REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") dated as of September
18, 1998, between COMSAT CORPORATION, a District of Columbia corporation
("COMSAT") and LOCKHEED XXXXXX CORPORATION, a Maryland corporation (collectively
with its subsidiaries, "LOCKHEED XXXXXX").
Terms not otherwise defined herein have the meanings stated in the
Merger Agreement (as defined below).
RECITALS
A. Pursuant to an Agreement and Plan of Merger dated as of September
18, 1998 (as amended or modified from time to time, the "MERGER AGREEMENT"),
among COMSAT, Lockheed Xxxxxx, and Deneb Corporation, a Delaware corporation and
a wholly-owned subsidiary of Lockheed Xxxxxx ("ACQUISITION SUB"), Lockheed
Xxxxxx, acting through a wholly-owned single member Delaware limited liability
company ("OFFER SUBSIDIARY"), will commence an offer to purchase for cash (the
"OFFER") shares (collectively, the "SHARES") of COMSAT's common stock, without
par value (the "COMSAT COMMON STOCK"). The Shares to be acquired in the Offer
are hereinafter referred to as the "REGISTRABLE SHARES."
B. In order to induce Lockheed Xxxxxx to enter into the Merger
Agreement, COMSAT and Lockheed Xxxxxx have agreed to enter into this Agreement
concurrent therewith.
AGREEMENT
The parties agree as follows:
SECTION 1. DEMAND REGISTRATION RIGHTS.
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(a) From and after the date of termination of the Merger Agreement in
accordance with its terms, and assuming Offer Subsidiary acquired any
Registrable Shares pursuant to the Offer (the "COMMENCEMENT DATE"), on one or
more occasions when COMSAT shall have received a written request for
registration hereunder from Lockheed Xxxxxx, COMSAT shall, as expeditiously as
possible and in good faith, include in a Registration Statement in accordance
with the methods of distribution specified by Lockheed Xxxxxx, the number of
Registrable Shares (the "TRANSACTION REGISTRABLE SHARES") that Lockheed Xxxxxx
shall have requested that COMSAT register.
(b) If the requested registration pursuant to this Section 1 shall
involve an underwritten offering, (i) no other securities of COMSAT, including
securities to be offered for the account of COMSAT or any Person other than
Lockheed Xxxxxx, shall be included in the
Registration Statement and (ii) Lockheed Xxxxxx shall select (with the consent
of COMSAT, not to be unreasonably withheld or delayed) the managing underwriter
in connection with the offering and any additional investment bankers and
managers to be used in connection with the offering.
(c) Notwithstanding anything herein to the contrary:
(i) COMSAT shall not be required to prepare and file pursuant to this
Section 1 a Registration Statement including less than 3,000,000
Registrable Shares in the aggregate (as such number of shares may be
equitably adjusted in the event of any change in the Registerable Shares by
reason of stock dividends, split-ups, reverse split-ups, mergers,
recapitalizations, subdivisions, conversions, exchanges of shares or the
like);
(ii) subject to the following clause (iii), COMSAT shall not be
required to prepare and file pursuant to this Section 1 more than five
Registration Statements;
(iii) if a requested registration pursuant to this Section 1 shall
involve an underwritten offering, and if the managing underwriter shall
advise COMSAT and Lockheed Xxxxxx in writing that, in its opinion, the
number of Transaction Registrable Shares proposed to be included in the
registration is so great as to adversely affect the offering, including the
price at which the Transaction Registrable Shares could be sold, COMSAT
will, upon the request of Lockheed Xxxxxx, include in the registration the
maximum number of Transaction Registrable Shares which it is so advised can
be sold without the adverse effect. Alternatively, Lockheed Xxxxxx may
notify COMSAT that Lockheed Xxxxxx has determined not to proceed with such
registration, in which case such registration shall not be counted toward
the total number of registrations allotted to Lockheed Xxxxxx under the
preceding clause (ii); and
(iv) an exercise of a request for registration under this Section 1
shall not count as the use of such right (A) if the Registration Statement
to which it relates is not declared effective by the SEC within 90 days of
the date such Registration Statement is first filed with the SEC, (B) if,
within 90 days after the registration relating to any such request has
become effective but before Lockheed Xxxxxx distributes the Transaction
Registrable Shares thereunder, such registration is interfered with by any
stop order, injunction or other order or requirement of the SEC or other
Governmental Authority for any reason and COMSAT fails to have such stop
order, injunction or other order or requirement removed, withdrawn or
resolved to the reasonable satisfaction of Lockheed Xxxxxx within 30 days,
or (C) if the Registration Statement and the Prospectus do not remain
effective or current for the period they are required to remain effective
or current hereunder; provided, that except as otherwise provided in the
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preceding clause (iii) such exercise shall count if such Registration
Statement is withdrawn because Lockheed Xxxxxx determines not to proceed
with such registration.
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SECTION 2. PIGGY-BACK REGISTRATION RIGHTS.
