Execution Version
Registration Rights Agreement
-----------------------------
February 5, 2008
This Registration Rights Agreement (the "Agreement") is made and
entered into as of February 5, 2008, by and among TerreStar Corporation, a
Delaware corporation (the "Company"), EchoStar Corporation, a Nevada corporation
("EchoStar"), Harbinger Capital Partners Master Fund I, Ltd., and Harbinger
Capital Partners Special Situations Fund, L.P. (collectively, the "Harbinger
Funds" and together with EchoStar and the other purchasers of the Notes who
become a party to this Agreement by signing a counterpart signature page to this
Agreement on or prior to February 8, 2008, the "Investors") pursuant to the
Master Investment Agreement, dated of even date herewith, by and among the
Company, TerreStar Networks Inc., a Delaware corporation ("TerreStar") and
EchoStar (the "EchoStar Master Investment Agreement"), and the Master Investment
Agreement, dated of even date herewith, by and among the Company, TerreStar and
the Harbinger Funds (the "Harbinger Master Investment Agreement" and together
with the EchoStar Master Investment Agreement, the "Master Investment
Agreements"), the Spectrum Contribution Agreement, dated of even date herewith,
by and among the Company, Harbinger Capital Partners Master Fund I, Ltd. and
Harbinger Capital Partners Special Situations Fund, L.P. (the "Harbinger
Spectrum Contribution Agreement") and the Spectrum Agreement, dated of even date
herewith, by and among the Company and EchoStar (the "EchoStar Spectrum
Agreement").
As an inducement to the Investors to enter into the Master Investment
Agreements, the Harbinger Spectrum Contribution Agreement and the EchoStar
Spectrum Agreement and in satisfaction of a condition to the obligations of the
Investors thereunder, the Company agrees with the Investors, for the benefit of
the holders from time to time (including the Investors) of the Notes, the Junior
Preferred Shares and the Registrable Securities (as defined below)
(collectively, the "Holders"), as follows:
1. Certain Definitions.
For purposes of this Registration Rights Agreement, the following
terms shall have the following meanings:
(a) "Additional Interest" has the meaning assigned thereto in Section
2(e).
(b) "Additional Interest Payment Date" has the meaning assigned thereto in
Section 2(e).
(c) "Additional Registrable Securities" means:
(i) the Common Shares, if any, issued or issuable upon conversion of
the Junior Preferred Shares issued to Harbinger pursuant to the
Harbinger Spectrum Contribution Agreement, until the earliest of
(i) their effective registration under the Securities Act and the
resale of all such Common Shares in accordance with the Shelf
Registration Statement, (ii) the date on which all such Common
Shares are freely transferable by persons who are not Affiliates
of the Company in a single transaction at one time without
registration under the Securities Act, or (iii) the date on which
all such Common Shares cease to be outstanding; and
(ii) the Common Shares issued to EchoStar pursuant to the EchoStar
Spectrum Agreement, if any, until the earliest of (i) their
effective registration under the Securities Act and the resale of
all such Common Shares in accordance with the Shelf Registration
Statement, (ii) the date on which all such Common Shares are
freely transferable by persons who are not Affiliates of the
Company in a single transaction at one time without registration
under the Securities Act, or (iii) the date on which all such
Common Shares cease to be outstanding.
(d) "Additional Registration Effective Period" has the meaning assigned
thereto in Section 2(a).
(e) "Additional Shelf Registration Statement" means the shelf registration
statement referred to in Section 2(b), as amended or supplemented by
any amendment or supplement, including post-effective amendments, and
all materials incorporated by reference or explicitly deemed to be
incorporated by reference in such Shelf Registration Statement.
(f) "Agreement" means this Registration Rights Agreement, as the same may
be amended from time to time pursuant to the terms hereof.
(g) "Closing Date" means:
(i) with respect to the Initial Registrable Securities and the
Initial Shelf Registration Statement, the Notes Closing Date; and
(ii) with respect to the Additional Registrable Securities and the
Additional Shelf Registration Statement, the Spectrum Closing
Date.
(h) "Commission" means the Securities and Exchange Commission, or any
other federal agency at the time administering the Exchange Act or the
Securities Act, whichever is the relevant statute for the particular
purpose.
(i) "Common Shares" means the shares of common stock of the Company, par
value $0.01 per share, (i) for which the Notes (other than the Notes
that are exchangeable for Junior Preferred Shares) are exchangeable or
that have been issued upon any exchange of such Notes, (ii) into which
the Junior Preferred Shares are convertible or that have been issued
upon any conversion of any Junior Preferred Shares and (iii) to be
issued to EchoStar pursuant to the EchoStar Spectrum Agreement.
(j) "Company" has the meaning specified in the preamble to this Agreement.
(k) "Deferral Notice" has the meaning assigned thereto in Section 3(b).
(l) "Deferral Period" has the meaning assigned thereto in Section 3(b).
(m) "EchoStar" has the meaning specified in the preamble to this
Agreement.
(n) "EchoStar Master Investment Agreement" has the meaning specified in
the preamble to this Agreement.
(o) "EchoStar Spectrum Agreement" has the meaning assigned thereto in the
preamble to this Agreement.
(p) "Effective Period" means:
(i) with respect to the Initial Shelf Registration Statement, the
Initial Registration Effective Period; and
(ii) with respect to the Additional Shelf Registration Statement, the
Additional Registration Effective Period.
(q) "Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
(r) "Eligibility Date" shall have the meaning set forth in Section 2(e).
(s) "FINRA" means the Financial Industry Regulatory Authority.
(t) "Harbinger" means the Harbinger Funds, collectively.
(u) "Harbinger Spectrum Contribution Agreement" has the meaning assigned
thereto in the preamble to this Agreement.
(v) "Harbinger Master Investment Agreement" has the meaning specified in
the preamble to this Agreement.
(w) "Harbinger Funds" has the meaning assigned thereto in the preamble to
this Agreement.
(x) "Holders" has the meaning specified in the preamble to this Agreement.
(y) "Indenture" means the Indenture dated as of the date hereof among the
Company, TerreStar, the guarantors party thereto and U.S. Bank,
National Association, as Trustee, pursuant to which the Notes are
being issued.
(z) "Initial Registrable Securities" means:
(i) the Common Shares, if any, issued upon exchange of the Notes or
upon exchange of the Junior Preferred Stock, if any, issued upon
exchange of the Notes, until the earliest of (i) their effective
registration under the Securities Act and the resale of all such
Common Shares in accordance with the Shelf Registration
Statement, (ii) the date on which all such Common Shares are
freely transferable by persons who are not Affiliates of the
Company in a single transaction at one time without registration
under the Securities Act, or (iii) the date on which all such
Common Shares cease to be outstanding.
(aa) "Initial Registration Effective Period" has the meaning assigned
thereto in Section 2(a).
(bb) "Initial Shelf Registration Statement" means the shelf registration
statement referred to in Section 2(a), as amended or supplemented by
any amendment or supplement, including post-effective amendments, and
all materials incorporated by reference or explicitly deemed to be
incorporated by reference in such Shelf Registration Statement.
(cc) "Investors" has the meaning specified in the preamble to this
Agreement.
(dd) "Junior Preferred Shares" means the shares of Series E Junior
Participating Preferred Stock of the Company, par value $0.01 per
share, (i) for which the Notes (other than the Notes that are
exchangeable for Common Shares) are exchangeable or that have been
issued upon any exchange of such Notes and (ii) to be issued to
Harbinger pursuant to the terms of the Harbinger Spectrum Contribution
Agreement.
(ee) "Material Event" has the meaning assigned thereto in Section 3(a)(iv).
(ff) "Majority Holders" shall mean, on any date, holders of the majority of
the Registrable Securities; for the purposes of this definition,
Holders of Underlying Securities shall be deemed to be the Holders of
the number of Common Shares into which such Underlying Securities are
or would be exchangeable or convertible as of such date.
(gg) "Master Investment Agreements" has the meaning specified in the
preamble to this Agreement.
(hh) "Notes" shall mean the 6.5% Senior Exchangeable PIK Notes Due 2014, to
be issued under the Indenture and sold by TerreStar to the Investors.
