Execution Copy
--------------
SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT (this "Agreement") is made and
entered into as of the 15th day of December, 2007 by and among MOBILE SATELLITE
VENTURES LP, a Delaware limited partnership ("MSV"), MOBILE SATELLITE VENTURES
FINANCE CO., a Delaware corporation ("MSV Finance Co." and, together with MSV,
the "Issuers"), SkyTerra Communications, Inc., a Delaware corporation
("SkyTerra"), HARBINGER CAPITAL PARTNERS MASTER FUND I, LTD., a Cayman Islands
fund, and HARBINGER CAPITAL PARTNERS SPECIAL SITUATIONS FUND, LP, a Delaware
limited partnership (collectively, the "Purchasers").
In consideration of the mutual agreements, representations, warranties
and covenants herein contained, the parties hereto agree as follows:
1. Definitions; Certain Rules of Construction. As used in this Agreement,
the following terms shall have the following respective meanings:
"Affiliate" means, with respect to any Person, any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this Agreement,
"control," when used with respect to any specified Person means the power to
direct or cause the direction of the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Antitrust Laws" means the HSR Act, the Xxxxxxx Act, as amended, the
Xxxxxxx Act, as amended, the Federal Trade Commission Act, as amended, and any
other United States federal or state or foreign statutes, rules, regulations,
orders, decrees, administrative or judicial doctrines or other laws that are
designed to prohibit, restrict or regulate actions having the purpose or effect
of monopolization or restraint of trade.
"Authorizations" has the meaning assigned to it in Section 4.14(a) hereof.
"Board" means the board of directors of Mobile Satellite Ventures GP, Inc.,
a Delaware corporation ("MSV GP") and the general partner of MSV, or any duly
authorized committee thereof.
"Business Day" (whether such term is capitalized or not) means any day
except Saturday, Sunday and any day which shall be a federal legal holiday or a
day on which banking institutions in the State of New York are authorized or
required by law or other governmental action to close.
"Closing" has the meaning assigned to it in Section 3.2 hereof.
"Closing Date" has the meaning assigned to it in Section 3.2 hereof.
"Common Stock" means either Voting Common Stock or Non-Voting Common Stock.
"Disclosure Schedules" has the meaning assigned to it in Section 4 and
Section 4A hereof.
"DOJ" has the meaning assigned to it in Section 6 hereof.
"Environmental Protection Laws" means any law, statute or regulation
enacted by any jurisdiction in connection with or relating to the protection or
regulation of the environment, including, without limitation, those laws,
statutes and regulations regulating the disposal, removal, production, storing,
refining, handling, transferring, processing or transporting of hazardous or
toxic substances, and any orders, decrees or judgments issued by any court of
competent jurisdiction in connection with any of the foregoing.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
all of the rules and regulations promulgated thereunder.
"Exchange Act Reports" means SkyTerra's reports filed with the SEC since
September 1, 2006, pursuant to Section 13 of the Exchange Act.
"Existing High Yield Indenture" means the Indenture, dated as of March 30,
2006, by and among the Issuers, the Guarantors named therein, and The Bank of
New York, a New York banking corporation, as Trustee, relating to the 14% Senior
Secured Discount Notes of the Issuers, as such Indenture is in effect on the
date of this Agreement (and without regard to any subsequent amendment thereto).
"FCC" has the meaning assigned to it in Section 4.14(a) hereof.
"FTC" has the meaning assigned to it in Section 6 hereof.
"GAAP" means U.S. generally accepted accounting principles.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"HSR Act" has the meaning assigned to it in Section 4A.6 hereof.
"Indebtedness" has the meaning assigned to it in the Indenture.
"Indenture" means an Indenture in the form of the Existing High Yield
Indenture but modified (i) to reflect that the Notes are to be unsecured instead
of secured as are the notes issued under the Existing Indenture, (ii) to
eliminate the "accreted value" concept since the Notes are to be issued at par
as opposed to at the discount at which the existing notes were issued, (iii) to
add provisions necessary to implement the PIK Accrual feature, and to reflect
the other financial terms described in Section 2, (iv) to revise the provisions
that contemplated an underwritten Rule 144A transaction (with DTC global
securities issued upon the initial issuance) in a manner that provides for
certificated notes issued on the Closing Date, with Global/DTC book-entry
arrangements implemented at the request of the holders of a majority in
principal amount of the Notes, (v) to include the additional affirmative and
negative covenants described in Parts A and B of Exhibit C, and (vi) by such
other related changes.
"Intellectual Property" has the meaning assigned to it in Section 4.18(a)
hereof.
"Issuers" has the meaning assigned to it in the Preamble.
"in writing" means any form of written communication or a communication by
means of facsimile transmission, in all events delivered in accordance with
Section 9.3(b).
"Law" means any constitution, treaty, statute, law, ordinance, regulation,
rule, standard, code, rule of common law, order or other requirement or rule
enacted or promulgated by any Governmental Authority.
"Lien" means, with respect to any property or asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
property or asset, whether or not filed, recorded or otherwise perfected under
applicable law, other than (a) those resulting from taxes which have not yet
become delinquent or (b) minor liens and encumbrances that do not materially
detract from the value of the property or materially impair the operations of
MSV or SkyTerra, as applicable, or materially interfere with the use of such
property or asset.
"Losses" means any and all losses, liabilities, obligations, claims,
contingencies, damages, diminution in value, costs and expenses, including all
judgments, amounts paid in settlements, court costs and reasonable attorneys'
fees and costs of preparation and investigation.
"Material Adverse Effect" means a material adverse effect on the business,
assets, liabilities, properties, operations, prospects or condition (financial
or otherwise) of SkyTerra, the Issuers and their Subsidiaries, taken as a whole,
except to the extent that such adverse effect results from (a) general economic,
regulatory or political conditions or changes therein in the United States or
the other countries in which such party operates; (b) financial or securities
market fluctuations or conditions; or (c) changes in, or events or conditions
affecting, the satellite telecommunications industry generally.
"MSV" has the meaning assigned to it in the Preamble.
"Non-Responding Holder" has the meaning assigned to it in Section 8.6(b)
hereof.
"Non-Voting Common Stock" means the non-voting common stock, par value
$0.01 per share, of SkyTerra.
"Notes" has the meaning assigned to it in Section 2 hereof.
"Original Issue Date" means the date on which the Warrants are first
issued.
"Permits" has the meaning assigned to it in Section 4.15 hereof.
"Person" (whether or not capitalized) means an individual, entity,
partnership, limited liability company, corporation, association, trust, joint
venture, unincorporated organization, and any Governmental Authority.
"PIK Accrual" has the meaning assigned to it in Section 2 hereof.
"Public Offering" means an underwritten public offering or a registered
direct placement resulting in net proceeds to SkyTerra or any of its
Subsidiaries of at least $50,000,000.
"PUC" has the meaning assigned to it in Section 4.14(a) hereof.
"Purchase Price" means the amount to be determined in accordance with
Section 3.1(b) hereof.
"Purchasers" has the meaning assigned it in the Preamble.
"Registration Rights Agreement" means the agreement dated as of the Closing
Date in the form attached hereto as Exhibit B.
"Registration Statements" means SkyTerra's registration statements filed
with the SEC since September 1, 2006, pursuant to the Securities Act.
"Restricted Common Stock" means shares of Non-Voting Common Stock or Voting
Common Stock which are, or which upon their issuance on the exercise of the
Warrants would be, and shares of Voting Common Stock issued upon exchange of
such shares of Non-Voting Common Stock, evidenced by a certificate bearing the
restrictive legend set forth in Section 8.3(c) hereof.
"Rule 144" means Rule 144 promulgated under the Securities Act and any
successor or substitute rule, law or provision.
"SEC" means the United States Securities and Exchange Commission.
"SEC Reports" means the Exchange Act Reports filed with the SEC since
September 1, 2006 and the Registration Statements.
"Securities" mean, collectively, the Notes and the Warrants.
"Securities Act" means the Securities Act of 1933, as amended, and all of
the rules and regulations promulgated thereunder.
"Significant Subsidiary" means any "significant subsidiary" of MSV or MSV
Finance Co. within the meaning of Rule 1-02 under Regulation S-X.
"SkyTerra" has the meaning assigned to it in the preamble.
"Subsidiary" means, with respect to any Person at any time, (a) any other
Person the accounts of which would be required by GAAP to be consolidated with
those of such first Person in its consolidated financial statements as of such
time, and (b) any other Person capital securities of which having ordinary
voting power to elect a majority of the board of directors (or other persons
having similar functions), or other ownership interest of which ordinarily
constituting a majority voting interest, are at such time, directly or
indirectly, owned or controlled by such first Person or one or more of its
Subsidiaries or by such first Person and one or more of its Subsidiaries. Unless
otherwise expressly provided, all references herein to "Subsidiary" means a
Subsidiary of the Issuers.
"Tax" or "Taxes" means any and all taxes, charges, fees, levies, imposts,
duties or other assessments of any kind whatsoever, imposed by or payable to any
federal, state, provincial, local, or foreign tax authority, including any gross
income, net income, alternative or add on minimum, franchise, profits or excess
profits, gross receipts, estimated, capital, goods, services, documentary, use,
transfer, ad valorem, business rates, value added, sales, customs, real or
personal property, capital stock, license, payroll, withholding or back up
withholding, employment, social security, workers' compensation, unemployment
compensation, utility, severance, production, excise, stamp, occupation,
premium, windfall profits, occupancy, transfer, gains taxes, together with any
interest, penalties, additions to tax or additional amounts imposed with respect
thereto.
"Third Party" means any Person (other than the Purchasers or any Subsidiary
of SkyTerra) that is a prospective transferee of Offered Shares from SkyTerra as
defined in Section 8.6(a).
"Transaction Documents" means, collectively, this Agreement, the Warrants,
the Indenture and the Registration Rights Agreement, as well as all certificates
and exhibits executed or delivered in connection with such agreements.
"Transfer" means and includes any sale, assignment, encumbrance,
hypothecation, pledge, conveyance in trust, gift, or other transfer or
disposition of any kind, including but not limited to transfers to receivers,
levying creditors, trustees or receivers in bankruptcy proceedings or general
assignees for the benefit of creditors, whether voluntary or by operation of
law, directly or indirectly.