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(a) If COMSAT shall determine to register or qualify by a registration
statement filed under the Securities Act and under any applicable state
securities Laws, any offering of any Equity Securities of COMSAT, other than an
offering with respect to which Lockheed Xxxxxx shall have requested a
registration pursuant to Section 1 hereof, COMSAT shall give notice of such
determination to Lockheed Xxxxxx. COMSAT shall, as expeditiously as possible
and in good faith, include in the registration statement the number of
Transaction Registrable Shares that Lockheed Xxxxxx shall have specified by
written notice received by COMSAT not later than 10 business days after COMSAT
shall have given such written notice to Lockheed Xxxxxx pursuant to this Section
2(a).
(b) Notwithstanding anything herein to the contrary:
(i) COMSAT shall not be required by this Section 2 to include any
Registrable Shares owned by Lockheed Xxxxxx in a registration statement on
Form S-4 or S-8 (or any successor form) or a registration statement filed
in connection with an exchange offer or other offering of securities solely
to the then existing shareholders of COMSAT; and
(ii) if a registration pursuant to this Section 2 involves an
underwritten offering, COMSAT or the Person initiating the registration
shall select the managing underwriter for the offering and any additional
investment bankers and managers to be used in connection with the offering,
and if the managing underwriter advises COMSAT in writing that, in its
opinion, the number of securities requested to be included in the
registration is so great as to adversely affect the offering, including the
price at which the securities could be sold, COMSAT will include in the
registration the maximum number of securities which it is so advised can be
sold without the adverse effect, allocated as follows:
(A) first, all securities proposed to be registered by COMSAT for
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its own account;
(B) second, all securities proposed to be registered by COMSAT
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pursuant to the exercise by any Person other than Lockheed Xxxxxx of a
"demand" right requesting the registration of shares of COMSAT Common Stock
in accordance with an agreement entered into prior to the date of execution
of the Merger Agreement substantially similar to the provisions of Section
1 hereof; and
(C) third, all other securities (including Transaction
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Registrable Shares) duly requested to be included in the registration,
allocated pro rata among Lockheed Xxxxxx and such other Persons on the
basis of the relative number of securities that each such Person has duly
requested to be included in the registration.
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(c) From and after the date of this Agreement, COMSAT shall not,
without the prior written consent of Lockheed Xxxxxx, enter into any agreement
with any holder or prospective holder of any Equity Securities of COMSAT giving
such holder or prospective holder any registration rights, including without
limitation "piggyback" registration rights, the terms of which are inconsistent
with the registration rights granted to Lockheed Xxxxxx hereunder.
SECTION 3. REGISTRATION PROVISIONS. With respect to each
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registration pursuant to this Agreement:
(a) Notwithstanding anything herein to the contrary, COMSAT shall not
be required to include in any registration any of the Registrable Shares owned
by Lockheed Xxxxxx (i) if COMSAT shall deliver to Lockheed Xxxxxx an opinion,
satisfactory in form, scope and substance to Lockheed Xxxxxx and addressed to
Lockheed Xxxxxx by legal counsel satisfactory to Lockheed Xxxxxx to the effect
that the distribution of such Registrable Shares proposed by Lockheed Xxxxxx is
(1) not required to be registered under the Securities Act and (2) is not
subject to any limitations imposed by COMSAT's Articles of Incorporation and By-
Laws or (ii) if Lockheed Xxxxxx or any underwriter of such Registrable Shares
shall fail to furnish to COMSAT the information in respect of the distribution
of the shares that is required under this Agreement to be furnished by Lockheed
Xxxxxx or the underwriter to COMSAT.
(b) COMSAT shall make available for inspection by Lockheed Xxxxxx,
each underwriter of Transaction Registrable Shares and Lockheed Xxxxxx'x
accountants, counsel and other representatives, all financial and other records,
pertinent corporate documents and properties of COMSAT as shall be reasonably
necessary to enable them to exercise their due diligence responsibility in
connection with each registration of Transaction Registrable Shares, and shall
cause COMSAT's officers, directors and employees to supply all information
reasonably requested by any such Person in connection with such registration;
provided that records and documents which COMSAT determines, in good faith,
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after consultation with its counsel to be confidential and which it notifies
such Persons are confidential shall not be disclosed to them, except in each
case to the extent that (i) the disclosure of such records or documents is
necessary to avoid or correct a misstatement or omission in the Registration
Statement, (ii) the disclosure of such records or documents to a Governmental
Authority having jurisdiction over such Person is necessary or (iii) the
disclosure of such records or documents may otherwise be required by applicable
Laws, subpoena, or the order of any Governmental Authority. Lockheed Xxxxxx
shall, and shall cause its accountants, counsel and other representatives to,
after determining that disclosure of any records or documents may be necessary
in the circumstances referenced in the proviso to the preceding sentence, give
notice to COMSAT, and allow COMSAT, at COMSAT's expense, to undertake
appropriate action to prevent disclosure of any such records or documents deemed
confidential.
(c) Lockheed Xxxxxx shall furnish, and shall cause each underwriter of
Transaction Registrable Shares to be distributed pursuant to the registration to
furnish, to COMSAT in writing promptly upon the request of COMSAT the additional
information
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regarding Lockheed Xxxxxx or the underwriter, the contemplated distribution of
the Transaction Registrable Shares and the other information regarding the
proposed distribution by Lockheed Xxxxxx and the underwriter that shall be
required in connection with the proposed distribution by the applicable
securities Laws of the United States of America and the states thereof in which
the Transaction Registrable Shares are contemplated to be distributed. The
information furnished by Lockheed Xxxxxx or any underwriter shall be certified
by Lockheed Xxxxxx or the underwriter, as the case may be, and shall be stated
to be specifically for use in connection with the registration.