(ii) "Note Stockholder Approval": the approval of the Stockholders of the
Parent (i) to the issuance of Common Shares issuable (A) upon exchange
of the Notes and (B) upon conversion of the Junior Preferred Stock
issuable upon exchange of the Notes and (ii) to the extent required
for such issuances, to increase the number of shares of capital stock
authorized under the Company's Certificate of Incorporation.
(jj) "Notes Closing Date" means the effective date of the Note Stockholder
Approval.
(kk) "Notice and Questionnaire" means a written notice delivered to the
Company containing substantially the information called for by the
Form of Selling Securityholder Notice and Questionnaire attached
hereto as Annex A.
(ll) "Notice Holder" means, on any date, any Holder that has delivered a
Notice and Questionnaire to the Company on or prior to such date.
(mm) "Penalty Principal Amount" means, at any given time:
(i) For each Note issued and outstanding at such time, the principal
amount of such Note; and
(ii) For each Common Share or Junior Preferred Share issued and
outstanding at such time, an amount equal to the Conversion
Price, as such term is defined in the Indenture.
(nn) "Person" means a corporation, association, partnership, organization,
business, individual, government or political subdivision thereof or
governmental agency.
(oo) "Prospectus" means the prospectus included in any Shelf Registration
Statement, as amended or supplemented by any amendment or prospectus
supplement, including post-effective amendments, and all materials
incorporated by reference or explicitly deemed to be incorporated by
reference in such Prospectus.
(pp) "Registrable Securities" means the Initial Registrable Securities and
the Additional Registrable Securities.
(qq) "Registration Default" has the meaning assigned thereto in Section
2(e).
(rr) "Registration Expenses" has the meaning assigned thereto in Section 6.
(ss) "Rule 144," "Rule 405" and "Rule 415" mean, in each case, such rule as
promulgated under the Securities Act.
(tt) "Securities" means, collectively, the Notes, the Common Shares and the
Junior Preferred Shares.
(uu) "Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
(vv) "Shelf Registration Statements" means the Initial Shelf Registration
Statement and the Additional Shelf Registration Statement.
(ww) "Spectrum Closing Date" means the effective date of the Spectrum
Stockholder Approval.
(xx) "Special Counsel" has the meaning assigned thereto in Section 6.
(yy) "Spectrum Contribution": the transactions contemplated by (i) the
Spectrum Contribution Agreement dated as of February 5, 2008 among the
Company, Harbinger Capital Partners Master Fund I, Ltd. and Harbinger
Capital Partners Special Situations Fund, L.P. and (ii) the Spectrum
Agreement dated as of February 5, 2008 among Parent, the Company and
EchoStar.
(zz) "Spectrum Stockholder Approval": the approval of the stockholders of
the Company (i) to the issuance of Common Shares and Junior Preferred
Shares issuable in connection with the Spectrum Contribution, and (ii)
to the extent required for such issuances, to increase the number of
shares of capital stock authorized under the Company's Certificate of
Incorporation.
(aaa) "TerreStar" has the meaning assigned thereto in the preamble to this
Agreement.
(bbb) "Trustee" shall have the meaning assigned thereto in the Indenture.
(ccc) "Underlying Securities" means, at any given time:
(i) the Notes issued and outstanding at such time which have not been
repurchased or exchanged pursuant to the terms of the Indenture;
and
(ii) the Junior Preferred Shares issued and outstanding at such time
which have not been converted into Common Shares.
Unless the context otherwise requires, any reference herein to a
"Section" or "clause" refers to a Section or clause, as the case may be, of this
Agreement, and the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Section or other subdivision. Unless the context otherwise requires, any
reference to a statute, rule or regulation refers to the same (including any
successor statute, rule or regulation thereto) as it may be amended from time to
time.
2. Registration Under the Securities Act.
(a) The Company agrees to file under the Securities Act as promptly as
practicable but in any event no later than the 30th day after the
Notes Closing Date with respect to the Initial Registrable Securities
a shelf registration statement providing for the registration of, and
the sale on a continuous or delayed basis by the Holders of, all of
the Initial Registrable Securities, pursuant to Rule 415 or any
similar rule that may be adopted by the Commission. The Company agrees
to use its reasonable efforts to cause the Initial Shelf Registration
Statement to become or be declared effective under the Securities Act
as promptly as practicable but in no event later than 90 days after
such Notes Closing Date and to keep such Initial Shelf Registration
Statement continuously effective until each of the Initial Registrable
Securities covered by the Initial Shelf Registration Statement ceases
to be an Initial Registrable Security (the "Initial Registration
Effective Period"). Reasonable efforts shall be deemed to have been
used notwithstanding an inability to have the Initial Shelf
Registration Statement declared or kept effective due to an inability
to obtain the consent of the Company's accountants after the use of
reasonable efforts to obtain such consent by the Company. Except
pursuant to registration rights obligations of the Company in
existence prior to such Notes Closing Date, the Company's
securityholders (other than the Holders) shall not have the right to
include any of the Company's securities in the Initial Shelf
Registration Statement.
(b) The Company agrees to file under the Securities Act as promptly as
practicable but in any event no later than the 30th day after the
Spectrum Closing Date with respect to the Additional Registrable
Securities a shelf registration statement providing for the
registration of, and the sale on a continuous or delayed basis by the
Holders of, all of the Additional Registrable Securities, pursuant to
Rule 415 or any similar rule that may be adopted by the Commission.
The Company agrees to use its reasonable efforts to cause the
Additional Shelf Registration Statement to become or be declared
effective under the Securities Act as promptly as practicable but in
no event later than 90 days after such Spectrum Closing Date and to
keep such Additional Shelf Registration Statement continuously
effective until each of the Additional Registrable Securities covered
by the Additional Shelf Registration Statement ceases to be an
Additional Registrable Security (the "Additional Registration
Effective Period"). Reasonable efforts shall be deemed to have been
used notwithstanding an inability to have the Additional Shelf
Registration Statement declared or kept effective due to an inability
to obtain the consent of the Company's accountants after the use of
reasonable efforts to obtain such consent by the Company. Except
pursuant to registration rights obligations of the Company in
existence prior to such Spectrum Closing Date, the Company's
securityholders (other than the Holders) shall not have the right to
include any of the Company's securities in the Additional Shelf
Registration Statement.
(c) The Company further agrees that it shall cause each Shelf Registration
Statement and the related Prospectus and any amendment or supplement
thereto, as of the effective date of such Shelf Registration Statement
or such amendment or supplement, (i) to comply in all material
respects with the applicable requirements of the Securities Act; and
(ii) not to contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in
order to make the statements therein (in the case of the Prospectus,
in the light of the circumstances under which they were made) not
misleading, and the Company agrees to furnish to the Holders copies of
any supplement or amendment upon the request of such Holder prior to
its being used or promptly following its filing with the Commission;
provided, however, that the Company shall have no obligation to
deliver to the Holders copies of any amendment consisting exclusively
of an Exchange Act report or other Exchange Act filing otherwise
publicly available on the Company's website. If a Shelf Registration
Statement, as amended or supplemented from time to time, ceases to be
effective for any reason at any time during its respective Effective
Period (other than because all Registrable Securities registered
thereunder shall have been sold pursuant thereto or shall have
otherwise ceased to be Registrable Securities), the Company shall use
its reasonable efforts, subject to Section 3(b), to obtain the prompt
withdrawal of any order suspending the effectiveness thereof.
(d) Each Holder agrees that if such Holder wishes to sell Registrable
Securities pursuant to a Shelf Registration Statement and related
Prospectus, it will do so only in accordance with this Section 2(d)
and Section 3(b). From and after the date a Shelf Registration
Statement is declared effective, the Company shall, as promptly as is
practicable after the date a Notice and Questionnaire is delivered to
itself and counsel to the Company, and in any event within fifteen
(15) days after the date of receipt of such Notice and Questionnaire,
or if the use of the Prospectus has been suspended by the Company
under Section 3(b) hereof at the time of receipt of the Notice and
Questionnaire, ten (10) days after the expiration of the period during
which the use of the Prospectus is suspended:
(i) if required by applicable law, file with the Commission a
post-effective amendment to such Shelf Registration Statement or
prepare and if required by applicable law, file a supplement to
the related Prospectus or a supplement or amendment to any
document incorporated therein by reference or file any other
required document so that the Holder delivering such Notice and
Questionnaire is named as a selling security holder in such Shelf
Registration Statement and the related Prospectus in such a
manner as to permit such Holder to deliver such Prospectus to
purchasers of the Registrable Securities in accordance with
applicable law and, if the Company shall file a post-effective
amendment to such Shelf Registration Statement, use its
reasonable efforts to cause such post-effective amendment to be
declared effective under the Securities Act as promptly as is
practicable. Notwithstanding the foregoing, the Company shall not
be required to file more than one post-effective amendment to
each Shelf Registration Statement or supplement to the related
Prospectus during any thirty (30) day period;
(ii) provide such Holder copies of any documents filed pursuant to
Section 2(d)(i); and
(iii) notify such Holder as promptly as practicable after the
effectiveness under the Securities Act of any post-effective
amendment filed pursuant to Section 2(d)(i).
