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EXECUTION COPY
LORAL SPACE & COMMUNICATIONS LTD.
$350,000,000
9-1/2% Senior Notes due 2006
PURCHASE AGREEMENT
New York, New York
January 15, 1999
XXXXXX BROTHERS INC.
and the other Initial Purchasers
named in Schedule I hereto
c/x XXXXXX BROTHERS INC.
3 World Financial Center
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Loral Space & Communications Ltd., a Bermuda company (the
"Company"), proposes to sell to the several initial purchasers named in Schedule
I hereto (the "Initial Purchasers") $350,000,000 aggregate principal amount of
9-1/2% Senior Notes due 2006 of the Company (the "Securities"). The Securities
will be issued under an Indenture (as defined herein).
Holders (including subsequent transferees) of the Securities will
have the registration rights set forth in the Registration Rights Agreement (the
"Registration Rights Agreement") between the Company and the Initial Purchasers.
Pursuant to the Registration Rights Agreement, the Company has agreed to file
with the Securities and Exchange Commission (the "Commission") (i) a
registration statement (the "Exchange Offer Registration Statement") under the
Securities Act of 1933 (the "Securities Act"), registering an issue of a series
of senior notes (the "Exchange
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Securities") identical in all material respects to the Securities (except that
the Exchange Securities will not contain terms with respect to transfer
restrictions) to be offered in exchange for the Securities (the "Exchange
Offer") and (ii) under certain circumstances, a shelf registration statement
pursuant to Rule 415 under the Securities Act (the "Shelf Registration
Statement").
The following terms as used in this Agreement shall have the
following meanings:
"Affiliates" shall have the meaning ascribed thereto in Rule 501(b)
of Regulation D under the Securities Act ("Regulation D").
"Business Day" shall mean any day on which the trading is conducted
on the NYSE.
"Closing Date" shall have the meaning set forth in Section 3(b).
"Common Stock" shall mean the common stock, par value $0.01 per
share, of the Company.
"Convertible Preferred Offering" shall mean the proposed offering of
up to 8,400,000 shares of convertible preferred stock (the "GTL Convertible
Preferred") of GTL and the concurrent sale to GTL of preferred partnership
interests (the "Globalstar Preferred Interests") contemplated in connection
therewith.
"DTC" shall mean The Depository Trust Company.
"Exchange Act" shall mean the Securities Exchange Act of 1934.
"Exchange Act Reports" shall have the meaning set forth in Section
1(a).
"Exchange Offer" shall have the meaning set forth in the second
paragraph of this Agreement.
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"Exchange Offer Registration Statement" shall have the meaning set
forth in the Registration Rights Agreement.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"FCC" shall mean the Federal Communications Commission.
"Final Memorandum" shall mean the final offering memorandum dated
January 15, 1999, including any information incorporated by reference therein.
"Globalstar" shall mean Globalstar, L.P., a Delaware limited
partnership.
"Globalstar Credit Agreement" shall mean the Revolving Credit
Agreement dated as of December 15, 1995, as amended by the First Amendment dated
March 25, 1996, the Second Amendment dated July 31, 1997 and the Third Amendment
dated October 15, 1997, among Globalstar, the several financial institutions
named therein and The Chase Manhattan Bank (as successor to Chemical Bank), as
administrative agent.
"GTL" shall mean Globalstar Telecommunications Limited, a Bermuda
company.
"Indenture" shall mean the Indenture dated as of January 15, 1999
between the Company and The Bank of New York, as trustee, pursuant to which the
Securities will be issued.
"Initial Purchasers" shall mean the parties named in Schedule I
hereto.
"Investment Company Act" shall mean the Investment Company Act of
1940 and the rules and regulations thereunder.
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"Loral Affiliates" shall mean each of GTL, Globalstar, SS/L, Orion
and SatMex, and any other subsidiary (as defined in Rule 405 under the
Securities Act) of the Company.
"LQP" shall mean Loral/QUALCOMM Partnership, L.P., a Delaware
limited partnership and the general partner of LQSS.
"LQSS" shall mean Loral/QUALCOMM Satellite Services, L.P., a
Delaware limited partnership and the managing general partner of Globalstar.
"NASD" shall mean the National Association of Securities Dealers,
Inc.
"Operative Documents" shall mean, collectively, this Agreement, the
Indenture and the Registration Rights Agreement.
"Orion" shall mean Loral Orion, Inc., a Delaware corporation.
"Partnership Agreement" shall mean the Amended and Restated
Agreement of Limited Partnership of Globalstar, L.P. dated as of March 6, 1996,
as amended April 8, 1998, among LQSS, GTL, the Company and certain limited
partners named therein.
"PORTAL" shall mean the Private Offerings, Resale and Trading
through Automated Linkages market operated by the NASD.
"Preliminary Memorandum" shall mean the preliminary offering
memorandum, dated January 7, 1999, including any information incorporated by
reference therein.
"Registration Rights Agreement" shall mean the Registration Rights
Agreement dated as of the Closing Date between the Company and the Initial
Purchasers.
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"Rules and Regulations" shall mean the rules and regulations in
effect at any relevant time adopted by the Commission under the Securities Act
or the Exchange Act, as applicable.
"SatMex" shall mean Satelites Mexicanos, S.A. de C.V., a company
organized under the laws of Mexico.
"Securities Act" shall mean the Securities Act of 1933.
"Shelf Registration Statement" shall have the meaning set forth in
the second paragraph of this Agreement.
"Skynet" shall mean Loral Skynet, a Delaware corporation.
"SpaceCom Credit Agreement" shall mean that certain Amended and
Restated Credit and Participation Agreement among Loral SpaceCom Corporation,
Space Systems/Loral, Inc., certain lending banks, Bank of America National Trust
and Savings Association, as Administrative Agent, and Istituto Bancario San
Paolo Di Torino S.P.A., individually and as Italian Export Financing Arranger
and as Selling Bank, dated as of November 14, 1997, providing for up to $850
million of credit extensions, including any related notes, guarantees,
collateral documents, instruments and agreements executed in connection
therewith, and in each case as amended, modified, renewed, refunded, replaced or
refinanced from time to time, as amended on May 7, 1998.
"SS/L" shall mean Space Systems/Loral, Inc., a Delaware corporation.
"Trustee" shall mean The Bank of New York, as trustee under the
Indenture.
The sale of the Securities to you will be made without registration
of the Securities under the Securities Act, in reliance upon exemptions from the
registration requirements of the Securities Act. You have advised the Company
that the Initial Purchasers will offer and sell the
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Securities purchased by them hereunder in accordance with Section 3 hereof as
soon as you deem advisable.
In connection with the sale of the Securities, the Company has
prepared the Preliminary Memorandum and the Final Memorandum. Each of the
Preliminary Memorandum and the Final Memorandum sets forth certain information
concerning the Company, the Loral Affiliates and the Securities. The Company
hereby confirms that it has authorized the use of the Preliminary Memorandum and
the Final Memorandum in connection with the offer and sale of the Securities by
the Initial Purchasers.
Unless stated to the contrary, all references herein to the Final
Memorandum are to the Final Memorandum at the Execution Time and are not meant
to include any amendment or supplement thereto, or any information incorporated
by reference therein, subsequent to the Execution Time, and any references
herein to the terms "amend", "amendment" or "supplement" with respect to the
Final Memorandum shall be deemed to refer to and include any information filed
under the Exchange Act, subsequent to the Execution Time which is incorporated
by reference therein.
1. Representations and Warranties of the Company. The Company
represents and warrants to each Initial Purchaser as set forth below in this
Section 1 that:
(a) The Preliminary Memorandum, at the date thereof, did not contain
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The Final Memorandum, at the date
hereof, does not, and at the Closing Date will not (and any amendment or
supplement thereto, at the date thereof and at the Closing Date, will not),
contain any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that the Company
makes no representation or warranty as to the information contained in or
omitted from the Preliminary Memorandum or the Final
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Memorandum, or any amendment or supplement thereto, in reliance upon and in
conformity with information furnished in writing to the Company by or on behalf
of the Initial Purchasers specifically for inclusion therein.
(b) It is not required by applicable law or regulation in connection
with the offer, sale and delivery of the Securities to the Initial Purchasers in
the manner contemplated by this Agreement to register the Securities under the
Securities Act, provided that neither the Initial Purchasers or any person
acting on their behalf (i) has or will directly, or through an agent, sell,
offer for sale, solicit offers to buy or otherwise negotiate in respect of any
security (as defined in the Securities Act) which is or will be integrated with
the sale of the Securities in a manner that would require the registration of
the Securities under the Securities Act and (ii) has or will engage in any form
of general solicitation or general advertising (within the meaning of Regulation
D) in connection with the offer and sale of any of the Securities, including,
but not limited to, articles, notices or other communications published in any
newspaper, magazine, or similar medium or broadcast over television or radio, or
any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising.
(c) Prior to the effectiveness of the Exchange Offer Registration
Statement or the Shelf Registration Statement, it is not necessary to qualify
the Indenture in respect of the Securities under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act").
(d) The Securities satisfy the eligibility requirements of Rule
144A(d)(3) under the Securities Act and the Company has been advised by the NASD
that the Securities have or will be designated PORTAL eligible securities in
accordance with the rules and regulations of the NASD.