(d) COMSAT shall prepare and file with the SEC the Registration
Statement, including the Prospectus, and each amendment thereof or supplement
thereto, under the Securities Act and as required under any applicable state
securities Laws, on a form that is then required or available for use by COMSAT
to permit Lockheed Xxxxxx, upon the effective date of the Registration
Statement, to use the Prospectus in connection with the contemplated
distribution by Lockheed Xxxxxx of the Transaction Registrable Shares requested
to be so registered. A registration pursuant to Section 1 hereof shall be
effected pursuant to Rule 415 (or any similar provision then in force) under the
Securities Act if the manner of distribution contemplated by Lockheed Xxxxxx
shall include an offering on a delayed or continuous basis. COMSAT shall
furnish to Lockheed Xxxxxx drafts of the Registration Statement and the
Prospectus and each amendment thereof or supplement thereto for its timely
review and comment prior to the filing thereof with the SEC. If the
registration shall have been initiated solely by COMSAT or shall not have been
initiated by Lockheed Xxxxxx, COMSAT shall not be obligated to prosecute the
registration, and may withdraw the Registration Statement at any time prior to
the effectiveness thereof, if COMSAT shall determine in good faith not to
proceed with the offering of securities included in the Registration Statement.
In all other cases, COMSAT shall use its reasonable efforts to cause the
Registration Statement to become effective and, as soon as practicable after the
effectiveness thereof, shall deliver to Lockheed Xxxxxx evidence of the
effectiveness and as many copies of the Prospectus and each amendment thereof or
supplement thereto as Lockheed Xxxxxx may reasonably request. COMSAT consents
to the use by Lockheed Xxxxxx of each Prospectus and each amendment thereof and
supplement thereto in connection with the distribution, in accordance with this
Agreement, of the Transaction Registrable Shares. In addition, if necessary for
resale by Lockheed Xxxxxx, COMSAT shall qualify or register in such states as
may be reasonably requested by Lockheed Xxxxxx; provided that COMSAT shall not
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be obligated to file any general consent to service of process or to qualify as
a foreign corporation in any state in which it is not subject to process or
qualified as of the date of the request. COMSAT shall advise Lockheed Xxxxxx in
writing, promptly after the occurrence of any of the following, (i) the filing
of the Registration Statement or any Prospectus, or any amendment thereof or
supplement thereto, with the SEC, (ii) the effectiveness of the Registration
Statement and any post-effective amendment thereto, (iii) the receipt by COMSAT
of any communication from the SEC with respect to the Registration Statement or
the Prospectus, or any amendment thereof or supplement thereto, including,
without limitation, any stop order suspending the effectiveness thereof, any
comments with respect thereto and any requests for amendments or supplements (in
which case COMSAT shall promptly provide Lockheed Xxxxxx with copies of any
written communications received with respect thereto and
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written summaries of any oral communications with respect thereto) and (iv) the
receipt by COMSAT of any notification with respect to the suspension of the
qualification of Transaction Registrable Shares for sale in any jurisdiction or
the initiation or threatening of any proceeding for such purpose.
(e) COMSAT shall use its reasonable efforts to cause the Registration
Statement and the Prospectus to remain effective or current, as the case may be,
including the filing of necessary amendments, post-effective amendments and
supplements, and shall furnish copies of such amendments, post-effective
amendments and supplements to Lockheed Xxxxxx, so as to permit Lockheed Xxxxxx
to distribute the Transaction Registrable Shares in the manner of distribution
during the contemplated period of distribution, but in no event longer than 90
days from the effective date of the Registration Statement; provided that the
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period shall be increased by the number of days that Lockheed Xxxxxx shall have
been required by Section 4 hereof to refrain from disposing of the Transaction
Registrable Shares. During such contemplated period of distribution, COMSAT
shall comply with the provisions of the Securities Act applicable to it with
respect to the disposition of all Transaction Registrable Shares that shall have
been included in the Registration Statement in accordance with the contemplated
manner of disposition by Lockheed Xxxxxx set forth in the Registration
Statement, the Prospectus or the supplement, as the case may be. COMSAT shall
notify Lockheed Xxxxxx, at any time when a Prospectus with respect to the
Transaction Registrable Shares is required to be delivered under the Securities
Act, when COMSAT becomes aware of the happening of any event as a result of
which the Prospectus (as then in effect) contains any untrue statement of a
material fact or omits to state a material fact necessary to make the statements
therein (in the case of the Prospectus or any preliminary prospectus, in light
of the circumstances under which they were made) not misleading and, as promptly
as practicable thereafter, prepare and file with the SEC an amendment or
supplement to the Registration Statement or the Prospectus so that, as
thereafter delivered to the purchasers of such Transaction Registrable Shares,
such Prospectus will not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. COMSAT shall make
every reasonable effort to obtain the withdrawal of any order suspending the
effectiveness of the Registration Statement at the earliest possible moment.
