Item 1.01 Entry into a Material Definitive Agreement.





Transaction Agreement.

On November 23, 2020, Loral Space & Communications Inc., a Delaware corporation ("Loral") entered into a Transaction Agreement and Plan of Merger (as it may be amended from time to time, the "Transaction Agreement") with Telesat Canada, a Canadian corporation ("Telesat"), Telesat Partnership LP, a limited partnership formed under the laws of Ontario, Canada ("Telesat Partnership"), Telesat Corporation, a newly formed corporation incorporated under the laws of the Province of British Columbia, Canada and the sole general partner of Telesat Partnership ("New Telesat"), Telesat CanHold Corporation, a corporation incorporated under the laws of British Columbia, Canada and wholly owned subsidiary of Telesat Partnership ("Telesat CanHoldco"), Lion Combination Sub Corporation, a Delaware corporation and wholly owned subsidiary of Loral ("Merger Sub"), Public Sector Pension Investment Board, a Canadian Crown corporation ("PSP Investments"), and Red Isle Private Investments Inc., a Canadian corporation and wholly owned subsidiary of PSP Investments ("Red Isle"), under which Merger Sub will merge with and into Loral, with Loral surviving the merger as a wholly owned subsidiary of Telesat Partnership (the "Merger"), and Loral stockholders receiving common shares of New Telesat and/or units of Telesat Partnership that will be exchangeable for common shares of New Telesat as more fully described below (the "Transaction").





Transaction.

At the effective time of the Merger (the "Effective Time"), each share of Loral common stock outstanding immediately prior to the Effective Time will be converted into the right to receive (a) if the Loral stockholder validly elects to receive Telesat Partnership Units pursuant to the Merger (a "Unit Election"), one (1) newly issued Class A unit of Telesat Partnership ("Class A Units") if such Loral stockholder is Canadian (as such term is defined in the Investment Canada Act), otherwise one (1) newly issued Class B unit of Telesat Partnership ("Class B Units" and, together with the Class A Units and Class C Units (as defined below), the "Telesat Partnership Units"), or (b) if the Loral stockholder validly makes an election to receive common shares of New Telesat (a "Common Shares Election") or does not validly make a Unit Election, one (1) newly issued Class A common share of New Telesat (the "Class A Shares") if such Loral stockholder is Canadian (as such term is defined in the Investment Canada Act), otherwise one (1) newly issued Class B common share of New Telesat (the "Class B Shares"). The Telesat Partnership Units will be subject to exchange for New Telesat shares (x) at the election of the holder beginning six months following the Effective Time and (y) in certain other circumstances.

Upon satisfaction of the terms and subject to the conditions set forth in the Transaction Agreement, the Transaction will result in the current stockholders of Loral, PSP Investments and the other shareholders in Telesat (principally current or former management of Telesat) owning approximately the same percentage of equity in Telesat indirectly through New Telesat and/or Telesat Partnership as they currently hold (indirectly in the case of Loral stockholders and PSP Investments) in Telesat, New Telesat becoming the publicly traded general partner of Telesat Partnership and Telesat Partnership indirectly owning all of the economic interests in Telesat, except to the extent that the other shareholders in Telesat elect to retain their direct interest in Telesat.

While the exchange of Loral stock for New Telesat shares is anticipated to be taxable to U.S. stockholders to the extent of any gain, Loral stockholders may elect to receive Telesat Partnership Units in lieu of receiving New Telesat shares. Receipt of the Telesat Partnership Units is anticipated to be tax deferred to U.S. stockholders. The Telesat Partnership Units, while not transferable, will otherwise have substantially the same economic and voting rights as the corresponding class of the New Telesat shares. Loral stockholders who elect to receive Telesat Partnership Units will, however, be required to hold their Telesat Partnership Units for at least six months before they may exchange their Telesat Partnership Units for New Telesat shares. The exchange of Telesat Partnership Units for New Telesat shares is anticipated to be taxable to U.S. stockholders.





Listing.

It is a condition to the completion of the Transaction that the Class A Shares and the Class B Shares be listed on a U.S. securities exchange. Listing on any such exchange will be subject to fulfillment of the listing requirements of the relevant exchange. If the Transaction is completed, Loral's publicly traded stock will be delisted from NASDAQ and deregistered under the Exchange Act, and Loral will no longer file periodic reports with the U.S. Securities and Exchange Commission (the "SEC").





Inducement Payment.

