Exhibit J
NEITHER THIS WARRANT NOR ANY OF THE SECURITIES ISSUABLE UPON EXERCISE HEREOF
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
OR ANY STATE SECURITIES LAW. THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND
THE SECURITIES ISSUABLE UPON EXERCISE HEREOF MAY NOT BE TRANSFERRED, SOLD,
ASSIGNED, EXCHANGED, MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF
OR ENCUMBERED WITHOUT COMPLIANCE WITH THE PROVISIONS OF, AND ARE OTHERWISE
RESTRICTED BY THE PROVISIONS OF, THE ACT, THE RULES AND REGULATIONS THEREUNDER
AND THIS WARRANT.
Warrant No. [___]
WARRANT
TO PURCHASE 7,500,000 SHARES OF COMMON STOCK
(SUBJECT TO ADJUSTMENT)
OF
SKYTERRA COMMUNICATIONS, INC.
THIS IS TO CERTIFY THAT , or its registered assigns, is entitled, at any
time prior to the Expiration Date (such term, and certain other capitalized
terms used herein being hereinafter defined), to purchase from SKYTERRA
COMMUNICATIONS, INC., a Delaware corporation (the "Company"), 7,500,000 shares
of the Common Stock of the Company, (subject to adjustment as provided herein),
at a purchase price of $.01 per share (the initial "Exercise Price", subject to
adjustment as provided herein).
1. DEFINITIONS
As used in this Warrant, the following terms have the respective meanings
set forth below:
"Affiliate" of any Person means any other Person which directly or
indirectly through one or more intermediaries controls, or is controlled by, or
is under common control with such Person. The term "control" (including the
terms "controlled by" and "under common control with") as used with respect to
any Person means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise.
"April Warrants" shall mean warrants to be issued by the Company to
Harbinger on April 1, 2009 (or such other time that the Company and Harbinger
may agree) to purchase an aggregate of 17,500,000 shares of Common Stock, and
all warrants issued upon transfer, division, or combination of, or in
substitution of such warrants.
"Appraised Value" per share of Common Stock as of a date specified herein
shall mean the value of such a share as of such date as determined by an
investment bank of nationally recognized standing selected by the Majority
Warrant Holders and reasonably acceptable to the Company. If the investment bank
selected by the Majority Warrant Holders is not reasonably acceptable to the
Company, and the Company and the Majority Warrant Holders cannot agree on a
mutually acceptable investment bank, then the Company and the Majority Warrant
Holders shall each choose one such investment bank and the respective chosen
firms shall jointly select a third investment bank, which shall make the
determination. The Company shall pay the costs and fees of each such investment
bank (including any such investment bank selected by the Majority Warrant
Holders), and the decision of the investment bank making such determination of
Appraised Value shall be final and binding on the Company and all affected
holders of Warrants or Warrant Stock. Such Appraised Value shall be determined
as a pro rata portion of the value of the Company taken as a whole, based on the
higher of (A) the value derived from a hypothetical sale of the entire Company
as a going concern by a willing seller to a willing buyer (neither acting under
any compulsion) and (B) the liquidation value of the entire Company. No discount
shall be applied on account of (i) any Warrants or Warrant Stock representing a
minority interest, (ii) any lack of liquidity of the Common Stock or the
Warrants, (iii) the fact that the Warrants or Warrant Stock may constitute
"restricted securities" for securities law purposes, (iv) the existence of any
call option or (v) any other grounds.
"Business Day" shall mean any day that is not a Saturday or Sunday or a day
on which banks are required or permitted to be closed in the State of New York.
"Commission" shall mean the Securities and Exchange Commission or any other
federal agency then administering the Securities Act and other federal
securities laws.
"Common Stock" shall mean the Voting Common Stock or the Non-Voting Common
Stock, as constituted on the Original Issue Date, and any capital stock into
which such Common Stock may thereafter be changed, and shall also include (i)
capital stock of the Company of any other class (regardless of how denominated)
issued to the holders of shares of any Common Stock upon any reclassification
thereof which is also not preferred as to dividends or liquidation over any
other class of stock of the Company and which is not subject to redemption, and
(ii) shares of common stock of any successor or acquiring corporation received
by or distributed to the holders of Common Stock of the Company in the
circumstances contemplated by Section 4.3 hereof.
"Company" means SkyTerra Communications, Inc., a Delaware corporation, and
any successor corporation.
"Current Market Price" shall mean as of any specified date the average of
the daily market price of one share of the Common Stock for the shorter of (x)
the twenty (20) consecutive Business Days immediately preceding such date or (y)
the period commencing on the Business Day next following the first public
announcement by the Company of any event giving rise to an adjustment of the
Exercise Price pursuant to Section 5 below and ending on the date of such event.
The "daily market price" of one share of Common Stock for each such Business Day
shall be: (i) if the Common Stock is then listed on a national securities
exchange, the last sale price of one share of Common Stock, regular way, on such
day on the principal stock exchange or market system on which such Common Stock
is then listed or admitted to trading, or, if no such sale takes place on such
day, the average of the closing bid and asked prices for one share of Common
Stock on such day as reported on such stock exchange or market system or (ii) if
the Common Stock is not then listed or admitted to trading on any national
securities exchange but is traded over-the-counter, the average of the closing
bid and asked prices for one share of Common Stock as reported on the Electronic
Bulletin Board or in the National Daily Quotation Sheets, as applicable.
