1
Exhibit 10.3
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT dated as of June 23, 1997 (this
"Agreement") among LORAL SPACE & COMMUNICATIONS LTD., a Bermuda company (the
"Company"), AEROSPATIALE SNI, a societe nationale industrielle organized under
the laws of France ("Aerospatiale"), and ALCATEL ESPACE, a societe anonyme
organized under the laws of France ("Alcatel" and, together with Aerospatiale,
the "Strategic Participants").
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. The following terms shall have the
meanings ascribed to them below:
"Affiliate", as applied to any Person, shall mean any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person. For the purpose of this definition "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person whether through the ownership of voting securities, by
contract or otherwise.
"Board of Directors" means the Board of Directors of the Company.
"Business Day" means each day other than Saturdays, Sundays and days
when commercial banks are authorized to be closed for business in New York, New
York.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the Common Stock, par value $.01 per share, of
the Company transferred to the Strategic Participants pursuant to the Exchange
Agreement, dated as of June 18, 1997, by and among the Company and the Strategic
Participants.
"Company" has the meaning set forth in the preamble of this
Agreement.
"Demand Offering" has the meaning set forth in Section 2.1(c).
"Excess Amount" means the number of Registrable Securities requested
by an SP Holder or SP Holders to be sold pursuant to Section 2.1(c) or 2.2 which
the managing Underwriter or Underwriters determines exceeds the largest number
of Registrable Securities which can successfully be sold in an orderly manner in
such offering within a price range acceptable to the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
2
"Holder" means each of the Strategic Participants for so long as it
owns any Registrable Securities, and such of its respective successors or
assigns who acquire Registrable Securities, directly or indirectly, from the
Strategic Participants, in each case for so long as such successors or assigns
own any Registrable Securities.
"Market Price" means with respect to any Registrable Security on any
date, (i) the last reported sale price of the Registrable Security on the
principal national securities exchange on which the class of Registrable
Securities is listed or admitted to trading or, if no such reported sale takes
place on any such day, the average of the closing bid and asked prices thereon,
as reported in The Wall Street Journal, or (ii) if such Registrable Security is
not listed or admitted to trading on a national securities exchange, the last
reported sales price on the NASDAQ National Market System or, if no such
reported sale takes place on any such day, the average of the closing bid and
asked prices thereon, as reported in The Wall Street Journal, or (iii) if such
Registrable Security is not quoted on such National Market System nor listed or
admitted to trading on a national exchange, then the average of the closing bid
and asked prices, as reported by The Wall Street Journal for the
over-the-counter market, or (iv) if there is no public market for such
Registrable Security, the fair market value of a share of such Registrable
Security as determined by a nationally recognized investment bank ("SP
Investment Bank") selected by one or both Strategic Participants, as applicable,
and a nationally recognized investment bank selected by the Company or, if such
investment banks are not able to agree, by a third nationally recognized
investment bank selected jointly by the SP Investment Bank and the investment
bank selected by the Company. All fees and expenses of such investment banks
(including the SP Investment Bank) shall be paid by the Company.
"Other Holder Notice" shall have the meaning set forth in Section
2.1(c).
"Person" means an individual or a corporation partnership, limited
liability company, trust, or any other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"Piggy-Back Offering" has the meaning set forth in Section 2.2.
"Registrable Security" means any share of Common Stock issued and
delivered to the Strategic Participants pursuant to the Exchange Agreement,
dated as of June 18, 1997, among the Company and the Strategic Participants,
until (i) it has been disposed of pursuant to the Shelf Registration Statement,
(ii) it is sold under circumstances in which all of the applicable conditions of
Rule 144 (or any similar provisions then in force) under the Securities Act are
met or it may be sold pursuant to Rule 144(k) or (iii) it has been otherwise
transferred, the Company has delivered a new certificate or other evidence of
ownership for it not bearing the legend required pursuant to this Agreement and
it may be resold without subsequent registration under the Securities Act.
"Requisite Share Number" means a number of Registrable Securities
equal, in the case of Aerospatiale, to not less than 2,925,000 shares of Common
Stock and, in the case of Alcatel, to not less than 3,150,000 shares of Common
Stock (as adjusted from time to time to
-2-
3
reflect stock splits, stock dividends, recapitalizations and similar
transactions), or such lesser number as constitutes all shares of Common Stock
then held by SP Holders in the aggregate.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Shelf Registration" means the registration effected pursuant to
the Shelf Registration Statement.
"Shelf Registration Statement" means the registration statement of
the Company, on Form S-3, filed with the Commission on May 5, 1997 with respect
to the Registrable Securities and other Loral securities (Registration No.
333-26517), and all amendments and supplements to such registration statement,
including post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all material incorporated by
reference therein.