In order to induce PSP Investments and Red Isle to enter into the Transaction Agreement, Loral will pay to Red Isle an "inducement payment" in the amount of $7,000,000 upon consummation of the Transaction; however, if Loral does not have sufficient cash to pay the inducement payment in full, Telesat Partnership will pay to Red Isle the balance of the amount owed multiplied by a gross-up factor.

Effect of Transaction on Loral Restricted Stock Units.

Prior to the Effective Time, Loral will take all actions necessary to provide that each restricted stock unit in respect of Loral common stock that is outstanding immediately prior to the Effective Time will be converted into the right to receive the merger consideration in respect of each share of Loral common stock underlying such restricted stock unit in accordance with the Transaction Agreement as if such underlying shares were outstanding immediately prior to the Effective Time.

Terms of the Partnership Units.

In connection with the consummation of the Transaction, New Telesat, PSP Investments, Red Isle and each other person who will be admitted to Telesat Partnership as a limited partner in accordance with the provisions thereof, which will include each Loral stockholder who makes a Unit Election, will enter into an amended and restated partnership agreement of Telesat Partnership (the "Partnership Agreement"), which will govern Telesat Partnership and set out the terms of the Telesat Partnership Units. Once in effect, subject to specified exceptions, the Partnership Agreement may be amended only with the affirmative vote of each of: (i) a simple majority of the votes cast by the shareholders of New Telesat, (ii) a majority of the holders of Telesat Partnership Units and general partnership units of Telesat Partnership, (iii) a simple majority of the votes cast by the shareholders of New Telesat, other than PSP Investments, MHR Fund Management LLC (together with its affiliates that hold Loral common shares, "MHR") and their respective affiliates, and (iv) a majority of the holders of Telesat Partnership Units other than PSP Investments and MHR and general partnership units of Telesat Partnership.

Pursuant to the Partnership Agreement, New Telesat, as general partner, will . . .

Item 3.03 Material Modification to Rights of Security Holders

The information set forth above in the sections titled "Shareholder Rights Plan" and "Subscription Agreement for Series B Preferred Stock" in Item 1.01 of this Current Report on Form 8-K is incorporated into this Item 3.03 by reference.

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year

The information set forth above in the sections titled "Shareholder Rights Plan" and "Subscription Agreement for Series B Preferred Stock" in Item 1.01 of this Current Report on Form 8-K is incorporated into this Item 5.03 by reference.





Forward-Looking Statements

This report contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. When used in this report, the words "believes," "expects," "plans," "may," "will," "would," "could," "should," "anticipates," "estimates," "project," "intend" or "outlook" or other variations of these words or other similar expressions are intended to identify forward-looking statements and information. In addition, Loral or its representatives have made or may make forward-looking statements, orally or in writing, which may be included in, but are not limited to, various filings made from time to time with the SEC, and press releases or oral statements made with the approval of an authorized executive officer of Loral. Actual results may differ materially from anticipated results as a result of certain risks and uncertainties which are described as "Risk Factors" in Loral's current Annual Report on Form 10-K and in Loral's Quarterly Reports on Form 10-Q. The reader is specifically referred to these documents, as well as Loral's other filings with the SEC.

Risks and uncertainties include but are not limited to (1) risks associated with financial factors, including swings in the global financial markets, increases in interest rates and access to capital; (2) risks associated with satellite services, including dependence on large customers, launch delays and failures, in-orbit failures and competition; (3) risks and uncertainties associated with Telesat's planned low earth orbit satellite network, including overcoming technological challenges, access to spectrum and markets, governmental restrictions or regulations to address environmental concerns, raising sufficient capital to design and implement the system and competition from other low earth orbit systems; (4) regulatory risks, such as the effect of industry and government regulations that affect Telesat; (5) risks related to the satisfaction of the conditions to closing the Transaction in the anticipated timeframe or at all, including the failure to obtain necessary regulatory and stockholder approvals; (6) risks relating to the inability or failure to realize the anticipated benefits of the Transaction; (7) risks of disruption from the Transaction making it more difficult to maintain business and operational relationships; (8) risks arising from or relating to the negative effects of this announcement or the consummation of the Transaction on the market price of Loral's voting common stock; (9) risks relating to the incurrence of significant transaction costs and unknown liabilities, including litigation or regulatory actions related to the Transaction; and (10) other risks, including risks relating to and resulting from the COVID-19 pandemic. The foregoing list of important factors is not exclusive. Furthermore, Loral operates in an industry sector where securities values may be volatile and may be influenced by economic and other factors beyond Loral's control.

