EXECUTION
AGREEMENT
This agreement (this "Agreement") is made and entered into as of October
15, 2001, by and among Loral Cyberstar, Inc. (formerly Orion Network Systems,
Inc.) (the "Company"), Loral Space & Communications Ltd. ("Loral Ltd."), Loral
SpaceCom Corporation ("LSC", and the Company, Loral Ltd. and LSC being referred
to as the "Loral Entities"), and certain holders of the Company's 11 1/4% Senior
Notes due 2007 (the "Senior Notes") and the Company's 12 1/2% Senior Discount
Notes due 2007 (the "Senior Discount Notes", and together with the Senior Notes,
the "Existing Notes") which holders are signatories hereto from time to time
(each individually a "Consenting Holder", and collectively the "Consenting
Holders").
RECITALS
WHEREAS, LSC is a wholly owned indirect subsidiary of Loral Ltd. and is the
holder of a demand note issued by the Company in the approximate aggregate
principal amount outstanding as of the date hereof of $79,700,000 (the "LSC
Note");
WHEREAS, the Company is a wholly owned indirect subsidiary of Loral Ltd.;
WHEREAS, the Company, Loral Ltd., LSC and the Consenting Holders (each a
"Party" and collectively the "Parties") have engaged in good faith negotiations
with the objective of reaching an agreement with regard to restructuring the
Senior Notes, the Senior Discount Notes and the LSC Note;
WHEREAS, the Parties now desire to implement a financial restructuring (the
"Financial Restructuring") and in order to implement the Financial
Restructuring, the Company intends, subject to the terms and conditions of this
Agreement, to make an exchange offer (the "Exchange Offer") to exchange each
Existing Note for (1) new notes due 2006 to be issued by the Company in the
aggregate principal amount equal to $675,000,000 (subject to adjustment) (the
"New Notes"), which New Notes shall be guaranteed by Loral Ltd., and (2) a
pro-rata share of five year warrants to purchase up to 6,657,096 common shares
of Loral Ltd. (representing as of June 30, 2001, 2% of Loral Ltd.'s outstanding
common stock) with an exercise price equal to 110% of the average of the daily
volume-weighted average trading prices of the common stock on the New York Stock
Exchange as reported by Bloomberg, L.P. for the ten consecutive trading days
preceding the second trading day prior to the closing of the Exchange Offer,
subject to normal and customary anti-dilution provisions, all as more fully
described in Schedule I attached hereto;
WHEREAS, LSC desires as part of the Financial Restructuring to exchange the
LSC Note on the terms set forth on Schedule III hereto;
WHEREAS, the Parties desire that, upon consummation of the Exchange Offer,
each of the Indentures with respect to the Senior Notes and Senior Discount
Notes, each dated January 31, 1997 (together, the "Indentures") shall be amended
to (a) effect the Exchange Offer, (b)
make any changes to the Indentures, or waive compliance with any provisions
thereof that are deemed necessary or desirable by the Company to be made or
waived in order for the Company to be able to effect the foregoing and (c)
remove the operating restrictions contained in the Indenture, all as more fully
specified on Schedule II hereto (the "Proposed Amendments");
WHEREAS, the Company desires to commence a consent solicitation of the
holders of the Existing Notes for the approval of the Proposed Amendments (the
"Consent Solicitation"); and
WHEREAS, as a condition to its willingness to make the Exchange Offer, the
Company has required the Consenting Holders to agree, and the Consenting Holders
have agreed, among other things, (i) to consent to the Consent Solicitation, and
(ii) to tender pursuant to the Exchange Offer all of its Existing Notes, in each
case, on the terms and subject to the conditions provided for in this Agreement
and the Solicitation Material (as defined below);
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Parties hereby
agree as follows:
1. Certain Covenants of the Company. The Company hereby covenants and
agrees to use its best efforts, and to take all reasonable steps necessary or
desirable, to:
(a) as promptly as practicable, prepare and file with the Securities and
Exchange Commission a registration statement on Form S-4 relating to
the Exchange Offer and the Consent Solicitation (the "Solicitation
Materials"), in form and substance reasonably acceptable to the
Consenting Holders, and thereupon commence the Exchange Offer and
Consent Solicitation (it being understood and agreed that the
Consenting Holders or their representatives will have the opportunity
to review and comment on a draft of such Solicitation Materials);
(b) publicly disclose the terms of the transactions set forth herein
within two (2) business days after the effectiveness of this agreement
in accordance with Paragraph 11;
(c) as promptly as practicable after the commencement of the Exchange
Offer and Consent Solicitation, and subject to the satisfaction or
waiver of the conditions to consummation set forth in Paragraph 5,
consummate the Exchange Offer and Consent Solicitation, and all
related transactions; and
(d) as promptly as practicable after the date hereof (but not as a
condition to consummation of the Exchange Offer and Consent
Solicitation), obtain a rating of the New Notes by Standard &
2
Poor's Ratings Group, a division of McGraw Hill, Inc. or Xxxxx'x
Investors Service, Inc.
2. Certain Covenants of Loral Ltd. Loral Ltd. hereby covenants and agrees
that it shall, upon satisfaction of the conditions to consummation set forth in
Paragraph 5, enter into a guaranty agreement with respect to the New Notes on
terms set forth in Schedule I.
3. Certain Covenants of LSC. LSC hereby covenants and agrees that it shall,
upon satisfaction of the conditions to consummation set forth in Paragraph 6,
exchange the LSC Note on terms set forth in Schedule III.