"Designated Office" shall have the meaning set forth in Section 10 hereof.
"Encumbrance" means any mortgage, pledge, hypothecation, claim, charge,
security interest, encumbrance, option, lien, put or call right, right of first
offer or refusal, proxy, voting right or other restrictions or limitations of
any nature whatsoever in respect of any property or asset, whether or not filed,
recorded or otherwise perfected under applicable law, other than (a) those
resulting from Taxes which have not yet become delinquent or (b) minor liens and
encumbrances that do not materially detract from the value of the property or
asset, or materially impair the operations of MSV or the Company or materially
interfere with the use of such property or asset.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission thereunder, all as the same
shall be in effect from time to time.
"Exercise Date" shall have the meaning set forth in Section 2.1 hereof.
"Exercise Notice" shall have the meaning set forth in Section 2.1 hereof.
"Exercise Price" shall mean $0.01 per share of Common Stock, subject to
adjustment as provided herein.
"Expiration Date" shall mean January 6, 2014.
"Fair Value" per share of Common Stock as of any specified date shall mean
(A) if the Common Stock is publicly traded on such date, the Current Market
Price per share, or (B) if the Common Stock is not publicly traded on such date,
(1) the fair market value per share of Common Stock as determined in good faith
by the Board of Directors of the Company and set forth in a written notice to
each Holder or (2) if the Majority Warrant Holders object in writing to such
price as determined by the Board of Directors within thirty (30) days after
receiving notice of same, the Appraised Value per share as of such date. For the
avoidance of doubt and notwithstanding the foregoing, the Fair Value per share
of Voting Common Stock and Non-Voting Common Stock shall, at all times, be
deemed to be the same. Fair Value with respect to property, services or other
consideration shall be calculated in a similar manner.
"FCC" shall mean the Federal Communications Commission.
"Harbinger" shall mean Harbinger Capital Partners Master Fund I, Ltd. or
Harbinger Capital Partners Special Situations Fund, L.P. or any of their
respective Affiliates.
"Holder" shall mean (a) with respect to this Warrant, the Person in whose
name the Warrant set forth herein is registered on the books of the Company
maintained for such purpose and (b) with respect to any other Warrant or shares
of Warrant Stock, the Person in whose name such Warrant or Warrant Stock is
registered on the books of the Company maintained for such purpose.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976.
"Majority Warrant Holders", with respect to a given determination, shall
mean the Holders of Warrants and April Warrants (to the extent issued)
representing more than fifty percent (50%) of all Common Stock issuable upon
exercise of all outstanding Warrants and April Warrants (taken together).
"Master Contribution Agreement" shall mean the Master Contribution and
Support Agreement dated July 24, 2008, 2008 among Harbinger Capital Partners
Master Fund I, Ltd., Harbinger Capital Partners Special Situations Fund, L.P.,
Harbinger Co-Investment Fund, L.P., the Company, MSV and Mobile Satellite
Ventures Subsidiary LLC.
"MSV" shall mean Mobile Satellite Ventures LP, a Delaware limited
partnership.
"MSV Finance Co." shall mean Mobile Satellite Ventures Finance Co., a
Delaware corporation.
"Non-Voting Common Stock" shall mean the non-voting common stock, par value
$0.01 per share, of the Company.
"Notes" shall mean the 16.0% Senior Notes due 2013 of MSV and MSV Finance
Co.
"Opinion of Counsel" means a written opinion of outside counsel experienced
in Securities Act matters chosen by the Holder of this Warrant or Warrant Stock
issued upon the exercise hereof and reasonably acceptable to the Company.
"Original Issue Date" shall mean January 6, 2009.
"Original Warrants" shall mean all of the Warrants issued by the Company to
Harbinger on January 6, 2009 to purchase an aggregate of 7,500,000 shares of
Common Stock.
"Outstanding" shall mean, when used with reference to Common Stock, at any
date as of which the number of shares thereof is to be determined, all issued
shares of Common Stock, whether Voting Common Stock or Non-Voting Common Stock,
as the case may be, except shares then owned or held by or for the account of
the Company or any Subsidiary, and shall include all shares issuable in respect
of outstanding scrip or any certificates representing fractional interests in
shares of Common Stock.
"Person" shall mean any individual, sole proprietorship, partnership,
limited liability company, joint venture, trust, incorporated organization,
association, corporation, institution, public benefit corporation, entity or
government (whether federal, state, county, city, municipal or otherwise,
including, without limitation, any instrumentality, division, agency, body or
department thereof).
"Restricted Common Stock" shall mean shares of Common Stock which are, or
which upon their issuance on the exercise of this Warrant would be, evidenced by
a certificate bearing the restrictive legend set forth in Section 8.2(a) hereof.
"Securities Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations of the Commission thereunder, all as the same shall be in
effect at the time.
"Share Withholding Option" has the meaning set forth in Section 2.1 hereof.
"Subsidiary" shall mean any corporation, association or other business
entity (i) at least 50% of the outstanding voting securities of which are at the
time owned or controlled directly or indirectly by the Company; or (ii) with
respect to which the Company possesses, directly or indirectly, the power to
direct or cause the direction of the affairs or management of such person.