Additional Information and Where to Find It

This report does not constitute an offer to sell or the solicitation of an offer to buy any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. In connection with the Transaction, New Telesat and Telesat Partnership intend to file with the SEC a registration statement on Form F-4 that will include a proxy statement/prospectus and other relevant documents to be mailed by Loral to its security holders in connection with the Transaction. The proxy statement/prospectus will also be filed with the applicable Canadian securities regulators. WE URGE INVESTORS AND SECURITY HOLDERS TO READ THE PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION about Loral, Telesat, New Telesat, Telesat Partnership and the Transaction. Investors and security holders will be able to obtain these materials (when they are available) and other documents filed with the SEC and the Canadian securities regulators free of charge at the SEC's website, www.sec.gov and at the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com. In addition, a copy of the proxy statement/prospectus (when it becomes available) may be obtained free of charge from Telesat's internet website for investors www.telesat.com/investor-relations, or from Loral's investor relations website at www.loral.com/Investors. Investors and security holders may also read and copy any reports, statements and other information that Loral, Telesat, New Telesat or Telesat Partnership files with the SEC on the SEC's website at www.sec.gov.

Participants in the Solicitation of Votes

Loral, Telesat, and their respective directors, executive officers and certain other members of management and employees may be deemed to be participants in the solicitation of proxies from the stockholders of Loral in respect of the proposed Transaction. Information regarding Telesat directors and executive officers is available in its Form 20-F filed by Telesat on SEDAR at www.sedar.com, on February 27, 2020, and information regarding Loral's directors and executive officers is available in its Amendment No. 1 to Form 10-K filed with the SEC on March 26, 2020. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement/prospectus and other relevant materials to be filed with the SEC and the Canadian securities regulators when they become available.

For more information regarding these and other risks and uncertainties that Loral may face, see the section entitled "Risk Factors" in Loral's Form 10-K, Form 10-Q and Form 8-K filings with the SEC and as otherwise enumerated herein or therein.

For more information regarding these and other risks and uncertainties that Telesat may face, see the section entitled "Risk Factors" in Telesat's Form 20-F and Form 6-K filings with the SEC and as otherwise enumerated herein or therein.

Item 9.01 Financial Statements and Exhibits





(d) Exhibits.



  2.1      Transaction Agreement and Plan of Merger, dated as of November 23, 2020,
         by and among Loral Space & Communications Inc., Telesat Corporation,
         Telesat Canada, Telesat Partnership LP, Telesat CanHold Corporation, Lion
         Combination Sub Corporation, Public Sector Pension Investment Board and Red
         Isle Private Investments Inc.*

  3.1      Certificate of Designation of Series A Junior Participating Preferred
         Stock of Loral Space & Communications Inc.

  3.2      Certificate of Designation of Series B Preferred Stock of Loral Space &
         Communications Inc.

  4.1      Rights Agreement, dated as of November 23, 2020, between Loral Space &
         Communications Inc. and Computershare Trust Company, N.A.

  4.2      Standstill Agreement, dated as of November 23, 2020, by and among Loral
         Space & Communications Inc., MHR Fund Management LLC and certain funds
         managed by MHR Fund Management LLC

  10.1     Investor Rights Agreement, dated as of November 23, 2020, by and between
         Telesat Corporation and certain funds managed by MHR Fund Management LLC

  10.2     Investor Rights Agreement, dated as of November 23, 2020, by and between
         Telesat Corporation and Public Sector Pension Investment Board

  10.3     Voting Support Agreement, dated as of November 23, 2020, by and among
         certain funds managed by MHR Fund Management LLC and Public Sector Pension
         Investment Board

  10.4     Subscription Agreement, dated as of November 23, 2020, by and between
         Loral Space & Communications Inc. and Telesat Partnership LP

  10.5     Full and Final Release and Amendment of Tolling Agreement, dated as of
         November 23, 2020, by and among Public Sector Pension Investment Board, Red
         Isle Private Investments Inc., Loral Space & Communications Inc., Loral
         Holdings Corporation, MHR Fund Management LLC and Telesat Canada

104      Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Certain exhibits and disclosure schedules to the Transaction Agreement and the

redacted portion of the filed disclosure schedules attached as part of Exhibit

2.1 have been omitted pursuant to Item 601(b)(2) of Regulation S-K. Loral

agrees to furnish supplementally to the SEC a copy of any omitted schedule or

exhibit upon request.

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