Notwithstanding anything contained herein to the contrary, the Company shall be
under no obligation to name any Holder that is not a Notice Holder as a selling
securityholder in any Shelf Registration Statement or related Prospectus;
provided, however, that any Holder that becomes a Notice Holder pursuant to the
provisions of this Section 2(d) (whether or not such Holder was a Notice Holder
at the time such Shelf Registration Statement was declared effective) shall be
named as a selling securityholder in such Shelf Registration Statement or
related Prospectus in accordance with the requirements of this Section 2(d).
(e) If any of the following events (any such event a "Registration
Default") shall occur (notwithstanding the Company's compliance with
the provisions of this Agreement, including this Section 2), then
additional interest (the "Additional Interest") shall become payable
by the Company to Holders in respect of the Registrable Securities and
Underlying Securities as follows:
(i) if (notwithstanding the Company's compliance with the provisions
of this Agreement, including this Section 2) a Shelf Registration
Statement is not filed with the Commission within 30 days
following the relevant Closing Date, then commencing on the 31st
day after such Closing Date, Additional Interest shall accrue on
the Penalty Principal Amount of such securities at a rate of
0.25% per annum for the first 60 days following such 31st day and
at a rate of 0.5% per annum thereafter;
(ii) if (notwithstanding the Company's compliance with the provisions
of this Agreement, including this Section 2) a Shelf Registration
Statement is not declared effective by the Commission within 90
days following the relevant Closing Date, then commencing on the
91st day after such Closing Date, Additional Interest shall
accrue on the Penalty Principal Amount of such securities at a
rate of 0.25% per annum for the first 90 days following such 91st
day and at a rate of 0.5% per annum thereafter;
(iii) if the Company has failed to perform its obligations set forth
in Section 2(d) hereof with respect to a Holder within the time
periods required therein, then commencing on the first day after
the date by which the Company was required to perform such
obligations, Additional Interest shall accrue on the Penalty
Principal Amount of such securities of such Holder at a rate of
0.25% per annum for the first 60 days and at a rate of 0.5% per
annum thereafter;
(iv) if the Shelf Registration Statement has been declared effective
but such Shelf Registration Statement ceases to be effective at
any time during the relevant Effective Period (other than
pursuant to Section 3(b) hereof), then commencing on the day such
Shelf Registration Statement ceases to be effective, Additional
Interest shall accrue on the Penalty Principal Amount of such
securities at a rate of 0.25% per annum for the first 60 days
following such date on which the Shelf Registration Statement
ceases to be effective and at a rate of 0.5% per annum
thereafter;
(v) if the aggregate duration of Deferral Periods in any period
exceeds the number of days permitted in respect of such period
pursuant to Section 3(b) hereof, then commencing on the day the
aggregate duration of Deferral Periods in any period exceeds the
number of days permitted in respect of such period (and again on
the first day of any subsequent Deferral Period during such
period), Additional Interest shall accrue on the Penalty
Principal Amount of such securities at a rate of 0.25% per annum
for the first 60 days and at a rate of 0.5% per annum thereafter;
(vi) if pursuant to Section 2(f), the Company has not filed a
registration statement upon the request of holders of excluded
Registrable Securities, within 30 days following the receipt of
such request, then commencing on the 31st day after such request,
Additional Interest shall accrue on the Penalty Principal Amount
of all then excluded Registrable Securities under Section 2(f) at
a rate of 0.25% per annum for the first 60 days following such
31st day and at a rate of 0.5% per annum thereafter; or
(vii) if pursuant to Section 2(f), the registration statement
requested by the holders of excluded Registrable Securities is
not declared effective by the Commission within 90 days following
the date that a registration statement was requested by holders
of excluded Registrable Securities pursuant to Section 2(f), then
commencing on the 91st day after such request, Additional
Interest shall accrue on the Penalty Principal Amount of all then
excluded Registrable Securities under Section 2(f) at a rate of
0.25% per annum for the first 90 days following such 91st day and
at a rate of 0.5% per annum thereafter;
(f) The Company shall be entitled to exclude from the relevant Shelf
Registration Statement such Registrable Securities as the Company and
its securities counsel reasonably determine (in consultation with the
Investors and their securities counsel) is required for the offering
to qualify as a secondary (rather than a primary) offering pursuant to
Rule 415 under the Securities Act in response to comments from the
staff of the SEC after the Company and its securities counsel have
used their reasonable best efforts to address the staff's comments. To
the extent any Registrable Securities are so excluded, no Additional
Interest (other than as set forth in Section 2(e)(vi) and (vii)) or
other penalty will apply to such excluded Registrable Securities, and
the Company agrees to use its reasonable best efforts to register such
excluded Registrable Securities in accordance with this Section 2
promptly when eligible to do so under applicable federal securities
laws, rules, regulations and policies, as the Company and its
securities counsel reasonably determine (in consultation with the
Investors and their securities counsel). Notwithstanding the
foregoing, if the Company shall at any time receive a written request
from the Holders of excluded Registrable Securities with an
anticipated aggregate offering price of at least $5,000,000 that have
not been registered, the Company shall within 30 days of such request
file a registration statement under the Securities Act covering the
registration of such excluded Registrable Securities. The Company
shall also within 10 days of the receipt of such request give written
notice of such request to all Holders of excluded Registrable
Securities and shall use its reasonable best efforts to effect as soon
as practicable, and in any event within 90 days of the receipt of such
request, the registration under the Securities Act of all excluded
Registrable Securities which the Holders request to be registered
within 20 days of the mailing of such notice by the Company;
provided, however, that the Additional Interest rate on such securities shall
not exceed in the aggregate 0.5% per annum and shall not be payable under more
than one clause above for any given period of time, except that if Additional
Interest would be payable under more than one clause above, but at a rate of
0.25% per annum under one clause and at a rate of 0.5% per annum under the
other, then the Additional Interest rate shall be the higher rate of 0.5% per
annum. Following the cure of all Registration Defaults requiring the payment of
Additional Interest to the Holders pursuant to this Section or upon the
termination of certain transfer restrictions on the Securities with respect to a
particular Holder because such Holder is able to sell all of its Securities in a
single transaction at one time pursuant to Rule 144 or any successor provision,
the accrual of Additional Interest will cease with respect to that Holder
(without in any way limiting the effect of any subsequent Registration Default
requiring the payment of Additional Interest).
Additional Interest on such securities, if any, will be payable in
cash on March 15 and September 15 of each year (the "Additional Interest Payment
Date") to holders of record of such securities at the close of business on March
1 or September 1, as the case may be, immediately preceding the relevant
interest payment date; provided that in the case of an event of the type
described in clause (iii) above, such Additional Interest shall be paid only to
the Holders that have delivered Notice and Questionnaires that caused the
Company to incur the obligations set forth in Section 2(d) the non-performance
of which is the basis of such Registration Default; provided further that any
Additional Interest accrued with respect to such securities or portion thereof
put for repurchase on a repurchase date or exchanged for Common Shares or Junior
Preferred Shares on an exchange date prior to the Registration Default shall, in
any such event, be paid instead to the Holder who submitted such Notes or
portion thereof for repurchase or exchange on the applicable repurchase date or
exchange date, as the case may be, on such date (or promptly following the
exchange date, in the case of exchange).
The Company shall notify the Trustee immediately upon the happening of
each and every Registration Default. The Trustee shall be entitled, on behalf of
the Holders, to seek any available remedy for the enforcement of this Agreement,
including for the payment of any Additional Interest. Notwithstanding the
foregoing, the parties agree that the sole monetary damages payable for a
violation of the terms of this Agreement with respect to which additional
monetary amounts are expressly provided shall be as set forth in this Section 2.