"Tax" or "Taxes" means any and all taxes, charges, fees, levies, imposts,
duties or other assessments of any kind whatsoever, imposed by or payable to any
federal, state, provincial, local, or foreign tax authority, including any gross
income, net income, alternative or add on minimum, franchise, profits or excess
profits, gross receipts, estimated, capital, goods, services, documentary, use,
transfer, ad valorem, business rates, value added, sales, customs, real or
personal property, capital stock, license, payroll, withholding or back up
withholding, employment, social security, workers' compensation, unemployment
compensation, utility, severance, production, excise, stamp, occupation,
premium, windfall profits, occupancy, transfer, gains taxes, together with any
interest, penalties, additions to tax or additional amounts imposed with respect
thereto.
"Transfer" shall mean any disposition of any Warrant or Warrant Stock or of
any interest therein, which would constitute a "sale" thereof or a transfer of a
beneficial interest therein within the meaning of the Securities Act.
"Voting Common Stock" shall mean the voting common stock, par value $0.01
per share, of the Company.
"Warrant Price" shall mean an amount equal to (i) the number of shares of
Common Stock being purchased upon exercise of this Warrant pursuant to Section
2.1 hereof, multiplied by (ii) the Exercise Price as of the date of such
exercise.
"Warrants" shall mean the Original Warrants and all warrants issued upon
transfer, division or combination of, or in substitution for, such Original
Warrants. All Warrants shall at all times be identical as to terms and
conditions, except as to the number of shares of Common Stock for which they may
be exercised and their date of issuance.
"Warrant Stock" generally shall mean the shares of Common Stock issued,
issuable or both (as the context may require) upon the exercise of Warrants.
2. EXERCISE OF WARRANT
2.1 Manner of Exercise.
(a) From and after the Original Issue Date and until 5:00 P.M., New York
time, on the Expiration Date, the Holder of this Warrant may, from time to time,
exercise this Warrant, on any Business Day, for up to 7,500,000 shares of Common
Stock. In order to exercise this Warrant, in whole or in part, the Holder shall
(i) deliver to the Company at its Designated Office a written notice of the
Holder's election to exercise this Warrant (an "Exercise Notice"), which
Exercise Notice shall be irrevocable and specify the number of shares of
Non-Voting Common Stock and/or Voting Common Stock to be purchased, together
with this Warrant and (ii) pay to the Company the Warrant Price (the date on
which both such delivery and payment shall have first taken place being
hereinafter sometimes referred to as the "Exercise Date"). Such Exercise Notice
shall be in the form of the subscription form appearing at the end of this
Warrant as Annex A, duly executed by the Holder or its duly authorized agent or
attorney. For the avoidance of doubt, subject to the other conditions set forth
in Sections 2.1(b), 2.1(c) or elsewhere herein, the Holder may, at its sole
discretion, exercise the Warrant for shares of Voting Common Stock, shares of
Non-Voting Common Stock or any combination thereof.
(b) Upon receipt by the Company of such Exercise Notice, Warrant and
payment, the Company shall, as promptly as practicable, and in any event within
five (5) Business Days thereafter, execute (or cause to be executed) and deliver
(or cause to be delivered) to the Holder a certificate or certificates
representing the aggregate number of full shares of Common Stock issuable upon
such exercise, together with cash in lieu of any fraction of a share, as
hereafter provided. The stock certificate or certificates so delivered shall be,
to the extent possible, in such denomination or denominations as the exercising
Holder shall reasonably request in the Exercise Notice and shall be registered
in the name of the Holder or, subject to Section 8 below, such other name as
shall be designated in the Exercise Notice. This Warrant shall be deemed to have
been exercised and such certificate or certificates shall be deemed to have been
issued, and the Holder or any other Person so designated to be named therein
shall be deemed to have become a holder of record of such shares for all
purposes, as of the Exercise Date. Notwithstanding the foregoing, in the event
that the rules of any stock exchange or automatic quotation system on which the
Company's Common Stock is then listed, traded or quoted requires shareholder
approval prior to the issuance of any or all of the Warrant Stock (or the
conversion of Non-Voting Common Stock into Voting Common Stock), the Company
shall issue on the Exercise Date the maximum number of shares of Warrant Stock
that can be issued without shareholder approval, without regard to any shares of
Warrant Stock otherwise required to be issued in excess of such maximum number
of shares of Warrant Stock, and shall promptly after receipt of such shareholder
approval issue the balance of the number of shares of Warrant Stock for which
this Warrant has been exercised. The Company shall use its reasonable best
efforts to obtain such shareholder approval as soon as reasonably possible,
including, without limitation, filing all proxy statements or information
statements, necessary or convenient to obtain such consent.
(c) Notwithstanding anything to the contrary contained herein, prior to the
issuance of the Warrant Stock or, in the event that the Warrant Stock is
Non-Voting Common Stock, the Voting Common Stock issuable upon exchange of such
Warrant Stock, the Holder or its permitted assigns on the one hand, and the
Company on the other hand, shall have satisfied any and all applicable legal or
regulatory requirements for conversion, including compliance with the HSR Act
and FCC requirements. The Company shall use its reasonable best efforts in
cooperating with such Holder to obtain such legal or regulatory approvals to the
extent its cooperation is necessary. The Company shall pay all necessary filing
fees and reasonable out-of-pocket expenses to obtain such legal or regulatory
approvals.
