EXHIBIT XIII
PARTICIPATION RIGHTS AGREEMENT
THIS PARTICIPATION RIGHTS AGREEMENT (this "AGREEMENT") is made as of
December 31, 1997, by and among Motorola, Inc., a Delaware corporation (the
"INVESTOR"), American Mobile Satellite Corporation, a Delaware corporation (the
"Company"), and the parties listed on SCHEDULE A attached hereto
(the "STOCKHOLDERS").
American Mobile Satellite Corporation, a Delaware corporation, the
Investor and certain others are parties to a Stock Purchase Agreement dated as
of December 31, 1997 (the "PURCHASE AGREEMENT"). In order to induce the Investor
to enter into the Purchase Agreement, the Stockholders have agreed to the
provisions set forth in this Agreement. Unless otherwise provided in this
Agreement, capitalized terms used herein shall have the meanings set forth in
Section 5 hereof.
The parties hereto agree as follows:
1. INVESTOR PARTICIPATION RIGHTS. At any time after the Closing Date
and prior to the date on which the Investor beneficially owns less than 5% of
the Common Stock on a fully-diluted basis:
(a) At least 30 days prior to any transfer, assignment or any other
disposition of Stockholder Shares (other than a transfer (i) to the public
pursuant to Rule 144 under the Securities Act (or any similar rule then in
force) or (ii) in other sales through a broker or dealer in the public stock
market over an exchange or the Nasdaq Stock Market (a "TRANSFER"), the
transferring Stockholder (the "TRANSFERRING STOCKHOLDER") shall deliver a
written notice (the "SALE NOTICE") to the Investor, specifying in reasonable
detail the identity of the prospective transferee(s), the number of Stockholder
Shares to be transferred and the terms and conditions of the Transfer (including
the proposed price at which the Stockholder Shares is to be transferred). The
Investor may elect to participate in the contemplated Transfer by delivering
written notice of such election to the Transferring Stockholder within 30 days
after delivery of the Sale Notice. If the Investor elects to participate in such
Transfer, each of the Transferring Stockholder and the Investor shall be
entitled to sell in the contemplated Transfer, at the same price and on the same
terms, a number of Stockholder Shares equal to the product of (A) the quotient
determined by dividing the number of Stockholder Shares owned by such Person by
the aggregate number of Stockholder Shares owned by the Transferring Stockholder
and the Investor and (B) the number of Stockholder Shares to be sold in the
contemplated Transfer.
FOR EXAMPLE (BY WAY OF ILLUSTRATION ONLY), if the Sale Notice
contemplated a sale of 100 shares of Common Stock by the
Transferring Stockholder, and if the Transferring Stockholder at
such time owns shares which constitute 30% of all Common Stock which
are Stockholder Shares and if the Investor elects to participate in
such Transfer and the Investor owns shares of Common Stock which
constitutes 10% of all the Common Stock which are Stockholder
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Shares, the Transferring Stockholder would be entitled to sell 75
shares of Common Stock (30% / 40% x 100 shares) and the Investor
would be entitled to sell 25 shares of Common Stock (10% / 40% x 100
shares).
(b) The Transferring Stockholder will use its best efforts to obtain
the agreement of the prospective transferee(s) to the participation of the
Investor in any contemplated Transfer, and the Transferring Stockholder will not
Transfer any of its Stockholder Shares to the prospective transferee(s) unless
(i) simultaneously with such Transfer, the prospective transferee(s) purchases
from the Investor at the same price and on the same terms, the number of
Stockholder Shares which it is entitled to sell to such prospective transferee
pursuant to Section 1 above or (ii) simultaneously with such Transfer, the
Transferring Stockholder purchases the number of Stockholder Shares from the
Investor at the same price and on the same terms which the Investor would have
been entitled to sell pursuant to Section 1 above.
2. SHAREHOLDER PARTICIPATION RIGHTS. At any time after the Closing
Date and prior to the date on which the Investor beneficially owns less than 5%
of the Common Stock on a fully-diluted basis:
(a) At least 30 days prior to any transfer, assignment or any other
disposition of Stockholder Shares by the Investor (other than a transfer (i) to
the public pursuant to Rule 144 under the Securities Act (or any similar rule
then in force) or (ii) in other sales through a broker or dealer in the public
stock market over an exchange or the Nasdaq Stock Market) (a "TRANSFER"), the
Investor shall deliver a written notice (the "SALE NOTICE") to the Stockholders,
specifying in reasonable detail the identity of the prospective transferee(s),
the number of Stockholder Shares to be transferred and the terms and conditions
of the Transfer (including the proposed price at which the Stockholder Shares is
to be transferred). The Stockholders may elect, pro rata based on the number of
Stockholder Shares owned by them, to participate in the contemplated Transfer by
delivering written notice of such election to the Investor within 30 days after
delivery of the Sale Notice. If any Stockholder elects to participate in such
Transfer, the Investor and each such electing Stockholder (an "ELECTING
STOCKHOLDER") shall be entitled to sell in the contemplated Transfer, at the
same price and on the same terms, a number of Stockholder Shares equal to the
product of (A) the quotient determined by dividing the number of Stockholder
Shares owned by such Person by the aggregate number of Stockholder Shares owned
by the Electing Stockholders and the Investor and (B) the number of Stockholder
Shares to be sold in the contemplated Transfer.