"SP Holders" means the specific Strategic Participant that is
requesting a Demand Offering, together with each of such Strategic Participant's
Transferees, and, as applicable, any of the other Strategic Participant and its
Transferees that decide pursuant to Section 2.1(c) to participate in such Demand
Offering.
"Strategic Participants" shall have the meaning set forth in the
preamble of this Agreement.
"Trading Day" means with respect to any securities exchange or
securities market, each Monday, Tuesday, Wednesday, Thursday and Friday other
than any day on which securities are not traded on the applicable securities
exchange or in the applicable securities market.
"Transferee" means each of a Strategic Participant's successors or
assigns who acquire Registrable Securities, directly or indirectly, from such
Strategic Participant, in each case for so long as such successors or assigns
own any Registrable Securities.
"Underwriter" means a securities dealer who purchases any
Registrable Securities as principal in an underwritten offering and not as part
of such dealer's market-making activities.
"Withdrawal Election" means a Withdrawal Election as defined in
Section 2.3.
ARTICLE II
REGISTRATION RIGHTS
SECTION 2.1. (a) Shelf Registration. The Company shall use its
reasonable best efforts to keep the Shelf Registration Statement continuously
effective in order to permit the Prospectus forming part thereof to be usable by
Holders until the earlier of (i) the date as of which the Registrable Securities
shall not constitute restricted securities under Rule 144(k) of the Securities
Act or (ii) the date as of which all the Registrable Securities covered by the
Shelf Registration Statement have been sold pursuant to the Shelf Registration
Statement (in any such
-3-
4
case, such period being called the "Shelf Registration Period"). The Company
shall be deemed not to have used its reasonable best efforts to keep the Shelf
Registration Statement effective during the requisite period if, among other
things, it voluntarily takes any action that would result in Holders of
Registrable Securities covered thereby not to be able to offer and sell such
Registrable Securities during that period, unless such action is (A) required by
applicable law or (B) pursuant to Section 2.1(b) hereof, and in either case, so
long as the Company promptly thereafter complies with the requirements of
Section 3.1(e) hereof, if applicable.
(b) The Company may suspend the use of the Prospectus for a period
not to exceed fifteen (15) days (or such longer period as is reasonably
necessary under the circumstances) in any three (3) month period for valid
business reasons (not including avoidance of the Company's obligations
hereunder), including the acquisition or divestiture of assets, public filings
with the Commission, pending corporate developments and similar events.
(c) Demand for Underwritten Offering. At any time on or after the
date hereof, if a Strategic Participant so requests, the offering of Registrable
Securities pursuant to the Shelf Registration shall be in the form of an
underwritten offering ("Demand Offering"), provided that such Strategic
Participant (or any Transferee to whom such Strategic Participant has
transferred its right to request a Demand Offering), makes such request in
writing on behalf of SP Holders owning, individually or in the aggregate, at
least the Requisite Share Number and provided further that each Strategic
Participant and its Transferees may request a Demand Offering no more than once
in the aggregate. Such written request will specify the number of shares of
Registrable Securities proposed to be sold. The Company shall give written
notice of such request for a Demand Offering within 10 days after the receipt
thereof to all other Strategic Participants and their Transferees. Within 20
days after receipt of such notice by any Strategic Participant and its
Transferees, any of such Holders may request in writing that Registrable
Securities be included in the Demand Offering and the Company shall include in
the Demand Offering the Registrable Securities of any such Holder requested to
be so included. Each such request by such other Holders (each, an "Other Holder
Notice") shall specify the number of shares of Registrable Securities proposed
to be sold. Notwithstanding anything to the contrary herein, unless the
Strategic Participant making the request for a Demand Offering shall consent in
writing, no other party, including the Company, shall be permitted to offer
securities under any such Demand Offering, provided that such consent may not be
unreasonably withheld. In connection with a Demand Offering, a nationally
recognized underwriter selected by the Company and reasonably acceptable to the
Strategic Participant requesting the Demand Offering shall act as the
book-running managing Underwriter and the Company may select one or more
nationally recognized firms of investment bankers to act as co-manager or
managers, if any.
(d) Notice of Demand Offering. Upon receipt of a written request for
a Demand Offering in accordance with Section 2.1(c) and receipt of any Other
Holder Notices, the Company shall be entitled to deliver a notice (a "Purchase
Notice") to the SP Holders requesting inclusion of Registrable Securities in the
Demand Offering within 10 days of the date by which all Other Holder Notices
must have been delivered indicating that the Company intends to purchase all or
some portion of the Registrable Securities to be included in the Demand
Offering. The Purchase Notice shall set forth the number of shares of
Registrable Securities to be
-4-
5
purchased; provided that, if the Company elects to purchase less than all of the
Registrable Securities to be included in the Demand Offering, the SP Holders
shall be entitled to retain, and not to sell to the Company pursuant to this
Section 2.1(d), a number of such Registrable Securities equal to the Requisite
Share Number. The delivery of the Purchase Notice shall constitute a binding
contract among the Company and the SP Holders seeking to include Registrable
Securities in the Demand Offering to consummate the purchase and sale
transaction contemplated by the Purchase Notice on the terms set forth in this
Section 2.1(d).
