SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-1
(Amendment No. 11)
TENDER OFFER STATEMENT
PURSUANT TO SECTION 14(d)(1) OF THE
SECURITIES EXCHANGE ACT OF 1934
LORAL CORPORATION
(Name of Subject Company)
LOCKHEED MARTIN CORPORATION
LAC ACQUISITION CORPORATION
(Bidders)
Common Stock, par value $0.25 per share
(Title of Class of Securities)
543859 10 2
(CUSIP number of Class of Securities)
Frank H. Menaker, Jr., Esq.
Lockheed Martin Corporation
6801 Rockledge Drive
Bethesda, Maryland 20817
(301) 897-6000
(Name, address and telephone number of person
authorized to receive notice and communications on
behalf of the person(s) filing statement)
With a copy to:
Peter Allan Atkins, Esq.
Lou R. Kling, Esq.
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, New York 10022
(212) 735-3000
This Amendment No. 11 amends and supplements
the Tender Offer Statement on Schedule 14D-1 (as may be
amended from time to time, the "Schedule 14D-1") of LAC
Acquisition Corporation, a New York corporation (the
"Purchaser") and a wholly-owned subsidiary of Lockheed
Martin Corporation, a Maryland corporation ("Lockheed
Martin"), filed on January 12, 1996 with the Securities
and Exchange Commission (the "Commission") in respect of
the tender offer (the "Offer") by the Purchaser for all
of the outstanding shares of Common Stock, par value
$0.25 per share, of Loral Corporation (the "Company" or
"Loral"). The Offer is being made pursuant to an
Agreement and Plan of Merger dated as of January 7, 1995
by and among the Company, Purchaser and Lockheed Martin.
All capitalized terms set forth herein which are not
otherwise defined herein shall have the same meanings as
ascribed thereto in the Offer to Purchase, dated January
12, 1996 (which is attached as Exhibit (a)(9) to the
Schedule 14D-1 (the "Offer to Purchase")). In connection
with the foregoing, the Purchaser and Lockheed Martin are
hereby amending and supplementing the Schedule 14D-1 as
follows:
Item 5. PURPOSE OF THE TENDER OFFER AND PLANS OR
PROPOSALS OF THE BIDDER.
Item 5(a)-(e) is hereby amended and
supplemented by the addition of the following paragraphs
thereto:
"The Distribution Agreement. The
Distribution Agreement will be amended as of April
15, 1996 as set forth below. All capitalized terms
set forth in this paragraph which are not otherwise
defined herein shall have the same meanings as
ascribed thereto in the Distribution Agreement,
dated January 7, 1996, which is attached as Exhibit
(c)(3) to the Schedule 14D-1.
1. Subject to the provisions of paragraph 2
below, Lockheed Martin Corporation ("Lockheed
Martin") waives the provisions of Section 2.6(a) and
(b) of the Distribution Agreement insofar as such
provisions would otherwise prohibit, restrict or
delay the assignment, conveyance or transfer of
shares (the "SSL Shares") of capital stock of Space
Systems/Loral, Inc. ("SSL") to Loral SpaceCom or a
Loral Spacecom subsidiary prior to the Distribution
Date if waivers of all Third Party Call Rights or
Third Party Put Rights with respect to the SSL
Shares have not been received prior to the time of
such assignment, conveyance or transfer.
2. The parties consent to the prior assignment
by Loral Space & Communications Corp. ("Loral
Space") of all of its rights and obligations under
the Distribution Agreement to Loral Space &
Communications Ltd., a Bermuda company ("Loral
SpaceCom"), and agree that all references to Spinco
in the Distribution Agreement shall be deemed to be
references to Loral Spacecom. Loral SpaceCom
reaffirms and acknowledges its agreement that (x) it
shall, pursuant to the provisions of Section 2.6(c)
of the Distribution Agreement, indemnify Loral and
all Parent Indemnified Parties for all Indemnifiable
Losses arising out of, relating to or resulting from
the exercise or purported exercise of any Third
Party Call Right or any Third Party Put Right and
(y) prior to the exercise or the receipt of waivers
of Third Party Call Rights, it shall not assign,
convey or transfer the applicable SSL Shares to any
third party or otherwise take any action that would
have the effect of denying or materially adversely
affecting the Third Party Call Rights set forth in
the SSL Stockholders Agreements. Loral SpaceCom
further agrees that it shall indemnify and hold
harmless the Company and all Parent Indemnified
Parties from and against all Indemnifiable Losses
arising out of, relating to or resulting from the
transfer of the SSL Shares to Loral SpaceCom prior
to the receipt by the Company or Loral SpaceCom of
all waivers and consents otherwise required prior to
such transfer, including without limitation, the
continuation of the Company after the Distribution
Date as a party to the SSL Stockholders Agreements.
Notwithstanding anything to the contrary contained
in the Distribution Agreement Amendment or in the
Distribution Agreement, Loral SpaceCom shall
indemnify the Company and the Parent Indemnified
Parties for costs, fees and expenses of attorneys,
accountants, consultants and other similar persons
engaged by the Company or the Parent Indemnified
Parties with respect to the matters set forth in
this paragraph 2 or in Section 2.6 of the
Distribution Agreement if and only to the extent
that they relate to (x) claims or inquiries
initiated by a third-party not affiliated with the
Company or Lockheed Martin or (y) Actions.
3. (a) Notwithstanding anything to the
contrary contained in Section 6.7(d) of the
Distribution Agreement, the obligations and rights
of the parties arising under Section 6.7(d) shall be
qualified in their entirety by and subject to the
limitations with respect thereto set forth in the
Agreement Containing Consent Order to be entered
into between Lockheed Martin and the Federal Trade
Commission (the "FTC") (File No. 961-0026).
(b) Section 2.1(a), "Transfer of Assets",
of the Distribution Agreement, detailing the steps
in the Restructuring of the Company, is amended and
supplemented by replacing Section 2.1(a) with the
new Section 2.1(a) contained in Annex I to the
Letter Amendment (the "Distribution Agreement
Amendment" ) dated as of April 15, 1996 to the
Restructuring, Financing and Distribution Agreement,
dated as of January 7, 1996, a copy of which is
attached hereto and filed as Exhibit (c)(20) to the
Schedule 14D-1.
(c) Spinco's indemnification obligation
under Section 5.2(a)(v) of the Distribution
Agreement is amended to cover all Indemnifiable
Losses of Parent Indemnifiable Parties arising out
of, relating to or resulting from, directly or
indirectly, any transfer of Spinco Assets to, or
assumption of Spinco Liabilities by, Spinco or any
Spinco Company in accordance with the Distribution
Agreement or otherwise in connection with the
Restructuring (other than any costs and expenses
which have been expressly assumed by the Company
pursuant to the provisions of the Distribution
Agreement) or the continuation of the Company, LAC
or LAH as parties to the SSL Stockholders Agreements
on or after the Distribution Date.
The foregoing summary of the Distribution Agreement
Amendment does not purport to be complete and is
qualified in its entirety by reference to the text of
the Letter Amendment to the Distribution Agreement
dated as of April 15, 1996 which is herein incorporated
by reference, a copy of which is attached hereto and
filed as Exhibit (c)(20) to the Schedule 14D-1."
Item 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR
RELATIONSHIPS WITH RESPECT TO THE SUBJECT
COMPANY'S SECURITIES
Item 7 is hereby amended and supplemented as
set forth in Item 5 above.
Item 10. ADDITIONAL INFORMATION.
Item 10(a) is hereby amended and supplemented
as set forth in Item 5 above.
Item 10 (b)-(c) is hereby amended and
supplemented by incorporating by reference therein the
Agreement Containing Consent Order entered into between
Lockheed Martin and the Federal Trade Commission on April
15, 1996, a copy of which is attached hereto and filed as
Exhibit (c)(17) to the Schedule 14D-1.
Item 10 (b)-(c) is hereby further amended and
supplemented by incorporating by reference therein the
Letter from the Federal Trade Commission, dated April 18,
1996 confirming early termination of the waiting period
provided by Section 7A(b)(1) of the Clayton Act and the
Hart-Scott-Rodino Antitrust Improvements Act of 1976,
a copy of which is attached hereto and filed as Exhibit
(c)(18) to the Schedule 14D-1.
Item 10(f) is hereby amended and supplemented
by incorporating by reference therein the press release
issued by the Federal Trade Commission on April 18, 1996,
a copy of which is attached hereto and filed as Exhibit
(c)(19) to the Schedule 14D-1.
Item 11. Material to be Filed as Exhibits
Item 11 is hereby amended and supplemented by
the addition of the following exhibits thereto:
Exhibit (c)(17) Agreement Containing Consent Order
entered into between Lockheed Martin
and the Federal Trade Commission on
April 15, 1996
Exhibit (c)(18) Letter from the Federal Trade
Commission, dated April 18, 1996
confirming early termination of the
waiting period provided by Section
7A(b)(1) of the Clayton Act and the
Hart-Scott-Rodino Antitrust
Improvements Act of 1976
Exhibit (c)(19) Press Release issued by the Federal
Trade Commission on April 18, 1996
Exhibit (c)(20) Letter Amendment dated as of April
15, 1996 to the Restructuring,
Financing and Distribution Agreement,
dated as of January 7, 1996, by and
among Lockheed Martin Corporation,
Loral Corporation, Loral Space and
Communications Corporation, Loral
Aerospace Holdings, Inc., Loral
Aerospace Corp., Loral General
Partner, Inc., Loral Globalstar,
L.P., Loral Globalstar Limited
SIGNATURE
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set
forth in this statement is true, complete and correct.
LAC ACQUISITION CORPORATION
By:/s/ STEPHEN M. PIPER
Name: Stephen M. Piper
Title: Assistant Secretary
Dated: April 22, 1996
SIGNATURE
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set
forth in this statement is true, complete and correct.
