RIGHT OF FIRST OFFER AGREEMENT February 5, 2008
Exhibit 99.8
Execution Version
February 5, 2008
This Right of First Offer Agreement is made and entered into by and between TerreStar
Corporation, a Delaware corporation (the “Parent”), TerreStar Networks Inc., a Delaware
corporation (the “Company”) and EchoStar Corporation, a Nevada corporation
(“EchoStar”) pursuant to the Master Investment Agreement, dated as of February 5, 2008, by
and among Parent, the Company and EchoStar (the “Master Investment Agreement”).
As an inducement to EchoStar to enter into the Master Investment Agreement and in satisfaction
of a condition to the obligations of EchoStar thereunder, each of Parent and the Company agrees
with EchoStar as follows:
ARTICLE I
DEFINITIONS
DEFINITIONS
Section 1.01 Definitions. For the purposes of this Agreement, the following terms
shall have the following meanings:
“Agreement” means this Right of First Offer Agreement.
The “Company” has the meaning assigned to such term in the preamble to this Agreement.
“Company Excluded Securities” means (i) equity securities issued as dividends payable
in kind, (ii) securities issued as interest payable-in-kind, (ii) equity securities issued in
connection with a stock split or reclassification, (iii) securities issued as direct consideration
in connection with a bona fide acquisition of another corporation or entity by the Company (or a
wholly-owned subsidiary thereof) by consolidation, merger, purchase of all or substantially all of
the assets of such other corporation or entity or 50% or more of the equity ownership of such other
entity, or other similar transaction, not resulting in the holders of voting common stock of the
Company owning less than 50% of the voting securities of the Company or the entity resulting from
such transaction; provided that such transaction or series of transactions has been
approved by the Board of Directors of the Company and such transaction is not being done in breach
of any approval rights of EchoStar, (iv) shares of Company Common Stock issuable upon conversion or
exercise of any options, warrants or other rights to purchase Company Common Stock outstanding as
of the date hereof or approved by the Board of Directors of the Company after the date hereof, and
(v) Company Common Stock (or options, warrants or rights therefor) issuable to employees, officers,
directors, contractors, consultants or advisors of the Company (or any subsidiary) pursuant to
incentive agreements, stock purchase or stock option plans, stock bonuses or awards, warrants,
contracts or other similar arrangements in each case for other than primarily equity financing
purposes, as approved by the Board of Directors of the Company.
“EchoStar” has the meaning assigned to such term in the preamble to this Agreement.
The “EchoStar Proportionate Number” is, at any given time and with respect to a
particular Offering, the product of (i) a number equal to (A) the aggregate principal amount of
Exchangeable Notes held by EchoStar and its affiliates at such time, divided by (B) the aggregate
principal amount of all Exchangeable Notes held by EchoStar, Harbinger and their respective
affiliates and (ii) the total amount of securities proposed to be sold, issued or otherwise
transferred in such Offering; provided, however, that the number referred to in
clause (i)(B) above shall include those Exchangeable Notes held by Harbinger only if Harbinger and
its affiliates, at the time of the relevant Right of First Offer Notice, hold at least 50% of the
aggregate principal amount of the Exchangeable Notes initially purchased by Harbinger pursuant to
the terms of the Master Investment Agreement between Parent, the Company and Harbinger.
“Harbinger”: Harbinger Capital Partners Master Fund I, Ltd. and Harbinger Capital
Partners Special Situations Fund, L.P.
“Master Investment Agreement” has the meaning assigned to such term in the preamble to
this Agreement.
“Offering” has the meaning assigned to such term in Section 2.01 of this Agreement.
“Parent” has the meaning assigned to such term in the preamble to this Agreement.
“Parent Excluded Securities” means (i) equity securities issued as dividends payable
in kind, (ii) securities issued as interest payable-in-kind, (iii) equity securities issued in
connection with a stock split or reclassification, (iii) securities issued as direct consideration
in connection with a bona fide acquisition of another corporation or entity by Parent (or a
wholly-owned subsidiary thereof) by consolidation, merger, purchase of all or substantially all of
the assets of such other corporation or entity or 50% or more of the equity ownership of such other
entity, or other similar transaction, not resulting in the holders of voting common stock of Parent
owning less than 50% of the voting securities of Parent or the entity resulting from such
transaction; provided that such transaction or series of transactions has been approved by
the Board of Directors of Parent and such transaction is not being done in breach of any approval
rights of EchoStar, (iv) shares of Parent Common Stock issuable upon conversion or exercise of any
options, warrants or other rights to purchase Parent Common Stock outstanding as of the date hereof
or approved by the Board of Directors of Parent after the date hereof, and (vi) Parent Common Stock
(or options, warrants or rights therefor) to employees, officers, directors, contractors,
consultants or advisors of the Company (or any subsidiary) pursuant to incentive agreements, stock
purchase or stock option plans, stock bonuses or awards, warrants, contracts or other similar
arrangements in each case for other than primarily equity financing purposes, as approved by the
Board of Directors of Parent.
