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SHAREHOLDERS AGREEMENT
DATE: 7th December, 1998
PARTIES:
(1) ALCATEL SPACECOM SOCIETE PAR ACTIONS SIMPLIFIEE, a company incorporated in
France whose principal place of business is at ▇▇, ▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ("ALCATEL");
(2) LORAL SPACE & COMMUNICATIONS LTD., a company incorporated in Bermuda whose
registered office is at ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇ ("LORAL");
(3) ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇▇▇ of ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, for
himself and as agent for the ▇▇▇▇▇▇▇-▇▇▇▇▇▇ Parties ("JSH"); and
(4) EUROPE*STAR LIMITED, a company incorporated in England under registered
number 3562015 whose registered office is at ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ (the "COMPANY").
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PART 1
INTERPRETATION AND CONDITIONS PRECEDENT TO THIS AGREEMENT
1. DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
Terms defined in Schedule 1, Part I of the Definitions Agreement dated on
or about the same date as this agreement shall have the same meaning and
construction when used in this agreement.
1.2 INTERPRETATION
The rules of construction and interpretation set out in Schedule 1, Part II
of the Definitions Agreement shall apply to this agreement, unless
otherwise specified.
1.3 SCHEDULES
The schedules form part of this agreement and shall have the same force and
effect as if expressly set out in the body of this agreement, and any
reference to this agreement shall include the schedules.
2. CONDITIONS PRECEDENT
This agreement shall come into force immediately upon execution and
delivery of all the Definitive Agreements by all the parties thereto.
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PART 2
JOINT VENTURE OPERATIONS AND MANAGEMENT
3. OPERATIONS
3.1 SCOPE OF BUSINESS
The parties agree that (unless and until a resolution is passed in
accordance with clause 6.1) the business of the Company shall be:
(i) to build, launch and operate the Initial Satellite and one or more
other geostationary communications satellites to be located at one or
more of the Orbital Positions and otherwise to develop, market,
finance, build and operate the Europe*Star System; and
(ii) to engage in the business of providing satellite services in
connection therewith,
in accordance with the provisions of this agreement and the other
Definitive Agreements.
3.2 OPERATIONS CENTRE
The operations centre of the Company will be located in Toulouse (i)
pursuant to the E*S System Contract and (ii) otherwise on terms approved by
the Directors.
3.3 SALES AND MARKETING
Sales and marketing of Europe*Star capacity will be conducted in accordance
with the principles set forth in the Loral Global Alliance Policy
Statement. The Chief Executive Officer of the Company, and any other
executive officer of the Company as may be required, shall attend monthly
operations review meetings with executives from Loral and Loral Skynet, in
order to discuss plans and operating performance.
4. MANAGEMENT PLANNING AND BUDGETS
4.1 PURPOSE OF BUSINESS PLANS AND ANNUAL BUDGETS
Subject to clause 6.1, the affairs of the Company shall be managed
initially in accordance with the Initial Business Plan, and thereafter in
accordance with the Business Plan and Annual Budget current from time to
time.
4.2 BUSINESS PLANS
(a) PREPARATION: Each Business Plan shall be prepared in respect of the period
from and including, in the case of the Initial Business Plan, the Final
Closing Date or, in the case of any subsequent Business Plan, the date on
which such plan is first adopted in accordance with the provisions of
clause 4.2(b), to the date falling 15 years after the Operations Date for
the Initial Satellite. Each Business Plan shall be substantially in the
form of, and shall contain financial data of a nature substantially the
same as that contained in, the Initial Business Plan. All Business Plans
shall also incorporate appropriate explanations of the management's
proposed strategy, business forecasts and details of the assumptions used.
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(b) ADOPTION AND APPROVAL: The A Shareholders shall adopt the Initial Business
Plan on or prior to the Final Closing Date. By not later than 60 days prior
to the end of each Annual Period, a revised draft of the Business Plan
shall be submitted by the Directors to the A Shareholders for approval in
accordance with this clause prior to the beginning of the next Annual
Period. If a Business Plan has not been so adopted or approved prior to the
relevant date or period then, until such time as a new Business Plan is so
adopted or approved in accordance with the provisions of this clause, the
previous approved Business Plan shall continue to apply, subject to clause
6.2(d).
4.3 ANNUAL BUDGETS
(a) PREPARATION: The first Annual Budget shall cover the first Annual Period
and shall be adopted by the A Shareholders on or prior to the Final Closing
Date. By not later than 60 days prior to the end of each subsequent Annual
Period, a draft annual budget covering the next Annual Period shall be
submitted by the Directors to the A Shareholders for approval in accordance
with this clause. Each draft Annual Budget shall include, inter alia, a
breakdown in reasonable detail of:
(i) monthly revenues, operating expenses, operating results and net
interest expenses;
(ii) quarterly capital expenditures and cash flow;
(iii) balance sheet as at the end of such Annual Period and profit and loss
account for such Annual Period;
(iv) expected funding requirements on a quarterly basis and the proposed
methods of meeting those requirements, including without limitation
any proposal to raise any loan or otherwise incur any indebtedness in
respect of borrowed money;
(v) cash flow return on investment.
All Annual Budgets shall incorporate, in addition to the above financial
data, appropriate explanations of the management's proposed strategy,
business forecasts and details of the assumptions used.
(b) ADOPTION AND APPROVAL: If an Annual Budget for a particular period has not
been adopted prior to the beginning of that period then, until such time as
a new Annual Budget is adopted and approved in accordance with the
provisions of this clause 4, the previous approved Annual Budget shall
continue to apply (subject to clause 6.2(d)).
5. MANAGEMENT STRUCTURE
5.1 BOARD OF DIRECTORS
(a) NUMBER: The maximum number of Directors shall be six.
(b) APPOINTMENT AND REMOVAL: No person shall be appointed or removed from
office as a Director except in accordance with the provisions of the
Articles of Association and this agreement.
(c) OBSERVERS: The ▇▇▇▇▇▇▇-▇▇▇▇▇▇ Parties shall be entitled, for so long as JSH
(or any of the other ▇▇▇▇▇▇▇-▇▇▇▇▇▇ Parties) continues to hold any B
Shares, to designate one person to attend at all meetings of the board of
Directors as a non-voting observer.
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5.2 CHAIRMAN
The Chairman of the board of Directors shall be one of the Directors
designated by Alcatel (so long as it is a Relevant A Shareholder) and shall
preside at any general meeting at which he is present.
5.3 CHIEF EXECUTIVE OFFICER
(a) NOMINATION BY ALCATEL: Alcatel shall, so long as it is a Relevant A
Shareholder, be entitled (subject to the prior written approval of Loral,
so long as it is a Relevant A Shareholder, under clause 5.3(b) below and
subject to clause 5.3(e)), by notice in writing to the Company and Loral to
nominate a Director to act as the Chief Executive Officer of the Company.
(b) APPROVAL BY LORAL: If Loral has not notified Alcatel in writing that it
disapproves of the Director nominated by Alcatel within 10 days of being
notified of such nomination, the appointment of the relevant Director shall
be treated as having been approved for the purposes of this clause 5.3.
(c) REMOVAL AND REPLACEMENT: Alcatel (so long as it is a Relevant A
Shareholder) shall be entitled, and at the request of Loral (so long as it
is a Relevant A Shareholder) shall be obliged, by notice in writing to the
Company and the other Relevant A Shareholders, to remove the Chief
Executive Officer appointed under this clause, any successor to be
appointed in accordance with paragraph (a) above.
(d) POWERS: The Chief Executive Officer shall be responsible for the day to day
operations of the Company and the implementation of the Business Plan, and
all executives of the Company (including the Head of Marketing and the
Chief Financial Officer) shall be responsible to him. Immediately upon the
appointment of the Chief Executive Officer the parties shall procure the
passing of a resolution of the board of Directors pursuant to which the
Chief Executive Officer shall be authorised and empowered to manage the day
to day operations of the Company and to implement the Business Plan (other
than Extraordinary Decisions).
(e) NOMINATION BY LORAL: Loral shall be entitled, in place of Alcatel (subject
to corresponding rights in favour of Alcatel equivalent to those of Loral
regarding approval (clause 5.3(b)), removal and replacement (clause
5.3(c)), to nominate the Chief Executive Officer under clause 5.3(a), in
the circumstances specified in paragraph 13 of Schedule 4.