4. Certain Covenants of the Consenting Holders. Each of the Consenting
Holders hereby covenants and agrees for itself that, subject to the conditions
that the material terms of the Exchange Offer and Consent Solicitation are
consistent with the terms set forth in this Agreement and the schedules attached
hereto, and subject to the other terms herein, unless such Consenting Holder
shall have transferred all of its Existing Notes pursuant to Paragraph 6, it
shall:
(a) timely and validly tender its Senior Notes and Senior Discount Notes
pursuant to the Exchange Offer and to provide its consent in favor of
the Proposed Amendments to the Indentures (such tender and consent
collectively called the "Consent");
(b) execute and deliver such other documentation as may be reasonably
requested by the Company to evidence the Consent given hereunder; and
(c) not take any action that would impede, interfere with, delay, postpone
or attempt to discourage the Exchange Offer or Consent Solicitation.
5. Conditions to the Exchange Offer. The obligations of each Party to
consummate the transactions contemplated hereby is subject to the satisfaction
of each of the following conditions:
(a) receipt of the consent of the requisite percentage of the holders of
each of the Senior Notes and the Senior Discount Notes to the Proposed
Amendments, which amendments will not become effective unless the
Exchange Offer is consummated;
(b) at least eighty-five percent (85%) in amount of the sum of (i) the
aggregate principal amount of the Senior Notes and (ii) the aggregate
accreted value of the Senior Discount Notes (such sum being herein
called the "Accreted Amount") being validly tendered and not properly
withdrawn;
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(c) the execution of satisfactory documentation with respect to the New
Notes;
(d) the delivery by each of the Loral Entities to the Consenting Holders
and/or the indenture trustee for the New Notes of a usual and
customary certificate of a responsible officer of such Loral Entity
dated as of the closing date which states that all representations and
warranties made by such Loral Entity in connection with this agreement
and the transactions contemplated hereby and thereby are true and
correct in all material respects as of such date, and that such Loral
Entity has complied as of such date in all material respects with all
of its covenants contemplated hereby and thereby;
(e) the exchange by LSC of the LSC Note according to the terms set forth
on Schedule III hereto; and
(f) All necessary consents of any person (including without limitation
consents from government bodies and authorities) that are required in
connection with the Exchange Offer, Consent Solicitation and the
transactions contemplated thereby have been obtained.
6. Restriction on Transfer. Except pursuant to the terms of this Agreement,
each of the Consenting Holders hereby agrees for itself that, so long as this
Agreement shall remain in effect with respect to such Consenting Holder, such
Consenting Holder shall not (i) grant any proxies to any person in connection
with the Owned Existing Notes to vote on the Exchange Offer or Consent
Solicitation, or (ii) sell, transfer or assign any of the Existing Notes or any
option thereon or any right or interest (voting or otherwise) therein, unless
the grantee or transferee, as the case may be, agrees in writing to be bound by
all the terms of this Agreement by executing a counterpart signature page of
this Agreement and the transferor promptly provides the Parties with a copy
thereof, in which event the Company, Loral Ltd. and LSC shall be deemed to have
acknowledged that their obligations to such Consenting Holder hereunder shall be
deemed to constitute obligations in favor of such grantee or transferee.
7. Acknowledgment. This Agreement is not and shall not be deemed to be a
solicitation for consents to the Exchange Offer or Consent Solicitation. The
acceptances of the Consenting Holders will not be solicited until the they have
received the Solicitation Materials.
8. Termination of Agreement by a Consenting Holder. A Consenting Holder may
terminate its obligations hereunder, which obligations shall upon termination be
of no further force and effect, in the event that the Solicitation Materials
shall have been amended or modified and such amendment or modification shall
constitute, or result in, a modification or amendment of the Solicitation
Materials such that, after giving effect to such modification or amendment, the
Solicitation Materials contain terms that are different from those provided in
this Agreement (including the Schedules attached hereto) and which in the
judgment of the
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Consenting Holder, materially and adversely affects the treatment or the rights
of such Consenting Holder.
9. Termination of Agreement by Any Party. Any Party may terminate its
obligations hereunder, which obligations shall upon termination be of no further
force and effect, in the event that:
(a) the Exchange Offer and Consent Solicitation are not consummated on or
prior to December 31, 2001;
(b) there shall have occurred and be continuing an event which has a
material adverse effect on the business, assets, operations, property
or condition (financial or otherwise) of the Company or Loral Ltd.; or
(c) there shall exist or be threatened any action, proceeding, claim or
counterclaim by any government or governmental, regulatory or
administrative agency or authority or tribunal or any other person,
domestic or foreign (other than any action, proceeding, claim or
counterclaim by the Party seeking to terminate its obligations
hereunder), before any court, authority, agency or tribunal that
challenges the Exchange Offer or Consent Solicitation and related
transactions contemplated hereby which, if decided adversely to the
Company or any other Party, would likely prohibit, prevent, restrict,
limit or delay consummation of the Exchange Offer, Consent
Solicitation or such related transactions.
10. Representations and Warranties. The Company, Loral Ltd., LSC and each
of the Consenting Holders represents and warrants to each other the following
statements as applicable to it, are true, correct and complete as of the date
hereof:
(a) Corporate Power and Authority. Each Party hereto is a corporation,
partnership, or limited liability company duly organized, validly
existing and in good standing under the laws of its respective state
of organization. Each Party hereto has all requisite corporate,
partnership, or limited liability company, as applicable, power and
authority to execute and deliver this Agreement.
(b) Authorization. The execution and delivery of this Agreement and the
performance of its obligations hereunder have been duly and validly
authorized by all necessary corporate, partnership or LLC action on
its part, and no other proceedings on the part of such Party are
necessary to authorize this Agreement or to consummate the
transactions contemplated hereby.
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(c) Binding Obligation. This Agreement is the legally valid and binding
obligation of it, enforceable against it in accordance with its terms.
(d) No Conflicts. The execution, delivery and performance by it of this
Agreement do not and shall not (i) violate any provision of law, rule
or regulation applicable to it or any of its subsidiaries or its
certificate of incorporation or bylaws or other organizational
documents or those of any of its subsidiaries or (ii) conflict with,
result in a breach of or constitute (with due notice or lapse of time
or both) a default under any material contractual obligation to which
it or any of its subsidiaries is a party.