FOR EXAMPLE (BY WAY OF ILLUSTRATION ONLY), if the Sale Notice
contemplated a sale of 100 shares of Common Stock by the Investor,
and if the Investor at such time owns shares which constitute 30% of
all Common Stock which are Stockholder Shares and if Electing
Stockholders elect to participate in such Transfer and the Electing
Stockholders own shares of Common Stock which constitutes 10% of all
of the Common Stock which are Stockholder Shares, the Investor would
be entitled to sell 75 shares of Common Stock (30% / 40% x
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100 shares) and the Electing Stockholders would be entitled to sell
25 shares of Common Stock (10% / 40% x 100 shares).
(b) The Investor use its best efforts to obtain the agreement of the
prospective transferee(s) to the participation of the Electing Stockholders in
any contemplated Transfer, and the Investor will not Transfer any of its
Stockholder Shares to the prospective transferee(s) unless (i) simultaneously
with such Transfer, the prospective transferee(s) purchases from the Electing
Stockholders at the same price and on the same terms, the number of Stockholder
Shares which they are entitled to sell to such prospective transferee pursuant
to Section 2 above or (ii) simultaneously with such Transfer, the Investor will
purchase the number of Stockholder Shares from the Electing Stockholders at the
same price and on the same terms which the Electing Stockholders would have been
entitled to sell pursuant to Section 2 above.
3. AGREEMENT TO VOTE FOR TRANSACTION. Each Stockholder agrees that
it shall vote all of its Stockholder Shares in favor of and take such other
action as may be necessary to approve, and hereby consents to the Company
entering into, all of the transactions contemplated by the Purchase Agreement,
including the issuance of shares of Common Stock to the Investor.
4. REGISTRATION RIGHTS AGREEMENT. Pursuant to the Purchase
Agreement, the Company shall provide the Investor with certain registration
rights under a registration rights agreement substantially in the form of
SCHEDULE B attached hereto (the "REGISTRATION RIGHTS AGREEMENT"). Each
Stockholder agrees and acknowledges that pursuant to the Registration Rights
Agreement, the Company shall provide the Investor with Demand Registrations and
Piggyback Registrations (each as defined in the Registration Rights Agreement),
for which the Investor shall have a priority of sale of its Registrable
Securities (as defined in the Registration Rights Agreement) over all other
unregistered securities held by any other stockholder of the Company. Each
Stockholder agrees to subordinate any registration rights granted with respect
to the unregistered securities of the Company owned by it (including any
unregistered securities it may acquire in the future), to the Investor under the
Registration Rights Agreement, and agrees that it shall be bound by Sections
1(b) and 2(c) therein until the end of the 42nd month after the month in which
the Closing under the Purchase Agreement occurs the "SUBORDINATION TERMINATION
DATE"). After the Subordination Termination Date, the Investor and the
Stockholders will be PARI PASSU with respect to the priority of sale in any
piggyback registration rights granted to such parties as set forth in the
Registration Rights Agreement.
5. DEFINITIONS.
(a) "COMMON STOCK" means the Common Stock, par value $.01 per share,
of the Company.
(b) "STOCKHOLDER SHARES" means (i) any shares of Common Stock issued
to the Stockholders and the Investor (including shares issuable upon the
exercise of any AMSC Warrants) and (ii) any equity securities issued or issuable
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directly or indirectly with respect to the Common Stock referred to in clause
(i) above (including by way of stock dividend or stock split or in connection
with a combination of shares, recapitalization, merger, consolidation or other
reorganization). As to any particular shares constituting Stockholder Shares,
such shares will cease to be Stockholder Shares when they have been (x)
effectively registered under the Securities Act and disposed of in accordance
with the registration statement covering them, or (y) sold to the public through
a broker, dealer or market maker pursuant to Rule 144 (or by similar provision
then in force) under the Securities Act.
(c) Unless otherwise stated, other capitalized terms contained
herein have the meanings set forth in the Purchase Agreement.
(6) MISCELLANEOUS.
(a) ENTIRE AGREEMENT: NO INCONSISTENT AGREEMENTS. This Agreement
contains the entire agreement between the parties hereto with respect to the
transactions contemplated herein and supersede all previous negotiations,
commitments and writings. The Company shall not hereafter enter into any
agreement with respect to its securities which is inconsistent with or violates
the rights granted to the Investor in this Agreement.
(b) REMEDIES. Any Person having rights under any provision of this
Agreement shall be entitled to enforce such rights specifically to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that any party may in its sole discretion
apply to any court of law or equity of competent jurisdiction (without posting
any bond or other security) for specific performance and for other injunctive
relief in order to enforce or prevent violation of the provisions of this
Agreement.
(c) AMENDMENTS AND WAIVERS. Except as otherwise provided herein, the
provisions of this Agreement may be amended or waived only upon the prior
written consent of the Investor and the Stockholders.
(d) SUCCESSORS AND ASSIGNS. All covenants and agreements in this
Agreement by or on behalf of any of the parties hereto shall bind and inure to
the benefit of the respective successors and assigns of the parties hereto
whether so expressed or not. In addition, whether or not any express assignment
has been made, the provisions of this Agreement which are for the benefit of
purchasers or holders of the Investor's Stockholder Shares are also for the
benefit of, and enforceable by, any subsequent holder of such shares.
(e) SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or the
5
effectiveness or validity of any provision in any other jurisdiction, and this
Agreement shall be reformed, construed and enforced in such jurisdiction as if
such invalid, illegal or unenforceable provision had never been contained
herein.
(f) COUNTERPARTS. This Agreement may be executed simultaneously in
two or more counterparts (including by means of telecopied signature pages), any
one of which need not contain the signatures of more than one party, but all
such counterparts taken together shall constitute one and the same Agreement.