(i) The per share purchase price for any such purchase
shall be the Market Price for the Registrable Securities on the
Trading Day immediately preceding the delivery of the written
request for the Demand Offering less the underwriting fees,
discounts and commissions (together, the "Underwriting Spread") that
would have been applicable to such Registrable Securities, taking
into account the contemplated manner of distribution, had such
Registrable Securities been included in the Demand Offering.
(ii) The closing shall be held at 10:00 A.M., local
time, on the earlier of (A) the closing of the Demand Offering and
(B) third Business Day after a determination not to proceed with the
Demand Offering, at the principal office of the Company, or at such
other time or place as the parties mutually agree.
(iii) On the closing date, each selling SP Holder shall
deliver (i) certificates representing the shares being sold, free
and clear of any lien, claim or encumbrance, and (ii) such other
documents, including evidence of ownership and authority, as the
Company may reasonably request. The purchase price shall be paid by
wire transfer of immediately available funds no later than 2:00 P.M.
on the closing date.
SECTION 2.2. Piggy-Back Offering. If at any time the Company, for
its own account or for the account of any of its securityholders, proposes to
offer the Company's Common Stock, par value $.01 per share, in the form of an
underwritten offering (other than with respect to a registration statement on
Form S-4 or S-8 (or any substitute form that may be adopted by the Commission)
or a registration statement filed in connection with an exchange offer or
offering of securities solely to the Company's existing securityholders), then
the Company shall give written notice of such proposed underwritten offering to
Holders as soon as practicable (but in no event later than the anticipated
filing date), and such notice shall offer such Holders the opportunity to
include in such underwritten offering such number of shares of Registrable
Securities as each such Holder may request (which request shall specify the
number of shares of Registrable Securities intended to be disposed of by such
Holder) (a "Piggy-Back Offering"). The Company shall use its reasonable best
efforts to cause the managing Underwriter or Underwriters of a proposed
underwritten offering to permit the Registrable Securities requested to be
included in a Piggy-Back Offering to be included on the same terms and
conditions as any similar securities of the Company included therein to permit
the sale or other disposition of such Registrable Securities in accordance with
the intended method of distribution thereof. Notwithstanding the foregoing,
Holders shall not be entitled to a Piggy-
-5-
6
Back Offering in connection with any underwritten offering granted by the
Company to a third party pursuant to a contractual obligation if the agreement
between such third party and the Company providing for such underwritten
offering prohibits the Company from granting to other Persons the right to
"piggy-back" on to such underwritten offering; provided that in such event, the
Company shall provide Holders notice of such prohibition prior to the
anticipated filing date of such registration so as to permit Holders to seek
permission from such third party to include Registrable Securities in such
underwritten offering.
SECTION 2.3. Reduction of Offering. Notwithstanding anything
contained herein, if the managing Underwriter or Underwriters of an offering
described in Section 2.1(c) or 2.2 deliver a written opinion to the Holders of
the Registrable Securities requesting inclusion in such offering that (i) the
size of the offering that the Holders, the Company and/or such other Persons
intend to make or (ii) the kind of securities that the Holders, the Company
and/or any other Persons intend to include in such offering is such that the
success of the offering would be materially and adversely affected by inclusion
of the Registrable Securities requested to be included, then (A) if the size of
the offering is the basis of such Underwriter's or Underwriters' opinion, the
Company shall not include an amount of Registrable Securities requested to be
included in such offering by all Holders equal to the Excess Amount (such
reduction in connection with a Demand Offering to be allocated, first, pro rata
among Holders requesting inclusion of Registrable Securities in the Demand
Offering pursuant to Other Holder Notices, according to the number of
Registrable Securities requested by such Holders for inclusion, and then, and
only to the extent any portion of the Excess Amount remains unallocated, pro
rata among the remaining Holders requesting inclusion of Registrable Securities
in the Demand Offering); provided that, in the case of a Piggy-Back Offering, if
securities are being offered for the account of other Persons as well as the
Company, then with respect to the Registrable Securities intended to be offered
by Holders, the proportion by which the amount of such class of securities
intended to be offered by Holders is reduced shall not exceed the proportion by
which the amount of such class of securities intended to be offered by such
other Persons is reduced (it being understood that such reduction may be all of
such class of securities); and (B) if the combination of securities to be
offered is the basis of such Underwriter's or Underwriters' opinion, (x) the
Registrable Securities to be included in such offering shall be reduced as
described in clause (A) above (subject to the proviso in clause (A)) or, (y) if
the actions described in clause (B)(x) would, in the judgment of the managing
Underwriter or Underwriters, be insufficient to substantially eliminate the
adverse effect that inclusion of the Registrable Securities requested to be
included would have on such offering, such Registrable Securities will be
excluded from such offering.
