Exhibit G
SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of the 24th day of July, 2008 by and among MOBILE SATELLITE VENTURES LP,
a Delaware limited partnership ("MSV"), MOBILE SATELLITE VENTURES FINANCE CO., a
Delaware corporation ("MSV Finance Co." and, together with MSV, the "Issuers"),
SkyTerra Communications, Inc., a Delaware corporation ("SkyTerra"), HARBINGER
CAPITAL PARTNERS MASTER FUND I, LTD., a Cayman Islands fund, and HARBINGER
CAPITAL PARTNERS SPECIAL SITUATIONS FUND, L.P., a Delaware limited partnership
(collectively, the "Purchasers").
In consideration of the mutual agreements, representations, warranties and
covenants herein contained, the parties hereto agree as follows:
1. Definitions; Certain Rules of Construction. As used in this Agreement,
the following terms shall have the following respective meanings:
"14% Notes Indenture" means the Indenture, dated as of March 30, 2006, by
and among the Issuers, the Guarantors named therein, and The Bank of New York, a
New York banking corporation, as Trustee, relating to the 14% Senior Secured
Discount Notes of the Issuers, as such Indenture is in effect on the date of
this Agreement (and without regard to any subsequent amendment thereto).
"16.5% Notes" has the meaning assigned to it in Section 5.10 hereof.
"16.5% Notes Indenture" means the Indenture, dated as of January 7, 2008,
by and among the Issuers, the Guarantors named therein, and The Bank of New
York, a New York banking corporation, as Trustee, relating to the 16.5% Senior
Notes of the Issuers, as such Indenture is in effect on the date of this
Agreement (and without regard to any subsequent amendment thereto).
"16.5% Notes Supplemental Indenture" means the Supplemental Indenture to
the 16.5% Notes Indenture substantially in the form of Exhibit D hereof.
"Affiliate" means, with respect to any Person, any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this Agreement,
"control," when used with respect to any specified Person means the power to
direct or cause the direction of the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Antitrust Laws" means the HSR Act, as amended, the Xxxxxxx Antitrust Act,
as amended, the Xxxxxxx Antitrust Act, as amended, the Federal Trade Commission
Act, as amended, and any other United States federal or state or foreign
statutes, rules, regulations, orders, decrees, administrative or judicial
doctrines or other laws that are designed to prohibit, restrict or regulate
actions having the purpose or effect of monopolization or restraint of trade.
"April Warrants" means one or more warrants to purchase an aggregate of
17,500,000 shares of Common Stock, substantially in the form attached as Exhibit
A-2 hereto.
"Authorizations" has the meaning assigned to it in Section 4.14(a) hereof.
"Board" means the board of directors MSV GP or any duly authorized
committee thereof.
"Business Day" means any day except Saturday, Sunday and any day which
shall be a federal legal holiday or a day on which banking institutions in the
State of New York are authorized or required by law or other governmental action
to close.
"Closings" has the meaning assigned to it in Section 3.2 hereof.
"Closing Dates" has the meaning assigned to it in Section 3.1 hereof.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" means the Voting Common Stock and the Non-Voting Common
Stock.
"Company Transaction Proposal" has the meaning assigned to it in Section
8.6(e) hereof.
"Disclosure Schedules" has the meaning assigned to it in Section 4 and
Section 4A hereof.
"DOJ" has the meaning assigned to it in Section 6 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 either Issuer or SkyTerra or
materially interfere with the use of such property or asset.
"Environmental Protection Laws" means any Law enacted in any jurisdiction
in connection with or relating to the protection or regulation of the
environment, including those Laws regulating the disposal, removal, production,
storing, refining, handling, transferring, processing or transporting of
hazardous or toxic substances, and any orders, decrees or judgments issued by
any court of competent jurisdiction in connection with any of the foregoing.
"ERISA Plan" has the meaning assigned to it in Section 4.25(e) hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
all of the rules and regulations promulgated thereunder.
"Exchange Act Reports" means SkyTerra's reports filed with the SEC since
December 31, 2007, pursuant to Section 13 of the Exchange Act.
"Existing High Yield Indentures" means the 14% Notes Indenture and the
16.5% Notes Indenture.
"FCC" has the meaning assigned to it in Section 4.14(a) hereof.
"First Closing Date" has the meaning assigned to it in Section 3.1(a)
hereof.
"Fourth Closing Date" has the meaning assigned to it in Section 3.1(a)
hereof.
"FTC" has the meaning assigned to it in Section 6 hereof.
"GAAP" means U.S. generally accepted accounting principles.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"HSR Act" has the meaning assigned to it in Section 4A.6 hereof.