(e) Each of the Company and GTL has been duly incorporated as an
exempted company and is validly existing as an exempted company in good standing
under the laws of Bermuda, with all requisite power and authority and, except
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as disclosed in the Final Memorandum, has all necessary material government
authorizations, licenses, certificates, franchises, permits and approvals
required to own its properties and to conduct its business as described in the
Final Memorandum; Globalstar has been duly formed and is validly existing as a
limited partnership under the laws of the State of Delaware, and has been duly
qualified for the transaction of business and is in good standing under the laws
of each other jurisdiction in which it owns or leases property, or conducts any
business, so as to require such qualification (except where the failure to so
qualify would not have a material adverse effect on the Company); and Globalstar
has all requisite power and authority and, except as disclosed in the Final
Memorandum, has all necessary material government authorizations, licenses,
certificates, franchises, permits and approvals required to own its properties
and to conduct its business as described in the Final Memorandum; SS/L and Orion
have been duly incorporated and are validly existing in good standing under the
laws of the State of Delaware, with all requisite power and authority and,
except as disclosed in the Final Memorandum, have all necessary material
government authorizations, licenses, certificates, franchises, permits and
approvals required to own their properties and to conduct their businesses as
described in the Final Memorandum; SatMex has been duly formed and is validly
existing as a company under the laws of Mexico, with all requisite power and
authority and, except as disclosed in the Final Memorandum, has all necessary
material government authorizations, licenses, certificates, franchises, permits
and approvals required to own its properties and conduct its business as
described in the Final Memorandum; each other Loral Affiliate that is a
corporation has been duly incorporated and is validly existing in good standing
under the laws of its jurisdiction of incorporation; each Loral Affiliate that
is a partnership has been duly formed and is validly existing under the laws of
its jurisdiction of formation. Since the respective dates as of which
information is given in the Final Memorandum, and except as otherwise disclosed
in the Final Memorandum, there has not been, and (other than as contemplated in
the Convertible Preferred Offering) prior to the Closing Date there will not be,
any material change in
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the capital stock or partnership interests of the Company or short-term debt or
long-term consolidated debt of the Company or any Loral Affiliate, or any
material adverse change, or any development involving a prospective material
adverse change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company and the
Loral Affiliates, taken as a whole, otherwise than as set forth or contemplated,
or under arrangements referred to, in the Final Memorandum (as amended or
supplemented).
(f) Neither the Company nor any Loral Affiliate is an "investment
company" within the meaning of such term under the United States Investment
Company Act of 1940 and the rules and regulations of the Commission thereunder.
(g) The Company has authorized capital stock as set forth in its
Memorandum of Association, and all the issued shares of Common Stock have been
duly and validly authorized and issued, are fully paid and not subject to any
preemptive or similar rights.
(h) The Indenture has been duly authorized by the Company and, when
executed by the proper officers of the Company (assuming due execution and
delivery by the Trustee) and delivered by the Company, will constitute a valid
and legally binding obligation of the Company, enforceable against the Company
in accordance with its terms except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to or affecting creditor's rights generally or by general equitable
principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law) and except as enforcement of rights to indemnity
or contribution may be limited by Federal or state securities laws or principles
of public policy; and the Securities will conform in all material respects to
the description of the Securities in the Final Memorandum and the Indenture.
(i) The Securities to be issued and sold by the Company to the
Initial Purchasers hereunder have been duly and validly authorized and, when
duly executed,
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authenticated, issued and delivered as contemplated by the Indenture against
payment therefor as provided herein, will be duly and validly issued, fully paid
and not subject to further calls, and will constitute the valid and binding
obligations of the Company, entitled to the benefits of the Indenture and
enforceable in accordance with their terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium and other similar
laws relating to or affecting creditor's rights generally or by general
equitable principles (regardless of whether such enforceability is considered in
a proceeding in equity or at law) and except as enforcement of rights to
indemnity or contribution may be limited by Federal or state securities laws or
principles of public policy; and the Securities will conform in all material
respects to the description of the Securities in the Final Memorandum and the
Indenture.
(j) The Registration Rights Agreement has been duly authorized by
the Company and, when executed by the proper officers of the Company (assuming
due execution and delivery by the Initial Purchasers) and delivered by the
Company, will constitute the valid and legally binding obligation of the
Company, enforceable against the Company in accordance with its terms except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to or affecting creditor's rights
generally or by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and except as
enforcement of rights to indemnity or contribution may be limited by Federal or
state securities laws or principles of public policy; and the Registration
Rights Agreement conforms in all material respects to the description thereof
contained in the Final Memorandum.
(k) This Agreement has been duly authorized, executed and delivered
by the Company.
(l) The execution, delivery and performance of the Operative
Documents by the Company and the consummation of the transactions contemplated
hereby will not conflict with or result in a breach or violation of any of the
terms
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or provisions of, or constitute a default under, any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which the Company
or any Loral Affiliate is a party or by which the Company or any Loral Affiliate
is bound or to which any of the property or assets of the Company or any Loral
Affiliate is subject, nor will such actions result in any violation of the
provisions of the charter or by-laws (or other constitutive documents) of the
Company or any Loral Affiliate, or any statute or any order, rule or regulation
of any court or governmental agency or body having jurisdiction over the Company
or any Loral Affiliate or any of their properties or assets; no consent,
approval, authorization or order of, or filing or registration with, any such
court or governmental agency or body is required for the issue and sale of
Securities by the Company and the consummation of the transactions contemplated
by the Operative Documents, except as may be required under the various state
securities or Blue Sky Laws or as may be required by the laws of any country
other than the United States in connection with the resale of the Securities by
the Initial Purchasers or as may be required under the Securities Act pursuant
to the terms of the Registration Rights Agreement.
(m) Except as may otherwise be disclosed in or contemplated by the
Final Memorandum or as part of the Convertible Preferred Offering, since
September 30, 1998, none of the Company or the Loral Affiliates have issued or
granted any securities or partnership interests, including any sales pursuant to
Rule 144A, Regulation D or Regulation S under the Securities Act, other than
shares issued pursuant to employee benefit plans, qualified stock options plans
or other employee compensation plans or pursuant to outstanding options, rights
or warrants.
(n) Except as disclosed in the Final Memorandum, neither the Company
nor any Loral Affiliate has sustained, since the date of the latest audited
financial statements included in the Final Memorandum, any material loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action,
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order or decree; and, since such date, there has not been any prospective change
in the capital stock, partnership interests or long-term debt of the Company or
any Loral Affiliate (other than as part of the Convertible Preferred Offering)
or any material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of the Company
and the Loral Affiliates, otherwise than as set forth or contemplated in the
Final Memorandum.
(o) Deloitte & Touche LLP, whose report appears in the Final
Memorandum, are independent public accountants with respect to each of the
Company and certain of the Loral Affiliate. The financial statements (including
the related notes) included or incorporated by reference in the Final Memorandum
or Preliminary Memorandum present fairly the financial condition, results of
operations and changes in financial condition of the entities purported to be
shown thereby at the dates and for the periods indicated and have been prepared
in accordance with generally accepted accounting principles applied on a
consistent basis (except as may be noted therein) throughout the periods
indicated.
(p) Except as described in the Final Memorandum, the Company and
each of the Loral Affiliates carry, or are covered by, insurance in such amounts
and covering such risks as is adequate for the conduct of their respective
businesses and the value of their respective properties and as is customary for
companies engaged in similar businesses in similar industries.
(q) Each of the Company and the Loral Affiliates and their
respective equipment suppliers owns or possesses adequate patent rights or
licenses or other rights to use patent rights, inventions, trademarks, service
marks, trade names and copyrights (except as otherwise described in the Final
Memorandum) necessary to conduct the general business proposed to be operated by
the Company and the Loral Affiliates as described in the Final Memorandum, and
none of the Company or the Loral Affiliates or, to the knowledge of the Company,
any of their respective equipment suppliers,
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has received any notice of infringement of or conflict with asserted rights of
others with respect to any patent, patent rights, inventions, trademarks,
service marks, trade names or copyrights which, singly or in the aggregate,
could materially adversely affect the business, operations, financial condition,
income or business prospects of the Company and the Loral Affiliates, taken as a
whole.
(r) Except as described or contemplated in the Final Memorandum,
there are no legal or governmental proceedings pending to which the Company or
any Loral Affiliate is a party or of which any property or assets of the Company
or any Loral Affiliate is the subject which, if determined adversely to the
Company or any Loral Affiliate, would have a material adverse effect on the
consolidated financial position, stockholders' equity, results of operations,
business or prospects of the Company and the Loral Affiliates, taken as a whole,
and to the best of the Company's knowledge, except as described in the Final
Memorandum, no such proceedings are threatened or contemplated by governmental
authorities or threatened by others.
(s) Other than as disclosed in the Final Memorandum, (i) no default
exists, and no event has occurred which with notice or lapse of time, or both,
would constitute a default in the due performance and observance of any term,
covenant or condition of any indenture, mortgage, deed of trust, loan or credit
agreement, lease or other agreement or instrument to which the Company or any
Loral Affiliate is a party or by which the Company or any Loral Affiliate is
bound, except any such default or event as would not singly or in the aggregate
have a material adverse effect on the Company and the Loral Affiliates, taken as
a whole, and (ii) neither the Company nor any Loral Affiliate is in violation in
any material respect of any applicable law.
(t) (i) The FCC has authorized LQP to construct a mobile satellite
system capable of operating in the 1610- 1626.5/2483.5-2500 MHz frequency bands,
consistent with the technical specifications set forth in its application, the
FCC's rules and the conditions set forth in the FCC's Order
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and Authorization (DA 95-128), released January 31, 1995, as affirmed and
modified by the Memorandum Opinion and Order, FCC 96 279 (released June 27,
1996), as modified by the FCC's Order and Authorization, DA 96 1924 (released
November 19, 1996); however, such authorization is presently subject to
modification, stay or revocation through judicial appeals.