Notwithstanding anything in the foregoing to the contrary, if, in the opinion of
counsel for COMSAT, there shall have arisen any legal impediment to the offer of
the Transaction Registrable Shares made by the Prospectus or if any legal action
or administrative proceeding shall have been instituted or threatened or any
other claim shall have been made relating to the offer made by the Prospectus or
against any of the parties involved in the offer, COMSAT may at any time upon
written notice to Lockheed Xxxxxx (i) terminate the effectiveness of the
Registration Statement or (ii) withdraw from the Registration Statement the
Transaction Registrable Shares; provided that, (A) if the registration was
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requested under Section 1 hereof it shall not count as the use of such right
unless all securities registered thereunder are sold and (B) if the registration
was requested under Section 1 hereof, COMSAT shall pay, in addition to the
expenses set forth in Section 5 hereof, any expenses incurred by Lockheed Xxxxxx
in connection with such registration.
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(f) If requested by Lockheed Xxxxxx or an underwriter of Transaction
Registrable Shares, COMSAT shall as promptly as practicable prepare and file
with the SEC an amendment or supplement to the Registration Statement or the
Prospectus containing such information as required by Law to be set forth
therein as Lockheed Xxxxxx or the underwriter requests to be included therein,
including, without limitation, information with respect to the Transaction
Registrable Shares being sold by Lockheed Xxxxxx to the underwriter, the
purchase price being paid therefor by such underwriter and other terms of the
underwritten offering of the Transaction Registrable Shares to be sold in such
offering.
(g) Lockheed Xxxxxx shall report to COMSAT distributions made by
Lockheed Xxxxxx of Transaction Registrable Shares pursuant to the Prospectus
and, upon written notice by COMSAT that an event has occurred as a result of
which an amendment or supplement to the Registration Statement or the Prospectus
is required, Lockheed Xxxxxx shall cease further distributions pursuant to the
Prospectus until notified by COMSAT of the effectiveness of the amendment or
supplement. Lockheed Xxxxxx shall distribute Transaction Registrable Shares
only in accordance with the manner of distribution contemplated by the
Prospectus with respect to the Transaction Registrable Shares. Lockheed Xxxxxx,
by participating in a registration pursuant to this Agreement, acknowledges that
the remedies of COMSAT at Law for failure by Lockheed Xxxxxx to comply with the
undertaking contained in this paragraph (g) would be inadequate and that the
failure would not be adequately compensable in damages and would cause
irreparable harm to COMSAT, and therefore agrees that undertakings made by
Lockheed Xxxxxx in this paragraph (g) may be specifically enforced.
(h) If the registration is made pursuant to Section 2 hereof and the
registration involves an underwritten offering, in whole or in part, COMSAT may
require the Transaction Registrable Shares to be included in such underwriting
on the same terms and conditions as shall be applicable to the other securities
being sold through underwriters in the registration. In that event, Lockheed
Xxxxxx shall be a party to the related underwriting agreement.
(i) If the registration involves an underwritten offering, (i) at the
request of Lockheed Xxxxxx or COMSAT, COMSAT and Lockheed Xxxxxx shall enter
into an appropriate underwriting agreement with respect to the Transaction
Registrable Shares containing terms and provisions customary in agreements of
that nature, including, without limitation, provisions with respect to
indemnification and contribution of underwriters substantially the same as those
set forth in Section 6 hereof, (ii) COMSAT shall make such representations and
warranties, and deliver such certificates with respect thereto, to Lockheed
Xxxxxx and each underwriter of such Transaction Registrable Shares, and in each
case in such form, substance and scope, as are customarily made by issuers to
underwriters in primary underwritten offerings, (iii) COMSAT shall obtain and
deliver to Lockheed Xxxxxx and each underwriter opinions of counsel to COMSAT
and updates thereof (which counsel and opinions (in form, substance and scope)
shall be reasonably satisfactory to the managing underwriter in such offering)
addressed to Lockheed Xxxxxx and such underwriters with respect to matters
customarily covered by such opinions requested in underwritten offerings and
such other matters as may reasonably be requested by Lockheed Xxxxxx or such
underwriters, (iv) COMSAT shall obtain and deliver to Lockheed
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Xxxxxx and each underwriter "cold comfort" letters and updates thereof from the
independent certified public accountants of COMSAT (and, if necessary, any other
independent certified public accountants of any Subsidiary of COMSAT or of any
business of COMSAT for which financial statements and financial data are, or
required to be, included in the Registration Statement), addressed to Lockheed
Xxxxxx and such underwriters, in customary form and substance, with respect to
matters customarily covered by "cold comfort" letters in connection with primary
underwritten offerings, (v) COMSAT shall enter into such agreements and take
such other actions as Lockheed Xxxxxx on advice of the underwriters, or the
underwriters may reasonably request in order to expedite or facilitate the
disposition of such Registrable Shares, including, without limitation, making
members of senior management available for, preparing for, and participating in,
such number of "road shows," investor conference calls and all such other
customary selling efforts as Lockheed Xxxxxx on advice of the underwriters, or
the underwriters shall reasonably request in order to expedite or facilitate the
disposition of such Registrable Shares and (vi) COMSAT shall prepare or obtain,
and deliver to Lockheed Xxxxxx and the underwriters, such other documents as may
reasonably be requested by Lockheed Xxxxxx or such underwriters.
