
promulgated, enforced or entered any statute, rule, regulation,
judgment, decree, injunction or other order or action which is in
effect or (b) commenced or threatened any action or proceeding, which
in either case would prohibit or make illegal consummation of any of
the transactions contemplated by this Agreement.
3. CERTAIN ACKNOWLEDGEMENTS AND COVENANTS.
(a) Restricted Securities. Each Warrant Holder acknowledges
and agrees that all Warrant Shares issued by the Company to such Warrant Holder
shall, prior to the effectiveness of a registration statement filed with the
Securities and Exchange Commission (the "SEC") covering such shares of Common
Stock, be "restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act of 1933 (the "Securities Act"). The certificates evidencing such
"restricted securities"
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shall bear a restrictive legend to the effect that the shares of Common Stock
represented thereby have not been registered under the Securities Act, and may
not be sold except pursuant to an effective registration statement under the
Securities Act or in compliance with an available exemption from the
registration requirements thereof.
(b) Sale by Warrant Holder. Each Warrant Holder hereby agrees
that it will not, directly or indirectly, transfer, sell, assign, pledge,
hypothecate, encumber or otherwise dispose of, to any Person (as such term is
defined in the Credit Agreement referred to in the Fee Agreement), in one or a
series of transactions, (i) any Warrant from the date hereof to the Closing Date
or (ii) any Warrant Shares acquired pursuant to this Agreement, except, in the
case of Loral Warrant Shares, in accordance with the requirements of the Loral
Warrantholders to pledge (except as otherwise permitted in Section 2(d)(i)) its
Warrants and any related Loral Warrant Shares to Lockheed pursuant to Section
4.4 of the Fee Agreement and the terms of the Distribution Agreement, and in the
case of all Warrant Shares, (A)(I) pursuant to a registration statement that has
been declared effective under the Securities Act or (II) in compliance with an
available exemption from registration under the Securities Act and (B) in
compliance with the applicable securities laws of any state of the United States
or any other applicable jurisdiction. Each Warrant Holder hereby further agrees
that if the Warrant Shares become eligible for sale pursuant to an effective
registration statement pursuant to Rule 415 of the Securities Act prior to April
15, 1997, then no Warrant Holder may sell any of its Warrant Shares prior to
such date except by means of an underwritten public offering under such
registration statement in accordance with Section 4(a) hereof.
4. REGISTRATION RIGHTS.
(a) Underwritten Registration. Subject to Section 4(b) below,
as soon as reasonably practicable following the completion by the Company of a
high yield debt financing, the Company shall use all reasonable efforts to
effect an underwritten offering on behalf of the Warrant Holders of the Warrant
Shares pursuant to a registration statement declared effective by the SEC
(including, without limitation, the execution of an undertaking to file
post-effective amendments, appropriate qualification under applicable blue sky
or other state securities laws and appropriate compliance with applicable
regulations issued under the Securities Act and applicable blue sky or other
state securities laws). The Company will keep such registration effective for a
period of 120 days or until the Warrant Holders, as applicable, have completed
the distribution
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described in the registration statement relating thereto, whichever first
occurs. The Company shall have sole discretion in selecting any underwriters and
the method of distribution in connection with any offering pursuant to this
Section 4(a). Notwithstanding the foregoing, a Warrant Holder shall not be
obligated to participate in the offering contemplated by this Section 4(a) in
the event it determines in its sole discretion that such participation is not in
its best interests.