“Right of First Offer Notice” has the meaning assigned to such term in Section 2.01 of
this Agreement.
Section 1.02 Other Terms. Capitalized terms used herein but not defined shall have
the meanings assigned to such terms in the Master Investment Agreement.
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ARTICLE II
LIMITED PREEMPTIVE RIGHTS
LIMITED PREEMPTIVE RIGHTS
Section 2.01 Right of First Offer. In the event that either the Company or Parent
proposes to sell, issue or otherwise transfer any equity or debt securities (other than Company
Excluded Securities and Parent Excluded Securities) of the Company or Parent (each such
transaction, an “Offering”), it shall provide EchoStar written notice (the “Right of
First Offer Notice”) of such Offering, specifying the proposed price (it being understood that
the form of consideration shall be cash or tangible assets only) and the material terms upon which
the Company or Parent proposes to sell, issue or otherwise transfer the same. Any such Right of
First Offer Notice shall contain, as applicable, the term, maturity, amortization, interest rate
and payment terms (including cash and Paid-in-Kind components, as applicable), fees, discount,
equity component, security, terms of credit support (including, but not limited to, collateral and
guarantees), subordination (including contractual and structural) and governance rights of such
securities. EchoStar shall have ten (10) Business Days from the delivery date of any Right of
First Offer Notice to agree to purchase (if the form of consideration is tangible assets, at
EchoStar’s option, for cash and/or the same type of tangible assets of equal value), an amount of
equity or debt securities of Parent or the Company up to the EchoStar Proportionate Number (in each
case calculated prior to the issuance) for the price and upon the terms specified in the Right of
First Offer Notice by giving written notice to the Company or Parent, as applicable, and stating
therein the amount of such equity or debt securities to be purchased. If a definitive agreement
for the purchase of such equity or debt securities is not provided along with the Right of First
Offer Notice, EchoStar’s election to purchase such equity or debt securities pursuant to such Right
of First Offer Notice shall not be binding until a definitive agreement is executed (but, subject
to Section 2.03, an election not to purchase shall be binding).
Section 2.02 Extension Right. To the extent that EchoStar has agreed to purchase all
of the EchoStar Proportionate Number of securities with respect to an Offering and any other person
with a similar right (i) does not elect to purchase all of the securities with respect to such
Offering which such other person has a right to acquire or (ii) is otherwise unable to reach
agreement with the Company or Parent, as applicable, with regard to the terms of the definitive
agreements related thereto, EchoStar shall have the option to purchase any or all of such
securities not so purchased in addition to the EchoStar Proportionate Number of securities with
respect to such Offering.
Section 2.03 Right to Sell. In the event that EchoStar does not elect to purchase all
of the equity or debt securities to be offered in an Offering, or to the extent that EchoStar is
not able to reach agreement with the Company or Parent, as applicable, with regard to the terms of
the definitive agreements related thereto, the Company or Parent, as applicable, shall have 120
days after the date of the Right of First Offer Notice to consummate the sale, issuance or transfer
of any or all of the amount of equity or debt securities with respect to which EchoStar’s
preemptive rights hereunder were not exercised, at or above the price and upon terms not less
favorable to the Company or Parent in any material respect (it being understood and agreed that any
increase in the number of equity or debt securities or any decrease in the price thereof shall be
deemed material for this purpose) than the terms specified in the initial Right of First Offer
Notice given in connection with such sale, issuance or other transfer.
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ARTICLE III
MISCELLANEOUS
MISCELLANEOUS
Section 3.01 Term. This Agreement shall terminate at such time when EchoStar and its
affiliates collectively own less than 50% of the aggregate principal amount of the Exchangeable
Notes initially purchased by EchoStar pursuant to the terms of the Master Investment Agreement.
Section 3.02 Most Favored Nation. Each of the Company and Parent agree not to grant
to any third party any preemptive rights or rights similar to the rights granted to EchoStar
hereunder (i) on any terms more favorable to such third party or (ii) to the extent that such third
party’s rights would interfere with or impair EchoStar’s rights hereunder.
Section 3.03 Termination by Mutual Consent. This Agreement may be terminated and the
sale and purchase of the Purchased Securities hereunder may be abandoned at any time prior to the
Closing, by mutual written consent of (a) the Company, (b) Parent and (c) EchoStar.