(ii) Participation by Globalstar in the development and operation of
the Globalstar System as described in the Final Memorandum does not
violate the Communications Act of 1934, as amended (the "Communications
Act"), or the rules and regulations thereunder.
(iii) The construction, launch and operation by Globalstar of the
Globalstar satellite constellation authorized by the Order and
Authorization (DA 95-128), released January 31, 1995 as modified by the
Erratum, DA 95 373 (released February 29, 1995), as affirmed and modified
by the Memorandum Opinion and Order, FCC 96 279 (released June 27, 1996),
as modified by the FCC's Order and Authorization, DA 96 1924 (released
November 19, 1996), would not violate provisions of the Communications Act
or the FCC's rules and policies thereunder relating to control of FCC
authorizations, provided that L/Q Licensee, Inc. remains in ultimate
control of the authorized facilities as defined by the rules and policies
of the FCC and that there is no transfer of control of L/Q Licensee, Inc.
without prior approval of the FCC.
(u) Neither the Company nor any Loral Affiliate, nor any director,
officer, agent, employee or other person associated with or acting on behalf of
the Company or any Loral Affiliate, has used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expense relating to
political activity; made any direct or indirect unlawful payment to any foreign
or domestic government official or employee from corporate funds; violated or is
in violation of any provision of the Foreign Corrupt Practices Act of 1977; or
made any bribe, rebate,
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payoff, influence payment, kickback or other unlawful payment.
(v) Except as disclosed in the Final Memorandum, there has been no
storage, disposal, generation, manufacture, refinement, transportation, handling
or treatment of toxic wastes, medical wastes, hazardous wastes or hazardous
substances by any of the Company or the Loral Affiliates (or, to the knowledge
of the Company, any predecessors in interest of any of them) at, upon or from
any of the property now or previously owned or leased by the Company or any
Loral Affiliate, as the case may be, in violation of any applicable law,
ordinance, rule, regulation, order, judgment, decree or permit or which would
require remedial action under any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit, except for any violation or remedial action
which would not have, or would not be reasonably likely to have, singularly or
in the aggregate with all such violations and remedial actions, a material
adverse effect on the general affairs, management, financial position,
shareholders' equity or results of operations of the Company and the Loral
Affiliates, taken as a whole; there has been no material spill, discharge, leak,
emission, injection, escape, dumping or release of any kind onto such property
or into the environment surrounding such property of any toxic wastes, medical
wastes, solid wastes, hazardous wastes or hazardous substances due to or caused
by the Company, any Loral Affiliate or any of their respective predecessors or
with respect to which the Company has knowledge, except for any such spill,
discharge, leak, emission, injection, escape, dumping or release which would not
have or would not be reasonably likely to have, singularly or in the aggregate
with all such spills, discharges, leaks, emissions, injections, escapes,
dumpings and releases, a material adverse effect on the general affairs,
management, financial position, shareholders' equity or results of operations of
the Company and the Loral Affiliates, taken as a whole; and the terms "hazardous
wastes", "toxic wastes", "hazardous substances" and "medical wastes" shall have
the meanings specified in any applicable local, state, Federal and
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foreign laws or regulations with respect to environmental protection.
(w) The partnership interests in Globalstar held by the Company and
GTL pursuant to the Partnership Agreement are duly and validly authorized,
executed, issued and delivered in accordance with the terms of the Partnership
Agreement, are fully paid and constitute the valid and binding obligations of
Globalstar; all the issued and outstanding capital stock of each other Loral
Affiliate has been duly authorized and validly issued and is fully paid and
nonassessable; and, except as disclosed in the Final Memorandum and except for
the stock of GTL that is owned by the Company and has been pledged to Lockheed
Xxxxxx, common stock of GTL owned by the Company that is subject to outstanding
options, shares of Loral SpaceCom Corporation and SS/L pledged as security for
borrowings under the SpaceCom Credit Agreement, partnership interests in
Globalstar owned by the Company, some of which are subject to a pledge in the
event of a drawing by the Company under a credit agreement, dated as of June 30,
1998, among the Company, the lenders party thereto from time to time and Bank of
America National Trust and Savings Association, as administrative agent,
interests in Firmanento Mexicano, S. de X.X. de C.V. that have been pledged to
the Mexican government and shares of SatMex pledged in favor of certain banks in
connection with the SatMex Credit Agreement dated as of February 23, 1998 and
the Indenture dated March 4, 1998 relating to the Senior Secured Floating Rate
Notes, the capital stock of such Loral Affiliate owned by the Company, directly
or indirectly, is owned free from liens, encumbrances, equities, claims and
defects.
(x) For U.S. Federal income tax purposes, the Company is not, and
does not expect to become, a "passive foreign investment company" within the
meaning of Section 1297 of the Internal Revenue Code of 1986, as amended.
(y) The proceeds from the offering of Securities will be used as
contemplated in the Final Memorandum.
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2. Purchase and Sale of the Securities.
On the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth, the
Company agrees to sell to each Initial Purchaser, and each Initial Purchaser
agrees, severally and not jointly, to purchase from the Company, at a purchase
price of 98.25% of the principal amount thereof plus accrued interest, if any,
from January 21, 1999 to the Closing Date, the principal amount of Firm
Securities set forth opposite such Initial Purchaser's name in Schedule I
hereto.
3. Delivery and Payment for Securities.
(a) Delivery of and payment for the Securities shall be made at the
offices of Cravath, Swaine & Xxxxx, 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
(or such other place as mutually may be agreed upon), at 10:00 a.m., New York
City time, on January 21, 1999 or such later date as the Initial Purchasers and
the Company shall agree (such date and time of delivery and payment for the
Securities being herein called the "Closing Date").
(b) The Securities to be purchased by the Initial Purchasers
hereunder shall be delivered by or on behalf of the Company to you against
payment of the purchase price therefor by wire transfer in immediately available
funds. On the Closing Date, payment will be made against delivery of a single
global Securities certificate to be deposited with, or on behalf of, DTC, and
registered in the name of Cede & Co., as DTC's nominee. Time shall be of the
essence, and delivery of certificates for the Securities at the time and place
specified in this Agreement is a further condition to the obligations of each
Initial Purchaser.
4. Representations by Initial Purchasers; Sale and Resale of the
Securities by Initial Purchasers. Each
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Initial Purchaser represents and warrants to and agrees with the Company that:
(a) it has offered and will offer to sell the Securities only to,
and has solicited and will solicit offers to buy the Securities only from,
persons that in purchasing such Securities will be deemed to have represented
and agreed as provided under "Investor Representations and Restrictions on
Resale" in Exhibit A hereto;
(b) none of it or any of its affiliates has entered into or will
enter into any contractual arrangement with respect to the distribution of the
Securities except for any such arrangements with any other Initial Purchaser or
affiliates of any other Initial Purchaser or with the prior written consent of
the Company;
(c) with respect to resales made in reliance on Rule 144A of any of
the Securities, it will deliver either with the confirmation of such resale or
otherwise prior to settlement of such resale a notice to the effect that the
resale of such Securities has been made in reliance upon the exemption from the
registration requirements of the Securities Act provided by Rule 144A;
(d) with respect to offers and sales outside the United States in
reliance on Regulation S: (i) the Securities have not been and will not be
registered under the Securities Act and may not be offered or sold within the
United States or to, or for the account or benefit of, U.S. persons (as defined
in Regulation S) except in accordance with Regulation S or pursuant to an
exemption from the registration requirements of the Securities Act; and (ii)
such Initial Purchaser has not offered the Securities and will not offer, sell
or deliver the Securities in the United States or to, or for the account or
benefit of, U.S. persons, (A) as part of its distribution at any time or (B)
otherwise until 40 days after the later of the commencement of the offering and
the Closing Date, only in accordance with Rule 903 of Regulation S. Accordingly,
neither such Initial Purchaser, its affiliates nor any
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persons acting on its behalf have engaged or will engage in any directed selling
efforts (within the meaning of Regulation S) with respect to the Securities, and
such Initial Purchaser, its affiliates and any such persons have complied and
will comply with the offering restrictions requirement of Regulation S; and
(e) it has not offered or sold, and will not offer or sell, in the
United Kingdom, by means of any document, any Securities other than to persons
whose ordinary business it is to buy or sell shares or debentures, whether as a
principal or agent, or in circumstances which do not constitute an offer to the
public within the meaning of the Public Offers of Securities Regulations 1995;
it has complied and will comply with all applicable provisions of the Financial
Services Act 1986 with respect to anything done by it in relation to the
Securities in, from or otherwise involving the United Kingdom; and it has only
issued or passed on and will only issue or pass on in the United Kingdom any
document received by it in connection with the issue of the Securities to a
person who is of a kind described in Article 11(3) of the Financial Services Act
1986 (Investment Advertisements) (Exemptions) Order 1995 or is a person to whom
the document may otherwise lawfully be issued or passed on.
5. Covenants of the Company. The Company agrees with each Initial
Purchaser that:
(a) The Company will furnish to each Initial Purchaser and to
counsel for the Initial Purchasers, without charge, during the period referred
to in paragraph (c) of this Section 5, as many copies of the Final Memorandum,
including any documents incorporated by reference therein and any amendments and
supplements thereto, as it may reasonably request. The Company will pay the
expenses of printing or other production of all documents relating to the
offering.
(b) The Company will not amend or supplement the Final Memorandum
without the prior written consent of the
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Initial Purchasers, which consent shall not be unreasonably withheld or delayed.