(d) Payment of the Warrant Price shall be made at the option of the Holder
by one or more of the following methods: (i) by delivery of a certified or
official bank check in the amount of such Warrant Price payable to the order of
the Company, (ii) by instructing the Company to withhold a number of shares of
Warrant Stock then issuable upon exercise of this Warrant with an aggregate Fair
Value equal to such Warrant Price (the "Share Withholding Option"), (iii) by
surrendering to the Company, Notes previously acquired by the Holder with an
aggregate fair market value equal to such Warrant Price; it being understood
that the fair market value of the Note shall be its principal amount plus any
accrued interest to that day, or (iv) by surrendering to the Company shares of
Common Stock previously acquired by the Holder with an aggregate Fair Value
equal to such Warrant Price. In the event of any withholding of Warrant Stock or
surrender of Notes or Common Stock pursuant to clause (ii), (iii) or (iv) above
where the number of shares whose Fair Value (as measured on the Exercise Date)
is equal to the Warrant Price is not a whole number, the number of shares
withheld by or surrendered to the Company shall be rounded up to the nearest
whole share and the Company shall make a cash payment to the Holder based on the
incremental fraction of a share being so withheld by or surrendered to the
Company in an amount determined in accordance with Section 2.3 hereof.
Notwithstanding any provision herein to the contrary, the Company shall not be
required to register shares of Common Stock in the name of any Person who
acquired this Warrant (or part hereof) or any shares of Warrant Stock otherwise
than in accordance with this Warrant.
(e) If this Warrant shall have been exercised in part, the Company shall,
at the time of delivery of the certificate or certificates representing the
shares of Common Stock being issued, deliver to the Holder a new Warrant
evidencing the rights of the Holder to purchase the unpurchased shares of Common
Stock called for by this Warrant. Such new Warrant shall in all other respects
be identical to this Warrant.
(f) Subject to Section 2.1(g), all Warrants delivered for exercise shall be
canceled by the Company.
(g) Notwithstanding anything to the contrary in this Warrant,
if, at the time that the Holder of this Warrant elects to exercise this Warrant,
in whole or in part, the Company does not have a sufficient number of authorized
and issued shares of Non-Voting Common Stock sufficient to permit such Holder to
receive a complete allotment of Non-Voting Common Stock pursuant its election
under Section 2.1(a), such election shall be deemed to be for a number of shares
of Non-Voting Common Stock equal to the number of shares of Non-Voting Common
Stock then authorized but unissued by the Company.
2.2 Payment of Taxes. All shares of Warrant Stock issuable upon the
exercise of this Warrant pursuant to the terms hereof shall be validly issued,
fully paid and nonassessable, issued without violation of any preemptive or
similar rights of any stockholder of the Company and free and clear of all
Encumbrances (other than any created by actions of the Holder). The Company
shall pay all expenses in connection with, and all Taxes and other governmental
charges that may be imposed with respect to, the issue or delivery thereof,
unless such Tax or charge is imposed by law upon the Holder. The Company shall
not, however, be required to pay any Tax or governmental charge which may be
payable in respect of any Transfer involved in the issue and delivery of shares
of Warrant Stock issuable upon exercise of this Warrant in a name other than
that of the holder of the Warrants to be exercised, and no such issue or
delivery shall be made unless and until the Person requesting such issue has
paid to the Company the amount of any such Tax, or has established to the
satisfaction of the Company that such Tax has been paid. The Company shall not
be required to reimburse the Holder or any other Person for any income,
withholding, franchise, or similar Taxes or governmental charges (whether
collected by withholding or otherwise and whether imposed on the gross amount of
any payment or otherwise) paid by the Company or imposed on the Holder with
respect to the exercise or issuance of the Warrant or issuance of any Warrant
Stock or on or with respect to any payments made on or with respect to the
Warrant or Warrant Stock.
2.3 Fractional Shares. The Company shall not be required to issue a
fractional share of Common Stock upon exercise of any Warrant. As to any
fraction of a share that the Holder of one or more Warrants, the rights under
which are exercised in the same transaction, would otherwise be entitled to
purchase upon such exercise, the Company shall pay to such Holder an amount in
cash equal to such fraction multiplied by the Fair Value of one share of Common
Stock on the Exercise Date.
3. TRANSFER, DIVISION AND COMBINATION
3.1 Transfer. Subject to compliance with Section 8 hereof, each transfer of
this Warrant and all rights hereunder, in whole or in part, shall be registered
on the books of the Company to be maintained for such purpose, upon surrender of
this Warrant at the Designated Office, together with a written assignment of
this Warrant in the form of Annex B hereto duly executed by the Holder or its
agent or attorney and funds sufficient to pay any transfer Taxes described in
Section 2.2 in connection with the making of such transfer. Upon such surrender
and delivery and, if required, such payment, the Company shall, subject to
Section 8, execute and deliver a new Warrant or Warrants in the name of the
assignee or assignees and in the denominations specified in such instrument of
assignment, and shall issue to the assignor a new Warrant evidencing the portion
of this Warrant not so assigned and this Warrant shall promptly be cancelled. A
Warrant, if properly assigned in compliance with Section 8, may be exercised by
the new Holder for the purchase of shares of Common Stock without having a new
Warrant issued.
3.2 Division and Combination. Subject to compliance with the applicable
provisions of this Warrant including, without limitation, Section 8, this
Warrant may be divided or combined with other Warrants upon presentation hereof
at the Designated Office, together with a written notice specifying the names
and denominations in which new Warrants are to be issued, signed by the Holder
or its agent or attorney. Subject to compliance with the applicable provisions
of this Warrant as to any transfer which may be involved in such division or
combination, the Company shall execute and deliver a new Warrant or Warrants in
exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice.