(f) FIRST SENIOR VICE PRESIDENT: During any period in which Loral is entitled
to nominate the Chief Executive Officer pursuant to clause 5.3(e), Alcatel
shall be entitled (subject to corresponding rights in favour of Loral
regarding approval (clause 5.3(b)) and removal and replacement (clause
5.3(c) that apply to the nomination of the Chief Executive Officer) by
notice in writing to the Company and to Loral to nominate a person to act
as the First Senior Vice President of the Company.
5.4 HEAD OF MARKETING AND SALES
(a) NOMINATION BY LORAL: Loral shall, so long as it is a Relevant A
Shareholder, be entitled (subject to the prior written approval of Alcatel,
so long as it is a Relevant A Shareholder, under (b) below) by notice in
writing to the Company to nominate from time to time the Head of Marketing
and Sales of the Company.
(b) APPROVAL BY ALCATEL: If Alcatel has not notified Loral in writing that it
disapproves of the appointment of the Head of Marketing and Sales (whose
title shall be Executive Vice President and Vice President of Marketing and
Sales) nominated by Loral within 5 business days of being notified of such
nomination, the appointment of the relevant person shall be treated as
having been approved for the purpose of this clause.
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(c) REMOVAL AND REPLACEMENT: Loral (so long as it is a Relevant A Shareholder)
shall be entitled, and at the request of Alcatel (so long as it is a
Relevant A Shareholder) shall be obliged, by notice in writing to the
Company and the other Relevant A Shareholders, to remove from office any
head of marketing appointed under this clause, any successor to be
appointed in accordance with paragraph (a) above. The Head of Marketing and
Sales may only be removed from office pursuant to this clause 5.4.
(d) SALES AND MARKETING ORGANISATION: The Head of Marketing shall report to the
Chief Executive Officer and shall be responsible for the marketing of the
Company in accordance with the Business Plan and the Loral Global Alliance
Policy Statement. A director of sales (who need not be a Director) shall be
recommended by the Head of Marketing and Sales and appointed by the
Directors and shall report and be responsible to the Head of Marketing and
Sales. The sales organisation of the Company shall report and be
responsible to the director of sales and, ultimately, to the Head of
Marketing and Sales.
5.5 CHIEF FINANCIAL OFFICER
(a) NOMINATION: The Chief Executive Officer for the time being shall, subject
to the prior written approval of both Alcatel and Loral (in each case, so
long as it is a Relevant A Shareholder), be entitled by notice in writing
to the Company, Alcatel and Loral to nominate from time to time the Chief
Financial Officer of the Company.
(b) APPROVAL: If either Alcatel or Loral has not notified the Chief Executive
Officer that it disapproves of the appointment of the Chief Financial
Officer of the Company so nominated within 5 business days of being
notified of such nomination, it shall be deemed to have given its consent
to such nomination for the purposes of this clause 5.5.
(c) REMOVAL AND REPLACEMENT: Alcatel or Loral shall be entitled (in each case,
so long as it is a Relevant A Shareholder) by notice in writing to the
Company and the other Relevant A Shareholders, to remove from office any
Chief Financial Officer of the Company appointed under this clause, any
successor to be appointed in accordance with paragraph (a) above.
5.6 INDEMNITY
Any Relevant A Shareholder who, pursuant to this clause 5, removes (other
than pursuant to a request of the other Relevant A Shareholder) a Director
or an officer of the Company appointed in accordance with this clause 5
from office shall indemnify each other Shareholder and the Company against
any claim, whether for compensation for loss of office, wrongful dismissal
or otherwise, which arises out of the removal of that Director or officer
of the Company from office.
5.7 EXECUTIVE COMMITTEE
(a) FUNCTION: An Executive Committee shall be formed, the only functions of
which shall be to:
(i) meet with the Chief Executive Officer of the Company and such other
executive officer of the Company as may be required, for the purpose
of discussing and exchanging information regarding the operations of
the Company;
(ii) advise and make recommendations to the Chief Executive Officer as it
deems appropriate; and
(iii) discuss and attempt to resolve disagreements or disputes between the
parties in a timely manner pursuant to clause 28.1.
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(b) STATUS: The Executive Committee shall have the advisory powers and
functions specified in paragraph (a) above. It shall not be a committee of
the board of Directors for the purposes of the Articles of Association or
be vested with any powers of such a committee, except to the extent the
Directors may unanimously decide. For the avoidance of doubt, the Executive
Committee shall not be entitled to exercise any of the responsibilities,
powers and functions assigned to the Chief Executive Officer.
(c) NOMINATIONS: Immediately upon the appointment of the Chief Executive
Officer of the Company, Loral shall appoint the President of Skynet and
Alcatel shall appoint the President of Alcatel Spacecom to participate in
meetings of the Executive Committee. Each Executive Committee member shall
participate in meetings in person or, in the case of absence, may from time
to time nominate another senior executive to represent him. Loral and
Alcatel shall each be entitled from time to time to remove such committee
member and replace, as a member of the Executive Committee, the person who
is for the time being (in the case of Loral) the President of Skynet and
(in the case of Alcatel) the President of Alcatel Spacecom.
(d) MEETINGS: The Executive Committee shall convene at the Company's offices or
any other mutually agreed location and members of the Executive Committee
may participate in its meetings by telephone or video conference which
allows all persons participating in the meeting to hear each other, it
being understood that meetings in person are preferred. The Executive
Committee shall convene as frequently as required, but no less than once a
month, and its meetings may also be attended by Loral and Alcatel
executives.
6. MANAGEMENT POWERS
6.1 EXTRAORDINARY DECISIONS
(a) APPROVAL: As a matter overriding any other provision of this agreement or
the Articles of Association, the Company shall not (unless the relevant
decision is one to which Schedule 4 applies) take, or do or agree to do
anything which would require it to take, any Extraordinary Decision unless
and until each of Alcatel and Loral (in each case, so long as (i) it is a
Relevant A Shareholder and (ii) it has not transferred, other than to
transferees which continue to be members of its Group, A Shares
representing 30% or more of its holding of A Shares (appropriately adjusted
to reflect any sub-division, consolidation or other re-organisation of the
capital of the Company) immediately following completion of the
Subscription Agreement) has given its prior approval:
(i) in writing; or
(ii) by a vote in favour of a separate and specific members' resolution on
that matter; or
(iii) by a vote in favour of a separate and specific directors' resolution
on that matter by a Director appointed by that Shareholder.
(b) NO DEEMED APPROVAL: The approval of any Business Plan or Annual Budget
shall not imply or be deemed to be an approval of any matter within that
Business Plan or Annual Budget which would itself constitute an
Extraordinary Decision requiring approval in accordance with this clause.
6.2 PROCEDURES TO RESOLVE DEADLOCK
(a) CONSULTATION PROCESS: If Alcatel or Loral does not approve any
Extraordinary Decision which has been submitted to it for approval in
accordance with the provisions of clause 6.1, they shall, in good faith and
for the period of three months following the date on which such approval is
withheld, enter into discussions and take such other steps as may be
considered desirable to resolve such deadlock (including, but without
limitation, procuring, where initial discussions have been unsuccessful,
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discussions between the senior management of each Alcatel's and Loral's
Group). If, at the end of such three month period, Alcatel and Loral have
not reached an agreement on such Extraordinary Decision in accordance with
the provisions of clause 6.1 then the following provisions of this clause
shall apply.
(b) PART 1 MATTERS: If any disapproval of an Extraordinary Decision specified
in Part 1 of Schedule 1 is not resolved pursuant to (a) above, each of
Alcatel and Loral shall have the right to serve a notice on the other
Shareholders (a "DEADLOCK NOTICE"), with a copy to the Company, specifying
that a deadlock has occurred, and the provisions of clause 11.3 shall
apply.
(c) PART 2 MATTERS: If any disapproval of an Extraordinary Decision specified
in Part 2 of Schedule 1 is not resolved pursuant to (a) above, such
Extraordinary Decision may, so long as Alcatel remains a Relevant A
Shareholder, be approved by Alcatel only. Such approval may be given be
Alcatel in accordance with the provisions of clause 6.1(a) and once given,
such matter shall be regarded in all respects as having been approved by
the Company. If Alcatel approves such matter, then Loral (and members of
its Group then holding A Shares) may, if Loral continues to disapprove such
matter, serve a notice on Alcatel requiring it (or a third party nominated
by Alcatel) to purchase all of the A Shares held by Loral (and members of
its Group); and Alcatel shall be obliged to purchase or procure the
purchase of such Shares in accordance with the provisions of clause 11.2.
