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EXHIBIT 1
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EXHIBIT 1
STANDBY STOCK PURCHASE AGREEMENT
THIS STANDBY STOCK PURCHASE AGREEMENT (this "Agreement") is made and
entered into as of March , 1997, by and between Globalstar Telecommunications
Limited, a Bermuda company (the "Company") and Loral Space & Communications
Ltd., a Bermuda company (the "Purchaser").
WITNESSETH:
WHEREAS, the Company anticipates issuing to its Shareholders holding Common
Stock on a record date to be determined by the Company, subscription rights (the
"Rights") to subscribe for and purchase an aggregate of 1,131,168 shares (the
"Rights Shares") of the Company's Common Stock, $1.00 par value per share (the
"Common Stock"), at the per share Subscription Price of $26.50 (the "Rights
Offering"); and
WHEREAS, in connection with the Rights Offering the Purchaser agrees to
purchase and the Company agrees to sell and issue at the Subscription Price to
the Purchaser any and all Rights Shares not subscribed for by the holders of the
Rights; and
WHEREAS, the Purchaser and the Company desire to enter into this Agreement
regarding the issuance, sale and purchase of the Standby Shares (as defined
herein);
NOW, THEREFORE, in and for consideration of the premises, and other good
and valuable consideration the receipt and sufficiency of all of which is hereby
acknowledged, intending to be legally bound, the parties agree as follows:
I. CERTAIN DEFINITIONS.
A. Capitalized terms not otherwise defined herein have the meanings
ascribed to them in the Preliminary or Final Prospectus, as the case may be,
contained in the Company's Registration Statement (as defined below).
B. The following terms have the meanings specified:
"Commission" means the United States Securities and Exchange
Commission.
"Effective Date" means the date as of which the Commission declares
the Registration Statement to be effective for purposes of the Securities
Act.
"Prospectus" means the prospectus constituting a part of the
Registration Statement (including all information incorporated therein by
reference), as from time to time amended or supplemented. If any revised
prospectus shall be filed by the Company at the Commission on or after the
Effective Date of the Registration Statement, the term "Prospectus" shall
refer to each such revised prospectus from and after the time it is first
used.
"Registration Statement" means the registration statement filed by the
Company with the Commission on form S-3 (Commission including all exhibits
thereto, and as the same may be amended (at the date on which it became or
becomes effective) and, in the event any post-effective amendment thereto
is filed with the Commission prior to the Closing Date, the term
"Registration Statement" shall also mean such registration statement as so
amended.
"Securities Act" shall mean the Securities Act of 1933, as amended.
II. PURCHASE AND SALE OF SHARES.
Subject to the terms and conditions herein set forth, the Company hereby
agrees to issue and sell to the Purchaser, and the Purchaser hereby agrees to
purchase from the Company, at the Subscription Price, up to 1,131,168 shares of
the Common Stock (the "Standby Shares"), with the exact number of the Standby
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Shares to be calculated by subtracting (a) the number of Rights Shares sold
pursuant to the Rights Offering from (b) the 1,131,168 Rights Shares available
for sale pursuant to the Rights Offering.
III. THE CLOSING.
As soon as practicable following its determination of the number of Rights
Shares subject to Rights that expire without being exercised, the Company shall
notify the Purchaser of the number of Standby Shares, if any, to be purchased by
the Purchaser. The delivery of and payment for the Standby Shares (the
"Closing"), if any, shall occur on the fifth business day following the
Expiration Date (or such later date as the Company and the Purchaser may agree,
the "Closing Date") at the office of Xxxxxxx Xxxx & Xxxxxxxxx, 000 X. 00xx
Xxxxxx, Xxx Xxxx, Xxx Xxxx, at 10:00 a.m. New York time (the "Closing Time").
IV. DELIVERY OF THE STANDBY SHARES.
At the Closing, the Standby Shares, registered in the name of the purchaser
or such nominee(s) as the Purchaser may have specified in writing, shall be
delivered by or on behalf of the Company to the Purchaser, for the Purchaser's
account, against delivery by the Purchaser of the aggregate Subscription Price
therefor in immediately available funds in the form of one or more certified
checks or a wire transfer to an account designated by the Company.
