AGREEMENT
Among
LORAL SPACE & COMMUNICATIONS LTD.,
LORAL SPACECOM CORPORATION,
XXXXXX BROTHERS CAPITAL PARTNERS II, L.P.,
XXXXXX BROTHERS MERCHANT BANKING PORTFOLIO PARTNERSHIP L.P.,
XXXXXX BROTHERS OFFSHORE INVESTMENT PARTNERSHIP L.P.
and
XXXXXX BROTHERS OFFSHORE INVESTMENT PARTNERSHIP-JAPAN L.P.
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Dated as of August 9, 1996
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TABLE OF CONTENTS
Page
PREAMBLE
1. THE TRANSACTION
1.1. Exchange............................................................1
1.2. Closing.............................................................2
2. PRICE PROTECTION; SUBSEQUENT EXCHANGE; REGISTRATION RIGHTS
2 1. Additional Consideration in Certain Events..........................2
2 2. Adjusted Price Per Share............................................3
2 3. Adjustment Closing..................................................3
2 4. Registration of GTL Shares..........................................3
3. REPRESENTATIONS AND WARRANTIES
3 1. Representations and Warranties of Loral and SpaceCom................5
3 1.1. Organization; Capitalization................................5
3 1.2. Authorization and Validity of Agreements....................6
3 1.3. No Conflict or Violation....................................6
3 1.4. Validity of Shares..........................................7
3 2. Representations and Warranties of the Xxxxxx Partnerships...........7
3 2.1. Organization................................................7
3 2.2. Authorization and Validity of Agreements....................7
3 2.3. No Conflict or Violation....................................7
3 2.4. Title to shares of Tracking Stock...........................8
4. CONDITIONS TO CLOSINGS
4 1. Conditions to the Closing...........................................8
4 1.1. Conditions to Obligations of the Xxxxxx Partnerships........8
4 1.2. Conditions to Obligations of Loral and SpaceCom.............9
-i-
4 1.3. Conditions to Obligations of Loral and the Xxxxxx
Partnerships................................................9
4 2. Adjustment Closing.................................................10
4 2.1. Conditions to Obligations of the Xxxxxx Partnerships.......10
4 2.2. Conditions to Obligations of Loral and the Xxxxxx
Partnerships...............................................10
5. MISCELLANEOUS
5 1. Reasonable Best Efforts............................................10
5 2. No Waivers; Amendments.............................................10
5 3. Survival of Provisions.............................................11
5 4. Entire Agreement...................................................11
5 5. Counterparts; Governing Law........................................11
5 6. Section Headings...................................................11
5 7. Press Releases and Public Announcements............................11
5.8 Termination of Stockholders Agreement..............................11
5.9 Expenses...........................................................12
5.10 PFIC Covenant......................................................12
SIGNATURES
SCHEDULE
Schedule A - Loral Shares, GTL Shares and Cash Consideration to be
transferred to the Xxxxxx Partnerships
Schedule B - Tracking Shares to be transferred to Loral and SpaceCom
EXHIBIT
Exhibit A - Form of Registration Rights Agreement
-ii-
AGREEMENT
AGREEMENT dated as of August 9, 1996 (this "Agreement") among LORAL
SPACE & COMMUNICATIONS LTD. ("Loral"), LORAL SPACECOM CORPORATION ("SpaceCom"),
XXXXXX BROTHERS CAPITAL PARTNERS II, L.P. ("Capital Partners"), XXXXXX BROTHERS
MERCHANT BANKING PORTFOLIO PARTNERSHIP L.P. ("Merchant Banking"), XXXXXX
BROTHERS OFFSHORE INVESTMENT PARTNERSHIP L.P. ("Offshore Investment") and XXXXXX
BROTHERS OFFSHORE INVESTMENT PARTNERSHIP-JAPAN L.P. ("Offshore Japan" and,
together with Capital Partners, Merchant Banking and Offshore Investment, the
"Xxxxxx Partnerships").