LOCKHEED MARTIN CORPORATION
By:/s/ STEPHEN M. PIPER
Name: Stephen M. Piper
Title: Assistant Secretary
Dated: April 22, 1996
EXHIBIT INDEX
Exhibit No. Description
Exhibit (c)(17) Agreement Containing Consent Order entered into
between Lockheed Martin and the Federal Trade
Commission on April 15, 1996
Exhibit (c)(18) Letter from the Federal Trade Commission, dated
April 18, 1996 confirming early termination of
the waiting period provided by Section 7A(b)(1)
of the Clayton Act and the Hart-Scott-Rodino
Antitrust Improvements Act of 1976
Exhibit (c)(19) Press Release issued by the Federal Trade
Commission on April 18, 1996
Exhibit (c)(20) Letter Amendment dated as of April 15, 1996 to
the Restructuring, Financing and Distribution
Agreement, dated as of January 7, 1996, by and
among Lockheed Martin Corporation, Loral
Corporation, Loral Space and Communications
Corporation, Loral Aerospace Holdings, Inc.,
Loral Aerospace Corp., Loral General Partner,
Inc., Loral Globalstar, L.P., Loral Globalstar
Limited
UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION
)
)
In the Matter of )
) File No. 961-0026
LOCKHEED MARTIN CORPORATION, )
a corporation. )
)
)
AGREEMENT CONTAINING CONSENT ORDER
The Federal Trade Commission ("Commission"),
having initiated an investigation of the proposed
acquisition by Lockheed Martin Corporation ("Lockheed
Martin") of Loral Corporation ("Loral"), and it now
appearing that Lockheed Martin, hereinafter sometimes
referred to as "Proposed Respondent," is willing to enter
into an agreement containing an order to divest assets,
to refrain from certain acts and to provide for certain
other relief:
IT IS HEREBY AGREED by and between Proposed
Respondent Lockheed Martin, by its duly authorized
officers and attorneys, and counsel for the Commission
that:
1. Proposed Respondent Lockheed Martin is a
corporation organized, existing the doing business under
and by virtue of the laws of the state of Maryland with
its office and principal place of business located at
6801 Rockledge Drive, Bethesda, Maryland 20817.
2. Proposed Respondent admits all the
jurisdictional facts set forth in the draft of complaint
here attached.
3. Proposed Respondent waives:
(a) any further procedural steps;
(b) the requirement that the Commission's
decision contain a statement of findings of fact and
conclusions of law;
(c) all rights to seek judicial review or
otherwise to challenge or contest the validity of
the order entered pursuant to this agreement; and
(d) any claim under the Equal Access to
Justice Act.
4. Proposed Respondent shall submit within
thirty (30) days of the date this agreement is signed by
LOCKHEED MARTIN CORPORATION
AGREEMENT CONTAINING CONSENT ORDER
Proposed Respondent, an initial report, pursuant to
Section 2.33 of the Commission's Rules, signed by
Proposed Respondent setting forth in detail the manner in
which the Proposed Respondent will comply with Paragraphs
II. through XVI. of the order when and if entered. Such
report will not become part of the public record unless
and until the accompanying agreement and order are
accepted by the Commission for public comment.
5. This agreement shall not become part of
the public record of the proceeding unless and until it
is accepted by the Commission. If this agreement is
accepted by the Commission it, together with the draft of
complaint contemplated thereby, will be placed on the
public record for a period of sixty (60) days and
information in respect thereto publicly released. The
Commission thereafter may either withdraw its acceptance
of this agreement and so notify the Proposed Respondent,
in which event it will take such action as it may
consider appropriate, or issue and serve its complaint
(in such form as the circumstances may require) and
decision, in disposition of the proceeding.
6. This agreement is for settlement purposes
only and does not constitute an admission by Proposed
Respondent that the law has been violated as alleged in
the draft of complaint here attached, or that the facts
as alleged in the draft complaint, other than
jurisdictional facts, are true.
7. This agreement contemplates that, if it is
accepted by the Commission, and if such acceptance is not
subsequently withdrawn by the Commission pursuant to the
provisions of Section 2.34 of the Commission's Rules, the
Commission may, without further notice to Proposed
Respondent, (1) issue its complaint corresponding in form
and substance with the draft of complaint here attached
and its decision containing the following order to divest
and refrain from certain acts in disposition of the
proceeding, and (2) make information public with respect
thereto. When so entered, the order shall have the same
force and effect and may be altered, modified, or set
aside in the same manner and within the same time
provided by statute for other orders. The order shall
become final upon service. Delivery by the U.S. Postal
Service of the complaint and decision containing the
agreed-to order to Proposed Respondent's address as
stated in the agreement shall constitute service.
Proposed Respondent waives any right it may have to any
other manner of service. The complaint may be used in
construing the terms of the order, and no agreement,
understanding, representation or interpretation not
contained in the order or the agreement may be used to
vary or contradict the terms of the order.
8. Proposed Respondent has read the proposed
complaint and order contemplated hereby. Proposed
Respondent understands that once the order has been
issued, it will be required to file one or more
compliance reports showing that it has fully complied
with the order. Proposed Respondent further understands
it may be liable for civil penalties in the amount
provided by law for each violation of the order after it
becomes final.
ORDER
I.
IT IS ORDERED that, as used in this order, the
following definitions shall apply:
A. "Respondent" or "Lockheed Martin" means
Lockheed Martin Corporation, its directors, officers,
employees, agents, representatives, predecessors,
successors and assigns; its subsidiaries, divisions,
groups, affiliates, partnerships and joint ventures
controlled by Lockheed Martin Corporation, and the
respective directors, officers, employees, agents,
representatives, successors and assigns of each.
Lockheed Martin includes Loral Corporation, which prior
to the Acquisition had its principal office and place of
business located at 600 Third Avenue, New York, New York
10016; except that Lockheed Martin does not include any
of the foregoing that will be part of Loral Space after
the Acquisition.
B. "Loral" means Loral Corporation, a New York
corporation, with its principal office and place of
business located at 600 Third Avenue, New York, New York
10016, its directors, officers, employees, agents,
representatives, predecessors, successors and assigns;
its subsidiaries, divisions, groups, affiliates,
partnerships and joint ventures controlled by Loral
Corporation, and the respective directors, officers,
employees, agents, representatives, successors and
assigns of each; except that Loral does not include any
of the foregoing that will be part of Loral Space after
the Acquisition.
C. "Commission" means the Federal Trade
Commission.
D. "SETA Services" means systems engineering,
technical assistance services and support services
relating to Air Traffic Control Systems provided by
Lockheed Martin to the Federal Aviation Administration,
pursuant to Paragraphs C.2.2.1.3., C.2.2.1.5.,
C.2.2.1.12. and C.2.2.4. of Task Area 2 and Paragraphs
C.9.1.3, C.9.2.2., C.9.2.3., C.9.2.4., C.9.2.6.,
C.9.2.7., C.9.2.8. and C.9.2.10. of Task Area 9 of the
National Implementation and Support Contract, DTFA01-93-
C-00031, that involve the development of technical and
other specifications for procurements and programs; the
assessment of bid and other proposals; the evaluation,
testing or monitoring of any service, equipment or
product provided by any company; the modification or
change of any performance requirements of any contractor;
or the development of financial, cost or budgetary plans,
procedures or policies.
E. "SETA Services Operations" means all assets,
properties, business and goodwill, tangible and
intangible, held by Respondent and used in the provision
of SETA Services including, without limitation, the
following:
1. all rights, obligations and interests in
Paragraphs C.2.2.1.3., C.2.2.1.5., C.2.2.1.12.,
C.2.2.4., C.9.1.3., C.9.2.2., C.9.2.3, C.9.2.4.,
C.9.2.6., C.9.2.7., C.9.2.8. and C.9.2.10. of
contract DTFA01-93-C-00031 relating to the provision
of SETA Services;
2. all customer lists, vendor lists,
catalogs, sales promotion literature, advertising
materials, research materials, financial
information, technical information, management
information and systems, software, software
licenses, inventions, copyrights, trademarks, trade
secrets, intellectual property, patents, technology,
know-how, specifications, designs, drawings,
processes and quality control data;
3. all rights, titles and interests in and to
owned or leased real property, together with
appurtenances, licenses and permits;
4. all rights, titles and interests in and to
the contracts entered into in the ordinary course of
business, including, but not limited to, contracts
with customers (together with associated bid and
performance bonds), suppliers, subcontractors, sales
representatives, distributors, agents, personal
property lessors, personal property lessees,
licensors, licensees, consignors and consigees;
5. all rights under warranties and
guarantees, express or implied;
6. all books, records and files;
7. all data developed, prepared, received,
stored or maintained; and
8. all items of prepaid expense.
F. "Non-Public Air Traffic Control Information"
means any information not in the public domain disclosed
by the Federal Aviation Administration or any company to
Respondent in its capacity as a provider of SETA
Services.
G. "Standard Terminal Automation Replacement
System" means any current or future equipment and
services design, developed, proposed or provided by Loral
Air Traffic Control to upgrade the traffic control
equipment and systems in the Federal Aviation
Administration's U.S. air traffic control terminals.
H. "Traffic Flow Management System" means any
current or future equipment and services designed,
developed, proposed or provided by Loral Air Traffic
Control to predict arrival and departure traffic flows at
U.S. airports for the Federal Aviation Administration.
I. "Operational and Supportability Implementation
Service" means any current or future equipment and
services designed, developed, proposed or provided by
Loral Air Traffic Control to upgrade Federal Aviation
Administration flight servicer stations.
J. "Air Traffic Control Systems" means any current
or future air traffic control equipment, system or
service designed, developed, proposed or provided by
Loral Air Traffic Control, including, but not limited to,
the Standard Terminal Automation Replacement System, the
Traffic Flow Management System and the Operational and
Supportability Implementation Service, for the Federal
Aviation Administration.
K. "Military Aircraft" means fixed-wing aircraft
manufactured for sale to the United States or foreign
governments.
L. "NITE Hawk Systems" means any airborne forward-
looking infrared targeting system researched, developed,
designed, manufactured or sold by Loral for use on the
F/A-18 series of Military Aircraft.
