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Exhibit 10.1
EXCHANGE AGREEMENT
by and among
LORAL SPACE & COMMUNICATIONS LTD.,
AEROSPATIALE SNI and
ALCATEL ESPACE
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Dated as of June 18, 1997
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EXCHANGE AGREEMENT
EXCHANGE AGREEMENT, dated as of June 18, 1997 ("Agreement"), by and
among LORAL SPACE & COMMUNICATIONS LTD., a company organized under the laws of
Bermuda ("Loral"), 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") (Aerospatiale and Alcatel
collectively the "Stockholders").
W I T N E S S E T H :
WHEREAS, on the date hereof, (i) Aerospatiale owns 490 shares of
Common Stock, par value $.10 per share, of SS/L (shares of such Common Stock the
"SS/L Shares") and (ii) Alcatel owns 490 SS/L Shares;
WHEREAS, on March 25, 1997, pursuant to an Exchange Agreement, dated
as of December 19, 1996, as amended by Amendment No. 1 thereto, dated as of
February 6, 1997 (such Exchange Agreement, as so amended, the "DASA Agreement"),
Loral SpaceCom Corporation, a Delaware corporation ("Holdings"), acquired the
490 SS/L Shares owned by Daimler-Benz Aerospace AG ("DASA") in exchange for
$93.5 million in cash;
WHEREAS, on March 31, 1997, pursuant to a Transaction Agreement,
dated as of March 20, 1997 (the "Finmeccanica Agreement"), Loral acquired the
490 SS/L Shares owned by Finmeccanica S.p.A., a societe par azione organized
under the laws of Italy ("Finmeccanica"), in exchange for $92.3 million
aggregate principal amount of Loral's 6% Convertible Preferred Equivalent
Obligations due 2006 (the "CPEOs") having a market value of $93.5 million; and
WHEREAS, the parties hereto desire for each of the Stockholders to
exchange their SS/L Shares for Loral securities, as set forth in this Agreement,
while at the same time, preserving their strategic alliance with SS/L in the
field of Space Systems.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, the parties hereto agree as follows:
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1. THE EXCHANGE
1.1. Exchange.
1.1.1. At the Closing described in Section 1.2. below, Aerospatiale
agrees to transfer to Loral the 490 SS/L Shares held by Aerospatiale (the
"Aerospatiale SS/L Shares"), and Loral agrees to issue and deliver to
Aerospatiale: (i) 3,837,300 shares of Loral Common Stock, par value $.01 per
share ("LSC Common Stock"), and (ii) 514,200 shares of Loral's 6% Series C
Convertible Redeemable Preferred Shares, par value $.01 per share ("LSC Series C
Preferred Shares").
1.1.2. At the Closing described in Section 1.2. below, Alcatel
agrees to transfer to Loral the 490 SS/L Shares held by Alcatel (the "Alcatel
SS/L Shares"), and Loral agrees to issue and deliver to Alcatel: (i) 4,205,622
shares of LSC Common Stock and (ii) 549,463 shares of LSC Series C Preferred
Shares.
1.1.3. The LSC Series C Preferred Shares issued to the Stockholders
pursuant to this Agreement shall be issued under Schedule III to Loral's Second
Amended and Restated Bye-laws (the "Series C Schedule"), a complete and accurate
copy of which is attached hereto as Exhibit A, and, upon execution by the
Stockholders of the Registration Rights Agreement, dated March 31, 1997 ("Series
C Reg Rights Agreement"), by and among certain parties including Loral and
Finmeccanica, a copy of which is attached hereto as Exhibit B, the Stockholders
will be entitled to all the rights of an "Initial Purchaser" and a "Holder"
thereunder with this Agreement constituting a "Purchase Agreement" for all
purposes of the Series C Reg Rights Agreement.
1.2. Closing.
1.2.1. Time and Place of Closing. The closing ("Closing") of the
transactions contemplated by Section 1.1. (the "Exchange") shall take place at
the law offices of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, One Citicorp Center, ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or such other place upon which the parties
hereto may agree and shall occur on June 23, 1997 or such other date upon which
the parties hereto may agree (the "Closing Date").