(d) PART 3 MATTERS: If any disapproval of an Extraordinary Decision specified
in Part 3 of Schedule 1 is not resolved pursuant to (a) above, then the
last approved Business Plan or, as the case may be, the last approved
Annual Budget shall continue to apply (pending agreement on a new Business
Plan or Annual Budget) subject to the following adjustments:
(i) all costs, revenues payments or other amounts in the relevant Business
Plan or, as the case may be, Annual Budget shall be increased by 5%
flat;
(ii) all such costs, revenues payments or other amounts shall be further
increased (beyond that specified in (i) above) to the extent necessary
to reflect any payment or other escalation or indexing provisions
applicable to any authorised contractual commitments of the Company
and its Subsidiaries, and any other present or future obligations or
liabilities or commitments of the Company and its Subsidiaries which
have been duly approved by the board of Directors or the Chief
Executive Officer in accordance with the powers set forth in clause
5.3(d).
7. MANAGEMENT FEES
(a) MANAGEMENT SERVICES AGREEMENTS: In consideration of management and other
administrative services to be provided by Alcatel and Loral, the Company
shall pay or procure the payment of management fees to Alcatel and Loral in
accordance with the Management Services Agreements.
(b) The Company agrees that if there is any modification to the definition or
the basis for determining the amount of "Gross Revenue" for the purpose of
calculating management fees under any of the Management Services
Agreements, then it will procure that the same modification is offered to
SLOD regarding the provisions of the License of the Slot Usage Agreement
insofar as those provisions affect the determination of Gross Revenue or
the extent to which SLOD is obliged to accept royalty payments in
currencies which are determined by the Company to be non-convertible or
non-transferable.
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PART 3
JOINT VENTURE FINANCING ARRANGEMENTS
8. CAPITAL REQUIREMENTS OF THE JOINT VENTURE
8.1 INITIAL CAPITAL
(a) INITIAL SHARE CAPITAL: The initial share capital of the Company will,
following the Final Closing, be the aggregate amount of the consideration
payable for the subscriptions for the A Shares and the B Shares made by or
on behalf of the Shareholders pursuant to clause 2 of the Subscription
Agreement (being $16,260,000 in the case of Alcatel, $15,622,353 in the
case of Loral and (pound)5 in the case of JSH). The proceeds of such
subscriptions shall be used in accordance with the Schedule of Sources and
Uses of Proceeds.
(b) SHAREHOLDER LOANS: In addition to the initial share capital referred to in
clause 8.1(a), the Company and the A Shareholders acknowledge that as at
the date of this agreement each A Shareholder has contributed additional
capital to fund payments under the E*S System Contract and other operating
expenses of the Company, amounting to: (i) in the case of ALCATEL,
$29,768,700 ($8,000,000 pursuant to the Authorisations to Proceed dated
20th February, 1998, $20,050,000 pursuant to the Authorisations to Proceed
dated 22nd October, 1998 and $1,718,700 towards operating expenses); and
(ii) in the case of Loral, $28,601,300 ($12,768,347 pursuant to the
Authorisations to Proceed dated 22nd October, 1998, $1,651,300 towards
operating expenses and $14,181,653 in cash on the Final Closing Date).
8.2 COMMITTED CAPITAL SPECIFIED IN THE BUSINESS PLAN
(a) FUNDING SCHEDULE: In addition to initial capital referred to in clause 8.1,
the parties agree that the capital requirements of the Company shall be
funded, by way of additional shareholder loan capital or other debt or
financial support, in the amounts and on the dates shown in the Funding
Schedule. Such initial capital and such agreed additional loan capital,
which together amounts to $125,000,000, are hereafter called the "COMMITTED
CAPITAL".
(b) FORM OF COMMITTED CAPITAL: In the absence of agreement to the contrary
between Alcatel and Loral, all instalments of Committed Capital, other than
the initial share capital referred to in clause 8.1, shall be advanced and
treated as shareholder loans to the Company on terms to be agreed by
Alcatel and Loral in accordance with clause 6.1.
(c) CONSEQUENCES OF FAILURE TO CONTRIBUTE COMMITTED CAPITAL: If and to the
extent that an A Shareholder fails to make its Committed Capital
contribution when due, then the other non-defaulting A Shareholder (i) may
(but only for so long as such failure remains unremedied) in its sole
discretion make or procure that its Affiliates make its own Committed
Capital contribution in the form of a loan to the Company which shall bear
interest at a rate equal to LIBOR plus 2% and (ii) if it so elects, having
first provided all its Committed Capital contribution as and when due or in
the form of a loan pursuant to (i) above, may in its discretion provide, or
cause its Affiliates to provide, all or part of the amount of the Committed
Capital contribution of the defaulting A Shareholder in the form of a loan
to the Company which shall bear interest at a rate equal to LIBOR plus 4%,
and which shall be repaid by the Company out of the proceeds of the
Committed Capital contribution of the defaulting A Shareholder immediately
upon receipt of such proceeds. If the defaulting A Shareholder has not made
its Committed Capital contribution within 60 days of the non-defaulting A
Shareholder making such loan, the non-defaulting A Shareholder (or its
Affiliates) making such loan shall be entitled to convert such loan into
additional A Shares at a conversion price per share equal to the lesser of
the fair market value or book value of one A Share or, in the
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case where its Affiliates have provided the loan, effect a transaction the
economic effects of which are consistent with the conversion described
above.
(d) A SHAREHOLDERS' RIGHTS OF FIRST REFUSAL: The parties shall procure that any
Shares or other securities which may be issued by the Company pursuant to
(and any right to participate in any other form of debt or other financial
support contemplated under) clause 8.2(a) or otherwise under the Business
Plan shall be offered to the A Shareholders on equal terms pro rata, as
nearly as practicable, to the nominal value of their holdings of A Shares
at the time of such offer.
8.3 ADDITIONAL CAPITAL
(a) PROCEDURE FOR RAISING ADDITIONAL CAPITAL: If the board of Directors shall
determine that any capital in addition to the Committed Capital is at any
time required from the Shareholders by the Company, whether as a result of
capital requirements which were not contemplated by the Business Plan, or
the Company being unable to raise all or part of any third party financing
contemplated in the Business Plan from external sources on reasonable
terms, or otherwise ("ADDITIONAL CAPITAL"), the Company shall (not less
than 30 days prior to the proposed date for approval of the raising of such
Additional Capital, if required under clause 6.1) issue to each of the A
Shareholders a written notice (with a copy to the B Shareholders) setting
out in reasonable detail:
(i) the amount of Additional Capital considered by the Directors to be
necessary;
(ii) the proposed manner in which such Additional Capital is to be raised;
(iii) the purpose of such Additional Capital; and
(iv) an explanation for the variation (if any) between the amount of
Additional Capital required and the amount of Committed Capital shown
by the most recent Business Plan.
Such proposals are referred in this clause 8.3 as an "ADDITIONAL CAPITAL
PROPOSAL".
(b) NOTICE OF ISSUE: Subject to any approval of the Additional Capital
Proposal, if required, pursuant to clause 6.1, the Company shall not less
than 30 days prior to the proposed date for issue of the securities under
such Additional Capital, serve a notice on each of the A Shareholders (with
a copy to the B Shareholders):
(i) confirming that the Additional Capital Proposal has, if required, been
approved pursuant to clause 6.1 in the form specified in the
Additional Capital Proposal;
(ii) specifying the number, price and terms of payment of the Shares,
securities to be issued, or other financial support to be raised, and
inviting each of the "A" Shareholders to state in writing within a
period of 14 days whether it is willing to take on any, and if so what
maximum number or value of, such Shares or securities or other
financial support; and
(iii) specifying the time and place where completion of the subscription
for the shares or securities, or of the provision of other financial
support, shall take place.
(c) RIGHTS OF FIRST REFUSAL: At the expiration of the time stipulated by an
offer pursuant to paragraph (b) of this clause 8.3, the Directors shall,
subject to compliance with the terms of that offer, allot and issue the
Shares or other securities offered to or amongst those A Shareholders who
have notified to the Company their willingness to take any of the Shares or
other securities offered. In the case of competition, such allotment shall
be made in proportion (as nearly as may be and without involving fractions)
to the number of A Shares held by them respectively at the date of the
offer but so that no person shall be required to take more than the maximum
number of Shares or other securities which it has stated it is willing to
take. In addition, the A Shareholders shall have the pre-emptive right, but
not any obligation, to participate in any other form of debt or other
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financial support contemplated in any Additional Capital Proposal and, in
the case of competition, in proportion to the number of A Shares then held
by them.