W I T N E S S E T H :
WHEREAS, the Xxxxxx Partnerships currently own, collectively, 731.85
Series S Redeemable Preferred Shares (the "Tracking Stock") of SS/L (Bermuda)
Ltd., a Bermuda company ("SS/L Bermuda"), constituting all of the issued and
outstanding shares of such class and which are the economic equivalent of 731.85
shares of Common Stock of Space Systems/Loral, Inc., a Delaware corporation
("SS/L"), representing an effective economic interest of 18.3% therein;
WHEREAS, SpaceCom owns shares of Globalstar Telecommunications Limited
("GTL"), a Bermuda company, and has authorized the exchange of 267,256 of such
shares (the "GTL Shares") for 61.00 shares of the Tracking Stock held by the
Xxxxxx Partnerships;
WHEREAS, Loral has authorized the issuance and delivery of 7,500,000
shares of Loral Common Stock (together with associated rights ("Rights")
issuable pursuant to Loral's Rights Agreement, dated as of January 10, 1996)
(the "Loral Shares") plus $4,000,000 in cash (the "Cash Consideration") in
exchange for 670.85 shares of the Tracking Stock held by the Xxxxxx
Partnerships;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties hereto agree as follows:
1. THE TRANSACTION
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1.1. Exchange. At the Closing described in Section 1.2 below, SpaceCom
will transfer the GTL Shares, and Loral will transfer the Loral Shares and pay
the Cash Consideration, to the Xxxxxx Partnerships and, in exchange
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therefor, the Xxxxxx Partnerships will transfer to SpaceCom 61.00 shares of the
Tracking Stock and will transfer to Loral 670.85 shares of the Tracking Stock
held by the Xxxxxx Partnerships. The number of GTL Shares and Loral Shares to be
acquired by, and the portion of the Cash Consideration to be paid to, each of
the Xxxxxx Partnerships is set forth on Schedule A hereto and the number of
shares of Tracking Stock held by each of the Xxxxxx Partnerships (all of which
are to be exchanged and purchased at the Closing hereunder) to be acquired by
each of Loral and SpaceCom is set forth on Schedule B hereto.
1.2. Closing. The closing of the transactions contemplated by Section
1.1 (the "Exchange") shall occur on the third business day after the conditions
set forth in Section 4.1 shall have been satisfied or waived or on such other
date on which the parties may agree (the "Closing Date"). On the Closing Date,
Loral and the Xxxxxx Partnerships will enter into a Registration Rights
Agreement in the form attached hereto as Exhibit A (the "Registration Rights
Agreement
2. PRICE PROTECTION; SUBSEQUENT EXCHANGE; REGISTRATION RIGHTS.
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2.1 Additional Consideration in Certain Events. In the event that, at
any time hereafter and on or prior to February 4, 1997, Loral or any entity
under its control (including SS/L) purchases any shares of SS/L Common Stock, or
enters into a written agreement or any agreement in principle or letter of
intent to do so or an oral agreement as to all material terms, at an Adjusted
Price Per Share (as defined in Section 2.2 below) exceeding $143,472 (as such
amount shall be equitably adjusted from time to time to reflect stock splits,
stock dividends and the like), Loral will pay to each Xxxxxx Partnership an
amount equal to the product of such excess and the number of shares of Tracking
Stock acquired from such Xxxxxx Partnership in the Exchange, such payment to be
made in cash or, at Loral's election, in whole or in part, in additional shares
of Loral Common Stock (the "Additional Loral Shares") (valued at the average of
the daily high and low sales prices of the corresponding number of shares of
Loral Common Stock on the New York Stock Exchange on the ten trading days
preceding the date of the transaction in question), provided that Loral will
have the right to elect to make payment in the form of Additional Loral Shares
only if the conditions set forth in Section 4.2 have been satisfied or waived on
or prior to the Adjustment Closing Date (defined below). The additional
consideration contemplated by this Section 2.1 will not be payable in respect of
any acquisition by Loral
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of SS/L Common Stock held by SS/L Bermuda. In the event of successive purchases
or agreements during such 180 day period, the adjustment for all the Tracking
Stock shall be made based upon the highest price so paid.
2.2 Adjusted Price Per Share. The term "Adjusted Price Per Share"
refers to the value attributable to a share of SS/L Common Stock, excluding
therefrom any value attributable to the partnership interests in Globalstar,
L.P. held by SS/L. The Adjusted Price Per Share shall be calculated by dividing
(a) the difference obtained by subtracting (x) the value of the Globalstar
partnership interests at the time held by SS/L (valued at the average of the
daily high and low sales prices of the corresponding number of shares of GTL
Common Stock on the Nasdaq National Market on the ten trading days preceding the
date of the transaction in question) from (y) the valuation of 100% of the
equity of SS/L, taken as a whole as determined by the value of the consideration
paid in respect of the SS/L Common Stock in question (with consideration other
than cash to be valued at the fair market value thereof) by (b) the number of
shares of SS/L Common Stock outstanding immediately prior to such purchase.