3.3 Expenses. The Company shall prepare, issue and deliver at its own
expense any new Warrant or Warrants required to be issued under this Section 3
(other than pursuant to Section 2.2 and 3.1 hereof).
3.4 Maintenance of Books. The Company agrees to maintain, at the Designated
Office, books for the registration and transfer of the Warrants.
4. ANTIDILUTION PROVISIONS
The Exercise Price shall be subject to adjustment from time to time as
follows:
4.1 Upon Stock Dividends, Subdivisions or Splits. If, at any time after the
Original Issue Date, the number of shares of Common Stock outstanding is
increased by a stock dividend payable in shares of Common Stock or by a
subdivision or split-up of shares of Common Stock, then, following the record
date for the determination of holders of Common Stock entitled to receive such
stock dividend, or to be affected by such subdivision or split-up, the number of
shares issuable upon exercise of the Warrant shall be proportionately increased
by multiplying such number by a fraction, the numerator of which is the number
of shares of Common Stock Outstanding immediately after such increase in
Outstanding shares and the denominator of which is the number of shares of
Common Stock Outstanding immediately prior to such increase.
4.2 Upon Combinations or Reverse Stock Splits. If, at any time after the
Original Issue Date, the number of shares of Common Stock Outstanding is
decreased by a combination or reverse stock split of the Outstanding shares of
Common Stock into a smaller number of shares of Common Stock, then, upon the
record date to determine shares affected by such combination or reverse stock
split, (a) the Exercise Price shall be increased by multiplying the Exercise
Price by a fraction, the numerator of which is the number of shares of Common
Stock Outstanding immediately prior to such decrease and the denominator of
which is the number of shares of Common Stock Outstanding immediately after such
decrease in Outstanding shares, and (b) the number of shares issuable upon
exercise of the Warrant shall be proportionately decreased by multiplying the
same by the inverse of such fraction.
4.3 Upon Reclassifications, Reorganizations, Consolidations or Mergers. In
the event of any capital reorganization of the Company, any reclassification of
the stock of the Company (other than a change in par value or from par value to
no par value or from no par value to par value or as a result of a stock
dividend or subdivision, split up or combination of shares), or any
consolidation or merger of the Company with or into another Person (where the
Company is not the surviving Person or where there is a change in or
distribution with respect to the Common Stock), each Warrant shall after such
reorganization, reclassification, consolidation, or merger be exercisable for
the kind and number of shares of stock or other securities or property of the
Company or of the successor Person resulting from such consolidation or
surviving such merger, if any, to which the holder of the number of shares of
Common Stock deliverable (immediately prior to the time of such reorganization,
reclassification, consolidation or merger) upon exercise of such Warrant would
have been entitled upon such reorganization, reclassification, consolidation or
merger. The provisions of this Section 4.3 shall similarly apply to successive
reorganizations, reclassifications, consolidations, or mergers. The Company
shall not effect any such reorganization, reclassification, consolidation or
merger unless, prior to the consummation thereof, the successor Person (if other
than the Company) resulting from such reorganization, reclassification,
consolidation or merger, shall assume, by written instrument, the obligation to
deliver to the Holders of the Warrant such shares of stock, securities or
assets, which, in accordance with the foregoing provisions, such Holders shall
be entitled to receive upon such conversion.
5. NO IMPAIRMENT; REGULATORY COMPLIANCE AND COOPERATION; NOTICE OF EXPIRATION
(a) The Company shall not by any action, including, without limitation,
amending its charter documents or through any reorganization, reclassification,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other similar voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms and in the
taking of all such actions as may be necessary or appropriate to protect the
rights of the Holder against impairment. Without limiting the generality of the
foregoing, the Company shall take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable shares of Common Stock upon the exercise of this Warrant, free
and clear of all Encumbrances (other than any created by actions of the Holder),
and shall use its best efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction thereof as may be
necessary to enable the Company to perform its obligations under this Warrant.
(b) The Company shall deliver to each Holder of Warrants after the 60th day
but before the 30th day prior to the Expiration Date, advance notice of such
Expiration Date. If the Company fails to fulfill in a timely manner the notice
obligation set forth in the prior sentence, it shall provide such notice as soon
as possible thereafter.
6. RESERVATION AND AUTHORIZATION OF COMMON STOCK; REGISTRATION WITH OR
APPROVAL OF ANY GOVERNMENTAL AUTHORITY
From and after the Original Issue Date, the Company shall use its best
efforts to reserve and keep available for issuance upon the exercise of the
Warrants such number of its authorized but unissued shares of Non-Voting Common
Stock and Voting Common Stock, as will be sufficient to permit the exercise in
full of all outstanding Warrants; provided that if, at any time after the
Original Issue Date, the Company does not have available for issuance authorized
but unissued shares of Non-Voting Common Stock and Voting Common Stock, as will
be sufficient to permit the exercise in full of all outstanding Warrants, and
the Company shall pay a dividend (other than a dividend for which an adjustment
is made pursuant to Section 4.1) or otherwise distribute to all holders of its
shares of Common Stock cash, evidences of its indebtedness or assets, then the
Holder shall be entitled to also receive such dividend or distribution on the
date it is paid in an amount which it would have received if the Holder had
exercised the Warrants held by the Holder immediately prior to the date of such
dividend or distribution without duplication of any right of the Holder to
receive such dividend or distribution pursuant to the Master Contribution
Agreement.