M. "Simulations and Training Systems" means the
operational and weapons systems trainers designed,
developed, manufactured or sold by Loral that simulate
Military Aircraft.
N. "Electronic Countermeasures" means systems
designed, developed, manufactured or sold by Loral,
including, but not limited to, the ALR-56A and ALR-56C,
that detect, jam and deceive hostile radars and radar and
infrared guided weapons for use on Military Aircraft.
O. "Mission computers" means any computer
designed, developed, manufactured or sold by Loral,
including, but not limited to, to AP1, AAAP1R and
CP1075/B/C, that control monitor or manage the operations
and electronics of any Military Aircraft.
P. "Unmanned Aerial Vehicle" means any unmanned
aircraft used for tactical or strategic reconnaissance
missions manufactured for sale to the United States or
foreign governments.
Q. "Integrated Communications Systems" means
systems designed, developed, manufactured or sold by
Loral, including, but not limited to, the 367-6000-59-R-
012 and the 367-6000-59-R-013, that are capable of both
wideband satellite and line-of-sight data link
communications and command and control data links for sue
on Unmanned Aerial Vehicles.
R. "Loral Air Traffic Control" means Loral Air
Traffic Control, an entity with its principal place of
business at 9211 Corporate Blvd., Rockville, Maryland
20850, or any other entity within or controlled by
Lockheed Martin that is engaged in, among other things,
the research, development, manufacture or sale of Air
Traffic Control Systems, and its directors, officers,
employees, agents, representatives, predecessors,
successors and assigns; its subsidiaries, divisions,
groups, affiliates, partnerships and joint ventures
controlled by Loral Air Traffic Control (or such similar
entity), and the respective directors, officers,
employees, agents, representatives, successors and
assigns of each; except that Loral Air Traffic Control
does not include any of the foregoing that will be part
of Loral Space after the Acquisition.
S. "Lockheed Martin Military Aircraft Business"
means any entity within or controlled by Lockheed Martin
that in engaged in, among other things, the research,
development, manufacture or sale of Military Aircraft or
Unmanned Aerial Vehicles, and its directors, officers,
employee, agents, representatives, predecessors,
successors and assign; its subsidiaries, divisions,
groups, affiliates, partnerships and joint ventures
controlled by a Lockheed Martin Military Aircraft
Business and the respective directors, officers,
employees, agents, representatives, successors and
assigns of each.
T. "Management and Data Systems" means Lockheed
Martin Management and Data Systems Division, an entity
with its principal place of business at 7000 Gerdes
Blvd., King of Prussia, Pennsylvania 19406, or any other
entity within or controlled by Lockheed Martin that is
engaged in, among other things, the provision of SETA
Services, and its directors, officers, employees, agents,
representatives, predecessors, successors and assigns;
its subsidiaries, divisions, groups, affiliates,
partnerships and joint ventures controlled by Lockheed
Martin Management and Data Systems Division (or such
similar entity), and the respective directors, officers,
employees, agents, representatives, successors and
assigns of each.
U. "Non-Public Military Aircraft Information (NITE
Hawk)" means (1) any information not in the public domain
disclosed by any Military Aircraft manufacturer, other
than Lockheed Martin, to Respondent or Loral in its
capacity as a provider of NITE Hawk Systems and (a) if
written information, designated in writing by the
Military Aircraft manufacturer as proprietary information
by an appropriate legend, marking, stamp or positive
written identification on the face thereof, or (b) if
oral, visual or other information, identified as
proprietary information in writing by the Military
Aircraft manufacturer prior to the disclosure or within
thirty (30) days after such disclosure; or (2) any
information not in the public domain disclosed by any
Military Aircraft manufacturer prior to the Acquisition
to Loral in its capacity as a provider of NITE Hawk
Systems. Non-Public Military Aircraft Information (NITE
Hawk) shall not include: (1) information known or
disclosed to Respondent, excluding Loral, at the time
Respondent signed the Agreement Containing Consent Order
in this matter, (2) information that subsequently falls
within the public domain through no violation of this
order by Respondent, (3) information that subsequently
becomes known to Respondent from a third party not in
breach of a confidential disclosure agreement
(information obtained from Loral or otherwise obtained as
a result of the Acquisition shall not be considered
information known to Respondent from a third party), or
(4) information after six (6) years from the date of
disclosure of such Non-Public Military Aircraft
Information (NITE Hawk) to Respondent, or such other
period as agreed to in writing by Respondent and the
provider of the information.
V. "Non-Public Military Aircraft Information
(Simulation and Training)" means (1) any information not
in the public domain disclosed by any Military Aircraft
manufacturer, other than Lockheed Martin, to Respondent
or Loral in its capacity as a provider of Simulation and
Training Systems and (a) if written information,
designated in writing by the Military Aircraft
manufacturer as proprietary information by an appropriate
legend, marking, stamp or positive written identification
on the face thereof, or (b) if oral, visual or other
information, identified as proprietary information in
writing by Military Aircraft manufacturer prior to the
disclosure or within thirty (30) days after such
disclosure; or (2) any information not in the public
domain disclosed by any Military Aircraft manufacturer
prior to the Acquisition to Loral in its capacity as a
provider of Simulation and Training Systems. Non-Public
Military Aircraft Information (Simulation and Training)
shall not include: (1) information known or disclosed to
Respondent, excluding Loral, at the time Respondent
signed the Agreement containing Consent Order in this
matter, (2) information that subsequently falls within
the public domain through no violation of this order by
Respondent, (3) information that subsequently becomes
known to Respondent from a third party not in breach of a
confidential disclosure agreement (information obtained
from Loral or otherwise obtained as a result of the
Acquisition shall not be considered information known to
Respondent from, a third party) or (4) information after
six (6) years from the date of disclosure of such Non-
Public Military Aircraft information (Simulation and
Training) to Respondent, or such other period as agreed
to in writing by Respondent and the provider of the
information.
W. "Non-Public Military, Aircraft Information
(Electronic Countermeasures)" means (1) any information
not in the public domain disclosed by any Military
Aircraft manufacturer, other than Lockheed Martin, to
Respondent or Loral in its capacity as a provider of
Electronic Countermeasures and (a) if written
information, designated in writing by the Military
Aircraft manufacturer as proprietary information by an
appropriate legend, marking, stamp or positive written
identification on the face thereof, or (b) if oral,
visual or other information, identified as proprietary
information in writing by the Military Aircraft
manufacturer prior to the disclosure or within thirty
(30) days after such disclosure; or (2) any information
not in the public domain disclosed by any Military
Aircraft manufacturer prior to the Acquisition to Loral
in its capacity as a provider of Electronic
Countermeasures. Non-Public Military Aircraft
Information (Electronic Countermeasures) shall not
include: (1) information known or disclosed to
Respondent, excluding Loral, at the time Respondent
signed the Agreement Containing Consent Order in this
matter, (2) information that subsequently falls within
the public domain through no violation of this order by
Respondent, (3) information that subsequently becomes
known to Respondent from a third party not in breach of a
confidential disclosure agreement (information obtained
from Loral or otherwise obtained as a result of the
Acquisition shall not be considered information known to
Respondent from a third party), or (4) information after
six (6) years from the date of disclosure of such Non-
Public Military Aircraft Information (Electronic
Countermeasures) to Respondent, or such other period as
agreed to in writing by Respondent and the provider of
the information.
X. "Non-Public Military Aircraft Information
(Mission Computers)" means (1) any information not in the
public domain disclosed by any Military Aircraft
manufacturer, other than Lockheed Martin, to Respondent
or Loral in its capacity as a provider of Mission
Computers, and (a) if written information, designated in
writing by the Military Aircraft manufacturer as
proprietary information by an appropriate legend,
marking, stamp or positive written, identification on the
face thereof, or (b) if oral, visual or other
information, identified as proprietary information in
writing by the Military Aircraft manufacturer prior to
the disclosure or within thirty (30) days after such
disclosure; or (2) any information not in the public
domain disclosed by any Military Aircraft manufacturer
prior to the Acquisition to Loral in its capacity as a
provider of Mission Computers. Non-Public Military
Aircraft Information (Mission Computers) shall not
include: (1) information known or disclosed to
Respondent, excluding Loral, at the time Respondent
signed the Agreement Containing Consent Order in this
matter, (2) information that subsequently falls within
the public domain through no violation of this order by
Respondent, (3) information that subsequently becomes
known to Respondent from a third party not in breach of a
confidential disclosure agreement (information obtained
from Loral or otherwise obtained as a result of the
Acquisition shall not be considered information known to
Respondent from a third party), or (4) information after
six (6) years from the date of disclosure of such Non-
Public Military Aircraft Information (Mission Computers)
to Respondent, or such other period as agreed to in
writing by Respondent and the provider of the
information.
Y. "Non-Public Unmanned Aerial Vehicle
Information" means (1) any information not in the public
domain disclosed by any Unmanned Aerial Vehicle
manufacturer, other than Lockheed Martin, to Respondent
or Loral in its capacity as a provider of Integrated
Communications Systems, and (a) if written information,
designated in writing by the Unmanned Aerial Vehicle
manufacturer as proprietary information by an appropriate
legend, marking, stamp or positive written identification
on the face thereof, or (b) if oral, visual or other
information, identified as proprietary information in
writing by the Unmanned Aerial Vehicle manufacturer prior
to the disclosure or within thirty (30) days after such
disclosure; or (2) any information not in the public
domain disclosed by any Unmanned Aerial Vehicle
manufacturer prior to the Acquisition to Loral in its
capacity as a provider of Integrated Communications
systems. Non-Public Unmanned Aerial Vehicle Information
shall not include: (1) information known or disclosed to
Respondent, excluding Loral, at the time Respondent
signed the Agreement Containing Consent Order in this
matter, (2) information that subsequently falls within
the public domain through no violation of this order by
Respondent, (3) information that subsequently becomes
known to Respondent from a third party not in breach of a
confidential disclosure agreement (information obtained
from Loral or otherwise obtained as a result of the
Acquisition shall not be considered information known to
Respondent from a third party), or (4) information after
six (6) years from the date of disclosure of such Non-
Public Unmanned Aerial Vehicle Information to Respondent,
or such other period as agreed to in writing by
Respondent and the provider of the information.