(d) FAILURE TO AGREE ADDITIONAL CAPITAL PROPOSAL PRIOR TO SECOND CLOSING DATE:
If Additional Capital is required at any time before the Second Closing
Date, but the Directors are not able to agree upon the form and content of
an Additional Capital Proposal in accordance with clause 8.3(a), then
Alcatel and Loral shall negotiate in good faith with a view to agreeing
upon a method of providing such Additional Capital on an agreed basis. If
Alcatel and Loral have not reached such an agreement by the date on which
the unutilised amount of the US$125 million of Committed Capital becomes
insufficient to enable the Company to continue to perform the E*S System
Contract or to satisfy other budgeted expenses contemplated in the Business
Plan as and when they fall due and payable, then during the period (the
"INTERIM FUNDING PERIOD") commencing on such date and ending on the Second
Closing Date, the provisions of Schedule 4 will apply.
8.4 BORROWING AND GUARANTEES
(a) REQUESTS FOR SHAREHOLDER GUARANTEES: Except as contemplated in Schedule 4,
if, as a term of entering into any borrowing, a third party requires any
Shareholders to enter into any guarantee in respect of the Company's
obligations or liabilities, then the Company shall consult with the A
Shareholders with a view to agreeing whether it is appropriate for such
borrowing to be made or other agreement or arrangement to be entered into.
(b) PROVISION OF SHAREHOLDER GUARANTEES: Except as contemplated in Schedule 4,
if all the Relevant A Shareholders consent to such borrowing, then any
guarantee which any of them may agree to give shall be given on a several
basis in the same proportion as its respective holdings of A Shares, or
such greater proportion as it may agree at its discretion. Any A
Shareholder which provides such a guarantee may receive reasonable
consideration for so doing whether by charging a fee, receiving warrants to
subscribe for Shares or otherwise.
8.5 B SHAREHOLDERS
For the avoidance of doubt, none of the provisions set out in clauses 8.2,
8.3 or 8.4 nor any other provision of any of the Definitive Agreements
shall impose on the B Shareholders any obligation to advance loans, given
guarantees or otherwise provide capital for the benefit of the Company
except to the extent expressly provided in this agreement or otherwise
expressly accepted in writing by the B Shareholders.
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PART 4
OWNERSHIP STRUCTURE AND EXIT ARRANGEMENTS
9. ISSUES OF SHARES AND EQUITY SECURITIES
9.1 RESTRICTIONS ON NEW ISSUES
The parties shall procure that during the continuance of this agreement
there shall be no issue of any Shares or equity securities in the Company,
nor any grant of any option or other right to subscribe Shares or any
security or other right or obligations of any kind convertible or
exchangeable into share capital of the Company, other than pursuant to the
provisions of the Articles of Association, pursuant to the provisions of
this agreement, or with the consent of all the Relevant A Shareholders
given pursuant to clause 6.1.
9.2 EXISTING SHAREHOLDERS' RIGHTS OF FIRST REFUSAL
Except as contemplated in Schedule 4, the parties shall procure that any
new Shares of any class or other equity or debt securities for the time
being unissued and which may be created or issued in future shall be
offered, before they are issued, to the existing holders of Shares of that
class in accordance with the provisions set out in the Articles of
Association.
In addition, no A Shares may be allotted or issued during the period from
the Final Closing Date until the Second Closing Date unless, simultaneously
with such allotment or offer, the existing holders of the B Shares are each
offered on equal terms, pro rata, as nearly as practicable, to the nominal
amount of their existing holdings of B Shares, such number of B shares as
will result in the aggregate number of B Shares for the time being in issue
(immediately following the allotment of such A Shares) representing the
same percentage as the aggregate of all the A Shares and B Shares then in
issue as they represented on the Final Closing Date. In the case of any
Additional Capital Proposal made after the Second Closing Date, Alcatel and
Loral shall, during the period of 30 days from the date of such Additional
Capital Proposal, consult with JSH in good faith with a view to
establishing whether some basis can be agreed for JSH to subscribe at
market value for additional B Shares in such number as would result in JSH
and the other ▇▇▇▇▇▇▇-▇▇▇▇▇▇ Parties and their Relatives together
continuing to hold 5% of the issued ordinary share capital of the Company,
but without any liability whatever on any party in the event of any failure
to so agree.
9.3 UNDERTAKINGS BY NEW SHAREHOLDERS
No new member shall be registered as the holder of any Shares unless it:
(i) shall first have entered into a Deed of Adherence in which such
allottee shall undertake to the Shareholders and the Company to be
bound by the provisions of this agreement as if it were a party to
this agreement as a Shareholder (but without prejudice to the
continuation inter se of the rights and obligations of the
Shareholders); and
(ii) produces to the Company satisfactory evidence that all necessary
Regulatory Consents have been obtained.
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10. VOLUNTARY DISPOSALS OF SHARES
10.1 RESTRICTIONS ON DEALINGS IN SHARES
No disposal of any Share or any legal or beneficial interest in a Share
shall be permitted except a transfer of the entire legal and beneficial
interest in the Share made in accordance with the provisions of the
Articles of Association and the terms of this agreement.
10.2 COMPLIANCE BY GROUP TRANSFEREES
Each Shareholder shall procure that all Group Transferees or Relatives
holding Shares in respect of which it is the Original Holder shall execute
a Deed of Adherence.
11. MANDATORY TRANSFERS OF SHARES
11.1 INSOLVENCY, DISSOLUTION ETC.
If:
(i) Insolvency: any Shareholder is unable or admits in writing its
inability to pay its debts as they fall due or commences negotiations
with one or more of its creditors with a view to the general
readjustment or rescheduling of all or part of its indebtedness or
proposes or enters into any composition or other arrangement for the
benefit of its creditors generally or any class of creditors or
proceedings are commenced in relation to any Shareholder under any
law, regulation or procedure relating to reconstruction or
readjustment of debts;
(ii) Dissolution: an order is made or a resolution passed for the
administration, receivership, winding up, liquidation or dissolution
of any Shareholder (other than for the purpose of a solvent
amalgamation or reconstruction) or any other analogous event under the
laws applicable to the relevant Shareholders,
then the relevant Shareholder shall, and shall procure that all its
Affiliates shall, forthwith serve a Transfer Notice or Transfer Notices in
respect of all the Shares owned by that Shareholder and its Affiliates, in
accordance with the provisions of the Articles of Association. If the
relevant Shareholder or any of its Affiliates shall default in the service
of such Transfer Notice or Notices, it and the relevant Affiliates shall be
deemed to have given Transfer Notices to the Company in respect of all the
Shares held by them, and the provisions of the Articles of Association
shall apply, save that:
(a) any deemed Transfer Notice shall be deemed to:-
(1) provide that the price of such Shares shall be their Fair Value
determined by the procedure set out in clause 11.3(a); and
(2) provide for the transfer of all the Shares owned by the relevant
Shareholder;
(b) the fourteen days in which the Company is required to send a
notice to existing holders of Shares under Article 36 of the
Articles of Association shall commence on the date on which the
Company receives the certification of the Fair Value of such
Shares in the manner described in clause 11.3(a).
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11.2 LORAL PUT OPTION
Loral (and its Affiliates) shall be entitled, in the circumstances
described in clause 6.2(c), to serve notice in writing (an "OPTION NOTICE")
on Alcatel requiring Alcatel to purchase or procure the purchase by a third
party of all of the Shares then held by Loral and its Affiliates at their
Fair Value, established using the procedure described in clause 11.3(a),
and setting out the time (not being less than two nor more than seven days
after the date of determination of the Fair Value but in no event later
than 30 days after the date of the Option Notice) and place for completion
of the sale and purchase of such Shares.