"Voting Common Stock" means the voting common stock, par value $0.01 per
share, of SkyTerra.
"Warrants" means one or more warrants to purchase an aggregate of 7.5% of
the issued and outstanding Common Stock on a fully diluted basis (utilizing the
treasury method) on January 3, 2008, and assuming a Common Stock share price of
$5.05 for purposes of such treasury method calculation, substantially in the
form Exhibit A hereto.
"Warrant Stock" has the meaning assigned to it in Section 8.3(a).
2. Financial Terms of the Notes. The Issuers have authorized or will
authorize prior to the Closing Date the issuance and sale to the Purchasers of
$150,000,000 aggregate principal amount (exclusive of any amounts that may be
capitalized as a result of PIK Accrual (as defined below) of the Issuers' 16.50%
Senior Unsecured Notes due May 1, 2013 (the "Notes") to be issued pursuant to
the Indenture. Interest on the Notes will accrue from the issue date at a rate
of 16.50% per annum, computed on the basis of a 360-day year of twelve 30-day
months, payable semi-annually in arrears on each December 15 and June 15,
commencing June 15, 2008. Until and including December 15, 2011, each and every
interest payment on the Notes will be payable, at the option of the Issuers, (i)
in cash (a "Cash Payment"), (ii) by adding the amount of such interest to the
principal of the relevant Note (a "PIK Accrual") or (iii) in a combination of
Cash Payment and PIK Accrual, with any Cash Payment being allocated pro rata
among all Notes on which interest is due on such date; provided, however, that
interest payments on each Note shall be made wholly in the form of a Cash
Payment (x) upon any prepayment of such Note (to the extent accrued on the
amount being prepaid), (y) upon the scheduled maturity of such Note and (z) at
such other time as such Note becomes due and payable (whether by acceleration or
otherwise). Commencing June 15, 2012, interest on the Notes will be payable in
cash only. The Notes will mature on May 1, 2013.
3. Purchase and Sale of the Securities.
3.1 Purchase and Sale.
(a) Subject to and upon the terms and conditions set forth in this
Agreement, the Indenture and the Warrants: (i) the Issuers agree to issue and
sell to the Purchasers, and the Purchasers hereby agree to purchase from the
Issuers, $150,000,000 aggregate principal amount of the Notes, and (ii) SkyTerra
agrees to issue and sell to the Purchasers, and the Purchasers hereby agree to
purchase from SkyTerra, the Warrants.
(b) The aggregate Purchase Price to be delivered by the Purchasers
hereunder for the Notes and the Warrants shall be allocated between the Notes
and the Warrants in accordance with the procedure set forth in this Section
3.1(b). The parties agree to cooperate in good faith to determine the allocation
between the Notes and the Warrants within fifteen (15) days of the Closing Date.
The parties agree to be bound by such allocation and to take no position
inconsistent therewith unless otherwise required by a "determination" as defined
in Section 1313(a) of the Internal Revenue Code of 1986, as amended.
3.2 Closing. The closing of the sale to, and purchase by, the
Purchaser of the Securities as contemplated by Section 3.1 (the "Closing") shall
occur at the offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, Four Times
Square, New York, New York 10036-6522, on January 4 , 2008, subject to the
satisfaction or waiver of all of the conditions set forth in Section 7 hereof
and in the Indenture, or at such other time and place as the Issuers and the
Purchasers may agree (the "Closing Date"). At the Closing, the Issuers shall
deliver to the Purchasers (a) one or more Notes, substantially in the form set
forth in the Indenture evidencing $150,000,000 aggregate principal amount of the
Notes, and (b) SkyTerra shall deliver one or more instruments evidencing the
aggregate number of Warrants, in each case registered in the names of the
Purchasers, against delivery to the Issuers of $150,000,000 by wire transfer of
immediately available funds to an account or accounts that the Issuers designate
in writing to the Purchasers at least two Business Days prior to the Closing
Date.
4. Representations and Warranties of the Issuers. Except as disclosed in
the Disclosure Schedules delivered concurrently herewith (the "Disclosure
Schedules"), the Issuers jointly and severally hereby make the following
representations and warranties:
4.1 Corporate Status. Each of the Issuers and their Significant
Subsidiaries (a) has been duly organized, and is validly existing and in good
standing under the laws of the jurisdiction of its organization and has all
requisite corporate or other, as applicable, power and authority to own its
property and assets and to transact the business in which it is engaged and
presently proposes to engage and (b) has duly qualified to do business and is in
good standing in each jurisdiction where it is required to be so qualified and
where the failure to be so qualified would reasonably be expected to have a
Material Adverse Effect. Neither of the Issuers nor any of their Significant
Subsidiaries is currently in violation of any of the provisions of its
Certificate of Incorporation or By-laws (or other applicable charter documents),
each as amended to date.
4.2 Corporate Power and Authority. All corporate or other action on
the part of each of the Issuers, its officers, directors, shareholders, managers
or members necessary for the authorization, execution, delivery and performance
of this Agreement and the Indenture and the consummation of the transactions
contemplated herein and therein have been taken or will be taken prior to the
Closing Date. This Agreement, and the Indenture when executed and delivered by
each of the Issuers, shall constitute the legal, valid and binding obligation of
the Issuers and shall be enforceable against the Issuers in accordance with the
respective terms of the agreements, except as such may be limited by bankruptcy,
insolvency, reorganization or other laws affecting creditors' rights generally
and by general equitable principles. The Issuers have all requisite corporate
power and authority to enter into this Agreement and the Indenture, and to carry
out and perform their obligations under the terms hereof and thereof.
4.3 No Violation. None of the execution, delivery and performance by
the Issuers of this Agreement or the Indenture or compliance with the terms and
provisions hereof and thereof (a) will contravene any applicable provision of
any applicable Law, (b) will conflict with or result in any breach of, any of
the terms, covenants, conditions or provisions of, or constitute a default
under, or result in the creation or imposition of (or the obligation to create
or impose) any Lien upon any of the property or assets of any of the Issuers or
any of their Significant Subsidiaries pursuant to the terms of, any indenture,
mortgage, deed of trust, agreement or other material instrument to which any of
the Issuers or any of their Significant Subsidiaries is a party or by which it
or any of its or their property or assets are bound or to which it may be
subject, or result in the acceleration of any obligation of the Issuers or (c)
will violate any provision of the Certificate of Incorporation or By-laws (or
other applicable charter documents) of the Issuers, each as amended to date,
except in the case of (a) or (b), where such breach or conflict would not
reasonably be expected to have a Material Adverse Effect.
4.4 Capitalization. Section 4.4 of the Disclosure Schedules discloses
the number of authorized, issued and outstanding limited partnership units of
MSV, and outstanding warrants and options to purchase limited partnership units
of MSV as of the date hereof. As of the date hereof, 4,778,250 limited
partnership units were reserved for future issuance pursuant to outstanding
options, restricted shares/phantom units, and warrants issued by MSV. As of the
date hereof, 1,721,750 additional limited partnership units were authorized and
reserved for future issuance pursuant to option and other equity plans adopted
or approved by MSV. As of the date hereof, except as disclosed in Section 4.4 of
the Disclosure Schedules, there are no other outstanding options, warrants,
rights (including conversion or preemptive rights) or any agreement for the
purchase or acquisition from MSV or any wholly-owned Subsidiary of any of MSV's
limited partnership units or voting agreements with respect to equity of MSV.
All outstanding limited partnership units of MSV have been duly authorized,
validly issued, fully paid and nonassessable. Except as disclosed in Section 4.4
of the Disclosure Schedules, there are no anti-dilution or price adjustment
provisions contained in any security issued by MSV (or in any agreement
providing rights to security holders). None of the outstanding limited
partnership units of MSV were issued in violation of the Securities Act or any
state securities laws.
4.5 Valid Issuance of the Notes. The Notes have been or will be prior
to the Closing Date duly authorized and when delivered against payment therefor
in accordance with this Agreement and the Indenture will constitute valid and
binding obligations of the Issuers, entitled to the benefits of the Indenture
and enforceable against the Issuers in accordance with their terms.
4.6 Litigation. Except as disclosed in Section 4.6 of the Disclosure
Schedules, no actions, suits, claims, investigations or proceedings are pending
or, to the Issuers' knowledge, threatened or reasonably likely to be asserted
that would reasonably be expected to have, individually or in the aggregate (a)
a Material Adverse Effect or (b) an adverse effect on the rights or remedies of
the Purchasers or on the ability of the Issuers or their Significant
Subsidiaries to perform their respective obligations under the Transaction
Documents. Except as disclosed in Section 4.6 of the Disclosure Schedules,
neither of the Issuers nor any of their Significant Subsidiaries is a party to
or named in or subject to any order, writ, injunction, judgment or decree of any
court or Governmental Authority.
4.7 Approvals. Assuming the accuracy of the Purchaser's
representations and warranties set forth in Section 5 below, except (a) for any
required filings and recordings which have been made and are in full force and
effect, and (b) for applicable blue sky notice filings, no order, consent,
approval, license, authorization or validation of, or filing, recording or
registration with, or exemption by, any Person or Governmental Authority, is
required to authorize or is required for or as a condition to (i) the execution
and delivery of the Transaction Documents or the consummation of the issuance
and sale of the Notes contemplated hereby or (ii) the legality, validity,
binding effect or enforceability of the Transaction Documents. The execution and
delivery by the Issuers of this Agreement and the Indenture and the issuance of
the Notes do not require the consent or approval of the security holders of the
Issuers or of any other Person.
4.8 Financial Statements; Indebtedness.
(a) Except for Indebtedness disclosed in Section 4.8(a) of the
Disclosure Schedules or the Financial Statements, the Issuers and their
Significant Subsidiaries, taken as a whole, have no Indebtedness outstanding at
the date hereof. Neither the Issuers nor any Significant Subsidiary are in
default with respect to any outstanding Indebtedness or any instrument relating
thereto, and no event has occurred, or facts and circumstances exist, which,
after passage of time, would result in such a default.
