EXECUTION VERSION
SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT (this "Agreement") is made as of
April 7, 2008, by and among HARBINGER CAPITAL PARTNERS MASTER FUND I, 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"), APOLLO INVESTMENT FUND IV, L.P., a Delaware limited partnership
("AIF IV"), APOLLO OVERSEAS PARTNERS IV, L.P., a limited partnership registered
in the Cayman Islands ("Overseas IV"), AIF IV/RRRR LLC, a Delaware limited
liability company ("AIF IV/RRRR"), AP/RM ACQUISITION LLC, a Delaware limited
liability company ("AP/RM"), and ST/RRRR LLC, a Delaware limited liability
company ("ST/RRRR" each of AIF IV, Overseas IV, AIF/RRRR, AP/RM and ST/RRRR
being hereinafter referred to as a "Stockholder" and collectively as the
"Stockholders"). Each of Harbinger Master, Harbinger Special, AIF IV, Overseas
IV, AIF IV/RRRR, AP/RM and ST/RRRR is hereinafter referred to as a "Party" and
collectively as the "Parties".
Each of the Stockholders currently owns (i) the number of shares (the
"Voting Shares") of voting common stock, par value $0.01 per share (the "Voting
Common Stock"), of Skyterra Communications, Inc., a Delaware corporation (the
"Company"), as is set forth opposite such Stockholder's name on Annex A, (ii)
the number of shares (the "Non-Voting Shares") of non-voting common stock, par
value $0.01 per share (the "Non-Voting Common Stock"), of the Company as is set
forth opposite such Stockholder's name on Annex A, (iii) the number of Series
1-A Warrants of the Company (the "Series 1-A Warrants") as is set forth opposite
such Stockholder's name on Annex A, and (iv) the number of Series 2-A Warrants
of the Company (the "Series 2-A Warrants") as is set forth opposite such
Stockholder's name on Annex A. Except for the Voting Shares, the Non-Voting
Shares, the Series 1-A Warrants and the Series 2-A Warrants (collectively, the
"Securities") and the Directors' Shares (as hereinafter defined), neither any of
the Stockholders nor any of their Affiliates owns any Equity Security of the
Company or any Subsidiary of the Company.
The Stockholders wish to sell the Securities to Harbinger and Harbinger
wishes to purchase the Securities from the Stockholders on the terms and
conditions set forth in this Agreement.
THEREFORE, in consideration of the mutual covenants and agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, each of the Parties hereby agrees
as follows:
ARTICLE 1
DEFINITIONS
Section 1.1 Certain Definitions. For purposes of this Agreement, the
following terms shall have the meanings specified in this Section 1.1:
"Agreement" has the meaning set forth in the preamble.
"Affiliate" means, with respect to any Person, any other Person that,
directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such Person, and the term
"control" (including the terms "controlled by" and "under common control with")
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether through
ownership of voting securities, by contract or otherwise.
"AIF IV" has the meaning set forth in the preamble.
"AIF IV/RRRR" has the meaning set forth in the preamble.
"AP/RM" has the meaning set forth in the preamble.
"Board" means the board of directors of the Company.
"Business Day" means any day excluding (i) Saturday, (ii) Sunday and
(iii) any day on which banking institutions located in the State of New York are
required to be closed for the conduct of regular business.
"Closing" has the meaning set forth in Section 2.1.
"Closing Date" means a date no later than three Business Days following
the satisfaction of the conditions set forth in Section 3.1, as reasonably
determined by Harbinger and notified to the Stockholders.
"Common Stock" means the Voting Common Stock and the Non-Voting Common
Stock.
"Communications Act" means the Communications Act of 1933, as amended,
and the rules and published policies of the FCC promulgated thereunder.
"Directors' Shares" means a number of Equity Securities of the Company
not in excess of 600,000 in the aggregate that are owned by present or former
directors of the Company or by present or former directors of any predecessor of
the Company who also are or were Affiliates of any of the Stockholders, i.e.
Xxxxxx X. Xxxxxx, Xxxx X. Xxxxx and Xxxxx X. Xxxxx.
"Equity Security" means any stock, partnership interest (whether
general or limited), limited liability company interest, membership interest,
beneficial interest or similar security; any security convertible, with or
without consideration, into such a security, or carrying any warrant, option or
right to subscribe to or purchase such a security; or any such warrant, option
or right.
"Escrow Agent" means the Escrow Agent specified in the Escrow
Agreement.
"Escrow Agreement" means the Escrow Agreement dated as of the Closing
Date by and between the Parties and the Escrow Agent, in the form of Annex B.
"Escrow Break Date" means the final date as of which the Escrow Agent
has transferred and delivered all the Escrowed Property to Harbinger Master and
Harbinger Special or to such other Person or Persons to whom the Escrow Agent
shall have sold the Escrowed Property.
"Escrowed Property" has the meaning set forth in the Escrow Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"FCC" means the United States Federal Communications Commission.
"FCC Approval" means the consent and other actions of the FCC
(including any action duly taken by the FCC's staff pursuant to delegated
authority) granting its consent to (a) the transfer of control of MSV LLC to
Harbinger; (b) a petition for declaratory ruling that it is in the public
interest for MSV LLC to accept additional foreign ownership in excess of the
amounts approved in the Foreign Ownership Ruling and the applicable limitations
set forth in Section 310(b) of the Communications Act; and (c) any other
applications or petitions as may be required to be filed with the FCC to
consummate the transactions contemplated by this Agreement.
"Foreign Ownership Ruling" means the Order and Declaratory Ruling, File
Nos. ISP-PDR-20070314-00004 and ISP-PDR-20080111-00001, FCC 08-77, adopted by
the FCC on March 7, 2008.
"GAAP" means U.S. generally accepted accounting principles.
"Governmental Entity" means any governmental or quasi-governmental
body, whether administrative, executive, judicial, legislative or other, or any
combination thereof, including any federal, state, territorial, county, local,
municipal or other government or governmental or quasi-governmental agency,
arbitrator, authority, board, body, branch, bureau, or comparable agency,
commission, corporation, court, department, instrumentality, mediator, panel,
system or other political unit or subdivision or other entity of any of the
foregoing, whether domestic or foreign.
"Harbinger" has the meaning set forth in the preamble.
"Harbinger Master" has the meaning set forth in the preamble.
"Harbinger Petition" means Harbinger's petition for interim authority
for Harbinger to increase its ownership in MSV LLC through purchases of Company
shares, not to exceed 49.99% of equity interest and 49.99% of voting interest.
"Harbinger Special" has the meaning set forth in the preamble.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
"Indemnified Party" has the meaning set forth in Section 6.1(a).
"Indemnifying Party" has the meaning set forth in Section 6.1(a).
"Initial Shares" means the aggregate number of Shares set forth on
Annex C to be purchased from the Stockholders on the Closing Date.
"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 Entity.
"Lien" means, with respect to any of the Securities, any lien,
mortgage, pledge, charge, security interest, proxy, voting agreement, voting
trust or encumbrance of any kind in respect of such Securities, whether or not
filed, recorded or otherwise perfected under applicable law, and any agreement
to give any security interest.
"Losses" has the meaning set forth in Section 6.1(a).
"Material Adverse Change" means the occurrence of an event or change
that has had or is reasonably likely to have a material adverse effect on the
business, assets, liabilities, properties, operations, prospects or condition
(financial or otherwise) of the Company and its 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" means Mobile Satellite Ventures LP, a Delaware limited
partnership.
"MSV LLC" means Mobile Satellite Ventures Subsidiary LLC, a Delaware
limited liability company and a Subsidiary of MSV.
"Non-Cash Distributions" has the meaning set forth in Section 2.4.
"Non-Voting Common Stock" has the meaning set forth in the recitals.
"Non-Voting Shares" has the meaning set forth in the recitals.
"Organizational Documents" means as to any Person, the certificate of
or articles of incorporation, certificate of limited partnership, certificate of
formation, articles of organization, operating agreement, limited partnership
agreement, limited liability company agreement, stockholders agreements or
bylaws or other similar documents of such Person, as applicable.
"Overseas IV" has the meaning set forth in the preamble.
"Party" and "Parties" have the meanings set forth in the preamble.
"Person" means any individual, corporation, limited liability company,
partnership, firm, joint venture, association, joint-stock company, variable
interest entity, trust, unincorporated organization, Governmental Entity or
other entity.
"Purchase Price" means an amount equal to the sum of (i) the product of
the number of Shares (16,398,129) multiplied by $10.00 ($163,981,290), plus (ii)
$100,000.00 for a total of $164,081,290).
"Registration Statement" means the Company's registration statement on
Form S-4 filed with the SEC pursuant to the Securities Act and declared
effective by the SEC on March 12, 2008, including all amendments and exhibits
thereto and all documents incorporated by reference therein.