Z. "Satellite" means an unmanned machine that is
launched from the Earth's surface for the purpose of
transmitting data back to Earth and which is designed
either to orbit the Earth or travel away from the Earth.
AA. "Restructuring Agreement" means the
Restructuring, Financing and Distribution Agreement,
dated as of January 7, 1996, by and among Loral
Corporation, Loral Aerospace Holdings, Inc., Loral
Aerospace Corp. , Loral General Partner, Inc., Loral
Globalstar, L.P., Loral Globalstar Limited, Loral
Telecommunications Acquisition, Inc. (to be renamed Loral
Space & Communications Ltd.) and Lockheed Martin
Corporation.
BB. "Loral Space" means Loral Space &
Communications Ltd., a company organized under the laws
of the Islands of Bermuda, with its principal office and
place of business located at 600 Third Avenue, New York,
Now York 10016, as described by the Restructuring
Agreement; its directors, officers, employees, agents,
representatives, predecessors, successors and assigns;
its subsidiaries, divisions, groups, affiliates,
partnerships and joint ventures controlled or managed by
Loral Space & Communications Ltd., including, but not
limited to, Globalstar, L.P., Space Systems/Loral, Inc.
and K&F Industries, Inc., and the respective directors,
officers, employees, agents, representatives, successors
and assigns of each; except that Loral Space does not
include any of the foregoing that will be part of Loral
or Lockheed Martin after the Acquisition.
CC. "Space Systems/Loral" means Space
Systems/Loral, Inc., an entity with its principal place
of business at 3825 Fabian Way, Palo Alto, California
94303, or any other entity within or controlled by Loral
Space that is engaged in, among other things, the
research, development, manufacture or sale of Satellites,
and its directors, officers, employees, agents,
representatives, predecessors, successors and assigns;
its subsidiaries, divisions, groups, affiliates,
partnerships and joint ventures controlled by Space
Systems/Loral, Inc. (or such similar entity), and the
respective directors, officers, employees, agents,
representatives, successors and assigns of each; except
that Space Systems/Loral does not include any of the
foregoing that will be part of Loral or Lockheed Martin
after the Acquisition and does not include any entity or
line of business, outside of Space Systems/Loral, Inc.,
within or controlled by Loral Space that is not engaged
in the research, development, manufacture or sale of
Satellite.
DD. "Defensive Missiles Systems" are the research,
development, manufacture or sale of defensive missiles
systems and components, including, among other things,
the Theater High Altitude Area Defense System, Corps
SAM/MEADS, the Advanced Intercept Technology, National
Missile Defense, Naval Upper Tier, the Airborne Laser,
target programs and other related activities.
EE. "Fleet Ballistic Missiles" are the research,
development, manufacture, sale or life cycle support
including disposal of strategic offensive missiles and
associated support equipment, including, among other
things, the Trident missile.
FF. "Missile System Products Center" is the
research, development, manufacture or sale of missile
systems, missile components, missile technology,
propulsion systems, seekers, electronics, avionics,
composites, bombs, rockets and mortars, including, among
other things, the Composites Initiative, the Propulsion
Initiative, BLU-109 and Precision Guided Mortar Munition.
GG. "Space & Strategic Missiles" means Lockheed
Martin Space & Strategic Missiles Sector, an entity with
its principal place of business at 6801 Rockledge Drive,
Bethesda, Maryland 20817, or any other entity within or
controlled by Lockheed Martin that is engaged in, among
other things, the research, development, manufacture or
sale of Satellites; and its directors, officers,
employees, agents, representatives, predecessors,
successors and assigns; its subsidiaries, divisions,
groups, affiliates, partnerships and joint ventures
controlled by Lockheed Martin Space & Strategic Missiles
Sector (or such similar entity), and the respective
directors, officers, employees, agents, representatives,
successors and assigns of each; except that Space &
Strategic Missiles does not include Defensive Missile
Systems, Fleet Ballistic Missiles, and Missile System
Products Center, and any other entity or line of
business, outside of Lockheed Martin Space & Strategic
Missiles Sector, within or controlled by Lockheed Martin
that is not engaged in the research, development,
manufacture or sale of Satellites.
HH. "Common LM/Loral Space Director" means any
person who is simultaneously a member of the Board of
Directors of Lockheed Martin or an officer of Lockheed
Martin and a member of the Board of Directors of Loral
Space or an officer of Loral Space.
II. "Non-Public Space Information of Lockheed
Martin" means any information not in the public domain
relating to Space & Strategic Missiles.
JJ. "Non-Public Space Information of Loral Space"
means any information not in the public domain relating
to Space Systems/Loral.
KK. "Lockheed Martin/Loral Space Technical Services
Agreement" means the technical services agreement between
Lockheed Martin and Loral Space, as described by Article
VI, Section 6.7, Paragraph (d), of the Restructuring
Agreement.
LL. "Merger Agreement means the Agreement and Plan
of Merger, dated as of January 7, 1996, by and among
Loral Corporation, Lockheed Martin Corporation and LAC
Acquisition Corporation.
MM. "Stockholders Agreement" means the Stockholders
Agreement referred to in the Restructuring Agreement.
NN. "Non-Voting Equity Securities" means any share
of stock that does not entitle the shareholder to vote
for any member of the Board of Directors.
OO. "Voting Equity Securities" means any share of
stock that entitles the shareholder to vote for any
member of the Board of Directors.
PP. "Acquisition" means the transaction described
by the Merger Agreement and the Restructuring Agreement,
including, but not limited to: (1) the acquisition by
Respondent of all of the outstanding voting common stock
of Loral; (2) the transfer of the space and
telecommunications businesses of Loral and its
subsidiaries to Loral Space; (3) the acquisition by
Respondent of a 20% convertible preferred stock interest
in Loral Space, which in turn owns a 33% interest in
Space Systems/Loral; (4) the Lockheed Martin/Loral Space
Technical Services Agreement; and (5) the appointment of
Mr. Bernard Schwartz, Chairman of the Board of Directors
and Chief Executive Officer of Loral Space, to the
position of Vice Chairman of the Board of Directors of
Lockheed Martin.
II.
IT IS FURTHER ORDERED that:
A. Respondent shall divest, absolutely and in good
faith, within six (6) months of the date Respondent
signed the Agreement Containing Consent Order in this
matter, the SETA Services Operations, and shall not
charge any costs associated with the divestiture to the
Federal Aviation Administration.
B. Respondent shall divest the SETA Services
Operations only to an acquirer or acquirers that receive
the prior approval of the Commission and only in a manner
that receives the prior approval of the Commission. The
purpose of the divestiture is to ensure the continued
provision of SETA Services in the same manner as provided
by Respondent at the time of the proposed divestiture and
to remedy the lessening of competition alleged in the
Commission's complaint.
C. Pending divestiture of the SETA Services
Operations, Respondent shall take such actions as are
necessary to ensure the continued provision of SETA
Services, to maintain the viability and marketability of
the assets used to provide SETA Services, to prevent the
destruction, removal, wasting, deterioration or
impairment of the assets used to provide SETA Services,
and to prevent the disclosure of Non-Public Air Traffic
Control Information to Loral Air Traffic Control.
D. Upon reasonable notice from any acquirer or
the Federal Aviation Administration to Respondent,
Respondent shall provide such technical assistance to the
acquirer at the acquirer's facility for a period of time
sufficient to satisfy the acquirer's management that its
personnel are appropriately trained in the skills
necessary to perform the SETA Services Operations.
Respondent shall convey all know-how necessary to perform
the SETA Services Operations in substantially the same
manner and quality provided by Respondent prior to
divestiture, provided, however, that the Respondent may
retain the right to use the know-how. However,
Respondent shall not be required to continue providing
such assistance for more than one (1) year from the date
of the divestiture. Respondent shall charge the acquirer
at a rate no more than its own costs for providing such
technical assistance.
E. At the time of the execution of the purchase
agreement between Respondent and a proposed acquirer of
the SETA Services Operations ("Purchase Agreement"),
Respondent shall provide the acquirer(s) with a complete
list of all full-time, non-clerical, salaried employees
of Respondent who were engaged in the provision of SETA
Services on the date of the Acquisition, as well as all
current full-time, non-clerical, salaried employees of
Respondent engaged in the provision of SETA Services on
the date of the purchase agreement. Such list(s) shall
state each such individual's name, position, address,
business telephone number, or if no business telephone
number exists, a home telephone number, if available and
with the consent of the employee, and a description of
the duties and work performed by the individual in
connection with the SETA Services Operations.
F. Following the execution of the Purchase
Agreement(s) and subject to the consent of the employees,
Respondent shall provide the proposed acquirer(s) with an
opportunity to inspect the personnel files and other
documentation relating to the individuals identified in
Paragraph II.E. of this order to the extent permissible
under applicable laws. For a period of six (6) months
following the divestiture, Respondent shall further
provide the acquirer(s) with an opportunity to interview
such individuals and negotiate employment contracts with
them.
G. Respondent shall provide all employees
identified in Paragraph II.E. of this order with
reasonable financial incentives, if necessary, to
continue in their employment positions pending
divestiture of the SETA Services Operations, and to
accept employment with the acquirer(s) at the time of the
divestiture. Such incentives shall include continuation
of all employee benefits offered by Respondent until the
date of the divestiture, and vesting of all pension
benefits (as permitted by law). In addition, respondent
shall not enforce any confidentially restrictions
relating to the SETA services or SETA Services Operations
that apply to any employee identified in Paragraph II.E.
who accepts employment with any proposed acquirer.
Respondent also shall not enforce any non-compete
restrictions that apply to any employee identified in
Paragraph II.E. who accepts employment with any proposed
acquirer.
H. For a period of one (1) year commencing on the
date of the individual's employment by an acquirer,
Respondent shall not re-hire any of the individuals
identified in Paragraph II.E. of this order who accept
employment with any acquirer, unless such individual has
been separated from employment by the acquirer against
that individual's wishes.
