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EXHIBIT 10.6
PURCHASE AND SALE AGREEMENT
between
LORAL SPACE & COMMUNICATIONS LTD.
and
ALCATEL SPACECOM
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Dated as of June 19, 1997
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PURCHASE AND SALE AGREEMENT
PURCHASE AND SALE AGREEMENT, dated as of June 19, 1997 (the
"Agreement"), between LORAL SPACE & COMMUNICATIONS LTD., a company organized
under the laws of Bermuda ("Loral"), and ALCATEL SPACECOM, a societe par action
simplifee organized under the laws of France ("Alcatel").
W I T N E S S E T H :
WHEREAS, on the date hereof, Alcatel is a limited partner of,
and the owner of 720,000 partnership interests (the "Partnership Interests") in,
Loral/QUALCOMM Satellite Services, L.P., a Delaware limited partnership
("LQSS"), pursuant to that certain Amended and Restated Agreement of Limited
Partnership of LQSS, dated as of March 23, 1994 (the "Partnership Agreement");
and
WHEREAS, the parties hereto desire for Alcatel to exchange its
Partnership Interests for cash and securities from Loral, as set forth in this
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, the parties hereto agree as follows:
1. PURCHASE AND SALE
1.1. Purchase and Sale.
1.1.1. At the Closing described in Section 1.2. below, Alcatel
shall sell, transfer and assign, and Loral shall purchase and acquire, the
720,000 Partnership Interests held by Alcatel (the "LQSS Interests") in exchange
for (i) $17,487,360 in cash (the "Cash Consideration") and (ii) 1,255,684 shares
of Loral Common Stock, par value $.01 per share (such shares the "LSC Shares").
1.2. Closing.
1.2.1. Time and Place of Closing. The closing ("Closing") of
the transactions contemplated by Section 1.1. (the "Purchase and Sale") shall
take place at the law offices of Xxxxxxx Xxxx & Xxxxxxxxx, One Citicorp Center,
000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or such other place upon which
the parties hereto may agree and shall occur (the "Closing Date") upon execution
and delivery of this Agreement by the parties hereto.
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1.2.2. Deliveries at Closing. At the Closing,
(a) Loral is delivering to Alcatel (i) the Cash
Consideration by wire transfer of immediately available funds to the account
designated by Alcatel's written instructions delivered at least two (2) full
business days prior to the Closing Date and (ii) share certificates for the LSC
Shares, registered in the name of Alcatel;
(b) Alcatel is delivering to Loral, and Loral is
executing, the Assignment of Partnership Interests in the form attached hereto
as Exhibit A; and
(c) The parties hereto are acknowledging the delivery
to Alcatel of the item required by Section 3.1.1.
1.2.3. Stock Transfer Taxes. Loral will bear all United States
stock transfer taxes, direct or indirect, attributable to the share transfers in
the Purchase and Sale.
2. REPRESENTATIONS AND WARRANTIES
2.1. Representations and Warranties of Loral. Loral represents
and warrants to Alcatel as follows:
2.1.1. Organization; Capitalization. Loral is a company duly
organized, validly existing and in good standing under the laws of the Islands
of Bermuda and has all requisite corporate power and authority to own its
properties and assets and to conduct its business as now conducted. The
authorized capital stock of Loral consists of (a) 750,000,000 shares of Common
Stock, par value $.01 per share ("LSC Common Stock"), of which 191,162,455
shares are issued and outstanding and, without giving effect to the transactions
contemplated hereby, 97,553,912 additional shares are reserved for issuance upon
the exercise or conversion of outstanding options, warrants or convertible
securities; (b) 150,000,000 shares of Series A Non-Voting Convertible Preferred
Stock, par value $.01 per share, of which 45,896,977 shares are outstanding and
none of which have been reserved for issuance; (c) 750,000 shares of Series B
Preferred Stock, par value $.01 per share, no shares of which are outstanding,
and 250,000 shares of which have been reserved for issuance upon the exercise of
outstanding rights; and (d) 20,000,000 shares of 6% Series C Convertible
Redeemable Preferred Shares, par value $.01 per share, of which 13,845,774
shares are outstanding and none of which are reserved for issuance.