1.2.2. Deliveries at Closing. At the Closing,
(a) Loral will deliver to the Stockholders share certificates
for their respective shares of (i) LSC Common Stock to be issued hereunder (such
stock the "LSC Stock") and (ii) LSC Series C Preferred Shares to be issued
hereunder (the "LSC Preferred Stock"), all registered in the name or names and
denominations as each Stockholder will have requested at least two (2) business
days prior to Closing;
(b) Aerospatiale will deliver to Loral (or a direct or
indirect wholly owned subsidiary of Loral) certificates representing the
Aerospatiale SS/L Shares, duly endorsed for transfer or accompanied by stock
powers duly executed in blank;
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(c) Alcatel will deliver to Loral (or a direct or indirect
wholly owned subsidiary of Loral) certificates representing the Alcatel SS/L
Shares, duly endorsed for transfer or accompanied by stock powers duly executed
in blank;
(d) Loral will deliver to each of the Stockholders the items
required by Section 4.1.1. as a condition to the obligations of the Stockholders
to consummate the Exchange;
(e) Aerospatiale will deliver to Loral the items required by
Section 4.1.2. as a condition to Loral's obligation to consummate the Exchange;
and
(f) Alcatel will deliver to Loral the items required by
Section 4.1.2. as a condition to Loral's obligation to consummate the Exchange.
1.2.3. Stock Transfer Taxes. Loral will bear all United States stock
transfer taxes, direct or indirect, attributable to the share transfers in the
Exchange.
2. NOMINAL VALUE
2.1. For purposes of this Agreement and related arrangements between
the parties, including the Alliance Agreement in the form set forth in Exhibit
F, the term "Nominal Value" shall mean, regardless of actual value, market value
or selling price: (i) with respect to Aerospatiale, (A) $17.0563 for each share
of Loral Common Stock until an aggregate of 3,837,300 shares of such stock have
been sold or otherwise disposed by Aerospatiale as described in Section
8.1(a)(ii) of the Alliance Agreement, and thereafter, an amount per share as
determined in accordance with Clause (i)(B), and (B) $54.5508 for each Loral 6%
Convertible Redeemable Preferred Share or any group of Loral securities
(including, subject to Clause (i)(A), any Loral Common Stock) into which such
Share was converted or for which it was exchanged (the Share or such group of
Loral securities the "Convertible Preferred Security"); (ii) with respect to
Alcatel, (A) $15.5625 for each share of Loral Common Stock until an aggregate of
4,205,622 shares of such stock have been sold or otherwise disposed of by
Alcatel as described in Section 8.1(a)(ii) of the Alliance Agreement, and
thereafter, an amount per share as determined in accordance with Clause (ii)(B),
and (B) $51.0498 for each Convertible Preferred Security, and (iii) with respect
to Finmeccanica, $50.6563 for each Convertible Preferred Security. The foregoing
dollar figures will be adjusted appropriately to reflect the effect of
conversions, exchanges, splits, combinations, stock dividends, capital
distributions and similar capital adjustments. Hypothetical examples
illustrating the intended operation of Section 8.1(a)(ii) of the Alliance
Agreement are contained in Exhibit M attached hereto.
3. REPRESENTATIONS AND WARRANTIES
3.1. Representations and Warranties of Loral. Loral represents
and warrants to each of the Stockholders as follows:
3.1.1. Loral Organization; Capitalization. Loral is a company duly
organized, validly existing and in good standing under the laws of the Islands
of Bermuda and has all requisite corporate power and authority to own its
properties and assets and to conduct its
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business as now conducted. The authorized capital stock of Loral consists of (a)
750,000,000 shares of Common Stock, par value $.01 per share, of which
191,168,755 shares are issued and outstanding and, without giving effect to the
transactions contemplated hereby, 97,533,912 additional shares are reserved for
issuance upon the exercise or conversion of outstanding options, warrants or
convertible securities; (b) 150,000,000 shares of Series A Non-Voting
Convertible Preferred Stock, par value $.01 per share, of which 45,896,977
shares are outstanding and none of which have been reserved for issuance; (c)
750,000 shares of Series B Preferred Stock, par value $.01 per share, no shares
of which are outstanding, and 250,000 shares of which have been reserved for
issuance upon the exercise of outstanding rights; and (d) 20,000,000 shares of
LSC Series C Preferred Shares, of which 13,845,774 shares are outstanding, and
none of which are reserved for issuance.
3.1.2. Authorization and Validity of Agreement. Loral has the
corporate power to enter into this Agreement and to carry out its obligations
hereunder. The execution and delivery of this Agreement and the performance of
Loral's obligations hereunder have been, or will have been on the Closing Date,
duly authorized by the Board of Directors of Loral, and no other corporate
proceedings on the part of Loral are necessary to authorize such execution,
delivery and performance. This Agreement has been duly executed by Loral and is
the legal, valid and binding obligation of Loral.