Nothing shall preclude a Holder or Notice Holder from pursuing or obtaining
specific performance or other equitable relief with respect to this Agreement.
3. Registration Procedures.
The following provisions shall apply to a Shelf Registration Statement
filed pursuant to Section 2:
(a) The Company shall:
(i) prepare and file with the Commission a registration statement
with respect to the shelf registration on any form which may be
utilized by the Company and which shall permit the disposition of
the Registrable Securities covered by such Shelf Registration
Statement in accordance with the intended method or methods
thereof, as specified in writing by the Holders, and use its
reasonable efforts to cause such registration statement to become
effective in accordance with Section 2(a) or Section 2(b) above;
(ii) before filing any Shelf Registration Statement or Prospectus or
any amendments or supplements thereto with the Commission,
furnish to the Investors copies of all such documents proposed to
be filed and use reasonable efforts to reflect in each such
document when so filed with the Commission such comments as the
Investors reasonably shall propose within three (3) Business Days
of the delivery of such copies to the Investors;
(iii) subject to Section 3(b), use its reasonable efforts to prepare
and file with the Commission such amendments and post-effective
amendments to the Shelf Registration Statement and file with the
Commission any other required document as may be necessary to
keep such Shelf Registration Statement continuously effective
until the expiration of the relevant Effective Period; cause the
related Prospectus to be supplemented by any required prospectus
supplement, and as so supplemented to be filed pursuant to Rule
424 (or any similar provisions then in force) under the
Securities Act; and comply with the provisions of the Securities
Act applicable to it with respect to the disposition of all
Registrable Securities covered by such Shelf Registration
Statement during the relevant Effective Period in accordance with
the intended methods of disposition by the sellers thereof set
forth in such Shelf Registration Statement as so amended or such
Prospectus as so supplemented;
(iv) promptly notify the Notice Holders that have requested or
received copies of the Prospectus included in such Shelf
Registration Statement (A) when such Shelf Registration Statement
or the Prospectus included therein or any amendment or supplement
to the Prospectus or post-effective amendment has been filed with
the Commission, and, with respect to such Shelf Registration
Statement or any post-effective amendment, when the same has
become effective, (B) of any request, following the effectiveness
of the Shelf Registration Statement, by the Commission or any
other Federal or state governmental authority for amendments or
supplements to the Shelf Registration Statement or related
Prospectus, (C) of the issuance by the Commission of any stop
order suspending the effectiveness of such Shelf Registration
Statement or the initiation or written threat of any proceedings
for that purpose, (D) of the receipt by the Company of any
notification with respect to the suspension of the qualification
of the Registrable Securities for sale in any jurisdiction or the
initiation or written threat of any proceeding for such purpose,
(E) of the occurrence of (but not the nature of or details
concerning) any event or the existence of any fact (a "Material
Event") as a result of which any Shelf Registration Statement
shall contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary to make the statements therein not misleading, or any
Prospectus shall contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading
(provided, however, that no notice by the Company shall be
required pursuant to this clause (E) in the event that the
Company either promptly files a prospectus supplement to update
the Prospectus or a Form 8-K or other appropriate Exchange Act
report that is incorporated by reference into the Shelf
Registration Statement, which, in either case, contains the
requisite information with respect to such Material Event that
results in such Shelf Registration Statement no longer containing
any untrue statement of material fact or omitting to state a
material fact necessary to make the statements contained therein
not misleading), (F) of the determination by the Company that a
post-effective amendment to the Shelf Registration Statement
(other than for the purpose of naming a Notice Holder as a
selling securityholder therein) will be filed with the
Commission, which notice may, at the discretion of the Company
(or as required pursuant to Section 3(b)), state that it
constitutes a Deferral Notice, in which event the provisions of
Section 3(b) shall apply or (G) at any time when a Prospectus is
required to be delivered under the Securities Act, that the Shelf
Registration Statement, Prospectus, Prospectus amendment or
supplement or post-effective amendment does not conform in all
material respects to the applicable requirements of the
Securities Act and the rules and regulations of the Commission
thereunder;
(v) prior to any public offering of the Registrable Securities
pursuant to the Shelf Registration Statement, use its reasonable
efforts to register or qualify, or cooperate with the Notice
Holders of Securities included therein and their respective
counsel in connection with the registration or qualification of,
such Registrable Securities for offer and sale under the
securities or blue sky laws of such jurisdictions as any such
Notice Holders reasonably request in writing and do any and all
other acts or things reasonably necessary or advisable to enable
the offer and sale in such jurisdictions of the Registrable
Securities covered by the Shelf Registration Statement; prior to
any public offering of the Registrable Securities pursuant to the
Shelf Registration Statement, subject to Section 3(b), use its
reasonable efforts to keep each such registration or
qualification (or exemption therefrom) effective during the
relevant Effective Period in connection with such Notice Holder's
offer and sale of Registrable Securities pursuant to such
registration or qualification (or exemption therefrom) and do any
and all other acts or things reasonably necessary or advisable to
enable the disposition in such jurisdictions of such Registrable
Securities in the manner set forth in the Shelf Registration
Statement and the related Prospectus; provided that the Company
will not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified or to take any
action which would subject it to general service of process or to
taxation in any such jurisdiction where it is not then so
subject;
(vi) use its reasonable efforts to prevent the issuance of, and if
issued, to obtain the withdrawal of any order suspending the
effectiveness of the Shelf Registration Statement or any
post-effective amendment thereto, and to lift any suspension of
the qualification of any of the Registrable Securities for sale
in any jurisdiction in which they have been qualified for sale,
in each case at the earliest practicable date;
(vii) upon reasonable notice, for a reasonable period prior to the
filing of the Shelf Registration Statement, and throughout the
relevant Effective Period, (i) make reasonably available for
inspection by a representative of, and Special Counsel acting
for, Majority Holders of the Registrable Securities being sold
and any underwriter (and its counsel) participating in any
disposition of Registrable Securities pursuant to such Shelf
Registration Statement, all relevant financial and other records,
pertinent corporate documents and properties of the Company and
its subsidiaries, (ii) use reasonable efforts to have its
officers, directors, employees, accountants and counsel supply
all relevant information reasonably requested by such
representative, Special Counsel or any such underwriter in
connection with such Shelf Registration Statement, (iii) use
reasonable efforts to have its officers, directors, employees,
accountants and counsel participate in meetings, presentations,
road shows, due diligence sessions, drafting sessions and
sessions with rating agencies and (iv) use reasonable efforts to
have its officers, directors, employees, accountants and counsel
assist with the preparation of financial information and other
materials for road show presentations, offering documents,
prospectuses, business projections and similar documents required
in connection with the offering of any Registrable Securities
under the Shelf Registration Statement and provide all
representation letters and other materials reasonably requested
by its independent accountants for the inclusion therein of
financial information;
(viii) if requested by Majority Holders of the Registrable Securities
being sold, its Special Counsel or the managing underwriters (if
any) in connection with an underwritten offering under such Shelf
Registration Statement, use its reasonable efforts to cause (i)
its counsel to deliver an opinion relating to the Shelf
Registration Statement and the Registrable Securities in
customary form, (ii) its officers to execute and deliver all
customary documents and certificates requested by the Majority
Holders of the Registrable Securities being sold, their Special
Counsel or the managing underwriters (if any), (iii) its
independent public accountants to provide a comfort letter or
letters in customary form, subject to receipt of appropriate
documentation as contemplated, and only if permitted, by
Statement of Auditing Standards No. 72 and (iv) its independent
public accountants to provide consent to use audit reports;
(ix) if reasonably requested by the Investors or any Notice Holder,
promptly incorporate in a prospectus supplement or post-effective
amendment to the Shelf Registration Statement such information as
the Investors or such Notice Holder shall, on the basis of a
written opinion of nationally-recognized counsel experienced in
such matters, determine to be required to be included therein by
applicable law and make any required filings of such prospectus
supplement or such post-effective amendment; provided, that the
Company shall not be required to take any actions under this
Section 3(a)(ix) that are not, in the reasonable opinion of
counsel for the Company, in compliance with applicable law;
(x) promptly furnish to each Notice Holder and the Investors, upon
their request and without charge, at least one (1) conformed copy
of the Shelf Registration Statement and any amendments thereto,
including financial statements but excluding schedules, all
documents incorporated or deemed to be incorporated therein by
reference and all exhibits; provided, however, that the Company
shall have no obligation to deliver to Notice Holders or the
Investors a copy of any amendment consisting exclusively of an
Exchange Act report or other Exchange Act filing otherwise
publicly available on the Company's website;
(xi) during the Effective Period, deliver to each Notice Holder in
connection with any sale of Registrable Securities pursuant to
the Shelf Registration Statement, upon their request and without
charge, as many copies of the Prospectus relating to such
Registrable Securities (including each preliminary prospectus)
and any amendment or supplement thereto as such Notice Holder may
reasonably request; and the Company hereby consents (except
during such periods that a Deferral Notice is outstanding and has
not been revoked) to the use of such Prospectus or each amendment
or supplement thereto by each Notice Holder in connection with
any offering and sale of the Registrable Securities covered by
such Prospectus or any amendment or supplement thereto in the
manner set forth therein; and
(xii) cooperate with the Notice Holders of Securities to facilitate
the timely preparation and delivery of certificates representing
Registrable Securities to be sold pursuant to the Shelf
Registration Statement free of any restrictive legends and in
such denominations and registered in such names as the Holders
thereof may request in writing at least two business days prior
to sales of Registrable Securities pursuant to such Shelf
Registration Statement.