(b) Section 4.8(b) of the Disclosure Schedules sets forth (i) the
audited balance sheet of MSV as at December 31, 2006 together with combined
statements of income and cash flows for the fiscal year ended December 31, 2006
(the "Audited Financial Statements"), and (ii) the unaudited balance sheet of
MSV as at the nine-month period ending September 30, 2007, together with
combined statements of income and cash flows for the nine-month period ending
September 30, 2007 (collectively, the "Financial Statements"). Except as set
forth therein, the Financial Statements have been prepared in accordance with
GAAP applied on a consistent basis throughout the periods indicated and on that
basis, present fairly, in all material respects, the financial position and the
results of operations and cash flows of MSV as of the dates and for the periods
indicated.
4.9 Investment Company Act. Neither of the Issuers is an "investment
company" or a company "controlled" by an "investment company," within the
meaning of the Investment Company Act of 1940.
4.10 No Material Adverse Changes. Since September 30, 2007, (a) no
event has occurred which has had, or would reasonably be expected to have, a
Material Adverse Effect; (b) except as disclosed in Section 4.10(b) of the
Disclosure Schedules, there has been no transaction entered into by either of
the Issuers or any of their Significant Subsidiaries other than transactions in
the ordinary course of business or except as contemplated and previously
disclosed to the Purchasers or its counsel, Xxxxxxx XxXxxxxxx LLP; (c) there
have not been any increases in the Indebtedness of either of the Issuers or
their Significant Subsidiaries taken as a whole, except as disclosed in Section
4.10(c) of the Disclosure Schedules; (d) there has been no actual or, to the
knowledge of the Issuers, threatened revocation of, or default under, any
contract, agreement or arrangement to which either of the Issuers or any of
their Significant Subsidiaries is a party, except as would not reasonably be
expected to have a Material Adverse Effect; (e) except as disclosed in Section
4.10(e) of the Disclosure Schedules, there have not been any amendments or
changes in the charter documents, by-laws or other formation documents of either
of the Issuers or the Significant Subsidiaries; (f) except as disclosed in
Section 4.10(f) of the Disclosure Schedules, there has not been any entry into,
amendment of, relinquishment, termination or non-renewal by either of the
Issuers or the Significant Subsidiaries of any material contract, license,
lease, transaction, commitment or other right or obligation, other than in the
ordinary course of business, consistent with past practice; and (g) there has
not been any transfer or grant of a right with respect to the Intellectual
Property owned or licensed by either of the Issuers or the Significant
Subsidiaries, except as among the Issuers and the Significant Subsidiaries which
would not materially impact the Issuers' business plans.
4.11 Tax Returns and Payments. Except as would not reasonably be
expected to have a Material Adverse Effect, (a) each of the Issuers and
Significant Subsidiaries has filed all domestic and foreign Tax returns and
reports required to be filed by it, all such returns and reports are true and
correct to the best of the Issuers' knowledge, and each of the Issuers and
Significant Subsidiaries has paid all Taxes and other assessments shown due on
such returns and reports; (b) there is no pending or, to the knowledge of the
Issuers, threatened non-routine examination, investigation, audit, suit, action,
claim or proceeding relating to Taxes of either of the Issuers or any of the
Significant Subsidiaries; (c) none of the Issuers or any of the Significant
Subsidiaries have received written notice of a determination by any taxing
authority that any material Tax amounts are owed by the Issuers or any of the
Significant Subsidiaries, which determination has not been paid, compromised, or
otherwise finally disposed of, and, to the knowledge of the Issuers, no such
determination is proposed or threatened; and (d) there are no Liens arising from
or related to Taxes on or pending against either of the Issuers or any of the
Significant Subsidiaries, or any of their properties, other than statutory liens
for taxes that are not yet due and payable.
4.12 Significant Subsidiaries. As of the respective Closing Date, the
Issuers have no directly or indirectly held Significant Subsidiary other than
those disclosed in Section 4.12 of the Disclosure Schedules. Each of the Issuers
and their Significant Subsidiaries has good and marketable title to all of the
shares (or other equity interests) it purports to own of the stock of each
Significant Subsidiary, free and clear in each case of any Lien (defined for
purposes hereof without regard to the exceptions contained in (a) and (b) of the
definition of Lien). All such shares have been duly authorized, validly issued
and are fully paid and nonassessable. As of the respective Closing Date, the
Issuers are not party to any joint venture or similar arrangement, except as
disclosed in Section 4.12 of the Disclosure Schedule.
4.13 Properties. Except as disclosed in Section 4.13 of the Disclosure
Schedules, each the Issuers and each of their Significant Subsidiaries owns all
of its respective properties and assets, free and clear of all Liens. With
respect to leased property and assets, the Issuers and their Significant
Subsidiaries are in material compliance with such leases and hold a valid
leasehold interest, free of any Liens, except as would not reasonably be
expected to have a Material Adverse Effect.
4.14 Regulatory Matters.
(a) Authorizations. Section 4.14(a)(i) of the Disclosure Schedules
lists all material Federal Communications Commission ("FCC"), state public
utility commission ("PUC") and foreign regulatory authority permits, licenses,
certificates, registrations and other similar material authorizations held by
the Issuers and their Significant Subsidiaries (collectively, the
"Authorizations"). Except as disclosed in Section 4.14(a)(ii) of the Disclosure
Schedules, the Authorizations consist of all such authorizations necessary or
appropriate for the conduct of the Issuers' and their Significant Subsidiaries'
business as such business is currently being conducted. The Issuers and their
Significant Subsidiaries have maintained and kept in force and effect, and have
applied in a timely manner for renewal of all such Authorizations. Except as
disclosed in Section 4.14(a)(ii) of the Disclosure Schedules, the Issuers and
their Significant Subsidiaries are in compliance with all such Authorizations
and any terms and conditions thereof, except as would not reasonably be expected
to have a Material Adverse Effect. Except as disclosed in Section 4.14(a)(ii) of
the Disclosure Schedules, each Authorization which is material to the business
of the Issuers is valid and in full force and effect, and the Issuers and their
Significant Subsidiaries have not received notice from the FCC, any PUC, or any
foreign regulatory authority of its intention to revoke, suspend, condition or
fail to renew any such Authorization. Except as disclosed in Section 4.14(a)(ii)
of the Disclosure Schedules, no event has occurred or facts and circumstances
exist, which allows or would reasonably be expected to allow, or which after
notice or lapse of time would allow or would reasonably be expected to allow,
revocation, suspension, non-renewal or termination or result in any other
material impairment of the Issuers' or their Significant Subsidiaries' rights
under any of its Authorizations.
(b) Compliance with Laws. Except as disclosed in Section 4.14(b) of
the Disclosure Schedules, the conduct of the Issuers' and their Significant
Subsidiaries' business complies with all applicable U.S., state, local and
foreign Laws (including, without limitation, the Communications Act of 1934, as
amended, and the Communications Assistance for Law Enforcement Act), ordinances,
rules, regulations, and orders (including, without limitation, those issued by
the FCC, any PUC or any foreign regulatory authority), in each case, except as
would not reasonably be expected to have a Material Adverse Effect. Except as
disclosed in Section 4.14(b) of the Disclosure Schedules, none of the Issuers
nor any of their respective Significant Subsidiaries is in violation of any
applicable Environmental Protection Laws and, to their knowledge, no material
expenditures are or will be required in order to comply with any such Laws, in
each case, except as would not reasonably be expected to have a Material Adverse
Effect.
(c) Regulatory Filings. As of the date hereof, the Issuers and their
Significant Subsidiaries have made all material regulatory filings required, and
paid all applicable fees and assessments imposed, with respect to the
Authorizations, including but not limited to FCC regulatory fees, Universal
Service Fund contributions, Telecommunications Relay Service Fund contributions,
and North American Numbering Plan fees, and all such filings and the calculation
of such fees, are accurate in all material respects.
4.15 Permits. The Issuers and their Significant Subsidiaries have all
franchises, permits, licenses and any similar authority (the "Permits")
necessary for the conduct of their business as now being conducted by them, the
lack of which could, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect. As of the date hereof, no suspension or
cancellation of any of the Permits is pending or, to the knowledge of the
Issuers, threatened, which could, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect. The Issuers believe they can
obtain, without undue burden or expense, any similar authority for the conduct
of their business as presently proposed to be conducted. The Issuers and their
Significant Subsidiaries are not in default under any of such Permits.
4.16 Brokers. Neither of the Issuers nor any Significant Subsidiary
has any liability to pay any fees, commissions or other similar compensation to
any broker, finder, investment banker, financial advisor or other similar Person
in connection with the transactions contemplated by this Agreement.
4.17 Leases. Each of the Issuers and the Significant Subsidiaries has
complied with all material obligations under all leases for real property to
which it is a party as a lessee. All leases relating to the leasehold estates of
each of the Issuers and the Significant Subsidiaries necessary for the conduct
of the business of such Person are, with respect to the Issuers, valid and
enforceable, and, to the knowledge of the Issuers, are, valid and enforceable
with respect to the lessor, and each of the Issuers and the Significant
Subsidiaries that is the lessee in respect thereof currently enjoys peaceful and
undisturbed possession of the premises subject thereto.
4.18 Intellectual Property.
(a) Except as disclosed in Section 4.18(a) of the Disclosure
Schedules, the Issuers and each of their Significant Subsidiaries owns,
possesses or has the right to use, exploit and/or practice patents, trade
secrets, trademarks, service marks, trade names, copyrights, franchises and
licenses, and rights with respect thereto (collectively, "Intellectual
Property"), necessary for the present conduct of its business and as such
business is proposed to be conducted.
(b) Except as disclosed in Section 4.18(b) of the Disclosure
Schedules, there are no outstanding options, licenses, or agreements of any kind
relating to the Issuers' and/or its Significant Subsidiaries' Intellectual
Property with the exception of agreements for the sale or license of the
Issuers' products or services in the ordinary course of business.