2.1.2. Authorization and Validity of Agreement. Loral has the
corporate power to enter into this Agreement and to carry out its obligations
hereunder. The execution and delivery of this Agreement and the performance of
Loral's obligations hereunder have been, or will have been on the Closing Date,
duly authorized by the Board of Directors of Loral, and no other corporate
proceedings on the part of Loral are necessary to authorize such execution,
delivery and performance. This Agreement has been duly executed by Loral and is
the legal, valid and binding obligation of Loral.
2.1.3. No Conflict or Violation. The execution, delivery and
performance by Loral of this Agreement do not and will not violate or conflict
with any provision of the charter
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documents or bye-laws of Loral, and do not and will not violate any provision of
any agreement or instrument to which Loral is a party or by which it is bound,
or any order, judgment or decree of any court or other governmental or
regulatory authority to which Loral is subject.
2.1.4. Validity of Securities. The LSC Shares have been, or
will have been as of the Closing Date, duly authorized for issuance and sale to
Alcatel pursuant to this Agreement, and when duly executed and delivered against
payment therefor as provided herein, will be validly issued, fully paid and
non-assessable; the stock certificates evidencing the LSC Shares will be in due
and proper form and comply with all applicable legal requirements; the issuance
of the LSC Shares will not be subject to any call, preemptive or other similar
rights.
2.1.5. Compliance with Partnership Agreement. (i) Loral has,
or will have on the Closing Date, furnished the "General Partner" (as defined in
the Partnership Agreement) with an agreement, in form reasonably satisfactory to
the General Partner, to be bound by the Partnership Agreement and such other
documents or instruments as may be required by the General Partner pursuant to
Section 11.01(a) of the Partnership Agreement in order to effect Loral's
admission as a "Limited Partner" (as defined in the Partnership Agreement); (ii)
the General Partner has consented to the (A) transfer of the LQSS Interests
contemplated hereunder, as required by Section 10.03(a) of the Partnership
Agreement, and (B) admission of Loral as a substituted Limited Partner in LQSS
upon consummation of the Purchase and Sale in satisfaction of Section 11.01(b)
of the Partnership Agreement; and (iii) all other requirements for the transfer
of the LQSS Interests pursuant to the Partnership Agreement contemplated
hereunder have been met or otherwise waived.
2.1.6. Registration and Resale of LSC Shares. The LSC Shares
have been duly registered under the U.S. Securities Act of 1933, as amended
("Securities Act") (pursuant to Securities Act Registration Number 333-26517, on
Form S-3, the "Registration Statement"), and applicable state securities laws
(collectively the "Securities Laws") and admitted for trading on the New York
Stock Exchange. Other than restrictions imposed by the Securities Laws, the LSC
Shares are not subject to any legal or contractual restrictions on resale.
2.2. Representations and Warranties of Alcatel. Alcatel
represents and warrants to Loral as follows:
2.2.1. Organization. Alcatel is a societe par action simplifee
duly organized, validly existing and in good standing under the laws of the
Republic of France, and has all requisite corporate power and authority to own
its properties and assets and to conduct its business as now conducted.
2.2.2. Authorization and Validity of Agreement. Alcatel has
the corporate power to enter into this Agreement and to carry out its
obligations hereunder. The execution and delivery of this Agreement and the
performance of Alcatel's obligations hereunder have been duly authorized by the
appropriate governing body of Alcatel, and no other corporate proceedings on the
part of Alcatel are necessary to authorize such execution, delivery and
performance. This Agreement has been duly executed by Alcatel and is the legal,
valid and binding obligation of Alcatel.
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2.2.3. No Conflict or Violation. The execution, delivery and
performance by Alcatel of this Agreement do not and will not violate or conflict
with any provision of the charter documents or by-laws (or corresponding
instruments under the laws of France) of Alcatel, and do not and will not
violate any provision of any agreement or instrument to which Alcatel is a party
or by which it is bound, or any order, judgment or decree of any court or other
governmental or regulatory authority to which Alcatel is subject.