(b) Upon (A) the issuance by the Commission of a stop order suspending the
effectiveness of the Shelf Registration Statement or the initiation of
proceedings with respect to the Shelf Registration Statement under
Section 8(d) or 8(e) of the Securities Act, (B) the occurrence of any
event or the existence of any Material Event as a result of which the
Shelf Registration Statement shall contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, or
any Prospectus shall contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or (C) the
occurrence or existence of any corporate development that, in the
discretion of the Company, makes it appropriate to suspend the
availability of the Shelf Registration Statement and the related
Prospectus, the Company will (i) in the case of clause (B) above,
subject to the third sentence of this provision, as promptly as
practicable prepare and file a post-effective amendment to such Shelf
Registration Statement or a supplement to the related Prospectus or
any document incorporated therein by reference or file any other
required document that would be incorporated by reference into such
Shelf Registration Statement and Prospectus so that such Shelf
Registration Statement does not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading,
and such Prospectus does not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, as
thereafter delivered to the purchasers of the Registrable Securities
being sold thereunder, and, in the case of a post-effective amendment
to the Shelf Registration Statement, subject to the third sentence of
this provision, use reasonable efforts to cause it to be declared
effective as promptly as is practicable, and (ii) give notice to the
Notice Holders that the availability of the Shelf Registration
Statement is suspended (a "Deferral Notice"). Upon receipt of any
Deferral Notice, each Notice Holder agrees not to sell any Registrable
Securities pursuant to the Shelf Registration Statement until such
Notice Holder's receipt of copies of the supplemented or amended
Prospectus provided for in clause (i) above, or until it is advised in
writing by the Company that the Prospectus may be used, and has
received copies of any additional or supplemental filings that are
incorporated or deemed incorporated by reference in such Prospectus.
The Company will use its reasonable efforts to ensure that the use of
the Prospectus may be resumed (x) in the case of clause (A) above, as
promptly as practicable, (y) in the case of clause (B) above, as soon
as, in the sole judgment of the Company, public disclosure of such
Material Event would not be prejudicial to or contrary to the
interests of the Company or, if necessary to avoid unreasonable burden
or expense, as soon as practicable thereafter and (z) in the case of
clause (C) above, as soon as, in the discretion of the Company, such
suspension is no longer appropriate; provided that the period during
which the availability of the Shelf Registration Statement and any
Prospectus is suspended (the "Deferral Period"), without the Company
incurring any obligation to pay Additional Interest pursuant to
Section 2(e), shall not exceed sixty (60) days in any fiscal quarter
or one hundred and five (105) days in the aggregate in any twelve (12)
month period.
(c) Each Holder of Registrable Securities agrees that upon receipt of any
Deferral Notice from the Company, such Holder shall forthwith
discontinue (and cause any placement or sales agent or underwriters
acting on their behalf to discontinue) the disposition of Registrable
Securities pursuant to the registration statement applicable to such
Registrable Securities until such Holder (i) shall have received
copies of such amended or supplemented Prospectus and, if so directed
by the Company, such Holder shall deliver to the Company (at the
Company's expense) all copies, other than permanent file copies, then
in such Holder's possession of the Prospectus covering such
Registrable Securities at the time of receipt of such notice or (ii)
shall have received notice from the Company that the disposition of
Registrable Securities pursuant to the Shelf Registration may
continue.
(d) The Company may require each Holder seeking to sell Registrable
Securities pursuant to a Shelf Registration Statement to furnish to
the Company such information regarding such Holder and such Holder's
intended method of distribution of such Registrable Securities as the
Company may from time to time reasonably request in writing, but only
to the extent that such information is required in order to comply
with the Securities Act or other applicable law. Each such Holder
agrees to notify the Company as promptly as practicable of any
inaccuracy or change in information previously furnished by such
Holder to the Company or of the occurrence of any event in either case
as a result of which any Prospectus relating to such registration
contains or would contain an untrue statement of a material fact
regarding such Holder or such Holder's intended method of disposition
of such Registrable Securities or omits to state any material fact
regarding such Holder or such Holder's intended method of disposition
of such Registrable Securities required to be stated therein or
necessary to make the statements therein not misleading, and promptly
to furnish to the Company any additional information required to
correct and update any previously furnished information or required so
that such Prospectus shall not contain, with respect to such Holder or
the disposition of such Registrable Securities, an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
(e) The Company shall comply with all applicable rules and regulations of
the Commission and make generally available to its securityholders
earning statements (which need not be audited) satisfying the
provisions of Section 11(a) of the Securities Act and Rule 158
thereunder (or any similar rule promulgated under the Securities Act)
no later than (i) 40 days after the end of any 12-month period (or 60
days after the end of any 12-month period if such period is a fiscal
year) if the Company is at such time an "accelerated filer" and (ii)
45 days after the end of any 12-month period (or 90 days after the end
of any 12-month period if such period is a fiscal year) if the Company
is not an "accelerated filer" commencing on the first day of the first
fiscal quarter of the Company commencing after the effective date of
the Shelf Registration Statement, which statements shall cover said
12-month periods.
(f) The Company shall provide a CUSIP number for all Registrable
Securities covered by the Shelf Registration Statement not later than
the effective date of such Shelf Registration Statement and provide
the transfer agent for the Common Shares with printed certificates for
the Registrable Securities that are in a form eligible for deposit
with The Depository Trust Company.
(g) The Company shall use its reasonable efforts to provide such
information as is required for any filings required to be made with
FINRA.
(h) Until the expiration of the relevant Effectiveness Period, the Company
will not, and will use commercially reasonable efforts to not permit
any of its "affiliates" (as defined in Rule 144) to, resell any of the
Securities that have been reacquired by any of them except pursuant to
an effective registration statement under the Securities Act.
(i) The Company shall enter into such customary agreements and take all
such other necessary and lawful actions in connection therewith
(including those requested by the Majority Holders of the Registrable
Securities being sold) in order to expedite or facilitate disposition
of such Registrable Securities.
4. Piggyback Registrations.
(a) The Company shall notify all Holders of Registrable Securities and
Underlying Securites in writing at least twenty (20) days prior to
filing any registration statement under the Securities Act for
purposes of effecting an underwritten primary public offering by the
Company of Common Shares (excluding registration statements relating
to any employee benefit plan or a corporate reorganization or other
transaction covered by Rule 145 promulgated under the Securities Act,
or a registration on any registration form which does not permit
secondary sales or does not include substantially the same information
as would be required to be included in a registration statement
covering the sale of Registrable Securities) and will afford each such
Holder an opportunity to include in such registration statement all or
any part of the Registrable Securities (including Registrable
Securities issuable upon exchange or conversion of Underlying
Securities) then held by such Holder. Each Holder desiring to include
in any such registration statement all or any part of such Registrable
Securities held by such Holder shall, within ten (10) days after
receipt of the above-described notice from the Company, so notify the
Company in writing, and in such notice shall inform the Company of the
number of Registrable Securities such Holder wishes to include in such
registration statement. If a Holder decides not to include all of its
Registrable Securities (including Registrable Securities issuable upon
exchange or conversion of Underlying Securities) in any such
registration statement thereafter filed by the Company, such Holder
shall nevertheless continue to have the right to include any
Registrable Securities in any subsequent registration statement or
registration statements as may be filed by the Company with respect to
such offerings of its securities, all upon the terms and conditions
set forth herein.
