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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):
June 30, 2000
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GLOBALSTAR TELECOMMUNICATIONS LIMITED
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(Exact name of registrant as specified in its charter)
Islands of Bermuda 0-25456 13-3795510
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) Number
Cedar House, 41 Cedar Avenue, Hamilton, Bermuda HM 12
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(441) 295-2244
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GLOBALSTAR, L.P.
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(Exact name of registrant as specified in its charter)
Delaware 333-25461 13-3759824
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) Number
3200 Zanker Road, San Jose, California 95134
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(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code:
(408)933-4000
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Item 5. Other Events.
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On June 30, 2000, Globalstar, L.P. ("Globalstar") implemented an
arrangement that provided for replacement financing of its $250,000,000 credit
facility with The Chase Manhattan Bank (the "Chase Facility") by the guarantors
of that facility as provided for under the Restructuring, Financing and
Distribution Agreement dated as of January 7, 1996, as amended (the
"Distribution Agreement") among Lockheed Martin Corporation ("Lockheed Martin"),
Loral Space & Communications Ltd. ("Loral") and certain other parties, and the
Fee Agreement (the "Fee Agreement") dated as of April 19, 1996, by and among
Globalstar, Globalstar Telecommunications Limited ("GTL"), Loral Corporation,
Loral Space & Communications Ltd. ("Loral"), Qualcomm Limited Partner, Inc.
("Qualcomm"), Space Systems/Loral, Inc. ("Space Systems/Loral") and DASA
Globalstar Limited Partner, Inc. ("DASA").
Pursuant to the terms of these agreements, all amounts due and outstanding
under the $250,000,000 Chase Facility, which became due in accordance with its
terms on June 30, 2000, were repaid to the bank lenders by the guarantors, and
immediately thereafter, Globalstar issued to the guarantors, pursuant to these
agreements, pay-in-kind notes (the "Notes") in satisfaction of the guarantors'
rights of subrogation. The Notes are due on June 30, 2003 and bear interest at a
rate of LIBOR plus 3%.
The guarantors under the facility are Lockheed Martin, Qualcomm, Space
Systems/Loral and DASA, who in 1996 received warrants for GTL common stock in
consideration of their guarantees, which warrants were subsequently exercised.
Notes in the amount of $206,300,000, $21,925,000, $11,650,000 and $10,125,000
were issued by Globalstar to Lockheed Martin, Qualcomm, Space Systems/Loral and
DASA, respectively.
Loral agreed under the Distribution Agreement to indemnify Lockheed Martin
for its liability in excess of $150 million under its guarantee of the Chase
Facility. As a result, on June 30, 2000, Loral paid $56,300,000 on a net basis
to Lockheed Martin in satisfaction of this indemnity obligation. Accordingly,
Loral is subrogated to $56,300,000 of Lockheed Martin's rights against
Globalstar.
Globalstar believes that pursuant to the terms of the Distribution
Agreement and the Fee Agreement, the issuance of the Notes constitutes
satisfaction in full of the guarantors' subrogation claims. Lockheed Martin has,
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however, expressed its disagreement with this form of satisfaction, and
Globalstar and Lockheed Martin are engaged in discussions with a view to
resolving this matter.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
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(c) Exhibits.
Exhibit 4.1 Form of the Note.
Exhibit 10.1 Fee Agreement dated as of April 19, 1996 by and among
Globalstar, Globalstar Telecommunications Limited, Loral
Corporation, Loral Space & Communications Ltd., Qualcomm
Limited Partner, Inc., Space Systems/Loral, Inc. and DASA
Globalstar Limited Partner, Inc.
Exhibit 10.2 Intercreditor Agreement dated as of April 19, 1996 by and
among Globalstar, Globalstar Telecommunications Limited,
Loral Corporation, Loral Space & Communications Ltd.,
Qualcomm Limited Partner, Inc., Space Systems/Loral, Inc.
and DASA Globalstar Limited Partner, Inc.
Exhibit 10.3 Waiver and Amendment dated as of June 30, 2000 to the Credit
Agreement, dated as of August 5, 2000 by and among
Globalstar, Bank of America, National Association, as
administrative agent, and the several banks and other
financial institutions from time to time parties thereto.
Exhibit 10.4 Forbearance and Waiver Agreement dated as of June 30, 2000
between Globalstar and Qualcomm Incorporated.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GLOBALSTAR TELECOMMUNICATIONS
LIMITED
By: /s/ Richard Townsend
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Name: Richard Townsend
Title: Senior Vice President and
Chief Financial Officer
GLOBALSTAR, L.P.
By: Loral/Qualcomm Satellite
Services, L.P., its managing
general partner
By: Loral/Qualcomm Partnership,
L.P., its general partner
By: Loral General Partner, Inc.,
its general partner
By: /s/ Nicholas C. Moren
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Name: Nicholas C. Moren
Title: Senior Vice President and
Treasurer
Date: July 6, 2000
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EXHIBIT INDEX
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Exhibit Description
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Exhibit 4.1 Form of the Note.
Exhibit 10.1 Fee Agreement dated as of April 19, 1996 by and among
Globalstar, Globalstar Telecommunications Limited, Loral
Corporation, Loral Space & Communications Ltd., Qualcomm
Limited Partner, Inc., Space Systems/Loral, Inc. and DASA
Globalstar Limited Partner, Inc.
Exhibit 10.2 Intercreditor Agreement dated as of April 19, 1996 by and
among Globalstar, Globalstar Telecommunications Limited,
Loral Corporation, Loral Space & Communications Ltd.,
Qualcomm Limited Partner, Inc., Space Systems/Loral, Inc.
and DASA Globalstar Limited Partner, Inc.
Exhibit 10.3 Waiver and Amendment dated as of June 30, 2000 to the Credit
Agreement, dated as of August 5, 2000 by and among
Globalstar, Bank of America, National Association, as
administrative agent, and the several banks and other
financial institutions from time to time parties thereto.
Exhibit 10.4 Forbearance and Waiver Agreement dated as of June 30, 2000
between Globalstar and Qualcomm Incorporated.
