EXHIBIT 99.2
PLAN SUPPORT AGREEMENT
PLAN SUPPORT AGREEMENT (this "Agreement") by and among Globalstar,
L.P. ("Globalstar"), Loral Space & Communications Ltd., on behalf of itself and
on behalf of all entities identified in subclauses (i) through (xxi) on Schedule
A to the Memorandum of Understanding dated February 15, 2002 (the "MOU"), a copy
of which is annexed hereto as Annex I ("Loral"), Columbia Ventures Corp.
("Columbia"), Loeb Partners Corp. ("Loeb"), Stonehill Capital Management, LLC
("Stonehill") and Blue River LLC ("Blue River"; collectively with Loral,
Columbia, Loeb, Stonehill and Blue River, the "Parties in Interest").
W I T N E S S E T H
WHEREAS, Globalstar and the Parties in Interest have engaged in
negotiations regarding the treatment of claims and equity interests in
connection with a potential voluntary chapter 11 bankruptcy case (the "Chapter
11 Cases") to be filed by Globalstar in the United States Bankruptcy Court for
the District of Delaware (the "Bankruptcy Court");
WHEREAS, Globalstar and the Parties in Interest have reached an
agreement on the principal terms regarding (i) the treatment of certain claims
and equity interests, the terms and conditions of which are set forth in MOU and
(ii) other terms respecting a restructuring of Globalstar;
WHEREAS, Columbia, Loeb, Stonehill and Blue River are holders of
certain of Globalstar's 11.375% Senior Notes due 2004, 11.25% Senior Notes due
2004, 10.75% Senior Notes due 2004 and 11.5% Senior Notes due 2005
(collectively, the "Senior Notes"); and
WHEREAS, Columbia, Loeb, Stonehill and Blue River have formed an ad
hoc committee of holders of the Senior Notes (the "Informal Noteholders
Committee"), which committee has retained Akin, Gump, Strauss, Xxxxx & Xxxx
L.L.P. as its counsel and Jefferies & Co., Inc. as its financial advisors; and
WHEREAS, the Informal Noteholders Committee currently holds
approximately 15% of the outstanding aggregate principal amount of the Senior
Notes; and
WHEREAS, Globalstar and the Parties in Interest wish to formalize
their intent to support a proposed plan of reorganization under title 11 of the
United States Code (the "Bankruptcy Code"), that incorporates the terms and
conditions of the MOU (the "Proposed Plan") and addresses other issues not
addressed by the MOU including, without limitation, mutually acceptable
treatment of executory contracts involving certain of the Parties in Interest;
NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties hereto hereby agree as follows:
1. Definitions. Capitalized terms used but not defined herein shall
have the meanings ascribed thereto in the MOU.
2. Mutual Support. (a) Subject to and upon the terms and conditions
set forth herein, including Section 4, each of Globalstar and the Parties in
Interest shall
(i) negotiate the Proposed Plan and the other documents contemplated hereby and
thereby in good faith, (ii) subject to the completion and execution of
reasonably acceptable definitive documentation, use its commercially reasonable
efforts to cause the Bankruptcy Court to enter an order (the "Confirmation
Order") that is consistent with and supports the terms and conditions of the
Proposed Plan, and is otherwise in form and substance reasonably satisfactory to
Globalstar and the Parties in Interest confirming the Proposed Plan in
accordance with Section 1129 of the Bankruptcy Code, (iii) subject to the
completion and execution of reasonably acceptable definitive documentation,
otherwise use its commercially reasonable efforts to take, or cause to be taken,
all actions, and to do, or cause to be done, all things, necessary, proper or
advisable under applicable laws and regulations to consummate and make effective
the transactions contemplated hereby and by the Proposed Plan at the earliest
practicable date, and (iv) subject to the completion and execution of reasonably
acceptable definitive documentation, use its commercially reasonable efforts to
prevent confirmation of any plan for Globalstar other than the Proposed Plan and
refrain from taking any actions in support or furtherance of confirmation of any
plan for Globalstar other than the Proposed Plan, and refrain from inducing or
encouraging the submission of any proposal or offer from any person or entity
relating to any alternative terms for a plan of reorganization under the
Bankruptcy Code involving Globalstar that is inconsistent with the Proposed Plan
or any plan of reorganization contemplated by the New Money Proposal as defined
in Section 4 hereof. Notwithstanding the foregoing, nothing contained herein
shall preclude Globalstar and the Parties in Interest from (A) seeking,
discussing and negotiating an investment in Globalstar by any of the parties to
this Agreement or by any other party, consistent with the terms of the New Money
Proposal contemplated by Section 4 hereof and/or (B) supporting the confirmation
of a plan of reorganization (including a plan other than the Proposed Plan) that
is consistent with the terms of the New Money Proposal contemplated by Section 4
hereof.
(b) Each of Globalstar and the Parties in Interest further agrees
that, subject to negotiation, execution and delivery of documentation reflecting
the terms hereof and otherwise reasonably acceptable to it, and subject further
to Section 4 of this Agreement, it will (i) vote to accept the Proposed Plan,
recommend that other creditors vote to accept the Proposed Plan (it being
understood that in the case of the Informal Noteholders Committee and, to the
extent that the members of the Informal Noteholders Committee represent a
majority of the membership of an official committee appointed in the Chapter 11
Cases, such official committee, such recommendation shall be in the form of a
letter or statement included in the Disclosure Statement (as defined below)
recommending that other creditors vote to accept the Proposed Plan) and not
agree to, consent to, or vote for any plan of reorganization or plan of
liquidation other than the Proposed Plan, and (ii) not commence any proceeding
or prosecute any objection to oppose or object to the Proposed Plan or to the
related disclosure statement, and will not take any action that would delay
confirmation or approval, as applicable, of the Proposed Plan and the related
disclosure statement.
(c) The obligations of Globalstar and the Parties in Interest
hereunder shall not be interpreted so as to require them to act in a manner
which is not consistent
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with their fiduciary duties under the Bankruptcy Code or other applicable law or
agreement.
(d) Each of Globalstar and the Parties in Interest agree to
negotiate in good faith the treatment of any executory or other contracts or
agreements not expressly addressed by the MOU.