"Indebtedness" has the meaning assigned to it in the Indenture.
"Indenture" means the Indenture in the form attached hereto in Exhibit B.
"Intellectual Property" has the meaning assigned to it in Section 4.18(a)
hereof.
"IRS" means the Internal Revenue Service.
"Issuers" has the meaning assigned to it in the Preamble.
"in writing" means any form of written communication or a communication by
means of facsimile transmission, in all events delivered in accordance with
Section 9.3(c) or Section 9.3(d).
"January Warrants" means one or more warrants to purchase an aggregate of
7,500,000 shares of Common Stock, substantially in the form attached as Exhibit
A-1 hereto.
"Law" means any constitution, treaty, statute, law, ordinance, regulation,
rule, standard, code, rule of common law, order or other requirement or rule
enacted or promulgated by any Governmental Authority.
"Material Adverse Effect" means any events, facts, changes or circumstances
which have had or would reasonably be expected to have a material adverse effect
on the business, assets, liabilities, properties, operations or financial
condition of SkyTerra, the Issuers and their Subsidiaries, taken as a whole,
except to the extent that such adverse effect results from (a) general economic,
regulatory or political conditions or changes therein in the United States or
the other countries in which such party operates; (b) financial or securities
market fluctuations or conditions; (c) changes in, or events or conditions
affecting, the satellite telecommunications industry generally; (d) changes in
applicable Law or in GAAP; (e) compliance with the terms of, or the taking of
any action required by, the MCSA, this Agreement or consented to by the
Purchasers, or the failure to take any actions for which the Purchasers and
Harbinger Co-Investment Fund, L.P. have withheld their consent pursuant to
Section 16.1(k) of the MCSA; or (f) the failure of any in-orbit assets of
SkyTerra and its Subsidiaries existing as of the date of this Agreement (which,
for the avoidance of doubt, consist of two satellites known as MSAT-1 and
MSAT-2) unless such failure constitutes a material threat to the Authorizations
or would be likely to hinder the ability of SkyTerra and its Subsidiaries to
obtain material new permits, licenses, certificates, registrations or other
similar authorizations; provided, however, that the exclusions set forth in
clauses (a) to (d) shall not apply if the impact on SkyTerra, the Issuers and
their Subsidiaries, taken as a whole, is materially disproportionate to the
impact on other satellite companies involved in a business similar to that of
SkyTerra, the Issuers and their Subsidiaries.
"MCSA" means the Master Contribution and Support Agreement dated July 24,
2008 among the Purchasers, Harbinger Co-Investment Fund, L.P., SkyTerra, MSV and
Mobile Satellite Ventures Subsidiary LLC.
"MSV" has the meaning assigned to it in the Preamble.
"MSV GP" means Mobile Satellite Ventures GP, Inc., a Delaware corporation
and the general partner of MSV.
"MSV Finance Co." has the meaning assigned to it in the Preamble.
"MSV Option Exchange" means the revised offer by SkyTerra to issue options
to purchase shares of Common Stock in exchange for the termination of
outstanding options to purchase limited partnership units of MSV pursuant to the
prospectus dated May 15, 2008, as supplemented to date, filed by SkyTerra with
the SEC pursuant to Rule 424(b)(3) under the Securities Act on Registration
Statement No. 333-144093.
"Non-Voting Common Stock" means the non-voting common stock, par value
$0.01 per share, of SkyTerra.
"Notes" has the meaning assigned to it in Section 2 hereof.
"Original Issue Date" means the date on which the January Warrants are
first issued.
"Payment-in-Kind Notes" means additional Notes issued under the Indenture
on the same terms and conditions as the Notes issued on a particular Closing
Date for the purpose of paying interest on the Notes issued on such Closing
Date.
"Pension Plan" has the meaning assigned to it in Section 4.25(e) hereof.
"Permits" has the meaning assigned to it in Section 4.15 hereof.
"Person" means an individual, entity, partnership, limited liability
company, corporation, association, trust, joint venture, unincorporated
organization, and any Governmental Authority.
"Public Offering" means an underwritten public offering or a registered
direct placement resulting in net proceeds to SkyTerra or any of its
Subsidiaries of at least $50,000,000.
"PUC" has the meaning assigned to it in Section 4.14(a) hereof.
"Purchasers" has the meaning assigned it in the Preamble.
"Registration Rights Agreement" means the Registration Rights Agreement
attached as Exhibit E to the MCSA.
"Registration Statements" means SkyTerra's registration statements filed
with the SEC since December 31, 2007, pursuant to the Securities Act.