(g) DESCRIPTIVE HEADINGS. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
(h) GOVERNING LAW. THIS AGREEMENT AND THE EXHIBITS AND SCHEDULES
HERETO SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW
RULES OR PROVISIONS (WHETHER OF THE STATE OF NEW YORK OR ANY OTHER JURISDICTION)
THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE
STATE OF NEW YORK.
(i) NOTICES. All notices, demands or other communications to be
given or delivered under or by reason of the provisions of this Agreement shall
be in writing and shall be deemed to have been given when (i) delivered
personally to the recipient, (ii) sent to the recipient by reputable overnight
courier service (charges prepaid), (iii) sent by facsimile transmission, when
transmitted and receipt is confirmed or (iv) mailed to the recipient by
certified or registered mail, return receipt requested and postage prepaid. Such
notices, demands and other communications shall be sent to the Stockholders at
their respective addresses listed on SCHEDULE A attached hereto and to the
Investor at the address indicated below:
TO THE INVESTOR:
Motorola, Inc.
0000 Xxxx Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: General Counsel
Facsimile: (000) 000-0000
WITH A COPY (WHICH WILL NOT CONSTITUTE NOTICE) TO:
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxx X. Xxxxxxxxxx, Esq.
Facsimile: (000) 000-0000
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TO THE COMPANY:
American Mobile Satellite Corporation
00000 Xxxxxxxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxx 00000-0000
Attn: General Counsel
Facsimile: (000) 000-0000
WITH A COPY (WHICH WILL NOT CONSTITUTE NOTICE) TO:
Xxxxxx & Xxxxxx
000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attn: Xxxxxx X. Xxxx, Esq.
Facsimile: (000) 000-0000
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
* * * * *
7
IN WITNESS WHEREOF, the parties have duly executed this
Participation Rights Agreement as of the date first written above.
MOTOROLA, INC. SATELLITE MOBILE TELEPHONE
a Delaware corporation COMPANY, L.P.
By: /s/ Xxxxx X. Xxxxx By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------- ----------------------------------
Name: Xxxxx X. Xxxxx Name: Xxxxxxx X. Xxxxxxx
Its: Senior Operations Controller Its: VP - External Affairs & Law
XXXXXX COMMUNICATIONS TRANSIT COMMUNICATIONS, INC.
SATELLITE SERVICES, INC.
By: /s/ Xxxxx Xxxx By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------- ----------------------------------
Name: Xxxxx Xxxx Name: Xxxxxxx X. Xxxxxxx
Its: Assistant Treasurer Its: VP - External Affairs & Law
Xxxxxx Electronics Corporation
SATELLITE COMMUNICATIONS SINGAPORE
INVESTMENTS CORPORATION TELECOMMUNICATIONS LTD.
By: /s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxx Xxxx Keong
---------------------------------- ----------------------------------
Name: Xxxxxxx X. Xxxxxxx Name: Xxx Xxxx Keong
Its: VP - External Affairs & Law Its: Group Financial Controller
SPACE TECHNOLOGIES AMERICAN MOBILE SATELLITE
INVESTMENTS, INC. CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxx X. Xxxxxxx
---------------------------------- ----------------------------------
Name: Xxxxxxx X. Xxxxxxx Name: Xxxx X. Xxxxxxx
Its: VP - External Affairs & Law Its: Chief Executive Officer
and President
8
[Continuation of Signature Page
to Participation Rights Agreement]
Solely with respect to its Warrants:
BARON CAPITAL PARTNERS, L.P.
By: Baron Capital Management, Inc.
a General Partnership
By: /s/ Xxxxx Xxxxxx
----------------------------------
Name: Xxxxx Xxxxxx
Its: SVP
For purposes of Sections 3 only of the Participation Rights Agreement only:
BARON CAPITAL MANAGEMENT,
INC.
By: /s/ Xxxxx Xxxxxx
----------------------------------
Name: Xxxxx Xxxxxx
Its: SVP
HAMCO, INC.
By: /s/ Xxxxx Xxxxxx
----------------------------------
Name: Xxxxx Xxxxxx
Its: SVP
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SCHEDULE A
Xxxxxx Communications Satellite Services, Inc.
0000 Xxxxxx Xxx
Xxxx Xxxxx, Xxxxxxxxxx 00000
Space Technologies Investments, Inc.
0000 Xxxxxxxxxxx Xxxxxx, X.X.
0xx Xxxxx
Xxxxxxxxxx, X.X. 00000
Satellite Communications Investments Corporation
0000 Xxxxxxxxxxx Xxxxxx, X.X.
0xx Xxxxx
Xxxxxxxxxx, X.X. 00000
Satellite Communications Investments Corporation
0000 Xxxxxxxxxxx Xxxxxx, X.X.
0xx Xxxxx
Xxxxxxxxxx, X.X. 00000
Transit Communications, Inc.
0000 Xxxxxxxxxxx Xxxxxx, X.X.
0xx Xxxxx
Xxxxxxxxxx, X.X. 00000
Xxxxxxxxx Telecommunications Ltd.
00X Xxxxxx Xxxx
#00-00 Xxxxxxxxx XXX
Xxxxxxxxx 000000
Republic of Singapore
Baron Capital Partners, L.P.
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
SCHEDULE B
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is made as of
__________________, ___, 1998, by and between Motorola, Inc., a Delaware
corporation (the "INVESTOR") and American Mobile Satellite Corporation, a
Delaware corporation (the "COMPANY").