"Remaining Shares" means 442,825 Voting Shares (the total number of
Voting Shares, 10,224,532, less the total number of Voting Shares in the Initial
Shares, 9,781,707).
"SEC" means the United States Securities and Exchange Commission.
"Securities" has the meaning set forth in the recitals.
"Securities Act" means the Securities Act of 1933, as amended.
"Series 1-A Warrants" has the meaning set forth in the recitals. The
Stockholders own 234,633 Section 1-A Warrants.
"Series 2-A Warrants" has the meaning set forth in the recitals. The
Stockholders own 9,810,033 Section 2-A Warrants.
"Shares" means the Voting Shares and the Non-Voting Shares.
"Stockholder" and "Stockholders" have the meanings set forth in the
preamble.
"ST/RRRR" has the meaning set forth in the preamble.
"Subsidiary" means any corporation, limited liability company,
partnership, firm, joint venture, association, joint-stock company, variable
interest entity, trust, or other organization, whether incorporated or
unincorporated, (x) of which the Company or any other Subsidiary of the Company
is a general partner, or (y) at least a majority of the securities or other
interests of which, that have by their terms ordinary voting power to elect a
majority of the board of directors or other body performing similar functions
with respect to such corporation or organization, is directly owned or
controlled by the Company or by any one or more of its Subsidiaries, or by the
Company and one or more of its Subsidiaries or (z) of which the Company or any
other Subsidiary of the Company is the primary beneficiary.
"Transfer" means to sell, give, donate, pledge, grant a security
interest in, encumber or otherwise transfer any Securities or any interest in
any Securities.
"Third Party Claim" has the meaning set forth in Section 6.1(b).
"Voting Common Stock" has the meaning set forth in the recitals.
"Voting Shares" has the meaning set forth in the recitals.
"Warrants" means the Series 1-A Warrants and the Series 2-A Warrants.
Section 1.2 Other Definitional and Interpretive Matters. Unless otherwise
expressly provided, for purposes of this Agreement the following rules of
interpretation shall apply:
(a) Calculation of Time Period. When calculating the period of time
before which, within which or following which any act is to be done or step
taken pursuant to this Agreement, the date that is the reference date in
calculating such period shall be excluded. If the last day of such period is a
non-Business Day, the period in question shall end on the next succeeding
Business Day.
(b) Annexes. The Annexes to this Agreement are hereby incorporated and
made a part hereof and are an integral part of this Agreement. Any capitalized
terms used in any Annex but not otherwise defined therein are used therein with
the definition set forth in the body of this Agreement.
(c) Gender. Any reference in this Agreement to gender shall include
all genders.
(d) Headings. The division of this Agreement into Articles, Sections
and other subdivisions and the insertion of headings are for convenience of
reference only and shall not affect or be utilized in construing or interpreting
this Agreement. All references in this Agreement to any "Article" or "Section"
are to the corresponding Article or Section of this Agreement unless otherwise
specified.
(e) Herein. The words such as "herein," "hereinafter," "hereof," and
"hereunder" refer to this Agreement as a whole and not merely to a subdivision
in which such words appear unless the context otherwise requires.
(f) Including. The word "including" or any variation thereof means
"including without limitation" and shall not be construed to limit any general
statement that it follows to the specific or similar items or matters
immediately following it.
(g) No Strict Construction. The language used in this Agreement is the
language chosen by the Parties to express their mutual intent, and no rule of
strict construction will be applied against any Party.
ARTICLE 2
PURCHASE AND SALE OF SECURITIES
Section 2.1 Sale and Purchase of the Securities. Upon the terms and subject
to the conditions contained herein, the closing of the sale of the Initial
Shares and the Warrants to Harbinger (the "Closing") shall occur on the Closing
Date. At the Closing, to be held at the offices of Akin Gump Xxxxxxx Xxxxx &
Xxxx, LLP, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (or such other place as
the Parties shall agree) (i) each of the Stockholders shall indefeasibly sell,
grant, assign, convey, transfer and deliver to Harbinger Master, and Harbinger
Master shall purchase, acquire and accept from such Stockholder (free and clear
of all Liens), all of such Stockholder's right, title and interest in and to the
number of Initial Shares and Warrants set forth on Annex C, (ii) each of the
Stockholders shall indefeasibly sell, grant, assign, convey, transfer and
deliver to Harbinger Special, and Harbinger Special shall purchase, acquire and
accept from such Stockholder (free and clear of all Liens), all of such
Stockholder's right, title and interest in and to the number of Initial Shares
and Warrants set forth on Annex C, (iii) the Stockholders, Harbinger Master and
Harbinger Special shall enter into the Escrow Agreement with respect to the
Remaining Shares, and (iv) Harbinger shall pay to the Stockholders the aggregate
Purchase Price for all the Securities.
Section 2.2 Deliveries by the Stockholders and Harbinger at the Closing. At
the Closing, (i) each Stockholder shall deliver to Harbinger Master any and all
instruments reasonably necessary to effect the indefeasible transfer to
Harbinger Master of the Initial Shares and Warrants being purchased by Harbinger
Master from such Stockholder and to cause such Initial Shares and Warrants to be
registered in the name of Harbinger Master or such nominee or nominees as
Harbinger Master may specify to the Stockholders in writing at least three
Business Days prior to the Closing Date, (ii) each Stockholder shall deliver to
Harbinger Special any and all instruments reasonably necessary to effect the
indefeasible transfer to Harbinger Special of the Initial Shares and Warrants
being purchased by Harbinger Special from such Stockholder and to cause such
Initial Shares and Warrants to be registered in the name of Harbinger Special or
such nominee or nominees as Harbinger Special may specify to the Stockholders in
writing at least three Business Days prior to the Closing Date, (iii) each
Stockholder shall deliver to the Escrow Agent certificates representing the
Remaining Shares together with signed stock powers and any other instruments
executed in blank necessary to permit the Escrow Agent to effect the delivery
and transfer of the Remaining Shares in accordance with the terms of the Escrow
Agreement and to permit the Escrow Agent to effect the registration of the
Remaining Shares in the name of Harbinger Master and Harbinger Special or such
other Person or Persons to whom the Escrow Agent may sell the Remaining Shares;
and (iv) Harbinger shall pay the aggregate Purchase Price for all the Securities
to the Stockholders by wire transfer of immediately available funds to one
account specified in writing by each Stockholder to Harbinger at least three
Business Days prior to the Closing Date. In addition, at the Closing the
Stockholders and Harbinger shall deliver the instruments referred to in Sections
3.1 and 3.2.
Section 2.3 Adjustments. If prior to the Closing Date the Company shall
effect any split, combination or reclassification of its Voting Common Stock or
its Non-Voting Common Stock, or declare or pay any non-cash dividend or other
distribution payable to the holders of its Voting Common Stock or Non-Voting
Common Stock in additional shares of Common Stock, other securities or other
property, then (i) Harbinger's right to purchase the Shares shall extend to all
additional shares of Common Stock, other securities and other property payable
to the Stockholders with respect to the Shares as a result of such split,
combination, reclassification, dividend or distribution and (ii) the Purchase
Price shall be adjusted in accordance with standard market adjustments to
account for the overall economic effect of such split, combination,
reclassification, dividend or distribution.
Section 2.4 Escrow of Remaining Shares. If prior to the Escrow Break Date
the Company effects any split, combination or reclassification of its Voting
Common Stock or declares or pays any dividend or other distribution payable to
the holders of its Voting Common Stock in additional shares of Common Stock,
other securities or other property other than cash dividends ("Non-Cash
Distributions"), then the Stockholders shall promptly deliver any such Non-Cash
Distributions to the Escrow Agent to be held, delivered and transferred in
accordance with the terms of the Escrow Agreement. The Escrow Agent shall hold
the Escrowed Property in accordance with the terms of the Escrow Agreement. Upon
receipt of written notice from Harbinger that Harbinger has received FCC
Approval to acquire the Escrowed Property or that Harbinger has determined that
it may acquire the Escrowed Property without FCC Approval, the Escrow Agent
shall transfer and deliver the Escrowed Property to, and effect the registration
of the Escrowed Property in the name of, Harbinger Master, Harbinger Special or
such of their respective nominees as they may designate. Upon receipt of written
notice from Harbinger that Harbinger has failed to receive required FCC Approval
to acquire the Escrowed Property or has determined that it will not seek
required FCC Approval to acquire the Escrowed Property, the Escrow Agent shall
sell the Escrowed Property and remit the proceeds of such sale to Harbinger. In
connection with any such sale or sales, the Escrow Agent shall consult with
Harbinger but shall not take any directions from Harbinger. Notwithstanding the
foregoing, (a) Harbinger agrees that it shall not instruct the Escrow Agent to
transfer, deliver or effect the registration of any of the Escrowed Property in
the name of Harbinger Master, Harbinger Special or their respective nominees
without Harbinger's first having obtained any necessary FCC Approval to acquire
the Escrowed Property and (b) Harbinger shall not have the power to direct the
Escrow Agent to transfer and deliver the Escrowed Property to, and effect the
registration of the Escrowed Property in the name of, Harbinger Master,
Harbinger Special or their respective nominees or to sell the Escrowed Property
unless and until Harbinger delivers to the Escrow Agent an opinion of FCC
counsel addressed to Harbinger and to the Escrow Agent to the effect that such
disposition would not violate the Communications Act. Until such time as the
Escrow Agent transfers and delivers the Escrowed Property in accordance with the
terms of the Escrow Agreement, (x) title to the Escrowed Property shall remain
in the Stockholders and the Escrowed Property shall remain registered on the
books of the Company in the name of the Stockholders or their respective
nominees; (y) the Stockholders shall have the right to vote the Remaining Shares
and any other voting securities included within the Escrowed Property and (z)
the Stockholders shall have the right to receive any cash dividends declared or
paid by the Company with respect to the Remaining Shares.
