<PAGE>1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
August 9, 1996
LORAL SPACE & COMMUNICATIONS LTD.
(Exact name of registrant as specified in its charter)
Islands of Bermuda 1-14180 13-3867424
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) Number)
600 Third Avenue, New York, New York 10016
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(212) 697-1105
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Item 5. Other Events.
Pursuant to an Agreement dated as of August 9, 1996 (the
"Agreement") among Loral Space & Communications Ltd. (the "Registrant" or
"Loral SpaceCom"), Loral SpaceCom Corporation, Lehman Brothers Capital
Partners II, L.P. ("Capital Partners"), Lehman Brothers Merchant Banking
Portfolio Partnership L.P. ("Merchant Banking"), Lehman Brothers Offshore
Investment Partnership L.P. ("Offshore Investment") and Lehman Brothers
Offshore Investment Partnership-Japan L.P. ("Offshore Japan" and, together
with Capital Partners, Merchant Banking and Offshore Investment, the "Lehman
Partnerships"), on August 9, 1996, the Lehman Partnerships exchanged all of
their shares of Series S Redeemable Preferred Stock of SS/L (Bermuda) Ltd.,
representing an effective 18.3% economic interest in Space Systems/Loral, Inc.
("SS/L"), for 7,500,000 newly issued shares of Loral SpaceCom common stock
(the "Loral SpaceCom Shares"), 267,256 shares of common stock of Globalstar
Telecommunications Limited previously held by Loral SpaceCom Corporation and
$4 million in cash. As a result of this transaction, Loral SpaceCom has
increased its effective economic interest in SS/L from 32.7% to 51%. The
Agreement, a copy of which is filed as Exhibit 10.1 hereto, is hereby
incorporated by reference herein.
In addition, on August 9, 1996, the Registrant entered into
a Registration Rights Agreement dated as of August 9, 1996 (the "Registration
Rights Agreement") with the Lehman Partnerships granting the Lehman
Partnerships certain registration rights with respect to the Loral SpaceCom
Shares. The Registration Rights Agreement, a copy of which is filed as Exhibit
10.2 hereto, is hereby incorporated by reference herein.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(c) Exhibits.
Exhibit 10.1 Agreement dated as of August 9, 1996 among Loral
Space & Communications Ltd., Loral SpaceCom
Corporation, Lehman Brothers Capital Partners II,
L.P., Lehman Brothers Merchant Banking Portfolio
Partnership L.P., Lehman Brothers Offshore
Investment Partnership L.P. and Lehman Brothers
Offshore Investment Partnership-Japan L.P.
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Exhibit 10.2 Registration Rights Agreement dated as of August 9,
1996 among Loral Space & Communications Ltd.,
Lehman Brothers Capital Partners II, L.P., Lehman
Brothers Merchant Banking Portfolio Partnership
L.P., Lehman Brothers Offshore Investment
Partnership L.P. and Lehman Brothers Offshore
Investment Partnership-Japan L.P.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
LORAL SPACE & COMMUNICATIONS LTD.
(Registrant)
Date: August 12, 1996 By: /s/ Michael P. DeBlasio
Michael P. DeBlasio
Senior Vice President,
Finance
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EXHIBIT INDEX
Exhibit Description
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Exhibit 10.1 Agreement dated as of August 9, 1996 among Loral
Space & Communications Ltd., Loral SpaceCom
Corporation, Lehman Brothers Capital Partners II,
L.P., Lehman Brothers Merchant Banking Portfolio
Partnership L.P., Lehman Brothers Offshore
Investment Partnership L.P. and Lehman Brothers
Offshore Investment Partnership-Japan L.P.
Exhibit 10.2 Registration Rights Agreement dated as of August 9,
1996 among Loral Space & Communications Ltd, Lehman
Brothers Capital Partners II, L.P., Lehman Brothers
Merchant Banking Portfolio Partnership L.P., Lehman
Brothers Offshore Investment Partnership L.P. and
Lehman Brothers Offshore Investment
Partnership-Japan L.P.
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AGREEMENT
Among
LORAL SPACE & COMMUNICATIONS LTD.,
LORAL SPACECOM CORPORATION,
LEHMAN BROTHERS CAPITAL PARTNERS II, L.P.,
LEHMAN BROTHERS MERCHANT BANKING PORTFOLIO PARTNERSHIP L.P.,
LEHMAN BROTHERS OFFSHORE INVESTMENT PARTNERSHIP L.P.
and
LEHMAN BROTHERS OFFSHORE INVESTMENT PARTNERSHIP-JAPAN L.P.
Dated as of August 9, 1996
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TABLE OF CONTENTS
Page
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PREAMBLE
1. THE TRANSACTION
1.1. Exchange................................................1
1.2. Closing.................................................2
2. PRICE PROTECTION; SUBSEQUENT EXCHANGE; REGISTRATION RIGHTS
2.1. Additional Consideration in Certain Events..............2
2.2. Adjusted Price Per Share................................3
2.3. Adjustment Closing......................................3
2.4. Registration of GTL Shares..............................3
3. REPRESENTATIONS AND WARRANTIES
3.1. Representations and Warranties of Loral and
SpaceCom ...............................................5
3.1.1. Organization; Capitalization...............5
3.1.2. Authorization and Validity
of Agreements..............................6
3.1.3. No Conflict or Violation...................6
3.1.4. Validity of Shares.........................7
3.2. Representations and Warranties of
the Lehman Partnerships.................................7
3.2.1. Organization...............................7
3.2.2. Authorization and Validity
of Agreements..............................7
3.2.3. No Conflict or Violation...................7
3.2.4. Title to shares of Tracking Stock..........8
4. CONDITIONS TO CLOSINGS
4.1. Conditions to the Closing...............................8
4.1.1. Conditions to Obligations
of the Lehman Partnerships.................8
4.1.2. Conditions to Obligations
of Loral and SpaceCom......................9
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4.1.3. Conditions to Obligations
of Loral and the
Lehman Partnerships........................9
4.2. Adjustment Closing.....................................10
4.2.1. Conditions to Obligations
of the Lehman Partnerships................10
4.2.2. Conditions to Obligations
of Loral and the
Lehman Partnerships.......................10
5. MISCELLANEOUS
5.1. Reasonable Best Efforts................................10
5.2. No Waivers; Amendments.................................10
5.3. Survival of Provisions.................................11
5.4. Entire Agreement.......................................11
5.5. Counterparts; Governing Law............................11
5.6. Section Headings.......................................11
5.7. Press Releases and Public Announcements................11
5.8 Termination of Stockholders Agreement..................11
5.9 Expenses...............................................12
5.10 PFIC Covenant..........................................12
SIGNATURES
SCHEDULE
Schedule A - Loral Shares, GTL Shares and Cash Consideration to be
transferred to the Lehman Partnerships
Schedule B - Tracking Shares to be transferred to Loral and SpaceCom
EXHIBIT
Exhibit A - Form of Registration Rights Agreement
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AGREEMENT
AGREEMENT dated as of August 9, 1996 (this "Agreement")
among LORAL SPACE & COMMUNICATIONS LTD. ("Loral"), LORAL SPACECOM
CORPORATION ("SpaceCom"), LEHMAN BROTHERS CAPITAL PARTNERS II, L.P. ("Capital
Partners"), LEHMAN BROTHERS MERCHANT BANKING PORTFOLIO PARTNERSHIP L.P.
("Merchant Banking"), LEHMAN BROTHERS OFFSHORE INVESTMENT PARTNERSHIP L.P.
("Offshore Investment") and LEHMAN BROTHERS OFFSHORE INVESTMENT
PARTNERSHIP-JAPAN L.P. ("Offshore Japan" and, together with Capital Partners,
Merchant Banking and Offshore Investment, the "Lehman Partnerships").
W I T N E S S E T H :
WHEREAS, the Lehman Partnerships currently own, collectively,
731.85 Series S Redeemable Preferred Shares (the "Tracking Stock") of SS/L
(Bermuda) Ltd., a Bermuda company ("SS/L Bermuda"), constituting all of the
issued and outstanding shares of such class and which are the economic
equivalent of 731.85 shares of Common Stock of Space Systems/Loral, Inc., a
Delaware corporation ("SS/L"), representing an effective economic interest of
18.3% therein;
WHEREAS, SpaceCom owns shares of Globalstar Telecommunications
Limited ("GTL"), a Bermuda company, and has authorized the exchange of 267,256
of such shares (the "GTL Shares") for 61.00 shares of the Tracking Stock held by
the Lehman Partnerships;
WHEREAS, Loral has authorized the issuance and delivery of
7,500,000 shares of Loral Common Stock (together with associated rights
("Rights") issuable pursuant to Loral's Rights Agreement, dated as of January
10, 1996) (the "Loral Shares") plus $4,000,000 in cash (the "Cash
Consideration") in exchange for 670.85 shares of the Tracking Stock held by the
Lehman Partnerships;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, the parties hereto agree as follows:
1. THE TRANSACTION
1.1. Exchange. At the Closing described in Section 1.2
below, SpaceCom will transfer the GTL Shares, and Loral will transfer the
Loral Shares and pay the Cash Consideration, to the Lehman Partnerships and,
in exchange
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therefor, the Lehman Partnerships will transfer to SpaceCom 61.00 shares of
the Tracking Stock and will transfer to Loral 670.85 shares of the Tracking
Stock held by the Lehman Partnerships. The number of GTL Shares and Loral
Shares to be acquired by, and the portion of the Cash Consideration to be paid
to, each of the Lehman Partnerships is set forth on Schedule A hereto and the
number of shares of Tracking Stock held by each of the Lehman Partnerships
(all of which are to be exchanged and purchased at the Closing hereunder) to
be acquired by each of Loral and SpaceCom is set forth on Schedule B hereto.