The Company, the Investor and certain others are parties to a Stock
Purchase Agreement, dated as of December 31, 1997 (the "PURCHASE AGREEMENT"). In
order to induce the Investor to enter into the Purchase Agreement, the Company
has agreed to provide the registration rights set forth in this Agreement. The
execution and delivery of this Agreement is a condition to the Closing under the
Purchase Agreement. Unless otherwise provided in this Agreement; capitalized
terms used herein shall have the meanings set forth in Section 8 hereof.
The parties hereto agree as follows:
1. DEMAND REGISTRATIONS
(a) REQUESTS FOR REGISTRATION. At any time after the first
anniversary of the Closing Date under the Purchase Agreement, the holders of at
least 10% of the Registrable Securities may on two occasions request
registration under the Securities Acts of all or any portion of their
Registrable Securities on Form S-1 or any similar long-form registration or, if
available, Form S-2 or S-3 or any similar short-form registration. All
registrations requested pursuant to this Section 1(a) are referred to herein as
"DEMAND REGISTRATIONS". A registration shall not count as one of the two
permitted Demand Registrations until it has become effective and has not been
deemed to be a Piggyback Registration under Section 1(b); PROVIDED THAT, in any
event the Company shall pay all Registration Expenses in connection with any
registration initiated as a Demand Registration whether or not it has become
effective and whether or not such registration has counted as one of the two
permitted Demand Registrations. One of the two Demand Registrations shall be an
underwritten registration. Each request for a Demand Registration shall specify
the approximate number of Registrable Securities requested to be registered and
the anticipated per share price range for such offering. Within ten days after
receipt of any such request, the Company shall give written notice of such
requested registration to all other holders of Registrable Securities and shall
include in such registration all Registrable Securities with respect to which
the Company has received written requests for inclusion therein with 15 days
after the receipt of the Company's notice.
(b) PRIORITY ON DEMAND REGISTRATIONS. In the event that the Company
proposes to sell any of its securities in any Demand Registration and less than
75% of the Registrable Securities requested to be included in such registration
are ultimately sold pursuant to such registration, then such Demand Registration
shall be treated for all purposes hereunder as a Piggyback Registration and
shall not count as one of the two permitted Demand Registrations. If the
managing underwriters in an underwritten offering (as selected in accordance
with Section 1(d) below) advise the Company in
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writing that, in their opinion the number of Registrable Securities and, if
permitted hereunder, other securities requested to be included in such offering,
exceeds the number of Registrable Securities and other securities, if any, which
can be sold herein without adversely affecting the marketability of the
offering, the Company shall include in such registration (i) first, the
securities the Company proposes to sell, if any, (ii) second, the Registrable
Securities requested to be included in such registration, pro rata among the
holders of such Registrable Securities on the basis of the number of shares
owned by each such holder, and (iii) third, other securities requested to be
included in such registration.
(c) RESTRICTION ON DEMAND REGISTRATION. The Company may postpone for
up to 90 days the filing or the effectiveness of a registration statement for a
Demand Registration if (i) the Company's board of directors determines in good
faith that such Demand Registration would reasonably be expected to have a
material adverse effect on a then current proposal or plan by the Company or any
of its Subsidiaries to engage in a primary offering of common stock to the
public (subject to the Investor's rights under Section 2 below), an acquisition
of assets (other than in the ordinary course of business) or a merger,
consolidation, tender offer, reorganization or similar transaction, and (ii) if
the holders of the Registrable Securities have requested that such Demand
Registration be an underwritten registration as permitted under Section 1(a)
above, the managing underwriters (as selected in accordance with Section 1(d)
below) concur with such determination; PROVIDED THAT in such event, the holders
of Registrable Securities initially requesting such Demand Registration shall be
entitled to withdraw such request and, if such request is withdrawn, such Demand
Registration shall not count as one of the two permitted Demand Registrations
hereunder and the Company shall pay all Registration Expenses in connection with
such registration. The right to postpone the filing or the effectiveness of a
registration statement pursuant to this Section 1(c) may only be exercised once
in any twelve-month period.
(d) SELECTION OF UNDERWRITERS. The holders of a majority of the
Registrable Securities initially requesting registration hereunder shall have
the right to select the investment banker(s) and manager(s) to administer the
offering, subject to the Company's approval which shall not be unreasonably
withheld.
(e) OTHER REGISTRATION RIGHTS. Except as provided in this Agreement,
the Company shall not grant to any Persons the right to request the Company to
register any equity securities of the Company, or any securities convertible or
exchangeable into or exercisable for such securities, without the prior written
consent of the holders of a majority of the Registrable Securities if such right
is inconsistent with the terms of this Agreement (including without limitation
the priorities set forth in Sections 1(a), 2(c) and 2(d) hereof).
2. PIGGYBACK REGISTRATIONS
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(a) RIGHT TO PIGGYBACK. At any time after the date hereof, whenever
the Company proposes to register any of its securities under the Securities Act
(other than pursuant to a Demand Registration) and the registration form to be
used may be used for the registration of Registrable Securities (a "PIGGYBACK
REGISTRATION"), whether or not for sale for its own account, the Company shall
give prompt written notice (in any event within three business days after its
receipt of notice of any exercise of demand registration rights other than under
this Agreement) to all holders of Registrable Securities of its intention to
effect such a registration and shall include in such registration all
Registrable Securities with respect to which the Company has received written
requests for inclusion therein within 15 days after the receipt of the Company's
notice.