If, as a result of the proration provisions of this Section 2.3, any
Holder shall not be entitled to include all Registrable Securities in a Demand
Offering or Piggy-Back Offering that such Holder has requested to be included,
such Holder may elect to withdraw his request to include Registrable Securities
in such offering (a "Withdrawal Election"); provided, however, that a Withdrawal
Election shall be irrevocable and, after making a Withdrawal Election, a Holder
shall no longer have any right to include Registrable Securities in the offering
as to which such Withdrawal Election was made.
-6-
7
ARTICLE III
DEMAND OFFERING PROCEDURES
SECTION 3.1. In connection with any Demand Offering and any
amendment or supplement to the Shelf Registration Statement relating thereto,
the following provisions shall apply:
(a) The Company shall, prior to filing any amendment or
supplement to the Shelf Registration Statement or Prospectus, furnish to each
Holder, one counsel representing all Holders, and each Underwriter, if any, of
the Securities covered by such Shelf Registration Statement, Prospectus or
amendment or supplement thereto, a copy of such amendment or supplement thereto,
and shall use its reasonable best efforts to reflect in each such amendment or
supplement, when so filed with the Commission, such comments as such Holders may
reasonably propose. The Company shall furnish to each Holder of Securities
included within the coverage of the Shelf Registration Statement, without
charge, at least one copy of such Shelf Registration Statement and any
post-effective amendment thereto, including financial statements and schedules,
and, if the Holder so requests in writing, all exhibits (including those
incorporated by reference). The Company shall, during the Shelf Registration
Period, deliver to each Holder of Securities included within the coverage of the
Shelf Registration Statement, without charge, as many copies of the Prospectus
(including each preliminary Prospectus) included in the Shelf Registration
Statement and any amendment or supplement thereto as such Holder may reasonably
request.
(b) The Company shall ensure that (i) the Shelf Registration
Statement, and any amendment thereto, and any Prospectus forming part thereof
and any amendment or supplement thereto, complies in all material respects with
the Securities Act, (ii) the Shelf Registration Statement and any amendment
thereto does not contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading and (iii) any Prospectus forming part of the
Shelf Registration Statement, and any amendment or supplement to such
Prospectus, does not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(c) The Company shall use its reasonable best efforts to
obtain the withdrawal of any order suspending the effectiveness of the Shelf
Registration Statement at the earliest possible time.
(d) The Company will promptly notify each Holder of
Registrable Securities covered by the Shelf Registration Statement of any stop
order issued or threatened by the Commission and take all reasonable actions
required to prevent the entry of such stop order or to remove it if entered.
(e) The Company will use its best efforts to (i) register or
qualify the Registrable Securities under such other securities or blue sky laws
of such jurisdictions in the
-7-
8
United States as any Holder reasonably (in light of such Holder's intended plan
of distribution) request and (ii) cause such Registrable Securities to be
registered with or approved by such other governmental agencies or authorities
in the United States as may be necessary by virtue of the business and
operations of the Company and do any and all other acts and things that may be
reasonably necessary or advisable to enable such Holder to consummate the
disposition of the Registrable Securities owned by such Holder; provided that
the Company will not be required to (A) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
paragraph (d), (B) subject itself to taxation in any such jurisdiction or (C)
consent to general service of process in any such jurisdiction.
(f) The Company will immediately notify each Holder of such
Registrable Securities, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the occurrence of an event
requiring the preparation of a supplement or amendment to such prospectus so
that, as thereafter delivered to the purchasers of such Registrable Securities,
such prospectus will not contain an untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading and promptly make available to each Holder
any such supplement or amendment.
(g) The Company will enter into customary agreements
(including, if applicable, an underwriting agreement in customary form) and take
such other actions as are reasonably required in order to expedite or facilitate
the disposition of such Registrable Securities (the Holders may, at their
option, require that any or all of the representations, warranties and covenants
of the Company to or for the benefit of such Underwriters also be made to and
for the benefit of such Holders).
(h) The Chairman of the Board of Directors of the Company, the
Chief Executive Officer of the Company and other members of the management of
the Company will cooperate fully in any offering of Registrable Securities
hereunder, including, without limitation, participation in meetings with
potential investors and preparation of all materials for such investors.