2.2.4. Title to LQSS Interests. Alcatel is the lawful owner of
the LQSS Interests. Alcatel has good, valid and marketable title, free and clear
of all liens, pledges, security interests, and encumbrances, to the LQSS
Interests, with full right and lawful authority to sell and transfer such
interests to Loral pursuant to this Agreement. Upon payment for the LQSS
Interests to be purchased by Loral, Loral will acquire good, valid, and
marketable title thereto, free and clear of all liens, pledges, security
interests, and encumbrances except as set forth in the Partnership Agreement.
2.2.5. No Brokers or Agents. Alcatel has not retained the
services of any broker or agent in connection with the Purchase and Sale.
3. ACKNOWLEDGMENT
3.1. Acknowledgment. The parties hereto acknowledge that
Alcatel has received an opinion, dated the Closing Date, from Xxxxxxx, Xxxxxxxx
& Xxxxx as to due formation of Loral and the legality of the LSC Shares issued
to Alcatel hereunder.
4. BLOCK TRADE UNDERTAKING
4.1. Definitions. The following terms shall have the meanings
ascribed to them below:
4.1.1. "Excess Amount" means the number of LSC Shares
requested by a Holder or Holders to be sold pursuant to Section 4.3. which the
managing Underwriter or Underwriters determines exceeds the largest number of
LSC Shares which can successfully sold in an orderly manner in such offering
within the price range acceptable to Loral.
4.1.2. "Holders" means each of Alcatel for so long as it owns
any LSC Shares, and such of its successors and assigns who acquire LSC Shares,
directly or indirectly, from Alcatel, in each case for so long as such
successors or assigns own any LSC Shares.
4.1.3. "Majority Holders" means the Holders of a majority of
the LSC Shares.
4.1.4. "Person" means an individual or a corporation,
partnership, limited liability company, trust, or any other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.
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4.1.5. "Underwriter" means a securities dealer who purchases
any Loral securities as principal in an underwritten offering and not as part of
such dealer's market-making activities.
4.2. Block Trade Undertaking
4.2.1. Broker-dealers. Upon request from the Majority Holders,
Loral shall use its reasonable best efforts to assist the Majority Holders in
identifying registered broker-dealers (each, a "Broker") ready, willing and able
to effectuate a sale of all or a portion of the LSC Shares on terms acceptable
to the Majority Holders in a manner consistent with customary practice (other
than pursuant to an underwritten public offering) as contemplated under the
heading "Plan of Distribution" in the Registration Statement, including, but not
limited to, a block sale of all or a portion of the LSC Shares.
4.2.2. Preferred Sales Method. The Majority Holders and Loral
acknowledge and agree that their preferred manner of execution of the sale of
LSC Shares pursuant to Section 4.2. would be by means of a trade not requiring
any additional agreements, indemnification, or securities filings on the part of
Loral, so long as the terms of the transaction are otherwise satisfactory to the
Majority Holders. In the event, however, that no Broker recommended by Loral is
prepared to effectuate the sale on terms satisfactory to the Majority Holders
without (i) an agreement providing for indemnification, representations and
warranties or covenants (an "Indemnity Agreement") or (ii) requiring Loral to
incorporate in a prospectus supplement or post-effective amendment to the
Registration Statement information relating to the transaction with the Broker,
then Loral shall enter into such Indemnity Agreement and incorporate in a
prospectus supplement or post-effective amendment to the Registration Statement
such information as is reasonably determined to be included therein by such
Broker and the Majority Holders, and make all required filings of the same.
4.3. Piggy-Back Offering. If at any time Loral, for its own
account or for the account of any of its securityholders, proposes to offer
Loral's Common Stock, par value $.01 per share, in the form of a primary or
secondary underwritten offering (other than with respect to a registration
statement on Form S-4 or S-8 (or any substitute form that may be adopted by the
Commission) or a registration statement filed in connection with an exchange
offer or offering of securities solely to Loral's existing securityholders),
then Loral shall give written notice of such proposed underwritten offering to
Holders as soon as practicable (but in no event later than the anticipated
filing date of such offering), and such notice shall offer such Holders the
opportunity to include in such underwritten offering such number of LSC Shares
as each such Holder may request (which request shall specify the number of LSC
Shares intended to be disposed of by such Holder) (a "Piggy-Back Offering").