V. REPRESENTATIONS AND WARRANTIES.
The Company hereby represents and warrants to the Purchaser as of the date
hereof and, unless otherwise specified herein, at and as of the date hereof and
at and as of Closing Time as follows:
(1) The Company has filed with the Commission the Registration
Statement (Commission File No. 333-22063), including a preliminary
Prospectus, for the registration under the Act of the offering and sale of
the Rights and the Rights Shares. The Company has filed with the
Commission, or will file prior to the Closing, a further amendment to the
Registration Statement (including the form of final Prospectus). The
Company has included in the Registration Statement as of the date hereof,
and will include in the Registration Statement, as of the Effective Date
and the Closing Date, all information required by the Securities Act and
the rules and regulations promulgated thereunder to be included in the
final Prospectus with respect to the Rights and the Underlying Shares and
the offering thereof.
(2) On the Effective Date and the Closing Date, the Registration
Statement, including any Prospectus filed in accordance with Rule 424(b),
(a) does and will comply in all material respects with the
applicable requirements of the Act and the rules promulgated thereunder,
and
(b) does not and will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading.
(3) The Commission has not issued any order preventing or suspending
the use of any Preliminary Prospectus relating to the proposed offering of
the Shares nor instituted or, to the knowledge of the Company, threatened
to institute proceedings for that purpose.
(4) The Company has been duly formed under the laws of the Islands of
Bermuda and is an existing company in good standing under said laws with
full power and authority to enter into and perform its obligations under
this Agreement.
(5) The execution, delivery and performance of this Agreement by the
Company and the consummation by the Company of the transactions
contemplated hereby have been duly authorized by all necessary corporate
action of the Company this Agreement, when duly executed and delivered by
the Purchaser, will constitute a valid and legally binding instrument of
the Company, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
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moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general principles of equity.
(6) The Rights Shares (including the Standby Shares, if any) have been
duly authorized by the Company, and when issued and delivered by the
Company against payment of the Subscription Price therefor will be validly
issued, fully paid and nonassessable. The Rights have been duly authorized
by the Company, and when issued and delivered by the Company, will
constitute valid and legally binding obligations of the Company,
enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
(7) The execution and delivery of this Agreement, the consummation by
the Company of the transactions contemplated hereby and in the Prospectus
and the compliance by the Company with the terms hereof do not and will not
conflict with, or result in a breach or violation of, any of the terms or
provisions of, or constitute a default under, (a) the Memorandum of
Association or Bye-laws of the Company, or any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company
is a party or by which any of its properties or assets are bound, with such
exceptions as would not have a material adverse effect on the financial
condition of the Company, or (b) any applicable law, rule, regulation,
judgment, order or decree of any government, governmental instrumentality
or court having jurisdiction over the Company or any of its properties or
assets.
(8) No consent, approval, authorization, order, registration or
qualification of or with any government, governmental instrumentality or
court is required for the valid authorization, execution, delivery and
performance by the Company of this Agreement, the issue of the Rights and
the Rights Shares (including the Standby Shares, if any) or the
consummation by the Company of the other transactions contemplated by this
Agreement, except such as (a) have been obtained on or before the date
hereof or (b) if not required prior to the date hereof, will have been
obtained on or before the Closing Date.
B. The Purchaser hereby represents and warrants to the Company, as of the
date hereof and at and as of the Closing Time, as follows:
(1) The Purchaser has been duly formed under the laws of the Islands
of Bermuda and is an existing company in good standing under said laws with
full power and authority to enter into and perform its obligations under
this Agreement.
(2) The execution, delivery and performance of this Agreement by the
Purchaser and the consummation by the Purchaser of the transactions
contemplated hereby have been duly authorized by all necessary corporate
action of the Purchaser and this Agreement, when duly executed and
delivered by the Company, will constitute a valid and legally binding
agreement of the Purchaser, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general principles of equity.