(b) Shelf Registration. If no registration statement has been
filed and declared effective pursuant to Section 4(a) by April 15, 1997, or if a
registration statement has been filed and declared effective pursuant to Section
4(a) by such date and any Warrant Holders advise the Company within five
business days after being notified by the Company that such registration
statement has been declared effective that they do not wish to sell their
Warrant Shares pursuant to such registration statement, then the Company shall
use its best efforts to file with the SEC, and cause to be declared effective by
June 15, 1997, a registration statement pursuant to Rule 415 under the
Securities Act (including, without limitation, the execution of an undertaking
to file post-effective amendments, appropriate qualification under applicable
blue sky or other state securities laws and appropriate compliance with
applicable regulations issued under the Securities Act and applicable blue sky
or other securities laws) relating to the offer and sale of Warrant Shares by
the Warrant Holders thereof in accordance with the methods of distribution set
forth in such registration statement, provided, however, that if the Company
already has an effective registration statement under Rule 415 of the Securities
Act, the the Company shall cause such registration statement to remain effective
through the date specified in the last sentence of this Section 4(b). The
Company shall have sole discretion in selecting any underwriters in the event
the Warrant Shares are to be sold in an underwritten offering provided that the
method of distribution in connection with any offering pursuant to this Section
4(b) shall be determined jointly by the Company and any participating Warrant
Holders. The Company will keep any registration pursuant to this Section 4(b)
effective until the earlier of (i) the date on which all Warrant Shares covered
by such registration statement have been disposed of by the Warrant Holders or
(ii) December 31, 1997 (subject to extension for the number of days during which
the filing of any registration statement is postponed pursuant to Section 4(g).
(c) Blue Sky. Notwithstanding Sections 4(a) and 4(b) above,
the Company shall not be obligated to effect, or take any action to effect, any
qualification under blue sky laws pursuant to this Section 4 in any particular
jurisdiction in which the Company would be required to (A) qualify generally to
do business
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as a foreign corporation in any jurisdiction wherein it would not, but for the
requirements of this Section 4, be obligated to be so qualified or (B) execute a
general consent to service of process in effecting such registration,
qualification or compliance, unless the Company is already subject to service in
such jurisdiction and except as may be required by the Securities Act or
applicable rules or regulations thereunder.
(d) Distribution by Warrant Holder. If a Warrant Holder
intends to sell or distribute any Warrant Shares other than pursuant to an
effective registration statement filed pursuant to this Section 4, upon deciding
to so sell such Warrant Shares, the Warrant Holder shall promptly so advise the
Company in a written notice setting forth (i) the number of Warrant Shares
intended to be sold or distributed and (ii) the total number of Warrant Shares
and other shares of Common Stock to be held by such Warrant Holder after giving
effect to such sale or distribution.
(e) Registration of Additional Shares. Any registration
statement filed pursuant to this Section 4 may, in addition to the Warrant
Shares, include other securities for sale for the Company's own account or for
the account of any other Person, provided that if the underwriter retained in
connection with such registration subsequently advise the Company that the
inclusion in the registration statement of all of the securities proposed to be
included would interfere with the successful marketing of the securities
proposed to be registered, then the Company shall eliminate such adverse effect
by reducing or eliminating the number of securities to be included by Persons
other than the Warrant Holders.
(f) Assignability. The registration rights of a Warrant Holder
set forth in this Agreement shall be assignable, in whole or in part, to any
transferee of such Warrant Holder's Warrant Shares, provided such transferee or
holder agrees in a writing satisfactory in form and substance to the Company to
be bound by all provisions of this Agreement.
(g) Lock-Up Period. Notwithstanding the foregoing, the Company
shall be entitled to postpone for a reasonable period of time (but in no event
later than 60 days), the filing of any registration statement otherwise required
to be prepared and filed by the Company under this Section 4 if (A) the Company
is, at such time, conducting or about to conduct an underwritten public offering
of securities and is advised by its managing underwriter or underwriters in
writing (with a copy to the Warrant Holders), that such offering would, in its
or their opinion, be materially adversely affected by the registration required
hereunder, or (B) the Company determines in its
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reasonable judgment and in good faith that the registration and distribution of
the Warrant Shares would interfere with any announced or imminent material
financing, acquisition, disposition, corporate reorganization or other material
transaction of a similar type involving the Company. Upon any postponement by
the Company pursuant to Section 4(g), each Warrant Holder or its designee or
assignee owning Warrant Shares agrees that it shall not dispose of such Warrant
Shares during the above-stated 60-day period other than pursuant to the
limitations applicable to "restricted securities" within the meaning of Rule 144
under the Securities Act.