3. Diligence.
(a) Globalstar and Loral shall provide the Informal
Noteholders Committee with copies, and a list, of every contract, agreement,
memorandum of understanding or similar document between Loral and its
affiliates, on the one hand, and Globalstar and its subsidiaries and affiliates
(as defined under Rule 12b-2 of the Securities and Exchange Act of 1934) (which,
for purposes of this Section shall be deemed to include GUSA and GCL as
affiliates of Globalstar for so long as Globalstar's and/or NewCo's proposed
acquisition of GUSA and GCL has not been cancelled in accordance with the terms
and conditions of that certain Assignment and Assumption Agreement dated as of
December 18, 2001 between Vodafone Americas Asia Inc. and Globalstar
Corporation), on the other hand (the "Globalstar/Loral Documents"), provided,
however, that in no event shall any entity whose relationship with Globalstar
arises solely from contracts arising in the ordinary course of business be
considered an affiliate of Globalstar. For the purposes of this Section 3,
"Globalstar/Loral Documents" shall expressly not include (A) the Strategic
Agreement, dated as of March 23, 1994, between Loral/Qualcomm Partnership, L.P.,
and Airtouch Communications, (B) the Memorandum of Understanding -- US
Government and Aviation -- GUSA and Loral/Qualcomm Partnership, dated as of
November 1999, and (C) Globalstar USA, Inc. Globalstar Service Reseller
Agreement with Government Services, L.L.C. dated as of April 1, 2000
(collectively, excluding any amendments, supplements or modifications thereto,
the "Strategic Agreement Documents"). Globalstar and Loral shall deliver the
Globalstar/Loral Documents to the Informal Noteholders Committee as soon as
practicable after the date hereof (the date on which such documents are provided
being hereafter referred to as the "Delivery Date"). The Delivery Date shall be
not more than thirty (30) days after the date hereof, except that Globalstar or
Loral may extend such deadline for not more than an additional thirty (30) days
by giving written notice thereof to the Informal Noteholders Committee prior to
the end of the initial thirty-day period. Upon their delivery of the
Globalstar/Loral Documents, Globalstar and Loral shall represent, to the best of
their respective knowledge following due inquiry, that the documents provided to
the Informal Noteholders Committee constitute all of the Globalstar/Loral
Documents.
(b) The Informal Noteholders Committee shall have thirty (30)
days (the "Diligence Period") from the receipt of the Globalstar/Loral Documents
to review such documents. The Informal Noteholders Committee (as a group) shall
have the right to terminate this Agreement at any time prior to the expiration
of the Diligence Period, which right shall not apply with respect to the
Strategic Agreement Documents, if it determines that any of the Globalstar/Loral
Documents have or would reasonably be likely to have a material adverse effect
on the business, condition (financial or otherwise), prospects, operations,
assets or liabilities of NewCo (a "Material Adverse Effect"). The right of the
Informal Noteholders Committee (as a group) to terminate this Agreement as set
forth in this Section shall terminate on the expiration of
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the Diligence Period. Notwithstanding the foregoing, (A) if a Globalstar/Loral
Document not listed and provided to the Informal Noteholders Committee on the
Delivery Date is identified subsequent to the expiration of the Diligence Period
but prior to the approval of the Disclosure Statement (as defined below) by the
Bankruptcy Court, and the Informal Noteholders Committee (as a group) reasonably
determines that such document, individually or in combination with any other
Globalstar/Loral Document, has or would reasonably be likely to have a Material
Adverse Effect, then the Informal Noteholders Committee (as a group) may
thereupon terminate this Agreement if Loral does not, within fifteen (15) days
of its notification by the Informal Noteholders Committee of such determination,
either terminate and disavow such document (without any liability or obligation
of Globalstar, NewCo or Loral and its affiliates) or amend such document in a
manner reasonably acceptable to the Informal Noteholders Committee so as to
cause such document not to have a Material Adverse Effect; and (B) if a
Globalstar/Loral Document not listed and provided to the Informal Noteholders
Committee on the Delivery Date is identified subsequent to the approval of the
Disclosure Statement by the Bankruptcy Court, and the Informal Noteholders
Committee (as a group), prior to confirmation of the Proposed Plan, or the board
of directors of NewCo, thereafter, reasonably determines that such document,
individually or in combination with any other Globalstar/Loral Document, has or
would reasonably be likely to have a Material Adverse Effect, then Loral shall,
within thirty (30) days of its notification of such determination, either
terminate and disavow such document (without any liability or obligation of
NewCo or Loral and its affiliates) or amend such document in a manner reasonably
acceptable to the Informal Noteholders Committee or the NewCo board (as the case
may be) so as to cause such document not to have a Material Adverse Effect.
Notwithstanding the foregoing, nothing contained herein is intended to, or does,
in any manner, waive, limit, impair or restrict the ability and rights of Loral
to dispute, challenge and/or seek to enjoin, overturn and/or reverse, by
commencement of legal action, suit or proceeding, or otherwise, any
determination by the Informal Noteholders Committee and/or the board of
directors of NewCo, as applicable, that a document has or would reasonably be
likely to have a Material Adverse Effect.
(c) Globalstar and/or Loral shall, within five (5) business
days, provide the Informal Noteholders Committee or the NewCo Board (as the case
may be) with written notice and a true and complete copy of any contract or
agreement that would otherwise constitute a Globalstar/Loral Document (including
any amendments, supplements or modifications to any of the Strategic Agreement
Documents) entered into subsequent to the Delivery Date through and including
the effective date of the Proposed Plan (each, a "New Document"). In the event
that the Informal Noteholders Committee reasonably determines that any New
Document has or would reasonably be likely to have a Material Adverse Effect,
then all of the rights of the Informal Noteholders Committee to challenge and/or
to seek termination of any New Document and to take any other or further actions
in furtherance of its rights, by commencement of legal action, suit or
proceeding, or otherwise, are reserved in full, it being expressly understood
that such rights of the Informal Noteholders Committee do not include the rights
specifically granted to the Informal Noteholders Committee in Section 3(b) of
this Agreement.
4. New Money Proposal. To the extent that a New Money Proposal (as
defined below) is made to Globalstar and either of Loral or the Informal
Noteholders Committee (as a group) shall accept such New Money Proposal (the
"Accepting Party"), the other party shall
4
have 15 days to accept such New Money Proposal. If such other party shall have
failed to accept the New Money Proposal within such 15-day period (the "Failure
to Accept") or shall reject such proposal in writing within such 15-day period
(the "Rejection"), the Accepting Party shall have the right to terminate this
Agreement. Such right of termination shall terminate 15 days after the earlier
of the Failure to Accept or the Rejection. For purposes of this Agreement, "New
Money Proposal" shall mean a fully committed, non-contingent (other than
conditions to closing customary to a transaction of this nature) proposal for
the investment of a minimum of U.S. $50 million in NewCo (as defined in the MOU)
from a creditworthy investor, which proposal includes terms that (a) retain the
Release and Indemnification provisions in the MOU, (b) retain Loral's
contribution of the Loral Canadian Interest for a 3% interest in NewCo and (c)
provide that all recoveries are subject to pro-rata dilution, including by the
New Money Proposal.