(e) Governmental Consents. The execution, delivery and performance by it
of this Agreement does not and shall not require any registration or
filing with, consent or approval of, or notice to, or other action to,
with or by, any federal, state or other governmental authority or
regulatory body, other than the Securities and Exchange Commission.
(f) Holdings. Each Consenting Holder represents and warrants that, as of
the date hereof, (i) such Consenting Holder either (A) is the
beneficial owner of the principal amount of Existing Notes set forth
below under its signature, or (B) has investment and voting discretion
with respect to the principal amount of Existing Notes set forth below
under its signature and has the power and authority to bind the
beneficial owner of such Existing Notes to the terms of this Agreement
(in either case, the "Owned Existing Notes"), (ii) such Consenting
Holder has full power and authority to vote and consent to matters
concerning the Owned Existing Notes and to exchange, assign and
transfer the Owned Existing Notes.
(g) Qualified Institutional Buyer. Each Consenting Holder represents and
warrants that it is a "qualified institutional buyer" within the
meaning of Rule 144A under the Securities Act of 1933, as amended.
11. Effectiveness. This Agreement shall be effective and binding upon the
execution and delivery, in accordance with Paragraph 17, of this agreement by
each of the Company, Loral Ltd., LSC, and Consenting Holders holding at least
49% of the aggregate outstanding principal amount of the Existing Notes.
12. Further Acquisition of Securities. This Agreement shall in no way be
construed to preclude any Party from acquiring additional Existing Notes.
However, any such
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additional Existing Notes so acquired shall automatically be deemed to be
Existing Notes and to be subject to the terms of this Agreement.
13. Amendments. This Agreement may not be modified, amended or supplemented
without the prior written consent of all of the Parties.
14. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York without regard to any
conflicts of law provision which would require the application of the law of any
other jurisdiction.
15. Expenses. The Company will pay (i) the fees and expenses (including the
reasonable fees and expenses of counsel) of Loral Ltd. in connection with the
negotiation, execution and delivery of this Agreement and the Exchange Offer,
(ii) the fees and expenses of Wachtell, Lipton, Xxxxx & Xxxx, counsel to the
Consenting Holders, in accordance with the terms of that certain letter
agreement between the Company and Wachtell, Lipton, Xxxxx & Xxxx dated as of the
date hereof, (iii) its own expenses, including investment banking, financial
advisory, printing, legal, accounting, solicitation agent, information agent
fees and expenses, (iv) expenses incurred to obtain a rating of the New Notes,
and (v) the fees and expenses of the indenture trustee for the New Notes;
provided that the maximum amount payable by the Company in accordance herewith
will not exceed $5,000,000.
16. Confidentiality. The Consenting Holders agree to be bound by the
provisions of Schedule IV attached hereto, which terms are incorporated herein
by reference.
17. Notices. All demands, notices, requests, consents, and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered by courier service, messenger, or telecopy at, or if duly
deposited in the mails, by certified or registered mail, postage prepaid, return
receipt requested, to the following addresses, or such other addresses as may be
furnished hereafter by notice in writing, to the following Parties:
if to the Company, to:
Loral Cyberstar, Inc.
c/o Loral SpaceCom Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxx Xxxx
Fax: (000) 000-0000
With a copy to:
Xxxxxxx Xxxx & Xxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
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Fax: 000 000-0000
If to Loral Space & Communications Ltd., to:
Loral Space & Communications, Ltd.
c/o Loral SpaceCom Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxx Xxxx
Fax: (000) 000-0000
If to Loral SpaceCom Corporation, to:
Loral SpaceCom Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxx Xxxx
Fax: (000) 000-0000
if to any Consenting Holder, to such Consenting Holder at the address shown
on the applicable signature page hereto, to the attention of the person who
has signed this Agreement on behalf of such holder, with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 X. 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx X. Xxxxxxxx, Esq.
xxxxxxxxxx@xxxx.xxx
Fax: (000) 000-0000
18. Further Assurances. Each of the Parties agrees to execute and deliver,
or to cause to be executed and delivered, all such instruments, and to take all
such action as the other Parties may reasonably request in order to effectuate
the intent and purposes of, and to carry out the terms of, this Agreement.
19. Headings. The headings of the sections, paragraphs and subsections of
this Agreement are inserted for convenience only and shall not affect the
interpretation hereof.
20. Successors and Assigns. This Agreement is intended to bind and inure to
the benefit of the Parties and their respective successors, assigns, heirs,
executors, administrators and representatives.
21. Entire Agreement. This Agreement constitutes the entire agreement among
the parties with respect to the subject matter hereof and supersedes all other
prior agreements and
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understandings, both written and oral, between the Parties with respect to the
subject matter hereof.
22. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same Agreement.
23. No Third-Party Beneficiaries. Unless expressly stated herein, this
Agreement shall be solely for the benefit of the Parties hereto and no other
person or entity shall be a third-party beneficiary hereof.
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IN WITNESS WHEREOF, each of the Parties hereto has caused this Agreement to
be executed and delivered by its duly authorized officer as of the date first
above written.
LORAL CYBERSTAR, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Vice President & Assistant Treasurer
LORAL SPACE & COMMUNICATIONS LTD.
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Vice President & Assistant Treasurer
LORAL SPACECOM CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Vice President & Assistant Treasurer
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CONSENTING HOLDER NAME OF CONSENTING HOLDER:
AIG GLOBAL INVESTMENT CORP.