(b) PIGGYBACK EXPENSES. The Registration Expenses of the holders of
Registrable Securities shall be paid by the Company in all Piggyback
Registrations.
(c) PRIORITY ON PRIMARY REGISTRATIONS. If a Piggyback Registration
is an underwritten primary registration on behalf of the Company, and the
managing underwriters advise the Company in writing that in their opinion the
number of securities requested to be included in such registration exceeds the
number which can be sold in such offering without adversely affecting the
marketability of the offering, then,
(A) if such Piggyback registration is filed under the Securities Act on or
prior to the end of the 42nd month after the month in which the Closing
under the Purchase Agreement occurs, the Company shall include in such
registration (i) first, the securities the Company proposes to sell, (ii)
second, the Registrable Securities requested to be included in such
registration, pro rata among the holders of such Registrable Securities on
the basis of the number of shares owned by each such holders, and (iii)
third, other securities requested to be included in such registration; and
(B) if such Piggyback Registration is filed under the Securities Act after
the end of the 42nd month after the month in which the Closing under the
Purchase Agreement occurs, the Company shall include in such registration
(i) first, the securities the Company proposes to sell, (ii) second, the
Registrable Securities and all other securities requested to be included
in such registration, pro rata among the holders of such Registrable
Securities and other securities on the basis of the number of shares owned
by such holder thereof.
(d) PRIORITY ON SECONDARY REGISTRATIONS. If a Piggyback Registration
is solely an underwritten secondary registration on behalf of holders of the
Company's securities, and the managing underwriters advise the Company in
writing that in their opinion the number of securities requested to be included
in such registration exceeds the number which can be sold in such offering
without adversely affecting the marketability of the offering, then,
4
(A) if such Piggyback Registration is filed under the Securities Act on or
prior to the end of the 42nd month after the month in which the Closing
under the Purchase Agreement occurs, the Company shall include in such
registration (i) first, the Registrable Securities requested to be
included in such registration, pro rata among the holders of such
Registrable Securities on the basis of the number of shares owned by each
such holder, (ii) second, the securities requested to be included therein
by the holders requesting such registration, and (iii) third, other
securities requested to be included in such registration; and
(B) if such Piggyback Registration is filed under the Securities Act after
the end of the 42nd month after the month in which the Closing under the
Purchase Agreement occurs, the Company shall include in such registration
the Registrable Securities and all other securities requested to be
included in such registration, pro rata among the holders of such
Registrable Securities and other securities on the basis of the number of
shares owned by each holder thereof.
(e) OTHER REGISTRATIONS. If the Company has previously filed a
registration statement with respect to Registrable Securities pursuant to
Section 1 or pursuant to this Section 2, and if such previous registration has
not been withdrawn or abandoned, the Company shall not file or cause to be
effected any other registration of any of its equity securities or securities
convertible or exchangeable into or exercisable for its equity securities under
the Securities Act (except on Form S-4 or Form S-8 or any successor forms or on
Form S-3 with respect to any employee benefit plans of the Company), whether on
its own behalf or at the request of any holder or holders of such securities,
until a period of at least 180 days has elapsed from the effective date of such
previous registration.
3. HOLDBACK AGREEMENTS.
(a) Each holder of Registrable Securities shall not effect any
public sale or distribution (including sales pursuant to Rule 144) of equity
securities of the Company, or any securities convertible into or exchangeable or
exercisable for such securities, during the seven days prior to and the 90-day
period beginning on the effective date of any underwritten Demand Registration
or any underwritten Piggyback Registration in which Registrable Securities are
included (except as part of such underwritten registration), unless the
underwriters managing the registered public offering otherwise agree.
(b) The Company (i) shall not effect any public sale or distribution
on its equity securities, or any securities convertible into or exchangeable or
exercisable for such securities, during the seven days prior to and during the
90-day period beginning on the effective date of any underwritten Demand
Registration or any underwritten Piggyback Registration (except as part of such
underwritten registration or pursuant to registrations on Form S-4 or Form S-8
or any successor forms or on Form S-3 with respect to any employee benefit plans
of the Company), unless the underwriters managing
5
the registered public offering otherwise agree, and (ii) shall use reasonable
efforts to cause each holder of at least 10% (on a fully-diluted basis) of its
Common Stock, or any securities convertible into or exchangeable or exercisable
for Common Stock, purchased from the Company at any time after the date of this
Agreement (other than in a registered public offering or pursuant to the
exercise of any warrants for Common Stock outstanding as of the date of the
Purchase Agreement) to agree not to effect any public sale or distribution
(including sales pursuant to Rule 144) of any such securities during such period
(except as part of such underwritten registration, if otherwise permitted),
unless the underwriters managing the registered public offering otherwise agree.