I. Prior to divestiture, Respondent shall not
transfer, without the consent of the Federal Aviation
Administration, any of the individuals identified in
Paragraph II.E. of this order whose employment
responsibilities involve access to Non-Public Air Traffic
Control Information from Management and Data Systems to
any other position involving business with the Federal
Aviation Administration.
III.
IT IS FURTHER ORDERED that:
A. Respondent shall not provide, disclose or
otherwise make available to Loral Air Traffic Control any
Non-Public Air Traffic Control Information.
B. Respondent shall use any Non-Public Air Traffic
Control Information obtained by Management and Data
Systems only in Respondent's capacity as provider of
technical assistance to an acquirer, pursuant to
Paragraph II.D. of this order.
IV.
IT IS FURTHER ORDERED that:
A. If Respondent has not divested, absolutely and
in good faith and with the Commission's prior approval,
the SETA Services operations within six (6) months of the
date Respondent signed the Agreement Containing Consent
Order in this matter, the Commission may appoint a
trustee to divest the SETA Services Operations. In the
event that the Commission or the Attorney General brings
an action pursuant to SECTION 5(l) of the Federal Trade
Commission Act, 15 U.S.C. SECTION 45(l), or any other statute
enforced by the Commission, Respondent shall consent to
the appointment of a trustee in such action. Neither the
appointment of a trustee nor a decision not to appoint a
trustee under this Paragraph IV. shall preclude the
Commission or the Attorney General from seeking civil
penalties or any other relief available to it, including
a court-appointed trustee, pursuant to SECTION 5(l) of the
Federal Trade Commission Act, or any other statute
enforced by the Commission, for any failure by Respondent
to comply with this order.
B. If a trustee is appointed by the Commission or
a court pursuant to Paragraph IV.A. of this order,
Respondent shall consent to the following terms and
conditions regarding the trustee's powers, duties,
authority, and responsibilities:
1. The Commission shall select the trustee,
subject to the consent of Respondent, which consent
shall not be unreasonably withhold. The trustee
shall be a person with experience and expertise in
acquisitions and divestitures. If Respondent has
not opposed, in writing, including the reasons for
opposing, the selection of any proposed trustee
within ten (10) days after notice by the staff of
the commission to Respondent of the identity of any
proposed trustee, Respondent shall be deemed to have
consented to the selection of the proposed trustee.
2. Subject to the prior approval of the
Commission, the trustee shall have the exclusive
power and authority to divest the SETA Services
Operations.
3. Within ten (10) days after appointment of
the trustee, Respondent shall execute a trust
agreement that, subject to the prior approval of the
Commission and, in the case of a court-appointed
trustee, of the court, transfers to the trustee all
rights and powers necessary to permit the trustee
effect the divestiture required by this order.
4. The trustee shall have twelve (12) months
from the date the Commission approves the trust
agreement described in Paragraph IV.B.3. to
accomplish the divestiture, which shall be subject
to the prior approval of the Commission. If,
however, at the end of the twelve (12) month period,
the trustee has submitted a plan of divestiture or
believes that divestiture can be achieved within a
reasonable time, the divestiture period may be
extended by the Commission, or, in the case of a
court-appointed trustee, by the court; provided,
however, the Commission may extend this period only
two (2) times.
5. The trustee shall have full and complete
access to the personnel, books, records and
facilities related to the SETA Services Operations,
or to any other relevant information, as the trustee
may request. Respondent shall develop such
financial or other information as the trustee may
request and shall cooperate with the trustee.
Respondent shall take no action to interfere with or
impede the trustee's accomplishment of the
divestiture. Any delays in divestiture caused by
Respondent shall extend the time for divestiture
under this Paragraph in an amount equal to the
delay, an determined by the Commission or, for a
courtappointed trustee, by the court.
6. The trustee shall use his or her best
efforts to negotiate the most favorable price and
terms available in each contract that is submitted
to the Commission, subject to Respondent's absolute
and unconditional obligation to divest at no minimum
price. The divestiture shall be made in the manner
and to an acquirer or acquirers as set out in
Paragraph II. of this order; provided, however, if
the trustee receives bona fide offers from more than
one acquiring entity, and if the Commission
determines to approve more than one such acquiring
entity, the trustee shall divest to the acquiring
entity selected by Respondent from among those
approved by the Commission.
7. The trustee shall serve, without bond or
other security, at the cost and expense of
Respondent, on such reasonable and customary terms
and conditions as the Commission or a court may set.
The trustee shall have the authority to employ at
the cost and expense of Respondent, such
consultants, accountants, attorneys, investment
bankers, business brokers, appraisers, and other
representatives and assistants as are necessary to
carry out the trustee' s duties and
responsibilities. The trustee shall account for all
monies derived from the divestiture and all expenses
incurred. After approval by the Commission and, in
the case of a court-appointed trustee, by the court,
of the account of the trustee, including fees for
his or her services, all remaining monies shall be
paid at the direction of Respondent, and the
trustees power shall be terminated. The trustees
compensation shall be based at least in significant
part on a commission arrangement contingent on the
trustee's divesting the SETA Services Operations.
8. Respondent shall indemnify the trustee and
hold the trustee harmless against any losses,
claims, damages, liabilities, or expenses arising
out of, or in connection with, the performance of
the trustee's duties, including all reasonable fees
of counsel and other expenses incurred in connection
with the preparation for, or defense of any claim,
whether or not resulting in any liability, except to
the extent that such liabilities, losses, damages,
claims, or expenses result from misfeasance, gross
negligence, willful or wanton acts, or bad faith by
the trustee.
9. If the trustee ceases to act or fails to
act diligently, a substitute trustee shall be
appointed in the same manner as provided in
Paragraph IV.A. of this order.
10. The Commission or, in the case of a
court-appointed trustee, the court, may on its own
initiative or at the request of the trustee issue
such additional orders or directions as may be
necessary or appropriate to accomplish the
divestiture required by this order.
11. The trustee may also divest such
additional ancillary assets and businesses and
effect such arrangements as are necessary to assure
the marketability, viability and competitiveness of
the SETA Services Operations.
12. The trustee shall have no obligation or
authority to operate or maintain the SETA Services
Operations.
13. The trustee shall report in writing to
Respondent and the Commission every sixty (60) days
concerning the trustees efforts to accomplish
divestiture.
V.
IT IS FURTHER ORDERED that within forty-five (45)
days after the date this order becomes final and every
forty-five (45) days thereafter until Respondent has
fully complied with Paragraphs II. through IV. of this
order, Respondent shall submit to the Commission a
verified written report setting forth in detail the
manner and form in which it intends to comply, is
complying, and has complied with Paragraphs II. through
IV. of this order. Respondent shall include in its
compliance reports, among other things that are required
from time to time, a full description of the efforts
being made to comply with Paragraphs II. through IV.
including a description of all substantive contacts or
negotiations for the divestiture required by this order,
including the identity of all parties contacted.
Respondent shall include in its compliance reports copies
of all written communications to and from such parties,
all internal memoranda and all reports and
recommendations concerning the divestiture.
VI.
IT IS FURTHER ORDERED that:
A. Respondent shall not, absent the prior written
consent of the proprietor of Non-Public Military Aircraft
Information (NITE Hawk), provide, disclose or otherwise
make available to any Lockheed Martin Military Aircraft
Business any Non-Public Military Aircraft Information
(NITE Hawk).
B. Respondent shall use any Non-Public Military
Aircraft Information (NITE Hawk) only in respondent's
capacity as a provider of NITE Hawk systems, absent the
prior written consent of the proprietor of Non-Public
Military Aircraft information (NITE Hawk).
VII.
IT IS FURTHER ORDERED that:
A. Respondent shall not, absent the prior written
consent of the proprietor of Non-Public Military Aircraft
Information (Simulation and Training), provide, disclose
or otherwise make available to any Lockheed Martin
Military Aircraft Business any Non-Public Military
Aircraft Information Simulation and Non-training).
B. Respondent shall use any Non-Public Military
Aircraft Information (Simulation and Training)only in
Respondent's capacity an a provider of Simulation and
Training Systems, absent the prior written consent of the
proprietor of Non-Public Military Aircraft Information
(Simulation and Training).
VIII.
IT IS FURTHER ORDER that:
A. Respondent shall not, absent the prior written
consent of the proprietor of Non-Public Military Aircraft
Information (Electronic Countermeasures), provide,
disclose or otherwise make available to any Lockheed
Martin Military Aircraft Business any Non-Public Military
Aircraft Information (Electronic Countermeasures).
B. Respondent shall use any Non-Public Military
Aircraft Information (Electronic Countermeasures) only in
Respondent's capacity as a provider of Electronic
Countermeasures, absent the prior written consent of the
proprietor of Non-Public Military Aircraft Information
(Electronic Countermeasures).
IX.
IT IS FURTHER ORDERED that:
A. Respondent shall not, absent the prior written
consent of the proprietor of Non-Public Military Aircraft
Information (Mission Computers), provide, disclose or
otherwise make available to any Lockheed Martin Military
Aircraft Business any Non-Public Military Aircraft
Information (Mission Computers).
B. Respondent shall use any Non-Public Military
Aircraft Information (Mission Computers)only in
Respondent's capacity as a provider of Mission Computers,
absent the prior written consent of the proprietor of
Non-Public Military Aircraft Information (Mission
Computers).
X.
IT IS FURTHER ORDERED that Respondent shall deliver
a copy of this order to any United States Military
Aircraft manufacturer prior to obtaining any information
outside the public domain relating to that manufacturer's
Military Aircraft, either from the Military Aircraft
manufacturer or through the Acquisition.
XI.
IT IS FURTHER ORDERED that:
A. Respondent shall not, absent the prior written
consent of the proprietor of Non-Public Unmanned Aerial
Vehicle Information, provide, disclose or otherwise make
available to any Lockheed Martin Military Aircraft
Business any Non-Public Unmanned Aerial Vehicle
Information.