As Investment Manager for Certain Funds &
Accounts it Manages
By: /s/ Xxxx Xxxxxxx
------------------------------
Name: Xxxx Xxxxxxx
Title: Managing Director
Principal Amount of:
Senior Notes: $
Senior Discount Notes: $
Signature Page To Agreement
CONSENTING HOLDER NAME OF CONSENTING HOLDER:
AMERICAN HIGH-INCOME TRUST:
By: /s/ Xxxxxxx X. Xxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary, Capital Research and
Management Company, Holder's
investment adviser
Principal Amount of:
Senior Notes: $
Senior Discount Notes: $
Signature Page To Agreement
CONSENTING HOLDER NAME OF CONSENTING HOLDER:
THE BOND FUND OF AMERICA, INC.:
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary, Capital Research and
Management Company, Holder's
investment adviser
Principal Amount of:
Senior Notes: $
Senior Discount Notes: $
Signature Page To Agreement
CONSENTING HOLDER NAME OF CONSENTING HOLDER:
THE INCOME FUND OF AMERICA, INC.:
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary, Capital Research and
Management Company, Holder's
investment adviser
Principal Amount of:
Senior Notes: $
Senior Discount Notes: $
Signature Page To Agreement
CONSENTING HOLDER NAME OF CONSENTING HOLDER:
AMERICAN FUNDS INSURANCE SERIES - HIGH YIELD
BOND FUND:
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary, Capital Research and
Management Company, Holder's
investment adviser
Principal Amount of:
Senior Notes: $
Senior Discount Notes: $
Signature Page To Agreement
CONSENTING HOLDER NAME OF CONSENTING HOLDER:
THE DREYFUS CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice Chairman and CIO
Principal Amount of:
Senior Notes: $
Senior Discount Notes: $
Signature Page To Agreement
CONSENTING HOLDER NAME OF CONSENTING HOLDER:
FEDERATED HIGH INCOME BOND FUND, INC.
By: Federated Investment Management Company,
as attorney-in-fact
By: /s/ Xxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Assistant Vice President
Principal Amount of:
Senior Notes: $
Senior Discount Notes: $
CONSENTING HOLDER NAME OF CONSENTING HOLDER:
FEDERATED HIGH YIELD TRUST
By: Federated Investment Management Company,
as attorney-in-fact
By: /s/ Xxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Assistant Vice President
Principal Amount of:
Senior Notes: $
Senior Discount Notes: $
CONSENTING HOLDER NAME OF CONSENTING HOLDER:
FEDERATED HIGH INCOME ADVANTAGE FUND
By: Federated Investment Counseling,
as attorney-in-fact
By: /s/ Xxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Assistant Vice President
Principal Amount of:
Senior Notes: $
Senior Discount Notes: $
Signature Page To Agreement
CONSENTING HOLDER NAME OF CONSENTING HOLDER:
AMERICAN SKANDIA TRUST HIGH YIELD PROTFOLIO
By: Federated Investment Counseling,
as attorney-in-fact
By: /s/ Xxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Assistant Vice President
Principal Amount of:
Senior Notes: $
Senior Discount Notes: $
CONSENTING HOLDER NAME OF CONSENTING HOLDER:
FEDERATED HIGH INCOME BOND FUND II OF
FEDERATED INSURANCE SERIES
By: Federated Investment Management Company,
as attorney-in-fact
By: /s/ Xxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Assistant Vice President
Principal Amount of:
Senior Notes: $
Senior Discount Notes: $
CONSENTING HOLDER NAME OF CONSENTING HOLDER:
VARIABLE INVESTORS SERIES TRUST HIGH
INCOME PORTFOLIO
By: Federated Investment Counseling,
as attorney-in-fact
By: /s/ Xxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Assistant Vice President
Principal Amount of:
Senior Notes: $
Senior Discount Notes: $
Signature Page To Agreement
CONSENTING HOLDER NAME OF CONSENTING HOLDER:
TRAVELERS SERIES TRUST FEDERATED HIGH
YIELD PORTFOLIO
By: Federated Investment Counseling,
as attorney-in-fact
By: /s/ Xxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Assistant Vice President
Principal Amount of:
Senior Notes: $
Senior Discount Notes: $
CONSENTING HOLDER NAME OF CONSENTING HOLDER:
AMERICAN SKANDIA ADVISORY FUNDS, INC.
FEDERATED HIGH YIELD BOND FUND
By: Federated Investment Counseling,
as attorney-in-fact
By: /s/ Xxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Assistant Vice President
Principal Amount of:
Senior Notes: $
Senior Discount Notes: $
CONSENTING HOLDER NAME OF CONSENTING HOLDER:
NATIONWIDE SEPARATE ACCOUNT TRUST HIGH
INCOME BOND FUND
By: Federated Investment Counseling,
as attorney-in-fact
By: /s/ Xxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Assistant Vice President
Principal Amount of:
Senior Notes: $
Senior Discount Notes: $
Signature Page To Agreement
CONSENTING HOLDER NAME OF CONSENTING HOLDER:
HIGH YIELD BOND PORTFOLIO OF FEDERATED CORE TRUST
By: Federated Investment Management Company,
as attorney-in-fact
By: /s/ Xxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Assistant Vice President
Principal Amount of:
Senior Notes: $
Senior Discount Notes: $
CONSENTING HOLDER NAME OF CONSENTING HOLDER:
OHIO NATIONAL FUND, INC.