4. REGISTRATION PROCEDURES. Whenever the holders of Registrable
Securities have requested that any Registrable Securities be registered pursuant
to this Agreement, the Company shall use all commercially reasonable efforts to
effect the registration and the sale of such Registrable Securities in
accordance with the intended method of disposition thereof (including the
registration of AMSC Warrants held by a holder of Registrable Securities), and
pursuant thereto, the Company shall as expeditiously as possible:
(a) prepare and (within 60 days after the end of the period within
which requests for registration may be given to the Company) file with the
Securities and Exchange Commission a registration statement with respect to such
Registrable Securities and use all commercially reasonable efforts to cause such
registration statement to become effective (provided that before filing a
registration statement or prospectus or any amendments or supplements thereto,
the Company shall furnish to any counsel selected by the holders of a majority
of the Registrable Securities covered by such registration statement, copies of
all such documents proposed to be filed, which documents shall be subject to the
review and comment of such counsel);
(b) notify each holder of Registrable Securities of the
effectiveness of each registration statement filed hereunder and prepare and
file with the Securities and Exchange Commission such amendments and supplements
to such registration statement and the prospectus used in connection therewith
as may be necessary to keep such registration statement effective for a period
of not less than 180 days and comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such registration
statement during such period in accordance with the intended methods of
disposition by the sellers thereof, set forth in such registration statement;
(c) furnish to each seller of Registrable Securities such number of
copies of such registration statement, each amendment and supplement thereto,
the prospectus included in such registration statement (including each
preliminary prospectus), and such other documents as such seller may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such seller;
(d) use all commercially reasonable efforts to register or qualify
such Registrable Securities under such other securities or blue sky laws of such
jurisdictions
6
as any seller reasonably requests and do any and all other acts and things which
may be reasonably necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
seller (provided that the Company shall not be required to (i) qualify generally
to do business in any jurisdiction where it would not otherwise be required to
qualify but for this subparagraph, (ii) subject itself to taxation in any such
jurisdiction or (iii) consent to general service of process in any such
jurisdiction);
(e) notify each seller of such Registrable Securities, at any time
when a prospectus relating thereto is required to be delivered under the
Securities Act, upon discovery that, or upon the discovery of the happening of
any event as a result of which, the prospectus included in such registration
statement contains an untrue statement of a material fact or omits any fact
necessary to make the statements therein not misleading, and, at the request of
any such seller, the Company shall prepare a supplement or amendment to such
prospectus so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus shall not contain an untrue statement of
a material fact or omit to state any fact necessary to make the statements
therein not misleading;
(f) cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company are then
listed;
(g) provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such registration statement;
(h) enter into such customary agreements (including underwriting
agreements in customary form if such registration is underwritten) and take such
other customary actions (which persons in similar circumstances would be
expected to take in a reasonable effort to facilitate the sale of Registrable
Securities as contemplated hereby) as the holders of a majority of the
Registrable Securities being sold or the underwriters, if any, reasonably
request in order to expedite or facilitate the disposition of such Registrable
Securities;
(i) make available for inspection by any underwriter participating
in any disposition pursuant to such registration statement, and any attorney,
accountant or other agent retained by any such underwriter or selected by the
holders of a majority of the Registrable Securities, all financial and other
records, pertinent corporate documents and properties of the Company, and cause
the Company's officers, directors, employees and independent accountants to
supply all information reasonably requested by any such seller, underwriter,
attorney, accountant or agent in connection with such registration statement;
(j) otherwise use all commercially reasonable efforts to comply with
all applicable rules and regulations of the Securities and Exchange Commission,
and make available to its security holders, as soon as reasonably practicable,
an earnings statement covering the period of at least twelve months beginning
with the first day of
7
the Company's first full calendar quarter after the effective date of the
registration statement which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder;
(k) if any such registration or comparable statement refers to any
holder by name or otherwise as the holder of any securities of the Company and
if its sole and exclusive judgment, such holder is or might be deemed to be an
underwriter or a controlling person of the Company, such holder shall have the
right to require (i) the insertion therein of language, in form and substance
satisfactory to such holder and presented to the Company in writing, to the
effect that the holding by such holder of such securities is not to be construed
as a recommendation by such holder of the investment quality of the Company's
securities covered thereby and that such holding does not imply that such holder
shall assist in meeting any future financial requirements of the Company, or
(ii) in the event that such reference to such holder by name or otherwise is not
required by the Securities Act or any similar Federal statute then in force, the
deletion of the reference to such holder; PROVIDED that with respect to this
clause (ii) such holder shall furnish to the Company an opinion of counsel to
such effect, which opinion and counsel shall be reasonably satisfactory to the
Company;
(l) in the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any common stock included in such registration statement for sale in any
jurisdiction, the Company shall use all commercially reasonable efforts promptly
to obtain the withdrawal of such order;
(m) use all commercially reasonable efforts to cause such
Registrable Securities covered by such registration statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary to enable the sellers thereof to consummate the disposition of such
Registrable Securities; and
(n) use all commercially reasonable efforts to provide a legal
opinion of the Company's outside counsel, dated the effective date of such
registration statement (and, if such registration includes an underwritten
public offering, dated the date of the closing under the underwriting
agreement), with respect to the registration statement, each amendment and
supplement thereto, the prospectus included therein (including the preliminary
prospectus) and such other documents relating thereto in customary form and
covering such matters of the type customarily covered by legal opinions of such
nature.
5. REGISTRATION EXPENSES. All expenses incident to the Company's
performance of or compliance with this Agreement, including without limitation
all registration and filing fees, fees and expenses of compliance with
securities or blue sky laws, printing expenses, messenger and delivery expenses,
fees and disbursement of custodians, and fees and disbursements of counsel for
the Company and all independent certified public accountants, underwriters
(excluding discounts and commissions) and other Persons retained by the Company
(all such expenses being herein called
8
"REGISTRATION EXPENSES"), shall be borne as provided in this Agreement, except
that the Company shall, in any event, pay its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit or
quarterly review, the expense of any liability insurance and the expenses and
fees for listing the securities to be registered on each securities exchange on
which similar securities issued by the Company are then listed or on the NASD
automated quotation system. Notwithstanding the foregoing, the holders of the
Registrable Securities shall pay all of the fees and disbursements of their
respective separate legal counsel in connection with the registration rights
provided hereunder.
