Exhibit Z
Execution Version
ESCROW AGREEMENT
This Escrow Agreement, dated as of November 7, 2008 (the "Agreement"), is
entered into by and among Harbinger Capital Partners Master Fund, Ltd., an
exempted company organized under the laws of the Cayman Islands ("Harbinger
Master"), Harbinger Capital Partners Special Situations Fund, L.P., a Delaware
limited partnership ("Harbinger Special" and, together with Harbinger Master,
"Harbinger"), and Xxxxx Fargo Bank, National Association, as escrow agent
("Escrow Agent"). Harbinger and the Escrow Agent are referred to herein as the
"Parties" and individually as a "Party."
RECITALS
Harbinger, the Escrow Agent, Motient Ventures Holdings, Inc. (the "Stockholder")
and Goldberg, Godles, Wiener & Xxxxxx (the "Collateral Agent") have entered into
that certain Transfer and Termination Agreement, dated as of the date hereof
(the "Transfer and Termination Agreement"), pursuant to which, among other
things, the Stockholder transferred 7,906,737 shares of non-voting common stock,
par value $0.01 per share (the "Remaining Shares") of SkyTerra Communications,
Inc., a Delaware corporation (the "Company") to the Escrow Agent to hold and
distribute pursuant to the terms of this Agreement.
Therefore, in consideration of the promises and agreements of the Parties and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Parties agree as follows:
ARTICLE 1
ESCROW DEPOSIT
Section 1.1. Receipt of Escrow Property. The Escrow Agent acknowledges receipt
of the Remaining Shares from the Stockholder pursuant to the terms of the
Transfer and Termination Agreement. If prior to the final distribution of the
Escrow Property (as defined below) pursuant to Section 1.3 of this Agreement the
Company effects any split, combination or reclassification of its Non-Voting
Common Stock or declares or pays any dividend or other distribution payable to
the holders of its Non-Voting Common Stock in additional shares of Common Stock,
other securities or other property other than cash dividends ("Non-Cash
Distributions"), or any cash dividends ("Cash Distributions" and, together with
Non-Cash Distributions, "Distributions"), then the Escrow Agent shall hold,
deliver and transfer any such Distributions in accordance with the terms of this
Agreement. The Remaining Shares together with any such Distributions are
hereinafter referred to as the "Escrow Property."
Section 1.2. Title, Voting Rights; Distributions and Investments. Until such
time as the Escrow Agent transfers and delivers the Escrow Property in
accordance with Section 1.3 of this Agreement, (a) title to the Escrow Property
shall remain in the Escrow Agent and the Remaining Shares and any other portion
of the Escrow Property consisting of securities issued by the Company shall
remain registered on the books of the Company in the name of the Escrow Agent or
its nominees; and (b) the Escrow Agent shall have the right, but not the
obligation, to exercise all voting rights associated with the Remaining Shares
and any other portion of the Escrow Property consisting of securities issued by
the Company. The Escrow Agent is authorized and directed to deposit, transfer,
hold and invest the Cash Distributions and any investment income thereon as set
forth in Exhibit A hereto, or as set forth in any subsequent written instruction
signed by Harbinger. Any investment earnings and income on the Cash
Distributions shall become part of the Escrow Property, and shall be disbursed
in accordance with Section 1.3 of this Agreement.
Section 1.3. Disbursements. The Escrow Agent shall hold and dispose of the
Escrow Property as provided in this Section 1.3. Upon the Escrow Agent's receipt
of a written opinion from Goldberg, Godles, Wiener and Xxxxxx, special Federal
Communications Commission ("FCC") counsel to Harbinger, substantially in the
form attached hereto as Exhibit D, the Escrow Agent shall transfer and deliver
the Escrow Property to, and request the registration of the Remaining Shares and
any other portion of the Escrow Property consisting of securities issued by the
Company in the name of, Harbinger Master, Harbinger Special or such of their
respective nominees as they may designate. Upon the Escrow Agent's receipt of
written notice from Harbinger that Harbinger has failed to receive required FCC
Approval to acquire the Escrow Property or has determined that it will not seek,
or has abandoned efforts to seek, required FCC approval to acquire the Escrow
Property, the Escrow Agent shall engage Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated or another registered broker-dealer mutually acceptable to
Harbinger and the Escrow Agent for the purpose of executing a sale of the Escrow
Property (other than Cash Distributions). The Escrow Agent will then remit the
proceeds of such sale, along with any Cash Distributions, to Harbinger. The
Escrow Agent shall have no further duties hereunder after the transfer and
delivery of the Escrow Property in accordance with this Section 1.3.