11.3 PROCEDURE FOR SALE FOLLOWING DEADLOCK
(a) DETERMINATION OF FAIR VALUE: The Company shall, promptly upon this clause
becoming applicable, procure the appointment of an Expert to make a
determination of the Fair Value of the A Shares, acting as an expert and
not as arbitrator. Such Expert shall be such independent investment bank or
international firm of accountants of good repute as may be appointed
jointly by Alcatel and Loral or if a joint appointment is not agreed within
10 days from the written notice of nomination of an expert by one party to
the other, by the President for the time being of the Institute of
Chartered Accountants in England and Wales on the application of either
Alcatel or Loral. The Expert shall conduct its valuation in accordance with
generally accepted accounting principles and on the following assumptions
and bases:-
(i) the A Shares are being sold on an arm's length basis between a willing
vendor and a willing purchaser;
(ii) the purchaser is acquiring the A Shares in order to continue the
business of the Company in co-operation with the remaining
shareholders of the Company in accordance with the terms of this
agreement (without giving effect to minority discounts);
(iii) if the Company is then carrying on business as a going concern, that
it will continue to do so;
(iv) taking full account of the rights and restrictions attaching to the A
Shares and other Shares; and
(v) on such other terms as it shall consider appropriate and making such
assumptions as it considers necessary.
The Expert shall notify the Company of its determination which shall, in
the absence of manifest or proven error, be final and binding on the A
Shareholders. The costs of the valuation (including, but without
limitation, the fees and expenses of the Expert) are to be borne by the A
Shareholders in their respective Relevant Proportions.
(b) ELECTIONS TO BUY OR SELL AT FAIR VALUE: Following receipt of a Deadlock
Notice and the Expert's determination, the Company will notify each of the
A Shareholders of the Fair Value of the A Shares. Each of Alcatel and Loral
shall within 10 (ten) days of such notice, serve notice in writing (each an
"ELECTION NOTICE") on the other electing either (i) to buy all the A Shares
held by the other and its Affiliates or (ii) to sell all the A Shares held
by it and its Affiliates. Each Election Notice delivered by that party
under this paragraph shall constitute an irrevocable offer (until
superseded by any later Election Notice delivered by that party under this
clause) to sell or, as the case may be, buy all the A Shares held by the
other party and its Affiliates at the Fair Value of those A Shares.
(c) IF ONE PARTY WISHES TO BUY AND THE OTHER TO SELL: If one of Alcatel and
Loral offers in its Election Notice to buy all the A Shares held by the
other of them (and Affiliates), and the other one of them
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elects in its Election Notice to sell all the A Shares held by it (and
Affiliates), those parties shall be bound to buy and sell the relevant A
Shares at Fair Value in accordance with their elections.
(d) IF BOTH PARTIES WISH TO BUY: If each of Alcatel and Loral elects, in its
Election Notice, to purchase all the A Shares held by the other (and that
other's Affiliates), the Company shall invite Alcatel and Loral to serve a
second Election Notice within 7 days setting out an offer for all, but not
some, of the A Shares of the other (and its Affiliates) at a price which
shall not be less than the Fair Value. If both Alcatel and Loral deliver a
second Election Notice to purchase, the Company shall invite Alcatel and
Loral to serve a third Election Notice within 7 days setting out an offer
for all, but not some, of the A Shares of the other (and its Affiliates),
which shall not be less than the highest value attributed to the A Shares
by any of the second Election Notices, and such process shall be repeated
until one only of Alcatel and Loral elects to purchase all the A Shares
held by the other (and its Affiliates), at which point the other party (and
its Affiliates) shall be obliged to sell all of its (and their) A Shares to
the party who submitted the final Election Notice to purchase . Each
Election Notice delivered by any party under this paragraph shall
constitute an irrevocable offer (until superseded by any later Election
Notice by that party) to sell or, as the case may be, buy all the A Shares
held by the other party and members of its Group at the value stated in
such Election Notice.
(e) IF BOTH PARTIES WISH TO SELL: In the event that all the A Shareholders
elect at any time to sell the A Shares held by them (and members of their
respective Groups), the Company shall offer all, but not some, of the A
Shares as agent for the A Shareholders to third parties which may, for the
avoidance of doubt, include any holder of B Shares. The Company shall use
its reasonable endeavours to procure the sale of all, but not some, of the
A Shares to such a third party and accordingly, shall (at the expense of
the A Shareholders) accept the highest offer made by any such third party
for all, but not some of, the A Shares.
(f) COMPLETION: Subject to the provisions of clause 11.3(g), completion of each
sale and purchase under clause 11.3(c) and (d) shall be made on the date
specified by the purchaser which shall be not less than two and not more
than seven days from the date its offer is accepted, or deemed to be
accepted, under clause 11.3 (c) and (d).
(g) REGULATORY REQUIREMENTS: An A Shareholder may make an offer under this
clause 11.3 conditional upon receiving Regulatory Consent within 60 days of
acceptance of such offer. If it does so, then the parties will use their
reasonable endeavours to obtain that Regulatory Consent. In the event that
such regulatory Consent is refused or not obtained within such 60 days
period such offer shall lapse, without any liability or obligation on the
part of the offering party.
In this paragraph the term "REGULATORY CONSENT" means the obtaining of all
relevant statutory or governmental, regulatory or other licences, consents,
authorisations and approvals required for, or in connection with, such
transfer (including, without limitation, for the purchaser of the Shares to
hold such Shares and the Company to continue carrying on its business
following such transfer in the same manner in which it was carried on prior
to such transfer).
(h) ASSIGNMENT: Following the service of a Deadlock Notice, each of the A
Shareholders shall have the right to assign (in whole or in part) to any
person all its rights to elect to purchase and to purchase A Shares in
accordance with the provisions of this clause 11.3 and following any such
assignment, references in this clause 11.3 to any A Shareholder, shall, in
connection with any election to purchase, be to such assignee.
11.4 JSH CALL OPTION
JSH shall be entitled, in the circumstances contemplated in clause 11.3(a)
where:
(i) Alcatel (and its Affiliates) has given or has been deemed to have
given Transfer Notices in respect of all the Shares held by it and its
Affiliates; and
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(ii) Loral (and its Affiliates) has given or has been deemed to have given
Transfer Notices in respect of all the Shares held by it and its
Affiliates,
to serve a notice in writing on Alcatel and Loral requiring all of the
Shares held by Alcatel (and its Affiliates) and Loral (and its Affiliates)
to be sold to JSH (or his Relatives) at a price which shall be whichever is
the higher of the Fair Value established using the procedure described in
clause 11.3(a) and such higher value as may have been specified in any such
Transfer Notice, by a date not more than seven days after the date of
determination of the Fair Value. Time shall be of the essence of such sale
and in the event of any failure by JSH (or his Relatives) to purchase all
of the relevant Shares at their Fair Value on the due date, each of Alcatel
and Loral shall have no further obligation under this clause and shall,
subject to the provisions of the Articles of Association, be at liberty to
sell its Shares to any third party on such terms as it may at its
discretion see fit.
12. TAG-ALONG RIGHTS
(a) TAG-ALONG NOTICE: If an A Shareholder ("DIVESTING SHAREHOLDER") proposes to
sell any or all of its Shares to a third party, and pursuant to the
Articles of Association becomes entitled to transfer any Shares to a third
party, the Divesting Shareholder shall immediately give written notice to
the other Shareholders (the "TAG ALONG NOTICE") specifying the name and
address of the third party and the price and other material terms and
conditions of the transaction.
(b) TAG-ALONG DEMAND: Each of the other Shareholders may, not later than 20
days after receipt of the Tag-Along Notice, deliver to the Divesting
Shareholder a notice in writing invoking the provisions of this clause 12
(a "TAG-ALONG DEMAND"). The delivery by any Shareholder (a "TAG-ALONG
SHAREHOLDER") of a Tag-Along Demand shall be irrevocable and shall bind the
Divesting Shareholder:
(i) to sell or procure the sale, in accordance with the provisions of this
clause, of such number of Shares (the "TAG-ALONG Shares") owned by the
relevant Tag-Along Shareholder and its Affiliates or Relatives as is
equal to the number of Shares which the Divesting Shareholder is
proposing to sell, multiplied by a fraction, the numerator of which
shall be the number of Shares owned by the relevant Tag-Along
Shareholder and its Affiliates or Relatives and the denominator of
which shall be the number of Shares owned by the Divesting Shareholder
(and its Affiliates) and each other Tag-Along Shareholder that
delivers a Tag-Along Demand with respect to such sale (and their
respective Affiliates or Relatives); or
(ii) at the option of the Divesting Shareholder (notified to the relevant
Tag-Along Shareholders not later than three days before commencing any
sale) to acquire, or cause the third party to deliver to the relevant
Tag-Along Shareholders an irrevocable, valid, binding and bona fide
offer in writing (the "TAG-ALONG OFFER") to acquire, the Tag-Along
Shares from the relevant Tag-Along Shareholders and their respective
Affiliates or Relatives. The Tag-Along Offer shall remain open for
acceptance for a period of not less than fourteen days from the date
at which it is delivered to the Tag-Along Shareholders. If it is not
accepted in writing during that period the Tag-Along Offer may lapse.