"Restricted Common Stock" means shares of Non-Voting Common Stock or Voting
Common Stock which are, or which upon their issuance on the exercise of the
Warrants would be, and shares of Voting Common Stock issued upon exchange of
such shares of Non-Voting Common Stock pursuant to Section 8.1, evidenced by a
certificate bearing the restrictive legend set forth in Section 8.3(a) hereof.
"Rule 144" means Rule 144 promulgated under the Securities Act and any
successor or substitute rule, law or provision.
"SEC" means the United States Securities and Exchange Commission.
"SEC Reports" means the Exchange Act Reports and the Registration
Statements.
"Second Closing Date" has the meaning assigned to it in Section 3.1(a)
hereof.
"Securities" mean, collectively, the Notes and the Warrants.
"Securities Act" means the Securities Act of 1933, as amended, and all of
the rules and regulations promulgated thereunder.
"Significant Subsidiary" means any "significant subsidiary" of the Issuers
within the meaning of Rule 1-02 under Regulation S-X.
"SkyTerra" has the meaning assigned to it in the Preamble.
"Subsidiary" means, with respect to any Person at any time, (a) any other
Person the accounts of which would be required by GAAP to be consolidated with
those of such first Person in its consolidated financial statements as of such
time, and (b) any other Person the capital securities of which, having ordinary
voting power to elect a majority of the board of directors (or other Persons
having similar functions) are, or other ownership interest ordinarily
constituting a majority voting interest is, at such time, directly or
indirectly, owned or controlled by such first Person or one or more of its
Subsidiaries. Unless otherwise expressly provided, all references herein to
"Subsidiary" means a Subsidiary of the Issuers.
"Superior Proposal" has the meaning assigned to it in Section 8.6(e)
hereof.
"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.
"Third Closing Date" has the meaning assigned to it in Section 3.1(a)
hereof.
"Transaction Documents" means, collectively, this Agreement, the Warrants,
the Notes, the Registration Rights Agreement and the Indenture, as well as all
certificates and exhibits executed or delivered in connection with such
agreements.
"Voting Common Stock" means the voting common stock, par value $0.01 per
share, of SkyTerra.
"Warrants" means the January Warrants and the April Warrants.
"Warrant Stock" has the meaning assigned to it in Section 8.3(a).
2. Financial Terms of the Notes. The Issuers have authorized or will
authorize prior to the Closing Dates the issuance and sale to the Purchasers of
up to $500,000,000 aggregate principal amount (plus any additional amounts
necessary to satisfy their obligations to deliver Payment-in-Kind Notes) of the
Issuers' 16.00% Senior Unsecured Notes due July 1, 2013 (the "Notes") to be
issued pursuant to the Indenture. Interest on the Notes will accrue from the
issue date of such Notes at a rate of 16.00% per annum, computed on the basis of
a 360-day year of twelve 30-day months, payable semi-annually in arrears on each
July 1 and January 1, commencing July 1, 2009. Until and including January 1,
2011, each and every interest payment on the Notes will be payable, at the
option of the Issuers, (i) in cash (a "Cash Payment"), (ii) in the form of
Payment-in-Kind Notes or (iii) in a combination of Cash Payment and
Payment-in-Kind Notes, with any Cash Payment being allocated pro rata among all
Notes on which interest is due on such date; provided, however, that interest
payments on each Note shall be made wholly in the form of a Cash Payment (x)
upon any prepayment of such Note (to the extent accrued on the amount being
prepaid), (y) upon the scheduled maturity of such Note and (z) at such other
time as such Note becomes due and payable (whether by acceleration or
otherwise). Commencing July 1, 2011, interest on the Notes will be payable in
cash only. The Notes will mature on July 1, 2013.
3. Purchase and Sale of the Securities.
3.1 Purchase and Sale. Subject to and upon the terms and conditions
set forth in this Agreement, the Indenture and the Warrants: (i) the
Issuers agree to issue and sell to the Purchasers, and the Purchasers
hereby agree to purchase from the Issuers, $150,000,000 principal amount of
the Notes on January 6, 2009 or at such other time as the Issuers and the
Purchasers may agree ("First Closing Date"), $175,000,000 principal amount
of the Notes on April 1, 2009 or at such other time as the Issuers and the
Purchasers may agree ("Second Closing Date"), $75,000,000 principal amount
of the Notes on July 1, 2009 or at such other time as the Issuers and the
Purchasers may agree ("Third Closing Date") and $100,000,000 principal
amount of the Notes on January 4, 2010 or at such other time as the Issuers
and the Purchasers may agree ("Fourth Closing Date", and together with the
First Closing Date, Second Closing Date and Third Closing Date,
collectively, the "Closing Dates") and (ii) SkyTerra agrees to issue and
sell to the Purchasers, and the Purchasers hereby agree to purchase from
SkyTerra, the January Warrants on the First Closing Date and the April
Warrants on the Second Closing Date.