(h) Expenses. All registration expenses incurred in connection
with any registration, qualification or compliance pursuant to this Section 4,
including without limitation, all registration and filing fees, printing
expenses, fees and disbursements of counsel for the Company, blue sky fees and
expenses and the expenses of any audits incident to or required by any such
registration, shall be borne by Globalstar. All selling expenses attributable to
the Warrant Shares shall be borne by the Warrant Holders pro rata on the basis
of the number of Warrant Shares sold. Selling expenses shall mean all
commissions, underwriting discounts or brokers' or agents' fees applicable to
the sale of the Warrant Shares.
(i) Documents to be Furnished to Warrant Holders. The Company
shall furnish to each Warrant Holder such number of conformed copies of any
registration statement filed pursuant to this Section 4 and of any amendment and
supplement thereto (in each case including all exhibits), such number of copies
of the prospectus contained in such registration statement (including each
preliminary prospectus) and any other prospectus filed under Rule 424 under the
Securities Act, in conformity with the requirements of the Securities Act, as
such Warrant Holder may reasonably request. In addition, the Company shall (i)
deliver promptly to the Warrant Holders or their respective counsel copies of
all written communications between the Company and the SEC relating to the
registration statement, and (ii) advise the
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Warrant Holders or their respective counsel promptly of all telephonic and other
non-written communications between the Company and the SEC relating to such
registration statement. The Company shall respond promptly to any comments from
the SEC with respect thereto, and shall take such other actions as shall be
reasonably required in order to have each such registration statement declared
effective under the Securities Act as soon as reasonably practicable following
the date hereof.
(j) Listing. The Company shall use its best efforts to list
all Common Stock covered by any registration statement filed pursuant to this
Section 4 on any securities exchange or automated quotation system on which the
Common Stock is then listed.
(k) Information to be Furnished to the Company. Each of the
Warrant Holders shall furnish to the Company such information regarding such
Warrant Holder and the distribution proposed by any such Warrant Holder as the
Company may reasonably request in writing and as shall be reasonably required in
connection with any registration, qualification or compliance referred to in
this Section 4.
(l) Amendments. The Company shall prepare and file with the
SEC such amendments and supplements to any registration statement filed pursuant
to this Section 4 and the prospectus used in connection with such registration
statement as may be necessary to comply with the provisions of the Securities
Act with respect to the disposition of all securities covered by such
registration statement.
5. INDEMNIFICATION.
(a) Indemnification by the Company. The Company agrees to
indemnify, to the fullest extent permitted by law, the Warrant Holders, their
directors and officers and each Person who controls the Warrant Holders (within
the meaning of either the Securities Act or the Exchange Act) and each
underwriter of Warrant Shares, if any, against any and all losses, claims,
damages, liabilities and expenses (including reasonable attorneys' fees and
expenses) arising from or based upon any untrue or alleged untrue statement of a
material fact contained in any registration statement, prospectus or preliminary
prospectus or other document incident to any registration, qualification or
compliance, or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein (in
the case of a prospectus, in the light of the circumstances under which they
were made) not misleading, or any violation of any rule or regulation
promulgated under the Securities Act relating to any
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action or inaction required of the Company in connection with any such
registration, qualification or compliance, and the Company will reimburse each
Warrant Holder, its officers, directors, controlling Persons and underwriters
for any legal and any other expenses as they are incurred in connection with
investigating or defending any such claim, loss, damage, liability or expense;
provided that the Company shall not be required to indemnify any Warrant Holder
or its officers, directors or controlling Persons or any underwriter for any
losses, claims, damages, liabilities or expenses resulting from any such untrue
statement or omission if such untrue statement or omission is made in reliance
on and in conformity with any information with respect to such Person furnished
to the Company by such Person in writing expressly for use in such registration
statement, prospectus, amendment or supplement thereto, or preliminary
prospectus; and provided further that the Company shall not be required to
indemnify any Warrant Holder or its officers, directors or controlling Persons
or any underwriters for any losses, claims, damages, liabilities or expenses
resulting from any untrue or alleged untrue statement, or omission or alleged
omission, of a material fact contained in a preliminary prospectus which was
corrected in the final prospectus and the Company has previously furnished to
the Warrant Holders or the underwriters, if any, copies of the final prospectus.