1.2. Closing. The closing of the transactions contemplated by
Section 1.1 (the "Exchange") shall occur on the third business day after the
conditions set forth in Section 4.1 shall have been satisfied or waived or on
such other date on which the parties may agree (the "Closing Date"). On the
Closing Date, Loral and the Lehman Partnerships will enter into a Registration
Rights Agreement in the form attached hereto as Exhibit A (the "Registration
Rights Agreement
2. PRICE PROTECTION; SUBSEQUENT EXCHANGE; REGISTRATION RIGHTS.
2.1 Additional Consideration in Certain Events. In the event
that, at any time hereafter and on or prior to February 4, 1997, Loral or any
entity under its control(including SS/L) purchases any shares of SS/L Common
Stock, or enters into a written agreement or any agreement in principle or
letter of intent to do so or an oral agreement as to all material terms, at an
Adjusted Price Per Share (as defined in Section 2.2 below) exceeding $143,472
(as such amount shall be equitably adjusted from time to time to reflect stock
splits, stock dividends and the like), Loral will pay to each Lehman Partnership
an amount equal to the product of such excess and the number of shares of
Tracking Stock acquired from such Lehman Partnership in the Exchange, such
payment to be made in cash or, at Loral's election, in whole or in part, in
additional shares of Loral Common Stock (the "Additional Loral Shares") (valued
at the average of the daily high and low sales prices of the corresponding
number of shares of Loral Common Stock on the New York Stock Exchange on the ten
trading days preceding the date of the transaction in question), provided that
Loral will have the right to elect to make payment in the form of Additional
Loral Shares only if the conditions set forth in Section 4.2 have been satisfied
or waived on or prior to the Adjustment Closing Date (defined below). The
additional consideration contemplated by this Section 2.1 will not be payable in
respect of any acquisition by Loral
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of SS/L Common Stock held by SS/L Bermuda. In the event of successive
purchases or agreements during such 180 day period, the adjustment for all the
Tracking Stock shall be made based upon the highest price so paid.
2.2 Adjusted Price Per Share. The term "Adjusted Price Per
Share" refers to the value attributable to a share of SS/L Common Stock,
excluding therefrom any value attributable to the partnership interests in
Globalstar, L.P. held by SS/L. The Adjusted Price Per Share shall be calculated
by dividing (a) the difference obtained by subtracting (x) the value of the
Globalstar partnership interests at the time held by SS/L (valued at the average
of the daily high and low sales prices of the corresponding number of shares of
GTL Common Stock on the Nasdaq National Market on the ten trading days preceding
the date of the transaction in question) from (y) the valuation of 100% of the
equity of SS/L, taken as a whole as determined by the value of the consideration
paid in respect of the SS/L Common Stock in question (with consideration other
than cash to be valued at the fair market value thereof) by (b) the number of
shares of SS/L Common Stock outstanding immediately prior to such purchase.
2.3. Adjustment Closing. The closing of the transactions
contemplated by Section 2.1 (the "Adjustment") shall occur on the third business
day after the closing of the transaction requiring such adjustment (the
"Adjustment Closing Date"). Any cash amounts payable in connection with the
adjustment will be paid by wire transfer of immediately available funds to the
account or accounts specified by the Lehman Partnerships.
2.4 Registration of GTL Shares (a) Registration. SpaceCom will
cause the GTL Shares to be included in GTL's shelf registration statement on
Form S-3, File No. 333-6477 (the "GTL Shelf Registration Statement"), will pay
the additional registration fee associated therewith, and will cause GTL to use
all reasonable efforts to cause such registration statement to be declared
effective promptly. SpaceCom will cause such registration statement to remain
effective for a period of three years or such longer period as it is required to
do so with respect to the Convertible Preferred Equivalent Obligations
registered thereunder; provided that the effectiveness of such registration
statement may be terminated before the end of such period if the Lehman
Partnerships are provided registration rights with respect to the GTL Shares
substantially equivalent to their rights with respect to the Loral Shares under
the Registration Rights Agreement. The Lehman Partnerships acknowledge and
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agree that the GTL Shares may not be sold except pursuant to an effective
registration statement under the Securities Act of 1933, as amended (the
"Securities Act") or an applicable exemption from such registration.
(b) Indemnification and Contribution. SpaceCom shall cause GTL
to indemnify and hold harmless each Lehman Partnership, its officers, directors
and agents, and each Person (as defined in the Registration Rights Agreement),
if any, who controls such Lehman Partnership within the meaning of Section 15 of
the Securities Act or Section 20 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), (collectively, the "Lehman Entities") from and
against any loss, claim, damage or liability and any action in respect thereof
(collectively, "Losses") to which such Lehman Entities may become subject under
the Securities Act or otherwise, insofar as such Losses arise out of, or are
based upon, any untrue statement or alleged untrue statement of a material fact
contained in any registration statement (including without limitation the GTL
Shelf Registration Statement) or prospectus included therein relating to the GTL
Shares (as amended or supplemented if GTL shall have furnished any amendments or
supplements thereto) or any preliminary prospectus, or arise out of, or are
based upon, any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, on the same terms that Loral is obligated to indemnify such Lehman
Entities pursuant to Sections 4.1 and 4.3 of the Registration Rights Agreement
with respect to the Registrable Securities (as defined in the Registration
Rights Agreement). Each Lehman Partnership shall, severally and not jointly,
indemnify and hold harmless SpaceCom, its officers, directors and agents, and
each Person, if any, who controls SpaceCom within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act (collectively, the
"SpaceCom Entities") from and against any Losses to which such SpaceCom Entities
may become subject under the Securities Act or otherwise, with respect to such
matters and on the same terms that each Lehman Partnership is obligated to
indemnify Loral, its officers, directors and agents, and each Person, if any,
who controls Loral within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act pursuant to Sections 4.2 and 4.3 of the
Registration Rights Agreement with respect to the Registrable Securities. In
addition, SpaceCom shall cause GTL to contribute to the amount paid or payable
by each Lehman Partnership, and each Lehman Partnership shall contribute to the
amount paid or payable by SpaceCom, in respect of any Losses on the same terms
that Loral and the Lehman Partnerships are obligated to contribute to the
losses, claims, damages or liabilities
<PAGE>5
referred to in Section 4.4 of the Registration Rights Agreement.
(c) Obligations of SpaceCom and GTL. The Lehman Partnerships
shall be entitled to offer and sell GTL Shares pursuant to the GTL Shelf
Registration Statement from time to time upon delivery of written notice to GTL
at least 5 Business Days (as defined in the Registration Rights Agreement) prior
to the date of the intended offering, and SpaceCom shall cause GTL to use its
best efforts to effect the sale of the GTL Shares in accordance with the
intended method of disposition thereof as quickly as practicable, including
taking actions of the type set forth under Section 3.1 of the Registration
Rights Agreement. SpaceCom shall cause GTL to pay any expenses incurred in
connection with any sale of GTL Shares by the Lehman Partnerships pursuant to
the GTL Shelf Registration Statement, including all registration expenses of the
type set forth in Section 3.2 of the Registration Rights Agreement, provided
that GTL shall have no obligation to pay any underwriting fees, discounts or
commissions attributable to the sale of GTL Shares by any Lehman Partnership of
any out-of-pocket expenses of the Lehman Partnerships.
(d) Successors and Assigns. Each Lehman Partnership may
transfer its rights under this Section 2.4 to its successors or assigns who
acquire the GTL Shares, directly or indirectly, from the Lehman Partnerships.
3. REPRESENTATIONS AND WARRANTIES
3.1. Representations and Warranties of Loral and SpaceCom.
Loral and SpaceCom represent and warrant, severally and not jointly, to each
of the Lehman Partnerships as follows:
3.1.1. Organization; Capitalization. Loral and GTL are
companies duly organized, validly existing under the laws of the Islands of
Bermuda and have all requisite corporate power and authority to own their
respective properties and assets and to conduct their business as now conducted.
SpaceCom is a company duly organized, validly existing 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 Loral consists of (a) 750,000,000 shares of Common
Stock, par value $.01 per share, of which 183,592,308 shares are issued and
outstanding and, without giving effect to the transactions contemplated hereby,
62,896,978 additional shares are reserved for issuance upon the exercise or
conversion of
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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 45,896,978 shares are outstanding and none of which have been
reserved for issuance and (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. The authorized capital stock of GTL consists of 60,000,000 shares of
Common Stock, of which 10,000,000 shares are issued and outstanding, and
47,335,716 additional shares are reserved for issuance upon the exercise or
conversion of outstanding options, warrants or convertible securities.