HIGH INCOME BOND PORTFOLIO
By: Federated Investment Counseling,
as attorney-in-fact
By: /s/ Xxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Assistant Vice President
Principal Amount of:
Senior Notes: $
Senior Discount Notes: $
CONSENTING HOLDER NAME OF CONSENTING HOLDER:
FEDERATED CBO, LIMITED
By: Federated Investment Counseling,
as attorney-in-fact
By: /s/ Xxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Assistant Vice President
Principal Amount of:
Senior Notes: $
Senior Discount Notes: $
Signature Page To Agreement
CONSENTING HOLDER NAME OF CONSENTING HOLDER:
FEDERATED CBO II
By: Federated Investment Counseling,
as attorney-in-fact
By: /s/ Xxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Assistant Vice President
Principal Amount of:
Senior Notes: $
Senior Discount Notes: $
CONSENTING HOLDER NAME OF CONSENTING HOLDER:
SUNAMERICA SERIES TRUST CORPORATE BOND PORTFOLIO
HIGH YIELD SUBPORTFOLIO
By: Federated Investment Counseling,
as attorney-in-fact
By: /s/ Xxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Assistant Vice President
Principal Amount of:
Senior Notes: $
Senior Discount Notes: $
Signature Page To Agreement
CONSENTING HOLDER NAME OF CONSENTING HOLDER:
FIRST INVESTORS MANAGEMENT CO.
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
Principal Amount of:
Senior Notes: $
Senior Discount Notes: $
Signature Page To Agreement
CONSENTING HOLDER NAME OF CONSENTING HOLDER:
GOLDEN TREE ASSET MANAGEMENT
By: /s/ Xxxxxx X. Xxxxxxxxx of Golden Tree
--------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: President
Principal Amount of:
Senior Notes: $
Senior Discount Notes: $
Signature Page To Agreement
CONSENTING HOLDER NAME OF CONSENTING HOLDER:
ML CBO IV (CAYMAN) LTD.
By: Highland Capital Management, L.P.
as Collateral Manager
By: /s/ Xxxx X. Xxxxx, CFA
------------------------------
Name: Xxxx X. Xxxxx, CFA
Title: Executive Vice President, Highland
Capital Management, L.P.
Principal Amount of:
Senior Notes: $
Senior Discount Notes: $
Signature Page To Agreement
CONSENTING HOLDER NAME OF CONSENTING HOLDER:
PAMCO CAYMAR LTD.
By: Highland Capital Management, L.P.
as Collateral Manager
By: /s/ Xxxx X. Xxxxx, CFA
------------------------------
Name: Xxxx X. Xxxxx, CFA
Title: Executive Vice President, Highland
Capital Management, L.P.
Principal Amount of:
Senior Notes: $
Senior Discount Notes: $
Signature Page To Agreement
CONSENTING HOLDER NAME OF CONSENTING HOLDER:
XXX CAPITAL FUNDING, L.P.
By: Highland Capital Management, L.P.
as Collateral Manager
By: /s/ Xxxx X. Xxxxx, CFA
------------------------------
Name: Xxxx X. Xxxxx, CFA
Title: Executive Vice President, Highland
Capital Management, L.P.
Principal Amount of:
Senior Notes: $
Senior Discount Notes: $
Signature Page To Agreement
CONSENTING HOLDER NAME OF CONSENTING HOLDER:
CONTINENTAL ASSURANCE COMPANY
SEPARATE ACCOUNT (E)
By: Highland Capital Management, L.P.
as Attorney-in-Fact
By: /s/ Xxxx Xxxxxxx
------------------------------
Name: Xxxx Xxxxxxx
Title: Senior Portfolio Manager, Highland
Capital Management, L.P.
Principal Amount of:
Senior Notes: $
Senior Discount Notes: $
Signature Page To Agreement
CONSENTING HOLDER NAME OF CONSENTING HOLDER:
PROSPECT STREET HIGH INCOME PORTFOLIO, INC.
By: /s/ R. Xxxxxx Xxxxxxxxx
------------------------------
Name: R. Xxxxxx Xxxxxxxxx
Title: Senior Vice President, Secretary
Principal Amount of:
Senior Notes: $
Senior Discount Notes: $
Signature Page To Agreement
CONSENTING HOLDER NAME OF CONSENTING HOLDER:
LUTHERAN BROTHERHOOD HIGH YIELD FUND*
LB SERIES FUND, INC. - HIGH YIELD PORTFOLIO**
By: /s/ Xxxxx X. Xxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
Principal Amount of:
Senior Notes: $
Senior Discount Notes: $
* By Lutheran Brotherhood Research Corp., its
Investment Adviser
** By Lutheran Brotherhood, its Investment
Adviser
Signature Page To Agreement
CONSENTING HOLDER NAME OF CONSENTING HOLDER:
MW POST ADVISORY GROUP, LLC
AS MANAGER OF ITS INVESTMENT ACCOUNTS
By: /s/ Xxxx Xxxxxxxxx
------------------------------
Name: Xxxx Xxxxxxxxx
Title: Manager Director
Principal Amount of:
Senior Notes: $
Senior Discount Notes: $
Signature Page To Agreement
CONSENTING HOLDER NAME OF CONSENTING HOLDER:
MACKAY XXXXXXX LLC ON
BEHALF OF FUNDS LT MANAGES
By: /s/ Xxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Director
Principal Amount of:
Senior Notes: $
Senior Discount Notes: $
Signature Page To Agreement
CONSENTING HOLDER NAME OF CONSENTING HOLDER:
GCBS: US HIGH YIELD FUND
By: /s/ Xxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
Principal Amount of:
Senior Notes: $
Senior Discount Notes: $
Signature Page To Agreement
CONSENTING HOLDER NAME OF CONSENTING HOLDER:
XX XXXX FUND INC., HIGH INCOME PORTFOLIO
By: /s/ Xxxxxx Xxxxxxxx
------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Vice President
Principal Amount of:
Senior Notes: $
Senior Discount Notes: $
Signature Page To Agreement
CONSENTING HOLDER NAME OF CONSENTING HOLDER:
MASTER US HIGH YIELD TRUST
By: /s/ Xxxxxx Xxxxxxxx
------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Vice President
Principal Amount of:
Senior Notes: $
Senior Discount Notes: $
Signature Page To Agreement
CONSENTING HOLDER NAME OF CONSENTING HOLDER:
CORPORATE HIGH YIELD FUND III, INC.