Loral shall use its reasonable best efforts to cause the managing Underwriter or
Underwriters of a proposed underwritten offering to permit the LSC Shares
requested to be included in a Piggy-Back Offering to be included on the same
terms and conditions as any similar securities of Loral included therein to
permit the sale or other disposition of such LSC Shares in accordance with the
intended method of distribution thereof. Notwithstanding the foregoing, Holders
shall not be entitled to a Piggy-Back Offering in connection with any
underwritten offering granted by Loral to a third party pursuant to a
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contractual obligation if the agreement between such third party and Loral
providing for such underwritten offering prohibits Loral from granting to other
Persons the right to "piggy-back" on to such underwritten offering; provided
that in such event, Loral shall provide Holders notice of such prohibition prior
to the anticipated filing date of such registration so as to permit Holders to
seek permission from such third party to include LSC Shares in such underwritten
offering.
4.4. Reduction of Offering. Notwithstanding anything contained
herein, if the managing Underwriter or Underwriters of an offering described in
Section 4.3. deliver a written opinion to the Holders of the LSC Shares
requesting inclusion in such offering that (i) the size of the offering that the
Holders, Loral and/or such other Persons intend to make or (ii) the kind of
securities that the Holders, Loral and/or any other Persons intend to include in
such offering is such that the success of the offering would be materially and
adversely affected by inclusion of the LSC Shares requested to be included, then
(A) if the size of the offering is the basis of such Underwriter's or
Underwriters' opinion, Loral shall not include an amount of LSC Shares requested
to be included in such offering by all Holders equal to the Excess Amount (such
reduction to be allocated pro rata among the Holders requesting inclusion of LSC
Shares in the Piggy-Back Offering); provided that if securities are being
offered for the account of other Persons as well as Loral, then with respect to
the LSC Shares intended to be offered by Holders, the proportion by which the
amount of such class of securities intended to be offered by Holders is reduced
shall not exceed the proportion by which the amount of such class of securities
intended to be offered by such other Persons is reduced (it being understood
that such reduction may be all of such class of securities); and (B) if the
combination of securities to be offered is the basis of such Underwriter's or
Underwriters' opinion, (x) the LSC Shares to be included in such offering shall
be reduced as described in clause (A) above (subject to the proviso in clause
(A)) or, (y) if the actions described in clause (B)(x) would, in the judgment of
the managing Underwriter or Underwriters, be insufficient to substantially
eliminate the adverse effect that inclusion of the LSC Shares requested to be
included would have on such offering, such LSC Shares will be excluded from such
offering.
If, as a result of the proration provisions of this Section
4.4., any Holder shall not be entitled to include all LSC Shares in a Piggy-Back
Offering that such Holder has requested to be included, such Holder may elect to
withdraw his request to include LSC Shares in such offering (a "Withdrawal
Election"); provided, however, that a Withdrawal Election shall be irrevocable
and, after making a Withdrawal Election, a Holder shall no longer have any right
to include LSC Shares in the offering as to which such Withdrawal Election was
made.
4.5. Registration Statement. Loral covenants that it shall use
its reasonable best efforts to maintain the Registration Statement continuously
effective under the Securities Act until the earlier of the (a) date that the
LSC Shares shall no longer constitute restricted securities pursuant to Rule
144(k) of the Securities Act or (b) the date that all the LSC Shares shall have
been sold pursuant to such Registration Statement.
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5. MISCELLANEOUS
5.1. Additional Actions and Documents. Each of the parties
hereto hereby agrees to take or cause to be taken such further actions, to
execute, deliver, and file or cause to be executed, delivered and filed such
further documents and instruments, and to obtain such consents, as may be
necessary or as may be reasonably requested in order to fully effectuate the
purposes, terms and conditions of this Agreement, whether before or after the
Closing Date.
