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): December 21, 2001
LORAL CYBERSTAR, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-22085 52-1564318
(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation) Identification No.)
2440 Research Boulevard
Suite 400
Rockville, Maryland 20850 20850
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (301) 258-8101
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
In connection with the completion of the exchange offer described in Item 5
hereof, on December 21, 2001, Loral CyberStar, Inc., a Delaware corporation
("CyberStar"), sold to Loral CyberStar Data Services Corporation ("Dataco"), a
Delaware corporation and a wholly-owned subsidiary of Loral Space &
Communications Ltd., a Bermuda company ("Loral Space"), substantially all of its
assets (the "Purchased Assets") related primarily to its data services business,
which business includes, but is not limited to, the provision of managed
communications networks and internet and intranet services, the delivery of
high-speed broadband data communications, and business television and infomedia
services. The Purchased Assets were sold to Dataco pursuant to the terms and
conditions of the asset purchase agreement by and between CyberStar and Dataco,
dated as of December 21, 2001 (the "Asset Purchase Agreement"), in exchange for
the cancellation of a $50 million demand note made by CyberStar and held by
Dataco (the "CyberStar-Dataco Note"). The CyberStar-Dataco Note was cancelled
upon the closing of the transaction. The material terms of the sale of the data
business assets, including the purchase price, were determined in connection
with the negotiation of the terms and conditions of the exchange offer
transaction (described below), which terms and conditions were negotiated at
arm's length between Loral Space and an informal committee of holders of
CyberStar's Senior Notes (defined below) and Senior Discount Notes (defined
below). Loral Space is the indirect beneficial owner of all of the issued and
outstanding capital stock of CyberStar and Dataco. A copy of the Asset Purchase
Agreement is filed as an Exhibit to this filing and is incorporated herein by
reference.
The $50 million of intercompany indebtedness represented by the CyberStar-Dataco
Note was issued pursuant to the terms of a terminable at will demand line of
credit, dated as of January 1, 1999 (the "CyberStar-SpaceCom Credit Agreement"),
by and between CyberStar and Loral SpaceCom Corporation ("SpaceCom"), a Delaware
corporation and a wholly-owned subsidiary of Loral Space. Pursuant to a letter
agreement, dated December 17, 2001, by and between SpaceCom and CyberStar, all
obligations of SpaceCom to make further advances to CyberStar under the
CyberStar-SpaceCom Credit Agreement were terminated. Simultaneously with the
cancellation of the CyberStar-Dataco Note, the remaining $29.7 million principal
amount outstanding under the CyberStar-SpaceCom Credit Agreement was cancelled
upon consummation of the exchange offer in exchange for a $29.7 million
principal amount 10% subordinated note due 2006 held by SpaceCom, which note is
guaranteed, on a subordinated basis, by Loral Space. Copies of the letter
agreement with respect to the CyberStar-SpaceCom Credit Agreement, the 10%
subordinated note due 2006 and the subordinated guaranty by Loral Space with
respect to the 10% subordinated note are filed as exhibits to this filing and
are incorporated herein by reference.
ITEM 5. OTHER EVENTS.
On December 21, 2001, CyberStar announced the successful completion of an
exchange offer and consent solicitation for all of its outstanding aggregate
principal amount of 11-1/4% Senior Notes due 2007 (the "Senior Notes") and
12-1/2% Senior Discount Notes due 2007 (the "Senior Discount Notes") in exchange
for up to $675 million principal amount of new CyberStar 10% Senior Notes due
July 15, 2006 (the "New Notes"), which New Notes are guaranteed by Loral Space,
together with five-year warrants to purchase up to approximately 6.7 million
shares of Loral Space's common stock (less than two percent of outstanding Loral
Space shares) at a purchase price of $2.37 per share.