3.2 Closings. The closings of the sales to, and purchases by, the
Purchaser of the Securities as contemplated by Section 3.1 (the "Closings")
shall occur at the offices of Weil, Gotshal & Xxxxxx LLP, 000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000-0000, on the respective Closing Dates, subject, in
each case, to the satisfaction or waiver of all of the conditions set forth
in Section 7 hereof and in the Indenture, or at such other time and place
as the Issuers and the Purchasers may agree. At each Closing, the Issuers
shall deliver to the Purchasers one or more Notes, substantially in the
form set forth in the Indenture, evidencing the principal amount of the
Notes to be sold on such Closing Date, and at the First Closing Date and
the Second Closing Date, SkyTerra shall deliver to the Purchasers one or
more instruments evidencing the January Warrants and the April Warrants,
respectively, in each case registered in the names of the Purchasers,
against delivery to the Issuers of an amount equal to 100% of the principal
amount of the Notes to be sold on such Closing Date by wire transfer of
immediately available funds to an account or accounts that the Issuers
designate in writing to the Purchasers at least two Business Days prior to
the applicable Closing Date.
4. Representations and Warranties of the Issuers. Except as disclosed in
the Disclosure Schedules delivered concurrently herewith (the "Disclosure
Schedules"), the Issuers jointly and severally hereby make the following
representations and warranties:
4.1 Status. Each of the Issuers and their Significant Subsidiaries (a)
has been duly organized, and is validly existing and in good standing under
the Laws of the jurisdiction of its organization and has all requisite
corporate or other, as applicable, power and authority to own its property
and assets and to transact the business in which it is engaged, and
presently proposes to engage, and (b) has duly qualified to do business and
is in good standing in each jurisdiction where it is required to be so
qualified, except where the failure to be so qualified or be in good
standing would reasonably be expected to have a Material Adverse Effect.
Neither of the Issuers nor any of their Significant Subsidiaries is
currently in violation of any of the provisions of its Certificate of
Incorporation or By-laws (or other applicable charter documents), each as
amended to date.
4.2 Power and Authority. All corporate or other action on the part of
each of the Issuers necessary for the authorization, execution, delivery
and performance of this Agreement and the Indenture and the consummation of
the transactions contemplated herein and therein have been taken or will
have been taken prior to the Closing Date for such document or transaction.
This Agreement and the Indenture, when executed and delivered by each of
the Issuers, shall constitute the legal, valid and binding obligation of
the Issuers and shall be enforceable against the Issuers in accordance with
the respective terms of such agreements, except as such may be limited by
bankruptcy, insolvency, reorganization or other laws affecting creditors'
rights generally and by general equitable principles. The Issuers have all
requisite corporate or other, as applicable, power and authority to enter
into this Agreement and the Indenture, and to carry out and perform their
obligations under the terms hereof and thereof.
4.3 No Violation. Assuming the entry by the Issuers and the Trustee
into the 16.5% Notes Supplemental Indenture and the supplemental indenture
contemplated by Section 16.19 of the MCSA, none of the execution, delivery
and performance by the Issuers of this Agreement or the Indenture or
compliance with the terms and provisions hereof and thereof (a) will
contravene any applicable provision of any applicable Law, (b) will
conflict with or result in any breach of, any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in
the creation or imposition of (or the obligation to create or impose) any
Encumbrance upon any of the property or assets of either of the Issuers or
any of their Significant Subsidiaries pursuant to the terms of, any
indenture, mortgage, deed of trust, agreement or other material instrument
to which either of the Issuers or any of their Significant Subsidiaries is
a party or by which it or any of its or their property or assets are bound
or to which it may be subject, or result in the acceleration of any
obligation of the Issuers or (c) will violate any provision of the
Certificate of Incorporation or By-laws (or other applicable charter
documents) of the Issuers, each as amended to date, except in the case of
(a) or (b), where such breach or conflict would not reasonably be expected
to have a Material Adverse Effect.