3.1.2. Authorization and Validity of Agreements. (a) Loral has
the corporate power to enter into this Agreement, the Registration Rights
Agreement and to carry out its obligations hereunder and thereunder. The
execution and delivery of this Agreement and the Registration Rights Agreement
and the performance of Loral's obligations hereunder and thereunder have been
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,
and the Registration Rights Agreement, when executed and delivered by Loral,
will be, the legal, valid and binding obligations of Loral.
(b) SpaceCom 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 SpaceCom's obligations hereunder have been duly
authorized by the Board of Directors of SpaceCom, and no other corporate
proceedings on the part of SpaceCom are necessary to authorize such execution,
delivery and performance. This Agreement has been duly executed by SpaceCom and
is the legal, valid and binding obligations of SpaceCom.
3.1.3. No Conflict or Violation. The execution, delivery and
performance by Loral of this Agreement and the Registration Rights Agreement and
by SpaceCom of this Agreement do not and will not violate or conflict with any
provision of the charter documents or by-laws of Loral or SpaceCom, and do not
and will not violate any provision of any agreement or instrument to which Loral
or SpaceCom 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 or
SpaceCom is subject.
<PAGE>7
3.1.4. Validity of Shares. The Loral Shares, the GTL Shares
and the Additional Loral Shares have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, will be validly
issued, fully paid and nonassessable, and not subject to any contractual or
other restrictions on voting or transferability, except for compliance with the
Securities Act, and the Lehman Partnerships will acquire good and valid title
thereto free and clear of any lien or other right or claim. The issuance of the
Loral Shares, the GTL Shares and the Additional Loral Shares is not subject to
any preemptive or similar rights.
3.2. Representations and Warranties of the Lehman
Partnerships. Each of the Lehman Partnerships represents and warrants,
severally and not jointly, to Loral and SpaceCom as follows:
3.2.1. Organization. Each of the Lehman Partnerships is a
partnership duly organized, validly existing and in good standing under the
laws of its respective jurisdiction of organization and has all requisite
partnership power and authority to own its properties and assets and to
conduct its business as now conducted.
3.2.2. Authorization and Validity of Agreements. Each of the
Lehman Partnerships has the power to enter into this Agreement and the
Registration Rights Agreement and to carry out its obligations hereunder and
thereunder. The execution and delivery of this Agreement and the Registration
Rights Agreement and the performance of each of the Lehman Partnership's
obligations hereunder and thereunder have been duly authorized by the Board of
Directors of the general partner of such Lehman Partnership, and no other
corporate or other proceedings on the part of such Lehman Partnership are
necessary to authorize such execution, delivery and performance. This Agreement
has been duly executed by each of the Lehman Partnerships and is, and the
Registration Rights Agreement, when executed and delivered by such Lehman
Partnership, will be, the legal, valid and binding obligation of such Lehman
Partnership.
3.2.3. No Conflict or Violation. The execution, delivery and
performance by each of the Lehman Partnerships of this Agreement and the
Registration Rights Agreement do not and will not violate or conflict with any
provision of the organizational documents or partnership agreements of such
Lehman Partnership, and do not and will not violate any provision of any
agreement or instrument to which such Lehman Partnership is a party or by which
it is bound, or any order, judgment or decree of any court or other
<PAGE>8
governmental or regulatory authority to which such Lehman Partnership is
subject.
3.2.4. Title to Shares of Tracking Stock. Each of the Lehman
Partnerships holds good and valid title to the shares of Tracking Stock set
forth opposite such Lehman Partnership's name on Schedule B attached hereto,
which shares of Tracking Stock are owned by such Lehman Partnership 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, 1996 among Loral, SS/L Bermuda and
the Lehman Partnerships, and when such shares of Tracking Stock are acquired by
Loral and SpaceCom in accordance with the terms of this Agreement, Loral and
SpaceCom, respectively, will acquire good and valid title to such shares of
Tracking Stock free of any lien or other right or claim.
4. CONDITIONS TO CLOSINGS
4.1. Conditions to the Closing.
4.1.1. Conditions to Obligations of the Lehman
Partnerships. The obligations of the Lehman Partnerships 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 and
SpaceCom 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 and SpaceCom 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) the Lehman Partnerships shall have received a certificate
signed by an executive officer of each of Loral and SpaceCom to the
effect that the conditions set forth in paragraphs (a) and (b) above
have been satisfied;
(d) the Lehman Partnerships shall have received an opinion,
dated the Closing Date, from Avi Katz, Associate General Counsel of
Loral, as to the legality and validity of this Agreement, the
Registration Rights Agreement and such other matters relating to the
Exchange as the Lehman Partnerships may reasonably request;
<PAGE>9
(e) The Lehman Partnerships shall have received an opinion,
dated the Closing Date, from Willkie Farr & Gallagher to the effect
that (A) for United States federal income tax purposes, it is more
likely than not that the transfer by the Lehman Partnerships of the
731.85 shares of Tracking Stock pursuant to this Agreement will
constitute a sale or exchange of 731.85 shares of Common Stock of SS/L
under Section 1001 of the Internal Revenue Code of 1986, as amended
(the "Code"), and (B) that the Lehman Entities will not be subject to
penalties in respect of any Taxes for taking the position set forth in
clause (A) above. For purposes of this Agreement, "Taxes" shall mean
any net income, alternative, add-on minimum, gross income, gross
receipts, sales, use, ad valorem, value added, transfer, franchise,
corporation, metropolitan and other municipal surcharge, profits,
license, withholding on amounts paid to or by any Person, payroll,
employment, excise, severance, stamp, occupation, premium, property,
environmental or windfall profit tax, custom, duty or other tax,
governmental fee or other like assessment or like charge of any kind
whatsoever, together with any interest or any penalty, addition to tax
or additional amount imposed by any governmental authority responsible
for the imposition of any such tax (domestic or foreign). For the
avoidance of doubt, Taxes shall include any Tax resulting from the
treatment of SS/L Bermuda as a controlled foreign corporation or
passive foreign investment company within the meaning of Section 957
and 1296 of the Code, respectively, for United States federal income
tax purposes; and
(f) the Lehman Partnerships shall have received an opinion,
dated the Closing Date, from Appleby, Spurling & Kempe as to the
legality of the Loral Shares and the GTL Shares and such other matters
relating to the Exchange as the Lehman Partnerships may reasonably
request.
4.1.2. Conditions to Obligations of Loral and SpaceCom. The
obligations of Loral and SpaceCom 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 the Lehman
Partnerships 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;
<PAGE>10
(b) the Lehman Partnerships shall have performed and complied
in all material respects with all agreements required by this Agreement
to be performed or complied with by them on or prior to the Closing
Date; and
(c) Loral and SpaceCom shall have received a certificate
signed by the general partner of each of the Lehman Partnerships to the
effect that the conditions set forth in paragraphs (a) and (b) above
have been satisfied.
4.1.3. Conditions to Obligations of Loral and the Lehman
Partnerships. The obligations of Loral, SpaceCom and the Lehman Partnerships
to consummate the Exchange are subject to the satisfaction or waiver, at or
prior to the Closing Date, of the following conditions:
(a) Loral and the Lehman Partnerships shall have
entered into the Registration Rights Agreement;
(b) all consents, waivers, authorizations and approvals of
any governmental or regulatory authority required in connection with
the execution, delivery and performance of this Agreement and the
Registration Rights Agreement shall have been duly obtained and in
full force and effect; and
(c) the Exchange shall not be prohibited by any
applicable law, court order or governmental regulation.
4.2. Adjustment Closing.
4.2.1. Conditions to Use of Loral Shares. The right of
Loral to pay all or part of the Adjustment in shares of Loral Common Stock is
subject to the satisfaction or waiver, at or prior to the Adjustment Closing
Date, of the following conditions:
(a) the representations and warranties of (i) Loral
contained in Sections 3.1.1 through 3.1.4 shall be true and correct
in all material respects on and as of the Adjustment Closing Date as
if made on and as of such date;
(b) the Lehman Partnerships shall have received a
certificate signed by an executive officer of Loral to the effect
that the conditions set forth in paragraph (a) above has been
satisfied; and
<PAGE>11
(c) the Lehman Partnerships shall have received an opinion,
dated the Adjustment Closing Date, from Avi Katz, Associate General
Counsel of Loral, as to such other matters relating to the Adjustment
as the Lehman Partnerships may reasonably request.
4.2.2. Conditions to Obligations of Loral and the Lehman
Partnerships. The obligations of Loral and the Lehman Partnerships to consummate
the Adjustment are subject to the satisfaction or waiver, at or prior to the
Adjustment Closing Date, of the condition that the Adjustment shall not be
prohibited by any applicable law, court order or governmental regulation.
5. MISCELLANEOUS
5.1. Reasonable Best Efforts. The parties hereto will bear
their respective reasonable best efforts to cause the conditions to their
respective obligations to be satisfied.