Section 3.04 Interpretation; Severability. Article, Section, Schedule, and Exhibit
references are to this Agreement, unless otherwise specified. All references to instruments,
documents, contracts, and agreements are references to such instruments, documents, contracts, and
agreements as the same may be amended, supplemented, and otherwise modified from time to time,
unless otherwise specified. The word “including” shall mean “including but not limited to.”
Whenever any party has an obligation under this Agreement, the expense of complying with that
obligation shall be an expense of such party unless otherwise specified. If any provision of this
Agreement is held to be illegal, invalid, not binding, or unenforceable, such provision shall be
fully severable and this Agreement shall be construed and enforced as if such illegal, invalid, not
binding, or unenforceable provision had never comprised a part of this Agreement, and the remaining
provisions shall remain in full force and effect.
Section 3.05 Waivers; Remedies; Amendments.
(a) No Waiver; Remedies Cumulative. No failure or delay on the part of any party in
exercising any right, power, or remedy hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right, power, or remedy preclude any other
or further exercise thereof or the exercise of any right, power, or remedy. The remedies
provided for herein are cumulative and are not exclusive of any remedies that may be
available to a party at law or in equity or otherwise.
(b) Amendments and Modifications. Except as otherwise provided herein, no amendment,
waiver, consent or modification of any provision of this Agreement shall be effective unless
signed by each of the parties hereto affected by such amendment, waiver, consent or
modification. Any amendment, supplement or modification of or to any provision of this
Agreement, any waiver of any provision of this Agreement, and any consent to any departure
by any party hereto from the terms of any provision of this Agreement shall be effective
only in the specific instance and for the specific purpose for which made or given. Except
where notice is specifically required by this Agreement, no
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notice to or demand on any party hereto in any case shall entitle any party hereto to
any other or further notice or demand in similar or other circumstances.
Section 3.06 Binding Effect; Assignment. This Agreement shall be binding upon the
Company, Parent, EchoStar, and their respective successors and permitted assigns. Except as
expressly provided in this Agreement, this Agreement shall not be construed so as to confer any
right or benefit upon any Person other than the parties to this Agreement and their respective
successors and permitted assigns.
Section 3.07 Non-Disclosure. Notwithstanding anything herein to the contrary, the
Confidentiality Agreement shall remain in full force and effect according to its terms regardless
of any termination of this Agreement.
Section 3.08 Communications. All notices and demands to be delivered to any party
hereto shall be in writing and shall be given by registered or certified mail, return receipt
requested, telecopy, air courier guaranteeing overnight delivery or personal delivery to the
address of such party specified in the Master Investment Agreement or to such other address as such
party may designate in writing. All notices and communications shall be deemed to have been duly
given at the time delivered by hand, if personally delivered; upon actual receipt if sent by
certified mail, return receipt requested, or regular mail, if mailed; when receipt acknowledged, if
sent via facsimile; and upon actual receipt when delivered to an air courier guaranteeing overnight
delivery.
Section 3.09 Entire Agreement. This Agreement and the other agreements and documents
referred to herein are intended by the parties as a final expression of their agreement and
intended to be a complete and exclusive statement of the agreement and understanding of the parties
hereto in respect of the subject matter contained herein and therein. There are no restrictions,
promises, representations, warranties, covenants or undertakings, other than those set forth or
referred to herein or therein with respect to the rights granted by the Company, Parent or any of
their Affiliates or each of the Purchasers or any of their Affiliates set forth herein or therein.
This Agreement and the other agreements and documents referred to herein supersede all prior
agreements and understandings between the parties with respect to such subject matter.
Section 3.10 Governing Law. This Agreement will be construed in accordance with and
governed by the laws of the State of New York without regard to principles of conflicts of laws.
Section 3.11 Execution in Counterparts. This Agreement may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each of which
counterparts, when so executed and delivered, shall be deemed to be an original and all of which
counterparts, taken together, shall constitute but one and the same Agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the undersigned have entered into this Agreement as of the date first
written above.
| TERRESTAR NETWORKS INC. |
||||
| By: | /s/ Xxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxx X. Xxxxxxx | |||
| Title: | President and Chief Executive Officer | |||
| TERRESTAR CORPORATION |
||||
| By: | /s/ Xxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxx X. Xxxxxxx | |||
| Title: | President and Chief Executive Officer | |||
| ECHOSTAR CORPORATION |
||||
| By: | /s/ Xxxxxxx X. Xxxxx | |||
| Name: | Xxxxxxx X. Xxxxx | |||
| Title: | Chairman and Chief Executive Officer | |||
[Signature Page to EchoStar Right of First Offer Agreement]