(c) TERMS AND CONDITIONS OF SALE: The purchase by the Divesting Shareholder or,
as the case may be, the Tag-Along Offer shall, subject to the provisions of
this clause:
(i) in the case of any A Shares held by any Tag-Along Shareholders, be
made only on such terms and conditions as are identical to those upon
which the Divesting Shareholder or any of its Affiliates proposes to
sell A Shares to the third party and the price for A Shares which
shall be paid by the Divesting Shareholder or specified in the
Tag-Along Offer (as the case may be), shall be the same as, or the
cash equivalent of, the consideration at which the Divesting
Shareholder or any of its Affiliates proposes to sell to the third
party; and
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(ii) in the case of any B Shares, be at such price as may be specified by
the Divesting Shareholder or in the Tag-Along Offer as being the price
which the Divesting Shareholder at its discretion, acting in good
faith, considers to be the fair market value of such B Shares having
regard to the rights and restrictions attaching to such Shares.
Subject thereto, each Tag-Along Shareholder shall, if requested by the
Divesting Shareholder, join as an additional seller in the sale and
purchase agreement entered into between the Divesting Shareholder and the
third party purchaser, and so that such Tag-Along Shareholder shall,
(i) in respect of any A Shares which it is selling, have substantially the
same rights and several obligations as those of the Divesting
Shareholder in respect of the A Shares being sold by the Tag-Along
Shareholder
(ii) in respect of any B Shares which it is selling, have such rights as
shall be specified by the Divesting Shareholder acting in good faith
and obligations which are not more onerous than those applicable to
any Tag-Along Shareholder which is selling A Shares.
(d) EXCEPTIONS: The provisions of this clause 12 shall not apply if any steps
have been taken to commence Insolvency Proceedings in respect of the
Company, or in the case of any consolidation or merger of the Company with
or into any other person or entity.
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PART 5
PROTECTION OF JOINT VENTURE
13. CONFIDENTIALITY
13.1 CONFIDENTIAL INFORMATION
Each party shall treat as confidential all information ("CONFIDENTIAL
INFORMATION") obtained as a result of negotiating and entering into this
agreement and the other Definitive Agreements or, in the case of a
Shareholder, through its interest in the Company or any of its business or
assets and which relates to: (i) the provisions of this agreement; (ii) the
negotiations relating to this agreement; (iii) the Company or its business
or assets; or (iv) any Shareholder.
13.2 USE OF CONFIDENTIAL INFORMATION
Each party shall:-
(i) not disclose any Confidential Information to any person other than a
Director appointed by it or any person employed by it whose duties
include the management or monitoring of the business of the Company or
its investment in the Company and who needs to know such information
in order to discharge his duties;
(ii) not use any Confidential Information other than for the purpose of
managing or monitoring its investment in the Company or the business
of the Company;
(iii) use its best efforts to cause any person to whom Confidential
Information is disclosed by it to comply with the restrictions set out
in this clause 13 as if such person were a party to this agreement.
13.3 PERMITTED DISCLOSURE
(a) Notwithstanding the previous provisions of this clause 13, any party may
(subject to clause 13.2(iii)) disclose Confidential Information:-
(i) if and to the extent required by law or for the purpose of any
judicial proceedings;
(ii) if and to the extent required by the Initial Project Documents and the
Definitive Agreements;
(iii) if and to the extent required by any securities exchange or
regulatory or governmental body to which that party is subject,
wherever situated, whether or not the requirement for information has
the force of law;
(iv) to its professional advisers, auditors, lenders and bankers (provided
that in each case, they have agreed to keep such information in
confidence);
(v) if and to the extent the information has come into the public domain
through no fault of that party; or
(vi) to a proposed third party transferee of any Shares after notice has
been given to the other parties of the identity of the proposed
transferee and with the prior written approval of the Shareholder to
whom the Confidential Information belongs or, if the Confidential
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Information belongs to the Company, the prior written approval of each
of the A Shareholders such approval not to be unreasonably withheld or
delayed.
(b) Any information to be disclosed pursuant to paragraphs (i), (ii), or (iii)
of this clause 13.3 shall be disclosed only after (if and to the extent
practicable) prior notification to the party or parties to whom the
Confidential Information belongs.
(c) Each Director is irrevocably authorised by the Company to disclose any
information or records belonging to or concerning the Company, its
subsidiaries and its or their business and assets to any Shareholder who
has appointed him.
13.4 DURATION OF OBLIGATIONS
The restrictions contained in this clause 13 shall continue to apply to
each party (including any Shareholder who has ceased to hold Shares) for 5
years after termination of this Agreement.
14. ANNOUNCEMENTS
14.1 RESTRICTION ON ANNOUNCEMENTS
No announcement concerning this agreement shall be made by any party
without the prior written approval of the others, such approval not to be
unreasonably withheld or delayed. This clause 14.1 does not apply in the
circumstances described in clause 14.2.
14.2 PERMITTED ANNOUNCEMENTS
Any party may, after (if and to the extent practicable) prior notification
to the other parties, make an announcement concerning this agreement if
required by: (i) law; or (ii) any of the Initial Project Documents or the
Definitive Agreements; or (iii) any securities exchange or regulatory or
governmental body to which that party is subject, wherever situated,
whether or not the requirement has the force of law.
14.3 DURATION OF RESTRICTIONS
The restrictions contained in this clause 14 shall continue to apply to
each party (including any Shareholder who has ceased to hold Shares) for 5
years after termination of this agreement.
15. VOTING UNDERTAKINGS
Each Shareholder shall exercise its voting rights and other rights as
members of the Company in order to procure (insofar as they are able to do
so through the exercise of such rights) that the Company complies with the
provisions of this agreement. Each Shareholder shall procure that any
Director appointed by it from time to time shall (subject to their
fiduciary duties to the Company) exercise their voting rights and other
powers and authorities in order to procure (insofar as they are able to do
so through the exercise of such rights, powers and authorities) that the
Company complies with the provisions of this agreement.
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PART 6
GENERAL PROVISIONS
16. RESTRICTIVE TRADE PRACTICES ACT 1976
If this agreement (which for the purposes of this clause 16 includes any
other agreement or arrangement of which it forms part) contains any
provision which causes or would cause it to be subject to registration
under the Restrictive Trade Practices ▇▇▇ ▇▇▇▇, and if it is not a
non-notifiable agreement under that Act, that provision will not take
effect until the day after particulars of this agreement have been
furnished to the Director General of Fair Trading in accordance with
section 24 of that Act.
17. ASSIGNMENT
This agreement shall be binding on and inure for the benefit of each
party's successors in title but (subject to clause 11.3(h)) no party shall
assign all or any part of the benefit of, or its rights or benefits under,
this agreement without the prior written consent of the other parties (such
consent not to be unreasonably withheld), provided that:
(i) any A Shareholder may (subject to paragraph (ii) below) assign all or
any part of the benefit of, or its rights or benefits under this
agreement to any member of its Group; and
(ii) each A Shareholder expressly acknowledges that any such assignment to
another member of its Group shall not in any respect release it from
any of its obligations under this agreement which shall continue in
full force and effect, unless otherwise agreed in writing by all other
A Shareholders.
18. ENTIRE AGREEMENT
(a) WHOLE AND ONLY AGREEMENT: This agreement and the other Definitive
Agreements together constitute the whole and only agreement between the
parties relating to the Company and its business and assets.
(b) PRE-CONTRACTUAL STATEMENTS SUPERSEDED: Except to the extent repeated in
this agreement or any Definitive Agreement, this agreement and the
Definitive Agreements supersede and extinguish any Pre-contractual
Statement. Each party acknowledges that in entering into this agreement and
the Definitive Agreements it is not relying upon any Pre-contractual
Statement which is not set out in this agreement or in a Definitive
Agreement. For this purpose "PRE-CONTRACTUAL STATEMENT" means a draft,
agreement, undertaking, representation, warranty, promise, assurance or
arrangement of any nature whatsoever, whether or not in writing, relating
to the Company and its business and assets made or given by a party to this
agreement or any Definitive Agreement or any other person at any time prior
to the execution of this agreement or any Definitive Agreement.