(b) In the event the Company gives notice under this Section 4, the right
of any Holder's Registrable Securities to be included in a
registration statement pursuant to this Section 4 shall be conditioned
upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting
to the extent provided herein. All Holders proposing to distribute
their Registrable Securities through such underwriting shall enter
into an underwriting agreement in customary form with the managing
underwriter or underwriter(s) selected for such underwriting.
Notwithstanding any other provision of this Agreement, if the managing
underwriter determine(s) in good faith that marketing factors require
a limitation of the number of shares to be underwritten, then the
managing underwriter(s) may exclude shares (including Registrable
Securities) from the registration and the underwriting, and the number
of shares that may be included in the registration and the
underwriting shall be allocated, first, to the Company, second, to
Holders requesting inclusion of their Registrable Securities in such
registration statement on a pro rata basis based on the number of
Registrable Securities each such Holder has requested to be included
in the registration; provided however, that the right of the
underwriters to exclude shares (including Registrable Securities) from
the registration and underwriting as described above shall be
restricted so that the number of Registrable Securities included in
any such registration is not reduced below the lesser of (i)
twenty-five (25%) of the total number of Registrable Securities
requested to be included in the registration and (ii) 50% of the total
number of shares to be included in the registration. If any Holder
disapproves of the terms of any such underwriting, such Holder may
elect to withdraw therefrom by written notice, given in accordance
with Section 10(b) hereof, to the Company and the underwriter,
delivered at least twenty (20) days prior to the effective date of the
registration statement; provided, however, the foregoing 20 day
deadline shall not apply if at the time of such withdrawal, the
withdrawing Holder has learned of a material adverse change in the
condition, business or prospects of the Company not known to the
Holder at the time of its request for such registration and has
withdrawn its request for registration with reasonable promptness
after learning of such material adverse change. Any Registrable
Securities excluded or withdrawn from such underwriting shall be
excluded and withdrawn from the registration. For any such holder that
is a partnership, limited liability company or corporation, the
partners, retired partners, members, retired members and stockholders
of such holder, or the estates and family members of any such partners
and retired partners, members and retired members and any trusts for
the benefit of any of the foregoing persons shall be deemed to be a
single "holder," and any pro rata reduction with respect to such
"holder" shall be based upon the aggregate amount of shares carrying
registration rights owned by all entities and individuals included in
such "holder," as defined in this sentence.
5. Holder's Obligations.
Each Holder agrees, by acquisition of the Securities, that no Holder
shall be entitled to sell any Registrable Securities pursuant to a Shelf
Registration Statement or to receive a Prospectus relating thereto, unless such
Holder has furnished the Company with a Notice and Questionnaire as required
pursuant to Section 2(d) hereof (including the information required to be
included in such Notice and Questionnaire) and the information set forth in the
next sentence. Each Notice Holder agrees promptly to furnish to the Company all
information required to be disclosed in order to make the information previously
furnished to the Company by such Notice Holder not misleading and any other
information regarding such Notice Holder and the distribution of such
Registrable Securities as may be required to be disclosed in a Shelf
Registration Statement under applicable law or pursuant to Commission comments.
Each Holder further agrees not to sell any Registrable Securities pursuant to a
Shelf Registration Statement without delivering, or causing to be delivered, a
Prospectus to the purchaser thereof and, following termination of the relevant
Effective Period, to notify the Company, within 10 Business Days of a request by
the Company, of the amount of Registrable Securities sold pursuant to such Shelf
Registration Statement and, in the absence of a response, the Company may assume
that all of the Holder's Registrable Securities were so sold.
6. Registration Expenses.
The Company agrees to bear and to pay or cause to be paid promptly
upon request being made therefor all expenses incident to the Company's
performance of or compliance with this Agreement, including, but not limited to,
(a) all Commission and any FINRA registration and filing fees and expenses, (b)
all fees and expenses in connection with the qualification of the Securities for
offering and sale under the State securities and Blue Sky laws referred to in
Section 3(a)(v) hereof, including reasonable fees and disbursements of one
counsel for the placement agent or underwriters, if any, in connection with such
qualifications, (c) all expenses relating to the preparation, printing,
distribution and reproduction of the Shelf Registration Statements, the related
Prospectuses, each amendment or supplement to each of the foregoing, the
certificates representing the Registrable Securities and all other documents
relating hereto, (d) fees and expenses of the transfer agent for the Common
Shares, (e) fees, disbursements and expenses of counsel and independent
certified public accountants of the Company (including the expenses of any
reports required by the Securities Act or the rules and regulations thereunder
to be included or incorporated by reference in the Shelf Registration Statements
or "cold comfort" letters required by or incident to such performance and
compliance) and (f) reasonable fees, disbursements and expenses of one counsel
for the Holders retained in connection with each Shelf Registration Statement,
as selected by the Company (unless reasonably objected to by the Majority
Holders of the Registrable Securities being registered, in which case the
Majority Holders shall select one such counsel for the Holders) ("Special
Counsel"), and fees, expenses and disbursements of any other Persons, including
special experts, retained by the Company in connection with such registration
(collectively, the "Registration Expenses"). To the extent that any Registration
Expenses are incurred, assumed or paid by any Holder or any underwriter or
placement agent therefor, the Company shall reimburse such Person for the full
amount of the Registration Expenses so incurred, assumed or paid promptly after
receipt of a documented request therefor. Notwithstanding the foregoing, the
Holders of the Registrable Securities being registered shall pay all
underwriting discounts and commissions and placement agent fees and commissions
attributable to the sale of such Registrable Securities and the fees and
disbursements of any counsel or other advisors or experts retained by such
Holders (severally or jointly), other than the counsel and experts specifically
referred to above.
7. Indemnification.
(a) The Company agrees to indemnify and hold harmless each Holder
(including, without limitation, the Investors), the directors,
officers, employees and Affiliates of the Investors and each person
who controls such Holder within the meaning of either the Act or the
Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become
subject under the Act, the Exchange Act or other federal or state
statutory law or regulation, at common law or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in any such
Registration Statement or any prospectus forming part thereof or in
any amendment or supplement thereto, or arise out of or are based upon
the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, and agrees to reimburse each such indemnified party,
as incurred, for any legal or other expenses reasonably incurred by it
in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Company will
not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged
omission from any such document, in reliance upon and in conformity
with written information provided by a Holder in its most recent
Notice and Questionnaire; provided further, that with respect to any
untrue statement or omission of material fact from any related
preliminary prospectus, the indemnity agreement contained in this
Section 7(a) shall not inure to the benefit of any Holder from whom
the Person asserting any such loss, claim, damage or liability
purchased the securities concerned, to the extent that any such loss,
claim, damage or liability of such Holder occurs under the
circumstance that (y) the untrue statement or omission of a material
fact from the related preliminary prospectus was corrected in the
final prospectus unless, in either case, such failure to deliver the
final Prospectus was a result of non-compliance by the Company with
Section 3 and (z) there was not sent or given to such Person, at or
prior to the written confirmation of the sale of such securities to
such Person, a copy of the final prospectus. This indemnity agreement
will be in addition to any liability that the Company may otherwise
have.