(j) Prior to sales of such Transaction Registrable Shares, COMSAT
shall cooperate with Lockheed Xxxxxx and each underwriter of Transaction
Registrable Shares to facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legends) representing the Transaction
Registrable Shares to be sold under the Registration Statement, and to enable
such Transaction Registrable Shares to be in such denominations and registered
in such names as Lockheed Xxxxxx or the underwriter may request.
(k) COMSAT shall use its best efforts to comply with all applicable
rules and regulations of the SEC, and make available to its securityholders, as
soon as reasonably practicable, an earnings statement covering the period of at
least twelve months, but not more than eighteen months, beginning with the first
calendar month after the effective date of the Registration Statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act.
(l) COMSAT shall take all action required to cause the Transaction
Registrable Shares to be listed on each national securities exchange on which
the COMSAT Common Stock shall then be listed, if any, or to be qualified for
inclusion in the NASDAQ/National Market System, if the COMSAT Common Stock is
then so qualified, and in each case if the listing or inclusion of the
Transaction Registrable Shares is then permitted under the rules of such
national securities exchange or the NASD, as the case may be.
(m) For the purposes of this Agreement, the following terms shall have
the following meanings:
(i) "PROSPECTUS" means (A) the prospectus relating to the Transaction
Registrable Shares included in a Registration Statement, (B) if a
prospectus relating to the Transaction Registrable Shares shall be filed
with the SEC pursuant to Rule 424 (or
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any similar provision then in force) under the Securities Act, such
prospectus, and (C) in the event of any amendment or supplement to the
prospectus after the effective date of the Registration Statement, then
from and after the effectiveness of the amendment or the filing with the
SEC of the supplement, the prospectus as so amended or supplemented;
(ii) "REGISTRATION STATEMENT" means (A) a registration statement filed
by COMSAT in accordance with Section 3(d) hereof, including exhibits and
financial statements thereto, in the form in which it shall become
effective, the documents incorporated by reference therein pursuant to Item
12 of Form S-3 (or any similar provision or forms then in force) under the
Securities Act and information deemed to be a part of such registration
statement pursuant to paragraph (b) of Rule 430A (or any similar provision
then in force) and (B) in the event of any amendment thereto after the
effective date of the registration statement, then from and after the
effectiveness of the amendment, the registration statement as so amended;
and
(iii) information "CONTAINED", "INCLUDED" or "STATED" in a
Registration Statement or a Prospectus (or other references of like import)
includes information incorporated by reference.
SECTION 4. BLACKOUT PROVISIONS.
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(a) Subject to the provisions of paragraph (b) below, by delivery of
written notice to Lockheed Xxxxxx, stating which one or more of the
circumstances in paragraph (b) below shall apply to Lockheed Xxxxxx, COMSAT may
postpone effecting a registration under this Agreement pursuant to this Section
4 or require Lockheed Xxxxxx to refrain from otherwise disposing of any
Registrable Shares (whether pursuant to Rule 144 or 144A under the Securities
Act or otherwise), for a reasonable period specified in the notice but not
exceeding two 90 day periods in any 12 month period (which periods may not be
extended or renewed); provided, that if COMSAT postpones effecting a
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registration hereunder pursuant to clause (i) of paragraph (b) below, then the
next such blackout period shall not commence until COMSAT has effected the
registration so postponed and the Registrable Shares registered thereunder have
been distributed and if COMSAT requires Lockheed Xxxxxx to refrain from
otherwise disposing of any Registrable Shares, then the next such blackout
period shall not come until 90 days after the expiration of the previous such
period.
(b) COMSAT may postpone effecting a registration or apply to Lockheed
Xxxxxx any of the limitations specified in paragraph (a) above only if (i) an
investment banking firm of recognized national standing shall advise COMSAT in
writing that effecting the registration or the disposition by Lockheed Xxxxxx of
Registrable Shares would materially and adversely affect an offering of Equity
Securities of COMSAT the preparation of which had then been commenced or (ii)
COMSAT is in possession of material non-public information the disclosure of
which during the period specified in such notice COMSAT reasonably believes in
good faith would not be in the best interests of COMSAT.
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SECTION 5. EXPENSES.