(i) The Company will deliver promptly to each Holder of such
Registrable Securities and each Underwriter, if any, subject to restrictions
imposed by the United States federal government or any agency or instrumentality
thereof, copies of all correspondence between the Commission and the Company,
its counsel or auditors and all memoranda relating to discussions with the
Commission or its staff with respect to the Shelf Registration Statement and
make available for inspection by any Holder of such Registrable Securities, any
Underwriter participating in any disposition pursuant to such Shelf Registration
Statement and any attorney, accountant or other professional retained by any
such Holder or Underwriter (collectively, the "Inspectors"), all financial and
other records, pertinent corporate documents and properties of the Company
(collectively, the "Records"), subject to restrictions imposed by any
governmental authority governing access to classified information, as shall be
reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers, directors and employees to
supply all information reasonably requested by any Inspectors in connection
-8-
9
with the Shelf Registration Statement. Records which the Company determines, in
good faith, to be confidential and which it notifies the Inspectors are
confidential shall not be disclosed by the Inspectors unless (i) the disclosure
of such Records is necessary to avoid or correct a misstatement or omission in
the Shelf Registration Statement or (ii) the disclosure or release of such
Records is requested or required pursuant to oral questions, interrogatories,
requests for information or documents or a subpoena or other order from a court
of competent jurisdiction or other process; provided that prior to any
disclosure or release pursuant to clause (ii), the Inspectors shall provide the
Company with prompt notice of any such request or requirement so that the
Company may seek an appropriate protective order or waive such Inspectors'
obligation not to disclose such Records; and provided, further, that if failing
the entry of a protective order or the waiver by the Company permitting the
disclosure or release of such Records, the Inspectors, upon advice of counsel,
are compelled to disclose such Records, the Inspectors may disclose that portion
of the Records which counsel has advised the Inspectors that the Inspectors are
compelled to disclose. Each Holder of such Registrable Securities agrees that
information obtained by it solely as a result of such inspections (not including
any information obtained from a third party who, insofar as is known to the
Holder after reasonable inquiry, is not prohibited from providing such
information by a contractual, legal or fiduciary obligation to the Company)
shall be deemed confidential and shall not be used by it as the basis for any
market transactions in the securities of the Company or its Affiliates unless
and until such is made generally available to the public. Each Holder of such
Registrable Securities further agrees that it will, upon learning that
disclosure of such Records is sought in a court of competent jurisdiction, give
notice to the Company and allow the Company, at its expense, to undertake
appropriate action to prevent disclosure of the Records deemed confidential.
(j) The Company will furnish to each Holder and to each
Underwriter, if any, a signed counterpart, addressed to such Holder or
Underwriter, of (i) an opinion or opinions of counsel to the Company and (ii) a
comfort letter or comfort letters from the Company's independent public
accountants, each in customary form and covering such matters of the type
customarily covered by opinions or comfort letters, as the case may be, as the
Holders of Registrable Securities included in such offering or the managing
Underwriter therefor reasonably requests.
(k) The Company will otherwise use its best efforts to comply
with all applicable rules and regulations of the Commission, and make available
to its securityholders, as soon as reasonably practicable, an earnings statement
covering a period of 12 months, beginning within three months after the
effective date of the Shelf Registration Statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the Securities Act.
(l) The Company will use its best efforts to cause all such
Registrable Securities to be listed on each national securities exchange on
which similar securities issued by the Company are then listed (if any), if the
listing of such Registrable Securities is then permitted under the rules of such
exchange.
(m) The Company shall have appointed a transfer agent and
registrar for all Registrable Securities by the date hereof.
-9-
10
The Company may require each Holder of Registrable Securities to
promptly furnish in writing to the Company such information regarding the
distribution of the Registrable Securities as the Company may from time to time
reasonably request and such other information as may be legally required in
connection with the Shelf Registration.
Each Holder agrees that, upon receipt of any notice from the Company
of the happening of any event of the kind described in Section 3.1(f) hereof,
such Holder will forthwith discontinue disposition of Registrable Securities
pursuant to the Shelf Registration Statement until such Holder's receipt of the
copies of the supplemented or amended Prospectus contemplated by Section 3.1(f)
hereof, and, if so directed by the Company, such Holder will deliver to the
Company all copies, other than permanent file copies then in such Holder's
possession, of the most recent Prospectus at the time of receipt of such notice.
SECTION 3.2. Registration Expenses. In connection with the Shelf
Registration pursuant to Section 2.1(a) hereof, and any registration statement
filed pursuant to Sections 2.1(c) or 2.2 hereof, the Company shall pay the
following registration expenses incurred in connection with the registration
hereunder (the "Registration Expenses"): (i) all registration and filing fees,
(ii) fees and expenses of compliance with securities or blue sky laws (including
fees and disbursements of counsel in connection with blue sky qualifications of
the Registrable Securities), (iii) printing expenses, (iv) the Company's
internal expenses (including, without limitation, all salaries and expenses of
its officers and employees performing legal or accounting duties), (v) the fees
and expenses incurred in connection with the listing of the Registrable
Securities, (vi) fees and disbursements of counsel for the Company and fees and
expenses for independent certified public accountants retained by the Company
(including the expenses of any comfort letters or costs associated with the
delivery by independent certified public accountants of a comfort letter or
comfort letters requested pursuant to Section 3.1(j) hereof), (vii) the fees and
expenses of any special experts retained by the Company in connection with such
registration, and (viii) reasonable fees and expenses of one counsel (who shall
be reasonably acceptable to the Company) for the Holders. The Company shall have
no obligation to pay any underwriting fees, discounts or commissions
attributable to the sale of Registrable Securities, or any out-of-pocket
expenses of the Holders (or the agents who manage their accounts).