All shares of Common Stock issuable pursuant to the terms hereof, when
issued upon exercise of this Warrant with payment therefor in accordance with
the terms hereof, shall be duly and validly issued and fully paid and
nonassessable, not subject to preemptive rights and shall be free and clear of
all Encumbrances (other than Encumbrances created by actions of a Holder).
Before taking any action that would result in an adjustment in the number of
shares of Common Stock for which this Warrant is exercisable or in the Exercise
Price, the Company shall obtain all such authorizations or exemptions thereof,
or consents thereto, as may be necessary from any public regulatory body or
bodies having jurisdiction over such action. Subject to the provisos in Section
2.1(b) and (c) herein, if any shares of Common Stock required to be reserved for
issuance upon exercise of Warrants require registration or qualification with
any governmental authority under any federal or state law (other than under the
Securities Act or any state securities law) before such shares may be so issued,
the Company will in good faith and as expeditiously as possible and at its
expense endeavor to cause such shares to be duly registered.
7. NOTICE OF CORPORATE ACTIONS; TAKING OF RECORD; TRANSFER BOOKS
7.1 Notices of Corporate Actions.
In case:
(a) the Company shall take an action or an event shall occur, that would
require an Exercise Price adjustment pursuant to Section 4; or
(b) the Company shall grant to the holders of its Common Stock rights or
warrants to subscribe for or purchase any shares of capital stock of any class;
or
(c) of any reclassification of the Common Stock (other than a subdivision
or combination of the Outstanding shares of Common Stock), or of any
consolidation, merger or share exchange to which the Company is a party and for
which approval of any stockholders of the Company is required, or of the sale or
transfer of all or substantially all of the assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or winding up
of the Company; or
(e) the Company or any Subsidiary shall commence a tender offer for all or
a portion of the Outstanding shares of Common Stock (or shall amend any such
tender offer to change the maximum number of shares being sought or the amount
or type of consideration being offered therefor);
then the Company shall cause to be filed at each office or agency maintained for
such purpose, and shall cause to be mailed to all Holders at their last
addresses as they shall appear in the stock register, at least 10 days prior to
the applicable record, effective or expiration date hereinafter specified, a
notice stating (x) the date on which a record is to be taken for the purpose of
such dividend, distribution or granting of rights or warrants, or, if a record
is not to be taken, the date as of which the holders of Common Stock of record
who will be entitled to such dividend, distribution, rights or warrants are to
be determined, (y) the date on which such reclassification, consolidation,
merger, share exchange, sale, transfer, dissolution, liquidation or winding up
is expected to become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, share exchange, sale, transfer,
dissolution, liquidation or winding up, or (z) the date on which such tender
offer commenced, the date on which such tender offer is scheduled to expire
unless extended, the consideration offered and the other material terms thereof
(or the material terms of the amendment thereto). Such notice shall also set
forth such facts with respect thereto as shall be reasonably necessary to
indicate the effect of such action on the Exercise Price and the number and kind
or class of shares or other securities or property which shall be deliverable or
purchasable upon the occurrence of such action or deliverable upon exercise of
the Warrants. Neither the failure to give any such notice nor any defect therein
shall affect the legality or validity of any action described in clauses (a)
through (e) of this Section 7.1.
7.2 Taking of Record. In the case of all dividends or other distributions
by the Company to the holders of its Common Stock with respect to which any
provision of any Section hereof refers to the taking of a record of such
holders, the Company will in each such case take such a record as of the close
of business on a Business Day.
7.3 Closing of Transfer Books. The Company shall not at any time, except
upon dissolution, liquidation or winding up of the Company, close its stock
transfer books or Warrant transfer books so as to result in preventing or
delaying the exercise or transfer of any Warrant.
8. TRANSFER RESTRICTIONS
The Holder, by acceptance of this Warrant, agrees to be bound by the
provisions of this Section 8.
8.1 Restrictions on Transfers. Subject to this Section 8.1, Holder may
transfer this Warrant or any shares of Restricted Common Stock or cause a
portion of this Warrant to be transferred. Neither this Warrant, any portion
hereof nor any shares of Restricted Common Stock issued upon the exercise hereof
shall be transferred, sold, assigned, exchanged, mortgaged, pledged,
hypothecated, or otherwise disposed of or encumbered without compliance with,
and they are otherwise restricted by, the provisions of the Securities Act, the
rules and regulations thereunder and this Warrant. Each certificate, if any,
evidencing such shares of Restricted Common Stock issued upon any such Transfer,
other than in a public offering pursuant to an effective registration statement,
shall bear the restrictive legend set forth in Section 8.2(a), and each Warrant
issued upon such Transfer shall bear the restrictive legend set forth in Section
8.2(b), unless the Holder delivers to the Company an Opinion of Counsel to the
effect that such legend is not required for the purposes of compliance with the
Securities Act. Holders of the Warrants or the Restricted Common Stock, as the
case may be, shall not be entitled to Transfer such Warrants or such Restricted
Common Stock except in accordance with this Section 8.1.