3.1.3. No Conflict or Violation. The execution, delivery and
performance by Loral of this Agreement do not and will not violate or conflict
with any provision of the charter documents or bye-laws of Loral, and do not and
will not violate any provision of any agreement or instrument to which Loral is
a party or by which it is bound, or any order, judgment or decree of any court
or other governmental or regulatory authority to which Loral is subject.
3.1.4. Validity of Securities. The shares of LSC Stock and LSC
Preferred Stock have been, or will have been as of the Closing Date, duly
authorized for issuance and sale to Aerospatiale and Alcatel pursuant to this
Agreement, and when duly executed and delivered against payment therefor as
provided herein, will be validly issued, fully paid and non-assessable; the
stock certificates evidencing the LSC Stock and LSC Preferred Stock will be in
due and proper form and comply with all applicable legal requirements; the
issuance of the LSC Stock and LSC Preferred Stock will not be subject to any
call, preemptive or other similar rights.
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3.1.5.Repurchase of SS/L Shares from DASA and Finmeccanica.
(a) On March 25, 1997, pursuant to the DASA Agreement,
Holdings acquired DASA's right, title and interest in and to SS/L Shares for
$93.5 million in cash. The DASA Agreement, a complete and accurate copy of which
is attached hereto as Exhibit C, is in full force and effect, without amendment
or breach by any party; Loral has not provided, and is not obligated to provide,
CPEOs or other consideration to DASA having an aggregate value of more than
$93.5 million, and Loral has made no purchases, or agreements, understandings or
letters of intent, creating or leading to an obligation to pay "additional
consideration" under the DASA Agreement.
(b) On March 31, 1997, pursuant to the Finmeccanica Agreement,
Loral acquired Finmeccanica's right, title and interest in and to SS/L Shares in
exchange for $92.3 million aggregate principal amount of CPEOs having a market
value of $93.5 million. The Finmeccanica Agreement, a complete and accurate copy
of which is attached hereto as Exhibit D, is in full force and effect, without
amendment or breach by any party; Loral has not provided, and is not obligated
to provide, CPEOs or other consideration to Finmeccanica having an aggregate
value of more than $93.5 million, and Loral has made no purchases or agreements,
understandings or letters of intent, creating or leading to an obligation to pay
"additional consideration" under the Finmeccanica Agreement. In addition,
Finmeccanica has not been granted, and does not have, any rights or benefits
with respect to SS/L that have not been, or at Closing will not be, granted on
an equal basis to the Stockholders.
(c) All periods during which "additional consideration" is to
be measured or calculated under the DASA Agreement, Finmeccanica Agreement, and
that certain Agreement, dated August 9, 1996, by and among Loral, Holdings (as
defined herein), ▇▇▇▇▇▇ Brothers Capital Partners II, L.P., ▇▇▇▇▇▇ Brothers
Merchant Banking Portfolio Partnership L.P., ▇▇▇▇▇▇ Brothers Offshore Investment
Partnership L.P. and ▇▇▇▇▇▇ Brothers Offshore Investment Partnership-Japan L.P.,
have expired.
3.1.6.LSC Corp. Matters.
(a) LSC Corp. Organization; Ownership. Loral Space &
Communications Corporation ("LSC Corp.") is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has all requisite corporate power and authority to own its properties and
assets and to conduct its business as now conducted. Loral owns, and will own as
of the Closing Date, all the outstanding shares of capital stock (having any
voting power) of LSC Corp.
(b) Authorization and Validity of Closing Agreements. LSC
Corp. has the corporate power to enter into each of the agreements and the
amendment, as applicable, referred to in Section 4.1.1.(e) (collectively the
"Closing Agreements") and to carry out its obligations thereunder. The execution
and delivery of the Closing Agreements and the performance of LSC Corp.'s
obligations thereunder have been, or will have been on the Closing Date, duly
authorized by the Board of Directors of LSC Corp., and no other corporate
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proceedings on the part of LSC Corp. are necessary to authorize such execution,
delivery and performance.
(c) No Conflict or Violation. The execution, delivery and
performance by LSC Corp. of the Closing Agreements do not and will not violate
or conflict with any provision of the charter documents or by-laws of LSC Corp.,
and do not and will not violate any provision of any agreement or instrument to
which LSC Corp. is a party or by which it is bound, or any order, judgment or
decree of any court or other governmental or regulatory authority to which LSC
Corp. is subject.