5. Termination Events. This Agreement may be terminated by delivery
of a written notice to each of the other parties hereto as follows:
(a) by Globalstar, Loral and the Informal Noteholders
Committee (as a group), upon mutual agreement of Globalstar and all
Parties in Interest prior to entry of the Confirmation Order;
(b) by Globalstar, Loral or the Informal Noteholders Committee
(as a group), upon material breach of this Agreement by any other party
hereto;
(c) by Globalstar, Loral or the Informal Noteholders Committee
(as a group), upon the taking of an action materially inconsistent with
this Agreement or the terms and conditions of the MOU by any party hereto
pursuant to Section 2(c) of this Agreement;
(d) by Globalstar, Loral or the Informal Noteholders Committee
(as a group), upon entry of an order by the Bankruptcy Court confirming
any plan for Globalstar other than the Proposed Plan;
(e) by Globalstar, Loral or the Informal Noteholders Committee
(as a group), if holders of more than 20% in the aggregate principal
amount, on a per issue basis, of the Senior Notes that are not members of
the Informal Noteholders Committee shall take actions which are materially
adverse to the obligations hereunder of the respective members of the
Informal Noteholders Committee;
(f) by Globalstar, Loral or the Informal Noteholders Committee
(as a group), if there shall be any material amendment of, supplement to,
modification to, or severance of any provision of, the Proposed Plan which
is materially inconsistent with the terms and conditions of the MOU
(including, without limitation, a material amendment of, supplement to,
modification to, or severance of, the release and indemnification
provisions of the MOU), except if any such material amendment of,
supplement to, modification to, or severance of any provision of, the
Proposed Plan is consented to by all parties hereto;
(g) by Loral or the Informal Noteholders Committee (as a
group), if:
5
(i) Globalstar has not commenced the Chapter 11
Cases on or before February 15, 2002 (the
"Commencement Date");
(ii) the Proposed Plan and the related disclosure
statement (the "Disclosure Statement") shall
not have been filed by the Proponents
pursuant to sections 1121 and 1125 of the
Bankruptcy Code and Federal Rule of
Bankruptcy Procedure 3016 within 60 days of
the Commencement Date;
(iii) the Disclosure Statement shall not have been
approved by the Bankruptcy Court within the
earlier of (A) 60 days after the date the
Disclosure Statement is filed, and (B) 120
days after the Commencement Date, but in no
event shall the Disclosure Statement be
approved by the Bankruptcy Court prior to
the expiration of the Diligence Period;
(iv) the Confirmation Order shall not have been
entered within the earlier of (A) 75 days
after the date the Disclosure Statement is
approved, and (B) 195 days after the
Commencement Date; and
(v) the Proposed Plan shall not have become
effective as defined in the Proposed Plan
within the earlier of (A) 60 days after the
date of the Confirmation Order, and (B) 255
days after the Commencement Date.
(h) by the Informal Noteholders Committee (as a group)
pursuant to the terms of Section 3 hereof; and
(i) by Loral or the Informal Noteholders Committee (as a
group) pursuant to the terms of Section 4 hereof.
6. Rights of Termination.
(a) Written Notice of Termination. The right of termination
hereunder may be exercised by any party only by giving written notice,
signed on behalf of such party by its duly authorized officer (or, in the
case of the Informal Noteholders Committee, by a duly authorized member of
Akin, Gump, Straus, Xxxxx & Xxxx, L.L.P.), to the other party or parties;
provided, however, that if a party determines to exercise a right of
termination pursuant to Section 5(g), such party shall within 15 days
after the passing of the deadline contemplated in any of such sections
notify each other party in writing of its determination to terminate this
Agreement, and if such notice is not so given within such 15-day period,
such right of termination based upon the passing of such deadline shall be
deemed waived.
(b) Waiver of Right of Termination. The right of termination
hereunder may be waived by any party only by giving written notice, signed
on behalf of
6
such party by its duly authorized officer, to the other parties except as
provided in Section 6(a) above.
(c) No Prejudice to Rights. No exercise by any party of its
right to terminate this Agreement shall prejudice any party's rights and
remedies against the others for breach of its obligations under this
Agreement.
(d) Effect of Termination. Upon termination of this Agreement,
Globalstar shall promptly either (i) cause the Proposed Plan to be
withdrawn, if it has been filed, or (ii) amend the Proposed Plan and any
related disclosure statement to reflect the fact that the agreements
contained herein have terminated. In either event described in clauses (i)
or (ii) of this Section 6(d), neither Globalstar nor any Party in Interest
shall have any further obligations to support any of the terms and
conditions of the Proposed Plan.
(e) Survival of Provisions. The provisions of Sections 6 and 9
hereof shall survive termination of this Agreement.
(f) Interpretation of Certain Language. Except as specifically
qualified to the contrary herein, all references herein to (x) the
judgment, discretion, determination or consent of a party shall be
understood to mean the reasonable judgment, discretion, determination or
consent of such party, and (y) satisfaction of, or acceptability to, a
party shall be understood to mean the reasonable satisfaction of, or
reasonably acceptable to such party; provided, however, that any
determination by any party to waive a right (including a failure of a
condition) provided hereunder or under applicable law shall be within the
sole discretion of that party.
7. Entire Agreement. This Agreement and the Annexes hereto
constitutes the entire agreement between the parties and supersedes all prior
and contemporaneous agreements, representations, warranties, and understandings
of the parties, whether oral, written or implied, as to the subject matter
hereof.
8. Amendment or Waiver. This Agreement may be amended by the written
agreement of the parties hereto at any time prior to the substantial
consummation of the Proposed Plan; provided, however, that no supplement,
modification or amendment of this Agreement shall be binding unless executed in
writing by all of the parties hereto. No waiver of any provision of this
Agreement shall be valid or effective unless in writing and executed and
delivered by all parties to this Agreement adversely affected by such waiver to
the party or parties seeking such waiver. No waiver of any of the provisions of
this Agreement shall be deemed or constitute a waiver of any other provision of
this Agreement, whether or not similar, nor shall any waiver be deemed a
continuing waiver.
9. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO ITS CONFLICT OF LAWS PROVISIONS.
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10. Counterparts. This Agreement may be executed by facsimile
transmission and in any number of counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
11. No Assignment or Sale. No party may assign, transfer or delegate
any of its rights or obligations under this Agreement (i) without the prior
written consent of each other party to this Agreement, or (ii) unless otherwise
expressly permitted by this Agreement. Without in any manner limiting the scope,
extent or effect of the foregoing, the respective members of the Informal
Noteholders Committee shall not transfer, assign, sell or otherwise dispose of
their right, title and interest in and to, as applicable, the Senior Notes (and
any and all rights, claims and obligations associated therewith), and any such
transfer shall be void and of no force and effect unless and until such
transferee, assignee or buyer agrees in writing at the time of such transfer,
assignment or sale to be bound by this Agreement in its entirety without
revision. In the event of any such transfer, assignment or sale, the transferor,
assignor or seller, as the case may be, shall, within three business days
following such transfer, assignment or sale, provide written notice of such
transfer, assignment or sale to Loral and Globalstar, together with a copy of
the written agreement of the transferee, assignee or buyer to be bound by this
Agreement in its entirety without revision. Notwithstanding the foregoing, if a
member of the Informal Noteholders Committee is an investment manager of a
partnership, limited liability company or other similar entity, and such
Informal Noteholders Committee member is specifically and without discretion
required to liquidate its positions in the Senior Notes according to the terms
and conditions of its existing operating agreement, partnership agreement or
other bylaws or similar agreements, to meet a capital withdrawal by one or all
of such Informal Noteholders Committee member's investors, or be required by its
clearing broker, a bank or a securities regulator specifically and without
discretion to liquidate its position in the Senior Notes, then such sale shall
be permitted by such Informal Noteholders Committee member, upon three business
days' written notice to Loral and Globalstar specifying the particular basis of
the requirement that the Senior Notes be sold, to any third party without the
forgoing documents and approvals.