8.2 Restrictive Legends.
(a) Except as otherwise provided in this Section 8, each certificate for
Warrant Stock initially issued upon the exercise of this Warrant, each
certificate for Warrant Stock issued to any subsequent transferee of any such
certificate, shall be stamped or otherwise imprinted with two legends in
substantially the following forms: "THE SHARES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR ANY STATE SECURITIES LAW. THE SHARES REPRESENTED BY THIS CERTIFICATE
MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, EXCHANGED, MORTGAGED, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF OR ENCUMBERED WITHOUT COMPLIANCE WITH THE
PROVISIONS OF, AND ARE OTHERWISE RESTRICTED BY THE PROVISIONS OF, THE ACT AND
THE RULES AND REGULATIONS THEREUNDER." "THE SHARES REPRESENTED BY THIS
CERTIFICATE ARE ENTITLED TO THE BENEFIT OF AND ARE SUBJECT TO CERTAIN
OBLIGATIONS SET FORTH IN A CERTAIN WARRANT DATED JANUARY 6, 2009, ORIGINALLY
ISSUED BY SKYTERRA COMMUNICATIONS, INC. (THE "WARRANT") PURSUANT TO THE EXERCISE
OF WHICH SUCH SHARES WERE ISSUED. A COPY OF THE WARRANT IS AVAILABLE AT THE
EXECUTIVE OFFICES OF SKYTERRA COMMUNICATIONS, INC."
(b) Except as otherwise provided in this Section 8, each Warrant shall be
stamped or otherwise imprinted with a legend in substantially the following
form: "NEITHER THIS WARRANT NOR ANY OF THE SECURITIES ISSUABLE UPON EXERCISE
HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR ANY STATE SECURITIES LAW. THE WARRANTS REPRESENTED BY THIS
CERTIFICATE AND THE STOCK ISSUABLE UPON EXERCISE HEREOF MAY NOT BE TRANSFERRED,
SOLD, ASSIGNED, EXCHANGED, MORTGAGED, PLEDGED, HYPOTHECATED OF OTHERWISE
DISPOSED OF OR ENCUMBERED WITHOUT COMPLIANCE WITH THE PROVISIONS OF, AND ARE
OTHERWISE RESTRICTED BY THE PROVISIONS OF, THE ACT, THE RULES AND REGULATIONS
THEREUNDER AND THIS WARRANT."
8.3 Termination of Securities Law Restrictions. Notwithstanding the
foregoing provisions of this Section 8, the restrictions imposed by Section 8.1
upon the transferability of the Warrants and the Restricted Common Stock and the
legend requirements of Section 8.2 shall terminate as to any particular Warrant
or shares of Restricted Common Stock when the Company shall have received from
the Holder thereof an Opinion of Counsel to the effect that such legend is not
required in order to ensure compliance with the Securities Act. Whenever the
restrictions imposed by Sections 8.1 and 8.2 shall terminate as to this Warrant,
as hereinabove provided, the Holder hereof shall be entitled to receive from the
Company, at the expense of the Company, a new Warrant not bearing the
restrictive legend set forth in Section 8.2(b).
All Warrants issued upon registration of transfer, division or combination of,
or in substitution for, any Warrant or Warrants entitled to bear such legend
shall have a similar legend endorsed thereon. Whenever the restrictions imposed
by this Section shall terminate as to any share of Restricted Common Stock, as
hereinabove provided, the Holder thereof shall be entitled to receive from the
Company, at the Company's expense, a new certificate representing such Common
Stock not bearing the restrictive legend set forth in Section 8.2(a).
9. LOSS OR MUTILATION
Upon receipt by the Company from any Holder of evidence reasonably
satisfactory to it of the ownership of and the loss, theft, destruction or
mutilation of this Warrant and an indemnity reasonably satisfactory to it (it
being understood that the written indemnification agreement of or affidavit of
loss of the Holder, shall be a sufficient indemnity) and, in case of mutilation,
upon surrender and cancellation hereof, the Company will execute and deliver in
lieu hereof a new Warrant of like tenor to such Holder; provided, however, that,
in the case of mutilation, no indemnity shall be required if this Warrant in
identifiable form is surrendered to the Company for cancellation.
10. OFFICE OF THE COMPANY
As long as any of the Warrants remain outstanding, the Company shall
maintain an office or agency, which may be the principal executive offices of
the Company (the "Designated Office"), where the Warrants may be presented for
exercise, registration of transfer, division or combination as provided in this
Warrant. Such Designated Office shall initially be the office of the Company at
00000 Xxxxxxxxx Xxxxxxxxx, Xxxxxx, Xxxxxxxx 00000. The Company may from time to
time change the Designated Office to another office of the Company or its agent
within the United States by notice given to all registered Holders at least ten
(10) Business Days prior to the effective date of such change.
11. MISCELLANEOUS
11.1 Nonwaiver. No course of dealing or any delay or failure to exercise
any right hereunder on the part of the Company or the Holder shall operate as a
waiver of such right or otherwise prejudice the rights, powers or remedies of
such Person.
11.2 Notice Generally. Any notice, demand, request, consent, approval,
declaration, delivery or communication hereunder to be made pursuant to the
provisions of this Warrant shall be sufficiently given or made if in writing and
either delivered in person with receipt acknowledged or sent by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
(a) if to any Holder of this Warrant or of Warrant Stock issued upon the
exercise hereof, at its last known address appearing on the books of the Company
maintained for such purpose;
(b) if to the Company, at the Designated Office;
or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration, delivery or other communication hereunder shall
be deemed to have been duly given or served on the date on which personally
delivered, with receipt acknowledged, or three (3) Business Days after the same
shall have been deposited in the United States mail, or one (1) Business Day
after the same shall have been sent by Federal Express or another recognized
overnight courier service.