(c) If at any time prior to the completion of the sale of the
Securities by the Initial Purchasers (as determined by the Initial Purchasers),
any event occurs as a result of which the Final Memorandum, as then amended or
supplemented, would include any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, or if it should
be necessary to amend or supplement the Final Memorandum to comply with
applicable law, the Company will promptly notify the Initial Purchasers of the
same and, subject to the requirements of paragraph (b) of this Section 5, will
promptly prepare and provide to the Initial Purchasers pursuant to paragraph (a)
of this Section 5 an amendment or supplement which will correct such statement
or omission or effect such compliance.
(d) The Company will arrange for the qualification of the Securities
for sale by the Initial Purchasers under the laws of such jurisdictions as the
Initial Purchasers may reasonably designate and will maintain such
qualifications in effect so long as required for the sale of the Securities;
provided that in connection therewith the Company shall not be required to
qualify as a foreign corporation, to file a general consent to service of
process, or become subject to taxation in any jurisdiction. The Company will
promptly advise the Initial Purchasers of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose.
(e) Neither the Company, nor any of the Loral Affiliates, nor any
person acting on either of their behalf will, directly or indirectly, make
offers or sales of any security, or solicit offers to buy any security, under
circumstances that would require the registration of the Securities under the
Securities Act. Neither the Company, nor any of the Loral Affiliates, nor any
person acting on
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either of or their behalf will engage in any form of general solicitation or
general advertising (within the meaning of Regulation D), in any "directed
selling efforts" (as defined in Regulation S) within the United States or in any
manner involving a public offering within the meaning of Section 4(2) of the
Securities Act in the United States.
(f) So long as any of the Securities are "restricted securities"
within the meaning of Rule 144(a)(3) under the Securities Act, the Company will,
during any period in which it is not subject to and in compliance with Section
13 or 15(d) of the Exchange Act (or has not otherwise provided such information
to the Commission), provide to each holder of such restricted securities and to
each prospective purchaser (as designated by such holder) of such restricted
securities, upon the request of such holder or prospective purchaser, any
information required to be provided by Rule 144A(d)(4) under the Securities Act.
This covenant is intended to be for the benefit of the holders, and the
prospective purchasers designated by such holders, from time to time of such
restricted securities.
(g) During the period of two years after the First Closing Date, the
Company will not, without the prior written consent of the Initial Purchasers,
resell any of the Securities that have been reacquired by them, and the Company
will not permit any of its directors nor will the Company permit any of the
Loral Affiliates to resell any of the Securities that have been reacquired by
any of them, except for Securities purchased by the Company or the Loral
Affiliates and resold in a transaction registered under the Securities Act.
(h) The Company agrees to pay (i) all expenses (including transfer
taxes) incurred in connection with the delivery to the Initial Purchasers of the
Securities, (ii) all reasonable fees and expenses (including, without
limitation, fees and expenses of the Company's accountants and counsel, but
excluding fees and expenses of counsel for the Initial Purchasers) in connection
with the preparation, printing, delivery and shipping of the Final Memorandum
(including the Exchange Act Reports and all amendments and
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exhibits thereto), the Preliminary Memorandum, and any amendments or supplements
of the foregoing, and the reproduction, delivery and shipping of this Agreement,
(iii) all filing fees and reasonable fees and disbursements of counsel to the
Initial Purchasers incurred in connection with the qualification of the
Securities under state securities laws as provided in Section 5(d) hereof, (iv)
any applicable listing, rating agency or similar fees, (v) the cost of printing
certificates representing the Securities, (vi) the cost and charges of the
Trustee, any transfer agent or registrar (including, without limitation, fees
and expenses of counsel thereto) and (vii) all other reasonable costs and
expenses incident to the performance of its obligations hereunder for which
provision is not otherwise made in this Section 5. It is understood, however,
that, except as provided in this Section 5 and Section 7 hereof, the Initial
Purchasers shall pay all their own costs and expenses, including the fees of
their counsel, transfer taxes due upon resale of any of the Securities by them
and any advertising expenses incurred in connection with any offers they may
make (such costs and expenses to be borne in equal proportions by the Initial
Purchasers). If the sale of the Securities provided for herein is not
consummated by reason of acts of the Company or any of the Loral Affiliates
pursuant to Section 8 hereof which prevent this Agreement from becoming
effective, or by reason of any failure, refusal or inability on the part of the
Company or the Loral Affiliates to perform in all material respects any
agreement on their part to be performed or because any condition of the Initial
Purchasers' obligations hereunder to be performed by the Company or any of the
Loral Affiliates is not fulfilled or if the Initial Purchasers shall decline to
purchase the Securities for any reason permitted under this Agreement (except
termination of this Agreement pursuant to paragraphs (c)-(f) of Section 8), the
Company shall reimburse the Initial Purchasers for all reasonable out-of-pocket
disbursements (including reasonable fees and disbursements of counsel) incurred
by the Initial Purchasers in connection with any investigation or preparation
made by it in respect of the marketing of the Securities or in contemplation of
the performance by them of their obligations hereunder. If this Agreement is
terminated
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pursuant to Section 8 hereof by reason of the default of one or more Initial
Purchasers, the Company shall not be obligated to reimburse any defaulting
Initial Purchasers on account of these expenses.
(i) In connection with the offering, until Xxxxxx Brothers Inc.
shall have notified the Company of the completion of the initial resale of the
Securities, neither the Company, nor any Loral Affiliate nor anyone acting on
their behalf has or will, either alone or with one or more other persons, bid
for or purchase for any account in which it or any of its directors or partners,
as the case may be, has a beneficial interest, any Securities or attempt to
induce any person to purchase any Securities for the purpose of creating actual,
or apparent, active trading in, or of raising the price of, the Securities.
(j) The Company will not at any time offer, sell, contract to sell,
pledge or otherwise dispose of, directly or indirectly, any securities under
circumstances where such offer, sale, pledge, contract or disposition would
cause the exemption afforded by Section 4(2) of the Securities Act or the safe
harbor of Regulation S thereunder to cease to be applicable to the offer and
sale of the Securities.
(k) The Company will use its reasonable efforts to permit the
Securities to be designated PORTAL securities in accordance with the rules and
regulations adopted by the NASD relating to trading in the PORTAL market and to
cause the Securities to be eligible for clearance and settlement through DTC.
(l) The Company will not, until 90 days following the Closing Date,
without the prior written consent of Xxxxxx Brothers Inc., agree to offer to
sell, sell or otherwise dispose of, directly or indirectly, any United States
dollar denominated debt securities issued or guaranteed by the Company and
having a maturity of more than one year from the date of issue, other than (i)
Securities issued in connection with the Exchange Offer or the Shelf
Registration Statement, (ii) strategically driven private placements of debt
securities with strategic investors and
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(iii) debt securities which are offered, sold or disposed of pursuant to
obligations in existence on the date of this Agreement.
(m) In connection with any disposition of Securities pursuant to a
transaction made in compliance with applicable state securities laws and (i)
satisfying the requirements of Rule 144(k) under the Securities Act, (ii)
satisfying the requirements of Rule 904 of Regulation S, (iii) made pursuant to
an effective registration statement under the Securities Act or (iv) disposed of
in any other transaction that does not require registration under the Securities
Act (and the Company has received an opinion of counsel or other documentation
satisfactory to them to such effect), the Company will reissue certificates
evidencing such Securities without the legend set forth under the heading
"Notice to Investors" in the Final Memorandum (provided, in the case of a
transaction specified in clause (iv) above, that the legal opinion referred to
therein so permits).
6. Conditions of Initial Purchasers' Obligations. The respective
obligations of the Initial Purchasers hereunder to purchase the Securities are
subject to there not being any material breach, as of the date hereof and the
Closing Date (as if made at the Closing Date), of the representations and
warranties of the Company contained herein, to the performance in all material
respects by the Company of its obligations hereunder and to the following
additional conditions:
(a) No Initial Purchaser shall have been advised by the Company or
discovered and disclosed to the Company that the Final Memorandum, as of the
date thereof, or as of the Closing Date, contained or contains an untrue
statement of fact which, in your opinion or in the opinion of counsel to the
Initial Purchasers, is material, or omitted or omits to state a fact which, in
your opinion or in the opinion of counsel to the Initial Purchasers, is material
and is required to be stated therein or is necessary to make the statements
therein not misleading.
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(b) On or prior to the Closing Date, you shall have received from
Cravath, Swaine & Xxxxx, counsel for the Initial Purchasers, such opinions or
letters with respect to such matters as you may reasonably request, and such
counsel shall have received such documents and information as they reasonably
request to enable them to pass upon such matters.