ARTICLE IV
INDEMNIFICATION AND CONTRIBUTION
SECTION 4.1. Indemnification by the Company. The Company agrees to
indemnify and hold harmless each Holder of Registrable Securities, its officers,
directors and agents, and each Person, if any, who controls such Holder within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act from and against any loss, claim, damage or liability and any action in
respect thereof to which such Holder, its officers, directors and agents, and
any such controlling Person may become subject under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, any untrue statement or alleged untrue statement of a
material fact contained in any registration statement or prospectus relating to
the Registrable Securities (as amended or supplemented if the Company
-10-
11
shall have furnished any amendments or supplements thereto) or any preliminary
prospectus, or arises out of, or is 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, and shall reimburse each Holder, its
officers, directors and agents, and each such controlling Person for any legal
and other expenses reasonably incurred by that Holder, its officers, directors
and agents, or any such controlling person in investigating or defending or
preparing to defend against any such loss, claim, damage, liability or action.
The Company also agrees to indemnify any Underwriters of the Registrable
Securities, their officers and directors and each Person who controls such
Underwriters on substantially the same basis as that of the indemnification of
the Holders provided in this Section 4.1.
SECTION 4.2. Indemnification by Holders of Registrable Securities.
Each Holder agrees, severally but not jointly, to indemnify and hold harmless
the Company, its officers, directors and agents and each Person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the foregoing indemnity
from the Company to such Holder, but only with reference to information related
to such Holder furnished in writing by such Holder or on such Holder's behalf
expressly for use in any registration statement or prospectus relating to the
Registrable Securities, or any amendment or supplement thereto, or any
preliminary prospectus. In case any action or proceeding shall be brought
against the Company or its officers, directors or agents or any such controlling
Person, in respect of which indemnity may be sought against such Holder, such
Holder shall have the rights and duties given to the Company, and the Company or
its officers, directors or agents or such controlling Person shall have the
rights and duties given to such Holder, by the preceding paragraph. Each Holder
also agrees to indemnify and hold harmless Underwriters of the Registrable
Securities, their officers and directors and each Person who controls such
Underwriters on substantially the same basis as that of the indemnification of
the Company provided in this Section 4.2.
SECTION 4.3. Conduct of Indemnification Proceedings. Promptly after
receipt by any person in respect of which indemnity may be sought pursuant to
Section 4.1 or 4.2 (an "Indemnified Party") of notice of any claim or the
commencement of any action, the Indemnified Party shall, if a claim in respect
thereof is to be made against the person against whom such indemnity may be
sought (an "Indemnifying Party") notify the Indemnifying Party in writing of the
claim or the commencement of such action provided that the failure to notify the
Indemnifying Party shall not relieve it from any liability which it may have to
an Indemnified Party otherwise than under Section 4.1 or 4.2 and except to the
extent of any actual prejudice resulting therefrom. If any such claim or action
shall be brought against an Indemnified Party, and it shall notify the
Indemnifying Party thereof, the Indemnifying Party shall be entitled to
participate therein, and, to the extent that it wishes, jointly with any other
similarly notified Indemnifying Party, to assume the defense thereof with
counsel satisfactory to the Indemnified Party. After notice from the
Indemnifying Party to the Indemnified Party of its election to assume the
defense of such claim or action, the Indemnifying Party shall not be liable to
the Indemnified Party for any legal or other expenses subsequently incurred by
the Indemnified Party in connection with the defense thereof other than
reasonable costs of investigation; provided that the Indemnified Party shall
have the right to employ separate counsel to represent
-11-
12
the Indemnified Party and its controlling Persons who may be subject to
liability arising out of any claim in respect of which indemnity may be sought
by the Indemnified Party against the Indemnifying Party, but the fees and
expenses of such counsel shall be for the account of such Indemnified Party
unless (i) the Indemnifying Party and the Indemnified Party shall have mutually
agreed to the retention of such counsel or (ii) in the reasonable judgment of
such Indemnified Party representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them. No
Indemnifying Party shall, without the prior written consent of the Indemnified
Party, effect any settlement of any claim or pending or threatened proceeding in
respect of which the Indemnified Party is or could have been a party and
indemnity could have been sought hereunder by such Indemnified Party, unless
such settlement includes an unconditional release of such Indemnified Party from
all liability arising out of such claim or proceeding.