5.2. LSC Shares. The LSC Shares to be issued pursuant to this
Agreement shall be separate from any LSC Common Stock acquired by Alcatel Espace
in connection with the sale of its interest in Space Systems/Loral, Inc., a
Delaware corporation, and shall not be included in any ownership calculations of
LSC Common Stock pursuant to any agreement that Alcatel Espace may enter in
connection with such sale.
5.3. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without giving
effect to the doctrine of conflicts of laws.
5.4. No Waivers; Amendments.
5.4.1. No failure or delay on the part of any party hereto in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein provided shall be cumulative and not exclusive of
any rights or remedies provided by law.
5.4.2. Any provision of this Agreement may be amended or
waived if, but only if, such amendment or waiver is in writing and is signed by
each party hereto.
5.5. Survival of Provisions. The representations and
warranties, covenants and agreements contained in this Agreement shall survive
and remain in full force and effect, regardless of any investigation made by or
on behalf of Alcatel, or by or on behalf of Loral, and shall survive delivery of
the Cash Consideration, LSC Shares, and the LQSS Interests.
5.6. Entire Agreement. This Agreement constitutes the entire
agreement and understanding between the parties hereto and supersedes any and
all prior agreements and understandings, written or oral, relating to the
subject matter hereof.
5.7. Counterparts. This Agreement may be signed in
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same instrument.
5.8. Section Headings. The section headings contained in this
Agreement are for reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
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5.9. Press Releases and Public Announcements. Any press
releases and public announcements or disclosures relating to the transactions
contemplated hereby shall be made only if mutually agreed upon by the parties
hereto, except to the extent a party has been advised in writing by counsel
(with a copy provided to the other party) that failure to disclose would violate
applicable law or stock exchange regulation, provided that any such required
disclosure will, to the extent practicable, be subject to prior consultation
among the parties.
5.10. Expenses. Except as otherwise set forth in this
Agreement, each party to this Agreement shall bear all the fees, costs and
expenses that are incurred by it in connection with the transactions
contemplated hereby, including, without limitation, attorneys' fees and fees of
financial advisors and investment bankers engaged by such party.
5.11. Notices. All notices, demands, requests, or other
communications which may be or are required to be given, served, or sent by any
party to any other party pursuant to this Agreement shall be in writing and
shall be mailed by first-class, registered or certified mail, return receipt
requested, postage prepaid, or transmitted by hand delivery (including delivery
by courier), telegram, telex, or facsimile transmission, addressed as follows:
To Alcatel: Alcatel Spacecom
0, xxx Xxxx Xxxx
00000 Xxxxxxxx Xxxxx
Xxxxxx
Attn.: Xxxxxx Xxxxxx
President
Xxxxxxx Xxxxxxxx, Esq.
Fax: 000-000-00-00-00-00
with a copy (which shall not constitute notice) to:
Xxxxx & Xxxxxxx L.L.P.
Columbia Square
000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Attn.: Xxxx X. Xxxx, Esq.
Fax: 202/000-0000
To Loral: Loral Space & Communications Ltd.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Xxxxxxx X. Xxxxxxx
President and Chief
Operating Officer
Fax: 212/000-0000
with a copy (which shall not constitute notice) to:
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Loral Space & Communications Ltd.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Xxxx Xxxxxx, Esq.
Xxx Xxxx, Esq.
Fax: 212/000-0000
and
Xxxxxxx Xxxx & Xxxxxxxxx
One Citicorp Center
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Xxxxx Xxxxx, Esq.
Fax: 212/000-0000
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IN WITNESS WHEREOF, the undersigned have duly executed and
delivered this Agreement as of the date first set forth above.
LORAL SPACE & COMMUNICATIONS LTD.
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
Title: President and Chief
Operating Officer
ALCATEL SPACECOM
By: /s/ Xxxxxx Xxxxxx
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Name: Xxxxxx Xxxxxx
Title: President
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