(c) Except as disclosed in Section 4.18(c) of the Disclosure
Schedules, neither of the Issuers nor any their Significant Subsidiaries is a
party to any agreement or license under which the Issuers or any Significant
Subsidiary acquires any right, license, title or interest in, under or to any
third party Intellectual Property (including without limitation any license to
open source software), other than (i) licenses that are available to the public
generally for a license fee of less than $10,000 (other than open source
software) and that were obtained in the ordinary course of business; and (ii)
license or ownership rights arising from services or development agreements (or
the like) made with third parties in the ordinary course of business.
(d) The Issuers have not received any communications alleging that the
Issuers or any Significant Subsidiary has violated, infringed or misappropriated
or, by conducting its business as presently proposed, would violate, infringe or
misappropriate any of the Intellectual Property of any other Person.
(e) To the knowledge of the Issuers and their Significant
Subsidiaries, no Person is infringing or misappropriating the Intellectual
Property of the Issuers or their Significant Subsidiaries.
(f) Except as disclosed in Section 4.18(f) of the Disclosure Schedule,
neither of the Issuers nor any Significant Subsidiary is subject or a party to
any order, decree, judgment, stipulation or agreement restricting its ability to
conduct the business, including the sale of products or services, in any
geographic area, market or field.
4.19 Securities Laws. Assuming the accuracy of the Purchasers'
representations and warranties set forth in Section 5, the offer, sale and
issuance of the Notes as provided in this Agreement is and is intended to be
exempt from the registration requirements of the Securities Act pursuant to
Section 4(2) thereof.
4.20 Insurance. Except as disclosed in Section 4.20 of the Disclosure
Schedules the Issuers and the Significant Subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and in such
amounts as are prudent and sufficient to address risks anticipated in the
businesses in which the Issuers and the Significant Subsidiaries are currently
engaged. Neither of the Issuers nor any Significant Subsidiary has any reason to
believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain coverage from reputable insurers as may
be necessary to continue its business without a significant increase in cost.
4.21 No Defaults. Each of the Issuers and their Significant
Subsidiaries has complied in all material respects with the terms and conditions
of any indenture, mortgage, deed of trust, agreement, note or other instrument
evidencing Indebtedness of the Issuers or their Significant Subsidiaries. None
of the Issuers, their Significant Subsidiaries or any party thereto is in
default in the performance or compliance with any provisions thereof, except as
would not reasonably be expected to have a Material Adverse Effect. All of the
foregoing instruments are in full force and effect as of the Closing Date and
have not been terminated, rescinded or withdrawn, except as would not reasonably
be expected to have a Material Adverse Effect.
4.22 Internal Accounting Controls. Each of the Issuers maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management's
general or specific authorizations, (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with GAAP and to
maintain asset accountability, (iii) access to assets is permitted only in
accordance with management's general or specific authorization, and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
4.23 MSV Finance Co. MSV Finance Co. owns no material assets and
engages in no material business activities other than being a co-issuer under
the Existing High Yield Indenture and the transactions contemplated hereby.
4A Representations and Warranties of SkyTerra. Except as disclosed in
the Disclosure Schedules, SkyTerra hereby makes the following representations
and warranties:
4A.1 Corporate Status. SkyTerra (a) has been duly organized, and is
validly existing and in good standing under the laws of the jurisdiction of its
organization and has the requisite corporate or other, as applicable, power and
authority to own its property and assets and to transact the business in which
it is engaged and presently proposes to engage and (b) has duly qualified to do
business and is in good standing in each jurisdiction where it is required to be
so qualified and where the failure to be so qualified would reasonably be
expected to have a Material Adverse Effect. SkyTerra is not currently in
violation of any of the provisions of its Certificate of Incorporation or
By-laws, each as amended to date.
4A.2 Corporate Power and Authority. All corporate action on the part
of SkyTerra, its officers, directors and shareholders necessary for the
authorization, execution, delivery and performance of this Agreement, the
issuance of the Warrants and the consummation of the transactions contemplated
herein have been taken or will be taken prior to the Closing Date. The Warrants
and the Registration Rights Agreement when executed and delivered by SkyTerra,
shall constitute the legal, valid and binding obligation of SkyTerra and shall
be enforceable against SkyTerra in accordance with their respective terms and
the terms of this Agreement, except as such may be limited by bankruptcy,
insolvency, reorganization or other laws affecting creditors' rights generally
and by general equitable principles. SkyTerra has all requisite corporate power
and authority to enter into this Agreement, the Warrants and the Registration
Rights Agreement and to carry out and perform its obligations under the terms
hereof and thereof.
4A.3 No Violation. None of the execution, delivery and performance by
SkyTerra of this Agreement, the Warrants and the Registration Rights Agreement,
or compliance with the terms and provisions hereof and thereof (a) will
contravene any applicable provision of any applicable Law, (b) will conflict
with or result in any breach of, any of the terms, covenants, conditions or
provisions of, or constitute a default under, or result in the creation or
imposition of (or the obligation to create or impose) any Lien upon any of the
property or assets of SkyTerra or any of its Subsidiaries pursuant to the terms
of, any indenture, mortgage, deed of trust, agreement or other material
instrument to which SkyTerra or any of its Subsidiaries is a party or by which
it or any of its property or assets are bound or to which it may be subject or
result in the acceleration of any obligation of SkyTerra or (c) will violate any
provision of the Certificate of Incorporation or By-laws of SkyTerra or any of
its Subsidiaries, each as amended to date, except in the case of (a) and (b),
where such breach or conflict would not reasonably be expected to have a
Material Adverse Effect.
4A.4 Capitalization. Section 4A.4 of the Disclosure Schedules
discloses the number of authorized, issued and outstanding shares of capital
stock of SkyTerra, and outstanding warrants and options to purchase capital
stock of SkyTerra as of the date hereof. As of the date hereof, 1,082,928 shares
of Common Stock were reserved for future issuance pursuant to outstanding
options and up to 3,212,893 shares of Common Stock were reserved for future
issuance pursuant to outstanding warrants issued by SkyTerra. As of the date
hereof, a total of 10,072,722 additional shares of Common Stock were authorized
and reserved for future issuance pursuant to option and other equity plans
adopted or approved by SkyTerra. As of the date hereof, except as further
disclosed in Section 4A.4 of the Disclosure Schedules or for the right to
purchase SkyTerra Common Stock upon exercise of the Warrants, there are no other
outstanding options, warrants, rights (including conversion or preemptive
rights) or any agreement for the purchase or acquisition from SkyTerra of any
shares of SkyTerra's capital stock or voting agreements with respect to equity
of SkyTerra or any of its Subsidiaries. All outstanding shares of the capital
stock of SkyTerra have been duly authorized, validly issued, fully paid and
nonassessable. Except as disclosed in Section 4A.4 of the Disclosure Schedules,
there are no obligations, contingent or otherwise, of SkyTerra or its
Subsidiaries to repurchase, redeem or otherwise acquire any shares of Common
Stock or other equity securities of SkyTerra or its Subsidiaries. Except as
disclosed in Section 4A.4 of the Disclosure Schedules, the sale of the Warrants,
and the issuance of any Common Stock upon exercise of the Warrants, will not
result in SkyTerra being obligated to issue, sell or purchase, pursuant to any
existing pre-emptive, anti-dilution, redemption or other right of third parties,
shares of Common Stock or other securities to or from any Person (other than the
Purchasers), and will not result in a right of any holder of convertible or
contingent securities issued by SkyTerra to adjust the exercise, conversion,
exchange or reset price under such securities, including, in any such case,
pursuant to any "poison pill" or shareholders rights plan. Except as disclosed
in Section 4A.4 of the Disclosure Schedules, there are no anti-dilution or price
adjustment provisions contained in any security issued by SkyTerra (or in any
agreement providing rights to security holders). None of the outstanding shares
of capital stock of SkyTerra were issued in violation of the Securities Act or
any state securities laws.
4A.5 Valid Issuance of the Common Stock.
(a) The shares of Common Stock issuable upon exercise of the Warrants
in accordance with the terms of the Warrants have been duly authorized by
SkyTerra and, when delivered in accordance with the terms of the Warrants (a)
will be validly issued, fully paid and nonasessable, (b) will not be subject to
any preemptive rights or any other similar contractual rights of the
stockholders of SkyTerra or any other Person, and (c) will be delivered to the
Purchasers or their designated transferee, free and clear of any Liens (defined
for purposes hereof without regard to the exceptions set forth in clauses (a)
and (b) of the definition of Lien) which are imposed by SkyTerra, or arise as a
result of SkyTerra's action or omission. SkyTerra has reserved from its duly
authorized capital stock the number of shares of Common Stock issuable upon the
exercise in full of the Warrants.
(b) The shares of Voting Common Stock issuable upon exchange of the
shares of Non-Voting Common Stock in accordance with the terms of Section 8.1
hereof have been duly authorized by SkyTerra and, when delivered in accordance
with the terms of this Agreement (a) will be validly issued, fully paid and
nonasessable, (b) will not be subject to any preemptive rights or any other
similar contractual rights of the stockholders of SkyTerra or any other Person,
and (c) will be delivered to the Purchasers or their designated transferee, free
and clear of any Liens (defined for purposes hereof without regard to the
exceptions set forth in clauses (a) and (b) of the definition of Lien) which are
imposed by SkyTerra, or arise as a result of SkyTerra's action or omission.
SkyTerra has reserved from its duly authorized capital stock the number of
shares of Common Stock issuable upon the exchange in full of the Non-Voting
Common.
4A.6 Approvals. Assuming the accuracy of the Purchaser's
representations and warranties set forth in Section 5 below, except (a) in
connection with or in order to comply with the applicable provisions of the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 0000 (xxx "XXX Xxx") and, if
necessary, similar foreign competition or Antitrust Laws, and if necessary, any
required stock exchange approvals (b) for any required filings and recordings
which have been made and are in full force and effect, and (c) for applicable
blue sky notice filings, no order, consent, approval, license, authorization or
validation of, or filing, recording or registration with, or exemption by, any
Person or Governmental Authority, is required to authorize or is required for or
as a condition to (i) the execution and delivery of the Transaction Documents or
the consummation of the issuance and sale of the Warrants contemplated hereby or
(ii) the legality, validity, binding effect or enforceability of the Transaction
Documents. The execution and delivery by SkyTerra of this Agreement and the
issuance of the Warrants do not require the consent or approval of the security
holders of SkyTerra or of any other Person.