11.3 Indemnification. The Company shall indemnify, save and hold harmless
the Holder hereof and the Holders of any Warrant Stock issued upon the exercise
hereof from and against any and all liability, loss, cost, damage, reasonable
attorneys' and accountants' fees and expenses, court costs and all other out
of-pocket expenses incurred in connection with or arising from any default
hereunder by the Company. This indemnification provision shall be in addition to
the rights of such Holder or Holders to bring an action against the Company for
breach of contract based on such default hereunder.
11.4 Limitation of Liability. No provision hereof, in the absence of
affirmative action by the Holder to purchase shares of Common Stock, and no
enumeration herein of the rights or privileges of the Holder hereof, shall give
rise to any liability of such Holder to pay the Exercise Price for any Warrant
Stock other than pursuant to an exercise of this Warrant or any liability as a
stockholder of the Company, whether such liability is asserted by the Company or
by creditors of the Company.
11.5 Remedies. Each Holder of Warrants and/or Warrant Stock, in addition to
being entitled to exercise its rights granted by law, including recovery of
damages, shall be entitled to specific performance of its rights provided under
this Warrant. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions
of this Warrant and hereby agrees, in an action for specific performance, to
waive the defense that a remedy at law would be adequate.
11.6 Successors and Assigns. Subject to the provisions of Sections 3.1 and
8.1, this Warrant and the rights evidenced hereby shall inure to the benefit of
and be binding upon the successors of the Company and the permitted successors
and assigns of the Holder hereof. The provisions of this Warrant are intended to
be for the benefit of all Holders from time to time of this Warrant and to the
extent applicable, all Holders of shares of Warrant Stock issued upon the
exercise hereof (including transferees), and shall be enforceable by any such
Holder.
11.7 Amendment. This Warrant and all other Warrants may be modified or
amended or the provisions hereof waived with the written consent of the Company
and the Majority Warrant Holders, provided that no such Warrant may be modified
or amended to reduce the number of shares of Common Stock for which such Warrant
is exercisable or to increase the price at which such shares may be purchased
upon exercise of such Warrant (before giving effect to any adjustment as
provided therein) without the written consent of the Holder thereof.
11.8 Severability. Wherever possible, each provision of this Warrant shall
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Warrant shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Warrant.
11.9 Headings. The headings used in this Warrant are for the convenience of
reference only and shall not, for any purpose, be deemed a part of this Warrant.
11.10 GOVERNING LAW; JURISDICTION. IN ALL RESPECTS, INCLUDING ALL MATTERS
OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS WARRANT AND THE OBLIGATIONS
ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND
PERFORMED IN SUCH STATE. THE COMPANY HEREBY CONSENTS AND AGREES THAT THE STATE
OR FEDERAL COURTS LOCATED IN NEW YORK, SHALL HAVE, EXCEPT AS SET FORTH BELOW,
EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE
COMPANY AND THE HOLDER OF THIS WARRANT PERTAINING TO THIS WARRANT OR TO ANY
MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT, PROVIDED, THAT IT IS
ACKNOWLEDGED THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT
LOCATED OUTSIDE OF NEW YORK.
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed
and its corporate seal to be impressed hereon and attested by its Secretary or
an Assistant Secretary.
SKYTERRA COMMUNICATIONS, INC.
By:
-----------------------------------
Name:
Title:
[SEAL]
Attest:
By: _____________________________
Name:
Title:
ANNEX A
SUBSCRIPTION FORM
[To be executed only upon exercise of Warrant]
The undersigned registered owner of this Warrant irrevocably exercises this
Warrant for the purchase of ______ shares of Voting Common Stock and ________
shares of Non-Voting Common Stock of SkyTerra Communications, Inc. and herewith
makes payment therefor in __________, all at the price and on the terms and
conditions specified in this Warrant and requests that certificates for the
shares of such Common Stock hereby purchased (and any securities or other
property issuable upon such exercise) be issued in the name of and delivered to
_________________ whose address is _______________________________ and, if such
shares of Common Stock shall not include all of the shares of Common Stock
issuable as provided in this Warrant, that a new Warrant of like tenor and date
for the balance of the shares of Common Stock issuable hereunder be delivered to
the undersigned.
Method of Payment of Exercise Price:
------------------------------
-------------------------------
(Name of Registered Owner)
-------------------------------
(Signature of Registered Owner)
-------------------------------
(Street Address)
-------------------------------
(City) (State) (Zip Code)
NOTICE: The signature on this subscription must correspond with the
name as written upon the face of the within Warrant in every
particular, without alteration or enlargement or any change
whatsoever.
ANNEX B
ASSIGNMENT FORM
FOR VALUE RECEIVED the undersigned registered owner of this Warrant hereby
sells, assigns and transfers unto the assignee named below all of the rights of
the under signed under this Warrant, with respect to the number of shares of
Common Stock set forth below:
No. of Shares of
Name and Address of Assignee Common Stock
---------------------------- ----------------
and does hereby irrevocably constitute and appoint ________ _____________
attorney-in-fact to register such transfer onto the books of SkyTerra
Communications, Inc. maintained for the purpose, with full power of substitution
in the premises.
Dated: Print Name:
Signature:
Witness:
NOTICE: The signature on this assignment must correspond with the name
as written upon the face of the within Warrant in every
particular, without alteration or enlargement or any change
whatsoever.