5.2. No Waivers; Amendments.
5.2.1. No failure or delay on the part of any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative and
not exclusive of any rights or remedies provided by law.
5.2.2. 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.
5.3. 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 the Lehman Partnerships, or by or on behalf of Loral or
SpaceCom, and shall survive delivery of the GTL Shares, Loral Shares, the
shares of Tracking Stock and the Additional Loral Shares.
5.4. Entire Agreement. This Agreement and the Registration
Rights Agreement constitute the entire agreement and understanding among the
parties hereto and supersedes any and all prior agreements and understandings,
written or oral, relating to the subject matter hereof.
<PAGE>12
5.5. Counterparts; Governing Law. 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. This Agreement
shall be governed by and construed in accordance with the laws of the State of
New York.
5.6. 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.
5.7. Press Releases and Public Announcements. 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 (i) to the extent required by law or by stock exchange
regulation, provided that any such required disclosure will, to the extent
practicable, be subject to consultation among the parties, or (ii) between any
Lehman Partnership and its partners therein.
5.8. Termination of Stockholders Agreement. The Stockholders
Agreement dated as of April 22, 1996 (the "Stockholders Agreement") by and
among Loral, SS/L Bermuda and the Lehman Partnerships shall hereby terminate
and be of no further force and effect and no party to the Stockholders
Agreement shall have any further rights or obligations under the Stockholders
Agreement as of the date hereof; provided, however, that Loral's obligation to
indemnify and hold harmless the Lehman Partnerships as set forth in Section
5.7 of the Stockholders Agreement shall not be terminated and shall survive
without limitation. For the avoidance of doubt, it is understood that such
indemnity will be calculated taking into account any Taxes (as defined in the
Stockholders Agreement) payable by reason of the exchange of Tracking Stock
pursuant to this Agreement in determining the amount of Tax which would not
have been payable had the Lehman Partnerships been treated as owners of SS/L
Common Stock for Tax purposes commencing with the November 1992 Exchange (as
defined in the Stockholders Agreement).
5.9 Expenses. Loral agrees to pay the reasonable
out-of-pocket expenses of the Lehman Partnerships in connection with the
transactions contemplated by this Agreement upon presentation of a reasonably
detailed itemized statement thereof.
5.10 PFIC Covenant. Loral agrees that it will review, in
consultation with its professional advisors, and will cause GTL to review, in
consultation with its
<PAGE>13
professional advisors, the possible status of each as a passive foreign
investment company within the meaning of Section 1296 of the Code for each
taxable year based upon the relevant financial data and applicable law. Loral
further agrees that if it or GTL should determine in good faith after such
review that it is more likely than not that either or both is a passive
foreign investment company for the preceding taxable year, that it will and
will cause GTL to promptly notify the Lehman Partnerships and furnish the
information necessary to permit an effective election for such year for one or
both as the case may be under Section 1295(b) of the Code, including the pro
rata share of "ordinary earnings" and "net capital gain" includible under
Section 1295(a)(2) of the Code by such Lehman Partnerships or any partner
thereof.
<PAGE>14
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date set forth above.
LORAL SPACE & COMMUNICATIONS LTD.
By: /s/ Eric J. Zahler
Name: Eric J. Zahler
Title: Vice President
LORAL SPACECOM CORPORATION
By: /s/ Eric J. Zahler
Name: Eric J. Zahler
Title: Vice President
SS/L (BERMUDA) LTD.
(For purposes of Section 5.8 only)
By: /s/ Eric J. Zahler
Name: Eric J. Zahler
Title: Vice President
<PAGE>15
LEHMAN BROTHERS CAPITAL
PARTNERS II, L.P.
By: Lehman Brothers
Holdings Inc.
By: /s/ Alan H. Washkowitz
Name: Alan H. Washkowitz
Title: Managing Director
LEHMAN BROTHERS MERCHANT BANKING
PORTFOLIO PARTNERSHIP L.P.
By: LB I Group Inc.
By: /s/ Alan H. Washkowitz
Name: Alan H. Washkowitz
Title: Managing Director
LEHMAN BROTHERS OFFSHORE INVESTMENT
PARTNERSHIP L.P.
By: Lehman Brothers Offshore
Partners Ltd.
By: /s/ Alan H. Washkowitz
Name: Alan H. Washkowitz
Title: Managing Director
LEHMAN BROTHERS OFFSHORE
INVESTMENT PARTNERSHIP-JAPAN L.P.
By: Lehman Brothers Offshore
Partners Ltd.
By: /s/ Alan H. Washkowitz
Name: Alan H. Washkowitz
Title: Managing Director
<PAGE>A-1
Schedule A
<TABLE>
<CAPTION>
Loral Shares
GTL Shares Acquired
Name Acquired Cash Received
---- ---------- ----------- -------------
<S> <C> <C> <C>
Capital Partners 88,224 2,475,815 $1,320,435
Merchant Banking 129,799 3,642,550 $1,942,693
Offshore Investment 35,667 1,000,922 $533,825
Offshore Japan 13,566 380,713 $203,047
------ ------- --------
TOTAL 267,256 7,500,000 $4,000,000
</TABLE>
<PAGE>B-1
Schedule B
<TABLE>
<CAPTION>
Shares of Tracking Tracking Stock Tracking Stock Acquired
Name Stock Exchanged Acquired by SpaceCom by Loral
---- ------------------ -------------------- -----------------------
<S> <C> <C> <C>
Capital Partners 241.59 20.14 221.45
Merchant Banking 355.44 29.63 325.81
Offshore Investment 97.67 8.14 89.53
Offshore Japan 37.15 3.09 34.06
------ ---- -----
TOTAL 731.85 61.00 670.85
</TABLE>
<PAGE>1
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT dated as of August 9, 1996
(this "Agreement") among LORAL SPACE & COMMUNICATIONS LTD. (the "Company"),
LEHMAN BROTHERS CAPITAL PARTNERS II, L.P. ("Capital Partners"), LEHMAN
BROTHERS MERCHANT BANKING PORTFOLIO PARTNERSHIP L.P. ("Merchant Banking"),
LEHMAN BROTHERS OFFSHORE INVESTMENT PARTNERSHIP L.P. ("Offshore Investment")
and LEHMAN BROTHERS OFFSHORE INVESTMENT PARTNERSHIP-JAPAN L.P. ("Offshore
Japan" and, together with Capital Partners, Merchant Banking and Offshore
Investment, the "Lehman Partnerships").
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. The following terms shall have
the meanings ascribed to them below:
"Affiliate", as applied to any Person, shall mean any other
Person directly or indirectly controlling, controlled by, or under common
control with, that Person. For the purpose of this definition "control"
(including, with correlative meanings, the terms "controlling", "controlled by"
and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of that Person whether through the
ownership of voting securities, by contract or otherwise.
"Board of Directors" means the Board of Directors of the
Company.
"Business Day" means each day other than Saturdays, Sundays
and days when commercial banks are authorized to be closed for business in New
York, New York.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the Common Stock, par value $.01 per
share, of the Company transferred to the Lehman Partnerships pursuant to the
Agreement, dated as of August __, 1996, by and among the Company, Loral
SpaceCom Corporation and the Lehman Partnerships.
<PAGE>2
"Company" has the meaning set forth in the preamble of this
Agreement.
"Demand Registration" means a Demand Registration as defined
in Section 2.1.
"Excess Amount" means the number of Registrable Securities
requested by a Holder or Holders to be sold pursuant to Section 2.1 which the
managing Underwriter or Underwriters determines exceeds the largest number of
Registrable Securities which can successfully be sold in an orderly manner in
such offering within a price range acceptable to the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Holder" means each of the Lehman Partnerships for so long
as it owns any Registrable Securities, and such of its respective successors
or assigns who acquire Registrable Securities, directly or indirectly, from
the Lehman Partnerships, in each case for so long as such successors or
assigns own any Registrable Securities.
"LBH" means Lehman Brothers Holdings Inc., a Delaware
corporation, or any successor.
"Lehman Partnerships" has the meaning set forth in the
preamble of this Agreement.
"Market Price" means with respect to any Registrable
Security on any date, the last reported sale price of the Registrable Security
on the principal national securities exchange on which the class of
Registrable Securities is listed or admitted to trading or, if no such
reported sale takes place on any such day, the average of the closing bid and
asked prices thereon, as reported in The Wall Street Journal, or (ii) if such
Registrable Security is not listed or admitted to trading on a national
securities exchange, the last reported sales price on the NASDAQ National
Market System or, if no such reported sale takes place on any such day, the
average of the closing bid and asked prices thereon, as reported in The Wall
Street Journal, or (iii) if such Registrable Security is not quoted on such
National Market System nor listed or admitted to trading on a national
exchange, then the average of the closing bid and asked prices, as reported by
The Wall Street Journal for the over-the-counter market, or (iv) if there is
no public market for such Registrable Security, the fair market value of a
share of such Registrable Security as determined by LBH (or a Subsidiary of
LBH) and a nationally recognized investment bank selected by the Company or,
if such investment banks are not able to agree, by a third nationally
recognized investment bank selected jointly by LBH (or a Subsidiary of LBH)
and the investment bank selected by the
<PAGE>3
Company. All fees and expenses of such investment banks (including LBH or its
Subsidiary) shall be paid by the Company.