(c) EXCLUSION OF OTHER RIGHTS OF ACTION: None of the parties shall have any
right of action against any other party to this agreement arising out of or
in connection with any Pre-contractual Statement (except in the case of
fraud) except to the extent repeated in this agreement or in a Definitive
Agreement.
(d) RESTRICTIONS ON COLLATERAL ARRANGEMENTS: No Shareholder shall enter into
any agreement, arrangement or understanding with any person (whether
legally binding or not) which imposes
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(directly or indirectly) obligations or restrictions with respect to the
exercise of any voting rights attached to any Share, other than as set out
or referred to in this Agreement.
(e) VARIATION: This agreement may only be varied in writing signed by each of
the parties.
(f) CONFLICT WITH ARTICLES OF ASSOCIATION: In the event of any ambiguity or
discrepancy between the provisions of this agreement and the Articles of
Association, then as between the Shareholders the provisions of this
agreement shall prevail. Each of the Shareholders shall exercise all voting
and other rights and powers available to it so as to give effect to the
provisions of this agreement and, if necessary, to procure (so far as it is
able to do so) any required amendment to the Articles of Association.
19. NOTICES
(a) NOTICES TO BE IN WRITING: A notice or other communication required or
permitted under this agreement shall be given in writing and shall be
delivered personally or sent by prepaid telegram or by telex or by
facsimile transmission, or by post or by reputable international courier.
(b) NOTICES EFFECTIVE ON RECEIPT: Such notice or other communication shall be
deemed to have been effectively given:
(i) if delivered personally or sent by prepaid telegram, at the time of
delivery at the correct address;
(ii) if sent by facsimile, at the time of despatch if the correct facsimile
number appears on the relevant transmission report;
(iii) if sent by reputable international courier, two days following the
date of despatch;
(iv) if sent by post, ten days following the date of posting.
(c) ADDRESSES: Notices and other communications under this agreement shall be
delivered to the address of the intended recipient as set out below:
If to Alcatel
▇▇ ▇▇▇ ▇▇▇▇-▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇-▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ no. ▇▇ (▇)▇ ▇▇ ▇▇ ▇▇ 32
Attention: Mr. Alain ▇▇▇▇▇
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If to Loral
c/o Loral Spacecom Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇.▇.
Facsimile no. ▇▇▇ ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
If to JSH
c/o SCIENTIFIC CONSULTING ▇▇ ▇▇▇▇▇▇▇-▇▇▇▇▇▇
GmbH
▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ ▇▇▇▇(▇▇▇▇)▇ ▇▇-▇▇
▇-▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇
Facsimile no. 0049 221 597 0049
Attention: Beatrix von Wietersheim
(Private and Confidential)
If to the Company
▇▇ ▇▇▇ ▇▇▇▇-▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇-▇▇▇▇▇
▇▇▇▇▇▇
Facsimile no. ▇▇ (▇)▇ ▇▇ ▇▇ ▇▇ 32
Attention: Mr Alain ▇▇▇▇▇
Any party may change its address and other details on giving notice to the
other parties of the change.
(d) SERVICE OF SERVICE DOCUMENTS: The provisions of this clause 19 shall not
apply in relation to the service of Service Documents.
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20. EXERCISE OF RIGHTS AND REMEDIES
(a) DELAY: No delay or omission by any party to this agreement in exercising
any right, power or remedy provided by law or under this agreement shall
affect, or operate as a waiver of, that right, power or remedy.
(b) PARTIAL EXERCISE: The single or partial exercise of any right, power or
remedy provided by law or under this agreement shall not preclude any other
or further exercise of it or the exercise of any other right, power or
remedy.
(c) REMEDIES NON-EXCLUSIVE: The rights, powers and remedies provided in this
agreement are cumulative and not exclusive of any rights, powers and
remedies provided by law.
(d) ENFORCEMENT: Notwithstanding any express remedies provided under this
agreement and without prejudice to any other right or remedy which any
party may have, each party acknowledges and agrees that damages alone may
not be an adequate remedy for any breach by it of the provisions of this
agreement, so that in the event of a breach or anticipated breach of such
provisions, the remedies of injunction and/or an order for specific
performance would in appropriate circumstances be available.
21. INVALIDITY AND SEVERABILITY
If at any time any provision of this agreement is or becomes illegal,
invalid or unenforceable in any respect under the law of any jurisdiction,
that shall not affect or impair:-
(i) the legality, validity or enforceability in that jurisdiction of any
other provision of this agreement; or
(ii) the legality, validity or enforceability under the law of any other
jurisdiction of that or any other provision of this agreement.
22. NO PARTNERSHIP
Nothing in this agreement and no action taken by the parties under this
agreement shall constitute a partnership, association, or other
co-operative entity between any of the parties or constitute any party the
agent of any other party for any purpose.
23. COSTS AND EXPENSES
Except as otherwise stated in this agreement, each party shall pay its own
costs and expenses in relation to the negotiation, preparation, execution
and carrying into effect of this agreement and the Definitive Agreements.
24. COUNTERPARTS
This agreement may be executed in any number of counterparts, and by the
parties on separate counterparts, but shall not be effective until each
party has executed at least one counterpart. Each counterpart shall
constitute an original of this agreement, but all the counterparts shall
together constitute but one and the same instrument.
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25. CHOICE OF GOVERNING LAW
This agreement is to be governed by and construed in accordance with
English law.
26. JURISDICTION
(a) JURISDICTION OF ENGLISH COURTS: Subject to clause 28, the courts of England
are to have jurisdiction to settle any dispute arising out of or in
connection with this agreement. Any proceeding, suit or action arising out
of or in connection with this agreement ("PROCEEDINGS") may therefore be
brought in the English courts. This jurisdiction agreement is irrevocable
and each Shareholder and the Company agrees that it is for the exclusive
benefit of the other Shareholder.
(b) RIGHT TO TAKE PROCEEDINGS: Nothing contained in this clause 26 shall limit
either Shareholder's right to take Proceedings against the other
Shareholder or the Company in any other court or in the courts of more than
one jurisdiction at the same time.
(c) WAIVER OF OBJECTIONS: Each party irrevocably waives any objection, on the
ground of forum non conveniens or on any other ground, to the taking of
Proceedings in any court referred to in this clause 26. Each party also
irrevocably agrees that a judgement in Proceedings brought in any
jurisdiction referred to in this clause 26 shall be conclusive and binding
upon it and may be enforced in any other jurisdiction.
27. AGENT FOR SERVICE
(a) APPOINTMENT OF AGENT(S): Alcatel irrevocably appoints Alcatel Network
Systems Limited of Alcatel Court, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇
to be its agent for the service of process in England, Loral irrevocably
appoints Willkie, ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ of ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ to
be its agent for service and process in England and JSH appoints Ashurst
▇▇▇▇▇▇ ▇▇▇▇▇ (Attn: ▇▇▇▇▇▇ ▇▇▇▇) of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ to be his agent for service of process in England. Each of
the Shareholders agrees that any writ, summons, order, judgement or other
process issued out of the courts of England and Wales in connection with
any Proceedings ("SERVICE DOCUMENT") may be effectively served on it in
connection with Proceedings in England and Wales by service on its agent.
(b) SERVICE OF SERVICE DOCUMENTS: Any Service Document shall be deemed to have
been duly served if addressed to the relevant agent for service of process
at the applicable address specified in clause 27(a) or such other address
within England or Wales as may be notified and:
(i) left at the specified address; or
(ii) sent to the specified address by first class post.
In the case of (i), the Service Document shall be deemed to have been duly
served when it is left. In the case of (ii), the Service Document shall be
deemed to have been duly served two clear business days after the date of
posting.
(c) APPOINTMENT OF REPLACEMENT AGENT: If the agent at any time ceases for any
reason to act as such, Alcatel, Loral or JSH (as the case may be) shall
appoint a replacement agent having an address for service in England or
Wales and shall notify the other parties of the name and address of the
replacement agent. Failing such appointment and notification, the Company
shall be entitled by notice to Alcatel, Loral or JSH (as the case may be)
to appoint a replacement agent to act on Alcatel, Loral or JSH (as the case
may be) behalf. The provisions of this clause 27 applying to service on an
agent apply equally to service on a replacement agent.