B. Respondent shall use any Non-Public Unmanned
Aerial Vehicle Information only in Respondent's capacity
as a provider of Integrated Communications Systems,
absent the prior written consent of the proprietor of
Non-Public Unmanned Aerial Vehicle Information.
XII.
IT IS FURTHER ORDERED that Respondent shall deliver
a copy of this order to any United States Unmanned Aerial
Vehicle manufacturer prior to obtaining any information
outside the public domain relating to that manufacturer's
Unmanned Aerial Vehicle, either from the Unmanned Aerial
Vehicle manufacturer or through the Acquisition.
XIII.
IT IS FURTHER ORDERED that:
A. Respondent shall not discuss, provide,
disclosure or otherwise make available, directly or
indirectly, to any Common LM/Loral Space Director
any Non-Public Space Information
of Lockheed Martin.
B. Respondent shall require any Common LM/Loral
Space Director to refrain from discussing, providing,
disclosing or otherwise making available, directly or
indirectly, any Non-Public Space Information of Loral
Space to any member of the Board of Directors of Lockheed
Martin, any officer of Lockheed Martin or any employee of
Lockheed Martin.
C. Respondent shall conduct all matters relating
to Space & Strategic Missiles without the vote,
concurrence or other participation of any kind whatsoever
of any Common LM/Loral Space Director.
D. Any Common LM/Loral Space Director shall not be
counted for purposes of establishing a quorum in
connection with any matter relating to Space & Strategic
Missiles.
E. Respondent shall not provide any Common
LM/Loral Space Director with any type of compensation
that is based in whole or in part on the profitability or
performance of Space & Strategic Missiles; provided,
however, that any Common LM/Loral Space Director may
receive as compensation for his or her serving on the
Lockheed Martin Board of Directors such stock options or
other stock-based compensation as is provided generally
to other members of the Lockheed Martin Board of
Directors in accordance with Respondent's ordinary
practice.
XIV.
IT IS FURTHER ORDERED that:
A. Respondent shall not provide or otherwise make
available, directly or indirectly, any personnel,
information, facilities, technical services or support
from Space & Strategic Missiles to, Space Systems/Loral
pursuant to any provision contained in the Lockheed
Martin/Loral Space Technical Services Agreement.
B. Respondent shall not disclose or otherwise make
available to Space & Strategic Missiles any information
received in connection with the Lockheed Martin/Loral
Space Technical Services Agreement.
C. Respondent shall not disclose to any Space &
Strategic Missile employee any information or technical
services provided to Space Systems/Loral by Lockheed
Martin pursuant to the Lockheed Martin/Loral Space Technical
Services Agreement.
XV.
IT IS FURTHER ORDERED that if Respondent's ownership
of the equity securities of Loral Space increases to more
than twenty percent (20%) of the total equity securities
(including both Voting Equity Securities and Non-Voting
Equity Securities) of Loral Space as the result of
repurchases of equity securities by Loral Space or for
any other reason, Respondent shall, following its
obtaining actual knowledge of an event leading to such
increase ("Event"), reduce its equity security ownership
interest to a level of not more than twenty percent (20%).
Those equity securities which must be sold are
hereinafter referred to as the "Excess Securities."
Respondent shall have a period of 185 days following its
obtaining actual knowledge of the Event to sell the
Excess Securities (the "Sale Period"); provided, however,
that, if within ten (10), business days of Respondent's
receipt of such knowledge, Respondent requests that Loral
Space file a registration statement providing for such
sale, the Sale Period shall be deemed to begin on the
effective date of such registration statement, and shall
extend for 150 days thereafter, and provided further
that, if Respondent elects to sell the Excess Securities
in a manner that does not require Loral Space to file a
registration statement, and such sales cannot be
accomplished within the Sale Period without violating
Rule 144 (or any successor provision) under the
Securities Act of 1933, then the Sale Period shall be
extended by the minimum amount necessary to allow such
securities to be sold pursuant to Rule 144 (or any
successor provision). Pending the sale of Excess
Securities, Respondent shall not exercise any voting
rights relating to the Excess Securities. Respondent
shall amend the Stockholders Agreement to provide
Respondent the means of complying with the foregoing
provisions and shall thereafter not amend the applicable
provisions of the Stockholders Agreement in a fashion so
an to impair Respondent's ability to comply with this
paragraph. The provisions of this paragraph shall
terminate ten (10) years from the date this order becomes
final.
XVI.
IT IS FURTHER ORDERED that Respondent shall compLy
with all terms of the Interim Agreement, attached to this
order and made a part hereof as Appendix I. Said Interim
Agreement shall continue in effect until the provisions
in Paragraphs II. through XVI. of this order are complied
with or until such other time as is stated in said
Interim Agreement.
XVII.
IT TO FURTHER ORDERED that within sixty (60) days of
the date this order becomes final and annually for the
next ten (10) years on the anniversary of the date this
order becomes final, and at such other times as the
Commission may require, Respondent shall file a verified
written report with the Commission setting forth in
detail the manner and form in which it has complied and
is complying with Paragraphs VI. through XVI. of this
order. To the extent not prohibited by United States
Government national security requirements, Respondent
shall include in its reports information sufficient to
identify all United States Military Aircraft and Unmanned
Aerial Vehicle manufacturers with whom Respondent has
entered into an agreement for the research, development,
manufacture or sale of NITE Hawk Systems, Simulation and
Training Systems, Electronic Countermeasures, Mission
Computers or Integrated Communications Systems.
XVIII.
IT IS FURTHER ORDERED that Respondent shall notify
the Commission at least thirty (30) days prior to any
proposed change in the corporate respondent such as
dissolution, assignment, sale resulting in the emergence
of a successor corporation, or the creation or
dissolution of subsidiaries or sale of any division or
any other change in the corporation in each instance
where such change may affect compliance obligations
arising out of the order.
XIX.
IT IS FURTHERED ORDERED that, for the purpose of
determining or securing compliance with this order, and
subject to any legally recognized privilege and
applicable United States Government national security
requirements, upon written request, and on reasonable
notice, Respondent shall permit any duly authorized
representatives of the Commission:
A. Access, during office hours and in the presence
of counsel, to inspect and copy all books, ledgers,
accounts, correspondence, memoranda and other records and
documents in the possession or under the control of
Respondent, relating to any matters contained in this
order; and
B. Upon five (5) days' notice to Respondent, and
without restraint or interference from Respondent, to
interview officers, directors, or employees of
Respondent, who may have counsel present, regarding any
such matters.
XX.
IT TO FURTHERED ORDERED that this order shall
terminate twenty (20) years from the date this order
becomes final, except as otherwise provided in this
order.
Signed this 15th day of April, 1996
FEDERAL TRADE COMMISSION LOCKHEED MARTIN CORPORATION
By: /s/ Steven K. Berstein By:/s/ Frank H. Menaker, Jr.
Steven K. Bernstein Frank H. Menaker, Jr.
John E. Scribner General Counsel
Christina R. Perez
Nicholas R. Koberstein
Attorneys
Bureau of Competition
/s/ Raymond A. Jacobsen, Jr.
Raymond A. Jacobsen, Jr.
APPROVED: Howrey & Simon
Counsel for Lockheed
/s/ Ann Malester Martin Corporation
Ann Malester
Assistant Director
Bureau of Competition
/s/ William J. Baer
William J. Baer
Director
Bureau of Competition
[BUREAU OF COMPETITION LOGO]
UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
WASHINGTON, D.C. 20580
4/18/1996
Raymond A. Jacobsen Jr., Esquire
Matthew E. Carswell, Esquire
Howrey & Simon
1299 Pennsylvania Avenue, N.W.
Washington, D.C. 200042402
Re: Premerger Notification Requirements Under the
Hart-Scott-Rodino Antitrust Improvements Act of
1976 Transaction Identification Number 96-0920
Dear Mr. Jacobsen:
Confirming our telephone conversation of 04/18/96, a
request for early termination of the waiting period provided by
Section 7A(b)(1) of the Clayton Act and Section 803.10(b) of
the premerger notification rules with respect to the proposed
acquisition by Lockheed Martin Corporation of certain voting
securities of Loral Corporation has been granted. Termination
of the waiting period became effective upon communication.*
Notice of this termination will be published in the
Federal Register in accordance with Section 7a(b)(2) of the
Clayton Act and Section 803.11(c) of the premerger notification
rules.
Sincerely,
Renee Horton
Sandra Peay
Contract Representative
Premerger Notification Office
Bureau of Competition
(202) 326-3100
*Early termination granted sua sponte.
FTC NEWS
FEDERAL TRADE COMMISSION WASHINGTON, D.C. 20580 (202) 326-2180
FOR RELEASE: APRIL 18, 1996
LOCKHEED MARTIN TO SETTLE CHARGES IN LORAL ACQUISITION
Lockheed Martin Corporation will settle Federal
Trade Commission charges that its $9.1 billion
acquisition of Loral Corporation would violate antitrust
laws. The FTC charged that the proposed deal would
violate antitrust laws by reducing competition in the
markets for the research, development, manufacture, and
sale of air traffic control systems, commercial low earth
orbit (LEO) satellites, commercial geosynchronous earth
orbit (GEO) satellites, military tactical fighter
aircraft, and unmanned aerial vehicles.
Lockheed Martin and Loral are two of the largest
U.S. defense and space contractors. In January, 1996,
Lockheed Martin proposed to buy Loral. As part of the
transaction, Loral's space and telecommunications
businesses would be transferred to a new entity, Loral
Space & Communications Ltd. with Lockheed Martin
purchasing a 20 percent convertible preferred equity
interest in Loral Space. The proposal additionally
provides that Bernard Schwartz, CEO and Chairman of the
Board of Loral Space, would be appointed Vice Chairman of
the Board of Lockheed Martin. Finally, the proposal
contains an agreement that Lockheed Martin provide
certain technical services to Loral at cost.