(b) Indemnification by the Warrant Holders. In connection with
any registration in which a Warrant Holder is participating, such Warrant Holder
will furnish to the Company in writing such information with respect to the
Warrant Holder as the Company reasonably requests for use in connection with any
registration statement, prospectus, or amendments or supplements thereto, or
preliminary prospectus and agrees to indemnify the Company, its directors, its
officers and each Person, if any, who controls the Company (within the meaning
of either the Securities Act or of the Exchange Act) and each underwriter of the
Warrant Shares, if any, to the same extent as the foregoing indemnity from the
Company to the Warrant Holders, but only with respect to information relating to
such Warrant Holder furnished to the Company in writing by such Warrant Holder
expressly for use in such registration statement, prospectus, amendment or
supplement thereto, or preliminary prospectus; and provided further that no
Warrant Holder shall be required to indemnify the Company or its officers,
directors or controlling Persons or any underwriters for any losses, claims,
damages, liabilities or expenses resulting from any untrue or alleged untrue
statement, or omission or alleged omission, of a material fact contained in a
preliminary prospectus which was corrected in the final prospectus and the
Company has previously furnished to the Warrant Holders or the underwriters, if
any, copies of the final prospectus.
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(c) Conduct of Indemnification Proceedings. In case any
proceeding (including any governmental investigation) shall be instituted
involving any Person in respect of which indemnity may be sought pursuant to
Section 5.5(a) or Section 5.5(b) hereof, such Person (hereinafter called the
"indemnified party") shall promptly notify the Person against whom such
indemnity may be sought (hereinafter called the "indemnifying party") in writing
and the indemnifying party, upon request of the indemnified party, shall retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and shall pay the reasonable fees and disbursements of such
counsel related to such proceeding. The failure of any indemnified party to so
notify an indemnifying party shall not relieve the indemnifying party from any
liability in respect of such claim which it may have to such indemnified party
under this Section 5.5, unless and to the extent that the indemnifying party was
prejudiced by such failure, and in no event shall such failure relieve the
indemnifying party from any other liability which it may otherwise have to such
indemnified party. In any such proceeding, any indemnified party shall have the
right to retain its own counsel, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (i) the indemnifying party
and the indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified party
and the indemnified party shall have been advised by counsel that representation
of both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all such
indemnified parties, and that all such fees and expenses shall be reimbursed as
they are incurred. In the case of any such separate firm for the indemnified
parties, such firm shall be designated in writing by the indemnified parties
with the consent of the indemnifying party, which consent shall not be
unreasonably withheld. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its prior written consent, but if
settled with such consent or if there shall be a final non-appealable judgment
for the plaintiff, the indemnifying party agrees to indemnify the indemnified
party from and against any loss or liability by reason of such settlement or
judgment. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened proceeding
in respect of which any indemnified party is or could reasonably be expected to
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an
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unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
(d) Contribution. If the indemnification provided for in this
Section 5.5 from the indemnifying party is unavailable to an indemnified party
hereunder in respect of any losses, claims, damages, liabilities or expenses
referred to in this Section 5.5, then the indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities or expenses (i) in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and indemnified parties in connection
with the statement or omission which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as shall be appropriate to reflect the
relative benefits received by the indemnifying and indemnified party from the
offering of securities covered by such registration statement; provided that for
the purposes of this clause (ii) the relative benefits received by a Warrant
Holder shall be deemed not to exceed the amount of proceeds received by such
Warrant Holder. The relative fault of such indemnifying party and indemnified
parties shall be determined by reference to, among other things, whether any
matter in question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact, has been
made by, or relates to information supplied by, such indemnifying party or
indemnified parties, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid
or payable by a party as a result of the losses, claims, damages, liabilities
and expenses referred to above shall be deemed to include, subject to the
limitations set forth in Section 5.5(c) hereof, any legal or other fees or
expenses reasonably incurred by such party in connection with any investigation
or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5.5(d) were determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
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(e) If indemnification is available under this Section 5.5,
the indemnifying parties shall indemnify each indemnified party to the full
extent provided in Section 5.5(a) and 5.5(b) hereof without regard to the
relative fault of said indemnifying party or indemnified party or any other
equitable consideration provided for in this Section 5.5(d).