12. Representations and Warranties.
(a) Each party represents and warrants to the other parties
that (i) it is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its formation, (ii) its execution,
delivery and performance of this Agreement are within the power and
authority of such party and have been duly authorized by such party and
that no other approval or authorization is required, (iii) this Agreement
has been duly executed and delivered by it and constitutes its legal,
valid and binding obligation, enforceable in accordance with the terms
hereof, and (iv) none of the execution and delivery of this Agreement or
compliance with the terms and provisions hereof will violate, conflict
with or result in a breach of, its certificate of incorporation or bylaws
or other constitutive document, any applicable law or regulation, any
order, writ, injunction or decree of any court or governmental authority
or agency, or any agreement or instrument to which it is a party or by
which it is bound or to which it is subject.
(b) Each member of the Informal Noteholders Committee further
represents and warrants, as applicable, that (i) it holds the principal
amount, on a per
8
issue basis, of Senior Notes as set forth next to its name on the
signature page hereof, (ii) except as contemplated herein or in the MOU,
it has not transferred, assigned, sold or otherwise disposed of, or
entered into any agreement (whether written or oral) to transfer, assign,
sell or otherwise dispose of, its rights title and interest in and to the
Senior Notes which it holds, and (iii) except with respect to the Proposed
Plan described in this Agreement, it has not consented to and is not
currently supporting or participating in the formulation of, and has not
entered into any agreement (whether written or oral) with respect to, (x)
any other plan of reorganization for Globalstar or (y) the sale of all or
substantially all of the assets of Globalstar or all or substantially all
of the stock to be issued pursuant to the Proposed Plan.
(c) Loral represents and warrants, as applicable, that except
with respect to the Proposed Plan described in this Agreement, it has not
consented to and is not currently supporting or participating in the
formulation of, and has not entered into any agreement (whether written or
oral) with respect to, (x) any other plan of reorganization for Globalstar
or (y) the sale of all or substantially all of the assets of Globalstar or
all or substantially all of the stock to be issued pursuant to the
Proposed Plan.
13. Notices. Any notice required or desired to be served, given or
delivered under this Agreement shall be in writing, and shall be deemed to have
been validly served, given or delivered if provided by personal delivery, or
upon receipt of fax delivery, as follows:
(a) if to Globalstar, to Xxxx X. Xxxxx, Esq., Xxxxx, Day,
Xxxxxx & Xxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, fax:
000-000-0000;
(b) if to Loral, to Xxxx Xxxxxx, Esq., Xxxxxxx Xxxx &
Xxxxxxxxx, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, fax:
000-000-0000; and
(c) if to the Informal Noteholders Committee, to Xxxxxx X.
Xxxxxx, Esq., Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P., 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, fax: 000-000-0000.
14. Headings. The headings of this Agreement are for reference only
and shall not limit or otherwise affect the meaning hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first written above.
GLOBALSTAR, L.P.
By: /S/ XXXXXXX X. XXXXXXX
-------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
LORAL SPACE & COMMUNICATIONS LTD.,
on behalf of itself and all entities
identified in subclauses (i) through
(xxviii) on Schedule A to the MOU
By: /S/ XXXXXXX X. XXXXXXXX
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Chairman and Chief Executive
Officer
COLUMBIA VENTURES CORP.
Aggregate Principal Amount:
of 11.375% Senior Notes: $28,000,000
of 11.25% Senior Notes: $24,000,000
of 10.75% Senior Notes: $48,000,000
of 11.5% Senior Notes: $46,000,000
By: /s/ XXXXXXX X. XXXXXXXX XX.
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxx Xx.
Title: Chief Executive Officer
LOEB PARTNERS CORP.
Aggregate Principal Amount:
of 11.375% Senior Notes: $21,045,000
of 11.25% Senior Notes: $ 7,980,000
of 10.75% Senior Notes: $ 1,263,000
of 11.5% Senior Notes: $10,750,000
By: /s/ XXXXXX XXXXXX
-------------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
STONEHILL CAPITAL MANAGEMENT, LLC,
on behalf of affiliated accounts
Aggregate Principal Amount:
of 11.375% Senior Notes: $9,000,000
of 11.25% Senior Notes: $ --
of 10.75% Senior Notes: $1,000,000
of 11.5% Senior Notes: $ --
By: /s/ XXXX XXXXXXXX
-------------------------------------
Name: Xxxx Xxxxxxxx
Title: Managing Member
BLUE RIVER, LLC
Aggregate Principal Amount:
of 11.375% Senior Notes: $ 8,735,000
of 11.25% Senior Notes: $40,050,000
of 10.75% Senior Notes: $ --
of 11.5% Senior Notes: $ --
By: /s/ VAN X. XXXXXXXXXX
-------------------------------------
Name: Van X. Xxxxxxxxxx
Title: Managing Member
GLOBALSTAR, L.P.
MEMORANDUM OF UNDERSTANDING -- PROPOSED RESTRUCTURING
FEBRUARY 15, 2002
This Memorandum of Understanding (the "MOU") describes the principal terms of a
proposed restructuring of the outstanding indebtedness and liabilities of, and
partnership interests in, Globalstar, L.P., a Delaware limited partnership
("Globalstar" or the "Company"). Certain of the transactions relating to the
reorganization described herein may be implemented outside of a plan of
reorganization for the Company (the "Plan") under chapter 11 of title 11 of the
United States Code, 11 U.S.C. Sections 101 et seq. (the "Bankruptcy
Code"). Other transactions described herein may only be implemented under a
Plan. The transactions described in this MOU are subject in all respects to,
among other things, definitive documentation, including the Plan, appropriate
disclosure materials and related documents.
General The Plan will provide for the conversion of all
allowed prepetition indebtedness and liabilities
of the Company into 97% of the equity (subject to
dilution) in a newly formed Delaware corporation
("NewCo"). Under the Plan, all ordinary
partnership interests and both classes of
redeemable preferred partnership interests in
Globalstar (including all ordinary partnership
interests which are reserved to provide for
purchases of interests by Globalstar
Telecommunications Limited ("GTL") upon exercise
of options or warrants to purchase GTL common
stock) will be cancelled for no consideration.