Section 1.4. Income Tax Allocation and Reporting.
(a) Harbinger agrees that, for tax reporting purposes, all interest and
other income from investment of the Escrow Property shall, as of the end of each
calendar year and to the extent required by the Internal Revenue Service, be
reported as having been earned by Harbinger Master for two-thirds (2/3) of the
amount and by Harbinger Special for one-third (1/3) of the amount, whether or
not such income was disbursed during such calendar year.
(b) Prior to termination of this Agreement, each of Harbinger Master and
Harbinger Special shall provide the Escrow Agent with certified tax
identification numbers by furnishing appropriate forms W-9 or W-8 and such other
forms and documents that the Escrow Agent may request. Harbinger understands
that if such tax reporting documentation is not provided and certified to the
Escrow Agent, the Escrow Agent may be required by the Internal Revenue Code of
1986, as amended, and the regulations promulgated thereunder, to withhold a
portion of any interest or other income earned on the investment of the Escrow
Property.
(c) To the extent that the Escrow Agent becomes liable for the payment of
any taxes in respect of income derived from the investment of the Escrow
Property, the Escrow Agent shall satisfy such liability to the extent possible
from the Escrow Property. Harbinger Master and Harbinger Special, jointly and
severally, shall indemnify, defend and hold the Escrow Agent harmless from and
against any tax, late payment, interest, penalty or other cost or expense that
may be assessed against the Escrow Agent on or with respect to the Escrow
Property and the investment thereof unless such tax, late payment, interest,
penalty or other expense was directly caused by the gross negligence or willful
misconduct of the Escrow Agent. The indemnification provided by this Section
1.4(c) is in addition to the indemnification provided in Section 3.1 and shall
survive the resignation or removal of the Escrow Agent and the termination of
this Agreement.
Section 1.5. Termination. Upon the disbursement of all of the Escrow
Property, including any interest and investment earnings thereon in accordance
with Section 1.3, this Agreement shall terminate and be of no further force and
effect except that the provisions of Sections 1.4(c), 3.1 and 3.2 hereof shall
survive termination.
ARTICLE 2
DUTIES OF THE ESCROW AGENT
Section 2.1. Scope of Responsibility. Notwithstanding any provision to the
contrary, the Escrow Agent is obligated only to perform the duties specifically
set forth in this Agreement. Under no circumstances will the Escrow Agent be
deemed to be a fiduciary to Harbinger or any other person under this Agreement.
The Escrow Agent will not be responsible or liable for the failure of Harbinger
to perform in accordance with this Agreement. The Escrow Agent shall neither be
responsible for, nor chargeable with, knowledge of the terms and conditions of
any other agreement, instrument, or document other than this Agreement and the
Transfer and Termination Agreement, whether or not an original or a copy of such
agreement has been provided to the Escrow Agent; and the Escrow Agent shall have
no duty to know or inquire as to the performance or nonperformance of any
provision of any such agreement, instrument, or document. Other than with
respect to the Transfer and Termination Agreement, references in this Agreement
to any other agreement, instrument, or document are for the convenience of
Harbinger, and the Escrow Agent has no duties or obligations with respect
thereto. This Agreement and the Transfer and Termination Agreement set forth all
matters pertinent to the escrow contemplated hereunder, and no additional
obligations of the Escrow Agent shall be inferred or implied from the terms of
this Agreement, the Transfer and Termination Agreement or any other agreement.
Section 2.2. Attorneys and Agents. The Escrow Agent shall be entitled to rely on
and shall not be liable for any action taken or omitted to be taken by the
Escrow Agent in accordance with the advice of counsel or other professionals
retained or consulted by the Escrow Agent. The Escrow Agent shall be reimbursed
as set forth in Section 3.1 for any and all compensation (fees, expenses and
other costs) paid and/or reimbursed to such counsel and/or professionals. The
Escrow Agent may perform any and all of its duties through its agents,
representatives, attorneys, custodians, and/or nominees.