2.3. Adjustment Closing. The closing of the transactions contemplated
by Section 2.1 (the "Adjustment") shall occur on the third business day after
the closing of the transaction requiring such adjustment (the "Adjustment
Closing Date"). Any cash amounts payable in connection with the adjustment will
be paid by wire transfer of immediately available funds to the account or
accounts specified by the Xxxxxx Partnerships.
2.4 Registration of GTL Shares
(a) Registration. SpaceCom will cause the GTL Shares to be included in
GTL's shelf registration statement on Form S-3, File No. 333-6477 (the "GTL
Shelf Registration Statement"), will pay the additional registration fee
associated therewith, and will cause GTL to use all reasonable efforts to cause
such registration statement to be declared effective promptly. SpaceCom will
cause such registration statement to remain effective for a period of three
years or such longer period as it is required to do so with respect to the
Convertible Preferred Equivalent Obligations registered thereunder; provided
that the effectiveness of such registration statement may be terminated before
the end of such period if the Xxxxxx Partnerships are provided registration
rights with respect to the GTL Shares substantially equivalent to their rights
with respect to the Loral Shares under the Registration Rights Agreement. The
Xxxxxx Partnerships acknowledge and
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agree that the GTL Shares may not be sold except pursuant to an effective
registration statement under the Securities Act of 1933, as amended (the
"Securities Act") or an applicable exemption from such registration.
(b) Indemnification and Contribution. SpaceCom shall cause GTL to
indemnify and hold harmless each Xxxxxx Partnership, its officers, directors and
agents, and each Person (as defined in the Registration Rights Agreement), if
any, who controls such Xxxxxx Partnership within the meaning of Section 15 of
the Securities Act or Section 20 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), (collectively, the "Xxxxxx Entities") from and
against any loss, claim, damage or liability and any action in respect thereof
(collectively, "Losses") to which such Xxxxxx Entities may become subject under
the Securities Act or otherwise, insofar as such Losses arise out of, or are
based upon, any untrue statement or alleged untrue statement of a material fact
contained in any registration statement (including without limitation the GTL
Shelf Registration Statement) or prospectus included therein relating to the GTL
Shares (as amended or supplemented if GTL shall have furnished any amendments or
supplements thereto) or any preliminary prospectus, or arise out of, or are
based upon, any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, on the same terms that Loral is obligated to indemnify such Xxxxxx
Entities pursuant to Sections 4.1 and 4.3 of the Registration Rights Agreement
with respect to the Registrable Securities (as defined in the Registration
Rights Agreement). Each Xxxxxx Partnership shall, severally and not jointly,
indemnify and hold harmless SpaceCom, its officers, directors and agents, and
each Person, if any, who controls SpaceCom within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act (collectively, the
"SpaceCom Entities") from and against any Losses to which such SpaceCom Entities
may become subject under the Securities Act or otherwise, with respect to such
matters and on the same terms that each Xxxxxx Partnership is obligated to
indemnify Loral, its officers, directors and agents, and each Person, if any,
who controls Loral within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act pursuant to Sections 4.2 and 4.3 of the
Registration Rights Agreement with respect to the Registrable Securities. In
addition, SpaceCom shall cause GTL to contribute to the amount paid or payable
by each Xxxxxx Partnership, and each Xxxxxx Partnership shall contribute to the
amount paid or payable by SpaceCom, in respect of any Losses on the same terms
that Loral and the Xxxxxx Partnerships are obligated to contribute to the
losses, claims, damages or liabilities
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referred to in Section 4.4 of the Registration Rights Agreement.