SECTION 4.4. Contribution. If the indemnification provided for in
this Article 4 is unavailable to the Indemnified Parties in respect of any
losses, claims, damages or liabilities referred to herein, then each such
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, claims, damages or liabilities (i) as between the Company and
the Holders on the one hand and the Underwriters on the other, in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Holders on the one hand and the Underwriters on the other from
the offering of the Registrable Securities, or if such allocation is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits but also the relative fault of the Company and the
Holders on the one hand and of the Underwriters on the other in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations and (ii) as
between the Company on the one hand and each Holder on the other, in such
proportion as is appropriate to reflect the relative fault of the Company and of
each Holder in connection with such statements or omissions, as well as any
other relevant equitable considerations. The relative benefits received by the
Company and the Holders on the one hand and the Underwriters on the other shall
be deemed to be in the same proportion as the total proceeds from the offering
(net of underwriting discounts and commissions but before deducting expenses)
received by the Company and the Holders bear to the total underwriting discounts
and commissions received by the Underwriters, in each case as set forth in the
table on the cover page of the prospectus. The relative fault of the Company and
the Holders on the one hand and of the Underwriters on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company and the Holders
or by the Underwriters. The relative fault of the Company on the one hand and of
each Holder on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by such party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Holders agree that it would not be just and
equitable if contribution pursuant to this Section 4.4 were determined by pro
rata allocation (even if the
-12-
13
Underwriters were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to in the immediately preceding paragraph. The amount paid or payable
by an Indemnified Party as a result of the losses, claims, damages or
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such Indemnified Party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 4.4, no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the
Registrable Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission, and no Holder shall be required to
contribute any amount in excess of the amount by which the total price at which
the Registrable Securities of such Holder were offered to the public (less
underwriting discounts and commissions) exceeds the amount of any damages which
such Holder has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. Each Holder's obligations to
contribute pursuant to this Section 4.4 are several in proportion to the
proceeds of the offering received by such Holder bears to the total proceeds of
the offering received by all the Holders and not joint.
ARTICLE V
CERTAIN AGREEMENTS
SECTION 5.1. Participation in Underwritten Registrations. No Holder
may participate in any underwritten registration hereunder unless such Holder
(a) agrees to sell such Holder's securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements and these
Registration Rights; provided that (i) any Holder participating in such
registration will not be required to make any representations or warranties
except those which relate solely to such Holder and its intended method of
distribution and (ii) the liability of each such Holder to any Underwriter under
such underwriting agreement will be limited to liability arising from
misstatements or omissions regarding such Holder and its intended method of
distribution and any such liability shall not exceed an amount equal to the
amount of net proceeds such Holder derives from such registration. The Company
shall take all reasonable steps to ensure that the shares of Registrable
Securities sold in any underwritten public offering shall be widely
disseminated.
SECTION 5.2. Rule 144. The Company covenants that it will file any
reports required to be filed by it under the Securities Act and the Exchange Act
and that it will take such further action as any Holder may reasonably request,
all to the extent required from time to time to enable Holders to sell
Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by (a) Rule 144 or Rule 144A under the
-13-
14
Securities Act, as such Rules may be amended from time to time, or (b) any
similar rule or regulation hereafter adopted by the Commission. Upon the request
of any Holder, the Company will deliver to such Holder a written statement as to
whether it has complied with such requirements.
SECTION 5.3. Holdback Agreements. To the extent not inconsistent
with applicable law, each Holder of Registrable Securities agrees not to effect
any sale or distribution of the issue being registered or of a similar security
of the Company, or any securities convertible into or exchangeable or
exercisable for such securities, including a sale pursuant to Rule 144 or Rule
144A under the Securities Act, during the l4 days prior to, and during the
90-day period beginning on, the effective date of the registration statement
filed by the Company (except as part of such registration) if, and to the
extent, requested by the managing Underwriter or Underwriters in the case of any
underwritten public offering.
ARTICLE VI
MISCELLANEOUS
SECTION 6.1. Legends. (a) Subject to Section 6.1(b), each
certificate evidencing Common Stock that is issued to any Holder shall bear a
legend in substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE OFFERED AND
SOLD ONLY IF SO REGISTERED OR AN EXEMPTION FROM REGISTRATION IS
AVAILABLE.
(b) If any Common Stock shall be transferred pursuant to an
effective registration statement or Rule 144 (or any similar rule then in
effect) under the Securities Act, or if in the opinion of the Company the Common
Stock shall otherwise not be subject to any restrictions on transfer under the
Securities Act, the Company shall, upon the written request of any Holder, issue
to such Holder a new certificate evidencing such Common Stock without the legend
set forth above endorsed thereon.