By: /s/ Xxxxxxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxxxxxx Xxxxxxxx
Title: Vice President
Principal Amount of:
Senior Notes: $
Senior Discount Notes: $
Signature Page To Agreement
CONSENTING HOLDER NAME OF CONSENTING HOLDER:
CORPORATE HIGH YIELD FUND II, INC.
By: /s/ Xxxxxxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxxxxxx Xxxxxxxx
Title: Vice President
Principal Amount of:
Senior Notes: $
Senior Discount Notes: $
Signature Page To Agreement
CONSENTING HOLDER NAME OF CONSENTING HOLDER:
CORPORATE HIGH YIELD FUND, INC.
By: /s/ Xxxxxxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxxxxxx Xxxxxxxx
Title: Vice President
Principal Amount of:
Senior Notes: $
Senior Discount Notes: $
Signature Page To Agreement
CONSENTING HOLDER NAME OF CONSENTING HOLDER:
PACIFIC INVESTMENT MANAGEMENT COMPANY, LLC
By: /s/ Xxxxxxx Xxxxxxx
------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Executive Vice President
Principal Amount of:
Senior Notes: $
Senior Discount Notes: $
Signature Page To Agreement
CONSENTING HOLDER NAME OF CONSENTING HOLDER:
SUN AMERICA ASSET MANAGEMENT
By: /s/ Xxxx X. Xxxxxx
------------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Vice President -
Senior Portfolio Management
Principal Amount of:
Senior Notes: $
Senior Discount Notes: $
Signature Page To Agreement
CONSENTING HOLDER NAME OF CONSENTING HOLDER:
DRESDNER KLEINWORT XXXXXXXXXXX -
GRANTCHESTER, INC.
By: /s/ Xxxxxx Xxxxxxx
------------------------------
Name: Xxxxxx Xxxxxxx
Title: CEO, North America
Principal Amount of:
Senior Notes: $
Senior Discount Notes: $
Signature Page To Agreement
CONSENTING HOLDER NAME OF CONSENTING HOLDER:
XXXXXX BROTHERS, INC.
By: /s/Xxxx Xxxxxxxxx Xxxx
------------------------------
Name: Xxxx Xxxxxxxxx Xxxx
Title: Managing Director
Principal Amount of:
Senior Notes:
Senior Discount Notes:
Signature Page To Agreement
SCHEDULE I
Principal Terms of the New Notes and Warrants
---------------------------------------------
1. Definitions. As used herein, the follows terms have the following meaning:
(a) "Aggregate Senior Discount Note Amount" as of any date of
determination means the aggregate accreted value of the Senior
Discount Notes as of October 15, 2001, computed in accordance with the
terms thereof, as of such date.
(b) "Aggregate Senior Note Amount" as of any date of determination means
the aggregate unpaid principal amount of the Senior Notes plus accrued
and unpaid interest thereon as of October 15, 2001, as of such date.
(c) "Pro Rata Share" means, as of any date of determination, a share of
New Notes or Warrants, as the case may be, equal to the ratio
determined as of the closing date of the Exchange Offer of (x) the
Tendered Senior Discount Note Amount or Tendered Senior Note Amount,
as the case may be, divided by (y) the sum of (i) the Tendered Senior
Note Amount plus (ii) the Tendered Senior Discount Note Amount.
(d) "Tendered Senior Discount Note Amount" as of any date of determination
means the accreted value of the Senior Discount Notes as of October
15, 2001 validly tendered and not properly withdrawn, computed in
accordance with the terms thereof.
(e) "Tendered Senior Note Amount" as of any date of determination means
the unpaid principal amount of the Senior Notes validly tendered and
not properly withdrawn plus accrued and unpaid interest thereon as of
October 15, 2001.
2. New Notes.
(a) Principal amount: Principal amount of New Notes equal to product of (x)
$675,000,000 multiplied by (y) the ratio determined as of the Closing Date of
the Exchange Offer of (i) the sum of the Tendered Senior Discount Note Amount
plus the Tendered Senior Note Amount divided by (ii) the sum of the Aggregate
Senior Discount Note Amount plus the Aggregate Senior Note Amount. Each holder
to receive their Pro Rata Share of the New Notes.
(b) Maturity: July 15, 2006
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(c) Interest Rate: 10% per annum, payable semiannually on January 15 and
July 15 of each year in cash, with the first interest payment due July 15, 2002.
First interest payment to include all interest that would have accrued on New
Notes as if such New Notes had been issued on October 15, 2001 (less any cash
interest paid on the Existing Notes after the date hereof, which amount shall
offset interest paid to each Existing Note holder having received such cash
interest payment).
(d) Redemption: Optional redemption is permitted (a) at any time upon
payment of a make whole premium (using a discount rate of 0.50% plus the rate on
treasuries with a comparable maturity) and (b) at any time up to $100 million
aggregate principal amount of New Notes solely out of "excess cash flow" at a
redemption price equal to 101% of the principal amount of the New Notes being
redeemed ("Excess Cash Flow Prepayment").
(e) Covenants: Covenants to include:
(i) covenants in Existing Notes but, tighter restrictions on the
incurrence of debt and the granting of liens;
(ii) covenants must be consistent with any limitations relating to
refinancing of indebtedness by subsidiaries of Loral Ltd. contained in the
Loral Ltd. Indenture relating to its 9 1/2% Senior Notes Due 2006;
(iii) covenants will permit the Company (i) to use its cash flow to
construct or acquire a replacement satellite and (ii) to incur secured
indebtedness to construct or acquire a replacement satellite in an amount
equal to (x) the amount of any Excess Cash Flow Prepayment actually paid
plus (y) the amount of equity proceeds received by the Company after the
date of consummation of the Exchange Offer; provided that (1) any such
secured indebtedness shall be incurred contemporaneously with the
acquisition of such satellite or within 60 days thereafter (or incurred to
refinance, renew or replace such indebtedness), (2) such liens secure
indebtedness in an amount not in excess of the cost of such satellite, and
(3) such liens do not extend to any property other than the satellite for
which such indebtedness was incurred. Prior to the acquisition of such
replacement satellite, the Company shall provide to the Consenting
Noteholders or their representatives a written opinion from an independent
party qualified in making such determination that the purchase price of the
replacement satellite is consistent with then prevailing market prices for
comparable satellites.