3.1.7. Holdings Matters.
(a) Holdings Organization; Ownership. Loral SpaceCom
Corporation ("Holdings") is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and has all requisite
corporate power and authority to own its properties and assets and to conduct
its business as now conducted. LSC Corp. owns, and will own as of the Closing
Date, all the outstanding shares of capital stock (having any voting power) of
Holdings.
(b) Authorization and Validity of Closing Agreements. Holdings
has the corporate power to enter into, as applicable, each of the Closing
Agreements and to carry out its obligations thereunder. The execution and
delivery of the Closing Agreements and the performance of Holdings' obligations
thereunder have been, or will have been on the Closing Date, duly authorized by
the Board of Directors of Holdings, and no other corporate proceedings on the
part of Holdings are necessary to authorize such execution, delivery and
performance.
(c) No Conflict or Violation. The execution, delivery and
performance by Holdings of the Closing Agreements do not and will not violate or
conflict with any provision of the charter documents or by-laws of Holdings, and
do not and will not violate any provision of any agreement or instrument to
which Holdings is a party or by which it is bound, or any order, judgment or
decree of any court or other governmental or regulatory authority to which
Holdings is subject.
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3.1.8. SS/L Matters.
(a) SS/L Organization; Capitalization. SS/L is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has all requisite corporate power and authority to own its
properties and assets and to conduct its business as now conducted. The
authorized capital stock of SS/L consists of 100,000 SS/L Shares and 100,000
shares of preferred stock, par value $.10 per share, of which 4,000 SS/L Shares
are issued and outstanding and no SS/L Shares are reserved for issuance upon the
exercise or conversion of outstanding options, warrants or convertible
securities. Without giving effect to the transactions contemplated hereby, 3,020
SS/L Shares are held by Holdings, and 490 SS/L Shares are held by each of
Aerospatiale and Alcatel. There are no outstanding options, warrants, agreements
or rights (including contingent rights) for any person to acquire any SS/L
Shares or any interest therein.
(b) Authorization and Validity of Closing Agreements. SS/L has
the corporate power to enter into each of the Closing Agreements and to carry
out its obligations thereunder. The execution and delivery of the Closing
Agreements and the performance of SS/L's obligations thereunder have been, or
will have been on the Closing Date, duly authorized by the Board of Directors of
SS/L, and no other corporate proceedings on the part of SS/L are necessary to
authorize such execution, delivery and performance.
(c) No Conflict or Violation. The execution, delivery and
performance by SS/L of the Closing Agreements do not and will not violate or
conflict with any provision of the Certificate of Incorporation or By-Laws of
SS/L, and do not and will not violate any provision of any agreement or
instrument to which SS/L is a party or by which it is bound, or any order,
judgment or decree of any court or other governmental or regulatory authority to
which SS/L is subject.
3.1.9. Registration and Resale of LSC Common Stock and LSC Series C
Preferred Shares. The shares of LSC Common Stock and LSC Series C Preferred
Shares issued hereunder, and, when issued, the shares of LSC Common Stock
issuable upon conversion of the LSC Series C Preferred Shares issued hereunder,
all have been duly registered under the U.S. Securities Act of 1933, as amended
(pursuant to Securities Act Registration Number 333-26517, on Form S-3), and
applicable state securities laws (collectively the "Securities Laws") and
admitted for trading on the New York Stock Exchange. Other than restrictions
imposed by the Securities Laws, the shares of LSC Common Stock issued hereunder,
the shares of LSC Series C Preferred Shares issued hereunder, and, when issued,
the shares of LSC Common Stock issuable upon conversion of the LSC Series C
Preferred Shares, are not subject to any legal or contractual restrictions on
resale other than as may be set forth in the Alliance Agreement in the form
attached hereto as Exhibit F.
3.2. Representations and Warranties of Aerospatiale. Aerospatiale
represents and warrants to Loral as follows:
3.2.1. Organization. Aerospatiale is a societe nationale
industrielle duly organized, validly existing and in good standing under the
laws of the Republic of France, and
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has all requisite corporate power and authority to own its properties and assets
and to conduct its business as now conducted.
3.2.2. Authorization and Validity of Agreement. Aerospatiale has the
corporate power to enter into this Agreement and to carry out its obligations
hereunder. The execution and delivery of this Agreement and the performance of
Aerospatiale's obligations hereunder have been, or will have been on the Closing
Date, duly authorized by the appropriate governing body of Aerospatiale, and no
other corporate proceedings on the part of Aerospatiale are necessary to
authorize such execution, delivery and performance. This Agreement has been duly
executed by Aerospatiale and is the legal, valid and binding obligation of
Aerospatiale.