(c) On the Closing Date there shall have been furnished to you the
opinion (addressed to the Initial Purchasers) of Xxxxxxx Xxxx & Xxxxxxxxx,
counsel to the Company, dated such Closing Date and in form and substance
satisfactory to counsel for the Initial Purchasers, to the effect that:
(i) Globalstar has been duly formed and is validly existing as a
limited partnership in good standing under the laws of the State of
Delaware; SS/L, Skynet and Orion have been duly incorporated and are
validly existing as corporations in good standing under the laws of the
State of Delaware; each of Globalstar, SS/L, Skynet and Orion has been
duly qualified for the transaction of business and is in good standing
under the laws of each other jurisdiction in the United States in which it
owns or leases property, or conducts any business, so as to require such
qualification (except where the failure to so qualify would not have a
material adverse effect on the Company, Globalstar, SS/L, Skynet and
Orion, taken as a whole; and each of Globalstar, SS/L, Skynet and Orion
has all requisite power and authority and, except as disclosed in the
Final Memorandum, all material governmental authorizations, licenses,
certificates, franchises, permits and approvals required to own its
properties and to conduct its business as described in the Final
Memorandum;
(ii) The Securities conform in all material respects to the
description thereof contained in the Final Memorandum;
(iii) To such counsel's knowledge, other than as set forth in the
Final Memorandum, no litigation or
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governmental proceedings are pending or threatened against the Company or
the Loral Affiliates which would adversely affect the Company's ability to
perform its obligations under this Agreement or is required to be
disclosed in the Final Memorandum and which is not disclosed and correctly
summarized therein;
(iv) The Indenture has been duly authorized, executed and delivered
by the Company and, assuming due execution and delivery by the Trustee,
the Indenture constitutes a valid and legally binding obligation of the
Company; and is enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights and to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at
law)(except that no opinion need be expressed with respect to the
indemnification or construction provisions contained therein);
(v) The Registration Rights Agreement has been duly authorized,
executed and delivered by the Company and conforms in all material
respects to the description thereof contained in the Final Memorandum,
and, assuming due execution and delivery thereof by the Initial
Purchasers, constitutes a valid and legally binding obligation of the
Company enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors' rights
and to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) (except
that no opinion need be expressed with respect to the indemnification or
construction provisions contained therein);
(vi) The Purchase Agreement has been duly authorized, executed and
delivered by the Company;
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(vii) The Securities have been duly executed, and assuming the
Securities have been duly authorized, when authenticated in accordance
with the provisions of the Indenture and delivered to and paid for by the
Initial Purchasers pursuant to this Agreement, will be duly and validly
issued and outstanding and will constitute valid and legally binding
obligations of the Company entitled to the benefits of the Indenture and
enforceable against the Company in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights and to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at
law)(except that no opinion need be expressed with respect to the
indemnification or construction provisions contained therein); and the
offer and sale of the Securities has been duly authorized by the Company;
(viii) The execution, delivery and performance by the Company of the
Operative Documents, and the consummation of the transactions therein
contemplated, will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other material
agreement or instrument known to such counsel to which the Company or any
Loral Affiliate is a party or by which the Company or any Loral Affiliate
is bound or to which any of the property or assets of the Company or any
Loral Affiliate is subject (except such breaches or events of default with
respect thereto as are disclosed in the Final Memorandum), nor will such
actions result in any violation of the provisions of the charter or
by-laws (or other constitutive documents) of the Company or any Loral
Affiliate or any statute or any order, rule or regulation known to such
counsel of any court or governmental agency or body having jurisdiction
over the Company or any Loral Affiliate or any of their properties or
assets;
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(ix) No consent, approval, authorization or order of any court,
regulatory body, administrative agency or other governmental body is
required to be obtained for the execution and delivery of any of the
Operative Documents, the consummation of the transactions contemplated
hereby and thereby and the sale of the Securities as contemplated in the
Final Memorandum, under any provision of law or regulation applicable to
the Company of the State of New York or the United States of America,
except as may be required under the various state securities or Blue Sky
laws or as may be required by the laws of any country other than the
United States in connection with the resale of the Securities by the
Initial Purchasers or as may be required under the Securities Act pursuant
to the terms of the Registration Rights Agreement;
(x) Such counsel has read (i) all contracts referred to in the Final
Memorandum and all other loan agreements to which the Company is a party
of which such counsel has knowledge and (ii) the SpaceCom Credit
Agreement, the Globalstar Credit Agreement and the indenture for each
series of notes issued by Globalstar and Globalstar Capital Corporation,
and to the extent material such contracts are fairly summarized as
disclosed therein, conform in all material respects to the descriptions
thereof contained therein, and such counsel does not know of any contracts
or other documents required to be so summarized or disclosed, which have
not been so summarized or disclosed;
(xi) The statements set forth in the Final Memorandum under "Certain
Federal Income Tax Considerations", insofar as such statements constitute
a summary of the legal matters, documents or proceedings referred to
therein fairly present the information referred to therein with respect to
such legal matters, documents and proceedings; the statements set forth
under the heading "Description of Notes" in the Final Memorandum, insofar
as such statements purport to summarize provisions of the
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Securities and the Indenture, provide a fair summary of such provisions;
(xii) The Partnership Agreement has been duly and validly
authorized, executed and delivered by LQSS, Globalstar and the Company
and, to the knowledge of such counsel, the other parties to such agreement
have authorized, executed and delivered such agreement and assuming such
authorization, execution and delivery by such other parties, such
agreement is valid and binding and enforceable against the parties
thereto, except as enforceability may be limited by (I) bankruptcy,
insolvency, reorganization, moratorium and other similar laws relating to
or affecting creditors' rights generally or by general equitable
principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law) and (II) Federal or state securities laws
or principles of public policy with regard to rights to indemnity;
provided, however, that no opinion is given with respect to the
enforceability of any provisions contained in the Partnership Agreement or
the Service Provider Agreements which state that the parties thereto have
agreed to further negotiate with respect to certain matters as specified
therein;
(xiii) LQP (or its subsidiary) has agreed to use the license to
operate mobile satellite services in the 1610-1626.5 MHz L-band and the
2483.5-2500 MHz S-band granted by the FCC for the exclusive benefit of
Globalstar;
(xiv) After giving effect to the sale of the Securities by the
Initial Purchasers as contemplated in the Final Memorandum, the Company
will not be an "investment company" under the Investment Company Act; and
(xvii) Assuming the accuracy of the representations and warranties
and compliance with the agreements contained herein, no registration of
the Securities under the Securities Act is required for the offer and
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sale by the Initial Purchasers of the Securities in the manner
contemplated by this Agreement prior to the effectiveness of the Exchange
Offer Registration Statement or the Shelf Registration Statement, and no
qualification of the Indenture under the Trust Indenture Act of 1939 prior
to the effectiveness of the Exchange Offer Registration Statement or the
Shelf Registration with respect to the Securities is required for the
offer and sale by the Initial Purchasers of the Securities in the manner
contemplated by this Agreement.
In rendering such opinion, such counsel may limit its opinion to the
laws of the State of New York, the laws of the United States and the Delaware
Revised Uniform Limited Partnership Act and as to matters of fact, such counsel
may rely to the extent deemed proper, on certificates of responsible officers of
the Company and public officials.
Such counsel shall also state that in connection with the
preparation of the Preliminary Memorandum and Final Memorandum, no facts have
come to its attention which lead it to believe that the Final Memorandum, as of
the Execution Time and the Closing Date, contained any untrue statement of
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that such counsel will express no opinion or belief with respect to the
financial data contained in the Final Memorandum or with respect to any matters
addressed by the opinion of Xxxxxxx & Xxxxxx set forth in Section 6(d) hereof or
the opinion of Xxxxxxx, Xxxxxxxx & Xxxxx set forth in Section 6(e) hereof with
respect to Bermuda law matters.
(d) On the Closing Date there shall have been furnished to you the
opinion (addressed to the Initial Purchasers) of Xxxxxxx & Xxxxxx, special
communications counsel to the Company, dated the Closing Date and in form
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and substance satisfactory to counsel for the Initial Purchasers to the effect
that:
(i) The statements set forth in the Final Memorandum under the
heading "Risk Factors--Regulations," insofar as such statements constitute
a summary of the FCC's regulatory framework relating to Globalstar
referred to therein, fairly present the information referred to therein
with respect to such regulatory framework. The statements set forth in the
Final Memorandum under the heading "Risks Relating to
Globalstar--Globalstar FCC License," insofar as such statements constitute
a summary of the proceedings related to the validity of the authorization
for construction, launch and operation of the Globalstar satellite
constellation, fairly present the information referred to therein with
respect to such proceedings, and to our knowledge, there are no other
pending or threatened proceedings which could have a material adverse
effect on the validity of such authorization.
(ii) The FCC has authorized LQP to construct a mobile satellite
system capable of operating in the 1610-1626.5/2483.5-2500 MHz frequency
bands, consistent with the technical specifications set forth in its
application, the FCC's rules and the conditions set forth in the FCC's
Order and Authorization (DA 95-128), released January 31, 1995 as modified
by the Erratum, DA 95 373 (released February 29, 1995), as affirmed and
modified by the Memorandum Opinion and Order, FCC 96 279 (released June
27, 1996), as modified by the FCC's Order and Authorization, DA 96 1924
(released November 19, 1996); and pursuant to FCC approval, LQP has
assigned such authorization to L/Q Licensee, Inc.; however, such
authorization is presently subject to modification, stay or revocation as
a result of pending judicial appeals.
(iii) The construction, launch and operation by Globalstar, of the
Globalstar satellite constellation authorized by the Order and
Authorization, DA 95-128
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(released Jan. 31, 1995) as modified by the Erratum, DA 95 373 (released
February 28, 1995), as affirmed and modified by the Memorandum Opinion and
Order, FCC 96 279 (released June 27, 1996) , as modified by the FCC's
Order and Authorization, DA 96 1924 (released November 19, 1996), would
not violate provisions of the Communications Act or the FCC's rules and
policies thereunder relating to control of FCC authorizations, provided
that L/Q Licensee, Inc. remains in ultimate control of the authorized
facilities as defined by the rules and policies of the FCC and that there
is no transfer of control of L/Q Licensee, Inc. without prior approval of
the FCC.