4A.7 Conformity to Securities Act and Exchange Act; No Misstatement or
Omission. Each of the SEC Reports as of the date it was filed with the SEC in
the case of the Exchange Act Reports or declared effective in the case of the
Registration Statements, complied in all material respects with the applicable
requirements of the Securities Act or the Exchange Act (as applicable) and the
respective rules and regulations of the SEC thereunder and did not contain an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein not misleading. Since September 1, 2006,
SkyTerra has filed all reports, schedules, forms, statements and other documents
required to be filed by it with the SEC pursuant to the reporting requirements
of the Exchange Act.
4A.8 Financial Statements; Indebtedness.
(a) Except as disclosed in Section 4A.8(a) of the Disclosure
Schedules, the financial statements and supporting schedules included in
SkyTerra's Annual Report on Form 10-K for the year ended December 31, 2006, and
in SkyTerra's Quarterly Report on Form 10-Q for the quarter ended September 30,
2007 and in any Registration Statements or other SEC Reports, in each case filed
with the SEC, present fairly, in all material respects, the consolidated
financial position of SkyTerra as of the dates specified and the consolidated
results of their operations and cash flows for the periods specified, in each
case, in conformity with GAAP applied on a consistent basis during the periods
involved, except as indicated therein or in the notes thereto.
(b) Except for Indebtedness disclosed in Section 4A.8(b) of the
Disclosure Schedules and in SkyTerra's Annual Report on Form 10-K for the year
ended December 31, 2006, and in SkyTerra's Quarterly Report on Form 10-Q for the
quarter ended September 30, 2007, SkyTerra has no Indebtedness outstanding at
the date hereof. SkyTerra is not in default with respect to any outstanding
Indebtedness or any instrument relating thereto, and no event has occurred, or
facts and circumstances exist, which, after passage of time, would result in
such a default.
4A.9 Internal Accounting Controls. SkyTerra maintains a system of
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management's general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
SkyTerra has established disclosure controls and procedures (as defined in
Exchange Act Rule 13a-15(e)) for SkyTerra and designed such disclosure controls
and procedures to ensure that information required to be disclosed by SkyTerra
in reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the
SEC's rules and forms, including controls and procedures designed to ensure that
such information is accumulated and communicated to SkyTerra's management as
appropriate to allow timely decisions regarding required disclosure. SkyTerra
has carried out evaluations of the effectiveness of their disclosure controls
and procedures as required by Rule 13a-15 of the Exchange Act.
5. Representations and Warranties of the Purchasers. The Purchasers
hereby make the following representations and warranties, as of the date hereof
and as of the Closing Date:
5.1 Authorization. All corporate, partnership or limited liability
company action on the part of each of the Purchasers necessary for the
authorization, execution, delivery and performance of this Agreement and the
other Transaction Documents and the consummation of the transactions
contemplated herein and therein, has been taken. When executed and delivered by
such Purchasers, each of this Agreement and the other Transaction Documents
shall constitute the legal, valid and binding obligation of each of the
Purchasers, enforceable against each of the Purchasers in accordance with its
terms, except as such may be limited by bankruptcy, insolvency, reorganization
or other laws affecting creditors' rights generally and by general equitable
principles. Each of the Purchasers has all the requisite corporate power and
authority to enter into each of this Agreement and the other Transaction
Documents and to carry out and perform its obligations under the terms hereof
and thereof.
5.2 Purchase Entirely for Own Account. Each of the Purchasers is
acquiring the Securities for its own account for investment and not for the
account of any other person or with a view to any resale, fractionalization,
division, or distribution thereof in a manner that would require registration
thereof or the transactions contemplated hereby under the Securities Act, and
the Purchasers do not presently have any reason to anticipate any change in such
Purchaser's circumstances or other particular occasion or event which would
cause the Purchasers to sell the Securities other than in compliance with the
requirements of the Securities Act. The Purchasers have no contract,
undertaking, agreement, understanding or arrangement with any person to sell,
transfer, or pledge to any person any part or all of the Securities which such
Purchasers are acquiring, or any interest therein, and have no present plans to
enter into the same. The Securities were not offered or sold to the Purchasers
by means of any general solicitation or general advertisement.
5.3 Investor Status; Etc. The Purchasers certify and represent to the
Issuers that (i) they are each an "accredited investor" as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D promulgated under the Securities Act
and were not organized for the purpose of acquiring any of the Securities. The
Purchasers have adequate means of providing for their current needs and personal
contingencies, have no need now, and anticipate no need in the foreseeable
future, to sell the Securities, and currently have sufficient net worth and
financial liquidity to afford a complete loss of their investment in the
Issuers. The Purchasers have such knowledge and experience in financial and
business matters so that the Purchasers are capable of evaluating the merits and
risks of an investment in the Issuers and SkyTerra and have made such
evaluation. The Purchasers fully understand that the Securities are speculative
investments which involve a high degree of risk of loss of the Purchasers'
entire investment. No person or entity, other than the Issuers or their
authorized representatives, have offered the Securities to the Purchasers. The
Purchasers are able to bear the economic risk of an investment in the
Securities.
5.4 Securities Not Registered. The Purchasers understand that neither
the Securities nor the Warrant Stock issuable upon exercise of the Warrants or
the Voting Common Stock issuable upon exchange of Warrant Stock that is
Non-Voting Common Stock have been registered under the Securities Act, by reason
of their issuance by the Issuers in a transaction exempt from the registration
requirements of the Securities Act, and that the Securities must continue to be
held by the Purchaser unless a subsequent disposition thereof is registered
under the Securities Act or is exempt from such registration. The Purchasers
understand that the exemptions from registration afforded by Rule 144 (the
provisions of which are known to it) promulgated under the Securities Act depend
on the satisfaction of various conditions, and that, if applicable, Rule 144 may
afford the basis for sales only in limited amounts. The Purchasers have had an
opportunity to ask questions of and receive answers from the management and
authorized representatives of the Issuers and SkyTerra, and to review any other
relevant documents and records concerning the business of the Issuers and
SkyTerra and the terms and conditions of this investment, and that any such
questions have been answered to the Purchasers' satisfaction. The Purchasers
understand that no federal or state agency have passed upon or made any
recommendation or endorsement of an investment in the Securities. The Purchasers
acknowledge that certain material information has been disclosed to Xxxxxxx
XxXxxxxxx, LLP on behalf of the Purchasers, and at the Purchasers' request, such
information has not been shared with the Purchasers.
5.5 No Violation. Neither the execution, delivery and performance by
such Purchasers of this Agreement or the Transaction Documents nor compliance
with the terms and provisions hereof and thereof by the Purchasers (a) will
contravene any applicable provision of any Law applicable to the Purchasers,
except as would not have a material adverse effect on the Purchasers' ability to
consummate the transactions contemplated hereby; or (b) will violate any
provision of the organizational documents of the Purchasers, except as would not
have a material adverse effect on the Purchasers' ability to consummate the
transactions contemplated hereby.
5.6 Brokers. The Purchasers have no liability to pay any fees,
commissions or other similar compensation to any broker, finder, investment
banker, financial advisor or other similar Person in connection with the
transactions contemplated by this Agreement.
5.7 Consents. Except (a) in connection with or in order to comply with
the applicable provisions of the HSR Act and, if necessary, similar foreign
competition or Antitrust Laws, (b) for any required filings and recordings with
Governmental Authorities under Section 6; all consents, approvals, orders and
authorizations required on the part of the Purchasers in connection with the
execution, delivery or performance of this Agreement and the consummation of the
transactions contemplated herein have been obtained and are effective as of the
date hereof.
5.8 Reliance. The Purchasers are relying solely upon the advice of
their own financial, legal and tax advisors and their entering into the
transactions contemplated by this Agreement is the result of independent arm's
length negotiations between the Purchasers, SkyTerra and the Issuers. The
Purchasers acknowledge that the Issuers and SkyTerra are relying on the
representation and warranties of the Purchaser contained in this Section 5 and
would not consummate the transactions contemplated by this Agreement, in the
absence of the representations and warranties of the Purchaser contained in this
Section 5.
5.9 Material Non-Public Information. The Purchasers hereby acknowledge
that they are familiar with their responsibilities under federal and state
securities laws relating to restrictions on trading in securities of an issuer
while in possession of material, non-public information, and restrictions on
sharing such information with other persons who may engage in such trading.
6. Governmental and FCC Approval. The parties will promptly execute and
file, or join in the execution and filing of, any application, notification or
other document that may be necessary in order to obtain the authorization,
approval or consent of any Governmental Authority, which may be reasonably
required in connection with the consummation of the transactions contemplated by
this Agreement. Any fees associated with such notifications or applications
shall be borne by the Issuers. Each party shall, in connection with its
obligation to use commercially reasonable efforts to obtain, or assist the other
parties in obtaining, all such requisite authorizations, approvals or consents,
use commercially reasonable efforts to (i) cooperate in all reasonable respects
with the other parties in connection with any filing or submission and in
connection with any investigation or other inquiry, including any proceeding
initiated by a private party, (ii) promptly inform the other parties of any
communication received by such party from, or given by such party to, the United
States Department of Justice (the "DOJ"), the United States Federal Trade
Commission (the "FTC"), the FCC or any other Governmental Authority or
quasi-governmental entity and of any material communication received or given in
connection with any proceeding by a private party, in each case regarding any of
the transactions contemplated hereby, (iii) permit the other parties, or the
other parties' legal counsel, to review any communication given by it to, and
consult with the other parties in advance of any meeting or conference with, the
DOJ, the FTC, the FCC or any such other Governmental Authority or
quasi-governmental entity or, in connection with any proceeding by a private
party, with any other person and (iv) to the extent permitted by any applicable
Governmental Authority, give the other parties the opportunity to attend and
participate in such meetings and conferences.