3.2.3. No Conflict or Violation. The execution, delivery and
performance by Aerospatiale of this Agreement do not and will not violate or
conflict with any provision of the charter documents or by-laws (or
corresponding instruments under the laws of France) of Aerospatiale, and do not
and will not violate any provision of any agreement or instrument to which
Aerospatiale is a party or by which it is bound, or any order, judgment or
decree of any court or other governmental or regulatory authority to which
Aerospatiale is subject.
3.2.4. Title to SS/L Shares. Aerospatiale holds good and valid title
to the Aerospatiale SS/L Shares, which shares are owned by Aerospatiale free and
clear of any lien or other right or claim, except to the extent set forth in the
Stockholders Agreement, dated as of April 22, 1991, by and among SS/L, the
Stockholders, Finmeccanica (through its predecessor in interest), Loral
Corporation, a New York corporation ("Old Loral"), and Loral Aerospace Holdings,
Inc., a Delaware corporation ("Old Holdings"), as amended by Amendment No. 1 to
Stockholders Agreement, dated as of November 10, 1992, by and among the parties
to the aforementioned Stockholders Agreement, DASA and Loral Aerospace
Corporation, a Delaware Corporation ("LAC") (such Stockholders Agreement, as
amended by such Amendment No. 1, hereinafter the "Stockholders Agreement"), and
when such SS/L Shares are acquired by Loral in accordance with the terms of this
Agreement, Loral will acquire good and valid title to such SS/L Shares free of
any lien or other right or claim created or suffered by Aerospatiale.
3.2.5. No Brokers or Agents. Aerospatiale has not retained the
services of any broker or agent in connection with the Exchange.
3.3. Representations and Warranties of Alcatel. Alcatel
represents and warrants to Loral as follows:
3.3.1. Organization. Alcatel is a societe anonyme duly organized,
validly existing and in good standing under the laws of the Republic of France,
and has all requisite corporate power and authority to own its properties and
assets and to conduct its business as now conducted.
3.3.2. Authorization and Validity of Agreement. Alcatel has the
corporate power to enter into this Agreement and to carry out its obligations
hereunder. The execution and delivery of this Agreement and the performance of
Alcatel's obligations hereunder have been, or will have been on the Closing
Date, duly authorized by the appropriate governing body of
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Alcatel, and no other corporate proceedings on the part of Alcatel are necessary
to authorize such execution, delivery and performance. This Agreement has been
duly executed by Alcatel and is the legal, valid and binding obligation of
Alcatel.
3.3.3. No Conflict or Violation. The execution, delivery and
performance by Alcatel of this Agreement do not and will not violate or conflict
with any provision of the charter documents or by-laws (or corresponding
instruments under the laws of France) of Alcatel, and do not and will not
violate any provision of any agreement or instrument to which Alcatel is a party
or by which it is bound, or any order, judgment or decree of any court or other
governmental or regulatory authority to which Alcatel is subject.
3.3.4. Title to SS/L Shares. Alcatel holds good and valid title to
the Alcatel SS/L Shares, which shares are owned by Alcatel free and clear of any
lien or other right or claim, except to the extent set forth in the Stockholders
Agreement, and when such SS/L Shares are acquired by Loral in accordance with
the terms of this Agreement, Loral will acquire good and valid title to such
SS/L Shares free of any lien or other right or claim created or suffered by
Alcatel.
3.3.5. No Brokers or Agents. Alcatel has not retained the services
of any broker or agent in connection with the Exchange.