(e) On the Closing Date there shall have been furnished to you the
opinion (addressed to the Initial Purchasers) of Xxxxxxx, Xxxxxxxx & Xxxxx,
counsel to the Company, dated the Closing Date and in form and substance
satisfactory to counsel for the Initial Purchasers to the effect that:
(i) each of the Company and GTL has been duly incorporated as an
exempted company and is validly existing as an exempted company in good
standing under the laws of Bermuda; and has full power and authority and
has obtained all Bermuda governmental authorizations, licenses,
certificates, franchises, permits and approvals required to own its
properties and to conduct its business as described in the Final
Memorandum;
(ii) the Company has authorized share capital as set forth in the
Final Memorandum, and all the issued shares of Common Stock of the Company
and common stock of GTL have been duly and validly authorized and issued
and are fully paid and not subject to further calls;
(iii) the Indenture has been duly authorized, executed and delivered
by the Company and constitutes a valid and legally binding obligation of
the Company enforceable against the Company in accordance with its terms
except as enforceability may be limited by
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bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally or by general
equitable principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law); the Securities to be
issued and sold by the Company to the Initial Purchasers hereunder have
been duly and validly authorized and, when duly executed, authenticated
issued and delivered as contemplated by the Indenture against payment
therefor as provided herein, will be duly and validly issued, and will
constitute the valid and binding obligations of the Company entitled to
the benefits of the Indenture and enforceable in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally or by general equitable principles (regardless
of whether such enforceability is considered in a proceeding in equity or
at law); the issuance of the Securities is not subject to any preemptive
or similar rights under the Company's Memorandum of Association or
Bye-Laws, in each case as amended; the Securities and the Indenture
conform to the descriptions thereof in the Final Memorandum;
(iv) to such counsel's knowledge, no litigation or governmental
proceeding is pending or threatened against the Company or GTL in Bermuda
which would adversely affect the Company's ability to perform its
obligations under this Agreement;
(v) the execution, delivery and performance by the Company of each
of the Operative Documents have been duly authorized by the Company and
the consummation by the Company of the sale of the Securities in
accordance therewith will not (A) conflict with the Company's Memorandum
of Association or Bye-Laws, in each case as amended, or (B) violate or
conflict with any provision of law or regulation of Bermuda applicable to
the Company or GTL;
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(vi) no consent, approval, authorization or order of any court,
regulatory body, administrative agency or other governmental body is
required to be obtained for the sale of Securities under any provision of
law or regulation of Bermuda applicable to the Company or GTL or for the
consummation of the transactions contemplated by this Agreement, the
Indenture and Registration Rights Agreement, except for the consent of the
Bermuda Monetary Authority which has been obtained;
(vii) there is no restriction upon the transfer of any Securities
pursuant to (A) the law of Bermuda or (B) the Company's Memorandum of
Association or By-laws, in each case as amended;
(viii) the statements set forth in the Final Memorandum under the
headings "Certain Foreign Issuer Considerations", insofar as such
statements constitute a summary of the legal matters referred to therein,
fairly present the information referred to therein with respect to such
legal and other matters;
(ix) a final and conclusive judgment of a New York court under which
a sum of money is payable (not being a sum payable in respect of taxes or
other charges of a like nature, in respect of a fine or other penalty or
in respect of multiple damages as defined in The Protection of Trading
Interests Act, 1981) may be the subject of enforcement proceedings in the
Supreme Court of Bermuda under the common law doctrine of obligation by
action for the debt evidenced by the New York court's judgment; assuming
that (1) the court that gave such judgment was competent to hear the
action in accordance with private international law principles as applied
to courts in Bermuda and (2) such judgment is not contrary to public
policy in Bermuda, has not been obtained by fraud or in proceedings
contrary to natural justice and is not based on an error in Bermuda law,
such counsel believes that, on general principles, such a judgment would
be enforceable in the Supreme Court of Bermuda; and enforcement of such a
judgment against
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assets in Bermuda may involve the conversion of the judgment into Bermuda
dollars, but the Bermuda Monetary Authority's policy is to give the
consents necessary to enable recovery in the currency of the obligation;
(x) the submission by the Company to the jurisdiction of the State
and federal courts sitting in the City of New York contained in the
Operative Agreements constitutes a legal, valid and binding obligation of
the Company, provided that such submission is valid under the laws of New
York; and
(xi) the choice of the laws of the State of New York to govern the
Notes and the Operative Agreements is a valid choice of law under Bermuda
law assuming that such choice is valid under the laws of the state of New
York.
(f) There shall have been furnished to you certificates, dated the
Closing Date and addressed to you, signed by the Chief Executive Officer or
President and by the Chief Financial Officer or Treasurer of the Company, in
each case, to the effect that: (i) the representations and warranties of the
Company contained in this Agreement are true and correct in all material
respects, as if made at and as of the Closing Date, and the Company has in all
material respects complied with all the agreements and satisfied all the
conditions on its part to be complied with or satisfied at or prior to the
Closing Date; and (ii) the signers of said certificates have carefully examined
the Final Memorandum and the Exchange Act Reports and each of the Final
Memorandum and the Exchange Act Reports (A) as of the date of the Final
Memorandum, does not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading, and (B) since the date of the Final
Memorandum there has occurred no event required to be set forth in an amendment
or supplement to the Final Memorandum which has not been so set forth.
(g) Since the date of the Final Memorandum, none of the Company and
the Loral Affiliates shall have sustained
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any loss or interference with its business by fire, explosion, flood, accident
or other calamity, whether or not covered by insurance, or shall have been
subject to any labor dispute, or shall have become a party to or the subject of
any action, suit or proceeding before any court or governmental agency,
authority or body or arbitrator, that is likely to have a material adverse
effect on, nor shall there have been a material adverse change in, the general
affairs, management, financial position, stockholders' equity or results of
operations of the Company and the Loral Affiliates, taken as a whole, whether or
not arising in the ordinary course of business, which loss, action, suit,
proceeding or change is in the Initial Purchasers' judgment so material and
adverse as to render it impracticable or inadvisable to proceed with the payment
for and delivery of the Securities.
(h) On the Closing Date, you shall have received a letter of
Deloitte & Touche LLP dated the Closing Date and addressed to you, confirming
that they are independent certified public accountants within the meaning of the
Securities Act and the applicable published Rules and Regulations with respect
to the Company and stating, as of the date of such letter (or, with respect to
matters involving changes or developments since the respective dates as of
which specified financial information is given in the Final Memorandum, as of a
date not more than five Business Days prior to the date of such letter), the
conclusions and findings of such firm with respect to the financial information
included in the Final Memorandum in form and substance satisfactory to you.
(i) You shall have been furnished such additional documents and
certificates as you or counsel for the Initial Purchasers may reasonably
request.
All references in paragraphs (b)-(h) of this Section 6 to the Final
Memorandum shall be deemed to include any amendment or supplement thereto at the
Closing Date.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof
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only if they are reasonably satisfactory in form and sub stance to you and to
counsel for the Initial Purchasers. The Company shall furnish to you conformed
copies of such opinions, certificates, letters and other documents in such
number as you shall reasonably request. If any of the conditions specified in
this Section 6 shall not have been fulfilled when and as required by this
Agreement, this Agreement and all obligations of the Initial Purchasers
hereunder may be canceled at, or at any time prior to, the Closing Date, by you.
Any such cancelation shall be without liability of the Initial Purchasers to the
Company. Notice of such cancelation shall be given to the Company in writing, or
by telecopy or telephone and confirmed in writing.
7. Indemnification and Contribution. (a) The Company shall indemnify
and hold harmless each Initial Purchaser from and against any loss, claim,
damage or liability (or any action in respect thereof), joint or several, to
which such Initial Purchaser may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage or liability (or action in
respect thereof) arises out of or is based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in the Final Memorandum
(as amended or supplemented) or any Preliminary Memorandum (as amended or
supplemented) or (ii) the omission or alleged omission to state in the Final
Memorandum (as amended or supplemented) or any Preliminary Memorandum (as
amended or supplemented) a material fact required to be stated therein or
necessary to make the statements therein not misleading; and shall reimburse
each Initial Purchaser promptly upon demand for any legal or other expenses
reasonably incurred by such Initial Purchaser in connection with investigating,
preparing to defend or defending against any such loss, claim, damage, liability
or action, as such expenses are incurred; provided, however, that the Company
shall not be liable under this Section 7(a) in any such case to the extent, but
only to the extent, that any such loss, claim, damage, liability or action
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in any Preliminary Memorandum (as amended
or supplemented) or the
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Final Memorandum (as amended or supplemented) in reliance upon and in conformity
with written information furnished to the Company by any Initial Purchaser
specifically for inclusion therein; and provided further that as to any
Preliminary Memorandum this indemnity agreement shall not inure to the benefit
of any Initial Purchaser on account of any loss, claim, damage, liability or
action arising from the sale of Securities to any person by that Initial
Purchaser if such loss, claim, damage, liability or action is a result of the
fact that both (i) to the extent required by applicable law, a copy of the Final
Memorandum, as the same may be amended or supplemented, was not sent or given to
such person at or prior to the written confirmation of the sale of such
Securities and (ii) the untrue statement or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact in such
Preliminary Memorandum was corrected in the Final Memorandum, unless such
failure resulted from non-compliance by the Company with Section 5(a) herein.