ARTICLE 3
CONDITIONS PRECEDENT
Section 3.1 Conditions Precedent to Harbinger's Purchase of the Securities.
The obligations of Harbinger to purchase and pay for the Securities are subject
to the fulfillment, prior to or on the Closing Date, of each of the following
conditions (any or all of which may be waived by Harbinger in its sole
discretion):
(a) the representations and warranties of each Stockholder contained
in this Agreement shall have been true and correct on and as of the date of this
Agreement and shall also be true and correct on and as of the Closing Date with
the same force and effect as if made on and as of the such date;
(b) each Stockholder shall have performed and complied in all material
respects with all obligations and agreements required by this Agreement to be
performed or complied with by such Stockholder on or prior to the Closing Date;
(c) Harbinger shall have received a certificate of each Stockholder,
in form and substance reasonably satisfactory to Harbinger, dated the Closing
Date, to the effect that each of the conditions specified in Section 3.1(a) and
Section 3.1(b) has been satisfied by such Stockholder;
(d) Harbinger shall have received an opinion or opinions of legal
counsel to the Stockholders in the form of Annex D-1;
(e) there shall not be in effect any order by any court or any other
Governmental Entity of competent jurisdiction restraining, enjoining or
otherwise prohibiting the sale of the Initial Shares or the Warrants by the
Stockholders to Harbinger, the purchase of the Initial Shares or the Warrants by
Harbinger from the Stockholders, or the payment of the aggregate Purchase Price
for all the Securities by Harbinger to the Stockholders;
(f) on the Closing Date, the Stockholders, Harbinger and the Escrow
Agent shall have executed the Escrow Agreement;
(g) on the Closing Date, Xxxxxx X. Xxxxxx and Xxxxxxx Xxxxx shall have
resigned from the Board and the boards of all Subsidiaries, and each of Xxxx X.
Xxxxxxxxx, Xx. and Xxxx X. Xxxxx, Xx., shall have been elected to the Board to
replace Messrs. Africk and Xxxxx;
(h) on the Closing Date, the size of the Board shall have been
increased to seven members and Xxxxxxxxx X. Good shall have been elected to the
Board;
(i) Xxxxxx X. Xxxxxx shall have resigned from the board of directors
of TerreStar Networks, Inc.; and
(j) prior to the Closing Date, the Company shall not have established
a record date for any future meeting of the Company's stockholders.
Section 3.2 Conditions Precedent to the Stockholders' Sale of the Securities.
The obligations of the Stockholders to sell the Securities are subject to the
fulfillment, prior to or on the Closing Date, of each of the following
conditions (any or all of which may be waived by the Stockholders in their sole
discretion):
(a) the representations and warranties of Harbinger contained in this
Agreement shall have been true and correct on and as of the date of this
Agreement and shall also be true and correct on and as of the Closing Date with
the same force and effect as if made on and as of the such date;
(b) Harbinger shall have performed and complied in all material
respects with all obligations and agreements required by this Agreement to be
performed or complied with by Harbinger on or prior to the Closing Date; and
(c) the Stockholders shall have received a certificate of Harbinger,
in form and substance reasonably satisfactory to the Stockholders, dated the
Closing Date, to the effect that each of the conditions specified in Section
3.2(a) and Section 3.2(b) has been satisfied.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Section 4.1 Representations and Warranties of the Stockholders. Each of the
Stockholders hereby represents and warrants to Harbinger as follows:
(a) Ownership of Securities. Each Stockholder owns, as of the date
hereof, and will continue to own through the Closing Date, good and valid title
to the number of Shares and Warrants set forth opposite its name on Annex A, in
each case, free and clear of any Liens. Except for the Securities and the
Directors' Shares, neither any of the Stockholders nor any of their Affiliates
owns any Equity Security of the Company or any Subsidiary of the Company. On the
Closing Date the Stockholders will have transferred to Harbinger, and Harbinger
will have acquired, good and valid title to the Initial Shares and the Warrants,
free and clear of all Liens. On the Escrow Break Date Harbinger (or such or
Person or Persons to whom the Escrow Agent may sell the Remaining Shares) will
acquire, good and valid title to the Remaining Shares, free and clear of all
Liens. Except as provided in the Foreign Ownership Ruling and Section 310(b) of
the Communications Act, neither any of the Stockholders nor any of the
Securities is subject to any contract, agreement or other understanding that
will restrict the right of Harbinger to sell or otherwise Transfer any of the
Securities or any interest in the Securities, to vote the Voting Shares or to
exercise the Warrants.
(b) Organization and Good Standing of the Stockholders. Each
Stockholder is an entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization and has all requisite
power and authority to own the Securities and to consummate the transactions
contemplated by this Agreement.
(c) Authority. Each Stockholder has all requisite power, authority and
legal capacity to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by each
Stockholder, the performance of each Stockholder's obligations hereunder and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary action of such Stockholder. This Agreement has been duly
executed and delivered by each Stockholder, and, assuming the due authorization,
execution and delivery of this Agreement by Harbinger, constitutes a valid and
binding obligation of each Stockholder, enforceable against each Stockholder in
accordance with its terms, except as enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to enforcement of creditors' rights generally and by general principles
of equity.
(d) No Conflict; Consents. The execution and delivery by each
Stockholder of this Agreement does not, and the consummation of the transactions
contemplated herby will not (i) conflict with, violate or constitute a breach or
default under the Organizational Documents of such Stockholder or any agreement
to which such Stockholder is a party or to which any of the Securities are
subject, or (ii) assuming receipt of FCC Approval with respect to the Remaining
Shares, violate any judgment, order, decree or Law applicable to such
Stockholder. Except for FCC Approval with respect to the Remaining Shares, no
consent, approval, authorization, order, filing, registration or qualification
of or with any Governmental Entity or other Person is required to be obtained in
connection with the execution and delivery of this Agreement by the Stockholders
or the performance of the Stockholders' obligations hereunder.
(e) Board Matters. Except for this Agreement, none of the Stockholders
is party to, bound by or knows of, any contract, agreement, judgment, order or
decree currently in effect relating to the size or composition of the Board or
the ability of the holders of a majority of the outstanding shares of Voting
Common Stock to elect such individuals as such holders may choose to the Board;
it is expressly understood that the Stockholders make no representation or
warranty with respect to any contract, agreement, judgment, order or decree to
which Harbinger or any of its Affiliates is a party.
(f) Disclosure. To the knowledge of the Stockholders, (i) the
Registration Statement complies 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 does not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein not misleading and (ii) there has been
no Material Adverse Change since the effective date of the Registration
Statement.
(g) No Brokers. No agent, broker, investment banker, financial advisor
or other Person is or shall be entitled, as a result of any action, agreement or
commitment of any Stockholder or any of their Affiliates, to any broker's,
finder's, financial advisor's or other similar fee or commission in connection
with any of the transactions contemplated by this Agreement.
Section 4.2 Representations and Warranties of Harbinger. Harbinger
represents and warrants to each of the Stockholders as follows:
(a) Organization and Good Standing. Each of Harbinger Master and
Harbinger Special is an entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization and has all
requisite power and authority to consummate the transactions contemplated by
this Agreement.
(b) Authority. Each of Harbinger Master and Harbinger Special has all
requisite power, authority and legal capacity to enter into this Agreement and
to consummate the transactions contemplated hereby. The execution and delivery
of this Agreement by Harbinger Master and Harbinger Special, the performance of
the obligations of Harbinger Master and Harbinger Special hereunder and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary action of Harbinger Master and Harbinger Special. This
Agreement has been duly executed and delivered by each of Harbinger Master and
Harbinger Special, and, assuming the due authorization, execution and delivery
of this Agreement by the Stockholders, constitutes a valid and binding
obligation of Harbinger Master and Harbinger Special, enforceable against
Harbinger Master and Harbinger Special in accordance with its terms, except as
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to enforcement of creditors' rights
generally and by general principles of equity.