4. CONDITIONS TO CLOSING
4.1. Conditions to the Closing.
4.1.1. Conditions to Obligations of Each of the Stockholders. The
obligations of each Stockholder to consummate the Exchange are subject to the
satisfaction or waiver, at or prior to the Closing Date, of the following
conditions:
(a) the representations and warranties of Loral contained
herein shall be true and correct in all material respects on and as of the
Closing Date as if made on and as of such date;
(b) Loral shall have performed and complied in all material
respects with all agreements required by this Agreement to be performed or
complied with by it on or prior to the Closing Date;
(c) such Stockholder shall have received a certificate signed
by an executive officer of Loral to the effect that the conditions set forth in
paragraphs (a) and (b) above have been satisfied;
(d) such Stockholder shall have received an opinion, dated the
Closing Date, from ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ as to due formation of Loral and
the legality of the LSC Common Stock and LSC Series C Preferred Shares issued to
such Stockholder;
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(e) Loral and, as applicable, LSC Corp., Holdings, and the
other parties thereto (other than such Stockholder) shall have executed and
delivered to such Stockholder, the Series C Reg Rights Agreement, attached
hereto as Exhibit B, the Registration Rights Agreement in the form of Exhibit E
attached hereto, the Alliance Agreement in the form of Exhibit F attached
hereto, and the Amendment No. 2 to Operational Agreement (amending the
Operational Agreement dated April 22, 1991 as amended by Amendment No. 1, dated
November 10, 1992 (the "Operational Agreement")) in the form of Exhibit G
attached hereto;
(f) the By-Laws of SS/L shall have been amended and restated
by the adoption of the resolutions in the form of Exhibit J attached hereto, and
such Stockholder shall have received a certificate, dated the Closing Date, from
the Secretary of SS/L attesting to and attaching true and complete copies of the
SS/L Certificate of Incorporation and By-Laws; and
(g) The Series C Schedule attached hereto as Exhibit A shall
be in full force and effect.
4.1.2. Conditions to Obligations of Loral. The obligations of Loral
to consummate the Exchange are subject to the satisfaction or waiver, at or
prior to the Closing Date, of the following conditions:
(a) the representations and warranties of each Stockholder
contained herein shall be true and correct in all material respects on and as of
the Closing Date as if made on and as of such date;
(b) each Stockholder shall have performed and complied in all
material respects with all agreements required by this Agreement to be performed
or complied with by it on or prior to the Closing Date;
(c) Loral shall have received from each Stockholder a
certificate signed by an executive officer of such Stockholder to the effect
that the conditions set forth in paragraphs (a) and (b) above have been
satisfied; and
(d) each Stockholder shall have executed and delivered (i) to
Loral the Series C Reg Rights Agreement attached hereto as Exhibit B, and (ii)
to Loral and, as applicable, LSC Corp., Holdings, and the other parties thereto
(other than such Stockholder) the Registration Rights Agreement in the form of
Exhibit E attached hereto, the Alliance Agreement in the form of Exhibit F
attached hereto, and the Amendment No. 2 to Operational Agreement in the form of
Exhibit G attached hereto.
4.1.3. Conditions to Obligations of Loral and Each of the
Stockholders. The obligations of Loral and each of the Stockholders to
consummate the Exchange are subject to the satisfaction or waiver at or prior to
the Closing Date, of the following conditions:
(a) The Defense Investigative Service of the United States
Department of Defense ("DoD") shall have countersigned and returned the letter
dated June 17, 1997, from counsel for Loral, in the form of Exhibit K attached
hereto; and
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(b) Finmeccanica shall have executed and delivered to Loral
and each of the Stockholders the Alliance Agreement in the form of Exhibit F
hereto, and the Amendment No. 2 to Operational Agreement in the form of Exhibit
G attached hereto.
5. TERMINATION
5.1. Termination. If Closing has not been completed on or
before July 31, 1997 for any reason, any Stockholder that did not default in
its obligations hereunder may terminate this Agreement without penalty.
5.2. Restated Stockholders Agreement. Upon termination pursuant to
Section 5.1. and demand by a Stockholder that did not default in its obligations
under this Agreement, the parties hereto promptly shall execute and deliver the
Restated Stockholders Agreement in the form attached hereto as Exhibit L for the
purposes of implementing among themselves the Term Sheet, dated as of July 2,
1996, by and among SS/L, Loral, the Stockholders, DASA and Finmeccanica. The
provisions of this Section 5.2. shall survive any termination of this Agreement.
6. MISCELLANEOUS
6.1. United States Department of Defense.
6.1.1. Loral, SS/L and each Stockholder shall, and each shall use
its reasonable best efforts to cause DoD to, execute and deliver as soon as
reasonably possible the Security Control Agreement in the form of Exhibit H
attached hereto and the Visitation Procedures Agreement in the form of Exhibit I
attached hereto, and, to that end, each Stockholder shall consider in good faith
any changes that DoD may propose to those agreements. Each Stockholder agrees
not to reject any modification to either or both of the aforesaid agreements
proposed by DoD unless such modification would adversely affect the rights of
such Stockholder under the Alliance Agreement (including the Schedules and
Attachments thereto) or the Operational Agreement (including the Schedules and
Attachments thereto). Each Stockholder hereby confirms that it is not its
intention or desire to exercise the rights it may have pursuant to Section
6.1.2.