6. INDEMNIFICATION
(a) The Company agrees to indemnify, to the extent permitted by law,
each holder of Registrable Securities, its officers and directors and each
Person who controls such holder (within the meaning of the Securities Act)
against all losses, claims, damages, liabilities and expenses incurred by such
party pursuant to any actual or threatened action, suit, proceeding or
investigation arising out of or based upon any untrue or alleged untrue
statement of material fact contained in any registration statement, prospectus
or preliminary prospectus or any amendment thereof or supplement thereto or any
omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as the
same arise out of or are based upon any information furnished in writing to the
Company by such holder expressly for use therein or by such holder's failure to
deliver a copy of the registration statement or prospectus or any amendments or
supplements thereto after the Company has furnished such holder with a
sufficient number of copies of the same.
(b) In connection with any registration statement in which a holder
of Registrable Securities is participating, each such holder shall furnish to
the Company in writing such information and affidavits as the Company reasonably
requests for use in connection with any such registration statement or
prospectus and, to the extent permitted by law, shall indemnify (in the same
manner and to the same extent as set forth in Section 6(a) above) the Company,
its directors and officers and each Person who controls the Company (within the
meaning of the Securities Act) against any losses, claims, damages, liabilities
and expenses resulting from any untrue or alleged untrue statement of material
fact contained in the registration statement, prospectus or preliminary
prospectus or any amendment thereof or supplement thereto or any omission or
alleged omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading, but only to the extent that such
untrue statement or omission is made in reliance on and in conformity with any
information or affidavit, so furnished in writing by such holder; provided that
the obligation to indemnify shall be individual, not joint and several, for each
holder and shall be limited to the net amount of proceeds received by such
holder from the sale of Registrable Securities pursuant to such registration
statement.
9
(c) Any Person entitled to indemnification hereunder shall (i) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification (provided that the failure to give prompt notice
shall not impair any Person's right to indemnification hereunder to the extent
such failure has not prejudiced the indemnifying party) and (ii) unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is assumed,
the indemnifying party shall not be subject to any liability for any settlement
made by the indemnified party without its consent (but such consent shall not be
unreasonably withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim shall not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim.
(d) The indemnification provided for under this Agreement shall
remain in full force and effect regardless of any investigation made by or on
behalf of the indemnified party or any officer, director or controlling Person
of such indemnified party and shall survive the transfer of securities. The
indemnifying party also agrees to make such provisions, as are reasonably
requested by any indemnified party, for contribution to such party in the event
the indemnifying party's indemnification is unavailable for any reason.
7. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No person may
participate in any registration hereunder which is underwritten unless such
Person (i) agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Person or Persons entitled hereunder
to approve such arrangements and (ii) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements; PROVIDED THAT, no
holder of Registrable Securities included in any underwritten registration shall
be required to make any representations or warranties to the Company or the
underwriters (other than representations and warranties regarding such holder
and such holder's intended method of distribution) or to undertake any
indemnification obligations to the Company or the underwriters with respect
thereto, except as otherwise provided in Section 6 hereof.
8. DEFINITIONS.
(a) "ALIENS" means any alien or a representative thereof, or a
foreign government or a representative thereof, or a corporation or other entity
organized under the laws of any foreign government.
10
(b) "COMMON STOCK" means the Common Stock, par value $.01 share, of
the Company.
(c) "REGISTRABLE SECURITIES" means (i) any Common Stock issued
pursuant to the Purchase Agreement (including shares issuable upon the exercise
of any AMSC Warrants) and (ii) any Common Stock issued or issuable with respect
to the securities referred to in clause (i) by way of a stock dividend or stock
split or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization. As to any particular Registrable
Securities, such securities shall cease to be Registrable Securities when they
have been distributed to the public pursuant to a offering registered under the
Securities Act or sold to the public through a broker, dealer or market maker in
compliance with Rule 144 under the Securities Act (or any similar rule then in
force) or repurchased by the Company or any Subsidiary. For purposes of this
Agreement, a Person shall be deemed to be a holder of Registrable Securities,
and the Registrable Securities shall be deemed to be in existence, whenever such
Person has the right to acquire directly or indirectly such Registrable
Securities (upon conversion or exercise in connection with a transfer of
securities or otherwise, but disregarding any restrictions or limitations upon
the exercise of such right), whether or not such acquisition has actually been
effected, and such Person shall be entitled to exercise the rights of a holder
of Registrable Securities hereunder.
(d) Unless otherwise stated, other capitalized terms contained
herein have the meanings set forth in the Purchase Agreement.
9. CURRENT PUBLIC INFORMATION. The Company shall file all reports
required to be filed by it under the Securities Act and the Securities Exchange
Act of 1934, as amended, and the rules and regulations adopted by the Securities
and Exchange Commission thereunder, and will take such further action as any
holder or holders of Registrable Securities may reasonably request, all to the
extent required to enable such holders to sell Registrable Securities pursuant
to Rule 144 adopted by the Securities and Exchange Commission under the
Securities Act (as such rule may be amended from time to time) or any similar
rule or regulation hereafter adopted by the Securities and Exchange Commission.