(c) No Conflict; Consents. The execution and delivery by Harbinger
Master and Harbinger Special of this Agreement does not, and the consummation of
the transactions contemplated herby will not (i) conflict with, violate or
constitute a breach or default under the Organizational Documents of Harbinger
Master or Harbinger Special or any agreement to which either of them is a party,
or (ii) assuming receipt of FCC Approval with respect to the Remaining Shares,
violate any judgment, order, decree or Law applicable to Harbinger Master or
Harbinger Special. Except for FCC Approval with respect to the Remaining Shares,
no consent, approval, authorization, order, filing, registration or
qualification of or with any Governmental Entity or other Person is required to
be obtained in connection with the execution and delivery of this Agreement by
Harbinger Master or Harbinger Special or the performance of their obligations
hereunder.
(d) No Brokers. No agent, broker, investment banker, financial advisor
or other Person is or shall be entitled, as a result of any action, agreement or
commitment of Harbinger Master or Harbinger Special or any of their Affiliates,
to any broker's, finder's, financial advisor's or other similar fee or
commission in connection with any of the transactions contemplated by this
Agreement.
(e) Securities Matters. Each of Harbinger Master and Harbinger Special
(i) is an "accredited investor" as such term is defined under
Rule 501 under the Securities Act, and has such knowledge and experience in
business and financial matters as to be capable of evaluating the merits and
risks of the investment in the Securities;
(ii) understands that ownership of the Securities involves
substantial risk and is capable of bearing the economic risks associated with
the investment in the Securities;
(iii) is acquiring the Securities for its own account, for
investment and not with a view to any public distribution thereof in a matter
that would require registration thereof or the transactions contemplated hereby
under the Securities Act;
(iv) does not presently have any reason to anticipate any change
in circumstances or other particular occasion or event which would cause it to
sell the Securities other than in compliance with the requirements of the
Securities Act or pursuant to an exemption therefrom;
(v) has 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 being acquired, or any interest therein, and has no
present plans to enter into the same;
(vi) understands that neither the sale of the Securities by the Stockholders nor
the issuance of any underlying Common Stock issuable upon exercise of the
Warrants has been registered under the Securities Act, and that
the Securities
must continue to be held by Harbinger unless a subsequent disposition thereof is
registered under the Securities Act or is exempt from such registration;
(vii) understands that the certificates evidencing the Securities shall bear a
restricted legend to the effect set forth in the preceding paragraph;
(viii) is an existing securityholder of the Company, has reviewed
the information contained in the Registration Statement, is relying solely upon
the advice of its own financial, legal and tax advisors, has made its own
independent investigation and evaluation of the merits and risks of the
investments in the Securities and acknowledges that it has received no
information concerning the business of the Company from the Stockholders in
making its decision to purchase the Securities and enter into this Agreement;
and
(ix) acknowledges that the Stockholders are relying on the
representation and warranties of Harbinger contained in this Section 4.2(e) and
would not consummate the transactions contemplated by this Agreement, in the
absence of the representations and warranties of Harbinger contained in this
Section 4.2(e).
(f) Initial Shares. The sale of the Initial Shares and the Warrants to
Harbinger is permitted under the Foreign Ownership Ruling, and no approval of
the FCC is required in order for Harbinger to purchase the Initial Shares and
Warrants. The Initial Shares to be purchased by Harbinger from the Stockholders
without prior FCC Approval will not exceed the amounts approved in the Foreign
Ownership Ruling and the applicable limitations set forth in Section 310(b) of
the Communications Act.
(g) Antitrust Matters. Provided that Harbinger Master acquires not
more that 9,250,000 Voting Shares and that Harbinger Special acquires not more
than 5,120,000 Voting Shares, then no notification under the HSR Act would be
required in order for Harbinger to purchase and pay for the Securities pursuant
to the terms of this Agreement.
ARTICLE 5
COVENANTS
Section 5.1 Notice. Each of the Stockholders and Harbinger shall promptly
advise the other in writing (i) of any representation or warranty made by it
contained in this Agreement becoming untrue or inaccurate in any material
respect, (ii) of the failure of it to comply with or satisfy in any material
respect any covenant, condition or agreement to be complied with or satisfied by
it under this Agreement, or (iii) upon the commencement of, or upon obtaining
knowledge of any facts that would give rise to a threat of, any claim or legal
proceeding commenced against any such Party relating to this Agreement or the
transactions contemplated by this Agreement; provided, however, that no such
notification shall affect the representations or warranties, covenants or
agreements of the Parties (or remedies with respect thereto) or the conditions
to the obligations of the Parties under this Agreement.
Section 5.2 Cooperation. Upon the terms and subject to the conditions set
forth in this Agreement, each of the Parties agrees to use reasonable best
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, and to assist and cooperate with the other Parties in doing, all things
reasonably necessary, proper or advisable to consummate and make effective, in
the most expeditious manner practicable, the transactions contemplated by this
Agreement.
Section 5.3 Regulatory Matters. The Stockholders and Harbinger shall use
their reasonable commercial efforts to cause the Company and MSV LLC to file the
FCC applications seeking the FCC Approval with the FCC on or before December 31,
2008. The Stockholders and Harbinger shall, and the Stockholders and Harbinger
shall use their reasonable commercial efforts to cause the Company and MSV LLC
to, each at its own expense, use their reasonable commercial efforts to
prosecute the FCC applications and obtain the FCC Approvals, cooperate in
providing all information requested by the FCC and take all steps reasonably
necessary or appropriate to prepare, file and prosecute such applications and
obtain the FCC Approvals. In the event any Person petitions the FCC to deny or
otherwise challenges the applications for the FCC Approvals or any other
application filed or amended to effectuate the purposes of this Agreement, or in
the event the FCC grants the applications for the FCC Approvals or any other
application filed or amended to effectuate the purposes of this Agreement and
any Person petitions for review or reconsideration of such grant before the FCC,
or seeks judicial review of such grant, then the Stockholders and Harbinger
shall, and the Stockholders and Harbinger shall use their reasonable commercial
efforts to cause the Company and MSV LLC to, use their reasonable commercial
efforts to oppose such petition or challenge before the FCC and vigorously
defend the grant of such applications by the FCC diligently and in good faith,
provided that the Stockholders, Harbinger, the Company or MSV LLC shall not have
any obligation to participate in any evidentiary hearing on any such
application. Should the FCC deny any such application or grant any such
application subject to material adverse conditions, the Stockholders and
Harbinger shall, and the Stockholders and Harbinger shall use their reasonable
commercial efforts to cause the Company and MSV LLC to, utilize their reasonable
commercial efforts to secure timely reconsideration or review of such denial or
conditions, provided that the Stockholders, Harbinger, the Company or MSV LLC
shall not have any obligation to participate in any evidentiary hearing on any
such denial or imposition of conditions. The Parties shall give each other a
reasonable opportunity to review any and all pleadings, documents, applications
and other materials filed by any Stockholder or Harbinger with respect to any of
the foregoing prior to its filing. The Parties shall provide to each other
copies of all material communications with the FCC related to the applications
for the FCC Approval and provide to each other a reasonable opportunity to
contribute to and review any and all pleadings, documents, applications and
other materials filed with the FCC by each other from the date hereof through
the Escrow Break Date. If consummation of the transactions contemplated by this
Agreement require the approval of Industry Canada, the obligations of the
Stockholders and Harbinger under this Section 5.3 shall apply to applications,
pleadings, documents and other materials and communications required to be filed
with Industry Canada mutatis mutandis. The Stockholders and Harbinger further
agree that they will use their reasonable commercial efforts to support, and
will use their reasonable commercial efforts to cause the Company and MSV LLC to
support, any further applications that Harbinger or its Affiliates may make in
the future for FCC, Industry Canada and other regulatory approvals relating to
the Company or MSV LLC.
Section 5.4 Publicity. None of the Parties shall issue, or permit any of
their respective Affiliates to issue, any press release or public announcement
concerning this Agreement or the transactions contemplated hereby without
obtaining the prior written approval of the other Parties (not to be
unreasonably withheld or delayed), unless disclosure is otherwise required by
applicable law, provided that, to the extent required by applicable law, the
Party intending to make such release shall use its commercially reasonable
efforts consistent with such applicable law to consult with the other Parties
with respect to the text thereof.