6.1.2. If the parties hereto have consummated the Exchange and the
DoD has not executed, on or prior to December 31, 1997 (i) the Security Control
Agreement in the form of Exhibit H attached hereto (as it may be modified in
accordance with Section 6.1.1.) and the Visitation Procedures Agreement in the
form of Exhibit I attached hereto (as it may be modified in accordance with
Section 6.1.1.), then each Stockholder shall have the right ("Swap Back Option")
to transfer to Loral all, but not less than all, of the LSC Common Stock and LSC
Series C Preferred Shares issued to such Stockholder in the Exchange in exchange
for SS/L Shares representing 12.25% of the total number of SS/L Shares issued
and outstanding. A Stockholder may elect to exercise the Swap Back Option by
delivery of a notice to Loral by January 23, 1998. The closing date of the
transactions contemplated by exercise of Swap Back Options shall occur on the
later of (A) February 6, 1998 and (B) the expiration of all regulatory holding
periods
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(including waiting periods under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended) and the obtaining of all governmental approvals, if
any, applicable to such transactions (including, with respect to Aerospatiale,
the approval of the French Ministry of Defense ("MOD") required pursuant to
Decret No.53-707 of 9 August 1953, modified by Decret No. 78-173 of 16 February
1978 (such approval, the "MOD Approval")). Upon closing of the transactions
contemplated by exercise of Swap Back Options, each Stockholder participating in
the Swap Back Option, Loral, LSC Corp., Holdings, and all stockholders of SS/L
not included among the foregoing parties shall thereupon become parties to the
Restated Stockholders Agreement in the form of Exhibit L attached hereto.
6.2. French Ministry of Defense
6.2.1. Aerospatiale shall promptly apply for, and use its reasonable
best efforts to obtain, as soon as possible, MOD Approval for Aerospatiale's
investment in Loral in accordance with this Agreement. Aerospatiale promptly
shall provide Loral copies of all correspondence to and from the MOD in
connection with this application, and shall keep Loral informed of relevant
developments.
6.2.2. If on or prior to December 31, 1997 (or such later date prior
to June 30, 1998, as Loral may designate by notice to the Stockholders), the MOD
shall have rejected in writing, or otherwise have failed to approve,
Aerospatiale's investment pursuant to this Agreement, Aerospatiale shall have
the right ("MOD Option") to transfer to Loral all, but not less than all, of the
LSC Common Stock and LSC Series C Preferred Shares issued to Aerospatiale in the
Exchange, in return for SS/L Shares representing 12.25% of the total number of
SS/L shares issued and outstanding. The MOD Option would be exercisable by
Aerospatiale by delivery of a notice to Loral by no later than January 23, 1998.
The closing date of the transactions contemplated by exercise of the MOD Option
shall occur on the later of (A) two weeks after delivery of the aforesaid notice
to Loral, and (B) the expiration of all regulatory holding periods (including
waiting periods under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976,
as amended) and the obtaining of all governmental approvals, if any, applicable
to such transactions.
6.2.3. Upon consummation of the transactions contemplated by
exercise of the MOD Option, Aerospatiale, Loral, LSC Corp., Holdings, and all
stockholders of SS/L not included among the foregoing parties shall thereupon
execute and deliver, and become parties to, the Restated Stockholders Agreement
in the form of Exhibit L attached hereto. In addition, Aerospatiale and Loral
shall execute and deliver any waivers, consents or other agreements as may be
reasonably requested to prevent the rights of Aerospatiale under the aforesaid
agreements from conflicting with or limiting the rights of the other Strategic
Participants under the Alliance Agreement and Operational Agreement.
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6.3. Consents and Waivers by Stockholders.
6.3.1. Effective upon the Closing, each of the Stockholders hereby
(a) consents to the Loral/Lockheed ▇▇▇▇▇▇ Transaction (as defined below) in so
far as such transaction, together with subsequent transactions completed by
Loral, LSC Corp., and Holdings prior to the date hereof, relate to the rights
and obligations between Loral and LSC Corp. (as successors in interest to Old
Loral) and Holdings (as successor in interest to Old Holdings and LAC), on the
one hand, and the Stockholders, on the other hand, under the Stockholders
Agreement and other agreements with respect to SS/L and (b) waives any and all
put or call rights it may have in connection with the Loral/Lockheed ▇▇▇▇▇▇
Transaction.