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(a) In connection with the registration of Transaction Registrable
Shares pursuant to this Agreement, whether or not any related Registration
Statement shall become effective (except in connection with a registration under
Section 1 where such registration is withdrawn because Lockheed Xxxxxx
determines not to proceed with such registration for any reason other than
pursuant to Section 1(c)(iii)), COMSAT shall bear all expenses of the following:
(i) preparing, printing and filing each Registration Statement and
Prospectus and each qualification or notice required to be filed under
federal and state securities Laws or the rules and regulations of the
National Association of Securities Dealers, Inc. (the "NASD") in connection
with a registration pursuant to Section 1 hereof;
(ii) furnishing to Lockheed Xxxxxx one executed copy of the related
Registration Statement and the number of copies of the related Prospectus
that may be required by Section 3(e) hereof to be so furnished, together
with a like number of copies of each amendment, post-effective amendment or
supplement;
(iii) performing its obligations under Section 3(e) hereof;
(iv) printing and issuing share certificates, including the transfer
agent's fees, in connection with each distribution so registered;
(v) preparing audited financial statements required by the
Securities Act to be included in the Registration Statement and preparing
audited financial statements for use in connection with the registration
other than audited financial statements required by the Securities Act;
(vi) internal and out-of-pocket expenses of COMSAT and its employees
(including, without limitation, all salaries and expenses of its officers
and employees performing legal or accounting duties);
(vii) listing of the Registrable Shares on national securities
exchanges or inclusion of the Registrable Shares on the NASDAQ/National
Market System; and
(viii) fees and expenses of any special experts retained by COMSAT in
connection with the registration.
(b) Lockheed Xxxxxx shall bear all other expenses incident to the
distribution by Lockheed Xxxxxx of the Registrable Shares owned by it in
connection with a registration pursuant to this Agreement, including without
limitation the selling expenses of Lockheed Xxxxxx, commissions, underwriting
discounts, insurance, fees of counsel for Lockheed Xxxxxx and its underwriters.
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SECTION 6. INDEMNIFICATION
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(a) COMSAT shall indemnify and hold harmless Lockheed Xxxxxx, each
underwriter of Transaction Registrable Shares to be distributed pursuant to a
registration pursuant to this Agreement, the officers, directors, employees and
agents of Lockheed Xxxxxx and the underwriter and each Person, if any, who
controls Lockheed Xxxxxx or the underwriter within the meaning of Section 15 (or
any successor provision) of the Securities Act, and their respective successors,
against all claims, losses, damages and liabilities to third parties (or actions
in respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in the Registration Statement or
the Prospectus or other document incident thereto or 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
Lockheed Xxxxxx and each other Person indemnified pursuant to this Section 6(a)
for any legal and any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or action;
provided that COMSAT shall not be liable in any case to the extent that any such
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claim, loss, damage or liability arises out of or is based upon:
(i) any untrue statement or omission based upon written
information furnished to COMSAT by Lockheed Xxxxxx or the underwriter of such
Transaction Registrable Shares specifically for use in the Registration
Statement or the Prospectus, or
(ii) Lockheed Xxxxxx'x failure to comply with any Prospectus
delivery requirements.
(b) Lockheed Xxxxxx, by participating in a registration pursuant to
this Agreement, thereby agrees to indemnify and to hold harmless COMSAT and its
officers, directors, employees, agents and the underwriter and each Person, if
any, who controls any of them within the meaning of Section 15 (or any successor
provision) of the Securities Act, and their respective successors, against all
claims, losses, damages and liabilities to third parties (or actions in respect
thereof) arising out of or based upon:
(i) any untrue statement (or alleged untrue statement) of a
material fact contained in the Registration Statement or the Prospectus or
other document incident thereto or 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, or
(ii) Lockheed Xxxxxx'x failure to comply with any Prospectus
delivery requirements,
and shall reimburse COMSAT and each other Person indemnified pursuant to this
Section 6(b) for any legal and any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action; provided that this Section 6(b) shall apply only with
--------
respect to claims, losses, damages and liabilities arising out of or based upon
11
the matters set forth at clause (i) above if (and only to the extent that) the
statement or omission was made in reliance upon and in conformity with
information furnished to COMSAT in writing by Lockheed Xxxxxx specifically for
use in the Registration Statement or the Prospectus.
(c) If any action or proceeding (including any governmental
investigation or inquiry) shall be brought, asserted or threatened against any
Person indemnified under this Section 6, the indemnified Person shall promptly
notify the indemnifying Person in writing, and the indemnifying Person shall
assume the defense of the action or proceeding, including the employment of
counsel reasonably satisfactory to the indemnified Person and the payment of all
expenses. The indemnified Person shall have the right to employ separate
counsel in any action or proceeding and to participate in the defense of the
action or proceeding, but the fees and expenses of that counsel shall be at the
expense of the indemnified Person unless:
(i) the indemnifying Person shall have agreed to pay those fees and
expenses; or
(ii) the indemnifying Person shall have failed to assume the defense
of the action or proceeding or shall have failed to employ counsel
reasonably satisfactory to the indemnified Person in the action or
proceeding; or
(iii) the named parties to the action or proceeding (including any
impleaded parties) include both the indemnified Person and the indemnifying
Person, and the indemnified Person shall have been advised by counsel that
there may be one or more legal defenses available to the indemnified Person
that are different from or additional to those available to the
indemnifying Person (in which case, if the indemnified Person notifies the
indemnifying Person in writing that it elects to employ separate counsel at
the expense of the indemnifying Person, the indemnifying Person shall not
have the right to assume the defense of such action or proceeding on behalf
of the indemnified Person; it being understood, however, that the
indemnifying Person shall not, in connection with any one action or
proceeding or separate but substantially similar or related actions or
proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys at any time for the
indemnified Person, which firm shall be designated in writing by the
indemnified Person).