The terms of the settlement provide for Lockheed
Martin to divest its systems engineering and technical
services (SETA) contract with the Federal Aviation
Administration; prohibit Lockheed Martin from providing
certain technical services or information to Space
Systems/Loral, a subsidiary of Loral Space &
Communications Ltd.; restrict participation and
compensation of persons who serve as directors or
officers of both Lockheed Martin or Loral Space; limit
Lockheed Martin's ownership of Loral Space; and require
"firewalls" to limit information flow about competitors'
tactical fighter aircraft and unmanned aerial vehicles.
"The Department of Defense and other agencies of the
government are entitled, like any other consumer, to the
benefits that competitive markets provide," said William
J. Baer, Director of the FTC's Bureau of Competition.
"This order ensures that the Lockheed Martin/Loral merger
will not cause higher prices or lower quality for the
defense and space industries or result in higher costs to
DoD or American taxpayers."
As a result of the proposed acquisition, Lockheed
Martin, currently the FAA's SETA contractor, would gain
ownership of Loral, the largest supplier of air traffic
control systems to the FAA. The SETA contractor is
responsible for developing technical and other
procurement specifications, assessing bids and other
proposals submitted by companies competing for FAA
contracts, and evaluating the cost and performance of the
contractors.
According to the FTC complaint detailing the
charges, Lockheed Martin's position as SETA contractor
would allow it access to competitively sensitive, non-
public information about contractors competing with
Lockheed Martin/Loral for air traffic control systems
business. The complaint alleges that access to that
information could result in increased prices and reduced
innovation. In addition, Lockheed Martin would be in a
position to disadvantage competitors or raise
competitors' costs by setting unfair proposal
specifications or submitting unfair evaluations.
The proposed agreement to settle the FTC charges,
announced today for public comment, would require that
Lockheed Martin divest its SETA contract and any
associated assets, within six months, to a Commission-
approved acquirer. In addition, it would require
Lockheed Martin to provide technical assistance to the
acquirer in order to assure uninterrupted SETA services
to the FAA.
Lockheed Martin and Loral are also leading
competitors in the markets for commercial LEO and GEO
satellites. Under the terms of the merger agreement,
Lockheed Martin proposed to acquire a 20 percent
convertible, preferred stock interest in Loral Space and
to provide technical assistance, including R&D support,
at cost, upon Loral Space's request. Bernard Schwartz,
Chairman of the Board of Directors and Chief Executive
Officer of Loral Space, would be appointed to the
position of Vice Chairman of the Board of Lockheed
Martin, under the agreement.
According to the FTC complaint, the technical
services agreement could allow Lockheed Martin to gain
access to proprietary information about Loral Space's
competitive activities and bidding strategies, thereby
increasing the likelihood of collusion between the
companies. The agreement also would likely reduce Loral
Space's incentives to invest in R&D, since R&D would be
included in the technical package provided at cost by
Lockheed Martin. In addition, Mr. Schwartz's positions
with each company would give him access to competitively
sensitive information, including bid strategies, pricing
and R&D plans, which could adversely impact satellite
competition between the two companies. Moreover,
compensation based on the profitability of Lockheed
Martin's space business could diminish Schwartz's
incentive to compete aggressively with Loral Space
products and services against Lockheed Martin. Thus,
these arrangements would violate antitrust laws,
according to the complaint.
The proposed settlement would prohibit Lockheed
Martin's space business from providing personnel,
information or facilities to Space Systems/Loral,
pursuant to the technical services agreement. It would
also prohibit Lockheed Martin from acquiring an interest
greater than 20 percent in Loral Space. In addition, it
would prohibit any person serving as a board member or
officer of both companies simultaneously, including Mr.
Schwartz, from participating in Lockheed Martin's space
business, obtaining non-public information relating to
Lockheed Martin's space business or providing non-public
information about Space Systems/Loral to Lockheed Martin.
In addition, the order would prohibit compensation for
individuals serving as a board member or officer of both
companies to be based on the profitability or performance
of Lockheed Martin's space business.
Loral is currently the sole supplier of a number of
critical components for tactical fighter aircraft
procured by the Department of Defense. Lockheed Martin
is a leading manufacturer of tactical fighter aircraft.
Integration of these critical components into the
aircraft requires the transfer of non-public,
competitively sensitive information between the aircraft
manufacturers and the component supplier. According to
the complaint, the merger of Loral and Lockheed Martin
would allow Lockheed Martin/Loral to gain access to
competitively sensitive information about its fighter
aircraft competitors. To preserve competition and
protect innovation and research, the proposed agreement
to settle the charges would erect a "firewall" that would
prohibit the Lockheed Martin division that manufactures
and supplies critical aircraft components from making any
competing aircraft manufacturers' proprietary information
available to Lockheed Martin's aircraft division.
Similar "firewall" provisions have been used in previous
Commission orders and the Department of Defense has
stated that the proposed order resolves all of the
competitive concerns it identified as a result of the
merger.
Currently, Loral is the sole supplier of integrated
communications systems for unmanned aerial vehicles and
Lockheed Martin manufactures and markets such vehicles.
Because other manufacturers of the aerial vehicles
provide proprietary information to the integrated
communication system supplier, the complaint alleges that
the merger would allow Lockheed Martin's unmanned aerial
vehicle division to gain access to competitively
sensitive non-public information about competitors which
could affect prices and reduce innovation and quality.
The agreement to settle the charges would require a
"firewall" to prevent confidential or proprietary
information from being transferred from the division that
develops the integrated communications systems to the
unmanned aerial vehicle division.
Commission staff consulted closely with the
Department of Defense during the course of this
investigation and in identifying appropriate relief for
the competitive concerns that were identified.
The Commission vote to announce the proposed consent
agreement for public comment was 5-0. It will be
published in the Federal Register shortly and will be
subject to public comment for 60 days, after which the
Commission will decide whether to make it final.
Comments should be addressed to the FTC, Office of the
Secretary, 6th Street and Pennsylvania Avenue, N.W.,
Washington D.C. 20580.
NOTE: A consent agreement is for settlement purposes
only and does not constitute an admission of a law
violation. When the Commission issues a consent order on
a final basis, it carries the force of law with respect
to future actions. Each violation of such an order may
result in a civil penalty of $10,000.
COPIES OF THE COMPLAINT, CONSENT AND AN ANALYSIS TO
AID PUBLIC COMMENT ARE AVAILABLE FROM THE FTC'S PUBLIC
REFERENCE BRANCH, ROOM 130, 6TH STREET AND PENNSYLVANIA
AVENUE, N.W., WASHINGTON, D.C. 20580; 202-326-2222; TTY
FOR THE HEARING IMPAIRED 202-326-2502. TO FIND OUT THE
LATEST NEWS AS IT IS ANNOUNCED, CALL THE FTC NEWSPHONE
RECORDING AT 202-326-2710. FTC NEWS RELEASES AND OTHER
MATERIALS ALSO ARE AVAILABLE ON THE INTERNET AT THE FTC'S
WORLD WIDE WEB SITE AT: HTTP://WWW.FTC.GOV
# # #
MEDIA CONTACT: Victoria Streitfeld or Claudia Bourne Farrell
Office of Public Affairs
202-326-2180
STAFF CONTACT: William J. Baer or Steven K. Bernstein
Bureau of Competition
202-326-2932 or 202-326-2682
LOCKHEED MARTIN CORPORATION
6801 ROCKLEDGE DRIVE
BETHESDA, MARYLAND 20817
as of April 15, 1996
Loral Corporation
Loral Space & Communications Ltd.
Loral Aerospace Holdings, Inc.
Loral Aerospace Corp.
Loral General Partner, Inc.
Loral Globalstar, L.P.
600 Third Avenue
New York, New York 10016
Loral Globalstar Limited
P.O. Box 309
Ugland House
South Church Street
Grand Cayman Islands
British West Indies
Re: Waiver With Respect to and Amendment
of Distribution Agreement
Ladies and Gentlemen:
Reference is made to the Restructuring,
Financing and Distribution Agreement (the "Distribution
Agreement"), dated as of January 7, 1996, by and among
Lockheed Martin Corporation ("Lockheed Martin"), Loral
Corporation ("Loral"), Loral Aerospace Holdings, Inc.,
Loral Aerospace Corp., Loral General Partner, Inc., Loral
Globalstar, L.P., Loral Globalstar Limited and Loral
Space & Communications Corp. ("Loral SpaceCom Corp.").
Terms not specifically defined herein shall have the
meanings set forth in the Distribution Agreement. The
following sets forth our mutual agreement with respect to
certain matters relating to the Distribution Agreement.
1. Subject to the provisions of paragraph 2
below, Lockheed Martin hereby waives the provisions of
Section 2.6(a) and (b) of the Distribution Agreement
insofar as such provisions would otherwise prohibit,
restrict or delay the assignment, conveyance or transfer
of shares (the "SS/L Shares") of capital stock of Space
Systems/Loral, Inc. ("SS/L") to Loral Space &
Communications Ltd., a Bermuda company ("Loral
SpaceCom") or a Loral SpaceCom subsidiary prior to the
Distribution Date if waivers of all Third Party Call
Rights or Third Party Put Rights with respect to such
SS/L Shares have not been received prior to the time of
such assignment, conveyance or transfer.