Section 2.3. Reliance. The Escrow Agent shall not be liable for any action taken
or not taken by it in accordance with the direction or consent of Harbinger or
Harbinger's agents, representatives, successors, or assigns. The Escrow Agent
shall not be liable for acting or refraining from acting upon any notice,
request, consent, direction, requisition, certificate, order, affidavit, letter,
or other paper or document believed by it to be genuine and correct and to have
been signed or sent by the proper person or persons, without further inquiry
into the person's or persons' authority. Concurrent with the execution of this
Agreement, Harbinger shall deliver to the Escrow Agent authorized signers' forms
in the form of Exhibit B-1 and Exhibit B-2 to this Agreement.
Section 2.4. No Financial Obligation. No provision of this Agreement shall
require the Escrow Agent to risk or advance its own funds or otherwise incur any
financial liability or potential financial liability in the performance of its
duties or the exercise of its rights under this Agreement.
ARTICLE 3
PROVISIONS CONCERNING THE ESCROW AGENT
Section 3.1. Indemnification. Harbinger Master and Harbinger Special, jointly
and severally, shall indemnify, defend and hold harmless the Escrow Agent from
and against any and all loss, liability, cost, damage and expense, including,
without limitation, attorneys' fees and expenses or other professional fees and
expenses which the Escrow Agent may suffer or incur by reason of any action,
claim or proceeding brought against the Escrow Agent, arising out of or relating
in any way to this Agreement or any transaction to which this Agreement relates
(including without limitation any action, claim or proceeding brought against
the Escrow Agent with respect to (a) the Escrow Agent exercising or failing to
exercise the voting rights associated with the Remaining Shares and any other
portion of the Escrow Property consisting of securities issued by the Company,
and (b) the sale by the Escrow Agent of the Escrow Property to a party other
than Harbinger, if any such sale occurs, pursuant to Section 1.3 of this
Agreement), unless such loss, liability, cost, damage or expense shall have been
finally adjudicated to have been directly caused by the willful misconduct or
gross negligence of the Escrow Agent. The provisions of this Section 3.1 shall
survive the resignation or removal of the Escrow Agent and the termination of
this Agreement.
Section 3.2. Limitation of Liability. THE ESCROW AGENT SHALL NOT BE LIABLE,
DIRECTLY OR INDIRECTLY, FOR ANY (A) DAMAGES, LOSSES OR EXPENSES ARISING OUT OF
THE SERVICES PROVIDED HEREUNDER, OTHER THAN DAMAGES, LOSSES OR EXPENSES WHICH
HAVE BEEN FINALLY ADJUDICATED TO HAVE DIRECTLY RESULTED FROM THE ESCROW AGENT'S
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, OR (B) SPECIAL, INDIRECT OR
CONSEQUENTIAL DAMAGES OR LOSSES OF ANY KIND WHATSOEVER (INCLUDING WITHOUT
LIMITATION LOST PROFITS), EVEN IF THE ESCROW AGENT HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH LOSSES OR DAMAGES AND REGARDLESS OF THE FORM OF ACTION.
Section 3.3. Resignation or Removal. The Escrow Agent may resign as escrow agent
with respect to the Escrow Property by furnishing written notice of its
resignation to Harbinger, and Harbinger may remove the Escrow Agent as escrow
agent with respect to the Escrow Property by furnishing to the Escrow Agent a
written notice of its removal along with payment of all fees and expenses to
which it is entitled through the date of termination. Such resignation or
removal, as the case may be, shall be effective 30 days after the delivery of
such notice or upon the earlier appointment of a successor. Notwithstanding any
such resignation or removal, the Escrow Agent shall retain title to the Escrow
Property and shall have the voting rights specified in Section 1.2 of this
Agreement. Promptly following any such resignation or removal, the Escrow Agent
shall deliver the Escrow Property to a successor escrow agent as shall be
appointed by Harbinger, as evidenced by a written notice filed with the Escrow
Agent or in accordance with a court order. If Harbinger has failed to appoint a
successor escrow agent prior to the expiration of 30 days following the delivery
of such notice of resignation or removal, the Escrow Agent may petition any
court of competent jurisdiction for the appointment of a successor escrow agent
or for other appropriate relief, and any such resulting appointment shall be
binding upon Harbinger.