The indemnifying Person shall not be liable for any settlement of any action or
proceeding effected without its written consent, but if settled with its written
consent, or if there be a final judgment for the plaintiff in any such action or
proceeding, the indemnifying Person shall indemnify and hold harmless the
indemnified Person from and against any loss or liability by reason of the
settlement or judgment.
(d) If the indemnification provided for in this Section 6 is
unavailable to an indemnified Person (other than by reason of exceptions
provided in this Section 6) in respect of losses, claims, damages, liabilities
or expenses referred to in this Section 6, then each applicable
12
indemnifying Person, in lieu of indemnifying the indemnified Person, shall
contribute to the amount paid or payable by the indemnified Person as a result
of the losses, claims, damages, liabilities or expenses in such proportion as is
appropriate to reflect the relative fault of the indemnifying Person on the one
hand and of the indemnified Person on the other in connection with the
statements or omissions which resulted in the losses, claims, damages,
liabilities or expenses as well as any other relevant equitable considerations.
The relative fault of the indemnifying Person on the one hand and of the
indemnified Person 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 indemnifying Person or by the indemnified Person and by these
Persons' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The parties agree that it would
not be just and equitable if contribution pursuant to this Section 6(d) were
determined by pro rata allocation or by any other method of allocation that does
not take into account the equitable considerations referred to in the
immediately preceding sentence. The amount paid or payable by a Person as a
result of the losses, claims, damages, liabilities and expenses shall be deemed
to include any legal or other fees or expenses reasonably incurred by the Person
in connection with investigating or defending any action or claim.
Notwithstanding the foregoing, neither Lockheed Xxxxxx nor any underwriter of
Transaction Registrable Shares shall be required to contribute any amount in
excess of the amount by which (i) in the case of Lockheed Xxxxxx, the net
proceeds received by Lockheed Xxxxxx xxxx the sale of Transaction Registrable
Shares or (ii) in the case of the underwriter, the total price at which such
Transaction Registrable Shares purchased by it and distributed to the public
were offered to the public exceeds, in any such case, the amount of any damages
that Lockheed Xxxxxx or such underwriter, as the case may be, has otherwise been
required to pay by reason of any untrue or alleged untrue statement or 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 is not guilty of such fraudulent misrepresentation.
(e) Lockheed Xxxxxx shall cause each underwriter of any Transaction
Registrable Shares to be distributed pursuant to a registration pursuant to
Section 1 hereof to agree in writing on terms reasonably satisfactory to COMSAT
to indemnify and to hold harmless COMSAT and its officers and directors and each
Person, if any, who controls any of them within the meaning of Section 15 (or
any successors provision) of the Securities Act, and their respective
successors, against all claims, losses, damages and liabilities to third parties
(or actions in respect thereof) arising out of or based upon:
(i) any untrue statement (or alleged untrue statement) of a
material fact contained in the Registration Statement or the Prospectus or
other document incident thereto or 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, or
(ii) such underwriter's failure to comply with applicable
Prospectus delivery requirements,
13
and shall reimburse COMSAT and each other Person indemnified pursuant to this
Section 6(e) for any legal and any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action; provided that the agreement shall apply only with respect
--------
to claims, losses, damages and liabilities arising out of or based upon the
matters set forth at clause (i) above if (and only to the extent that) the
statement or omission was made in reliance upon and in conformity with
information furnished to COMSAT in writing by such underwriter specifically for
use in the Registration Statement or the Prospectus.
SECTION 7. EXEMPT SALES. COMSAT shall make all filings with the SEC
------------
required by paragraph (c) of Rule 144 (or any similar provision then in force)
under the Securities Act to permit the sale of Registrable Shares by any holder
thereof (other than an Affiliate of COMSAT) to satisfy the conditions of Rule
144 (or any similar provision then in force). COMSAT shall, promptly upon the
written request of the holder of Registrable Shares, deliver to such holder a
written statement as to whether COMSAT has complied with all such filing
requirements.
SECTION 8. MERGER, CONSOLIDATION, EXCHANGE, ETC. In the event,
------------------------------------
directly or indirectly, (1) COMSAT shall merge with and into, or consolidate
with, or consummate a share exchange with, any other Person, or (2) any Person
shall merge with and into, or consolidate with COMSAT and COMSAT shall be the
surviving corporation of such merger or consolidation and, in connection with
such merger or consolidation, all or part of the Registrable Shares shall be
changed into or exchanged for stock or other securities of any other Person,
then, in each such case, proper provision shall be made so that such other
Person shall be bound by the provisions of this Agreement and the term "COMSAT"
shall thereafter be deemed to refer to such other Person.
SECTION 9. NOTICES. All notices and other communications hereunder
-------
shall be in writing and shall be deemed to have been duly given (and shall be
deemed to have been duly received if so given) if (i) personally delivered, (ii)
sent by postage prepaid certified or registered mail, return receipt requested,
(iii) sent by recognized overnight courier, or (iv) transmitted by telecopier,
with a copy sent by postage prepaid certified or registered mail, return receipt
requested, or by recognized overnight courier addressed to the respective
parties as set forth in Section 8.4 of the Merger Agreement.