(3) The Purchaser is not (i) a member of the National Association of
Securities Dealers, Inc. ("NASD"), (ii) an officer, director, general
partner, employee or agent of any NASD member, (iii) associated with any
NASD member or (iv) an immediate family member of any such person.
(4) The Purchaser acknowledges that, upon its receipt of the Standby
Shares, such shares will constitute "restricted securities" within the
meaning of Rule 144(a)(3) under the Securities Act for the purposes of any
resale by the Purchaser of such Standby Shares.
(5) The Purchaser shall not, directly or indirectly, sell, pledge or
otherwise dispose of any Standby Shares in one transaction or series of
transactions except (a)(i) pursuant to a registration statement that has
been declared effective under the Securities Act or (ii) in compliance with
an available exemption from registration under the Securities Act and (B)
in compliance with the applicable securities laws of any state of the
United States or any other applicable jurisdiction.
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(6) The Purchaser is acquiring the Standby Shares for its own account
without any view to, and not for offer or sale in connection with, any
distribution of the Standby Shares in violation of the Securities Act.
VI. CLOSING CONDITIONS.
A. The obligations of the Company to consummate its issuance and sale of
the Standby Shares shall be subject to the conditions that (1) all
representations and warranties and other statements of the Purchaser are, as of
the date hereof and at and as of the Closing Time, true and correct in all
material respects, (2) the Purchaser shall have performed in all material
respects all of its obligations hereunder to have been performed at or prior to,
the Closing Time, and (3) no stop order suspending the effectiveness of the
Registration Statement or any amendment or supplement thereto shall have been
issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission.
B. The obligations of the Purchaser to the consummate its purchase of the
Standby Shares shall be subject to the conditions that (1) all representations
and warranties and other statements of the Company are, as of the date hereof
and at and as of the Closing Time, true and correct in all material respects,
(2) the Company shall have performed in all material respects all of its
obligations hereunder to have been performed at or prior to the Closing Time,
and (3) no stop order suspending the effectiveness of the Registration Statement
or any amendment or supplement thereto shall have been issued and no proceeding
for that purpose shall have been initiated or threatened by the Commission.
VII. TERMINATION.
Either of the parties hereto may terminate this Agreement if the
transactions contemplated hereby are not consummated by December 31, 1997
through no fault of such party. In addition, this Agreement shall terminate upon
mutual consent of the parties hereto. The Company and the Purchaser hereby agree
that any termination of this Agreement pursuant to this Section 6, or the
termination of the Rights Offering for any reason whatsoever by the Company
(other than termination in the event of a breach of this Agreement by the
Purchaser or misrepresentation of any of the statements made herein by the
Purchaser) shall be without liability of the Company or the Purchaser.
VIII. GOVERNING LAW.
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York without regard to principles of conflicts of laws.
IX. ENTIRE AGREEMENT.
This Agreement represents the entire understanding of the parties with
respect to the matters addressed herein and supersedes all prior written and
oral understandings concerning the subject matter hereof.
X. EXECUTION IN COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but all such respective counterparts shall
together constitute but one and the same instrument.
XI. ATTORNEYS' FEES.
In the event of any suit or other proceeding to construe or enforce any
provision of this Agreement, or otherwise in connection with this Agreement, the
prevailing party's reasonable attorneys' fees and costs (in addition to all
other amounts and relief to which such party may be entitled) shall be paid by
the other party, whether or not such suit or proceeding is prosecuted to
judgment.
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IN WITNESS WHEREOF, and intending to be legally bound, the Company and the
Purchaser has each signed or caused to be signed its name as of the day and year
first above written.
COMPANY
GLOBALSTAR TELECOMMUNICATIONS LIMITED
Xxxxx Xxxxx
00 Xxxxx Xxxxxx
Xxxxxxxx XX00
Xxxxxxx
By:
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Name:
Title:
PURCHASER
LORAL SPACE & COMMUNICATIONS LTD.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
By:
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Name:
Title:
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