Section 3.4. Compensation. The Escrow Agent shall be entitled to compensation
for its services as stated in the fee schedule attached hereto as Exhibit C,
which compensation shall be paid by Harbinger. The fee agreed upon for the
services rendered hereunder is intended as full compensation for the Escrow
Agent's services as contemplated by this Agreement; provided, however, that in
the event that the Escrow Agent renders any service not contemplated in this
Agreement, or there is any assignment of interest in the subject matter of this
Agreement, or any material modification hereof, or if any material controversy
arises hereunder, or the Escrow Agent is made a party to any litigation
pertaining to this Agreement or the subject matter hereof, then the Escrow Agent
shall be compensated for such extraordinary services and reimbursed for all
costs and expenses, including reasonable attorneys' fees and expenses,
occasioned by any such delay, controversy, litigation or event. If any amount
due to the Escrow Agent hereunder is not paid within 30 days after the date due,
the Escrow Agent in its sole discretion may charge interest on such amount up to
the highest rate permitted by applicable law. The Escrow Agent shall have, and
is hereby granted, a prior lien upon the Escrow Property with respect to its
unpaid fees, non-reimbursed expenses and unsatisfied indemnification rights,
superior to the interests of any other persons or entities and is hereby granted
the right to set off and deduct any unpaid fees, non-reimbursed expenses and
unsatisfied indemnification rights from the Escrow Property.
Section 3.5. Merger or Consolidation. Any corporation or association into which
the Escrow Agent may be converted or merged, or with which it may be
consolidated, or to which it may sell or transfer all or substantially all of
its corporate trust business and assets as a whole or substantially as a whole,
or any corporation or association resulting from any such conversion, sale,
merger, consolidation or transfer to which the Escrow Agent is a party, shall be
and become the successor escrow agent under this Agreement and shall have and
succeed to the rights, powers, duties, immunities and privileges as its
predecessor, without the execution or filing of any instrument or paper or the
performance of any further act.
Section 3.6. Attachment of Escrow Property; Compliance with Legal Orders. In the
event that any Escrow Property shall be attached, garnished or levied upon by
any court order, or the delivery thereof shall be stayed or enjoined by an order
of a court, or any order, judgment or decree shall be made or entered by any
court order affecting the Escrow Property, the Escrow Agent is hereby expressly
authorized, in its sole discretion, to respond as it deems appropriate or to
comply with all writs, orders or decrees so entered or issued, or which it is
advised by legal counsel of its own choosing is binding upon it, whether with or
without jurisdiction. In the event that the Escrow Agent obeys or complies with
any such writ, order or decree it shall not be liable to Harbinger or to any
other person, firm or corporation, should, by reason of such compliance
notwithstanding, such writ, order or decree be subsequently reversed, modified,
annulled, set aside or vacated.
ARTICLE 4
MISCELLANEOUS
Section 4.1. Successors and Assigns. This Agreement shall be binding on and
inure to the benefit of the Parties and their respective successors and
permitted assigns. No other persons shall have any rights under this Agreement.
No assignment of the interest of any of the Parties shall be binding (other than
in the case of Harbinger, which shall have the right to assign any or all of its
rights and/or delegate its obligations to any fund affiliated with Harbinger
Master or Harbinger Special), unless and until written notice of such assignment
shall be delivered to the other Party and shall require the prior written
consent of the other Party (such consent not to be unreasonably withheld).
Section 4.2. Escheat. Harbinger is aware that under applicable state law,
property which is presumed abandoned may under certain circumstances escheat to
the applicable state. The Escrow Agent shall have no liability to Harbinger, its
legal representatives, successors and assigns, or any other party, should any or
all of the Escrow Property escheat by operation of law.