(c) Obligations of SpaceCom and GTL. The Xxxxxx Partnerships shall be
entitled to offer and sell GTL Shares pursuant to the GTL Shelf Registration
Statement from time to time upon delivery of written notice to GTL at least 5
Business Days (as defined in the Registration Rights Agreement) prior to the
date of the intended offering, and SpaceCom shall cause GTL to use its best
efforts to effect the sale of the GTL Shares in accordance with the intended
method of disposition thereof as quickly as practicable, including taking
actions of the type set forth under Section 3.1 of the Registration Rights
Agreement. SpaceCom shall cause GTL to pay any expenses incurred in connection
with any sale of GTL Shares by the Xxxxxx Partnerships pursuant to the GTL Shelf
Registration Statement, including all registration expenses of the type set
forth in Section 3.2 of the Registration Rights Agreement, provided that GTL
shall have no obligation to pay any underwriting fees, discounts or commissions
attributable to the sale of GTL Shares by any Xxxxxx Partnership of any
out-of-pocket expenses of the Xxxxxx Partnerships.
(d) Successors and Assigns. Each Xxxxxx Partnership may transfer its
rights under this Section 2.4 to its successors or assigns who acquire the GTL
Shares, directly or indirectly, from the Xxxxxx Partnerships.
3. REPRESENTATIONS AND WARRANTIES
------------------------------
3.1. Representations and Warranties of Loral and SpaceCom. Loral and
SpaceCom represent and warrant, severally and not jointly, to each of the Xxxxxx
Partnerships as follows:
3.1.1. Organization; Capitalization. Loral and GTL are companies duly
organized, validly existing under the laws of the Islands of Bermuda and have
all requisite corporate power and authority to own their respective properties
and assets and to conduct their business as now conducted. SpaceCom is a company
duly organized, validly existing under the laws of the State of Delaware 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, of
which 183,592,308 shares are issued and outstanding and, without giving effect
to the transactions contemplated hereby, 62,896,978 additional shares are
reserved for issuance upon the exercise or conversion of
5
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 45,896,978 shares are outstanding and none of which have been reserved for
issuance and (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. The authorized
capital stock of GTL consists of 60,000,000 shares of Common Stock, of which
10,000,000 shares are issued and outstanding, and 47,335,716 additional shares
are reserved for issuance upon the exercise or conversion of outstanding
options, warrants or convertible securities.
3.1.2. Authorization and Validity of Agreements. (a) Loral has the
corporate power to enter into this Agreement, the Registration Rights Agreement
and to carry out its obligations hereunder and thereunder. The execution and
delivery of this Agreement and the Registration Rights Agreement and the
performance of Loral's obligations hereunder and thereunder have been 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,
and the Registration Rights Agreement, when executed and delivered by Loral,
will be, the legal, valid and binding obligations of Loral.
(b) SpaceCom 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 SpaceCom's obligations hereunder have been duly
authorized by the Board of Directors of SpaceCom, and no other corporate
proceedings on the part of SpaceCom are necessary to authorize such execution,
delivery and performance. This Agreement has been duly executed by SpaceCom and
is the legal, valid and binding obligations of SpaceCom.
3.1.3. No Conflict or Violation. The execution, delivery and
performance by Loral of this Agreement and the Registration Rights Agreement and
by SpaceCom of this Agreement do not and will not violate or conflict with any
provision of the charter documents or by-laws of Loral or SpaceCom, and do not
and will not violate any provision of any agreement or instrument to which Loral
or SpaceCom 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 or
SpaceCom is subject.
6
3.1.4. Validity of Shares. The Loral Shares, the GTL Shares and the
Additional Loral Shares have been duly authorized and, when issued and delivered
in accordance with the terms of this Agreement, will be validly issued, fully
paid and nonassessable, and not subject to any contractual or other restrictions
on voting or transferability, except for compliance with the Securities Act, and
the Xxxxxx Partnerships will acquire good and valid title thereto free and clear
of any lien or other right or claim. The issuance of the Loral Shares, the GTL
Shares and the Additional Loral Shares is not subject to any preemptive or
similar rights.
3.2. Representations and Warranties of the Xxxxxx Partnerships. Each of
the Xxxxxx Partnerships represents and warrants, severally and not jointly, to
Loral and SpaceCom as follows:
3.2.1. Organization. Each of the Xxxxxx Partnerships is a partnership
duly organized, validly existing and in good standing under the laws of its
respective jurisdiction of organization and has all requisite partnership power
and authority to own its properties and assets and to conduct its business as
now conducted.