Section 5.5 No Transfers of Securities. Prior to the Closing Date, except
for this Agreement, the Escrow Agreement and the consummation of the
transactions contemplated herein and therein, none of the Stockholders shall (i)
Transfer or consent to the Transfer of, any Securities or any interest therein,
(ii) enter into any contract, option or other agreement or understanding with
respect to any Transfer of any Securities or any interest therein, (iii) grant
any proxy, power or attorney or other authorization in or with respect to any
Securities, (iv) deposit any Shares into a voting trust or enter into a voting
agreement with respect to any Shares, (v) exercise any of the Warrants, (vi)
exchange any Non-Voting Shares for Voting Shares or (vii) exchange any Voting
Shares for Non-Voting Shares. Prior to the Escrow Break Date, except for this
Agreement, the Escrow Agreement and the consummation of the transactions
contemplated herein and therein, none of the Stockholders shall (i) Transfer or
consent to the Transfer of, any Remaining Shares or other Escrowed Property or
any interest therein, (ii) enter into any contract, option or other agreement or
understanding with respect to any Transfer of any Remaining Shares or other
Escrowed Property or any interest therein, (iii) grant any proxy, power or
attorney or other authorization in or with respect to any Remaining Shares or
any other voting securities included within the Escrowed Property that will not
by its terms expire before the Escrow Break Date, (iv) deposit any Remaining
Shares or any other voting securities included within the Escrowed Property into
a voting trust or enter into a voting agreement with respect to any Remaining
Shares or any other voting securities included within the Escrowed Property that
will not by its terms expire before the Escrow Break Date, or (v) exchange any
Remaining Shares for Non-Voting Shares or exchange any other voting securities
included within the Escrowed Property for non-voting securities.
Section 5.6 Access to Information. The Stockholders agree that Harbinger
shall be entitled, through its officers, employees and representatives
(including legal advisors and accountants), to make such investigation of the
properties, businesses and operations of the Company and its Subsidiaries, such
examination of the books, records and financial condition of such entities (and
to make extracts and copies of such books and records) and to interview such
officers and employees of the Company and its Subsidiaries as Harbinger shall
reasonably request. The Stockholders shall cooperate fully with all such
reasonable requests.
Section 5.7 Xxxxxxxxxx Retention. The Stockholders for themselves and their
Affiliates consent to, and agree that neither they nor any of their Affiliates
will object to, the retention of Xxxxxxxxxx Hyatt Xxxxxx Xxxxxxx and Xxxxxx
Xxxxxxxxxx by Harbinger and/or its Affiliates and representatives to advise and
represent Harbinger, its Affiliates and representatives in connection with
Harbinger's investment in the Company, investments in other telecommunications
companies and/or other matters regardless of whether the interests of Harbinger
and its Affiliates, on the one hand, and the Stockholders and their Affiliates,
on the other hand, are adverse with respect to such matters.
ARTICLE 6
INDEMNIFICATION
Section 6.1 Indemnification
(a) Each of the Stockholders (an "Indemnifying Party") shall indemnify
and hold harmless Harbinger and Harbinger's officers, directors, employees,
agents, successors, assigns and Affiliates (each, an "Indemnified Party"), and
Harbinger (an "Indemnifying Party") shall indemnify and hold harmless each of
the Stockholders and the Stockholders' officers, directors, employees, agents,
successors, assigns and Affiliate (each, an "Indemnified Party") against any
losses, claims, damages, liabilities, actions, judgments, causes of action,
costs or expenses, including interest, penalties and reasonable attorneys' fees
and expenses (collectively, "Losses") asserted against, resulting from, imposed
upon or incurred or suffered by the Indemnified Party as a result of or relating
to any breach by any Indemnifying Party of any of its representations,
warranties, covenants or agreements contained in this Agreement.
(b) If an Indemnified Party receives notice from any third party with
respect to any matter (a "Third-Party Claim") that may give rise to a claim for
indemnification against the Indemnifying Party under Section 6.1(a), then the
Indemnified Party shall promptly (but in any event no later than 10 days after
receipt of such notice) notify the Indemnifying Party thereof in writing;
provided, however, that no delay on the part of the Indemnified Party in so
notifying the Indemnifying Party shall relieve the Indemnifying Party from any
obligation under this Article 6 unless (and then solely to the extent that) the
Indemnifying Party is thereby materially prejudiced.
(c) The Indemnifying Party shall have the right (except as otherwise
provided herein) to assume the defense of the Third-Party Claim with counsel of
its choice, who shall be reasonably satisfactory to the Indemnified Party, at
any time within 15 days after the Indemnified Party has given notice to the
Indemnifying Party of the Third-Party Claim; provided, however, that the
Indemnified Party may retain separate counsel at its sole cost and expense and
participate in the defense of the Third-Party Claim. Notwithstanding the
foregoing the Indemnifying Party shall not be entitled to assume, and the
Indemnified Party shall be entitled to have sole control over, the defense or
settlement of any Third-Party Claim (i) if the Indemnifying Party does not
promptly acknowledge in writing its obligation to indemnify the Indemnified
Party hereunder, (ii) if the Indemnifying Party does not timely assume the
defense of such Third-Party Claim, (iii) if there exists or is reasonably likely
to exist a conflict of interest that would make it inappropriate in the
reasonable judgment of the Indemnified Party for the same counsel to represent
both the Indemnified Party and the Indemnifying Party or (iv) to the extent the
Third-Party Claim seeks an order, injunction, non-monetary or other equitable
relief against the Indemnified Party which, in the reasonable judgment of the
Indemnified Party, if successful, could materially interfere with the business,
operations, assets, condition (financial or otherwise) or prospects of the
Indemnified Party. In any such case, the Indemnified Party shall be entitled to
retain its own counsel in each jurisdiction for which the Indemnified Party
determines counsel is required, at the sole cost and expense of the Indemnifying
Party.
(d) So long as the Indemnifying Party has assumed and is conducting
the defense of the Third-Party Claim in accordance with Section 6.1(c), the
Indemnifying Party will not consent to the entry of any judgment on or enter
into any settlement that (i) does not include as an unconditional term thereof
the giving by each claimant or plaintiff to each Indemnified Party of a full
release from all liabilities in respect of such Third-Party Claim, except with
the prior written consent of the Indemnified Party, or (ii) does contain any
admission of wrongdoing by or guilt of any Indemnified Party.
(e) The Indemnifying Party shall reimburse the Indemnified Party for
his, her or its legal and other fees, costs expenses (including the cost of any
investigation or preparation) as and when bills are received or expenses are
incurred.
ARTICLE 7
MISCELLANEOUS
Section 7.1 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 and 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 7.2 Jurisdiction. The Parties hereby irrevocably submit to the
exclusive jurisdiction of any federal or state court located within the County,
City and 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 consents to process being served by any other Party in
any suit, action or proceeding by delivery of a copy thereof in accordance with
the provisions of Section 7.2.
Section 7.3 Notices. All notices, requests, payments, instructions or other
documents to be given hereunder will be in writing or by written
telecommunication, and will be deemed to have been duly given if (i) delivered
personally (effective upon delivery), (ii) mailed by registered or certified
mail, return receipt requested, postage prepaid (effective five business days
after dispatch), or (iii) sent by a reputable, established courier service that
guarantees next business day delivery (effective the next business day),
addressed as follows (or to such other address as the recipient Party may have
furnished to the sending Party for the purpose pursuant to this Section):
If to Harbinger to:
c/o Harbinger Capital Partners Funds
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
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
and
Xxxxxxx XxXxxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
If to any Stockholder, to:
Xxxxxx X. Xxxxxx
c/o Apollo Global Management L.P.
0 Xxxx 00xx Xxxxxx, 00xx xxxxx
Xxx Xxxx, Xxx Xxxx 00000
with a copy, which shall not constitute notice, sent at the
same time and by the same means to:
Xxxxxx X. Xxxxxx, P.C.
Akin Gump Xxxxxxx Xxxxx & Xxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Any Party may change the Person(s) and the address(es) to which notices
or other communications are to be sent by giving written notice of any such
change in the manner provided herein for giving notice.
Section 7.4 Further Assurances. Each of the Parties shall, upon request of
another Party, execute and deliver to the requesting Party and to the Escrow
Agent any additional documents and take such further actions (including
delivering instructions to any depositary or securities intermediary or the
Company) as the requesting Party or the Escrow Agent may deem to be necessary or
desirable to effect the transactions contemplated by this Agreement and the
Escrow Agreement.
Section 7.5 Specific Performance. Each Stockholder acknowledges that it
will be impossible to measure in money the damages to Harbinger if any
Stockholder fails to comply with its obligations under this Agreement, and that,
in the event of any such failure, Harbinger will not have an adequate remedy at
law. Accordingly, each Stockholder agrees that injunctive or other equitable
relief, in addition to remedies at law or damages, is an appropriate remedy for
any such failure and will not oppose the granting of such relief on the basis
that Harbinger has an adequate remedy at law. Each Stockholder agrees that it
will not seek, and agrees to waive any requirement for, the securing or posting
of a bond in connection with Harbinger's seeking or obtaining such equitable
relief.