Contribution of Assets All of Globalstar's currently existing assets
(including the 2 GHZ space station license held by
Globalstar and any other licenses not held by
service providers used to operate the Big XXX
satellite system) will be contributed to NewCo or
a wholly-owned subsidiary of NewCo.
The Globalstar Big XXX space station license held
by L/Q Licensee, Inc. will be contributed to NewCo
or a wholly-owned subsidiary of NewCo.
Potential Cash Investment In connection with the consummation of the Plan, a
rights offering (the "Rights Offering) will be
made to GTL's public preferred and common
shareholders (the "GTL Shareholders") and the
Company's creditors to acquire up to 15% of the
common stock of NewCo as follows:
- Series A: Other Creditors and
Noteholders (each as defined below) may
invest to acquire up to 7.5% of the
common stock of NewCo in the aggregate
- Series B: GTL Shareholders may invest to
acquire up to 7.5% of the common stock
of NewCo in the aggregate. This right
shall be allocated between the
preferreds and common on a conversion of
preferred shares to common stock of 5:1.
- Globalstar, Loral (as defined below) and
the informal committee of Noteholders
(the "Informal Committee") will, in good
faith and using
their commercially reasonable efforts,
negotiate an agreement regarding the
pre-money valuation for NewCo, which
valuation will be reflected by the NewCo
common stock sold in the Rights
Offering. If the parties are unable to
reach an agreement on valuation, there
will not be a Rights Offering.
- To the extent that one of the series is
undersubscribed, any of the participants
of the other series may oversubscribe so
that the aggregate subscription shall
not exceed 15% of the common stock of
NewCo.
Contributing Service Certain service providers will contribute their
Providers businesses and all assets associated with the
operations of their businesses free and clear of
all liens, claims and encumbrances, and will
provide certain financial support (to be
determined), to Globalstar or NewCo or one of
their wholly owned subsidiaries (collectively, the
"Contributing Service Providers"). The terms under
which such transfers will be made (certain of
which may be consummated before Globalstar
commences a chapter 11 case under the Bankruptcy
Code) will be governed by separate documentation
and structured to ensure that the substance of the
benefits associated with licenses, PSTN
interconnect agreements and other tangible and
intangible assets required to operate the
businesses of the Contributing Service Providers
are transferred to Globalstar, NewCo or one of
their wholly-owned subsidiaries in a manner that
is fully effective and enforceable against the
applicable counter-parties to the respective
agreements. The Contributing Service Providers
will be required to provide an indemnity from a
creditworthy party for the benefit of Globalstar
or NewCo and their affiliates, as applicable, with
respect to any and all liabilities not expressly
transferred or assumed.
For the purposes of this MOU, the Contributing
Service Providers shall include:
- Vodafone Limited (including any
affiliates, "Vodafone"), with respect to
its 100% interest in GUSA, 50.1%
interest in Globalstar Canada Satellite
Co. and 100% interest in Globalstar
Caribbean Ltd.
- Loral Space & Communications Ltd.
(including any affiliates, "Loral"),
with respect to its 49.9% interest in
Globalstar Canada Satellite Co.,
ATSS/Loral Netherlands B.V. and any
other equity interests or contractual
rights primarily relating to the
ownership or operation of Globalstar
gateways or service providers in Canada
(the "Loral Canadian Interest"). The
principal terms for Loral's contribution
of the Loral Canadian Interest are as
follows:
(i) Loral's contribution of the Loral
Canadian Interest shall be effected
pursuant to the Plan;
-2-
(ii) Loral will receive a 3% equity
interest in NewCo (prior to dilution by
the IGO Option Plan and the Management
Option Plan referred to below) on
account of the contribution of the Loral
Canadian Interest;
(iii) the credit facility between
Globalstar Canada Co. and the Royal Bank
of Canada ("RBC") (including any
replacement bank(s) that Loral and/or
Globalstar secures in the event the
credit agreement with RBC is not
renewed) will remain in place for up to
four years following consummation of the
Plan and Loral will continue to maintain
its credit support for the credit
agreement in the form of a letter of
credit, currently estimated at C$15
million. It is anticipated that Loral's
obligation to provide credit support
will be reduced from time to time as the
credit facility is paid down in the
ordinary course of operations of NewCo.
Effective on consummation of the Plan,
Loral shall provide a complete waiver
and release of any and all obligations
or liabilities of Globalstar Canada Co.
("GCC"), and any and all indirect
successor obligations or liabilities, if
any, of Newco or its subsidiaries, under
that certain Agreement to Issue
Guarantee dated September 15, 1997 among
GCC, Loral, Airtouch Satellite Services,
Inc. and Airtouch Communications, Inc.
or any other agreement under which GCC
or the other companies contained in the
meaning of "Loral Canadian Interest" or
Newco or its subsidiaries are obligated
to reimburse Loral for payments it may
make or liability it may incur in
connection with its credit support of
the RBC credit facility;
(iv) to the extent amounts due to
Globalstar L.P. from Globalstar Canada
Co. in connection with the gateway
procurement contract are attributable to
Loral's ownership interest in Globalstar
Canada Co., such amounts not to exceed
$2.5 million shall be subject to offset
against amounts otherwise due prior to
the commencement of Globalstar's chapter
11 cases by Globalstar L.P. or any of
its subsidiaries to Loral or any of its
subsidiaries; and
(v) Loral will provide an indemnity to
NewCo to cover 49.9% of the liabilities
of Globalstar Canada Satellite Co. and
to cover Loral's proportionate share of
the liabilities of the other Globalstar
Canadian companies or the other
companies contained in the meaning of
"Loral Canadian Interest" in which it
has an interest, in either case, which
liabilities (i) arise or accrue and (ii)
are not expressly transferred or
assumed, in each case, as of the date of
consummation of the Plan (it being
understood that such indemnity shall not
apply to trade liabilities arising in
the ordinary course of business).
There may be additional Contributing Service
Providers in the future. The terms of such
additional rollup transactions shall be negotiated
on a case-by-case basis.
-3-
IGOs Certain service providers that do not constitute
Contributing Service Providers may choose to
continue to operate as independent gateway
operators ("IGOs") and purchase wholesale airtime
(at rates described in Globalstar's business plan)
from Globalstar (and/or after the Plan is
consummated, from NewCo) and resell it in their
existing territories. Such future IGO
relationships will be governed by new agreements
between Globalstar (subject to the consent of
Loral and the Informal Committee solely to the
extent such agreements are to be entered into
after execution of this MOU and prior to
commencement of Globalstar's chapter 11 cases) or
NewCo (subject to Board approval), as the case may
be, and the respective IGOs that will contain
terms relating to, among other things,
coordination of rates, billing and the
non-exclusive nature of their rights to provide
Globalstar services in their respective
territories.