6.3.2. The "Loral/Lockheed ▇▇▇▇▇▇ Transaction" shall mean the
following actions taken pursuant to a Restructuring, Financing and Distribution
Agreement, dated as of January 7, 1996, by and among certain parties including
Old Loral, Old Holdings, LAC, and Lockheed ▇▇▇▇▇▇ Corporation, a Maryland
corporation ("Lockheed ▇▇▇▇▇▇"), on or before April 23, 1996, collectively: (i)
LAC acted to assign and transfer to Old Holdings all of LAC's right, title and
interest in and to SS/L Shares and all of its rights and obligations under and
with respect to the Stockholders Agreement and certain other agreements relating
to SS/L; (ii) Old Holdings acted to assign and transfer to Old Loral all of Old
Holdings' right, title and interest in and to SS/L Shares (including those
received from LAC) and all of its rights and obligations under and with respect
to the Stockholders Agreement and certain other agreements relating to SS/L
(including those received from LAC); (iii) Old Loral acted to transfer all such
rights, titles, interests and obligations to Loral; (iv) Loral acted through a
series of transactions to transfer to Holdings all rights, titles, interests and
obligations Loral received from Old Holdings, including the SS/L Shares and the
rights and obligations of Old Holdings and LAC under and with respect to the
Stockholders Agreement and certain other agreements relating to SS/L; (v) Old
Loral distributed as a dividend to its stockholders 80% of the capital stock of
Loral; (vi) Lockheed ▇▇▇▇▇▇ acquired 20% of the capital stock of Loral; and
(vii) Lockheed ▇▇▇▇▇▇ acquired Old Loral through merger with and into a wholly
owned subsidiary corporation of Lockheed ▇▇▇▇▇▇.
6.4. Effectiveness of the Stockholders Agreement. The Stockholders
Agreement remains in full force and effect with respect to the respective rights
and obligations between SS/L, Loral and LSC Corp. (Loral and LSC Corp. as
successors in interest to Old Loral) and Holdings (as successor in interest to
Old Holdings and LAC), on the one hand, and the Stockholders, on the other hand,
prior to and through Closing. Upon completion of Closing, the Stockholders
Agreement shall terminate with respect to the Stockholders. Nothing hereunder
shall constitute a termination or release by a Stockholder of the continuing
obligations that: (i) the other parties to the Stockholders Agreement have
following termination of the Stockholders Agreement, or (ii) DASA has following
the termination of the Operational Agreement with respect to DASA; the
Stockholders hereby reserve their respective rights with respect to such
continuing obligations.
6.5. Several Rights and Obligations. The respective rights and
obligations of the Stockholders hereunder are several, not joint.
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6.6. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without giving
effect to the doctrine of conflicts of laws.
6.7. No Waivers; Amendments.
6.7.1. No failure or delay on the part of any party hereto 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.
6.7.2. Any provision of this Agreement may be amended or
waived if, but only if, such amendment or waiver is in writing and is signed
by each party hereto.
6.8. Survival of Provisions. The representations and warranties,
covenants and agreements contained in this Agreement shall survive and remain in
full force and effect, regardless of any investigation made by or on behalf of
any of the Stockholders, or by or on behalf of Loral, and shall survive delivery
of the LSC Stock, LSC Preferred Stock, Aerospatiale SS/L Shares and Alcatel SS/L
Shares.
6.9. Entire Agreement. This Agreement constitutes the entire
agreement and understanding between the parties hereto and supersedes any and
all prior agreements and understandings, written or oral, relating to the
subject matter hereof.
6.10. Counterparts. This Agreement may be signed in
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same instrument.
6.11. 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.
6.12. Press Releases and Public Announcements. Any press releases
and public announcements or disclosures relating to the transactions
contemplated hereby shall be made only if mutually agreed upon by the parties
hereto, except to the extent a party has been advised in writing by counsel
(with a copy provided to the other parties) that failure to disclose would
violate applicable law or stock exchange regulation, provided that any such
required disclosure will, to the extent practicable, be subject to prior
consultation among the parties.
6.13. Expenses. Except as otherwise set forth in this Agreement,
each party to this Agreement shall bear all the fees, costs and expenses that
are incurred by it in connection with the transactions contemplated hereby,
including, without limitation, attorneys' fees and fees of financial advisors
and investment bankers engaged by such party.
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IN WITNESS WHEREOF, the undersigned have duly executed and delivered
this Agreement as of the date first set forth above.
LORAL SPACE & COMMUNICATIONS LTD.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President and Chief Operating Officer
AEROSPATIALE SNI
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Le Directeur, Aerospatiale Espace &
Defense
ALCATEL ESPACE
By: /s/ ▇▇ ▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President and CEO
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