Section 7.6 Assignments. This Agreement will bind and inure to the benefit
of the Parties and their respective successors, and permitted assigns. No Party
will assign any rights or delegate any obligations hereunder without the consent
of the other Parties, 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. Except as otherwise
expressly provided herein, nothing in this Agreement is intended to or will
confer any rights or remedies on any Person other than the Parties and their
respective successors and permitted assigns.
Section 7.7 Counterparts. This Agreement may be executed by the Parties in
separate counterparts, each of which when so executed and delivered will be an
original, but all of which together will constitute one and the same agreement.
In pleading or proving this Agreement, it will not be necessary to produce or
account for more than one such counterpart. Facsimile and PDF signatures hereto
shall be deemed to be of the same force and effect as originals.
Section 7.8 Waivers. No waiver of any breach or default hereunder will be
valid unless in a writing signed by the waiving Party. No failure or other delay
by any Party in exercising any right, power, or privilege hereunder will be or
operate as a waiver thereof, nor will any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.
Section 7.9 Entire Agreement. This Agreement and the Escrow Agreement
contains the entire understanding and agreement between the Stockholders, on the
one side, and Harbinger, on the other side, and supersedes any prior
understandings or agreements between the Stockholders, on the one side, and
Harbinger, on the other side, with respect to the subject matter hereof.
Section 7.10 Amendments in Writing. This Agreement may not be amended,
modified or supplemented except by a writing duly executed by all of the
Parties.
Section 7.11 Legal Fees. Each of the Parties acknowledges and agrees that
such Party is responsible for bearing and paying its own legal fees and expenses
incurred in connection with negotiating, executing and implementing this
Agreement. Nothing in this Section 7.11 shall preclude a Party from making a
claim for or recovering legal expenses incurred in connection with enforcement
of its rights and remedies under this Agreement in a court of law or other legal
proceeding, arbitration or mediation.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Parties have duly executed this Agreement as
of the date and year first above written.
HARBINGER CAPITAL PARTNERS
MASTER FUND I, LTD.
By: Harbinger Capital Partners Offshore
Manager, L.L.C., as investment
manager
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Managing Director
HARBINGER CAPITAL PARTNERS SPECIAL
SITUATIONS FUND, L.P.
By: Harbinger Capital Partners Special
Situations GP, LLC, as general
partner
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Managing Director
APOLLO INVESTMENT FUND IV, L.P.
By: Apollo Advisors IV, L.P.
Its General Partner
By: Apollo Capital Management IV, Inc.
Its General Partner
By: /s/ Xxxxxx Xxxxxx
------------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
APOLLO OVERSEAS PARTNERS IV, L.P.
By: Apollo Advisors IV, L.P.
Its General Partner
By: Apollo Capital Management IV, Inc.
Its General Partner
By: /s/ Xxxxxx Xxxxxx
------------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
AIF IV/RRRR LLC
AP/RM ACQUISITION, LLC
ST/RRRR LLC
By: /s/ Xxxxxx Xxxxxx
------------------------------------
Name: Xxxxxx Xxxxxx
Title: Authorized Signatory
AP/RM ACQUISITION LLC
By: Apollo Management IV, L.P.
Its Manager
By: AIF IV Management, Inc.
Its General Partner
By: /s/ Xxxxxx Xxxxxx
------------------------------------
Name: Xxxxxx Xxxxxx
Title:
ST/RRRR LLC
By: Apollo Management IV, L.P.
Its Manager
By: AIF IV Management, Inc.
Its General Partner
By: /s/ Xxxxxx Xxxxxx
------------------------------------
Name: Xxxxxx Xxxxxx
Title:
Annex A
Voting Non-Voting Series 1-A Series 2-A
Stockholder Shares Shares Warrants Warrants
----------- ------- ---------- ---------- ----------
Apollo Investment Fund IV, L.P. 8,018,344 5,291,024 179,693 7,512,917
Apollo Overseas Partners IV, L.P. 411,509 264,868 9,636 402,922
AIF IV/RR LLC 1,023,805 314,943 45,304 1,894,194
AP/RM Acquisition LLC 474,427 0 0 0
ST/RRRR LLC 296,447 302,762 0 0
Total 10,224,532 6,173,597 234,633 9,810,033
Annex B
Form of Escrow Agreement
ESCROW AGREEMENT dated as of April ___, 2008 (this "Agreement"), by
and among HARBINGER CAPITAL PARTNERS MASTER FUND I, 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"), APOLLO
INVESTMENT FUND IV, L.P., a Delaware limited partnership ("AIF IV"), APOLLO
OVERSEAS PARTNERS IV, L.P., a limited partnership registered in the Cayman
Islands ("Overseas IV"), AIF IV/RRRR LLC, a Delaware limited liability company
("AIF IV/RRRR"), AP/RM ACQUISITION LLC, a Delaware limited liability company
("AP/RM"), and ST/RRRR LLC, a Delaware limited liability company ("ST/RRRR" each
of AIF IV, Overseas IV, AIF/RRRR, AP/RM and ST/RRRR being hereinafter referred
to as a "Stockholder" and collectively as the "Stockholders") and Akin Gump
Xxxxxxx Xxxxx & Xxxx LLP (the "Escrow Agent"). Each of Harbinger Master,
Harbinger Special, AIF IV, Overseas IV, AIF IV/RRRR, AP/RM, ST/RRRR and the
Escrow Agent is hereinafter referred to as a "Party" and collectively as the
"Parties".
Harbinger and the Stockholders have entered into a Securities Purchase
Agreement, dated as of April 7, 2008 (the "Securities Purchase Agreement"),
respecting the Securities (as defined in the Securities Purchase Agreement)
issued by SkyTerra Communications, Inc., a Delaware corporation (the "Company"),
set forth opposite each such Stockholder's name on Annex A to the Securities
Purchase Agreement. Capitalized terms used but not defined in this Agreement
shall have the meanings specified for such terms in the Securities Purchase
Agreement.
Pursuant to Section 3.1(f) of the Securities Purchase Agreement, the
obligations of Harbinger to purchase and pay for the Securities are subject,
among other things, to the condition that the Parties shall have entered into
this Agreement prior to or on the Closing Date.
THEREFORE, in consideration of the mutual covenants and agreements
contained herein and in the Securities Purchase Agreement and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, each of the Parties hereby agrees as follows:
1. Appointment of Escrow Agent. Harbinger and the Stockholders hereby
appoint the Escrow Agent to act in accordance with and subject to the terms of
this Agreement, and the Escrow Agent hereby accepts such appointment and agrees
to act in accordance with and subject to such terms.
2. Deposit of Escrowed Property. On the Closing Date, each of the
Stockholders shall deliver or cause to be delivered to the Escrow Agent
certificates representing the number of Remaining Shares set forth opposite such
Stockholder's name on Exhibit 1, together with signed stock powers and any other
instruments executed in blank necessary to permit the Escrow Agent to effect the
delivery, transfer and registration of the Remaining Shares in accordance with
the terms of this Agreement. If prior to Escrow Break Date the Company effects
any split, combination or reclassification of its Voting Common Stock or
declares or pays any dividend or other distribution payable to the holders of
its Voting Common Stock in additional shares of Common Stock, other securities
or other property other than cash dividends ("Non-Cash Distributions"), then the
Stockholders shall promptly deliver any such Non-Cash Distributions to the
Escrow Agent and the Escrow Agent shall hold, deliver and transfer any such
Non-Cash Distributions in accordance with the terms of this Agreement. The
Remaining Shares together with any such Non-Cash Distributions are hereinafter
referred to as the "Escrowed Property".
3. Rights of Stockholders in Escrowed Property.
3.1. Title, Voting Rights and Cash Dividends. Until such time as
the Escrow Agent transfers and delivers the Escrowed Property in accordance with
Section 4, (a) title to the Escrowed Property shall remain in the Stockholders
and the Escrowed Property shall remain registered on the books of the Company in
the name of the Stockholders or their respective nominees; (b) the Stockholders
shall have the right to vote the Remaining Shares and any other voting
securities included within the Escrowed Property and (c) the Stockholders shall
have the right to receive any cash dividends declared or paid by the Company
with respect to the Remaining Shares.
3.2 Restrictions on Transfer. Prior to the Escrow Break Date none
of the Stockholders shall (i) Transfer or consent to the Transfer of, any
Escrowed Property or any interest therein, (ii) enter into any contract, option
or other agreement or understanding with respect to any Transfer of any Escrowed
Property or any interest therein, (iii) grant any proxy, power of attorney or
other authorization in or with respect to any Remaining Shares or any other
voting securities included within the Escrowed Property that will not by its
terms expire before the Escrow Break Date, (iv) deposit any Remaining Shares or
any other voting securities included within the Escrowed Property into a voting
trust or enter into a voting agreement with respect to any Remaining Shares or
any other voting securities included within the Escrowed Property that will not
by its terms expire before the Escrow Break Date, or (v) exchange any Remaining
Shares for Non-Voting Shares or exchange any other voting securities included
within the Escrowed Property for non-voting securities.