4.4 Capitalization. Section 4.4 of the Disclosure Schedules discloses
the number of authorized, issued and outstanding limited partnership units
of MSV, and outstanding warrants and options to purchase limited
partnership units of MSV as of the date hereof. As of the date hereof,
100,000 limited partnership units were reserved for future issuance
pursuant to outstanding options, restricted shares/phantom units, and
warrants issued by MSV (assuming the consummation of the MSV Option
Exchange). As of the date hereof, 6,400,000 additional limited partnership
units were authorized and reserved for future issuance pursuant to option
and other equity plans adopted or approved by MSV (assuming the
consummation of the MSV Option Exchange). As of the date hereof, except as
disclosed in Section 4.4 of the Disclosure Schedules, there are no other
outstanding options, warrants, rights (including conversion or preemptive
rights) or any agreement for the purchase or acquisition from MSV or any
wholly-owned Subsidiary of any of MSV's limited partnership units or voting
agreements with respect to equity of MSV. All outstanding limited
partnership units of MSV have been duly authorized, validly issued, fully
paid and nonassessable. As of the date hereof, except as disclosed in
Section 4.4 of the Disclosure Schedules, there are no anti-dilution or
price adjustment provisions contained in any security issued by MSV (or in
any agreement providing rights to security holders). None of the
outstanding limited partnership units of MSV were issued in violation of
the Securities Act or any state securities laws.
4.5 Valid Issuance of the Notes. The Notes have been or prior to their
issuance will be duly authorized and when delivered against payment
therefor in accordance with this Agreement and the Indenture will
constitute valid and binding obligations of the Issuers, entitled to the
benefits of the Indenture and enforceable against the Issuers in accordance
with their terms.
4.6 Litigation. Except as disclosed in Section 4.6 of the Disclosure
Schedules, no actions, suits, claims, investigations or proceedings are
pending or, to the Issuers' knowledge, threatened or reasonably likely to
be asserted that would reasonably be expected to have, individually or in
the aggregate, (a) a Material Adverse Effect or (b) an adverse effect on
the rights or remedies of the Purchasers or on the ability of the Issuers
or their Significant Subsidiaries to perform their respective obligations
under the Transaction Documents. Except as disclosed in Section 4.6 of the
Disclosure Schedules, neither of the Issuers nor any of their Significant
Subsidiaries is a party to or named in or subject to any order, writ,
injunction, judgment or decree of any court or Governmental Authority.
4.7 Approvals. Assuming the accuracy of the Purchasers'
representations and warranties set forth in Section 5 below, except (a) for
any required filings and recordings which have been made and are in full
force and effect, (b) for applicable blue sky notice filings, and (c) for
the consents, approvals, authorizations, orders, registrations,
qualifications, notices or filings disclosed in Section 4.7 of the
Disclosure Schedules, no order, consent, approval, license, authorization
or validation of, or filing, recording or registration with, or exemption
by, any Person or Governmental Authority, is required to authorize or is
required for or as a condition to (i) the execution and delivery of the
Transaction Documents or the consummation of the issuance and sale of the
Notes contemplated hereby or (ii) the legality, validity, binding effect or
enforceability of the Transaction Documents. The execution and delivery by
the Issuers of this Agreement and the Indenture and the issuance of the
Notes do not require the consent or approval of the security holders of the
Issuers or of any other Person.
4.8 Indebtedness. Except for Indebtedness disclosed in Section 4.8 of
the Disclosure Schedules and in SkyTerra's Annual Report on Form 10-K for
the year ended December 31, 2007, and in SkyTerra's Quarterly Report on
Form 10-Q for the quarter ended March 31, 2008, or incurred pursuant to
this Agreement, the Issuers and their Significant Subsidiaries, taken as a
whole, have no Indebtedness outstanding at the date hereof. Neither the
Issuers nor any Significant Subsidiary are in default with respect to any
outstanding Indebtedness or any instrument relating thereto, and no event
has occurred, or facts and circumstances exist, which, after passage of
time, would result in such a default.
4.9 Investment Company Act. Neither of the Issuers is an "investment
company" or a company "controlled" by an "investment company," within the
meaning of the Investment Company Act of 1940.
4.10 No Material Adverse Effects. Except as disclosed in Section 4.10
of the Disclosure Schedules, since December 31, 2007 through the date
hereof, (a) no event has occurred which has had, or would reasonably be
expected to have, a Material Adverse Effect, and (b) no event has occurred,
and the Issuers have not taken any action, that would have required the
consent of the Purchasers pursuant to Section 16.1 of the MCSA had such
event or action occurred after the date of the MCSA.