7. Conditions Precedent.
7.1 Conditions to the Obligation of the Purchasers to Consummate the
Closing. The obligation of the Purchasers to consummate the Closing and to
purchase and pay for the Securities to be purchased by them is subject to the
satisfaction (or waiver by such Purchasers) of the following conditions
precedent:
(a) The representations and warranties of the Issuers and SkyTerra
contained herein shall be true and correct on the Closing Date and the Issuers
and SkyTerra shall have performed all obligations and conditions herein required
to be performed or complied with by the Issuers and SkyTerra on or prior to the
Closing Date.
(b) There shall not be any Law injunction, order or decree, enacted,
enforced, promulgated, entered, issued or deemed applicable to this Agreement or
the transactions contemplated hereby by any Governmental Authority prohibiting
or enjoining the transactions contemplated by this Agreement or the Transaction
Documents.
(c) The sale of the Securities by the Issuers and SkyTerra shall not
be prohibited by any Law. All necessary consents, approvals, licenses, permits,
orders and authorizations of, or registrations, declarations and filings with,
any Governmental Authority or of or with any other Person, including, without
limitation all filings in accordance with Section 6 hereof, with respect to the
purchase and sale of the Securities shall have been duly obtained or made and
shall be in full force and effect; provided, however, that this shall not
require all approvals needed to issue Voting Common Stock.
(d) The Purchasers shall have received from Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP, special counsel to the Issuers and SkyTerra, a reasonable
and customary opinion for transactions of the type contemplated herein addressed
to the Purchasers, dated as of the Closing Date, which shall be reasonably
satisfactory to Xxxxxxx XxXxxxxxx LLP, counsel to the Purchasers.
(e) MSV shall have delivered to the Purchasers a certificate dated as
of the Closing Date and signed by the secretary or other officer of MSV GP,
certifying (i) that the copies of the Limited Partnership Agreement and
resolutions of the Board approving this Agreement, the Transaction Documents and
the transactions contemplated hereby and thereby attached thereto, are all true,
complete and correct and remain in full force and effect as of such date, and
(ii) as to the incumbency and specimen signature of each officer of MSV
executing this Agreement, the Transaction Documents and any other document
delivered in connection herewith on behalf of MSV.
(f) MSV Finance Co. shall have delivered to the Purchasers a
certificate dated as of the Closing Date and signed by the secretary or another
officer of MSV Finance Co., certifying (i) that the copies of the Certificate of
Incorporation, the By-Laws and resolutions of the Board of Directors of MSV
Finance Co. approving this Agreement, the Transaction Documents and the
transactions contemplated hereby and thereby attached thereto, are all true,
complete and correct and remain in full force and effect as of such date, and
(ii) as to the incumbency and specimen signature of each officer of MSV Finance
Co. executing this Agreement, the Transaction Documents and any other document
delivered in connection herewith on behalf of MSV Finance Co.
(g) Each of the Issuers shall have delivered to the Purchasers a
certificate dated as of the Closing Date and signed by the Issuer's respective
chief financial officer or chief executive officer, certifying that (i) each of
the Issuers has performed and complied with all of the agreements and conditions
set forth or contemplated herein that are required to be performed or complied
with by the Issuers on or before such Closing Date and (ii) that the conditions
set forth in Sections 7.1(a) and 7.1(b) have been met.
(h) SkyTerra shall have delivered to the Purchasers a certificate
dated as of the Closing Date and signed by the secretary or another officer of
SkyTerra, certifying (i) that the copies of the Certificate of Incorporation,
the By-Laws and resolutions of the Board of Directors of SkyTerra approving this
Agreement, the Transaction Documents and the transactions contemplated hereby
and thereby attached thereto, are all true, complete and correct and remain in
full force and effect as of such date, (ii) that the representations and
warranties made by SkyTerra in the Transaction Documents are true and correct as
of such date; and (iii) as to the incumbency and specimen signature of each
officer of SkyTerra executing this Agreement, the Transaction Documents and any
other document delivered in connection herewith on behalf of SkyTerra.
(i) SkyTerra shall have delivered to the Purchasers a certificate
dated as of the Closing Date and signed by SkyTerra's chief financial officer or
chief executive officer, certifying that (i) SkyTerra has performed and complied
with all of the agreements and conditions set forth or contemplated herein that
are required to be performed or complied with by the Issuers on or before such
Closing Date and (ii) that the conditions set forth in Sections 7.1(a) and
7.1(b) have been met.
(j) Each of the Issuers and SkyTerra shall have delivered to the
Purchasers a certificate of good standing for each of the Issuers from the
Secretary of State of the State of Delaware, in each case dated within one week
of the Closing.
(k) The Registration Rights Agreement, in substantially the form
attached hereto as Exhibit B, shall have been executed and delivered to the
Purchasers and SkyTerra.
(l) There shall be no Material Adverse Effect on the Closing Date.
(m) Each of the Issuers and SkyTerra will have provided reasonable
cooperation in providing the Purchasers with all the information available to
them reasonably requested by the Purchasers in writing.
7.2 Conditions to the Obligation of the Issuers and SkyTerra to
Consummate the Closing. The obligation of the Issuers and SkyTerra to consummate
the Closing and to issue and sell the Securities to the Purchasers at the
Closing is subject to the satisfaction (or waiver by the Issuers and SkyTerra)
of the following conditions precedent:
(a) The representations and warranties of the Purchasers contained
herein shall be true and correct on and as of the Closing Date.
(b) The Purchasers shall have performed all obligations and conditions
herein required to be performed or complied with by the Purchasers on or prior
to the Closing Date.
(c) The Purchaser shall have delivered to the Issuers and SkyTerra a
certificate dated the Closing Date, executed by an authorized officer,
certifying the satisfaction of the conditions specified in paragraphs (a) and
(b) of this Section 7.2.
(d) There shall not be any Law injunction, order or decree, enacted,
enforced, promulgated, entered, issued or deemed applicable to this Agreement or
the transactions contemplated hereby by any Governmental Authority prohibiting
or enjoining the transactions contemplated by this Agreement or the Transaction
Documents.
(e) The sale of the Securities by the Issuers and SkyTerra shall not
be prohibited by any Law. All necessary consents, approvals, licenses, permits,
orders and authorizations of, or registrations, declarations and filings with,
any Governmental Authority or of or with any other Person with respect to any of
the transactions contemplated hereby shall have been duly obtained or made and
shall be in full force and effect.
(f) The Purchasers shall have delivered to SkyTerra, MSV and MSV
Finance Co. each of a Form W-9 or Form W-8, as applicable.
8. Certain Covenants and Agreements.
8.1 Exchange of Non-Voting Common Stock for Common Stock.
(a) To the extent any holder of a Warrant or its permitted assigns,
obtains shares of Non-Voting Common Stock issued upon exercise of a Warrant,
SkyTerra will promptly upon the request of such holder or its permitted assign,
exchange such shares of Non-Voting Common Stock for shares of Voting Common
Stock on a one-for-one basis. Upon surrender of certificates representing the
shares of Non-Voting Common Stock that are being exchanged as part of such
transfer, SkyTerra will issue to such Person certificates representing the
appropriate number of shares of Common Stock. For the avoidance of doubt, other
than as to voting and listing or quotation on a stock exchange, automatic
quotation system or the OTC Bulletin Board, the Common Stock and Non-Voting
Common Stock shall have identical rights and terms.
(b) Notwithstanding anything to the contrary contained in this Section
8.1, prior to the issuance of the Voting Common Stock, the holder of the Warrant
or its permitted assigns shall have satisfied any and all legal or regulatory
requirements for conversion, including compliance with the HSR Act, any
applicable FCC requirements and any required shareholder approval as a result of
a stock exchange where the Common Stock is then so listed or quoted. SkyTerra
shall use its reasonable best efforts in cooperating with such holder to obtain
such legal or regulatory approvals to the extent its cooperation is necessary.
SkyTerra shall pay all necessary filing fees and reasonable out-of-pocket
expenses to obtain such approvals.
8.2 Reservation and Authorization of Common Stock; Registration with
and Approval of Any Governmental Authority. From and after the Original Issue
Date, SkyTerra shall at all times reserve and keep available for issuance upon
the exercise of the Warrants such number of its authorized but unissued shares
of Voting Common Stock as will be sufficient to permit the exchange in full of
all shares of Non-Voting Common Stock issuable upon exercise in full of all
outstanding Warrants. All shares of Voting Common Stock issuable pursuant to the
terms hereof, when issued upon (i) exercise of the Warrants; or (ii) exchange of
an equal number of shares of Non-Voting Common Stock in accordance with the
terms hereof, shall be duly and validly issued and fully paid and nonassessable,
not subject to preemptive rights and shall be free and clear of all Liens.
8.3 Legends.
(a) Each certificate for Common Stock initially issued upon the
exercise of the Warrants ("Warrant Stock"), each certificate for Warrant Stock
issued to any subsequent transferee of any such certificate, shall be stamped or
otherwise imprinted with two legends in substantially the following forms: "THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAW. THE
SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED, SOLD, ASSIGNED,
EXCHANGE, MORTGAGE, PLEDGED, HYPOTHECATED OF OTHERWISE DISPOSED OF OR ENCUMBERED
WITHOUT COMPLIANCE WITH THE PROVISIONS OF, AND ARE OTHERWISE RESTRICTED BY THE
PROVISIONS OF, THE ACT AND THE RULES AND REGULATIONS THEREUNDER." "THE SHARES
REPRESENTED BY THIS CERTIFICATE ARE ENTITLED TO THE BENEFIT OF AND ARE SUBJECT
TO CERTAIN OBLIGATIONS SET FORTH IN A CERTAIN WARRANT DATED JANUARY 4, 2008,
ORIGINALLY ISSUED BY SKYTERRA COMMUNICATIONS, INC. (THE "WARRANT") PURSUANT TO
THE EXERCISE OF WHICH SUCH SHARES WERE ISSUED. A COPY OF THE WARRANT IS
AVAILABLE AT THE EXECUTIVE OFFICES OF SKYTERRA COMMUNICATIONS, INC."
(b) Each Warrant shall be stamped or otherwise imprinted with a legend
in substantially the following form: "NEITHER THIS WARRANT NOR ANY OF THE
SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAW. THE
WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE STOCK ISSUABLE UPON EXERCISE
HEREOF MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, EXCHANGED, MORTGAGED, PLEDGED,
HYPOTHECATED OF OTHERWISE DISPOSED OF OR ENCUMBERED WITHOUT COMPLIANCE WITH THE
PROVISIONS OF, AND ARE OTHERWISE RESTRICTED BY THE PROVISIONS OF, THE ACT, THE
RULES AND REGULATIONS THEREUNDER AND THIS WARRANT."