4. Disbursement of the Escrowed Property. The Escrow Agent shall hold
and dispose of the Escrowed Property as provided in this Section 4. Upon receipt
of written notice from Harbinger that Harbinger has received FCC Approval to
acquire the Escrowed Property or that Harbinger has determined that it may
acquire the Escrowed Property without FCC Approval, the Escrow Agent shall
transfer and deliver the Escrowed Property to, and effect the registration of
the Escrowed Property in the name of, Harbinger Master, Harbinger Special or
such of their respective nominees as they may designate. Upon receipt of written
notice from Harbinger that Harbinger has failed to receive required FCC Approval
to acquire the Escrowed Property or has determined that it will not seek
required FCC Approval to acquire the Escrowed Property, the Escrow Agent shall
sell the Escrowed Property and remit the proceeds of such sale to Harbinger. In
connection with any such sale or sales, the Escrow Agent shall consult with
Harbinger but shall not take any directions from Harbinger. Notwithstanding the
foregoing, (a) Harbinger agrees that it shall not instruct the Escrow Agent to
transfer, deliver or effect the registration of the Escrowed Property in the
name of Harbinger Master, Harbinger Special or their respective nominees without
Harbinger's first having obtained any necessary FCC Approval to acquire the
Escrowed Property and (b) Harbinger shall not have the power to direct the
Escrow Agent to transfer and deliver the Escrowed Property to, and effect the
registration of the Escrowed Property in the name of, Harbinger Master,
Harbinger Special or their respective nominees or to sell the Escrowed Property
unless and until Harbinger delivers to the Escrow Agent an opinion of FCC
counsel addressed to Harbinger and to the Escrow Agent to the effect that such
disposition would not violate the Communications Act. The Escrow Agent shall
have no further duties hereunder after the transfer and delivery of the Escrowed
Property in accordance with this Section 4.
5. Concerning the Escrow Agent.
5.1 Good Faith Reliance. The Escrow Agent shall not be liable for
any action taken or omitted by it in good faith and in the exercise of its own
best judgment, and may rely conclusively and shall be protected in acting upon
any order, notice, demand, certificate, opinion or advice of counsel (including
counsel chosen by the Escrow Agent), statement, instrument, report or other
paper or document (not only as to its due execution and the validity and
effectiveness of its provisions, but also as to the truth and acceptability of
any information therein contained) that is believed by the Escrow Agent to be
genuine and to be signed or presented by the proper Person or Persons. The
Escrow Agent shall not be bound by any notice or demand, or any waiver,
modification, termination or rescission of this Agreement unless evidenced by a
writing delivered to the Escrow Agent signed by the proper Party or Parties and,
if the duties or rights of the Escrow Agent are affected, unless it shall have
given its prior written consent thereto.
5.2 Indemnification. The Escrow Agent shall be indemnified and
held harmless by Harbinger from and against any expenses, including counsel fees
and disbursements, or loss suffered by the Escrow Agent in connection with any
action, suit or other proceeding involving any claim which in any way, directly
or indirectly, arises out of or relates to this Agreement, the services of the
Escrow Agent hereunder, or the Escrowed Property held by it hereunder, other
than expenses or losses arising from the actual fraud of the Escrow Agent.
Promptly after the receipt by the Escrow Agent of notice of any demand or claim
or the commencement of any action, suit or proceeding, the Escrow Agent shall
notify the other Parties in writing. In the event of the receipt of such notice,
the Escrow Agent, in its sole discretion, may commence an action in the nature
of interpleader in an appropriate court to determine ownership or disposition of
the Escrowed Property or it may deposit the Escrowed Property with the clerk of
any appropriate court or it may retain the Escrowed Property pending receipt of
a final, non appealable order of a court having jurisdiction over all of the
Parties directing to whom and under what circumstances the Escrowed Property is
to be transferred and delivered. The provisions of this Section 5.2 shall
survive in the event the Escrow Agent resigns or is discharged pursuant to
Sections 5.5 or 5.6 below.
5.3 Compensation. The Escrow Agent shall be entitled to
reasonable compensation from Harbinger for all services rendered by it
hereunder. The Escrow Agent shall also be entitled to reimbursement from
Harbinger for all expenses paid or incurred by it in the administration of its
duties hereunder including, but not limited to, all counsel, advisors' and
agents' fees and disbursements and all taxes or other governmental charges.
5.4 Further Assurances. From time to time on and after the date
hereof, Harbinger and the Stockholders shall deliver or cause to be delivered to
the Escrow Agent such further documents and instruments and shall do or cause to
be done such further acts as the Escrow Agent shall reasonably request to carry
out more effectively the provisions and purposes of this Agreement, to evidence
compliance herewith or to assure itself that it is protected in acting
hereunder.
5.5 Resignation. The Escrow Agent may resign at any time and be
discharged from its duties as escrow agent hereunder by its giving the other
Parties written notice and such resignation shall become effective as
hereinafter provided. Such resignation shall become effective at such time that
the Escrow Agent shall turn over to a successor escrow agent appointed by
Harbinger and the Stockholders, the Escrowed Property then held hereunder. If no
new escrow agent is so appointed within the 60-day period following the giving
of such notice of resignation, the Escrow Agent may deposit the Escrow Shares
with any court it reasonably deems appropriate.
5.6 Discharge of Escrow Agent. The Escrow Agent shall resign and
be discharged from its duties as escrow agent hereunder if so requested in
writing at any time by Harbinger, provided, however, that such resignation shall
become effective only upon acceptance of appointment by a successor escrow agent
as provided in Section 5.5.
5.7 Liability. Notwithstanding anything herein to the contrary,
the Escrow Agent shall not be relieved from liability hereunder for its own
actual fraud.
6. Miscellaneous.
6.1 Governing Law. This Agreement shall be governed 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.
6.2 The Parties hereby irrevocably submit to the exclusive
jurisdiction of any federal or state court located within the County, City and
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 6.3.
6.3 Notices. All notices, requests, payments, instructions or
other documents to be given hereunder will be in writing or by written
telecommunication, and will be deemed to have been duly given if (i) delivered
personally (effective upon delivery), (ii) mailed by registered or certified
mail, return receipt requested, postage prepaid (effective five business days
after dispatch), or (iii) sent by a reputable, established courier service that
guarantees next business day delivery (effective the next business day),
addressed as follows (or to such other address as the recipient Party may have
furnished to the sending Party for the purpose pursuant to this Section):
If to Harbinger to:
c/o Harbinger Capital Partners Funds
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
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
and
Xxxxxxx XxXxxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
If to any Stockholder, to:
Xxxxxx X. Xxxxxx
c/o Apollo Global Management L.P.
0 Xxxx 00xx Xxxxxx, 00xx xxxxx
Xxx Xxxx, Xxx Xxxx 00000
with a copy, which shall not constitute notice, sent at the same time
and by the same means to:
Xxxxxx X. Xxxxxx, P.C.
Akin Gump Xxxxxxx Xxxxx & Xxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
and if to the Escrow Agent, to:
Xxxxxx X. Xxxxxx, P.C.
-and-
Xxxx Xxxxxxx
Akin Gump Xxxxxxx Xxxxx & Xxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Any Party may change the Person(s) and address(es) to which the notices
or other communications are to be sent by giving written notice of any such
change in the manner provided herein for giving notice.
6.4 Further Assurances. Each of the Parties shall, upon request of the
Escrow Agent, execute and deliver to the Escrow Agent, any additional documents
and take any actions (including delivering instructions to any depository or
securities intermediary or the Company) as the Escrow Agent may deem to be
necessary or desirable to effect the transactions contemplated by this
Agreement.
6.5 Specific Performance. Each Stockholder acknowledges that it will
be impossible to measure in money the damages to Harbinger if any Stockholder
fails to comply with its obligations under this Agreement, and that, in the
event of any such failure, Harbinger will not have an adequate remedy at law.
Accordingly, each Stockholder agrees that injunctive or other equitable relief,
in addition to remedies at law or damages, is an appropriate remedy for any such
failure and will not oppose the granting of such relief on the basis that
Harbinger has an adequate remedy at law. Each Stockholder agrees that it will
not seek, and agrees to waive any requirement for, the securing or posting of a
bond in connection with Harbinger's seeking or obtaining such equitable relief.
6.6 Assignments. This Agreement will bind and inure to the benefit of
the Parties and their respective successors, and permitted assigns. No Party
will assign any rights or delegate any obligations hereunder without the consent
of the other Parties, 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. Except as otherwise
expressly provided herein, nothing in this Agreement is intended to or will
confer any rights or remedies to any Person other than the Parties and their
respective successors and permitted assigns.