Section 4.3. Notices. All notices, requests, demands, and other communications
required under this Agreement shall be in writing, in English, and shall be
deemed to have been duly given if delivered (i) personally, (ii) by facsimile
transmission with written confirmation of receipt, (iii) by overnight delivery
with a reputable national overnight delivery service, or (iv) by mail or by
certified mail, return receipt requested, and postage prepaid. If any notice is
mailed, it shall be deemed given five business days after the date such notice
is deposited in the United States mail. Any notice given shall be deemed given
upon the actual date of such delivery. If notice is given to a Party, it shall
be given at the address for such Party set forth below. It shall be the
responsibility of Harbinger to notify the Escrow Agent in writing of any name or
address changes. In the case of communications delivered to the Escrow Agent,
such communications shall be deemed to have been given on the date received by
the Escrow Agent.
If to Harbinger to:
c/o Harbinger Capital Partners Funds
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
with a copy, which shall not constitute notice, sent at the same time and by the
same means to:
Xxxxxxx Management Corporation
Xxx Xxxxxxxxxx Xxxxxxx, Xxxxx
Xxxxxxxxxx, XX 00000
Attention: General Counsel
Facsimile: (000) 000-0000
and
Weil, Gotshal & Xxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
If to the Escrow Agent:
Xxxxx Fargo Bank, National Association
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx, Corporate, Municipal and Escrow Services
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Section 4.4. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and performed in such state without regard to the conflicts or choice of law
provisions thereof that would give rise to the application of the domestic
substantive law of any other jurisdiction.
Section 4.5. Consent to Jurisdiction, Waiver of Jury Trial. The Parties hereby
irrevocably submit to the exclusive jurisdiction of any federal or state court
located within the Borough of Manhattan in the State of New York over any
dispute arising out of or relating to this Agreement or any of the transactions
contemplated hereby and each Party hereby irrevocably agrees that all claims in
respect of such dispute or any legal proceeding related thereto may be heard and
determined in such courts. Each Party hereby irrevocably waives, to the fullest
extent permitted by applicable law, any objection that such Party may now or
hereafter have to the laying of venue of any such dispute brought in such court
or any defense of inconvenient forum for the maintenance of such dispute. EACH
PARTY FURTHER HEREBY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL OR EQUITABLE
ACTION (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) AND ANY OBJECTION THAT
SUCH PARTY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR
PROCEEDING ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT BROUGHT IN THE
AFOREMENTIONED COURTS. Each of the Parties agrees that a judgment in any such
dispute may be enforced in other jurisdictions by suit on the judgment or in any
other manner provided by law. Each of the Parties hereto consents to process
being served by any Party in such suit, action or proceeding by delivery of a
copy thereof in accordance with the provisions of Section 4.3.
Section 4.6. Entire Agreement. This Agreement and the Transfer and Termination
Agreement set forth the entire agreement and understanding of the Parties
related to the Escrow Property.
Section 4.7. Amendment. This Agreement may be amended, modified, superseded,
rescinded, or canceled only by a written instrument executed by the Parties.
Section 4.8. Waivers. The failure of any Party to this Agreement at any time or
times to require performance of any provision under this Agreement shall in no
manner affect the right at a later time to enforce the same performance. A
waiver by any Party to this Agreement of any such condition or breach of any
term, covenant, representation, or warranty contained in this Agreement, in any
one or more instances, shall neither be construed as a further or continuing
waiver of any such condition or breach nor a waiver of any other condition or
breach of any other term, covenant, representation, or warranty contained in
this Agreement.
Section 4.9. Headings. Section headings of this Agreement have been inserted for
convenience of reference only and shall in no way restrict or otherwise modify
any of the terms or provisions of this Agreement.
Section 4.10. Counterparts. This Agreement may be executed in one or more
counterparts, each of which when executed shall be deemed to be an original, and
such counterparts shall together constitute one and the same instrument.
[The remainder of this page left intentionally blank.]
IN WITNESS WHEREOF, this Agreement has been duly executed as of the date
first written above.
HARBINGER CAPITAL PARTNERS MASTER
FUND I, LTD.
By: Harbinger Capital Partners Offshore
Manager, L.L.C., as investment manager
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President
HARBINGER CAPITAL PARTNERS SPECIAL
SITUATIONS FUND, L.P.
By: Harbinger Capital Partners Special
Situations GP, LLC, as general partner
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as Escrow Agent
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