"Other Holder Notice" means an Other Holder Notice as
defined in Section 2.1.
"Person" means an individual or a corporation partnership,
limited liability company, trust, or any other entity or organization,
including a government or political subdivision or an agency or
instrumentality thereof.
"Piggy-Back Registration" means a Piggy-Back Registration as
defined in Section 2.2.
"Purchase Notice" means a Purchase Notice as defined in
Section 2.1.
"Registrable Security" means any share of Common Stock
issued and delivered to the Lehman Partnerships pursuant to the Agreement, of
even date herewith, among the Company, Loral SpaceCom Corporation and the
Lehman Partnerships, until (i) a registration statement covering such Common
Stock has been declared effective by the Commission and it has been disposed
of pursuant to such effective registration statement, (ii) it is sold under
circumstances in which all of the applicable conditions of Rule 144 (or any
similar provisions then in force) under the Securities Act are met or it may
be sold pursuant to Rule 144(k) or (iii) it has been otherwise transferred,
the Company has delivered a new certificate or other evidence of ownership for
it not bearing the legend required pursuant to this Agreement and it may be
resold without subsequent registration under the Securities Act.
"Requisite Share Number" means a number of Registrable
Securities equal to not less than 3,750,000 shares of Common Stock (as
adjusted from time to time to reflect stock splits, stock dividends,
recapitalizations and similar transactions), or such lesser number as
constitutes all shares of Common Stock then held by the Holders in the
aggregate.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Selling Holder" means a Holder who is selling Registrable
Securities pursuant to a registration statement under the Securities Act.
"Trading Day" means with respect to any securities exchange
or securities market, each Monday, Tuesday, Wednesday, Thursday and Friday
other than any day on which securities are not traded on the applicable
securities exchange or in the applicable securities market.
<PAGE>4
"Underwriter" means a securities dealer who purchases any
Registrable Securities as principal in an underwritten offering and not as
part of such dealer's market-making activities.
ARTICLE II
REGISTRATION RIGHTS
SECTION 2.1. Demand Registration. (a) Request for
Registration. At any time and from time to time on or after the date hereof, the
general partner of any Lehman Partnership (or any Holder to whom any such
general partner has transferred its right to request a Demand Registration (as
defined below)), on behalf of Holders owning, individually or in the aggregate,
at least the Requisite Share Number may make a written request for registration
under the Securities Act of all or part of its or their Registrable Securities
(a "Demand Registration"); provided that the Holders are together requesting
that the Requisite Share Number be registered, and provided further that the
Company shall not be obligated to effect (i) more than one Demand Registration
in any 12-month period or (ii) more than two Demand Registrations in the
aggregate. Such request will specify the number of shares of Registrable
Securities proposed to be sold and will also specify the intended method of
disposition thereof. The Company shall give written notice of such registration
request within 10 days after the receipt thereof to all other Holders. Within 20
days after receipt of such notice by any Holder, such Holder may request in
writing that Registrable Securities be included in such registration and the
Company shall include in the Demand Registration the Registrable Securities of
any such Holder requested to be so included. Each such request by such other
Holders (each, an "Other Holder Notice") shall specify the number of shares of
Registrable Securities proposed to be sold and the intended method of
disposition thereof. Unless the general partner of the Lehman Partnership making
such Demand Registration shall consent in writing, no other party, including the
Company, shall be permitted to offer securities under any such Demand
Registration.
(b) Notice of Demand Registration. Upon receipt of a written
request for a Demand Registration in accordance with Section 2.1(a) and receipt
of any Other Holder Notices, the Company shall be entitled to deliver a notice
(a "Purchase Notice") to the Holders requesting inclusion of Registrable
Securities in the Demand Registration within 10 days of the date by which all
Other Holder Notices must have been delivered indicating that the Company
intends to purchase all or some portion of the Registrable Securities to be
included in the Demand Registration. The Purchase Notice shall set forth the
number of shares of Registrable Securities to be purchased; provided that, if
the Company elects to purchase less than all of the Registrable Securities to be
included in the Demand
<PAGE>5
Registration, the Selling Holders shall be entitled to retain, and not to sell
to the Company pursuant to this Section 2.1(b), a number of such Registrable
Securities equal to the Requisite Share Number. The delivery of the Purchase
Notice shall constitute a binding contract among the Company and the Holders
seeking to include Registrable Securities in the Demand Registration to
consummate the purchase and sale transaction contemplated by the Purchase
Notice on the terms set forth in this Section 2.1(b).
(i) The per share purchase price for any such purchase shall
be the Market Price for the Registrable Securities on the Trading Day
immediately preceding the delivery of the written request for the
Demand Registration less the underwriting fees, discounts and
commissions (together, the "Underwriting Spread") that would have been
applicable to such Registrable Securities, taking into account the
contemplated manner of distribution, had such Registrable Securities
been included in the Demand Registration.
(ii) The closing shall be held at 10:00 A.M., local time, on
the earlier of (A) the closing of the Demand Registration and (B) third
Business Day after a determination not to proceed with the Demand
Registration, at the principal office of the Company, or at such other
time or place as the parties mutually agree.
(iii) On the closing date, each selling Holder shall deliver
(i) certificates representing the shares being sold, free and clear of
any lien, claim or encumbrance, and (ii) such other documents,
including evidence of ownership and authority, as the Company may
reasonably request. The purchase price shall be paid by wire transfer
of immediately available funds no later than 2:00 P.M. on the closing
date.
(c) Effective Registration. A registration will not count
as a Demand Registration until it has become effective.
(d) Underwritten Registrations. If the general partners of the
Lehman Partnerships so elect, the offering of such Registrable Securities
pursuant to such Demand Registration shall be in the form of an underwritten
offering. In connection with such offering, Lehman Brothers Inc. or an Affiliate
shall act as the book-running managing Underwriter and the Company and the
general partners of the Lehman Partnerships may select one or more nationally
recognized firms of investment bankers to act as co-manager or managers, if any.
SECTION 2.2. Piggy-Back Registration. (a) If at any time
the Company proposes to file a registration statement under the Securities Act
with respect to an offering by the Company for its own account or for the
account of any of its respective
<PAGE>6
securityholders of any class of security (other than a registration statement
on Form S-4 or S-8 (or any substitute form that may be adopted by the
Commission) or a registration statement filed in connection with an exchange
offer or offering of securities solely to the Company's existing
securityholders), then the Company shall give written notice of such proposed
filing to the Holders as soon as practicable (but in no event less than 10
days before the anticipated filing date), and such notice shall offer such
Holders the opportunity to register such number of shares of Registrable
Securities as each such Holder may request (which request shall specify the
number of shares of Registrable Securities intended to be disposed of by such
Holder and the intended method of distribution thereof) (a "Piggy-Back
Registration"). The Company shall use its best efforts to cause the managing
Underwriter or Underwriters of a proposed underwritten offering to permit the
Registrable Securities requested to be included in a Piggy-Back Registration
to be included on the same terms and conditions as any similar securities of
the Company included therein to permit the sale or other disposition of such
Registrable Securities in accordance with the intended method of distribution
thereof. Subject to Section 2.2(b), any Holder shall have the right to
withdraw its request for inclusion of its Registrable Securities in any
Piggy-Back Registration at any time prior to the time such registration
becomes effective by giving written notice to the Company of its request to
withdraw. The Company may withdraw a Piggy-Back Registration at any time prior
to the time it becomes effective, provided that the Company shall reimburse
Holders of Registrable Securities requested to be included in such Piggy-Back
Registration for all out-of-pocket expenses (including counsel fees and
expenses) incurred prior to such withdrawal and shall pay all amounts payable
by it pursuant to Section 2.2(b).
(b) Upon receipt of a written request for a Piggy-Back
Registration in accordance with Section 2.2(a), the Company shall be entitled,
at any time prior to the filing date of the registration statement relating to
such Piggy-Back Registration, to deliver a Purchase Notice to the Holders
requesting inclusion of Registrable Securities in the Piggy-Back Registration
indicating that the Company intends to purchase all or some portion of the
Registrable Securities to be included in the Piggy-Back Registration. The
Purchase Notice shall set forth the number of shares of Registrable Securities
to be purchased. The delivery of the Purchase Notice shall constitute a binding
contract among the Company and the Holders seeking to include Registrable
Securities in the Piggy-Back Registration to consummate the purchase and sale
transaction contemplated by the Purchase Notice on the terms set forth in this
Section 2.2(b).
(i) The per share purchase price for any such purchase shall
be the public offering price for the Registrable Securities of the same
class sold pursuant to such Piggy-Back Registration (or the Market
Price of the Registrable
<PAGE>7
Securities on the Trading Day immediately preceding the first
written request for the Piggy-Back Registration if such Registration is
not effected or if securities of the same class are not included in the
Piggy-Back Registration)) less the Underwriting Spread (determined as
set forth above) that would have been applicable to such Registrable
Securities had such Registrable Securities been included in the
Piggy-Back Registration.
(ii) The closing shall be held at 10:00 A.M., local time, on
the earlier of (A) the closing of the Piggy-Back Registration and (B)
the third Business Day after a determination not to proceed with the
Piggy-Back Registration, at the principal office of the Company, or at
such other time or place as the parties mutually agree.
(iii) On the closing date, each selling Holder shall deliver
(i) certificates representing the shares being sold, free and clear of
any lien, claim or encumbrance, and (ii) such other documents,
including evidence of ownership and authority, as the Company may
reasonably request. The purchase price shall be paid by wire transfer
of immediately available funds no later than 2:00 P.M. on the closing
date.
SECTION 2.3. Reduction of Offering.
Notwithstanding anything contained herein, if the managing Underwriter or
Underwriters of an offering described in Section 2.1 or 2.2 deliver a written
opinion to the Holders of the Registrable Securities requesting inclusion in
such offering that (i) the size of the offering that the Holders, the Company
and/or such other Persons intend to make or (ii) the kind of securities that the
Holders, the Company and/or any other Persons intend to include in such offering
is such that the success of the offering would be materially and adversely
affected by inclusion of the Registrable Securities requested to be included,
then (A) if the size of the offering is the basis of such Underwriter's or
Underwriters' opinion, the Company shall not include in such registration an
amount of Registrable Securities requested to be included in such offering by
all Holders equal to the Excess Amount (such reduction to be allocated pro rata
among such Holders according to the number of Registrable Securities requested
for inclusion); provided that, in the case of a Piggy-Back Registration, if
securities are being offered for the account of other Persons as well as the
Company, then with respect to the Registrable Securities intended to be offered
by Holders, the proportion by which the amount of such class of securities
intended to be offered by Holders is reduced shall not exceed the proportion by
which the amount of such class of securities intended to be offered by such
other Persons is reduced (it being understood that such reduction may be all of
such class of securities); and (B) if the combination of securities to be
offered is the basis of such Underwriter's or Underwriters' opinion, (x) the
Registrable Securities to be included in such offering shall be reduced as
described in clause
<PAGE>8
(A) above (subject to the proviso in clause (A)) or, (y) if
the actions described in clause (B)(x) would, in the judgment of the managing
Underwriter or Underwriters, be insufficient to substantially eliminate the
adverse effect that inclusion of the Registrable Securities requested to be
included would have on such offering, such Registrable Securities will be
excluded from such offering.
If, as a result of the proration provisions of this Section
2.3, any Holder shall not be entitled to include all Registrable Securities in a
Demand Registration or Piggy-Back Registration that such Holder has requested to
be included, such Holder may elect to withdraw his request to include
Registrable Securities in such registration (a "Withdrawal Election"); provided,
however, that a Withdrawal Election shall be irrevocable and, after making a
Withdrawal Election, a Holder shall no longer have any right to include
Registrable Securities in the registration as to which such Withdrawal Election
was made.
ARTICLE III
REGISTRATION PROCEDURES
SECTION 3.1. Filings; Information. Whenever the general
partner of any Lehman Partnership or any Holder requests that any Registrable
Securities be registered pursuant to Section 2.1 hereof, the Company will use
its best efforts to effect the registration and the sale of such Registrable
Securities in accordance with the intended method of disposition thereof as
quickly as practicable, and in connection with any such request:
(a) The Company will as expeditiously as possible prepare and
file with the Commission a registration statement on any form for which the
Company then qualifies or which counsel for the Company shall deem appropriate
and which form shall be available for the sale of the Registrable Securities to
be registered thereunder in accordance with the intended method of distribution
thereof, and use its best efforts to cause such filed registration statement to
become and remain effective for a period of not less than 270 days; provided
that, if the Company shall furnish to the general partner of any Lehman
Partnership or any Holder making a request pursuant to Section 2.1 a certificate
signed by either its Chairman or the Vice Chairman stating that in his good
faith judgment it would be significantly disadvantageous to the Company or its
shareholders for such a registration statement to be filed as expeditiously as
possible, the Company shall have a period of not more than 90 days within which
to file such registration statement measured from the date of receipt of the
request in accordance with Section 2.1.
<PAGE>9
(b) The Company will, prior to filing a registration statement
or prospectus or any amendment or supplement thereto, furnish to each Selling
Holder, one counsel representing all such Selling Holders, and each Underwriter,
if any, of the Registrable Securities covered by such registration statement
copies of such registration statement as proposed to be filed, together with
exhibits thereto, which documents will be subject to review and approval by the
foregoing within 5 days after delivery, and thereafter furnish to such Selling
Holder, counsel and Underwriter, if any, such number of copies of such
registration statement, each amendment and supplement thereto (in each case
including all exhibits thereto and documents incorporated by reference therein),
the prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as such Selling Holder or
Underwriter may reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such Selling Holder.
(c) After the filing of the registration statement, the
Company will promptly notify each Selling Holder of Registrable Securities
covered by such registration statement of any stop order issued or threatened by
the Commission and take all reasonable actions required to prevent the entry of
such stop order or to remove it if entered.
(d) The Company will use its best efforts to (i) register or
qualify the Registrable Securities under such other securities or blue sky laws
of such jurisdictions in the United States as any Selling Holder reasonably (in
light of such Selling Holder's intended plan of distribution) request and (ii)
cause such Registrable Securities to be registered with or approved by such
other governmental agencies or authorities in the United States as may be
necessary by virtue of the business and operations of the Company and do any and
all other acts and things that may be reasonably necessary or advisable to
enable such Selling Holder to consummate the disposition of the Registrable
Securities owned by such Selling Holder; provided that the Company will not be
required to (A) qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this paragraph (d), (B)
subject itself to taxation in any such jurisdiction or (C) consent to general
service of process in any such jurisdiction.
(e) The Company will immediately notify each Selling Holder of
such Registrable Securities, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the occurrence of an event
requiring the preparation of a supplement or amendment to such prospectus so
that, as thereafter delivered to the purchasers of such Registrable Securities,
such prospectus will not contain an untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading and promptly make available to each
Selling Holder any such supplement or amendment.
<PAGE>10
(f) The Company will enter into customary agreements
(including, if applicable, an underwriting agreement in customary form) and take
such other actions as are reasonably required in order to expedite or facilitate
the disposition of such Registrable Securities (the Selling Holders may, at
their option, require that any or all of the representations, warranties and
covenants of the Company to or for the benefit of such Underwriters also be made
to and for the benefit of such Selling Holders).
(g) The Chairman of the Board of Directors of the Company, the
Chief Executive Officer of the Company and other members of the management of
the Company will cooperate fully in any offering of Registrable Securities
hereunder, including, without limitation, participation in meetings with
potential investors and preparation of all materials for such investors.
(h) The Company will deliver promptly to each Selling Holder
of such Registrable Securities and each Underwriter, if any, subject to
restrictions imposed by the United States federal government or any agency or
instrumentality thereof, copies of all correspondence between the Commission and
the Company, its counsel or auditors and all memoranda relating to discussions
with the Commission or its staff with respect to the registration statement and
make available for inspection by any Selling Holder of such Registrable
Securities, any Underwriter participating in any disposition pursuant to such
registration statement and any attorney, accountant or other professional
retained by any such Selling Holder or Underwriter (collectively, the
"Inspectors"), all financial and other records, pertinent corporate documents
and properties of the Company (collectively, the "Records"), subject to
restrictions imposed by any governmental authority governing access to
classified information, as shall be reasonably necessary to enable them to
exercise their due diligence responsibility, and cause the Company's officers,
directors and employees to supply all information reasonably requested by any
Inspectors in connection with such registration statement. Records which the
Company determines, in good faith, to be confidential and which it notifies the
Inspectors are confidential shall not be disclosed by the Inspectors unless (i)
the disclosure of such Records is necessary to avoid or correct a misstatement
or omission in such registration statement or (ii) the disclosure or release of
such Records is requested or required pursuant to oral questions,
interrogatories, requests for information or documents or a subpoena or other
order from a court of competent jurisdiction or other process; provided that
prior to any disclosure or release pursuant to clause (ii), the Inspectors shall
provide the Company with prompt notice of any such request or requirement so
that the Company may seek an appropriate protective order or waive such
Inspectors' obligation not to disclose such Records; and provided, further, that
if failing the entry of a protective order or the waiver by the
<PAGE>11
Company permitting the disclosure or release of such Records, the Inspectors,
upon advice of counsel, are compelled to disclose such Records, the Inspectors
may disclose that portion of the Records which counsel has advised the
Inspectors that the Inspectors are compelled to disclose. Each Selling Holder
of such Registrable Securities agrees that information obtained by it solely
as a result of such inspections (not including any information obtained from a
third party who, insofar as is known to the Selling Holder after reasonable
inquiry, is not prohibited from providing such information by a contractual,
legal or fiduciary obligation to the Company) shall be deemed confidential and
shall not be used by it as the basis for any market transactions in the
securities of the Company or its Affiliates unless and until such is made
generally available to the public. Each Selling Holder of such Registrable
Securities further agrees that it will, upon learning that disclosure of such
Records is sought in a court of competent jurisdiction, give notice to the
Company and allow the Company, at its expense, to undertake appropriate action
to prevent disclosure of the Records deemed confidential.
(i) The Company will furnish to each Selling Holder and to
each Underwriter, if any, a signed counterpart, addressed to such Selling Holder
or Underwriter, of (i) an opinion or opinions of counsel to the Company and (ii)
a comfort letter or comfort letters from the Company's independent public
accountants, each in customary form and covering such matters of the type
customarily covered by opinions or comfort letters, as the case may be, as the
Selling Holders of Registrable Securities included in such offering or the
managing Underwriter therefor reasonably requests.
(j) The Company will otherwise use its best efforts to comply
with all applicable rules and regulations of the Commission, and make available
to its securityholders, as soon as reasonably practicable, an earnings statement
covering a period of 12 months, beginning within three months after the
effective date of the registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act.
(k) The Company will use its best efforts (a) to cause all
such Registrable Securities to be listed on a national securities exchange (if
such shares are not already so listed) and on each additional national
securities exchange on which similar securities issued by the Company are then
listed (if any), if the listing of such Registrable Securities is then permitted
under the rules of such exchange or (b) to secure designation of all such
Registrable Securities covered by such registration statement as a NASDAQ
"national market system security" within the meaning of Rule 11Aa2-1 of the
Commission or, failing that, to secure NASDAQ authorization for such Registrable
Securities and, without limiting the generality of
<PAGE>12
the foregoing, to arrange for at least two market makers to register as such
with respect to such Registrable Securities with the NASD.
(l) The Company will appoint a transfer agent and registrar
for all such Registrable Securities covered by such registration statement not
later than the effective date of such registration statement.
The Company may require each Selling Holder of Registrable
Securities to promptly furnish in writing to the Company such information
regarding the distribution of the Registrable Securities as the Company may from
time to time reasonably request and such other information as may be legally
required in connection with such registration.
Each Selling Holder agrees that, upon receipt of any notice
from the Company of the happening of any event of the kind described in Section
3.1(e) hereof, such Selling Holder will forthwith discontinue disposition of
Registrable Securities pursuant to the registration statement covering such
Registrable Securities until such Selling Holder's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3.1(e) hereof, and,
if so directed by the Company, such Selling Holder will deliver to the Company
all copies, other than permanent file copies then in such Selling Holder's
possession, of the most recent prospectus covering such Registrable Securities
at the time of receipt of such notice. In the event the Company shall give such
notice, the Company shall extend the period during which such registration
statement shall be maintained effective (including the period referred to in
Section 3.1(a) hereof) by the number of days during the period from and
including the date of the giving of notice pursuant to Section 3.1(e) hereof to
the date when the Company shall make available to the Selling Holders of
Registrable Securities covered by such registration statement a prospectus
supplemented or amended to conform with the requirements of Section 3.1(e)
hereof.
SECTION 3.2. Registration Expenses. In connection with any
Demand Registration pursuant to Section 2.1 hereof, and any registration
statement filed pursuant to Section 2.2 hereof, the Company shall pay the
following registration expenses incurred in connection with the registration
hereunder (the "Registration Expenses"): (i) all registration and filing fees,
(ii) fees and expenses of compliance with securities or blue sky laws (including
fees and disbursements of counsel in connection with blue sky qualifications of
the Registrable Securities), (iii) printing expenses, (iv) the Company's
internal expenses (including, without limitation, all salaries and expenses of
its officers and employees performing legal or accounting duties), (v) the fees
and expenses incurred in connection with the listing of the Registrable
Securities, (vi) fees and disbursements of counsel for the Company and fees and
expenses for independent
<PAGE>13
certified public accountants retained by the Company (including the expenses
of any comfort letters or costs associated with the delivery by independent
certified public accountants of a comfort letter or comfort letters requested
pursuant to Section 3.1(h) hereof), (vii) the fees and expenses of any special
experts retained by the Company in connection with such registration, and
(viii) reasonable fees and expenses of one counsel (who shall be reasonably
acceptable to the Company) for the Holders. The Company shall have no
obligation to pay any underwriting fees, discounts or commissions attributable
to the sale of Registrable Securities, or any out-of-pocket expenses of the
Holders (or the agents who manage their accounts).
ARTICLE IV
INDEMNIFICATION AND CONTRIBUTION
SECTION 4.1. Indemnification by the Company. The Company
agrees to indemnify and hold harmless each Selling Holder of Registrable
Securities, its officers, directors and agents, and each Person, if any, who
controls such Selling Holder within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act from and against any loss, claim, damage
or liability and any action in respect thereof to which such Selling Holder, its
officers, directors and agents, and any such controlling Person may become
subject under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, any untrue
statement or alleged untrue statement of a material fact contained in any
registration statement or prospectus relating to the Registrable Securities (as
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) or any preliminary prospectus, or arises out of, or is
based upon, any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and shall reimburse each Selling Holder, its officers, directors and
agents, and each such controlling Person for any legal and other expenses
reasonably incurred by that Selling Holder, its officers, directors and agents,
or any such controlling person in investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action. The Company
also agrees to indemnify any Underwriters of the Registrable Securities, their
officers and directors and each Person who controls such Underwriters on
substantially the same basis as that of the indemnification of the Selling
Holders provided in this Section 4.1.
SECTION 4.2. Indemnification by Holders of Registrable
Securities. Each Selling Holder agrees, severally but not jointly, to indemnify
and hold harmless the Company, its officers, directors and agents and each
Person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same
<PAGE>14
extent as the foregoing indemnity from the Company to such Selling Holder, but
only with reference to information related to such Selling Holder furnished in
writing by such Selling Holder or on such Selling Holder's behalf expressly for
use in any registration statement or prospectus relating to the Registrable
Securities, or any amendment or supplement thereto, or any preliminary
prospectus. In case any action or proceeding shall be brought against the
Company or its officers, directors or agents or any such controlling Person, in
respect of which indemnity may be sought against such Selling Holder, such
Selling Holder shall have the rights and duties given to the Company, and the
Company or its officers, directors or agents or such controlling Person shall
have the rights and duties given to such Selling Holder, by the preceding
paragraph. Each Selling Holder also agrees to indemnify and hold harmless
Underwriters of the Registrable Securities, their officers and directors and
each Person who controls such Underwriters on substantially the same basis as
that of the indemnification of the Company provided in this Section 4.2.
SECTION 4.3. Conduct of Indemnification Proceedings. Promptly
after receipt by any person in respect of which indemnity may be sought pursuant
to Section 4.1 or 4.2 (an "Indemnified Party") of notice of any claim or the
commencement of any action, the Indemnified Party shall, if a claim in respect
thereof is to be made against the person against whom such indemnity may be
sought (an "Indemnifying Party") notify the Indemnifying Party in writing of the
claim or the commencement of such action provided that the failure to notify the
Indemnifying Party shall not relieve it from any liability which it may have to
an Indemnified Party otherwise than under Section 4.1 or 4.2 and except to the
extent of any actual prejudice resulting therefrom. If any such claim or action
shall be brought against an Indemnified Party, and it shall notify the
Indemnifying Party thereof, the Indemnifying Party shall be entitled to
participate therein, and, to the extent that it wishes, jointly with any other
similarly notified Indemnifying Party, to assume the defense thereof with
counsel satisfactory to the Indemnified Party. After notice from the
Indemnifying Party to the Indemnified Party of its election to assume the
defense of such claim or action, the Indemnifying Party shall not be liable to
the Indemnified Party for any legal or other expenses subsequently incurred by
the Indemnified Party in connection with the defense thereof other than
reasonable costs of investigation; provided that the Indemnified Party shall
have the right to employ separate counsel to represent the Indemnified Party and
its controlling Persons who may be subject to liability arising out of any claim
in respect of which indemnity may be sought by the Indemnified Party against the
Indemnifying Party, but the fees and expenses of such counsel shall be for the
account of such Indemnified Party unless (i) the Indemnifying Party and the
Indemnified Party shall have mutually agreed to the retention of such counsel or
(ii) in the reasonable judgment of such
<PAGE>15
Indemnified Party representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. No
Indemnifying Party shall, without the prior written consent of the Indemnified
Party, effect any settlement of any claim or pending or threatened proceeding in
respect of which the Indemnified Party is or could have been a party and
indemnity could have been sought hereunder by such Indemnified Party, unless
such settlement includes an unconditional release of such Indemnified Party from
all liability arising out of such claim or proceeding.