6.7 Counterparts. This Agreement may be executed by the Parties in
separate counterparts, each of which when so executed and delivered will be an
original, but all of which together will constitute one and the same agreement.
In pleading or proving this Agreement, it will not be necessary to produce or
account for more than one such counterpart. Facsimile and PDF signatures hereto
shall be deemed to be of the same force and effect as originals.
6.8 Waivers. No waiver of any breach or default hereunder will be
valid unless in a writing signed by the waiving Party. No failure or other delay
by any Party in exercising any right, power or privilege hereunder will be or
operate as a waiver thereof, nor will any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.
6.9 Entire Agreement. This Agreement contains the entire understanding
and agreement among the Parties, and supersedes any prior understandings or
agreements among them, or between or among any of them, with respect to the
subject matter hereof, except for those set forth in the Securities Purchase
Agreement.
6.10 Amendments in Writing. This Agreement may not be amended,
modified, or supplemented except by a writing duly executed by all of the
Parties.
7. Waiver of Conflicts. Each of the Parties acknowledges that the
Escrow Agent is regular counsel to each of the Stockholders and each of their
respective Affiliates, and was and is counsel to the Stockholders respecting the
Securities Purchase Agreement and this Agreement. Each of the Parties further
acknowledges that it specifically requested the Escrow Agent to serve as the
escrow agent pursuant to this Agreement for its own good and valid reasons. Each
of the Parties agrees that the Escrow Agent may represent or continue to
represent any or all of the Stockholders, any or all of their respective
Affiliates, and any and all other Persons in any and all matters relating to the
Securities Purchase Agreement, this Agreement or any other matter including, but
not limited to, any action , suit or other proceeding arising out of or relating
to the Securities Purchase Agreement (including a breach thereof), this
Agreement (including a breach hereof) or any other matter whatsoever. Each of
the Parties represents and warrants to the Escrow Agent and to each other that
it has been represented by counsel of its own choice in connection herewith and
that this Section 7 is valid, binding and enforceable in accordance with its
terms and the intent hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of
the date and year first written above
HARBINGER CAPITAL PARTNERS MASTER
FUND I, LTD.
By: Harbinger Capital Partners Offshore
Manager, L.L.C., as investment
manager
By:
--------------------------------------
Name:
Title:
HARBINGER CAPITAL PARTNERS SPECIAL
SITUATIONS FUND, L.P.
By: Harbinger Capital Partners Special
Situations GP, LLC, as general
partner
By:
--------------------------------------
Name:
Title:
APOLLO INVESTMENT FUND IV, L.P.
By: Apollo Advisors IV, L.P.
Its General Partner
By: Apollo Capital Management IV, Inc.
Its General Partner
By:
--------------------------------------
Name:
Title:
APOLLO OVERSEAS PARTNERS IV, L.P.
By: Apollo Advisors IV, L.P.
Its Managing General Partner
By: Apollo Capital Management IV, Inc.
Its General Partner
By:
--------------------------------------
Name:
Title:
AIF IV/RRRR LLC
AP/RM ACQUISITION, LLC
ST/RRRR LLC
By:
--------------------------------------
Name:
Title:
AKIN GUMP XXXXXXX XXXXX & XXXX LLP,
as Escrow Agent
By:
--------------------------------------
Name:
Title:
Exhibit 1
to
Escrow Agreement
NUMBER OF
REMAINING
NAME OF STOCKHOLDER SHARES
------------------- ----------
APOLLO INVESTMENT FUND IV, L.P. 347,276
APOLLO OVERSEAS PARTNERS IV, L.P. 17,822
AIF IV/RRRR LLC 44,341
AP/RM ACQUISITION LLC 20,547
ST/RRRR LLC 12,839
------
TOTAL 442,825
Annex C
Number of Series Number of Series 2-A
1-A Warrants to Be Warrants to Be
Number of Initial Shares to Be Purchased at Purchased at Closing
Purchased at Closing Closing
------------------------------ ----------------- ---------------------
Harbinger Master 7,151,336 Voting Shares 175,975 7,357,525
1,028,362 Non-Voting Shares
Harbinger Special 2,630,371 Voting Shares 58,658 2,452,508
5,145,235 Non-Voting Shares
Net Total 9,781,707 Voting Shares 234,633 9,810,033
6,173,597 Non-Voting Shares Shares
Gross Total 15,955,304
Annex D
Form of Akin, Gump Opinion as Delaware and New York Counsel
to the Delaware Stockholders
1. AIF IV is validly existing as a limited partnership in good standing under
the laws of the State of Delaware and has the limited partnership power and
authority to execute, deliver and perform its obligations under the
Securities Purchase Agreement, including its obligations under the Escrow
Agreement.
2. The execution and delivery of each of the Securities Purchase Agreement and
the Escrow Agreement by AIF IV, and the performance by AIF IV of its
obligations thereunder, have been duly authorized by all necessary
partnership action on the part of AIF IV.
3. Each of AIF IV/RRRR, AP/RM and ST/RRRR is validly existing as a limited
liability company in good standing under the laws of the State of Delaware
and has the limited liability company power and authority to execute,
deliver and perform its obligations under the Securities Purchase
Agreement, including its obligations under the Escrow Agreement.
4. The execution and delivery of each of the Securities Purchase Agreement and
the Escrow Agreement by each of AIF IV/RRRR, AP/RM and ST/RRRR, and the
performance by each of AIF IV/RRRR, AP/RM and ST/RRRR of their respective
obligations thereunder, have been duly authorized by all necessary limited
liability company action on the part of each of them.
5. Each of the Securities Purchase Agreement and the Escrow Agreement has been
duly and validly executed by each of AIF IV, AIF IV/RRRR, AP/RM and ST/RRRR
(collectively, the "Delaware Stockholders") and constitutes a valid and
binding agreement of each of Delaware Stockholders, enforceable against
each of the Delaware Stockholders under the Laws of the State of New York
in accordance with its terms (provided that such counsel's opinion will be
subject to and qualified and limited by (i) applicable bankruptcy,
insolvency, fraudulent transfer and conveyance, reorganization, moratorium
and similar Laws affecting creditors' rights and remedies generally; (ii)
general principles of equity, including (without limitation) concepts of
materiality, reasonableness, good faith and fair dealing (regardless of
whether enforcement is sought in a proceeding at law or in equity); (iii)
the power of the courts to award damages in lieu of equitable remedies;
(iv) Laws or public policy underlying such Laws with respect to rights to
indemnification and contribution; (v) constitutional bounds on Laws that
govern the enforceability of choice of law provisions in agreements; and
(vi) the effect of Laws other than the Included Laws).
6. The execution and delivery of each of the Securities Purchase Agreement and
the Escrow Agreement by each of the Delaware Stockholders do not, and the
performance by each of the Delaware Stockholders of their respective
obligations thereunder will not, result in any violation of any law, rule
or regulation of any Included Law (as defined below), except that such
counsel does not express any opinion regarding the provisions of Section 6
of the Securities Purchase Agreement. For purposes of such opinion, the
term "Included Laws" means (i) the Delaware Revised Uniform Limited
Partnership Act and the Delaware Limited Liability Company Act, and (ii)
the Laws of the State of New York; in each case that such counsel, in the
exercise of customary professional diligence, recognized as normally
applicable to the transactions of the type contemplated by the Securities
Purchase Agreement and the Escrow Agreement. The term "Included Laws"
specifically excludes (a) Laws of any counties, cities, towns,
municipalities and special political subdivisions, or foreign governments
and any agencies thereof, (b) any antifraud, environmental, labor, tax
(including Article 12 - "Tax on Transfers of Stock and Other Corporate
Certificates" of the New York State Consolidated Laws - Tax), insurance,
antitrust, securities, blue sky, intellectual property and federal
communications Laws, and (c) any Laws that may be applicable to any of the
Delaware Stockholders by virtue of the particular nature of the businesses
conducted by them or any goods or services provided by them or property
owned or leased by them.
7. The execution and delivery of each of the Securities Purchase Agreement and
the Escrow Agreement by each of the Delaware Stockholders does not, and the
performance by each of the Delaware Stockholders of their respective
obligations thereunder will not, result in a violation of the
Organizational Documents (as such term is defined in such counsel's
opinion).
8. No consent, approval, authorization or order of or filing with any New York
or Federal court or any New York or Federal public, governmental or
regulatory agency or body is required under any of the Included Laws for
the sale by each of the Delaware Stockholders of the Securities to be sold
by each of such Delaware Stockholders or the consummation by each of the
Delaware Stockholders of the transactions contemplated by the Securities
Purchase Agreement or the Escrow Agreement except for such consents,
approvals, authorizations and orders as have been duly obtained on or prior
to the date hereof and are in full force and effect.
SK 03773 0003 872706