6. REPRESENTATIONS AND WARRANTIES.
(a) Representations and Warranties of the Company, LQSS and
Globalstar. Each of the Company, LQSS and Globalstar represents and warrants to
each of the Warrant Holders as follows:
(i) The execution, delivery and performance of this Agreement
by the Company, LQSS or Globalstar, as the case may be, have been duly
authorized by all requisite corporate or partnership action and will
not violate any provisions of law, any order of any court or other
agency of government, its organizational documents or any provision of
any indenture, agreement or other instrument to which it or any of its
properties or assets is bound, conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under
any such indenture, agreement or other instrument or result in the
creation or imposition of any lien, charge or encumbrance of any nature
whatsoever upon any of the properties or assets of the Company, LQSS or
Globalstar, as the case may be.
(ii) This Agreement has been duly executed and delivered by
the Company, LQSS and Globalstar and constitutes the legal, valid and
binding obligation of the Company, LQSS and Globalstar, enforceable in
accordance with its terms.
(iii) The Company has duly authorized and reserved for
issuance the Warrant Shares to be issued upon exercise of the Warrants,
and upon exercise of the Warrants pursuant to their terms and the terms
of this Agreement and the payment of the exercise price as provided for
pursuant to such terms, the Warrants Shares will be validly issued,
fully paid and non-assessable.
(b) Representations and Warranties of the Warrant Holders.
Each of the Warrant Holders represents and warrants to each of the Company, LQSS
and Globalstar as follows:
(i) The execution, delivery and performance of this Agreement
by such Warrant Holder have been duly authorized by all requisite
corporate, partnership or consortium action
15
and will not violate any provisions of law (assuming compliance by the
Company and Globalstar with all applicable federal or state securities
laws), any order of any court or other agency of government, the
organizational documents of the Warrant Holder or any provision of any
indenture, agreement or other instrument to which it or any of its
properties or assets is bound, conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under
any such indenture, agreement or other instrument or result in the
creation or imposition of any lien, charge or encumbrance of any nature
whatsoever upon any of the properties or assets of the Warrant Holder,
other than possible conflicts, breaches or defaults which in the
aggregate would not have a material adverse effect.
(ii) This Agreement has been duly executed and delivered by
the Warrant Holder and constitutes the legal, valid and binding
obligation of the Warrant Holder, enforceable in accordance with its
terms.
7. PLEDGED WARRANT SHARES.
(a) Acknowledgement of Pledge. The Company and Globalstar
acknowledge that the Loral Warrant registered in the name of Loral, and the
related Loral Warrant Shares to be registered in the name of Loral, are (and in
the case of the Warrant Shares, will be upon issuance) and any proceeds in
respect thereof, pledged to Lockheed pursuant to Section 4.4 of the Fee
Agreement and the provisions of the Distribution Agreement. The Company and
Globalstar covenant and agree that the terms of any underwriting, distribution
or agency agreement entered into by the Company or Globalstar will include
provisions providing that, if Loral makes a Loral Sale Election, then any
securities or cash proceeds obtained from the sale of the Loral Warrant Shares
shall be delivered to, and deposited with, Lockheed as security for Loral's
obligations pursuant to Section 4.4 of the Fee Agreement and the provisions of
the Distribution Agreement.
(b) Stock Powers. In connection with the exercise of the
Warrant registered in the name of Loral and the issuance of the Warrant Shares
relating thereto to Loral, (i) if Loral fails to make the Loral Sale Election,
Loral will execute and deliver to Lockheed blank stock powers sufficient to
enable Lockheed to transfer, assign and convey title to the Warrant Shares and
(ii) if Loral makes the Loral Sale Election, Loral will execute and deliver to
Lockheed (A) blank stock or security powers sufficient to enable Lockheed to
transfer, assign and convey title to the securities, if any, obtained in
accordance with Section 7(a) as consideration for the sale of Loral's Warrant
Shares or Loral's
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Warrants, (B) instructions to the agent, distributor or underwriter to confirm
the transfer, assignment and conveyance to Lockheed, as secured party, of any
cash proceeds obtained in accordance with Section 7(a) as consideration for the
sale of Loral's Warrant Shares or Loral's Warrants, all subject to the terms of
Section 4.4 of the Fee Agreement and the provisions of the Distribution
Agreement.