(b) Each Initial Purchaser severally, but not jointly, shall
indemnify and hold harmless the Company from and against any loss, claim, damage
or liability (or any action in respect thereof) to which the Company may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage or liability (or action in respect thereof) arises out of or is based
upon (i) any untrue statement or alleged untrue statement of a material fact
contained in the Final Memorandum or any Preliminary Memorandum, each as amended
or supplemented, or (ii) the omission or alleged omission to state in the Final
Memorandum or any Preliminary Memorandum, each as amended or supplemented, a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and shall reimburse the Company promptly for any legal
or other expenses reasonably incurred by the Company in connection with
investigating, preparing to defend or defending against any such loss, claim,
damage, liability or action, as such expenses are incurred; provided, however,
that such indemnification or reimbursement shall be available in each such case
to the extent, but only to the extent, that such untrue statement or alleged
untrue
39
39
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company through the Initial
Purchasers by or on behalf of such Initial Purchaser specifically for inclusion
therein.
(c) Promptly after receipt by any indemnified party under subsection
(a) or (b) above of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however,
that the failure so to notify the indemnifying party shall not relieve it from
any liability which it may have under this Section 7 unless the indemnifying
party is materially prejudiced thereby. If any such claim or action shall be
brought against any indemnified party and it shall notify the indemnifying party
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the indemnifying party
to the indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified party
under such subsection for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that any indemnified party
shall have the right to employ separate counsel in any such action and to
participate in the defense thereof but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the employment
thereof has been specifically authorized by the indemnifying party in writing,
(ii) such indemnified party shall have been advised by such counsel that there
may be one or more legal defenses available to it which are different from or
additional to those available to the indemnifying party and in the reasonable
judgment of such counsel it is advisable for such indemnified party to employ
separate counsel or (iii) the indemnifying party has
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failed to assume the defense of such action and employ counsel reasonably
satisfactory to the indemnified party, in which case, if such indemnified party
notifies the indemnifying party in writing that it elects to employ separate
counsel at the expense of the indemnifying party, the indemnifying party shall
not have the right to assume the defense of such action on behalf of such
indemnified party, it being understood, however, that the indemnifying party
shall not, in connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys at any time for all such
indemnified parties, which firm shall be designated in writing by the Initial
Purchasers, if the indemnified party under this Section 7 consist of any Initial
Purchaser, or the Company, if the indemnified parties under this Section 7
consists of the Company. No indemnifying party shall be liable for any
settlement of any such action effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff in
any such action, the indemnifying party agrees to indemnify the indemnified
party from and against any loss or liability by reason of such settlement or
judgment.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of the losses, claims, damages or liabilities
referred to in subsection (a) or (b) above (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Initial Purchasers from the offering of the Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company and the
Initial Purchasers in connection with the statements or omissions that resulted
in such losses,
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41
claims, damages or liabilities, or actions in respect thereof, as well as any
other relevant equitable considerations. The relative benefits received by the
Company and the Initial Purchasers shall be deemed to be in the same proportion
as the total net proceeds from the offering of the Securities (before deducting
expenses) received by the Company, on the one hand, and the total discounts and
commissions received by the Initial Purchasers, on the other hand, bear to the
total gross proceeds from the offering of Securities, in each case as set forth
on the cover page of the Final Memorandum. Relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Initial Purchasers and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The Company and the
Initial Purchasers agree that it would not be just and equitable if
contributions pursuant to this subsection (d) were to be determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the losses, claims, damages or liabilities
(or actions in respect thereof) referred to in this subsection (d) shall be
deemed to include, for purposes of this subsection (d), any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating, preparing to defend or defending against any action or claim
which is the subject of this subsection (d). Notwithstanding the provisions of
this subsection (d), no Initial Purchaser shall be required to contribute any
amount in excess of the amount by which the total price at which the Securities
sold by it exceeds the amount of any damages which such Initial Purchaser has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. 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. The Initial Purchasers'
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42
obligations in this subsection (d) to contribute are several in proportion to
their respective purchasing obligations and not joint. Each party entitled to
contribution agrees that upon the service of a summons or other initial legal
process upon it in any action instituted against it in respect of which
contribution may be sought, it shall promptly give written notice of such
service to the party or parties from whom contribution may be sought, but the
omission so to notify such party or parties of any such service shall not
relieve the party from whom contribution may be sought for any obligation it may
have hereunder or otherwise.
(e) The obligations of the Company under this Section 7 shall be in
addition to any liability which the Indemnitor may otherwise have, and shall
extend, upon the same terms and conditions, to each person, if any, who controls
any Initial Purchaser within the meaning of the Securities Act or the Exchange
Act; and the obligations of the Initial Purchasers under this Section 7 shall be
in addition to any liability that the respective Initial Purchasers may
otherwise have, and shall extend, upon the same terms and conditions, to each
director of the Company, and to each person, if any, who controls the Company
within the meaning of the Securities Act or Exchange Act.
8. Effective Date and Termination. Until the Closing Date, this
Agreement may be terminated by you by giving notice as hereinafter provided to
the Company if (a) the Company shall have failed, refused or been unable, at or
prior to the Closing Date, to perform in all material respects any agreement on
its part to be performed hereunder, (b) any other condition to the Initial
Purchasers' obligations hereunder is not fulfilled, (c) trading in securities
generally on the New York Stock Exchange, the American Stock Exchange, Nasdaq
National Market or the over-the-counter market shall have been suspended or
limited (which shall not include any limitation on program trading pursuant to
the rules of the New York Stock Exchange) or minimum prices shall have been
established on either of such exchanges or such markets by the Commission or
such exchange or other regulatory body or governmental authority having
jurisdiction, (d) a banking
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43
moratorium is declared by either Federal or state authorities, (e) the United
States becomes engaged in hostilities or there is an escalation of hostilities
involving the United States or there is a declaration of a national emergency or
war by the United States or (f) there shall have been such a material adverse
change in general economic, political or financial conditions, or the effect of
international conditions on the financial markets in the United States shall be
such, as to, in the judgment of the Initial Purchasers, make it inadvisable or
impracticable to proceed with the delivery of the Securities. Any termination of
this Agreement pursuant to this Section 8 shall be without liability on the part
of the Company or any Initial Purchaser, except as otherwise provided in
Sections 5(h) and 7 hereof.
Any notice referred to above may be given at the address specified
in Section 10 hereof in writing or by telecopy or telephone, and if by telecopy
or telephone, shall be immediately confirmed in writing.
9. Survival of Certain Representations and Provisions. The
agreements contained in Section 7 hereof and the representations, warranties and
agreements of the Company and the Initial Purchasers contained in this Agreement
shall survive the delivery of the Securities to the Initial Purchasers hereunder
and shall remain in full force and effect, regardless of any termination or
cancelation of this Agreement or any investigation made by or on behalf of any
indemnified party.
10. Notices. Except as otherwise provided in the Agreement, whenever
notice is required by the provisions of this Agreement to be given to the
following parties, such notice shall be in writing to the following addresses:
(a) to the Company:
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxx
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44
(b) to the several Initial Purchasers:
c/x Xxxxxx Brothers Inc.
3 World Financial Center
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Syndicate Department
11. Information Furnished by Initial Purchasers. The Company and the
Initial Purchasers severally confirm that the statements set forth in "Plan of
Distribution" in the Final Memorandum or any Preliminary Memorandum constitute
the written information furnished by or on behalf of any Initial Purchaser
referred to in paragraphs (a) and (b) of Section 7 hereof. The Initial
Purchasers severally agree that such information is correct.
12. Parties. This Agreement shall inure to the benefit of and be
binding upon the several Initial Purchasers, the Company and their respective
successors. This Agreement and the terms and provisions hereof are for the sole
benefit of only those persons, except that (a) the representations, warranties,
indemnities and agreements of the Company contained in this Agreement shall also
be deemed to be for the benefit of the person or persons, if any, who control
any Initial Purchaser within the meaning of Section 15 of the Securities Act and
(b) the indemnity agreement of the Initial Purchasers contained in Section 7
hereof shall be deemed to be for the benefit of officers and directors of the
Company and any person controlling the Company within the meaning of Section 15
of the Securities Act. Nothing in this Agreement is intended to confer or shall
be construed to give any person, other than the persons referred to in this
paragraph, any legal or equitable right, remedy or claim under or in respect of
this Agreement or any provision contained herein.
13. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
CONFLICTS OF LAWS PRINCIPLES THEREOF.