4.11 Tax Returns and Payments. Except as would not reasonably be
expected to have a Material Adverse Effect or except as disclosed in
Section 4.11 of the Disclosure Schedules, (a) each of the Issuers and
Significant Subsidiaries has filed all domestic and foreign Tax returns and
reports required to be filed by it, all such returns and reports are true
and correct to the best of the Issuers' knowledge, and each of the Issuers
and Significant Subsidiaries has paid all Taxes and other assessments shown
due on such returns and reports; (b) there is no pending or, to the
knowledge of the Issuers, threatened non-routine examination,
investigation, audit, suit, action, claim or proceeding relating to Taxes
of either of the Issuers or any of the Significant Subsidiaries; (c) none
of the Issuers or any of the Significant Subsidiaries have received written
notice of a determination by any taxing authority that any material Tax
amounts are owed by the Issuers or any of the Significant Subsidiaries,
which determination has not been paid, compromised, or otherwise finally
disposed of, and, to the knowledge of the Issuers, no such determination is
proposed or threatened; and (d) there are no Encumbrances arising from or
related to Taxes on or pending against either of the Issuers or any of the
Significant Subsidiaries, or any of their properties, other than statutory
liens for Taxes that are not yet due and payable.
4.12 Significant Subsidiaries. As of the date hereof, the Issuers have
no directly or indirectly held Significant Subsidiary other than those
disclosed in Section 4.12 of the Disclosure Schedules. Except as disclosed
in Section 4.12 of the Disclosure Schedules, each of the Issuers and their
Significant Subsidiaries has good and marketable title to all of the shares
(or other equity interests) it purports to own of the stock of each
Significant Subsidiary, free and clear in each case of any Encumbrance
(defined for purposes hereof without regard to the exceptions contained in
(a) and (b) of the definition of Encumbrance), except as otherwise pledged
in the 14% Notes Indenture. All such shares have been duly authorized,
validly issued and are fully paid and nonassessable. As of the date hereof,
the Issuers are not party to any joint venture or similar arrangement,
except as disclosed in Section 4.12 of the Disclosure Schedules.
4.13 Properties. Except as disclosed in Section 4.13 of the Disclosure
Schedules, each of the Issuers and each of their Significant Subsidiaries
owns all of its respective properties and assets, free and clear of all
Encumbrances. With respect to leased property and assets, the Issuers and
their Significant Subsidiaries are in material compliance with such leases
and hold a valid leasehold interest, free of any Encumbrances, except as
would not reasonably be expected to have a Material Adverse Effect.
4.14 Regulatory Matters.
(a) Authorizations. Section 4.14(a)(i) of the Disclosure Schedules lists
all material Federal Communications Commission ("FCC"), state public utility
commission ("PUC") and foreign regulatory authority permits, licenses,
certificates, registrations and other similar material authorizations held by
the Issuers and their Significant Subsidiaries as of the date hereof
(collectively, the "Authorizations"). Except as disclosed in Section 4.14(a)(ii)
of the Disclosure Schedules, the Issuers and their Significant Subsidiaries have
all necessary or appropriate Authorizations for the conduct of their business as
such business is being conducted as of the date hereof. Except as disclosed in
Section 4.14(a)(ii) of the Disclosure Schedules, the Issuers and their
Significant Subsidiaries are in compliance with all such Authorizations and any
terms and conditions thereof, except as would not reasonably be expected to have
a Material Adverse Effect. Except as disclosed in Section 4.14(a)(ii) of the
Disclosure Schedules, each Authorization which is material to the business of
the Issuers is valid and in full force and effect, and, as of the date hereof,
the Issuers and their Significant Subsidiaries have not received notice from the
FCC, any PUC, or any foreign regulatory authority of its intention to revoke,
suspend, condition or fail to renew any such Authorization. Except as disclosed
in Section 4.14(a)(ii) of the Disclosure Schedules, no event has occurred or
facts and circumstances exist, which allows or would reasonably be expected to
allow, or which after notice or lapse of time would allow or would reasonably be
expected to allow, revocation, suspension, non-renewal or termination or result
in any other material impairment of the Issuers' or their Significant
Subsidiaries' rights under any of its Authorizations.
(b) Compliance with Laws. Except as disclosed in Section 4.14(b) of the
Disclosure Schedules, the conduct of the Issuers' and their Significant
Subsidiaries' business complies with all applicable U.S., state, local and
foreign Laws (including, without limitation, the Communications Act of 1934, as
amended, and the Communications Assistance for Law Enforcement Act), ordinances,
rules, regulations, and orders (including, without limitation, those issued by
the FCC, any PUC or any foreign regulatory authority), in each case, except as
would not reasonably be expected to have a Material Adverse Effect. Except as
disclosed in Section 4.14(b) of the Disclosure Schedules, none of the Issuers
nor any of their respective Significant Subsidiaries is in violation of any
applicable Environmental Protection Laws and, to the Issuers' knowledge, no
material expenditures are or will be required in order to comply with any such
Laws, in each case, except as would not reasonably be expected to have a
Material Adverse Effect.