3.2.2. Authorization and Validity of Agreements. Each of the Xxxxxx
Partnerships has the power to enter into this Agreement and the Registration
Rights Agreement and to carry out its obligations hereunder and thereunder. The
execution and delivery of this Agreement and the Registration Rights Agreement
and the performance of each of the Xxxxxx Partnership's obligations hereunder
and thereunder have been duly authorized by the Board of Directors of the
general partner of such Xxxxxx Partnership, and no other corporate or other
proceedings on the part of such Xxxxxx Partnership are necessary to authorize
such execution, delivery and performance. This Agreement has been duly executed
by each of the Xxxxxx Partnerships and is, and the Registration Rights
Agreement, when executed and delivered by such Xxxxxx Partnership, will be, the
legal, valid and binding obligation of such Xxxxxx Partnership.
3.2.3. No Conflict or Violation. The execution, delivery and
performance by each of the Xxxxxx Partnerships of this Agreement and the
Registration Rights Agreement do not and will not violate or conflict with any
provision of the organizational documents or partnership agreements of such
Xxxxxx Partnership, and do not and will not violate any provision of any
agreement or instrument to which such Xxxxxx Partnership is a party or by which
it is bound, or any order, judgment or decree of any court or other
7
governmental or regulatory authority to which such Xxxxxx Partnership is
subject.
3.2.4. Title to Shares of Tracking Stock. Each of the Xxxxxx
Partnerships holds good and valid title to the shares of Tracking Stock set
forth opposite such Xxxxxx Partnership's name on Schedule B attached hereto,
which shares of Tracking Stock are owned by such Xxxxxx Partnership free and
clear of any lien or other right or claim, except to the extent set forth in the
Stockholders Agreement dated as of April 22, 1996 among Loral, SS/L Bermuda and
the Xxxxxx Partnerships, and when such shares of Tracking Stock are acquired by
Loral and SpaceCom in accordance with the terms of this Agreement, Loral and
SpaceCom, respectively, will acquire good and valid title to such shares of
Tracking Stock free of any lien or other right or claim.
4. CONDITIONS TO CLOSINGS
----------------------
4.1. Conditions to the Closing.
4.1.1. Conditions to Obligations of the Xxxxxx Partnerships. The
obligations of the Xxxxxx Partnerships to consummate the Exchange are subject to
the satisfaction or waiver, at or prior to the Closing Date, of the following
conditions:
(a) the representations and warranties of Loral and SpaceCom contained
herein shall be true and correct in all material respects on and as of the
Closing Date as if made on and as of such date;
(b) Loral and SpaceCom shall have performed and complied in all
material respects with all agreements required by this Agreement to be
performed or complied with by it on or prior to the Closing Date;
(c) the Xxxxxx Partnerships shall have received a certificate signed by
an executive officer of each of Loral and SpaceCom to the effect that the
conditions set forth in paragraphs (a) and (b) above have been satisfied;
(d) the Xxxxxx Partnerships shall have received an opinion, dated the
Closing Date, from Xxx Xxxx, Associate General Counsel of Loral, as to the
legality and validity of this Agreement, the Registration Rights Agreement
and such other matters relating to the Exchange as the Xxxxxx Partnerships
may reasonably request;
8
(e) The Xxxxxx Partnerships shall have received an opinion, dated the
Closing Date, from Xxxxxxx Xxxx & Xxxxxxxxx to the effect that (A) for
United States federal income tax purposes, it is more likely than not that
the transfer by the Xxxxxx Partnerships of the 731.85 shares of Tracking
Stock pursuant to this Agreement will constitute a sale or exchange of
731.85 shares of Common Stock of SS/L under Section 1001 of the Internal
Revenue Code of 1986, as amended (the "Code"), and (B) that the Xxxxxx
Entities will not be subject to penalties in respect of any Taxes for
taking the position set forth in clause (A) above. For purposes of this
Agreement, "Taxes" shall mean any net income, alternative, add-on minimum,
gross income, gross receipts, sales, use, ad valorem, value added,
transfer, franchise, corporation, metropolitan and other municipal
surcharge, profits, license, withholding on amounts paid to or by any
Person, payroll, employment, excise, severance, stamp, occupation, premium,
property, environmental or windfall profit tax, custom, duty or other tax,
governmental fee or other like assessment or like charge of any kind
whatsoever, together with any interest or any penalty, addition to tax or
additional amount imposed by any governmental authority responsible for the
imposition of any such tax (domestic or foreign). For the avoidance of
doubt, Taxes shall include any Tax resulting from the treatment of SS/L
Bermuda as a controlled foreign corporation or passive foreign investment
company within the meaning of Section 957 and 1296 of the Code,
respectively, for United States federal income tax purposes; and
(f) the Xxxxxx Partnerships shall have received an opinion, dated the
Closing Date, from Xxxxxxx, Xxxxxxxx & Xxxxx as to the legality of the
Loral Shares and the GTL Shares and such other matters relating to the
Exchange as the Xxxxxx Partnerships may reasonably request.