SECTION 6.2. Remedies. The Company and the Strategic Participants
acknowledge and agree that in the event of any breach of this Agreement by any
one of them, the Company or the appropriate Strategic Participants, as the case
may be, would be irreparably harmed and could not be made whole by monetary
damages. The Company and the Strategic Participants accordingly agree (i) to
waive the defense in any action for specific performance that a remedy at law
would be adequate, and (ii) that the Company and the Strategic Participants, in
addition to any other remedy to which they may be entitled at law or in equity,
shall be entitled to compel specific performance of this Agreement in any action
instituted in the United States District Court for the Southern District of New
York, or, in the event said Court would not have jurisdiction for such action,
in any court of the United States or any state thereof having subject matter
jurisdiction for such action. The Company and the Strategic Participants consent
to non-
-14-
15
exclusive personal jurisdiction in any such action brought in the United
States District Court of the Southern District of New York, or any such other
court.
SECTION 6.3. Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto, and their respective
successors and assigns; provided that neither this Agreement nor any rights or
obligations hereunder may be transferred or assigned by the Company.
SECTION 6.4. No Waivers; Amendments. (a) No failure or delay by 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.
(b) This Agreement may not be amended, modified or
supplemented other than by a written instrument signed by each party hereto.
(c) Any provision of this Agreement may be waived if, but only
if, such waiver is in writing and is signed by the party against whom the
enforcement of such waiver is sought.
SECTION 6.5. Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including telecopier or similar
writing) and shall be given to such party at its address or telecopier number
set forth below, or such other address or telecopier number as such party may
hereinafter specify for the purpose to the party giving such notice. Each such
notice, request or other communication shall be effective (i) if given by
telecopy, when such telecopy is transmitted to the telecopy number specified in
this Section and the appropriate answerback, if applicable, is received or (ii)
if given by any other means, when delivered at the address specified in this
Section 6.5.
Notices to the Company shall be addressed to Loral Space &
Communications Ltd., 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx
X. Xxxxxx, Vice President, General Counsel and Secretary (telecopier no. (212)
682-9805) with a copy thereof to Xxxxxxx Xxxx & Xxxxxxxxx, One Citicorp Center,
000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, Attention: Xxxxx Xxxxx,
Esq. (telecopier no. (000) 000-0000); notices to Aerospatiale shall be addressed
to Xxxxxxxxxxxx XXX, 00, Xxxxx xx Xxxxxxxx XX 00, 78133 Les Mureaux Cedex,
France, Attention: Xxxxxx Xxxxxx (telecopier no. 011-331-34-74-95-33), with a
copy thereof (which shall not constitute notice) to Aerospatiale SNI, c/o
Management Liaison Committee, Space Systems/Loral, Inc., 0000 Xxxxxx Xxx, X.X.X.
00, Xxxx Xxxx, XX 00000-0000, Attention: Xxxxxx Xxxxxxx (telecopier no. (415)
842-7389), and with a copy thereof (which shall not constitute notice) to Xxxxx
& Xxxxxxx L.L.P., Columbia Square, 000 00xx Xxxxxx, X.X., Xxxxxxxxxx, X.X.
00000-0000, Attention: Xxxx X. Xxxx, Esq. (telecopier no. (000) 000-0000); and
notices to Alcatel shall be addressed to Alcatel Espace, 0, xxx Xxxx Xxxx, 00000
Xxxxxxxx Xxxxx, Xxxxxx, Attention: Xxxxxx xx Xxxxxx (telecopier no.
011-331-46-52-64-60), with a copy thereof (which shall not constitute notice) to
Alcatel N.V. 00, Xxx Xxxxxxx, 00000 Xxxxx Cedex, France,
-15-
16
Attention: Xxxx Xxxx, Esq. (telecopier no. 011-331-40-58-59-31, and with a copy
thereof (which shall not constitute notice) to Xxxxx & Xxxxxxx L.L.P., as
detailed above.
SECTION 6.6. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York.
SECTION 6.7. 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.
SECTION 6.8. Entire Agreement. This Agreement constitutes 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.
SECTION 6.9. Severability. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdictions, it
being intended that all rights and obligations of the parties hereunder shall be
enforceable to the fullest extent permitted by law.
SECTION 6.10. Counterparts. This Agreement may be signed in
counterparts, each of which shall constitute an original and which together
shall constitute one and the same agreement.
-16-
17
IN WITNESS WHEREOF, the undersigned have duly executed and delivered
this Agreement as of the date set forth above.
LORAL SPACE & COMMUNICATIONS LTD.
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President and Chief Operating Officer
AEROSPATIALE SNI
By: /s/ Xxxxxx Xxxxxx
--------------------------------------------
Name: Xxxxxx Xxxxxx
Title: Le Directeur, Aerospatial Espace &
Defense
ALCATEL ESPACE
By: /s/ Xxxx Xxxxxx Xxxxxx
--------------------------------------------
Name: Xxxx Xxxxxx Xxxxxx
Title: President and CEO
-17-