(c) Regulatory Filings. As of the date hereof, the Issuers and their
Significant Subsidiaries have made all material regulatory filings required, and
paid all applicable fees and assessments imposed, with respect to the
Authorizations, including but not limited to FCC regulatory fees, Universal
Service Fund contributions, Telecommunications Relay Service Fund contributions,
and North American Numbering Plan fees, and all such filings and the calculation
of such fees, are accurate in all material respects.
4.15 Permits. The Issuers and their Significant Subsidiaries have all
franchises, permits, licenses and any similar authority (the "Permits")
necessary for the conduct of their business as being conducted by them, the
lack of which would, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. No suspension or cancellation
of any of the Permits is pending or, to the knowledge of the Issuers,
threatened, which would, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. The Issuers believe they can
obtain, without undue burden or expense, any similar authority for the
conduct of their business as presently proposed to be conducted as of the
date hereof. The Issuers and their Significant Subsidiaries are not in
default under any of such Permits.
4.16 Brokers. Neither of the Issuers nor any Significant Subsidiary
has any liability to pay any fees, commissions or other similar
compensation to any broker, finder, investment banker, financial advisor or
other similar Person in connection with the transactions contemplated by
this Agreement, other than Xxxxxx Xxxxxxx & Co. Incorporated, all fees of
which shall be paid by MSV or SkyTerra.
4.17 Leases. Each of the Issuers and the Significant Subsidiaries has
complied with all material obligations under all leases for real property
to which it is a party as a lessee. All leases relating to the leasehold
estates of each of the Issuers and the Significant Subsidiaries necessary
for the conduct of the business of such Person are, with respect to the
Issuers, valid and enforceable, and, to the knowledge of the Issuers, are,
valid and enforceable with respect to the lessor, and each of the Issuers
and the Significant Subsidiaries that is the lessee in respect thereof
currently enjoys peaceful and undisturbed possession of the premises
subject thereto.
4.18 Intellectual Property.
(a) Except as disclosed in Section 4.18(a) of the Disclosure Schedules, the
Issuers and each of their Significant Subsidiaries owns, possesses or has the
right to use, exploit and/or practice patents, trade secrets, trademarks,
service marks, trade names and copyrights, including pursuant to any franchise
and license agreements, and rights with respect thereto (collectively,
"Intellectual Property"), necessary for the present conduct of its business and
as such business is proposed to be conducted.
(b) Except as disclosed in Section 4.18(b) of the Disclosure Schedules,
there are no outstanding options, licenses, or agreements of any kind relating
to the Issuers' and/or its Significant Subsidiaries' Intellectual Property with
the exception of agreements for the sale or license of the Issuers' products or
services in the ordinary course of business.
(c) Except as disclosed in Section 4.18(c) of the Disclosure Schedules,
neither of the Issuers nor any their Significant Subsidiaries is a party to any
agreement or license under which the Issuers or any Significant Subsidiary
acquires any right, license, title or interest in, under or to any third party
Intellectual Property (including without limitation any license to open source
software), other than (i) licenses that are available to the public generally
for a license fee of less than $10,000 (other than open source software) and
that were obtained in the ordinary course of business; and (ii) license or
ownership rights arising from services or development agreements (or the like)
made with third parties in the ordinary course of business.
(d) The Issuers have not received any communications alleging that the
Issuers or any Significant Subsidiary has violated, infringed or misappropriated
or, by conducting its business as presently proposed, would violate, infringe or
misappropriate any of the Intellectual Property of any other Person.
(e) Except as disclosed in Section 4.18(e) of the Disclosure Schedules, to
the knowledge of the Issuers and their Significant Subsidiaries, no Person is
infringing or misappropriating the Intellectual Property of the Issuers or their
Significant Subsidiaries.
(f) Except as disclosed in Section 4.18(f) of the Disclosure Schedule,
neither of the Issuers nor any Significant Subsidiary is subject or a party to
any order, decree, judgment, stipulation or agreement restricting its ability to
conduct its business, including the sale of products or services in any
geographic area, market or field.
4.19 Securities Laws. Assuming the accuracy of the Purchasers'
representations and warranties set forth in Section 5, the offer, sale and
issuance of the Notes as provided in this Agreement is and is intended to
be exempt from the registration requirements of the Securities Act pursuant
to Section 4(2) thereof.
4.20 Insurance. Except as disclosed in Section 4.20 of the Disclosure
Schedules the Issuers and the Significant Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and sufficient to address risks
anticipated in the businesses in which the Issuers and the Significant
Subsidiaries are currently engaged. Except as disclosed in Section 4.20 of
the Disclosure Schedules, neither of the Issuers nor any Significant
Subsidiary has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
coverage from reputable insurers as may be necessary to continue its
business without a significant increase in cost.