Strategic Agreement All rights of the parties hereto in respect of the
following agreements shall be reserved in full:
(i) the Strategic Agreement, dated as of March 23,
1994, between Loral/Qualcomm Partnership, L.P.,
and Airtouch Communications, (ii) the Memorandum
of Understanding - US Government and Aviation --
GUSA and Loral/Qualcomm Partnership, dated as of
November 1999, and (iii) Globalstar USA, Inc.
Globalstar Service Reseller Agreement with
Government Services, L.L.C. dated as of April 1,
2000.
Treatment of Claims; As of December 31, 2001, the fixed, liquidated
Releases aggregate claim of Loral and the Loral Entities
identified in subclauses (i) through (xxi) on
Schedule A hereto against Globalstar is estimated
to be $887 million. This estimate excludes
contingent and/or unliquidated amounts owing to
Loral under executory or other contracts. All
entities referred to in Schedule A hereto are
collectively referred to herein as the "Loral
Entities."
Nothing herein shall prejudice (i) any rights of
setoff held by Loral in respect of any claims by
or against Globalstar or any of its affiliates,
nor (ii) the right, if any, of any party to
contest any such alleged setoff rights except as
provided in clause (iv) above under "Contributing
Service Providers".
Confirmation of the Plan shall be conditioned on,
among other things, the Loral Entities' allowed
prepetition claims not exceeding $1.0 billion.
Subject to the terms of the next four paragraphs
of this caption, all unsecured claims, including
claims under vendor financing agreements
(notwithstanding the provisions of the next
paragraph), Senior Notes (as defined below),
credit facilities and other financing
arrangements, and claims arising under executory
or other contracts and unexpired leases, will be
treated pari passu; provided, however, that
nothing contained herein shall prevent Globalstar
from asserting actions for equitable subordination
and recharacterization of claims arising against
any parties not receiving Releases (as defined
below) pursuant to the terms and conditions of
this MOU.
Loral may be obligated to obtain necessary
consents and approvals required in connection with
compromise and settlement of the claims arising
under vendor financing agreements (the "Vendor
Financing Consents"),
-4-
which Vendor Financing Consents Loral shall use
commercially reasonable efforts to obtain. In the
event Loral is unable to obtain the Vendor
Financing Consents, Loral shall support the Plan
and comply in all respects with the terms of the
MOU, except that, it may not vote or compromise
claims arising from vendor financing agreements
requiring Vendor Financing Consents. Nothing
contained in the MOU shall affect any Loral
contractual obligation to seek collection of
amounts due with respect to vendor financing
agreements for which the Vendor Financing Consents
have not been obtained, including by filing a
proof of claim.
Subject to the terms of the remainder of this
paragraph, the Plan will provide for general
mutual releases (and waivers of equitable
subordination and recharacterization of claims
actions) (the "Releases") of claims of, or
directly or indirectly relating to or concerning,
Globalstar, including, without limitation, its
management and operations, among, for the benefit
of, and solely in the designated capacity of, the
following releasees: all current officers and
directors (including members of the General
Partners Committee), the Loral Entities, current
direct or indirect general and limited partners of
Globalstar, Contributing Service Providers, the
members of any official and informal committees of
creditors, the respective advisors of the
foregoing, and certain other parties to be agreed
upon. Any entity other than Qualcomm, Incorporated
("Qualcomm") that is entitled under the Plan to
receive equity in exchange for cancellation of any
indebtedness owed to such entity (the "Equity
Participation") and that elects to obtain a
Release will be required to forfeit 22.5% of the
aggregate Equity Participation such entity would
otherwise be entitled to receive in exchange for
cancellation of indebtedness under the Plan (the
"Release Election"). All such forfeitures of
Equity Participations shall be deemed to occur
simultaneously for the purpose of reallocating the
forfeited NewCo equity. Subject to and conditioned
upon the effectiveness of the Plan, any such
forfeited Equity Participation will be allocated
pro rata to the Other Creditors and Noteholders
that have not elected to obtain a release as
described above. Loral and the Loral Entities
identified in subclauses (i) through (xxi) on
Schedule A hereto shall make a Release Election
and any of the Loral Entities identified in
subclauses (xxii) through (xxviii) on Schedule A
may, in order to obtain a Release, make a Release
Election on or prior to the date of the disclosure
statement hearing. All current direct and indirect
affiliates, controlling shareholders, members,
managing members, general and limited partners,
subsidiaries, officers, directors, advisors and
professionals of each of the Loral Entities
identified in subclauses (i) through (xxviii) of
Schedule A hereto that makes a Release Election
shall also receive Releases.
Notwithstanding anything contained herein to the
contrary, the Releases shall not affect (a)
subject to applicable rights of offset (if any),
commercial claims, loans and trade obligations
(including without limitation all airtime
obligations) owed to Globalstar by any of the
parties receiving Releases, or (b) the obligations
of Loral described in subparagraphs (iii) and (v)
under the caption "Contributing Service Providers"
herein.
Releases will extend to the released entity, its
subsidiaries and affiliates, its controlling
shareholders, members and/or managing partners as
well as its
-5-
directors, officers, other employees, and
advisers. Releases will include the entire
discharge of Globalstar's and its debtor
affiliates' as of the effective date of the Plan
(which affiliates shall include without limitation
Globalstar Corp.) against such entities receiving
the Releases and the claims of all others who
participate in exchanges and distributions under
or pursuant to the Plan. For good and valuable
consideration, all of Globalstar's non-debtor
affiliates (which affiliates include without
limitation Globalstar Trak Pty Ltd., Globalstar
Holdings, Ltd., Globalstar Int'l Svcs Ltd.,
Xxxxxxxxxxx Holdings NV , Globalstar Offshore Co.,
Globalstar Canada Satellite Co., ATSS/Loral
Netherlands B.V., Vodafone Satellite Services,
Inc. and any additional Contributing Service
Providers (including without limitation Globalstar
USA, Inc. and Globalstar Caribbean, Ltd.) in which
Globalstar acquires a controlling interest through
the effective date of the Plan) shall also release
and discharge their claims against Loral and the
Loral Entities identified in subclauses (i)
through (xxi) on Schedule A hereto and such other
Loral Entities that make a Release Election on or
prior to the date of the disclosure statement
hearing, and covenant not to xxx on account of
such claims, by executing mutual general releases
and covenants not to xxx with Loral and the Loral
Entities identified in subclauses (i) through
(xxi) on Schedule A hereto and such other Loral
Entities that make a Release Election on or prior
to the date of the disclosure statement hearing.
Globalstar shall use its best efforts to have such
non-debtor affiliate releases approved by the
Bankruptcy Court, however, a failure to obtain
Bankruptcy Court approval shall in no manner
impair the validity and enforceability of such
mutual general releases and covenants not to xxx
as between and among the parties thereto.
The Releases shall be part of the Plan and the
Plan shall be confirmed by order of the Bankruptcy
Court.
The Releases are an integral and material
component of the compromises and settlements to be
embodied in the Plan and the Releases will not be
severable from the other terms and provisions of
the Plan.