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45
14. Jurisdiction; Consent to Service of Process. THE COMPANY HEREBY
IRREVOCABLY AND UNCONDITIONALLY CONSENTS TO SUBMIT TO THE EXCLUSIVE JURISDICTION
OF THE COURTS OF THE STATE OF NEW YORK AND OF THE UNITED STATES DISTRICT COURTS
LOCATED IN THE CITY OF NEW YORK FOR ANY LAWSUITS, CLAIMS OR OTHER PROCEEDINGS
ARISING OUT OF OR RELATING TO THIS AGREEMENT AND AGREES NOT TO COMMENCE ANY SUCH
LAWSUIT, CLAIM OR OTHER PROCEEDING EXCEPT IN SUCH COURTS. THE COMPANY HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF
ANY LAWSUIT, CLAIM, OR OTHER PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT IN THE COURTS OF THE STATE OF NEW YORK OR THE UNITED STATES DISTRICT
COURTS LOCATED IN THE CITY OF NEW YORK, AND HEREBY FURTHER IRREVOCABLY AND
UNCONDITIONALLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT
ANY SUCH LAWSUIT, CLAIM OR OTHER PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. THE COMPANY HAS APPOINTED XXXX X. XXXXXX AT
000 XXXXX XXXXXX, XXX XXXX, XXX XXXX 00000, X.X.X. (HEREINAFTER REFERRED TO IN
SUCH CAPACITY AS THE "PROCESS AGENT"), AS ITS AUTHORIZED AGENT UPON WHOM PROCESS
MAY BE SERVED IN ANY SUCH SUIT OR PROCEEDING. THE COMPANY REPRESENTS TO YOU THAT
IT HAS NOTIFIED THE PROCESS AGENT OF SUCH DESIGNATION AND APPOINTMENT AND THAT
THE PROCESS AGENT HAS ACCEPTED THE SAME IN WRITING. THE COMPANY HAS AUTHORIZED
AND DIRECTED THE PROCESS AGENT TO ACCEPT SUCH SERVICE. IF THE PROCESS AGENT
SHALL CEASE TO ACT AS THE COMPANY'S AGENT FOR SERVICE OF PROCESS, THE COMPANY
SHALL APPOINT WITHOUT DELAY ANOTHER SUCH AGENT AND NOTIFY YOU OF SUCH
APPOINTMENT. THE COMPANY FURTHER AGREES THAT SERVICE OF PROCESS UPON THE PROCESS
AGENT AND WRITTEN NOTICE OF SAID SERVICE TO THE COMPANY MAILED BY FIRST CLASS
MAIL OR DELIVERED TO THE PROCESS AGENT SHALL BE DEEMED IN EVERY RESPECT
EFFECTIVE SERVICE OF PROCESS UPON IT IN ANY SUCH SUIT OR PROCEEDING. NOTHING
HEREIN SHALL AFFECT YOUR RIGHT OR THE RIGHT OF ANY PERSON CONTROLLING ANY OF YOU
TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. THE COMPANY AGREES THAT A
FINAL ACTION IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER LAWFUL
MANNER.
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15. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
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Please confirm, by signing and returning to us counterparts of this
Agreement, that the foregoing correctly sets forth the agreement among the
Company and the several Initial Purchasers.
Very truly yours,
LORAL SPACE & COMMUNICATIONS
LTD.,
By:
-----------------------------------
Name:
Title:
Confirmed and accepted as of the date first above mentioned:
XXXXXX BROTHERS INC.
BEAR, XXXXXXX & CO. INC.
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
CIBC XXXXXXXXXXX CORP.
ING BARING XXXXXX XXXX LLC
X.X. XXXXXXXXX, XXXXXX
By: XXXXXX BROTHERS INC.
By:
-----------------------------------
Name:
Title:
48
SCHEDULE I
Principal Amount
Initial Purchasers of Securities
to be Purchased
Xxxxxx Brothers Inc........................................... $157,500,000
Bear, Xxxxxxx & Co., Inc...................................... 70,000,000
Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation...................................... 70,000,000
CIBC Xxxxxxxxxxx Corp......................................... 17,500,000
Ing Baring Xxxxxx Xxxx LLC.................................... 17,500,000
X.X. Xxxxxxxxx, Xxxxxx........................................ 17,500,000
------------
Total................................................... $350,000,000
============
49
EXHIBIT A
Offers and Sales by the Initial Purchasers
The Securities have not been registered under the Securities Act and
may not be offered or sold except in accordance with an applicable exemption
from the registration requirements thereof. Accordingly, the Securities are
being offered and sold only (1) in the United states to qualified institutional
buyers (each, a "Qualified Institutional Buyer" or "QIB") under Rule 144A under
the Securities Act in a private sale exempt from the registration requirements
of the Securities Act, and (2) outside the United States to non-U.S. persons
("foreign purchasers") in reliance upon Regulation S under the Securities Act.
Investor Representations and Restrictions on Resale
Each purchaser of the Securities, by its acceptance thereof, will be
deemed to have acknowledged, represented to and agreed with the Initial
Purchasers and the Company as follows (terms used in this paragraph that are
defined in Rule 144A or Regulation S are used herein as defined therein):
(1) It understands and acknowledges that the Securities have not
been registered under the Securities Act or any other applicable
securities law, and are being offered for resale in transactions not
requiring registration under the Securities Act or any other applicable
securities law, including sales pursuant to Rule 144A and Regulation S
under the Securities Act, that the Securities (the Securities are referred
to herein as the "Restricted Securities") have not been registered under
the Securities Act or any other applicable securities law and, unless so
registered, may not be offered, sold or otherwise transferred except in
compliance with the registration requirements of the Securities Act or any
other applicable securities law, pursuant to an exemption therefrom or in
a transaction not subject thereto, and in each case, in compliance with
the conditions for transfer set forth in paragraph (4) below.
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(2) It is either (A) a "qualified institutional buyer" (QIB") within
the meaning of Rule 144A under the Securities Act, is aware that any sale
of the Notes to it will be made in reliance on Rule 144A and such
acquisition will be for its own account or for the account of another QIB
or (B) a non-U.S. person (a "foreign purchaser", which term shall include
dealers or other professional fiduciaries in the U.S. acting on a
discretionary basis for foreign beneficial owners (other than an estate or
trust)).
(3) It acknowledges that none of the Company nor the Initial
Purchasers, or any person representing the Company or the Initial
Purchasers, has made any representation to it with respect to the Company
or the offering of the Securities, other than in this Offering Memorandum,
which has been delivered to it and upon which it is relying in making its
investment decision with respect to the Securities. Accordingly, it
acknowledges that no representation or warranty is made by the Initial
Purchasers as to the accuracy or completeness of such materials. It has
had access to such financial and other information concerning the Company
and the Securities as it deemed necessary in connection with its decision
to purchase any of the Securities, including an opportunity to ask
questions and request information from the Company and the Initial
Purchasers.
(4) It is purchasing the Securities for its own account, or for one
or more investor accounts for which it is acting as a fiduciary or agent,
in each case for investment, and not with a view to, or for offer or sale
in connection with, any distribution thereof in violation of the
Securities Act, subject to any requirement of law that the disposition of
its property or the property of such investor account or accounts be at
all times within its or their control and subject to its or their ability
to resell such Securities pursuant to Rule 144A, Regulation S or any
exemption from registration available under the Securities Act. It agrees
on its own behalf and on behalf of any investor account for which it is
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3
purchasing the Restricted Securities, and each subsequent holder of the
Restricted Securities by its acceptance thereof will agree, to offer, sell
or otherwise transfer such Restricted Securities prior to the date which
is two years after the later of the date of original issue and the last
date on which the Company or any affiliate of the Company was the owner of
such Restricted Securities (or any predecessor thereto) (the "Resale
Restriction Termination Date") only (a) to the Company, (b) pursuant to a
registration statement which has been declared effective under the
Securities Act, (c) for so long as the Securities are eligible for resale
pursuant to Rule 144A, to a person it reasonably believes is a QIB that
purchases for its own account or for the account of a QIB to which notice
is given that the transfer is being made in reliance on Rule 144A, (d) in
an offshore transaction meeting the requirements of Rule 903 or Rule 904
of Regulation S, or (e) pursuant to another available exemption from the
registration requirements of the Securities Act, and in each case, in
accordance with the applicable securities laws of any state of the United
States or any other applicable jurisdiction and, subject to any
requirement of law that the disposition of its property or the property of
such investor account or accounts be at all times within its or their
control. The foregoing restrictions on resale will not apply subject to
the Resale Restriction Termination Date. Each purchaser acknowledges that
the Company and the Trustee or the transfer agent reserve the right prior
to any offer, sale or other transfer prior to the Resale Restriction
Termination Date of the Restricted Securities pursuant to clauses (d) or
(e) above to require the delivery of an opinion, certifications or other
information acceptable to the Company and the Trustee or the transfer
agent in form and substance. Each purchaser acknowledges that each
Restricted Security will contain a legend substantially to the following
effect:
"THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES LAWS AND NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION
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4
HEREIN MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF
THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED
BY RULE 144A THEREUNDER. THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE
HEREOF, REPRESENTS, ACKNOWLEDGES AND AGREES FOR THE BENEFIT OF THE COMPANY
THAT: (I) IT HAS ACQUIRED A "RESTRICTED" SECURITY WHICH HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT; (II) IT WILL NOT OFFER, SELL OR
OTHERWISE TRANSFER THIS SECURITY, PRIOR TO THE DATE WHEN THIS SECURITY NO
LONGER CONSTITUTES A "RESTRICTED" SECURITY UNDER RULE 144(K) OF THE
SECURITIES ACT EXCEPT (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C)
FOR SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A,
TO A PERSON WHO THE SELL REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (D) OUTSIDE THE UNITED STATES IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT,
OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH
THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
APPLICABLE JURISDICTION; AND (III) IT WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THIS SECURITY OF THE RESALE
RESTRICTIONS SET FORTH IN (II) ABOVE. ANY OFFER, SALE OR OTHER DISPOSITION
PURSUANT TO THE FOREGOING CLAUSES (II)(D) AND (E) IS SUBJECT TO THE RIGHT
OF THE ISSUER OF THIS SECURITY AND THE TRUSTEE OR TRANSFER AGENT FOR SUCH
SECURITIES TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATIONS OR OTHER INFORMATION ACCEPTABLE TO THEM IN FORM AND
SUBSTANCE."
(5) It acknowledges that the Company, the Initial Purchaser and
others will rely upon the truth and accuracy of the foregoing
acknowledgments, representations and agreements and agrees that, if any of
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the acknowledgments, representations and agreements deemed to have been
made by purchase of the Securities are no longer accurate, it shall
promptly notify the Initial Purchasers. If it is acquiring any Securities
as a fiduciary or agent for one or more investor accounts, it represents
that it has sole investment discretion with respect to each such account
and it has full power to make the foregoing acknowledgments,
representations and agreements on behalf of each such account.