(c) Notwithstanding the foregoing provisions of this Section 8, the
legend requirements of Section 8.3 shall terminate as to any particular Warrant
or shares of Restricted Common Stock when SkyTerra shall have received from the
holder thereof an opinion of counsel to the effect that such legend is not
required in order to ensure compliance with the Securities Act. Whenever the
restrictions imposed by Section 8.3 shall terminate as to the Warrants, as
hereinabove provided, the holder hereof shall be entitled to receive from
SkyTerra, at the expense of SkyTerra, a new Warrant bearing the following legend
in place of the restrictive legend set forth hereon: "THE RESTRICTIONS ON
TRANSFERABILITY OF THE WITHIN WARRANT CONTAINED IN SECTION 8.3 HEREOF TERMINATED
ON ______________, 20__, AND ARE OF NO FURTHER FORCE AND EFFECT."
All Warrants issued upon registration of transfer, division or combination of,
or in substitution for, any Warrant or Warrants entitled to bear such legend
shall have a similar legend endorsed thereon. Whenever the restrictions imposed
by this Section shall terminate as to any share of Restricted Common Stock, as
hereinabove provided, the holder thereof shall be entitled to receive from
SkyTerra at SkyTerra's expense, a new certificate representing such Common Stock
not bearing the restrictive legend set forth in Section 8.3(a).
8.4 Publicity. Except to the extent required by applicable laws,
rules, regulations, stock exchange requirements or other obligations set forth
in securities agreements outstanding as of the date hereof, neither party shall,
without the prior written consent of the other, make any public announcement or
issue any press release with respect to the transactions and other matters
contemplated by this Agreement. The parties agree that the Issuers and SkyTerra
may issue a press release announcing the consummation of the sale of the Notes
and Warrants in the form to be mutually agreed upon by the parties.
8.5 Use of Proceeds. The Issuers covenant and agree, and the
Purchasers acknowledge, that the proceeds from the sale of the Notes shall be
used by the Issuers for working capital and general corporate purposes relating
to the satellite network, including the payments of fees and expenses made in
the ordinary course of business.
8.6 Right of Negotiation/Pro-rata Participation Right.
(a) If at any time prior to the earlier of (i) December 31, 2011, and
(ii) such time that Purchasers and their Affiliates cease to collectively
beneficially own at least five percent (5%) of the outstanding Common Stock,
SkyTerra or any of its Subsidiaries proposes to issue any equity securities or
options to purchase or rights to subscribe for any equity securities of SkyTerra
or any of its Subsidiaries (other than Excluded Stock (as defined below)) (the
"Offered Shares") to any bona fide third party, SkyTerra or such Subsidiary
shall first hold discussions with one representative for the Purchasers (the
"Right of First Negotiation") to determine whether a sale of all of the Offered
Shares by SkyTerra (or any of its Subsidiaries) to any or all of the Purchasers
is of interest to the Purchasers, and to determine whether agreement can be
reached on terms reasonably satisfactory to the each of the parties. Upon a good
faith determination by SkyTerra that such an agreement cannot be reached or if
an agreement is not reached within five Business Days of the commencement of the
Right of First Negotiation, SkyTerra may pursue a transaction with a bona fide
third party involving the Offered Shares; provided, however, that to the extent
any such transaction is consummated, the Purchasers shall have the pro-rata
participation right set forth in Section 8.6(b) below. Any sale of Offered
Shares pursuant to this Section 8.6(a) shall be made within sixty (60) days of
the commencement of the Right of First Negotiation. From and after the
sixty-first (61st) day after the commencement of the Right of First Negotiation,
any sale of Offered Shares shall be subject to the provisions of Section 8.6(b).
(b) Following the completion or termination of the Right of First
Negotiation, if SkyTerra or any of its Subsidiaries proposes to issue Offered
Shares (other than Excluded Stock) to a bona fide third party, SkyTerra shall,
no later than fifteen (15) days prior to the consummation of such transaction (a
"Preemptive Rights Transaction"), give notice in writing (the "Preemptive Rights
Offer Notice") to each Purchaser of such Preemptive Rights Transaction. The
Preemptive Rights Offer Notice shall describe the proposed Preemptive Rights
Transaction, and contain an offer (the "Preemptive Rights Offer") to sell to the
Purchasers, at the same price and for the same consideration to be paid by the
proposed purchaser (provided, that, in the event any of such consideration is
non-cash consideration, at the election of the Purchaser to whom the Preemptive
Rights Offer is made, such Purchaser may pay cash equal to the value of such
non-cash consideration, determined in the manner as Fair Value is determined in
the Warrant), all or any part of such Purchaser's pro rata portion of the
Offered Shares (which shall be a fraction of the Offered Shares determined by
dividing the number of shares of outstanding Common Stock owned by such
Purchaser by the sum of (i) the number of shares of outstanding Common Stock
owned by such Purchaser and (ii) the number of outstanding shares of Common
Stock not held by such Purchaser). If any Purchaser to whom a Preemptive Rights
Offer is made fails to accept (a "Non-Responding Holder") in writing the
Preemptive Rights Offer by the tenth (10th) day after SkyTerra's delivery of the
Preemptive Rights Offer Notice, such Non-Responding Holders shall have no
further rights with respect to the proposed Preemptive Rights Transaction. For
purposes of this Section 8.6(b), the Purchaser's ownership of SkyTerra shall be
deemed to include the number of shares Common Stock equal to the product of: (i)
the number of shares of common stock of the TerreStar Corporation ("TerreStar
Corporation") owned by Purchasers divided by the total number of outstanding
shares of the TerreStar Corporation outstanding on a fully-diluted basis; and
(ii) the shares of Common Stock of SkyTerra held by TerreStar Corporation.
Additionally, notwithstanding the foregoing, no Purchaser shall be deemed to
beneficially own another Purchaser's Common Stock. Any sale of the Offered
Shares pursuant to a Preemptive Rights Transaction shall be made within sixty
(60) days of the delivery of the Preemptive Rights Offer Notice. From and after
the sixty-first (61st) day after the delivery of the Preemptive Rights Offer
Notice, any sale of Offered Shares pursuant to this Section 8.6(b) shall be
subject to a new Right of First Negotiation pursuant to Section 8.6(a).
(c) "Excluded Stock" shall mean (i) options or similar convertible
securities to employees, consultants, or directors, (ii) securities reserved for
issuance to employees, directors, consultants or other service providers under
arrangements, contracts or plans approved by the Board of Directors of SkyTerra,
(iii) securities issued to any bank, licensor, equipment lessor or strategic
partner, if and to the extent that the transaction in which such sale or grant
is not principally for the purpose of raising equity capital, (iv) shares issued
upon conversion of the Warrants, (v) securities upon exercise, exchange or
conversion of convertible, exchangeable or exercisable securities issued as of
the date hereof, (vi) securities issued in a Public Offering, (vii) securities
issued in an acquisition transaction, (viii) shares of Common Stock in exchange
for, or in connection with the termination of, outstanding options to purchase
limited partnership interests of MSV, as described in the Registration Statement
on Form S-4 (File No. 333-144093) filed with the Securities and Exchange
Commission on June 27, 2007 (the "S-4 Registration Statement") or any issuance
of Common Stock in exchange for, or in connection with the termination of,
limited partnership interests of MSV or equity interests in the general partner
of MSV (or any option or right to acquire such interests) outstanding on the
date hereof, so long as such exchange or termination is based on the same
exchange ratio referred to in the S-4 Registration Statement, or (ix) securities
issued in connection with any stock split, stock dividends or recapitalization,
in all cases where shareholders are treated equally and ratably.
(d) Notwithstanding anything to the contrary contained herein, prior
to the issuance to the Purchasers of any securities pursuant to the Right of
First Negotiation or a Preemptive Rights Offer or, in the event that securities
to be issued are convertible or exchangeable for Voting Common Stock, the Voting
Common Stock issuable upon exchange of such securities, the Purchasers or its
permitted assigns on the one hand, and SkyTerra on the other hand, shall have
satisfied any and all applicable legal or regulatory or shareholder approval
requirements (including the requirements of any stock exchange or automatic
quotation system on which the Common Stock is then listed, traded or quoted) for
issuance and/or conversion, including compliance with the HSR Act and FCC
requirements. SkyTerra shall use its reasonable best efforts in cooperating with
the Purchasers to obtain such legal or regulatory approvals to the extent its
cooperation is necessary. SkyTerra shall pay all necessary filing fees and
reasonable out-of-pocket expenses to obtain such legal or regulatory approvals.
8.7 Negative Covenants. Prior to the earlier of (i) December 31, 2011, and
(ii) such time that the Purchasers and their Affiliates cease to beneficially
own at least 5% of the outstanding Common Stock, without the prior consent of
the Purchasers;
(a) MSV shall not consolidate with or merge with or into, or convey,
transfer or lease, in one transaction or a series of related transactions,
directly or indirectly, all or substantially all of its assets to any Person (as
defined in the Existing High Yield Indenture) unless after immediately giving
pro forma effect to such transaction, the Successor Person (as defined in the
Existing High Yield Indenture) would have a Consolidated Leverage Ratio (as
defined in the Existing High Yield indenture) at least 10% better than
immediately prior to the transaction.
(b) MSV shall not make any Restricted Payment (as defined in the
Existing High Yield Indenture) in violation of the Existing High Yield
Indenture, except for purposes of Section 4.08(a)(3)(A) of the Existing High
Yield Indenture, (i) 100% shall be replaced with 50%, and (ii) the deduction of
1.4 times the Consolidated Interest Expense (as defined in the Existing High
Yield Indenture) shall be deleted.
9. Miscellaneous Provisions.
9.1 Rights Cumulative. Each and all of the various rights, powers and
remedies of the parties shall be considered to be cumulative with and in
addition to any other rights, powers and remedies which such parties may have at
law or in equity in the event of the breach of any of the terms of this
Agreement. The exercise or partial exercise of any right, power or remedy shall
neither constitute the exclusive election thereof nor the waiver of any other
right, power or remedy available to such party.