10. OPINION OF COUNSEL. If the Company so requests, any transfer of
shares of Common Stock held by the Investor on the effective date of this
Agreement (other than shares sold pursuant to the Section 1 or 2 above) shall be
accompanied by an opinion of counsel to the Investor, reasonably satisfactory in
form and substance to the Company to the effect that such transfer complies with
applicable provisions of the Securities Act, and the rules and regulations
promulgated thereunder. In addition, each transfer of shares of Common Stock by
the Investor shall be accompanied by an opinion of counsel to the transferee
reasonably satisfactory in form and substance to the Company, to the effect that
the transfer complies with applicable provisions of the Communications Act of
1934, as amended (the "COMMUNICATIONS ACT"). Notwithstanding the foregoing, no
opinion of counsel shall be required in connection with
11
the transfer of shares of Common Stock that cease to be Registrable Securities,
unless such shares are transferred together with Registrable Securities in a
single transfer or series of related transfers to a single purchaser (including
any Affiliates of such purchaser).
11. ALIEN OWNERSHIP RESTRICTIONS. The Investor acknowledges that the
Company is, and from time to time may be, subject to the laws, regulations
and/or FCC policies restricting the grant of FCC licenses to, or the holding of
FCC licenses by, corporations directly or indirectly owned or controlled by
Aliens, including, but not limited to, Section 310(b) of the Communications Act
(as modified by any FCC ruling or order specifically applicable to the Company
or any subsidiary, the "ALIEN OWNERSHIP RESTRICTIONS"). The Investor shall use
good faith efforts to cooperate (including providing the Company with annual
certifications as reasonably requested by the Company and other documents and/or
information as required by the FCC) with the Company in its compliance with the
Alien Ownership Restrictions as they relate to the Registrable Securities owned
by the Investor. The Investor shall not transfer any Registrable Securities if
such transfer would violate the Alien Ownership Restrictions.
12. MISCELLANEOUS.
(a) ENTIRE AGREEMENT: NO INCONSISTENT AGREEMENTS. This Agreement
contains the entire agreement between the parties hereto with respect to the
transactions contemplated herein and supersede all previous negotiations,
commitments and writings. The Company shall not hereafter enter into any
agreement with respect to its securities which is inconsistent with or violates
the rights granted to the holders of Registrable Securities in this Agreement.
(b) ADJUSTMENTS AFFECTING REGISTRABLE SECURITIES. The Company shall
not take any action, or permit any change to occur, with respect to its equity
capitalization which would adversely affect the ability of the holders of
Registrable Securities to include such Registrable Securities in a registration
undertaken pursuant to this Agreement or which would adversely affect the
marketability of such Registrable Securities in any such registration
(including, without limitation, effecting a stock split or a combination of
shares).
(c) REMEDIES. Any Person having rights under any provision of this
Agreement shall be entitled to enforce such rights specifically to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that any party may in its sole discretion
apply to any court of law or equity of competent jurisdiction (without posting
any bond or other security) for specific performance and for other injunctive
relief in order to enforce or prevent violation of the provisions of this
Agreement.
12
(d) AMENDMENTS AND WAIVERS. Except as otherwise provided herein, the
provisions of this Agreement may be amended or waived only upon the prior
written consent of the Company and holders of a majority of the Registrable
Securities.
(e) SUCCESSORS AND ASSIGNS. All covenants and agreements in this
Agreement by or on behalf of any of the parties hereto shall bind and inure to
the benefit of the respective successors and assigns of the parties hereto
whether so expressed or not. In addition, whether or not any express assignment
has been made, the provisions of this Agreement which are for the benefit of
purchasers or holders of Registrable Securities are also for the benefit of, and
enforceable by, any subsequent holder of Registrable Securities, subject to the
provisions respecting the minimum numbers or percentages of shares of
Registrable Securities required in order to be entitled to certain rights, or
take certain actions, contained herein.
(f) SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or the effectiveness or validity of any provision in any
other jurisdiction, and this Agreement shall be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.
(g) COUNTERPARTS. This Agreement may be executed simultaneously in
two or more counterparts (including by means of telecopied signature pages), any
one of which need not contain the signatures of more than one party, but all
such counterparts taken together shall constitute one and the same Agreement.
(h) DESCRIPTIVE HEADINGS. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING
EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW RULES OR PROVISIONS (WHETHER OF
THE STATE OF NEW YORK OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE
APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.
(j) NOTICES. All notices, demand or other communications to be given
or delivered under or by reasons of the provisions of this Agreement shall be in
writing and shall be deemed to have been given when (i) delivered personally to
the recipient, (ii) sent to the recipient by reputable overnight courier service
(charges prepaid) or (iii) mailed to the recipient by certified or registered
mail, return receipt requested and
13
postage prepaid. Such notices, demands and other communications shall be sent to
the Investor and the Company at the applicable address indicated below:
TO INVESTOR:
Motorola, Inc.
0000 Xxxx Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: General Counsel
Facsimile: (000) 000-0000
WITH A COPY (WHICH WILL NOT CONSTITUTE NOTICE) TO:
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxx X. Xxxxxxxxxx, Esq.
Facsimile: (000) 000-0000
TO THE COMPANY:
American Mobile Satellite Corporation
00000 Xxxxxxxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxx 00000-0000
Attn: General Counsel
Facsimile: (000) 000-0000
WITH A COPY (WHICH WILL NOT CONSTITUTE NOTICE) TO:
Xxxxxx & Xxxxxx
000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attn: Xxxxxx X. Xxxx, Esq.
Facsimile: (000) 000-0000
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
* * * * *
14
IN WITNESS WHEREOF, the parties have duly executed this Registration
Rights Agreement as of the date first written above.
MOTOROLA, INC.,
a Delaware corporation
By:
Name:
Its:
AMERICAN MOBILE SATELLITE
CORPORATION,
a Delaware corporation
By:
Name:
Its:
