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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):
March 14, 1997
LORAL SPACE & COMMUNICATIONS LTD.
(Exact name of registrant as specified in its charter)
Islands of Bermuda 1-14180 13-3867424
(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 2. Acquisition or Disposition of Assets.
On March 14, 1997, Loral Space & Communications Ltd., a
Bermuda company ("Loral"), acquired substantially all of the assets and
operations of Skynet Satellite Services ("Skynet") business of AT&T Corp.
("AT&T") for $478.1 million in cash. The acquired assets include the Telstar
series of satellites and related ground operations facilities. The acquisition
was made pursuant to the terms of an agreement, dated as of September 25, 1996,
by and between AT&T, as Seller, and Loral, as Buyer, as amended.
The purchase price was funded from Loral's available cash and
is subject to adjustment.
Skynet is a leading U.S. satellite communications service
provider specializing in the distribution of entertainment and educational
programming to mass audiences via a network of C- and Ku-Band geosynchronous
satellites known as the Telstar series. Skynet also operates two satellite
telecommunications control stations and a research and development facility.
Loral intends to expand Skynet, which has heretofore limited its operations to
the U.S. market, to become a worldwide satellite communications service
provider.
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Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired*
(b) Pro Forma Financial Information*
(c) Exhibits
2.1 Agreement for the Purchase and Sale of Assets, dated
as of September 25, 1996, by and between AT&T Corp.,
as Seller, and Loral Space & Communications Ltd., as
Buyer.**
2.2 First Amendment to Agreement for the Purchase and
Sale of Assets, dated as of March 14, 1997, by and
between AT&T Corp., as Seller, and Loral Space &
Communications Ltd., as Buyer.***
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* The Registrant will file the required financial statements and
pro forma financial information by an amendment to this Form 8-K
not later than 75 days after the closing date of the
acquisition.
** Incorporated herein by reference to Form 8-K Current Report of
Loral Space & Communications Ltd. filed on September 27, 1996.
*** Filed herewith.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange
Act of 1934, as amended, the Registrant has duly caused this Report to be signed
on its behalf by the undersigned hereunto duly authorized.
LORAL SPACE & COMMUNICATIONS LTD.
Date: March 28, 1997 By:/s/ Eric J. Zahler
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Name: Eric J. Zahler
Title: Vice President, General
Counsel and Secretary
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EXHIBIT INDEX
Exhibit
2.1 Agreement for the Purchase and Sale of Assets, dated as of September
25, 1996, by and among AT&T Corp., as Seller, and Loral Space &
Communications Ltd., as Buyer.*
2.2 First Amendment to Agreement for the Purchase and Sale of Assets, dated
as of March 14, 1997, by and between AT&T Corp., as Seller, and Loral
Space & Communications Ltd., as Buyer.**
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* Incorporated herein by reference to
Form 8-K Current Report of Loral Space
& Communications Ltd. on September 27, 1996.
** Filed herewith.
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EXHIBIT 2.2
FIRST AMENDMENT TO AGREEMENT FOR
THE PURCHASE AND SALE OF ASSETS
THIS FIRST AMENDMENT TO AGREEMENT FOR THE PURCHASE AND SALE OF
ASSETS (the "Amendment") is made as of March 14, 1997 by and between AT&T Corp.,
a New York corporation ("Seller"), and Loral Space & Communications Ltd., a
Bermuda company ("Buyer").
W I T N E S S E T H:
WHEREAS, Buyer and Seller entered into that certain Agreement
for the Purchase and Sale of Assets, dated as of September 25, 1996 (the
"Agreement"); and
WHEREAS, Buyer and Seller desire to amend the Agreement as
set forth herein;
NOW, THEREFORE, in consideration of the premises and the terms
and conditions herein, the parties hereto agree as follows:
1. Amendment.
(a) The Agreement is hereby amended by deleting
the words "means $487,000,000" from the definition of "Reference Amount" set
forth in Section 1.1 and inserting in their place the following words: "means
$418,000,000".
(b) The Agreement is hereby amended by
inserting the following sentence at the end of Section 2.1:
"Notwithstanding anything else contained in this
Section 2.1, "Purchased Assets" shall not include the rights of Seller under
any property, casualty or other insurance policy listed on Schedule 3.17
insofar as such rights relate to the Telstar 401 satellite, including all
rights to claims relating to the Telstar 401 satellite under such insurance
policies; provided, however, that the Telstar 401 satellite shall be a
Purchased Asset.
(c) The Agreement is hereby amended by deleting
Section 2.4 in its entirety and inserting the following:
"In consideration of the sale, transfer, assignment,
conveyance and delivery by Seller of the Purchased Assets to Buyer, Buyer
shall pay to Seller at the Closing Four Hundred Seventy Eight Million One
Hundred Thousand Dollars ($478,100,000), subject to adjustment as
hereinafter provided
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(the "Purchase Price"). The Purchase Price will be payable in cash by wire
transfer of immediately available funds to the account of Seller designated by
Seller's written instructions."
(d) The Agreement is hereby amended by
inserting the following subsection (g) at the end of Section 2.7:
"(g) any liabilities and obligations under the
Agreement, dated as of September 14, 1993, between Electronic Data Systems
Corporation, a Texas corporation, and AT&T Communications, Inc., a Delaware
corporation, whether with respect to periods prior to or following the Closing
Date."
(e) The Agreement is hereby amended by
inserting the following subsection (c) to the end of Section 5.3:
"Buyer and Seller agree that the amount of the
Purchase Price that shall be allocated to the Telstar 401 satellite shall be
zero."
(f) The Agreement is hereby amended by
inserting the following paragraph at the end of Section 5.13:
"Seller further agrees to use commercially
reasonable efforts to secure FCC approval to replace the Aurora II-Satcom C-5
satellite that is currently located in the orbital arc at 139(0) West
Longitude. If Seller secures such approval, to the extent Seller is legally
permitted to do so, (i) Seller will so inform Space Systems/Loral, Inc., a
Delaware corporation and an affiliate of Buyer ("SSL"), and if SSL is
prepared to deliver in a timely fashion such a replacement satellite at
the required level of quality on terms and conditions (including, without
limitation, pricing terms) substantially similar to those generally
available from other satellite providers, Seller will contract to purchase
such satellite on such terms and (ii) it will so inform Buyer and, if Buyer
or its affiliates is prepared to provide in a timely fashion tracking,
telemetry and command services required by Seller for such a satellite at the
required level of service quality on terms and conditions (including,
without limitation, pricing terms) substantially similar to those generally
available from other service providers, Seller will contract to purchase such
services on such terms. Additionally, Seller further agrees to give Buyer and
its affiliates the right, but not the obligation, to purchase up to fifty
percent (50%) of the transponder service that Seller has on any such
satellite, at a price equal to the percentage of such transponder service
being purchased by Buyer multiplied by Seller's cost to have such satellite
delivered in-orbit (including satellite construction, launch and launch
insurance costs), provided that Buyer shall have this right only if Alascom,
Inc. consents thereto on or before June 14, 1997, and provided further that
Seller shall use commercially reasonable efforts to secure such consent by
June 14, 1997."
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(g) The Agreement is hereby amended by
inserting the following subsection (h) to the end of Section 9.3:
"Buyer acknowledges that Seller has had discussions
with each of the American Broadcasting Companies, Inc. ("ABC") and the Public
Broadcasting Service ("PBS") relating to providing replacement transponder
service to such companies as a result of the failure of Telstar 401
("Replacement Transponder Service"). Buyer agrees to indemnify and hold
harmless Seller from and against any claims that either ABC or PBS may assert
against Seller with respect to the failure by Buyer to enter into a definitive
agreement after the Closing Date with either ABC or PBS, respectively,
relating to Replacement Transponder Service."
(h) The Agreement is hereby amended by
inserting the following paragraph (h) to Section 9.3:
"(h) Notwithstanding anything contained in this
Agreement to the contrary: (i) Seller shall not be liable to Buyer for any
Losses incurred by Buyer arising directly or indirectly out of, resulting
directly or indirectly from, or relating directly or indirectly to the
failure of the Telstar 401 satellite; and (ii) Seller shall not be liable to
Buyer for breach of contract, breach of one or more representations or
warranties, indemnification, or one or more tort claims, any or all of which
are related directly or indirectly to the failure of the Telstar 401
satellite. Accordingly, Buyer, in consideration of good and valuable
consideration, receipt whereof is hereby acknowledged, hereby releases
and discharges Seller from all actions, suits, debts, dues, sums of money,
accounts, reckonings, bonds, bills, specialties, covenants, contracts,
controversies, agreements, promises, variances, trespasses, damages,
judgments, extents, executions, claims and demands whatsoever, in law,
admiralty and equity, which against Seller Buyer ever had, now has or hereafter
can, shall or may have, for, upon by reason of, in connection with or
involving, directly or indirectly, the failure of the Telstar 401 satellite
through and including the date of this Agreement."
(i) The Agreement is hereby amended by
inserting the following sentence at the end of Schedule 2.2(e):
"The rights of Seller under any property, casualty
or other insurance policy listed on Schedule 3.17 insofar as such rights
relate to the Telstar 401 satellite, including all rights to claims under
such insurance policies relating to the Telstar 401 satellite."
(j) The Agreement is hereby amended by deleting
Schedule 2.4(b).
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(k) The Agreement is hereby amended by
inserting the following sentence as the fourth bullet point in Schedule 3.6
relating to changes associated with Section 3.6(a):
"On January 11, 1997, the Telstar 401's telemetry
and communications ceased working and all subsequent attempts to re-establish
contact with this satellite have been unsuccessful."
(l) The Agreement is hereby amended by deleting
the word "none" from Schedule 3.7 and inserting in
its place the following:
"Pursuant to an in-orbit insurance policy relating
to the Telstar 401 satellite, the insurers under this policy have the right
to take title to the Telstar 401 satellite upon payment for a total loss (as
defined in such policy)."
2. In accordance with Section 2.3 of the Agreement,
Buyer and Seller hereby agree that the Closing Date shall be March 14, 1997.
3. Governing Law. This Amendment shall be governed by
and construed and enforced in accordance with the laws of the State of New
York.
4. Limitation. Except as expressly set forth herein,
this Amendment shall not be deemed to waive, amend or modify any term or
condition of the Agreement, each of which shall remain in full force and
effect.
5. Counterparts. This Amendment may be executed in any
number of counterparts, each of which when executed and delivered will be
deemed to be an original, and all of which taken together will be deemed to be
but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused
this Amendment to be executed by their respective officers thereunto duly
authorized as of the date first above written.
AT&T CORP.
By: /s/ Mary Jane McKeever
Name: Mary Jane McKeever
Title: Vice President New
Business Development
LORAL SPACE & COMMUNICATIONS LTD.
By: /s/ Eric J. Zahler
Name: Eric J. Zahler
Title: Vice President and Secretary