SECTION 4.4. Contribution. If the indemnification provided for
in this Article 4 is unavailable to the Indemnified Parties in respect of any
losses, claims, damages or liabilities referred to herein, then each such
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, claims, damages or liabilities (i) as between the Company and
the Selling Holders on the one hand and the Underwriters on the other, in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Selling Holders on the one hand and the Underwriters on the
other from the offering of the Registrable Securities, or if such allocation is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits but also the relative fault of the Company and
the Selling Holders on the one hand and of the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations and (ii) as between the Company on the one hand and each Selling
Holder on the other, in such proportion as is appropriate to reflect the
relative fault of the Company and of each Selling Holder in connection with such
statements or omissions, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Selling Holders on the one
hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total proceeds from the offering (net of underwriting
discounts and commissions but before deducting expenses) received by the Company
and the Selling Holders bear to the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover page of the prospectus. The relative fault of the Company and the Selling
Holders on the one hand and of the Underwriters on the other shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company and the Selling
Holders or by the Underwriters. The relative fault of the Company on the one
hand and of each Selling Holder on the other shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by such party, and the parties' relative intent,
<PAGE>16
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Selling Holders agree that it would not be
just and equitable if contribution pursuant to this Section 4.4 were determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Party as a result of the
losses, claims, damages or liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such Indemnified Party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 4.4, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission, and no Selling Holder
shall be required to contribute any amount in excess of the amount by which the
total price at which the Registrable Securities of such Selling Holder were
offered to the public (less underwriting discounts and commissions) exceeds the
amount of any damages which such Selling Holder has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. Each Selling
Holder's obligations to contribute pursuant to this Section 4.4 are several in
proportion to the proceeds of the offering received by such Selling Holder bears
to the total proceeds of the offering received by all the Selling Holders and
not joint.
ARTICLE V
CERTAIN AGREEMENTS
SECTION 5.1. Participation in Underwritten Registrations. No
Holder may participate in any underwritten registration hereunder unless such
Holder (a) agrees to sell such Holder's securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements and these
Registration Rights; provided that (i) any Holder participating in such
registration will not be required to make any representations or
<PAGE>17
warranties except those which relate solely to such Holder and its intended
method of distribution and (ii) the liability of each such Holder to any
Underwriter under such underwriting agreement will be limited to liability
arising from misstatements or omissions regarding such Holder and its intended
method of distribution and any such liability shall not exceed an amount equal
to the amount of net proceeds such Holder derives from such registration. The
Company shall take all reasonable steps to ensure that the shares of Registrable
Securities sold in any underwritten public offering shall be widely
disseminated.
SECTION 5.2. Rule 144. The Company covenants that it will file
any reports required to be filed by it under the Securities Act and the Exchange
Act and that it will take such further action as any Holder may reasonably
request, all to the extent required from time to time to enable Holders to sell
Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by (a) Rule 144 or Rule 144A under the
Securities Act, as such Rules may be amended from time to time, or (b) any
similar rule or regulation hereafter adopted by the Commission. Upon the request
of any Holder, the Company will deliver to such Holder a written statement as to
whether it has complied with such requirements.
SECTION 5.3. Holdback Agreements. To the extent not
inconsistent with applicable law, each Holder of Registrable Securities agrees
not to effect any sale or distribution of the issue being registered or of a
similar security of the Company, or any securities convertible into or
exchangeable or exercisable for such securities, including a sale pursuant to
Rule 144 or Rule 144A under the Securities Act, during the 14 days prior to, and
during the 90-day period beginning on, the effective date of the registration
statement filed by the Company (except as part of such registration) if, and to
the extent, requested by the managing Underwriter or Underwriters in the case of
any underwritten public offering.
ARTICLE VI
MISCELLANEOUS
SECTION 6.1. Legends. (a) Subject to Section
6.1(b), each certificate evidencing Common Stock that is issued to any Holder
shall bear a legend in substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
MAY BE OFFERED AND SOLD ONLY IF SO REGISTERED OR AN EXEMPTION
FROM REGISTRATION IS AVAILABLE.
<PAGE>18
(b) If any Common Stock shall be transferred pursuant to an
effective registration statement or Rule 144 (or any similar rule then in
effect) under the Securities Act, or if in the opinion of the Company the Common
Stock shall otherwise not be subject to any restrictions on transfer under the
Securities Act, the Company shall, upon the written request of any Holder, issue
to such Holder a new certificate evidencing such Common Stock without the legend
set forth above endorsed thereon.
SECTION 6.2. Remedies. The Company and the Lehman Partnerships
acknowledge and agree that in the event of any breach of this Agreement by any
one of them, the Company or the appropriate Lehman Partnerships, as the case may
be, would be irreparably harmed and could not be made whole by monetary damages.
The Company and the Lehman Partnerships accordingly agree (i) to waive the
defense in any action for specific performance that a remedy at law would be
adequate, and (ii) that the Company and the Lehman Partnerships, in addition to
any other remedy to which they may be entitled at law or in equity, shall be
entitled to compel specific performance of this Agreement in any action
instituted in the United States District Court for the Southern District of New
York, or, in the event said Court would not have jurisdiction for such action,
in any court of the United States or any state thereof having subject matter
jurisdiction for such action. The Company and the Lehman Partnerships consent to
non-exclusive personal jurisdiction in any such action brought in the United
States District Court of the Southern District of New York, or any such other
court.
SECTION 6.3. Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto, and their
respective successors and assigns; provided that neither this Agreement nor any
rights or obligations hereunder may be transferred or assigned by the Company.
SECTION 6.4. No Waivers; Amendments. (a) No failure or delay
by any party in exercising any right, power or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise thereof preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege. The rights and remedies herein provided shall be cumulative and
not exclusive of any rights or remedies provided by law.
(b) This Agreement may not be amended, modified or
supplemented other than by a written instrument signed by each party hereto.
(c) Any provision of this Agreement may be waived if, but only
if, such waiver is in writing and is signed by the party against whom the
enforcement of such waiver is sought.
<PAGE>19
SECTION 6.5. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including telex,
telecopier or similar writing) and shall be given to such party at its address,
telex or telecopier number set forth below, or such other address, telex or
telecopier number as such party may hereinafter specify for the purpose to the
party giving such notice. Each such notice, request or other communication shall
be effective (i) if given by telex or telecopy, when such telex or telecopy is
transmitted to the telex or telecopy number specified in this Section and the
appropriate answerback, if applicable, is received or, (ii) if given by mail, 72
hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid or, (iii) if given by any other means,
when delivered at the address specified in this Section 6.5.
Notices to the Company shall be addressed to Loral Space &
Communications Ltd., 600 Third Avenue, New York, New York 10016, Attention:
Eric J. Zahler, Vice President, General Counsel and Secretary, (telecopier no.
(212) 682-9805) with a copy thereof to Willkie Farr & Gallagher, One Citicorp
Center, 153 East 53rd Street, New York, New York 10022-4669, Attention: Bruce
Kraus, Esq. (telecopier no. (212) 821-8111); and notices to the Lehman
Partnerships shall be addressed to the Lehman Partnerships, c/o Lehman
Brothers Holdings Inc., American Express Tower, World Financial Center, 200
Vesey Street, New York, New York 10285, Attention: Alan H. Washkowitz and
David J. Brand, (telecopier no. (212) 526-3738) with a copy thereof to Davis
Polk & Wardwell, 450 Lexington Avenue, New York, New York 10017, Attention:
Paul R. Kingsley, Esq. (telecopier no. (212) 450-4800).
SECTION 6.6. Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the State of New
York.
SECTION 6.7. Section Headings. The section headings
contained in this Agreement are for reference purposes only and shall not
affect the meaning or interpretation of this Agreement.
SECTION 6.8. Entire Agreement. This Agreement, constitutes
the entire agreement and understanding among the parties hereto and supersedes
any and all prior agreements and understandings, written or oral, relating to
the subject matter hereof.
SECTION 6.9. Severability. Any term or provision of this
Agreement which is invalid or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining
terms and provisions of this Agreement or affecting the validity or
enforceability of any of the terms or provisions of this Agreement in any
other jurisdictions, it being intended that all
<PAGE>20
rights and obligations of the parties hereunder shall be enforceable to the
fullest extent permitted by law.
SECTION 6.10. Counterparts. This Agreement may be
signed in counterparts, each of which shall constitute an original and which
together shall constitute one and the same agreement.
<PAGE>21
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date set forth above.
LORAL SPACE & COMMUNICATIONS LTD.
By: /s/ Eric J. Zahler
Name: Eric J. Zahler
Title: Vice President
<PAGE>22
LEHMAN BROTHERS CAPITAL
PARTNERS II, L.P.
By: Lehman Brothers
Holdings Inc.
By: /s/ Alan H. Washkowitz
Name: Alan H. Washkowitz
Title: Managing Director
LEHMAN BROTHERS MERCHANT BANKING
PORTFOLIO PARTNERSHIP L.P.
By: LB I Group Inc.
By: /s/ Alan H. Washkowitz
Name: Alan H. Washkowitz
Title: Managing Director
LEHMAN BROTHERS OFFSHORE
INVESTMENT PARTNERSHIP L.P.
By: Lehman Brothers Offshore
Partners Ltd.
By: /s/ Alan H. Washkowitz
Name: Alan H. Washkowitz
Title: Managing Director
LEHMAN BROTHERS OFFSHORE
INVESTMENT PARTNERSHIP-JAPAN L.P.
By: Lehman Brothers Offshore
Partners Ltd.
By: /s/ Alan H. Washkowitz
Name: Alan H. Washkowitz
Title: Managing Director