(iv) any covenant comparable to Section 4.15 of the Indentures will
change the 15 month period referred to therein to 26 months); and
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(v) Covenants to be applicable to the Company and its restricted
subsidiaries.
(f) Guarantee: Usual and customary guarantee of payment by Loral Ltd.
Operating and financial covenants in the Guarantee same as provided in the Loral
Ltd. 9 1/2% Senior Notes Due 2006.
(g) Collateral: None but, except as set forth in Item 2(e)(iii) above, the
covenants will include a negative pledge with exceptions to be negotiated.
(h) Registration and Trading: New Notes to be publicly traded (but not
listed), and may be traded separately from Warrants. The securities issued in
connection with the Exchange Offer shall be registered under the Securities Act
of 1933.
(i) Representations and Warranties: Prior to the commencement of the
Exchange Offer, Loral Ltd., Cyberstar and LSC shall each deliver to the
Consenting Holders an officer's certificate containing usual and customary
representations and warranties (subject to usual and customary carve-outs)
including without limitation representations and warranties concerning:
corporate standing, valid existence and authorization of the transactions
contemplated hereby; existence of all necessary corporate power and authority;
all necessary corporate action has been taken; due execution and delivery; the
New Notes and each agreement (including without limitation the guaranty) are
each valid, legally binding and enforceable in accordance with their respective
terms; shares issuable upon exercise of warrants duly authorized and reserved
for issuance, and upon issuance to be validly issued, fully paid and
non-assessable and not subject to any preemptive or similar rights; compliance
with applicable requirements of the federal and state securities laws; no
conflicts with existing agreements; no violation of any law, rule or regulation;
transactional compliance with all applicable foreign, federal, local or state
securities laws, rules and regulations; no consent or authorization required
(other than listed exceptions); no material pending or threatened action (other
than listed exceptions); New Notes and Guaranty when issued will be duly
authorized and when duly executed, will be duly authenticated, issued and
delivered.
(j) Legal Opinion: The registration statement when it becomes effective
will include the opinions of counsel for Cyberstar, Loral Ltd. and LSC
reasonably acceptable to the Consenting Holders, including without limitation an
opinion that each of the New Notes and the agreements (including without
limitation the guaranty agreement) are legal, valid and enforceable obligations
in accordance with their respective terms, and that there is no conflict between
the terms of such New Notes and agreements and each of the Loral Entities'
charter, bylaws and public and private funded indebtedness.
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3. Warrants.
(a) Warrants: Warrants to be five year warrants to purchase up to 6,657,096
common shares of Loral Ltd. (representing as of June 30, 2001, 2% of Loral
Ltd.'s outstanding common stock) with an exercise price equal to 110% of the
average of the daily volume-weighted average trading prices of the common stock
on the New York Stock Exchange as reported by Bloomberg, L.P. for the ten
consecutive trading days preceding the second trading day prior to the closing
of the Exchange Offer.
(b) Distribution: Each holder to receive their Pro Rata Share of the
Warrants.
(c) Terms: Warrant Agreement to contain usual and customary anti-dilution
provisions.
(d) Registration and Trading: Warrants to be publicly traded, and may be
traded separately from New Notes. The Warrants issued in connection with the
Exchange Offer shall be registered under the Securities Act of 1933.
(e) Representations and Warranties: Same as with respect to New Notes.
(f) Legal Opinion: Same as with respect to New Notes.
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SCHEDULE II
Summary of Proposed Amendments to Indentures
--------------------------------------------
I. AMENDMENT TO SENIOR NOTES INDENTURE. SECTIONS 4.02 THROUGH 4.10 AND
SECTIONS 4.12 THROUGH 4.15, SECTIONS 4.18 AND 4.19, SECTIONS 5.01 AND 5.02
(EXCEPT THEY SHALL BE RETAINED TO THE EXTENT NECESSARY TO REQUIRE THE
SUCCESSOR OR TRANSFEREE TO ASSUME THE OBLIGATIONS UNDER THE INDENTURE AND
THE SENIOR NOTES AND SHALL RELEASE THE PREDECESSOR PERSON), CLAUSES (C),
(E), (F), (G), (H) AND (J) OF SECTION 6.01 SHALL BE ELIMINATED AND
CONFORMING CHANGES SHALL BE MADE TO THE OTHER PROVISIONS OF THE INDENTURE.
II. AMENDMENT TO SENIOR DISCOUNT NOTES INDENTURE. SECTIONS 4.02 THROUGH 4.10
AND SECTIONS 4.12 THROUGH 4.15, SECTIONS 4.18 AND 4.19, SECTIONS 5.01 AND
5.02 (EXCEPT THEY SHALL BE RETAINED TO THE EXTENT NECESSARY TO REQUIRE THE
SUCCESSOR OR TRANSFEREE TO ASSUME THE OBLIGATIONS UNDER THE INDENTURE AND
THE SENIOR DISCOUNT NOTES AND SHALL RELEASE THE PREDECESSOR PERSON),
CLAUSES (C), (E), (F), (G), (H) AND (J) OF SECTION 6.01 SHALL BE ELIMINATED
AND CONFORMING CHANGES SHALL BE MADE TO THE OTHER PROVISIONS OF THE
INDENTURE.