4.1.2. Conditions to Obligations of Loral and SpaceCom. The obligations
of Loral and SpaceCom to consummate the Exchange are subject to the satisfaction
or waiver, at or prior to the Closing Date, of the following conditions:
(a) the representations and warranties of the Xxxxxx Partnerships
contained herein shall be true and correct in all material respects on and
as of the Closing Date as if made on and as of such date;
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(b) the Xxxxxx Partnerships shall have performed and complied in all
material respects with all agreements required by this Agreement to be
performed or complied with by them on or prior to the Closing Date; and
(c) Loral and SpaceCom shall have received a certificate signed by the
general partner of each of the Xxxxxx Partnerships to the effect that the
conditions set forth in paragraphs (a) and (b) above have been satisfied.
4.1.3. Conditions to Obligations of Loral and the Xxxxxx
Partnerships. The obligations of Loral, SpaceCom and the Xxxxxx
Partnerships to consummate the Exchange are subject to the
satisfaction or waiver, at or prior to the Closing Date, of the
following conditions:
(a) Loral and the Xxxxxx Partnerships shall have entered
into the Registration Rights Agreement;
(b) all consents, waivers, authorizations and approvals of any
governmental or regulatory authority required in connection with the
execution, delivery and performance of this Agreement and the Registration
Rights Agreement shall have been duly obtained and in full force and
effect; and
(c) the Exchange shall not be prohibited by any applicable
law, court order or governmental regulation.
4.2. Adjustment Closing.
4.2.1. Conditions to Use of Loral Shares. The right of Loral to pay all
or part of the Adjustment in shares of Loral Common Stock is subject to the
satisfaction or waiver, at or prior to the Adjustment Closing Date, of the
following conditions:
(a) the representations and warranties of (i) Loral contained in
Sections 3.1.1 through 3.1.4 shall be true and correct in all material
respects on and as of the Adjustment Closing Date as if made on and as of
such date;
(b) the Xxxxxx Partnerships shall have received a certificate signed by
an executive officer of Loral to the effect that the conditions set forth
in paragraph (a) above has been satisfied; and
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(c) the Xxxxxx Partnerships shall have received an opinion, dated the
Adjustment Closing Date, from Xxx Xxxx, Associate General Counsel of Loral,
as to such other matters relating to the Adjustment as the Xxxxxx
Partnerships may reasonably request.
4.2.2. Conditions to Obligations of Loral and the Xxxxxx Partnerships.
The obligations of Loral and the Xxxxxx Partnerships to consummate the
Adjustment are subject to the satisfaction or waiver, at or prior to the
Adjustment Closing Date, of the condition that the Adjustment shall not be
prohibited by any applicable law, court order or governmental regulation.
5. MISCELLANEOUS
-------------
5.1. Reasonable Best Efforts. The parties hereto will
bear their respective reasonable best efforts to cause the
conditions to their respective obligations to be satisfied.
5.2. No Waivers; Amendments.
5.2.1. No failure or delay on the part of any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
5.2.2. 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.
5.3. 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
the Xxxxxx Partnerships, or by or on behalf of Loral or SpaceCom, and shall
survive delivery of the GTL Shares, Loral Shares, the shares of Tracking Stock
and the Additional Loral Shares.
5.4. Entire Agreement. This Agreement and the Registration Rights
Agreement constitute the entire agreement and understanding among the parties
hereto and supersedes any and all prior agreements and understandings, written
or oral, relating to the subject matter hereof.
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5.5. Counterparts; Governing Law. 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. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York.
5.6. 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.
5.7. Press Releases and Public Announcements. 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 (i) to
the extent required by law or by stock exchange regulation, provided that any
such required disclosure will, to the extent practicable, be subject to
consultation among the parties, or (ii) between any Xxxxxx Partnership and its
partners therein.