The exchange offer and consent solicitation expired at midnight, New York City
time, on Thursday, December 20, 2001. Approximately 91.73% ($406,373,000
principal amount)
of the Senior Notes were tendered in exchange for $304,843,000 principal amount
of New Notes, warrants to purchase 3,007,163 shares of Loral Space common stock
and approximately $29,755 in cash paid to certain holders of New Notes in lieu
of receipt of a principal amount of New Notes in a denomination other than an
integral multiple of $1,000. Approximately 89.86% ($434,929,000 principal
amount) of the Senior Discount Notes were tendered in exchange for $307,861,000
principal amount of New Notes, warrants to purchase 3,035,823 shares of Loral
Space common stock and approximately $29,998 in cash paid to certain holders of
New Notes in lieu of receipt of a principal amount of New Notes in a
denomination other than an integral multiple of $1,000. A copy of the indenture
related to the New Notes, the warrant agreement, dated as of December 21, 2001,
between Loral Space and The Bank of New York, as warrant agent, the supplemental
indenture, dated as of December 21, 2001, to the Senior Note indenture, dated
January 31, 1997, the supplemental indenture, dated as of December 21, 2001, to
the Senior Discount Note indenture, dated January 31, 1997, and the guaranty
agreement, dated as of December 21, 2001, between Loral Space and Bankers Trust
Company, as trustee, are filed as exhibits to this filing and are incorporated
herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Not applicable.
(b) Pro Forma Financial Information.
The unaudited pro forma financial statements attached hereto
as Exhibit 99.10 are hereby incorporated by reference.
(c) Exhibits.
99.1 Asset Purchase Agreement, dated as of December 21, 2001,
between CyberStar and Dataco.
99.2 Letter Agreement, dated December 17, 2001, by and between
SpaceCom and CyberStar.
99.3 $29.7 million aggregate principal amount, 10% subordinated
note due 2006, made by CyberStar and issued to SpaceCom.
99.4 Subordinated Guaranty Agreement, dated as of December 21,
2001, between Loral Space and SpaceCom with respect to the
10% Subordinated Note due 2006.
99.5 Indenture, dated as of December 21, 2001, by and among
CyberStar, certain of its subsidiaries and Bankers Trust
Company, as Trustee.
99.6 Warrant Agreement, dated as of December 21, 2001, between
Loral Space and The Bank of New York, as Warrant Agent.
99.7 Supplemental Indenture, dated as of December 21, 2001, to the
Senior Note Indenture, dated January 31, 1997.
99.8 Supplemental Indenture, dated as of December 21, 2001, to the
Senior Discount Note Indenture, dated January 31, 1997.
99.9 Guaranty Agreement, dated as of December 21, 2001, between
Loral Space and Bankers Trust Company, as Trustee.
99.10 Unaudited Consolidated Pro Forma Statement of Operations for
the nine months ended September 30, 2001 and the year ended
December 31, 2000 and the Unaudited Consolidated Pro Forma
Balance Sheet as of September 30, 2001.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
LORAL CYBERSTAR, INC.
Date: January 7, 2002 By: /s/ Janet T. Yeung
----------------------- --------------------------------
Name: Janet T. Yeung
Title: Vice President and
Assistant Secretary
INDEX TO EXHIBITS
Exhibit
Number Description of Exhibit
99.1 Asset Purchase Agreement, dated as of December 21, 2001,
between CyberStar and Dataco.
99.2 Letter Agreement, dated December 17, 2001, by and between
SpaceCom and CyberStar.
99.3 $29.7 million aggregate principal amount, 10% subordinated note due
2006, made by CyberStar and issued to SpaceCom.
99.4 Subordinated Guaranty Agreement, dated as of December 21, 2001,
between Loral Space and SpaceCom with respect to the 10% Subordinated
Note due 2006.
99.5 Indenture, dated as of December 21, 2001, by and among CyberStar,
certain of its subsidiaries and Bankers Trust Company, as trustee.
99.6 Warrant Agreement, dated as of December 21, 2001, between
Loral Space and The Bank of New York, as Warrant Agent.
99.7 Supplemental Indenture, dated as of December 21, 2001, to the Senior
Note Indenture, dated January 31, 1997.
99.8 Supplemental Indenture, dated as of December 21, 2001, to the Senior
Discount Note Indenture, dated January 31, 1997.
99.9 Guaranty Agreement, dated as of December 21, 2001, between Loral Space
and Bankers Trust Company, as Trustee.
99.10 Unaudited Consolidated Pro Forma Statement of Operations for the nine
months ended September 30, 2001 and the year ended December 31, 2000
and the Unaudited Consolidated Pro Forma Balance Sheet as of September
30, 2001.