9.2 Pronouns. All pronouns or any variation thereof shall be deemed to
refer to the masculine, feminine or neuter, singular or plural, as the identity
of the person, persons, entity or entities may require.
9.3 Notices.
(a) Any notices, reports or other correspondence (hereinafter
collectively referred to as "correspondence") required or permitted to be given
hereunder shall be sent by postage prepaid first class mail (sent certified or
registered), overnight courier or facsimile transmission, or delivered by hand
to the party to whom such correspondence is required or permitted to be given
hereunder. The date of giving any notice shall be the date of its actual
receipt.
(b) All correspondence to the Issuers and SkyTerra shall be addressed
as follows:
SkyTerra Communications, Inc.
00000 Xxxxxxxxx Xxxxxxxxx
Xxxxxx XX 00000
Facsimile No.: 000-000-0000
Attn: Chief Financial Officer
with copies (which shall not constitute notice) to:
SkyTerra Communications, Inc.
00000 Xxxxxxxxx Xxxxxxxxx
Xxxxxx XX 00000
Facsimile No.: 000-000-0000
Attn: General Counsel
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: 000-000-0000
Attn: Xxxxxxx Xxxxxxxxx
(c) All correspondence to the Purchasers shall be addressed as
follows:
Harbinger Capital Partners Funds
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Vice President and Investment Counsel
Facsimile No.: (000) 000-0000
with a copy to
Xxxxxxx Management Corporation
Xxx Xxxxxxxxxx Xxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: General Counsel
Fax: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxxxx XxXxxxxxx, LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
Attn: Xxxxxx X. Xxxxxx, Xx.
(d) Any party may change the address to which correspondence to it is
to be addressed by notification as provided for herein.
9.4 Captions. The captions and paragraph headings of this Agreement
are solely for the convenience of reference and shall not affect its
interpretation.
9.5 Severability. Should any part or provision of this Agreement be
held unenforceable or in conflict with the applicable laws or regulations of any
jurisdiction, the invalid or unenforceable part or provisions shall be replaced
with a provision which accomplishes, to the extent possible, the original
business purpose of such part or provision in a valid and enforceable manner,
and the remainder of this Agreement shall remain binding upon the parties
hereto.
9.6 Governing Law; Exclusive Jurisdiction and Venue; Waiver of Jury
Trial. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York. THE PARTIES HERETO HEREBY AGREE THAT ALL ACTIONS
OR PROCEEDINGS ARISING DIRECTLY OR INDIRECTLY FROM OR IN CONNECTION WITH THIS
AGREEMENT SHALL BE LITIGATED ONLY IN THE STATE OR FEDERAL COURTS LOCATED IN
MANHATTAN IN THE STATE OF NEW YORK. TO THE EXTENT PERMITTED BY APPLICABLE LAW,
THE PARTIES HERETO CONSENT TO THE EXCLUSIVE JURISDICTION AND VENUE OF THE
FOREGOING COURTS AND CONSENT THAT ANY PROCESS OR NOTICE OF MOTION OR OTHER
APPLICATION TO EITHER OF SAID COURTS OR A JUDGE THEREOF MAY BE SERVED INSIDE OR
OUTSIDE THE STATE OF NEW YORK BY REGISTERED MAIL, RETURN RECEIPT REQUESTED,
DIRECTED TO SUCH PARTY AT ITS ADDRESS SET FORTH IN THIS AGREEMENT (AND SERVICE
SO MADE SHALL BE DEEMED COMPLETE FIVE (5) DAYS AFTER THE SAME HAS BEEN POSTED AS
AFORESAID) OR BY PERSONAL SERVICE OR IN SUCH OTHER MANNER AS MAY BE PERMISSIBLE
UNDER THE RULES OF SAID COURTS. THE PARTIES HEREBY IRREVOCABLY WAIVE ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS
AGREEMENT.
9.7 Waiver. No waiver of any term, provision or condition of this
Agreement, whether by conduct or otherwise, in any one or more instances, shall
be deemed to be, or be construed as, a further or continuing waiver of any such
term, provision or condition or as a waiver of any other term, provision or
condition of this Agreement.
9.8 Assignment. The rights and obligations of any party hereto shall
inure to the benefit of and shall be binding upon the authorized successors and
permitted assigns of such party. None of the Issuers, SkyTerra or the Purchasers
may assign this Agreement or any rights or obligations hereunder without the
prior written consent of the other; provided, however, that the each of
Purchasers may assign this Agreement in whole or in part to one or more
Affiliates of the Purchasers, whether presently existing or hereinafter created
by providing notice in writing to the Issuers and SkyTerra.
9.9 Survival. The respective representations and warranties given by
the parties hereto shall survive the Closing Date and the consummation of the
transactions contemplated herein and shall expire on the date that is eighteen
(18) months after the Closing Date (the "Survival Period"). Accordingly, no
claim relating to any representation or warranty given by the parties hereto
applicable to the Closing Date may be made following such expiration. If a claim
relating to any representation or warranty given by the parties hereto is made
on or prior to the expiration thereof, then, notwithstanding anything to the
contrary contained in this Section 9.9, such representation or warranty shall
not so expire, but rather shall remain in full force and effect until such time
as such claim has been fully and finally resolved, either by means of a written
settlement agreement executed on behalf of the parties or by means of a final,
non-appealable judgment issued by a court of competent jurisdiction. The
respective covenants and agreements agreed to by a party hereto shall survive
the Closing Date and the consummation of the transactions contemplated herein in
accordance with their respective terms and conditions.
9.10 Entire Agreement. This Agreement and the Transaction Documents
constitute the entire agreement between the parties hereto respecting the
subject matter hereof and supersede all prior agreements, negotiations,
understandings, representations and statements respecting the subject matter
hereof, whether written or oral, between the Issuers and the Purchasers.
9.11 Amendments. Any amendment, supplement or modification of or to
any provision of this Agreement and any waiver of any provisions of this
Agreement shall be effective only if made or given in writing and signed by the
Issuers and the Purchasers.
9.12 No Third Party Rights. This Agreement is intended solely for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not intended to confer any benefits upon, or create any rights in
favor of, any Person (including, without limitation, any stockholder or debt
holder of the Issuers or SkyTerra) other than the parties hereto.
9.13 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same document. The parties hereto confirm
that any facsimile copy of another party's executed counterpart of this
Agreement (or its signature page thereof) will be deemed to be an executed
original thereof.
9.14 Expenses. The Issuers shall pay all reasonable, documented fees
and expenses in connection with the consummation of the transactions
contemplated hereby, including the fees Xxxxxxx XxXxxxxxx LLP, outside counsel
to the Purchasers.
[Signature pages follow.]
Each of the parties hereto has caused a counterpart of this Agreement to be
duly executed and delivered as of the date first written above.
MOBILE SATELLITE VENTURES LP
By: /s/ Xxxxx Xxxxxxx
------------------------------
Name: Xxxxx Xxxxxxx
Title: Executive Vice President and
Chief Financial Officer
MOBILE SATELLITE VENTURES FINANCE CO.
By: /s/ Xxxxx Xxxxxxx
------------------------------
Name: Xxxxx Xxxxxxx
Title: Executive Vice President and
Chief Financial Officer
SKYTERRA COMMUNICATIONS, INC.
By: /s/ Xxxxx Xxxxxxx
------------------------------
Name: Xxxxx Xxxxxxx
Title: Executive Vice President,
Chief Financial Officer and
Treasurer
HARBINGER CAPITAL PARTNERS MASTER
FUND I, LTD.
By: Harbinger Capital Partners Offshore
Manager, L.L.C., as investment manager
By: /s/ Xxxxxxx X. Xxxxx, Xx.
------------------------------
Name: Xxxxxxx X. Xxxxx, Xx.
Title: Executive Vice President
HARBINGER CAPITAL PARTNERS SPECIAL
SITUATIONS FUND, LP
By: Harbinger Capital Partners Special
Situations GP, LLC, as general partner
By: /s/ Xxxxxxx X. Xxxxx, Xx.
------------------------------
Name: Xxxxxxx X. Xxxxx, Xx.
Title: Executive Vice President
LIST OF EXHIBITS
Exhibit A: Form of Warrant
Exhibit B: Form of Registration Rights Agreement
Exhibit C: Indenture Covenants
Exhibit A
---------
Form of Warrant
Exhibit B
---------
Form of Registration Rights Agreement
Exhibit C
---------
Indenture Covenants
A. AFFIRMATIVE COVENANTS
1. Compliance With Laws. The Indenture shall contain an affirmative
covenant requiring the Issuer and each of its Subsidiaries to comply with all
laws, rules or regulations applicable to each of them, subject to a Material
Adverse Effect qualification and other reasonable and customary exceptions.
2. Maintenance of Properties. The Indenture shall contain an affirmative
covenant requiring the Issuer and each of its Subsidiaries to maintain and keep
their respective properties in good repair, working order and condition (other
than ordinary wear and tear) so that the business of the Issuer and its
Subsidiaries carried on in connection therewith may be properly conducted at all
times, subject to a Material Adverse Effect qualification and other reasonable
and customary exceptions.
B. NEGATIVE COVENANTS
1. Pro Rata Payment of Notes and Secured Notes from Asset Disposition
Proceeds. The Indenture shall contain a negative covenant on asset dispositions
requiring that the Issuer offer to repurchase the Notes on a pro rata basis with
the Issuer's related required purchase offer to the holders of the Notes issued
under (and as defined in the Existing High Yield Indenture) and all other
Indebtedness existing now or in the future with a similar right; provided,
however, that the Issuers shall not be required to make any such offer in
violation of the Existing High Yield Indenture or any secured obligations
permitted to be incurred by the Existing High Yield Indenture, including without
limitation, an offer with the net cash proceeds from dispositions of the
Collateral (as defined in the Existing High Yield Indenture) until all
obligations under the Existing High Yield Indenture or such other secured
obligations have been satisfied.
SK 03773 0003 843527