5.8. Termination of Stockholders Agreement. The Stockholders Agreement
dated as of April 22, 1996 (the "Stockholders Agreement") by and among Loral,
SS/L Bermuda and the Xxxxxx Partnerships shall hereby terminate and be of no
further force and effect and no party to the Stockholders Agreement shall have
any further rights or obligations under the Stockholders Agreement as of the
date hereof; provided, however, that Loral's obligation to indemnify and hold
harmless the Xxxxxx Partnerships as set forth in Section 5.7 of the Stockholders
Agreement shall not be terminated and shall survive without limitation. For the
avoidance of doubt, it is understood that such indemnity will be calculated
taking into account any Taxes (as defined in the Stockholders Agreement) payable
by reason of the exchange of Tracking Stock pursuant to this Agreement in
determining the amount of Tax which would not have been payable had the Xxxxxx
Partnerships been treated as owners of SS/L Common Stock for Tax purposes
commencing with the November 1992 Exchange (as defined in the Stockholders
Agreement).
5.9 Expenses. Loral agrees to pay the reasonable out-of-pocket expenses
of the Xxxxxx Partnerships in connection with the transactions contemplated by
this Agreement upon presentation of a reasonably detailed itemized statement
thereof.
5.10 PFIC Covenant. Loral agrees that it will review, in consultation
with its professional advisors, and will cause GTL to review, in consultation
with its
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professional advisors, the possible status of each as a passive foreign
investment company within the meaning of Section 1296 of the Code for each
taxable year based upon the relevant financial data and applicable law. Loral
further agrees that if it or GTL should determine in good faith after such
review that it is more likely than not that either or both is a passive foreign
investment company for the preceding taxable year, that it will and will cause
GTL to promptly notify the Xxxxxx Partnerships and furnish the information
necessary to permit an effective election for such year for one or both as the
case may be under Section 1295(b) of the Code, including the pro rata share of
"ordinary earnings" and "net capital gain" includible under Section 1295(a)(2)
of the Code by such Xxxxxx Partnerships or any partner thereof.
13
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date set forth above.
LORAL SPACE & COMMUNICATIONS LTD.
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Vice President
LORAL SPACECOM CORPORATION
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Vice President
SS/L (BERMUDA) LTD.
(For purposes of Section 5.8 only)
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Vice President
14
XXXXXX BROTHERS CAPITAL
PARTNERS II, L.P.
By: Xxxxxx Brothers
Holdings Inc.
By: /s/ Xxxx X. Xxxxxxxxxx
Name: Xxxx X. Xxxxxxxxxx
Title: Managing Director
XXXXXX BROTHERS MERCHANT BANKING
PORTFOLIO PARTNERSHIP L.P.
By: LBI Group Inc.
By: /s/ Xxxx X. Xxxxxxxxxx
Name: Xxxx X. Xxxxxxxxxx
Title: Managing Director
XXXXXX BROTHERS OFFSHORE INVESTMENT
PARTNERSHIP L.P.
By: Xxxxxx Brothers Offshore
Partners Ltd.
By: /s/ Xxxx X. Xxxxxxxxxx
Name: Xxxx X. Xxxxxxxxxx
Title: Managing Director
XXXXXX BROTHERS OFFSHORE INVESTMENT
PARTNERSHIP-JAPAN L.P.
By: Xxxxxx Brothers Offshore
Partners Ltd.
By: /s/ Xxxx X. Xxxxxxxxxx
Name: Xxxx X. Xxxxxxxxxx
Title: Managing Director
15
Schedule A
----------
Loral
GTL Shares Shares
Name Acquired Acquired Cash Received
---- -------- -------- -------------
Capital Partners 88,224 2,475,815 $1,320,435
Merchant Banking 129,799 3,642,550 $1,942,693
Offshore 35,667 1,000,922 $ 533,825
Offshore Japan 13,566 380,713 $ 203,047
------- --------- ----------
TOTAL 267,256 7,500,000 $4,000,000
A-1
Schedule B
----------
Shares of Tracking Tracking
Tracking Stock Stock
Stock Acquired by Acquired by
Name Exchanged SpaceCom Loral
---- --------- ----------- -----------
Capital Partners 241.59 20.14 221.45
Merchant Banking 355.44 29.63 325.81
Offshore 97.67 8.14 89.53
Offshore Japan 37.15 3.09 34.06
TOTAL 731.85 61.00 670.85
B-1