(b) Each Holder agrees to indemnify and hold harmless the Company, each of
its directors, each of its officers, and each person, if any, who
controls the Company within the meaning of either the Act or the
Exchange Act, against any and all losses, claims, damages or
liabilities, joint or several, to which the Company may become subject
under the Act, the Exchange Act or other federal or state statutory
law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in any such Registration
Statement or any prospectus forming part thereof or in any amendment
or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading,
but in each case only to the extent that the untrue statement or
alleged untrue statement or omission or alleged omission was made in
reliance upon and in conformity with any information furnished to the
Company by such Holder in its most recent Notice and Questionnaire,
and agrees to reimburse the Company, as incurred, for any legal or
other expenses reasonably incurred by it in connection with
investigating or defending any such loss, claim, damage, liability or
action provided, however, that no such Holder shall be liable for any
indemnity claims hereunder in excess of the amount of net proceeds
received by such Holder from the sale of Registrable Securities
pursuant to such Shelf Registration Statement. This indemnity
agreement will be in addition to any liability which any such Holder
may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section 7 of
notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying
party under this Section 7, notify the indemnifying party in writing
of the commencement thereof; but the failure so to notify the
indemnifying party (i) will not relieve it from liability under
paragraph (a) or (b) above unless and to the extent it has been
materially prejudiced through the forfeiture by the indemnifying party
of substantial rights and defenses and (ii) will not, in any event,
relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph
(a) or (b). If any action shall be brought against an indemnified
party and it shall have notified the indemnifying party thereof, the
indemnifying party shall be entitled to appoint counsel (including
local counsel) of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for
which indemnification is sought (in which case the indemnifying party
shall not thereafter be responsible for the fees and expenses of any
separate counsel, other than local counsel if not appointed by the
indemnifying party, retained by the indemnified party or parties
except as set forth below); provided, however, that such counsel shall
be reasonably satisfactory to the indemnified party. Notwithstanding
the indemnifying party's election to appoint counsel (including local
counsel) to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel
(including local counsel), and the indemnifying party shall bear the
reasonable fees, costs and expenses of such separate counsel if (i)
the use of counsel chosen by the indemnifying party to represent the
indemnified party would present such counsel with a conflict of
interest; (ii) the actual or potential defendants in, or targets of,
any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or
other indemnified parties that are different from or additional to
those available to the indemnifying party; (iii) the indemnifying
party shall not have employed counsel reasonably satisfactory to the
indemnified party to represent the indemnified party within a
reasonable time after notice of the institution of such action; or
(iv) the indemnifying party shall authorize the indemnified party to
employ separate counsel at the expense of the indemnifying party. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of
any judgment with respect to any pending or threatened claim, action,
suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action) unless such
settlement, compromise or consent includes an unconditional release of
each indemnified party from all liability arising out of such claim,
action, suit or proceeding and does not include an admission of fault,
culpability or a failure to act, by or on behalf of such indemnified
party.
(d) The provisions of this Section 7 and Section 8 shall remain in full
force and effect, regardless of any investigation made by or on behalf
of any Holder, the Company, or any of the indemnified Persons referred
to in this Section 7 and Section 8, and shall survive the sale by a
Holder of Registrable Securities covered by the Shelf Registration
Statements.
8. Contribution.
If the indemnification provided for in Section 7 is unavailable or
insufficient to hold harmless an indemnified party under Section 7(a) or 7(b),
then each indemnifying party shall, in lieu of indemnifying such indemnified
party, contribute to the amount paid or payable by such indemnified party as a
result of such loss, claim, damage or liability, or action in respect thereof,
(i) in such proportion as shall be appropriate to reflect the relative benefits
received by the Company from the offering and sale of the Securities, on the one
hand, and a Holder with respect to the sale by such Holder of Registrable
Securities, on the other, or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company and such Holder on the other with respect to
the statements or omissions that resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and a Holder on the other with respect to such offering and such sale shall be
deemed to be in the same proportion as the total net proceeds from the offering
of the Registrable Securities (excluding discounts and commissions, but before
deducting expenses) received by or on behalf of the Company, on the one hand,
and the total net proceeds (excluding discounts and commissions, but before
deducting expenses) received by such Holder upon a resale of the Registrable
Securities, on the other, bear to the total gross proceeds from the sale all
Registrable Securities pursuant to the Shelf Registration Statement in the
offering of the Registrable Securities from which the contribution claim arises.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to the Company or
information supplied by the Company on the one hand or to any information
contained in the relevant Notice and Questionnaire supplied by such Holder on
the other, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The parties hereto agree that it would not be just and equitable if
contributions pursuant to this Section 8 were to be determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section 8 shall be deemed
to include, for purposes of this Section 8, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending or preparing to defend any such action or claim. Notwithstanding
the provisions of this Section 8, an indemnifying party that is a Holder shall
not be required to contribute any amount in excess of the amount by which the
total price at which the Registrable Securities sold by such indemnifying party
to any purchaser exceeds the amount of any damages which such indemnifying party
has otherwise paid or become liable to pay by reason of any untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
9. Rule 144A and Rule 144.
So long as any Underlying Securities or Registrable Securities remain
outstanding, the Company shall use its reasonable efforts to file the reports
required to be filed by it under Rule 144A(d)(4) under the Securities Act and
the Exchange Act in a timely manner and, if at any time the Company is not
required to file such reports, it will, upon the written request of any Holder,
make publicly available other information so long as necessary to permit sales
of such Holder's Securities pursuant to Rules 144 and 144A. The Company
covenants that it will take such further action as any Holder may reasonably
request, all to the extent required from time to time to enable such Holder to
sell Securities without registration under the Securities Act within the
limitation of the exemptions provided by Rules 144 and 144A (including, without
limitation, the requirements of Rule 144A(d)(4)). Upon the written request of
any Holder, the Company shall deliver to such Holder a written statement as to
whether it has complied with such requirements. Notwithstanding the foregoing,
nothing in this Section 9 shall be deemed to require the Company to register any
of its securities pursuant to the Exchange Act.
10. Miscellaneous.
(a) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given, unless the
Company has obtained the written consent of the Majority Holders.
Notwithstanding the foregoing, a waiver or consent to depart from the
provisions hereof with respect to a matter that relates exclusively to
the rights of Holders whose Registrable Securities are being sold
pursuant to a Shelf Registration Statement and that does not directly
or indirectly affect the rights of other Holders may be given by
Holders of a majority in aggregate amount of the Registrable
Securities being sold by such Holders pursuant to such Shelf
Registration Statement.
(b) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery,
first-class mail, telecopier or air courier guaranteeing next-day
delivery:
(1) If to the Company, initially at the address set forth in the
Master Investment Agreements;
(2) If to the Investors, initially at the respective addresses set
forth in the Master Investment Agreements; and
(3) If to a Holder, to the address of such Holder set forth in the
security register, the Notice and Questionnaire or other records
of the Company.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; one business day after
being delivered to a next-day air courier; five business days after being
deposited in the mail; and when receipt is acknowledged by the recipient's
telecopier machine, if sent by telecopier.
(c) Successors and Assigns. This Agreement shall be binding upon the
Company and each of its successors and assigns.
(d) Counterparts. This Agreement may be executed in any number of
counterparts (which may be delivered in original form or by
telecopier) and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.
(e) Definition of Terms. For purposes of this Agreement, (a) the term
"business day" means any day on which the New York Stock Exchange,
Inc. is open for trading, (b) the term "subsidiary" has the meaning
set forth in Rule 405 under the Securities Act and (c) except where
otherwise expressly provided, the term "affiliate" has the meaning set
forth in Rule 405 under the Securities Act.
(f) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning
hereof.
(g) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
(h) Remedies. In the event of a breach by the Company or by any Holder of
any of their respective obligations under this Agreement, each Holder
or the Company, as the case may be, in addition to being entitled to
exercise all rights granted by law, including recovery of damages
(other than the recovery of damages for a breach by the Company of its
obligations under Section 3 hereof for which Additional Interest have
been paid pursuant to Section 2 hereof), will be entitled to specific
performance of its rights under this Agreement. The Company and each
Holder agree that monetary damages would not be adequate compensation
for any loss incurred by reason of a breach by it of any of the
provisions of this Agreement and hereby further agree that, in the
event of any action for specific performance in respect of such
breach, it shall waive the defense that a remedy at law would be
adequate.
(i) No Inconsistent Agreements. Except pursuant to the agreements listed
on Schedule 1, the Company represents, warrants and agrees that (i) it
has not entered into, shall not, on or after the date of this
Agreement, enter into any agreement that is inconsistent with the
rights granted to the Holders in this Agreement or otherwise conflicts
with the provisions hereof, (ii) there are no contracts, commitments,
agreements, arrangements, understandings or undertakings of any kind
to which the Company is a party, or by which it is bound, requiring
the Company to include any securities of the Company with the
Securities registered pursuant to any registration statement and (iii)
without limiting the generality of the foregoing, without the written
consent of the Majority Holders, it shall not grant to any Person the
right to request the Company to register any securities of the Company
under the Securities Act unless the rights so granted are not in
conflict or inconsistent with the provisions of this Agreement.