(c) Investment of Certain Proceeds. Loral and Lockheed agree
that any proceeds received in accordance with Section 7(a) upon the sale of any
of Loral's Warrant Shares will be held by Lockheed as security for Loral's
obligations pursuant to Section 4.4 of the Fee Agreement and the provisions of
the Distribution Agreement and any cash proceeds will be invested in a
collateral account in the name of Lockheed, as secured party, in investment
grade securities selected from time to time in the reasonable discretion of
Loral.
8. MISCELLANEOUS.
(a) Section Headings. The headings of the sections and
subsections of this Agreement are inserted for convenience only and shall not be
deemed to constitute a part thereof.
(b) Definitions. Capitalized terms used herein but not
otherwise defined shall have the meanings ascribed to them in the Warrants or
the Fee Agreement, as the case may be.
(c) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties; provided however, that this Agreement may not be assigned by any party
hereto without the prior written consent of the Company.
(d) Notices. Notices shall be given pursuant to the provisions
of Section 9.1 of the Fee Agreement.
(e) Counterparts and Facsimile Execution. This Agreement may
be executed in one or more counterparts, by facsimile signature, each of which
shall be deemed an original and all of which together shall be considered one
and the same agreement.
(f) Entire Agreement. This Agreement constitutes the entire
understanding of the parties hereof with respect to the offerings contemplated
herein. With respect to any other matters, including any other offerings, the
provisions of the Fee Agreement shall continue in full force and effect.
(g) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
(h) Severability. If any provision of this Agreement shall be
held to be illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability shall attach only to such provision and shall not in any manner
affect or render illegal, invalid or unenforceable any other provision of this
Agreement, and this Agreement shall be carried out as if any such illegal,
invalid or unenforceable provision were not contained herein.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
GLOBALSTAR TELECOMMUNICATIONS LIMITED
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Vice President
GLOBALSTAR, L.P.
By: Loral/QUALCOMM Satellite Services,
L.P., its Managing General Partner
By: Loral/QUALCOMM Partnership, L.P.,
its General Partner
By: Loral General Partner, Inc.,
its General Partner
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Vice President
LORAL/QUALCOMM SATELLITE SERVICES, L.P.
By: Loral/QUALCOMM Partnership, L.P.,
its General Partner
By: Loral General Partner, Inc.,
its General Partner
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Vice President
LOCKHEED XXXXXX TACTICAL SYSTEMS, INC.
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Vice President
LORAL SPACE & COMMUNICATIONS LTD.
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Vice President
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QUALCOMM CHINA, INC.
By: /s/ Xxxxx Xxxx Xxxxxx
Name: Xxxxx Xxxx Xxxxxx
Title: Chief Executive Officer
SPACE SYSTEMS/LORAL, INC.
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Vice President
DASA GLOBALSTAR LIMITED PARTNER, INC.
By: /s/ Xxxxxx Xxxxxx
Name: Xx. Xxxxxx Xxxxxx
Title: President
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Schedule 1A
LQD Warrant Shares and Exercise Price
Aggregate Aggregate
Warrant Holder Warrant Shares Exercise Price
-------------- -------------- --------------
1. Lockheed 2,511,190 $66,546,535.00
2. Qualcomm 367,131 $9,728,971.50
3. DASA 169,475 $4,491,087.50
Total 3,047,796 $80,766,594.00
Schedule 1B
LSS/L Warrant Shares and Exercise Price
Aggregate Aggregate
Warrant Holder Warrant Shares Exercise Price
-------------- -------------- --------------
1. Loral 942,428 $24,974,342.00
2. SS/L 195,094 $5,169,991.00
Total 1,137,522 $30,144,333.00
TOTAL OF SCHEDULES 1A
AND 1B 4,185,318 $110,910,927.00