SECTION 10. NO WAIVERS; REMEDIES. No failure or delay by any party
--------------------
in exercising any right, power or privilege under this Agreement shall operate
as a waiver of such right, power or privilege. A single or partial exercise of
any right, power or privilege shall not preclude any other or further exercise
of such right, power or privilege or the exercise of any other right, power or
privilege. The rights and remedies provided in this Agreement shall be
cumulative and not exclusive of any rights or remedies available at law or in
equity.
SECTION 11. AMENDMENTS, ETC. No amendment, modification,
---------------
termination or waiver of any provision of this Agreement, and no consent to any
departure by a party to this Agreement from any provision of this Agreement,
shall be effective unless it shall be in writing
14
and signed and delivered by the other party to this Agreement, and then it shall
be effective only in the specific instance and for the specific purpose for
which it is given.
SECTION 12. SUCCESSORS AND ASSIGNS. The provisions of this
----------------------
Agreement shall be binding upon and inure to the benefit of the parties to this
Agreement and their respective successors and assigns.
SECTION 13. GOVERNING LAW. This Agreement shall be governed by and
-------------
construed in accordance with the internal laws of the State of Delaware. All
rights and obligations of the parties shall be in addition to and not in
limitation of those provided by applicable law.
SECTION 14. COUNTERPARTS. This Agreement may be signed in any
------------
number of counterparts, each of which shall be an original, with the same effect
as if all signatures were on the same instrument.
SECTION 15. SEVERABILITY OF PROVISIONS. Any provision of this
--------------------------
Agreement that is prohibited or unenforceable in any jurisdiction shall, as to
that jurisdiction, be ineffective to the extent of the prohibition or
unenforceability without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of the provision in any other
jurisdiction.
SECTION 16. HEADINGS AND REFERENCES. Section headings in this
-----------------------
Agreement are included for the convenience of reference only and do not
constitute a part of this Agreement for any other purpose. References to
parties and sections in this Agreement are references to the parties to or the
sections of this Agreement, as the case may be, unless the context shall require
otherwise.
SECTION 17. ENTIRE AGREEMENT. This Agreement embodies the entire
----------------
agreement and understanding of the parties and supersedes all prior agreements
or understandings with respect to the subject matters of this Agreement.
SECTION 18. SURVIVAL. Except as otherwise specifically provided in
--------
this Agreement, each representation, warranty or covenant of each party
contained in to this Agreement shall remain in full force and effect,
notwithstanding any investigation or notice to the contrary or any waiver by the
other party of a related condition precedent to the performance by such other
party of an obligation under this Agreement.
SECTION 19. EXCLUSIVE JURISDICTION. Each party (i) agrees that any
----------------------
action with respect to this Agreement or transactions contemplated by this
Agreement shall be brought exclusively in the courts of the State of Delaware or
of the United States of America for the State of Delaware, (ii) accepts for
itself and in respect of its property, generally and unconditionally, the
jurisdiction of those courts, (iii) irrevocably waives any objection, including,
without limitation, any objection to the laying of venue or based on the grounds
of forum non
----- ---
15
conveniens, which it may now or hereafter have to the bringing of any action in
----------
those jurisdictions; provided, however, that each party may assert in an action
-------- -------
in any other jurisdiction or venue each mandatory defense, third-party claim or
similar claim that, if not so asserted in such action, may not be asserted in an
original action in the courts referred to in clause (i) above. Lockheed Xxxxxx
and COMSAT each hereby appoints Corporation Trust Company as its agent for
service of process in the State of Delaware in connection with any such action.
SECTION 20. WAIVER OF JURY TRIAL. Each party waives any right to a
--------------------
trial by jury in any action to enforce or defend any right under this Agreement
or any amendment, instrument, document or agreement delivered, or which in the
future may be delivered, in connection with this Agreement and agrees that any
action shall be tried before a court and not before a jury.
SECTION 21. NON-RECOURSE. No recourse under this Agreement shall
------------
be had against any "controlling person" (within the meaning of Section 20 of the
Exchange Act) of Lockheed Xxxxxx or COMSAT or the respective shareholders,
directors, officers, employees, agents and affiliates of Lockheed Xxxxxx or
COMSAT or such controlling persons, whether by the enforcement of any assessment
or by any legal or equitable proceeding, or by virtue of any Law, it being
expressly agreed and acknowledged that no personal liability whatsoever shall
attach to, be imposed on or otherwise be incurred by such controlling person,
shareholder, director, officer, employee, agent or affiliate, as such, for any
obligations of Lockheed Xxxxxx or COMSAT, as the case may be, under this
Agreement or for any claim based on, in respect of or by reason of such
obligations or their creation.
______________________
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IN WITNESS WHEREOF, each of the parties has caused this Registration Rights
Agreement to be executed on its behalf by its officers thereunto duly
authorized, all as of the day and year first above written.
COMSAT CORPORATION
By: /s/ Xxxxx X. Flower
-------------------
Name: Xxxxx X. Flower
Title: Vice President and
Chief Financial Officer
LOCKHEED XXXXXX CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
--------------------
Name: Xxxxx X. Xxxxxxx
Title: Chairman and
Chief Executive Officer
17