III. EFFECTIVENESS OF AMENDMENTS. AMENDMENTS EFFECTIVE ONLY UPON RECEIPT BY THE
INDENTURE TRUSTEE OF REQUISITE CONSENTS AND CONSUMMATION BY THE COMPANY OF
THE EXCHANGE OFFER.
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SCHEDULE III
Summary of Terms of Consideration to be given in Exchange for Cyberstar/LSC Note
--------------------------------------------------------------------------------
THE COMPANY WILL PAY IN CASH ALL ACCRUED INTEREST ON THE CYBERSTAR/LSC NOTE
THROUGH THE DATE OF CONSUMMATION OF THE EXCHANGE OFFER.
THE COMPANY WILL TRANSFER TO LSC OR ITS DESIGNEE ALL ASSETS OWNED BY THE
COMPANY OR ANY OF ITS SUBSIDIARIES COMPRISING THE "DATA BUSINESS".
THE COMPANY WILL ISSUE TO LSC NEW SUBORDINATED NOTES (THE "SUBORDINATED
NOTES") AS FOLLOWS:
PRINCIPAL AMOUNT: AN AMOUNT EQUAL TO THE THEN OUTSTANDING PRINCIPAL
AMOUNT OF THE CYBERSTAR/LSC NOTE LESS $50,000,000 (WHICH
PRINCIPAL AMOUNT WILL BE APPROXIMATELY $29,700,000).
MATURITY: JULY 30, 2006.
INTEREST RATE: 10% PER ANNUM, PAYABLE SEMIANNUALLY ON JANUARY 30 AND
JULY 30 OF EACH YEAR, IN KIND, THROUGH MATURITY.
COVENANTS: TO BE DETERMINED BUT SUBSTANTIALLY SIMILAR TO THOSE OF THE
NEW NOTES.
SUBORDINATION: SUBORDINATED TO THE NEW NOTES ON USUAL AND CUSTOMARY
TERMS.
COLLATERAL: NONE.
GUARANTEE: USUAL AND CUSTOMARY GUARANTEE OF PAYMENT BY LORAL LTD.
OPERATING AND FINANCIAL COVENANTS IN THE GUARANTEE SAME AS
PROVIDED IN THE LORAL LTD. 9 1/2% SENIOR NOTES DUE 2006. THE
GUARANTEE WILL BE SUBORDINATED TO THE GUARANTEE OF LORAL LTD. OF
THE NEW NOTES.
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SCHEDULE IV
Confidentiality Provisions
--------------------------
All financial and other information regarding Loral Ltd., the Company and
its affiliates (whether written or oral) furnished to any Holder ("you") and
your Representatives (as defined below), whether prior to, on or following the
date hereof, together with analyses, compilations, forecasts, studies or other
documents or records prepared by you or your Representatives which contain, are
based on or otherwise reflect or are generated in whole or in part from such
information, including that stores on any computer, word processor or other
similar device, are collectively referred to herein as the "Evaluation
Material."
You hereby agree as follows:
(1) You shall use the Evaluation Material solely for the purpose of evaluating
the Exchange Offer and you shall keep the Evaluation Material confidential,
except that you may disclose the Evaluation Material or portions thereof to
those of your and your funds' directors, officers, employees, affiliates,
representatives (including, without limitation, financial advisors,
attorneys and accountants) (collectively, the "Representatives") (a) who
need to know such information for the purpose of evaluating the Exchange
Offer, (b) who are informed by you of the confidential nature of the
Evaluation Material and (c) who agree to be bound by the terms of this
Agreement as if they were parties hereto. You shall be responsible for any
breach of this Agreement by your Representatives. In the event that you or
any of your representatives are requested or required (by deposition,
interrogatory, request for documents, subpoena, civil investigative demand
or similar process) to disclose any of the Evaluation Material, you shall
provide Loral Ltd. and the Company with prompt prior written notice of such
requirement, you shall furnish only that portion of the Evaluation Material
which you are advised by counsel is legally required, and you shall
exercise your reasonable best efforts to obtain reliable assurance that
confidential treatment will be accorded such Evaluation Material.
(2) If you do not, in accordance with this Agreement, proceed with the Exchange
Offer or upon termination of this Agreement, you will promptly inform Loral
Ltd. and the Company of that decision and, in that case or at any time upon
the request of the Company or Loral Ltd., you and your Representatives
shall promptly either return to the Company and Loral Ltd., as appropriate,
or destroy all copies of the written Evaluation Material in your or their
possession or under your or their custody or control (including that stored
in any computer, word processor or similar device) and confirm such
destruction to the Company and Loral Ltd. in writing. Notwithstanding
anything to the contrary contained in this Agreement, if you are not
required, in accordance with this Agreement, to proceed with the Exchange
Offer or upon termination of this Agreement, you will continue to hold any
Evaluation Material obtained hereunder confidential and you further agree
not to use the Evaluation Material for any purpose.
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(3) The term "Evaluation Material" does not include any information which (i)
at the time of disclosure is generally available to and known by the public
(other than as a result of a disclosure by you or by any of the
Representatives) or (ii) was available to you or your representatives on a
non-confidential basis from a source (other than Loral Ltd., the Company or
their representatives) that is not and was not prohibited from disclosing
such information to you or your Representatives by a contractual, legal or
fiduciary obligation.
(4) You agree that no failure or delay by the Company or Loral Ltd. in
exercising any right, power or privilege hereunder will operate as a waiver
thereof, nor will any single or partial exercise thereof preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege hereunder.
The Company and Loral Ltd. hereby agree that the terms of this
confidentiality agreement shall terminate and no longer be of any force and
effect as to the Evaluation Material upon the earlier to occur of (i) the date
set forth in Section 1(b) of the Agreement; or (ii) the release to the public of
information concerning the principal terms of the Financial Restructuring,
whether by press release or commencement of the Exchange Offer or Consent
Solicitation.
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