2. The parties consent to the prior
assignment by Loral SpaceCom Corp. of all of its rights
and obligations under the Distribution Agreement to Loral
SpaceCom and agree that all references to Spinco in the
Distribution Agreement shall be deemed to be references
to Loral SpaceCom. SpaceCom hereby reaffirms and
acknowledges its agreement that (x) it shall, pursuant to
the provisions of Section 2.6(c) of the Distribution
Agreement, indemnify the Company and all Parent
Indemnified Parties for all Indemnifiable Losses arising
out of, relating to or resulting from the exercise or
purported exercise of any Third Party Call Right or any
Third Party Put Right and (y) prior to the exercise or
the receipt of waivers of Third Party Call Rights, it
shall not assign, convey or transfer the applicable SS/L
Shares to any third party or otherwise take any action
that would have the effect of denying or materially
adversely affecting the Third Party Call Rights set forth
in the SSL Stockholders Agreements. Loral SpaceCom
further agrees that it shall indemnify and hold harmless
the Company and all Parent Indemnified Parties from and
against all Indemnifiable Losses (whether as a result of
injunctive action or otherwise) arising out of, relating
to or resulting from the transfer of the SS/L Shares to
Loral SpaceCom prior to the receipt by the Company or
Loral SpaceCom of all waivers and consents otherwise
required prior to such transfer, including without
limitation, the continuation of the Company after the
Distribution Date as a party to the SSL Stockholder
Agreements. Notwithstanding anything to the contrary
contained herein or in the Distribution Agreement, Loral
SpaceCom shall indemnify the Company and the Parent
Indemnified Parties for costs, fees and expenses of
attorneys, accountants, consultants and other similar
persons engaged by the Company or the Parent Indemnified
Parties with respect to the matters set forth in this
paragraph 2 or in Section 2.6 of the Distribution
Agreement if and only to the extent that they relate to
(x) claims or inquiries initiated by a third-party not
affiliated with the Company or Lockheed Martin or (y)
Actions.
3. The parties agree that:
(a) Section 6.7(d) of the Distribution
Agreement shall be amended by adding the following as the
last sentence thereof:
"Notwithstanding anything
to the contrary contained
in this Section 6.7(d), the
obligations and rights of
the parties arising under
this Section 6.7(d) shall
be qualified in their
entirety by and subject to
the limitations with
respect thereto set forth
in the Agreement Containing
Consent Order to be entered
into between Parent and the
Federal Trade Commission
(File No. 961-0026)."
(b) Section 2.1(a) is hereby amended by
deleting such Section 2.1(a) in its entirety and
substituting therefor the new Section 2.1(a) contained in
Annex I hereto.
(c) Section 5.2(a)(v) is hereby amended by
adding at the end of such clause the following additional
language:
"or the continuation of
the Company, LAC or
Holdings as parties to the
SSL Stockholders Agreements
on or after the
Distribution Date."
Please indicate your acceptance of and
agreement to the foregoing Waiver With Respect to and
Amendment of the Restructuring, Financing and
Distribution Agreement by signing below.
Very truly yours,
LOCKHEED MARTIN CORPORATION
By:
Name:
Title:
ACCEPTED AND AGREED
AS OF THE DATE FIRST
ABOVE WRITTEN:
LORAL CORPORATION
By:
Name:
Title:
LORAL SPACE & COMMUNICATIONS LTD.
By:
Name:
Title:
LORAL AEROSPACE HOLDINGS, INC.
By:
Name:
Title:
LORAL AEROSPACE CORP.
By:
Name:
Title:
LORAL GENERAL PARTNER, INC.
By:
Name:
Title:
LORAL GLOBALSTAR, L.P.
By:
Name:
Title:
LORAL GLOBALSTAR LIMITED
By:
Name:
Title:
ANNEX 1
Section 2.1. Transfer of Assets
(a) Subject to the terms and conditions of
this Agreement:
(i) prior to the Distribution Date, Loral
shall form SS/L Bermuda, Ltd. ("SS/L Bermuda") and LGP
Bermuda, Ltd. ("LGPB") as wholly-owned Bermuda
corporations and Loral SpaceCom Corporation, as a
wholly-owned Delaware corporation ("Loral SpaceCom-
US");
(ii) prior to the Distribution Date, Loral
shall form Loral SpaceCom DBS Holdings, Inc. ("SpaceCom
DBS Holdings") as a wholly-owned subsidiary of Loral
SpaceCom and Loral SpaceCom DBS, Inc. ("SpaceCom DBS")
as a wholly-owned subsidiary of SpaceCom DBS Holdings;
(iii) prior to the Distribution Date, LG
shall transfer to LGP all of its right, title and
interest in and to all shares of capital stock owned by
LG in GTL, by means of a non-liquidating distribution
to LGP of such equity securities;
(iv) following the action referred to in the
immediately preceding clause, Cayman shall transfer to
LGP all of its assets, including all of its right,
title and interest in and to its partnership interest
in LG, by means of a liquidating distribution in
dissolution of Cayman under local law;
(v) following the action referred to in the
immediately preceding clause, LG shall dissolve under
Delaware law, pursuant to which LG shall transfer its
right, title and interest in and to its partnership
interests in LQP, LQSS, Globalstar, Loral/Dasa
Globalstar, L.P. ("Dasa") and in and to any other
Spinco Asset owned by LG to LGP (provided, however,
that the transfers of such partnership interests
pursuant to this subsection (a) shall be preceded by
the written consent to such transfer by the other
partners, but only to the extent such consent is
required under the relevant partnership agreements);
(vi) following the action referred to in the
immediately preceding clause, LGP shall distribute as a
dividend all of its right, title and interest in and to
(a) all properties received from LG pursuant to clause
2.1(a)(iii) hereof; (b) all properties received from LG
pursuant to clause 2.1(a)(v) hereof; and (c) from its
retained 2% interest in LQP, a 1% capital interest and
a 1.75% profits interest in LQP to Aerospace;
(vii) following the action referred to in the
immediately preceding clause, Aerospace shall
distribute as a dividend all of its right, title and
interest in and to (a) all properties received from LGP
pursuant to clause 2.1(a)(vi) hereof; and (b) all
shares of capital stock owned by Aerospace in SS/L to
Holdings;
(viii) following the action referred to in the
immediately preceding clause, Loral DBS, Inc. ("DBS")
shall distribute all right, title and interest in and
to its properties in liquidation of DBS to Holdings,
including any interest it may hold in Continental;
(ix) following the action referred to in
the immediately preceding clause, LAH shall distribute
all right, title and interest in and to (a) all of the
capital stock of Continental; (b) all properties
received from Aerospace pursuant to clause 2.1(a)(vii)
hereof; (c) all shares of capital stock owned by
Holdings in SS/L (excluding the 731.85 shares to be
transferred to SS/L Bermuda in exchange for a like
number of SS/L Tracking Shares of SS/L Bermuda); (d)
all shares of capital stock owned by Holdings in R/L
DBS, L.L.C. ("R/L DBS"); and (e) all properties
received from DBS pursuant to clause 2.1(a)(viii)
hereof to Loral;
(x) following the action referred to in the
immediately preceding clause, Loral Globalstar Canada,
L.P., a Delaware limited partnership ("Canada"), shall
dissolve under Delaware law, pursuant to which Canada
shall distribute all right, title and interest in and
to any Spinco Asset owned by Canada to GC One, Inc., a
Delaware corporation ("GC-1"), and GC Two, Inc. a
Delaware corporation ("GC-2"), respectively;
(xi) following the action referred to in the
immediately preceding clause, GC-1 and GC-2 shall
transfer all properties received from Canada pursuant
to clause 2.1(a)(x) hereof to Loral by means of a
liquidating distribution in dissolution of GC-1 and GC-
2 under Delaware law;
(xii) following the action referred to in the
immediately preceding clause, Loral Fairchild, Inc., a
Delaware corporation and indirect, wholly-owned
subsidiary of Loral ("Fairchild"), shall distribute its
entire beneficial interest in the CCD Lawsuit to Loral;
(xiii) following the action referred to in
the immediately preceding clause, Loral shall cause any
Subsidiary to distribute all right, title and interest
in and to any Spinco Asset of such Subsidiary to Loral
(other than the interest in LGP which is being
contributed pursuant to clause (xvi) hereof), to the
extent not previously distributed to Loral pursuant to
any of the preceding clauses of this Section 2.1(a);
(xiv) following the action referred to in
the immediately preceding clause, Loral shall
contribute all right, title and interest in and to (a)
all shares of capital stock owned by Loral in SS/L and
K&F to SS/L Bermuda; and (b) a 1% capital interest and
1.75% profits interest in LQP and all partnership
interests in LQSS to LGPB as capital contributions to
each entity;
(xv) following the action referred to in the
immediately preceding clause, Parent shall transfer to
Loral, as a capital contribution, $712,400,000 in
immediately available funds, less any amount which the
parties hereto have at such time agreed is owed to
Parent pursuant to the provisions of Sections 4.1(a)
and 4.1(c) hereof (the aggregate of such cash amount
being hereinafter referred to as the "Spinco Cash
Amount") and Loral shall then contribute all right,
title and interest in and to (a) all properties
described in clauses 2.1(a)(viii), (xi) and (xiii)
hereof; (b) all properties received from LAH pursuant
to clause 2.1(a)(ix) hereof (to the extent not
previously contributed to SS/L Bermuda or LGPB pursuant
to clause 2.1(a)(xiv) hereof); (c) all shares of
capital stock in SS/L Bermuda and LGPB; (d) all shares
of capital stock of Loral Travel Services, Inc., a
Delaware corporation ("Travel"); (e) the entire
beneficial interest in the CCD Lawsuit; (f) the 6.5%
GTL Convertible Preferred Equivalent Obligations due
2006 owned by Loral; (g) all of the capital stock of
Loral SpaceCom-US; (h) any other Spinco Asset owned by
Loral to the extent not specifically referred to in any
of the preceding or subsequent clauses of this Section
2.1(a); and (i) the Spinco Cash Amount to Loral
SpaceCom in exchange for Loral SpaceCom Common Stock
and Loral SpaceCom Preferred Stock, provided, however,
that $344,000,000 of the Spinco Cash Amount shall be in
exchange for the Loral SpaceCom Preferred Stock and the
balance shall be treated as additional consideration
for the Loral SpaceCom Common Stock;
(xvi) following the action referred to in the
immediately preceding clause, Aerospace shall
distribute all right, title and interest in and to all
of the capital stock of LGP to Holdings;
(xvii) following the action referred to in the
immediately preceding clause, Holdings shall
distribute all right, title and interest in and to all
properties received from Aerospace pursuant to clause
2.1(a)(xvi) hereof to Loral;
(xviii) following the action referred to in
the immediately preceding clause, Loral shall
contribute all right, title and interest in and to all
properties received from Holdings pursuant to clause
2.1(a)(xvii) hereof to Loral SpaceCom as a capital
contribution;