NewCo shall have the authority to investigate and
pursue all causes of action against all parties
that do not expressly receive a Release.
The holders of all pre-petition unsecured claims
other than the holders of the Company's 11.375%
Senior Notes due 2004, 11.25% Senior Notes due
2004, 10.75% Senior Notes due 2004 and 11.5%
Senior Notes due 2005 (collectively, the "Senior
Notes") will collectively be referred to herein as
"Other Creditors," and the owners of the Senior
Notes will be collectively referred to herein as
the "Noteholders".
Nothing contained herein shall affect the rights
of the Company's officers and directors in respect
of their allowed indemnification claims, if any.
Notwithstanding anything contained herein to the
contrary, indemnification claims of the Company's
officers and directors as against Globalstar and
its subsidiaries and affiliates shall nonetheless
survive as part of any Plan (i) to the extent of
available D&O insurance coverage and (ii) for
purposes of defense and offset against any claims
asserted against such officers and
-6-
directors; provided, however, that such directors
and officers shall have no right to receive any
affirmative recovery from Globalstar on account of
such indemnification claims that are not allowed
claims as of the effective date of the Plan.
Ownership of NewCo 97% (prior to dilution by the IGO Option Plan and
the Management Option Plan referred to below) by
the Other Creditors and the Noteholders as a
group, distributed pro rata.
3% (prior to dilution by the IGO Option Plan and
the Management Option Plan referred to below) by
Loral (as described above)
An option plan for the IGOs will be created (the
"IGO Option Plan"), pursuant to which IGOs will
receive options or other rights to purchase up to
5% of the common stock of NewCo, prior to dilution
for the Management Option Plan outlined below. All
other terms and conditions with respect to the IGO
Option Plan shall be determined by the Board of
Directors of NewCo.
An option plan for management (the "Management
Option Plan") of NewCo will be created pursuant to
which options will be reserved for distribution to
management personnel (including Xxxxxxx Xxxx, in
his capacity as the Chairman of the Management
Committee described below) to purchase an
aggregate of up to 10% of the common stock of
NewCo on a fully diluted basis. All other terms
and conditions, including the amount, the exercise
price, the timing, and the vesting schedule, with
respect to the Management Option Plan shall be
determined by the Board of Directors of NewCo.
Board Composition; The board of directors of NewCo will consist of
Governance the following five individuals:
- 3 individuals designated by the Informal
Committee as a group
- 2 individuals designated by Loral
(including Xxxxxxx Xxxx as one of such
designees)
In order to maintain the business continuity of
the Globalstar enterprise, the operating
management of NewCo will be directed by a
Management Committee formed by Loral. Through the
Management Committee, Loral will provide strategic
direction as well as operating management in
connection with the day-to-day operations of NewCo
in a fashion consistent with the exercise of
management, oversight and review functions
previously performed by Loral through Globalstar's
managing general partner.
The Chairman of the Management Committee will be
Xxxxxxx Xxxx, who will have general control of and
supervision over the business and affairs of
NewCo. The CEO and other officers of NewCo will
report to the Management Committee, which will be
subject to the authority of, and report to, the
board of directors of NewCo on all matters.
Loral will contribute the services of the
Management Committee and will not charge NewCo
other than for (a) reimbursement of out-of-pocket
expenses
-7-
reasonably incurred and (b) a portion of the
compensation of Xxxxxxx Xxxx (who will serve as
the Chairman of the Management Committee)
equivalent to that portion of his total time spent
performing his duties as Chairman of the
Management Committee.
NewCo will indemnify and hold harmless Loral and
its affiliates and their respective officers,
directors, members, partners, shareholders,
employees and agents (each, an "Indemnitee") from
and against any and all liabilities, claims,
losses or damages incurred by or threatened
against an Indemnitee, as a party or otherwise,
arising out of Loral's management of the business
of NewCo as specified above, provided, however,
NewCo shall not be liable under the foregoing
indemnity for any loss, claim, damage, or
liability resulting from the willful misconduct or
gross negligence of any Indemnitee.
The Board of Directors of NewCo shall have the
authority to terminate the Management Committee at
any time and for any reason effective five days
after written notice to the Chairman of the
Management Committee. The Management Committee
shall have the right to terminate its role at any
time and for any reason effective thirty days
after written notice to the Board of Directors of
NewCo.
Concurrently with the execution of this MOU, each
party to this MOU will execute and deliver a
lockup agreement pursuant to which such party
will, among other customary things, agree to
support the Plan provided that its terms are
materially consistent with the terms of this MOU
and that no term is added that is materially
adverse to such party without such party's
consent. Except as otherwise provided herein, this
MOU and the obligations hereunder are subject to
the execution of mutually satisfactory definitive
documentation.
Qualcomm Notwithstanding anything herein to the contrary,
if, on or before the hearing date for approval of
the disclosure statement in respect of the Plan
(the "Qualcomm Agreement Date"), Qualcomm, Inc.
("Qualcomm") and Globalstar shall have reached
agreement on new contracts (on terms reasonably
acceptable to Globalstar, Qualcomm and the
Informal Committee) governing their on-going
relationship (including, without limitation,
addressing such terms as continued support
services for the Globalstar system, exclusivity
arrangements, the disposition of certain tangible
assets (including, without limitation, gateways
and handsets) and certain intellectual property
rights), then:
1. The board of directors of NewCo will
consist of the following five
individuals:
3 individuals designated by the
Informal Committee
1 individual designated by Loral
(Xxxxxxx Xxxx)
1 individual designated by Qualcomm
2. Qualcomm shall have the right to obtain
a release pursuant to the Release
Election provisions of the "Treatment of
Claims; Releases"
-8-
section above.
3. As of the Qualcomm Agreement Date,
Qualcomm's fixed, liquidated aggregate
claim against Globalstar shall be
estimated. The estimate shall exclude
contingent and unliquidated amounts
owing to Qualcomm under executory or
other contracts. Nothing herein shall
prejudice (i) any rights of set off held
by Qualcomm in respect of any claims by
or against Globalstar or any of its
affiliates, nor (ii) the right, if any,
of any party to contest any such alleged
setoff rights.
4. Confirmation of the Plan shall be
conditioned on, among other things,
Qualcomm's allowed prepetition claims
not exceeding an amount to be agreed
among Globalstar, Loral and the Informal
Committee.
Disclosure As soon as practicable following the execution of
this MOU, Globalstar will make public disclosure
of the material terms of this MOU, which shall
include filing, within two (2) business days of
execution of this MOU, this MOU and the related
Plan Support Agreement as exhibits to an 8-K
filing by Globalstar. Neither Loral nor any member
of the Informal Committee (acting individually or
as a group) shall issue any press release
concerning this MOU without prior approval of
Globalstar, which approval shall not be
unreasonably withheld.