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(d) COPIES OF SERVICE DOCUMENTS: A copy of any Service Document served on an
agent shall be sent by post to Alcatel, Loral or JSH (as the case may be).
Failure or delay in so doing shall not prejudice the effectiveness of
service of the Service Document.
28. DISPUTE RESOLUTION
28.1 INITIAL DISPUTE RESOLUTION MEETING
If any disagreement or dispute arises under or in connection with this
agreement which the relevant parties are unable to resolve, any of the
parties to such disagreement or dispute may (without prejudice to those
matters which are specifically required to be referred to an Expert or to
clause 6.1 or 6.2) notify the other relevant parties to such dispute
pursuant to this clause and request that a meeting of the Executive
Committee be held as soon as reasonably practicable to discuss and attempt
to resolve the disagreement or dispute.
28.2 MEMORANDUM OF THE MATTER IN DISPUTE
If any of the parties gives notice of a disagreement or dispute pursuant to
clause 28.1 which the parties to such disagreement or dispute are unable to
resolve through the Executive Committee within a period of 5 (five)
business days of such notice being given, or such further time as the
parties to such disagreement or dispute may agree, or if a meeting of the
Executive Committee is not held within such period, then (save in the case
of those matters which are specifically required to be referred to an
Expert under this Agreement and without prejudice to clause 6.1 and 6.2),
any party may give written notice to the other pursuant to this clause
after which, within 30 (thirty) business days of the date of service of
such notice, each party shall prepare and send to the other party a
memorandum stating its understanding of the matter in dispute or
disagreement, its position in relation to such dispute or disagreement, its
reasons for taking such position and any proposals for resolving such
dispute or disagreement.
28.3 FURTHER EXECUTIVE COMMITTEE MEETING
If within 5 (five) business days from the delivery of the memoranda
referred to in clause 28.2, the parties shall have failed to resolve the
dispute or disagreement, a further meeting of the Executive Committee shall
be held as soon as reasonably practicable to discuss the dispute or
disagreement and each party shall use its reasonable endeavours to procure
that the dispute or disagreement is resolved.
28.4 ARBITRATION
If any such claim, dispute or difference is not resolved within 60 (sixty)
days of the notice under clause 28.1 being given, or such further time as
the parties to such claim, dispute or difference may agree, any claim or
dispute or difference arising out of or under or in connection with this
Agreement (if it arises under clause 3 (Operations), clause 4 (Management
Planning and Budgets) or clause 8.4 (Borrowing and Guarantees)) shall be
fully resolved by an arbitration by three arbitrators under the Rules on
Conciliation and Arbitration of the International Chamber of Commerce,
which Rules are deemed incorporated by reference into this clause 28, in
each case as such Rules may be amended by agreement between the parties to
such claim, dispute or difference or as ordered by their arbitrators.
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28.5 ARBITRATORS' DECISION FINAL
The decision of any arbitrators appointed pursuant to clause 28.4 shall be
final, conclusive and binding on the parties hereto without right of appeal
and may be enforced in any court of competent jurisdiction.
28.6 LANGUAGE
Any arbitration hereunder shall be held in London and shall be conducted in
the English language.
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SCHEDULES
SCHEDULE 1:
EXTRAORDINARY DECISIONS
PART I:
MATTERS TO WHICH, ON DEADLOCK, COMPULSORY SALE AND PURCHASE PROVISIONS APPLY
Constitution and Existence
(1) any amendment to the memorandum or articles of association of the Company
or any change to the rights attaching to any class of shares in the
Company;
(2) taking steps to commence Insolvency Proceedings in respect of the Company
or the making of any settlement with creditors generally;
(3) the merger and consolidation of the Company with any other person or
entity;
Equity and debt financing
(4) the creation, issue or allotment of any share or loan capital of the
Company or the creation of any option or right to subscribe or acquire or
convert any security into any share or loan capital of the Company (other
than in accordance with the terms of this agreement or pursuant to and in
accordance with the terms of any convertible security, the terms of which
have been approved in accordance with the terms of this agreement) or the
redemption or other repayment prior to its stated maturity of any equity or
debt security issued by the Company (it being expressly understood and
agreed that the provision of Bridge Finance or other interim funding
pursuant to the provisions of Schedule 4 shall not constitute an
Extraordinary Decision which is subject to clause 6.1);
(5) the raising of any loan or credit or the variation or termination of any
agreement for the raising of any loan or credit by the Company or the
entering into any leasing, hire purchase or deferred payment agreement or
any other indebtedness in respect of borrowed money, other than in
accordance with the terms of this agreement or any overdraft or other
banking facility established in the ordinary course of business and
contemplated by the Business Plan or Annual Budget currently in force) (it
being expressly understood and agreed that the provision of Bridge Finance
or other interim funding pursuant to the provisions of Schedule 4 shall not
constitute an Extraordinary Decision which is subject to clause 6.1);
(6) the repayment by the Company of any Shareholder Loan (as defined in the
Agreement relating to Shareholders Loans) or the payment of interest
thereon by the Company;
Business
(7) any material expansion in the nature and any material change in the scope
of the Business, including the introduction of any field of activity;
(8) any amendment, variation or termination of the Loral Global Alliance Policy
Statement;
Assets
(9) any disposal of all or substantially all of the assets of the Company;
Transactions with related parties
(10) the entering into or variation of any transaction by the Company with a
Shareholder or any Affiliate thereof or any Director or officer of the
Company or of any Subsidiary of the Company which is not
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a wholly owned Subsidiary, in all such cases other than pursuant to the
Definitive Agreements (but it being expressly understood and agreed that
the matters specified in paragraphs (11) and (12) below shall constitute
Extraordinary Decisions subject to clause 6.1);
(11) the exercise of the Company's option to launch the Second Satellite
pursuant to the E*S System Contract;
(12) the voluntary termination by the Company of the E*S System Contract;
Subsidiaries
(13) the formation of any subsidiary and the effecting of any of the matters
specified in this Part I by a Subsidiary of the Company.
PART 2:
MATTERS FOR WHICH, ON DEADLOCK, ALCATEL'S DECISION SHALL PREVAIL
Capital Expenditure
(14) any capital expenditure or commitment of the Company or any Subsidiary
which is not accounted for in the Business Plan in force for the time being
(including, without limitation, expenditure relating to construction,
launch and operation of additional satellites);
Distributions
(15) the declaration or payment of any dividend or other distribution or any
resolution to retain or allocate profits or the repayment of capital or
assets to members;
Transactions
(16) the entering into, variation or termination of any agreement or arrangement
outside the ordinary course of the Business (including, without limitation,
the initiation or settlement of litigation or arbitration proceedings where
the disputed amounts exceed US$500,000) which does not otherwise involve an
Extraordinary Decision;
Assets
(17) any subscription for, acquisition or disposal of any securities in or the
assets of any person by the Company or making, varying or terminating any
arrangements for any joint venture, partnership or consortium;
(18) making any investment, or the liquidation of any investment made by the
Company, in any other person or business;
Subsidiaries
(19) the effecting of any of the matters specified in this Part 2 by a
Subsidiary of the Company.
PART 3:
BUSINESS PLAN AND ANNUAL BUDGETS
(20) the adoption of any Business Plan (other than the Initial Business Plan) or
approval of any amendment to any Business Plan, or the approval or
ratification of any departure from the current Business Plan;
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(21) the adoption of any Annual Budget or any amendment thereto or the approval
or ratification of any departure from the current Annual Budget.
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SIGNATURES
Signed by ALAIN ▇▇▇▇▇
for and on behalf of
ALCATEL SPACECOM SOCIETE ALAIN ▇▇▇▇▇
PAR ACTIONS SIMPLIFIEE (Signature of named signatory)
Signed by ▇▇▇ ▇▇▇▇
for and on behalf of
LORAL SPACE & COMMUNICATIONS LTD ▇▇▇ ▇▇▇▇
(Signature of named signatory)
Signed by
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇▇▇
(Signature of named signatory)
Signed by ALAIN ▇▇▇▇▇
for and on behalf of
EUROPE*STAR LIMITED ALAIN ▇▇▇▇▇
(Signature of named signatory)