(j) No Piggyback on Registrations. Neither the Company nor any of its
security holders (other than the Holders of Registrable Securities in
such capacity) shall have the right to include any securities of the
Company in any Shelf Registration Statement other than Registrable
Securities.
(k) Severability. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law. If any term, provision,
covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, illegal, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions set
forth herein shall remain in full force and effect and shall in no way
be affected, impaired or invalidated, and the parties hereto shall use
their reasonable efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they
would have executed the remaining terms, provisions, covenants and
restrictions without including any of such that may be hereafter
declared invalid, illegal, void or unenforceable.
(l) Survival. The respective indemnities, agreements, representations,
warranties and each other provision set forth in this Agreement or
made pursuant hereto shall remain in full force and effect regardless
of any investigation (or statement as to the results thereof) made by
or on behalf of any Holder, any director, officer or partner of such
Holder, any agent or underwriter or any director, officer or partner
thereof, or any controlling person of any of the foregoing, and shall
survive delivery of and payment for the Underlying Securities and the
Registrable Securities pursuant to the Master Investment Agreements,
EchoStar Spectrum Agreement and Harbinger Spectrum Contribution
Agreement and the transfer and registration of Underlying or
Registrable Securities by such Holder.
(m) Securities Held by the Company, Etc. Whenever the consent or approval
of Holders of a specified percentage of Securities is required
hereunder, Securities held by the Company or its affiliates (other
than subsequent Holders of Securities if such subsequent Holders are
deemed to be affiliates solely by reason of their holdings of such
Securities) shall not be counted in determining whether such consent
or approval was given by the Holders of such required percentage.
SIGNATURE PAGE FOLLOWS
IN WITNESS WHEREOF, the parties have executed this agreement as of the
date first written above.
Very truly yours,
TerreStar Corporation
By: ___________________________________
Name:
Title:
EchoStar Corporation
By: ___________________________________
Name:
Title:
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:
[Signature page to the Registration Rights Agreement]
Annex A
Form of Selling Securityholder Notice and Questionnaire
NOTICE
The undersigned beneficial owner (the "Selling Securityholder") of
Registrable Securities hereby gives notice to the Company of its intention to
sell or otherwise dispose of Registrable Securities beneficially owned by it and
listed below in Item 3 (unless otherwise specified under such Item 3). The
undersigned, by signing and returning this Notice and Questionnaire, understands
that it will be bound by the terms and conditions of this Notice and
Questionnaire and the Registration Rights Agreement.
If the Selling Securityholder transfers all or any portion of the
Registrable Securities listed in Item 3 below after the date on which such
information is provided to the Company, the Selling Securityholder agrees to
notify the transferee(s) at the time of the transfer of its rights and
obligations under the Registration Rights Agreement.
QUESTIONNAIRE
Please respond to every item, even if your response is "none." If you need
more space for any response, please attach additional sheets of paper. Please be
sure to indicate your name and the number of the item being responded to on each
such additional sheet of paper, and to sign each such additional sheet of paper
before attaching it to this Questionnaire.
The undersigned hereby provides the following information to the Company
and represents and warrants that such information is accurate and complete:
1. Your Identity and Background as the Beneficial Owner of the
Registrable Securities.
(a) Your full legal name:
________________________________________________________________________________
(b) Your business address (including street address) (or residence if no
business address), telephone number and facsimile number:
Address: _______________________________________________________________________
________________________________________________________________________________
Telephone No.: _________________________________________________________________
Fax No.: _______________________________________________________________________
(c) Are you a broker-dealer registered pursuant to Section 15 of the Exchange
Act?
|_| Yes.
|_| No.
(d) If your response to Item 1(c) above is no, are you an "affiliate" of a
broker-dealer registered pursuant to Section 15 of the Exchange Act?
|_| Yes.
|_| No.
For the purposes of this Item 1(d), an "affiliate" of a registered broker-dealer
includes any person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
such broker-dealer, and does not include any individuals employed by such
broker-dealer or its affiliates.
(e) Full legal name of person through which you hold the Registrable
Securities, if applicable -- (i.e., name of your broker, if applicable, or
the DTC participant, if applicable, through which your Registrable
Securities are held):
Name of Broker: ________________________________________________________________
DTC No.: _______________________________________________________________________
Contact person: ________________________________________________________________
Telephone No.: _________________________________________________________________
2. Your Relationship with the Company.
(a) Have you or any of your affiliates, officers, directors or principal equity
holders (owners of 5% or more of the equity securities of the undersigned)
held any position or office or have you had any other material relationship
with the Company (or its predecessors or affiliates) within the past three
years?
|_| Yes.
|_| No.
(b) If your response to Item 2(a) above is yes, please state the nature and
duration of your relationship with the Company:
3. Your Interest in the Registrable Securities.
(a) State the type and amount of Registrable Securities beneficially owned by
you:
________________________________________________________________________________
(b) Other than as set forth in your response to Item 3(a) above, do you
beneficially own any other securities of the Company?
|_| Yes.
|_| No.
(c) If your answer to Item 3(b) above is yes, state the type and the aggregate
amount of such other securities of the Company beneficially owned by you:
Type: __________________________________________________________________________
Aggregate amount: ______________________________________________________________
4. Nature of your Beneficial Ownership.
(a) Check if the beneficial owner set forth in your response to Item 1(a) is
any of the below:
(i) A reporting company under the Exchange Act. ?
(ii) A majority owned subsidiary of a reporting company under the Exchange
Act. ?
(iii) A registered investment fund under the 0000 Xxx. ?
(b) If the beneficial owner of the Registrable Securities set forth in your
response to Item 1(a) above is a limited partnership, state the names of
the general partners of such limited partnership:
________________________________________________________________________________
________________________________________________________________________________
(i) With respect to each general partner listed in Item 4(b) above who is
not a natural person and is not publicly-held, name each shareholder (or holder
of partnership interests, if applicable) of such general partner. If any of
these named shareholders are not natural persons or publicly-held entities,
please provide the same information. This process should be repeated until you
reach natural persons or a publicly-held entity.
________________________________________________________________________________
________________________________________________________________________________
(c) Name your controlling shareholder(s) (the "Controlling Entity"). If the
Controlling Entity is not a natural person and is not a publicly-held
entity, name each shareholder of such Controlling Entity. If any of these
named shareholders are not natural persons or publicly-held entities,
please provide the same information. This process should be repeated until
you reach natural persons or a publicly-held entity.
(i) (A) Full legal name of Controlling Entity(ies) or natural person(s) who
have sole or shared voting or dispositive power over the Registrable Securities:
________________________________________________________________________________
________________________________________________________________________________
(B) Business address (including street address) (or residence if no
business address), telephone number and facsimile number of such person(s):
Address: _______________________________________________________________________
Telephone No.: _________________________________________________________________
Fax No.: _______________________________________________________________________
(C) Name of shareholders: ______________________________________________________
(ii) (A) Full legal name of Controlling Entity(ies):
________________________________________________________________________________
(B) Business address (including street address) (or residence if no
business address), telephone number and facsimile number of such person(s):
Address: _______________________________________________________________________
________________________________________________________________________________
Telephone No.: _________________________________________________________________
________________________________________________________________________________
Fax No.: _______________________________________________________________________
________________________________________________________________________________
(iii) Name of shareholders:
________________________________________________________________________________
________________________________________________________________________________
By signing below, the undersigned acknowledges that it is the beneficial
owner of the Registrable Securities set forth herein, consents to the disclosure
of the information contained in this Notice and Questionnaire and the inclusion
of such information in the Shelf Registration Statement and the related
prospectus. The undersigned understands that such information will be relied
upon by the Company in connection with the preparation or amendment of the Shelf
Registration Statement and the related prospectus.
This Notice and Questionnaire shall be governed in all respects by the laws
of the State of New York, without giving effect to rules governing the conflict
of laws.
IN WITNESS WHEREOF, the undersigned, by authority duly given, has
caused this Notice and Questionnaire to be executed and delivered either in
person or by its duly authorized agent.
NAME OF BENEFICIAL OWNER:
_____________________(Please Print)
Signature: _____________________________
Date: __________________________________
PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND
QUESTIONNAIRE TO TERRESTAR CORPORATION AS FOLLOWS:
TerreStar Corporation
00000 Xxxxxx Xxxxx Xxxx, 0xx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