Informal Committee To the extent that the members of the Informal
Committee constitute a majority of the initial
members of the official committee of unsecured
creditors appointed in Globalstar's Chapter 11
cases (the "Official Committee"), it being
understood that the members of the Informal
Committee will seek membership in the Official
Committee, all references to the Informal
Committee in this MOU shall be deemed to mean the
Official Committee. In the event that the members
of the Informal Committee do not constitute a
majority of the initial members of the Official
Committee, Globalstar shall (i) recognize the
continued existence of the Informal Committee for
so long as the Informal Committee is in existence
and is not disbanded, (ii) with respect to Akin,
Gump, Strauss, Xxxxx & Xxxx, L.L.P. ("AG"), as
counsel to the Informal Committee, (a) assume the
engagement letter dated February 21, 2001 as soon
as practicable during Globalstar's Chapter 11
cases, subject to Globalstar's right to
subsequently terminate the engagement letter
without penalty only in the event the Plan Support
Agreement is terminated or the Informal Committee
is not in existence or is disbanded, (b) pay, in
advance of Globalstar's Chapter 11 filing, all of
AG's reasonable fees and expenses outstanding as
of the date immediately preceding the filing of
Globalstar's Chapter 11 cases, and (c) pay, in
advance of Globalstar's Chapter 11 filing, AG an
advance payment of $300,000, which advance payment
shall become property of AG immediately upon
receipt subject to AG's obligation to return such
unused portion of the advance payment upon
completion and/or termination of AG's services on
behalf of the Informal Committee; and (iii) with
respect to Jefferies & Company, Inc.
("Jefferies"), as financial advisors to the
Informal
-9-
Committee, (a) assume the amended engagement
letter dated as of December 31, 2001 as soon as
practicable during Globalstar's Chapter 11 cases,
subject to Globalstar's right to subsequently
terminate the engagement letter without penalty
only in the event the Plan Support Agreement is
terminated or the Informal Committee is not in
existence or is disbanded, (b) pay, in advance of
Globalstar's Chapter 11 filing, all of Jefferies'
reasonable fees and expenses outstanding as of the
date immediately preceding the filing of
Globalstar's Chapter 11 cases, and (c) pay, in
advance of Globalstar's Chapter 11 filing,
Jefferies an advance payment of $300,000, which
advance payment shall become property of Jefferies
immediately upon receipt subject to Jefferies'
obligation to return such unused portion of the
advance payment upon completion and/or termination
of Jefferies' services on behalf of the Informal
Committee. In the event that (a) the Bankruptcy
Court allows AG and Jefferies to be retained to
represent the Official Committee and (b) the
Bankruptcy Court authorizes them to be paid
monthly upon the assumption of their respective
engagement letters, AG and Jefferies shall return
the unused portion of their respective advance
payments. Anything to the contrary
notwithstanding, all fees and expenses payable to
either Akin Gump or Jefferies for services
rendered to the Informal Committee in connection
with Globalstar's Chapter 11 cases shall be
subject to review and objection and shall be
subject to Bankruptcy Court approval under the
standards articulated in Section 330(a)(3) of the
Bankruptcy Code and the applicable guidelines
adopted by the Office of the United States Trustee
for the District of Delaware.
Governing Law This MOU will be construed and rights of the
parties hereto will be determined in all respects
according to the laws of the State of New York.
Definitive Documentation The parties hereto will use all commercially
reasonable efforts to expeditiously execute
definitive documentation required to implement
this MOU and to expeditiously pursue confirmation
of the Plan.
Non-Binding Effect Except as provided under "Definitive
Documentation" and "Disclosure," this MOU by
itself does not constitute a binding agreement
among the parties hereto.
Counterparts This MOU may be executed by facsimile transmission
and in any number of counterparts, each of which
shall be deemed an original, but all of which
together shall constitute one and the same
instrument.
[Signature Pages Follow]
-10-
IN WITNESS WHEREOF, this Memorandum of Understanding is hereby agreed
to by the undersigned parties.
GLOBALSTAR, L.P.
By: /s/ XXXXXXX X. XXXXXXX
------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
LORAL SPACE & COMMUNICATIONS LTD., on behalf of
itself and all entities identified in subclauses
(i) through (xxviii) on Schedule A hereto
By: /s/ XXXXXXX X. XXXXXXXX
------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Chairman and Chief Executive Officer
COLUMBIA VENTURES CORP.
By: /s/ XXXXXXX X. XXXXXXXX XX.
------------------------------------
Name: Xxxxxxx X. Xxxxxxxx Xx.
Title: Chief Executive Officer
LOEB PARTNERS CORP.
By: /s/ XXXXXX XXXXXX
------------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
STONEHILL CAPITAL MANAGEMENT, LLC, on behalf of
affiliated accounts
By: /s/ XXXX XXXXXXXX
------------------------------------
Name: Xxxx Xxxxxxxx
Title: Managing Member
BLUE RIVER, LLC
By: /s/ VAN X. XXXXXXXXXX
------------------------------------
Name: Van X. Xxxxxxxxxx
Title: Managing Member
-11-
SCHEDULE A -- "LORAL ENTITIES"
(i) Loral Space & Communications Ltd.
(ii) Loral Space & Communications Corporation
(iii) Loral/QUALCOMM Satellite Services, L.P.
(iv) Loral/QUALCOMM Partnership, L.P.
(v) Space Systems/Loral, Inc.
(vi) LGP (Bermuda) Ltd.
(vii) Loral/DASA Globalstar, L.P.
(viii) Loral General Partner, Inc.
(ix) Loral SpaceCom Corporation
(x) Loral Satellite, Inc.
(xi) L/Q Licensee, Inc.
(xii) Government Services, L.L.C.
(xiii) Loral CyberStar, Inc.
(xiv) Loral CyberStar Ltd.
(xv) CyberStar, L.P.
(xvi) Loral Orion, Inc.
(xvii) Loral Holdings Ltd.
(xviii) Loral Global Services N.V.
(xix) Globalstar do Brasil, S.A.
(xx) Loral/DASA do Brasil Ltda.
(xxi) Loral/DASA do Brasil Holdings Ltda.
(xxii) GlobalTel J.S.C.
(xxiii) ATTS/Loral Mexico, L.P.
(xxiv) Mexico Satellite LLC
(xxv) Globalstar de Mexico S. de X.X. de C.V.
(xxvi) Servicios Corporativos Alcance S.A. de C.V.
(xxvii) Globalstar Canada Holding Co.
(xxviii) Globalstar Canada Co.
(xxix) All current direct and indirect affiliates, controlling shareholders,
members, managing members, general and limited partners, subsidiaries,
officers, directors, advisors and professionals of the entities in
subclauses (i) through (xxviii) of this Schedule A to the extent that
such entities make a Release Election, acting in such capacities, but
specifically excluding Globalstar, L.P., Globalstar Capital
Corporation, Globalstar Services Company, Inc., Globalstar L.L.C. and
Globalstar Corporation.
-2-