4.21 No Defaults. Except as disclosed in Section 4.21 of the
Disclosure Schedules, each of the Issuers and their Significant
Subsidiaries has complied in all material respects with the terms and
conditions of any indenture, mortgage, deed of trust, agreement, note or
other instrument evidencing Indebtedness of the Issuers or their
Significant Subsidiaries, and, except as disclosed in Section 4.21 of the
Disclosure Schedules, none of the Issuers or their Significant Subsidiaries
or, to the best knowledge of the Issuers, any other party thereto is in
default in the performance or compliance with any provisions thereof,
except as would not reasonably be expected to have a Material Adverse
Effect. Except as disclosed in Section 4.21 of the Disclosure Schedules,
all of the foregoing instruments are in full force and effect as of the
date hereof and have not been terminated, rescinded or withdrawn, except as
would not reasonably be expected to have a Material Adverse Effect.
4.22 Internal Accounting Controls. Each of the Issuers maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management's general or
specific authorization, and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
4.23 MSV Finance Co. MSV Finance Co. owns no material assets and
engages in no material business activities other than being a co-issuer
under the Existing High Yield Indentures and the transactions contemplated
hereby.
4.24 Satellites.
(a) Section 4.24(a) of the Disclosure Schedules sets forth a list of all
contracts to which the Issuers or any of their Subsidiaries is a party or bound,
for or related to the construction, launch, operation, sale or resale of
capacity or services from, and/or the coordination of, satellites now in orbit
or under construction that are used or planned to be used by the Issuers or any
of their Subsidiaries, and the frequencies authorized for such use, including
for terrestrial services (the "Satellite Contracts") as of the date hereof. All
of the Satellite Contracts are valid, binding and in full force and effect and
the Issuers, and to the knowledge of the Issuers, the counterparties thereto are
not in default under any material provision of any of such contracts.
(b) The satellite health reports that are listed in Section 4.24(b) of the
Disclosure Schedules are, as of the date hereof, the most recent satellite
health reports issued for each of the satellites used by the Issuers or any of
their Subsidiaries. The Issuers have provided to the Purchasers complete copies
of such reports, and such reports fairly and accurately describe the health and
anticipated remaining life of each such satellite.
(c) Section 4.24(c) of the Disclosure Schedules provides a summary of the
licensed spectrum actually available for use by the Issuers and their
Subsidiaries in accordance with the coordination agreements to which the Issuers
or any of their Subsidiaries is subject.
4.25 Employee Benefits.
(a) All benefit and compensation plans, contracts, policies or arrangements
covering current or former employees or other service providers of MSV and its
Subsidiaries and current or former directors of MSV, including, but not limited
to, "employee benefit plans" within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and deferred
compensation, severance, stock option, stock purchase, stock appreciation
rights, stock based, incentive and bonus plans (the "Benefit Plans"), other than
Benefit Plans maintained outside of the United States primarily for the benefit
of employees working outside of the United States (such plans hereinafter being
referred to as "Non-US Benefit Plans"), are listed on Section 4.25(a) of the
Disclosure Schedules, and each Benefit Plan which has received a favorable
opinion letter from the IRS National Office, including any master or prototype
plan, has been separately identified. True and complete copies of all Benefit
Plans listed on Section 4.25(a) of the Disclosure Schedule, including, but not
limited to, any trust instruments, insurance contracts and, with respect to any
employee stock ownership plan, loan agreements forming a part of any Benefit
Plans, and all amendments thereto have been provided or made available to the
Purchasers.
(b) Section 4.25(b) of the Disclosure Schedule also sets forth the names,
corporate and functional titles, hire dates and the 2007 and 2008 annual
salaries, incentive compensation, bonuses and other compensation of all
executive officers and current directors of MSV as of the date hereof.
(c) Neither MSV nor any or its Subsidiaries nor any entity which is
considered one employer with MSV under Section 4001 of ERISA or Section 414 of
the Code (i) maintains or contributes to or has within the past six years
maintained or contributed to a Pension Plan that is subject to Subtitles C or D
of Title IV of ERISA or (ii) maintains or has an obligation to contribute to or
has within the past six years maintained or had an obligation to contribute to a
multiemployer plan as defined in Section 3(37) of ERISA.
(d) There has been no amendment to or announcement by MSV or any of its
Subsidiaries relating to, or change in employee participation or coverage under,
any Benefit Plan which would increase materially the expense of maintaining such
plan above the level of the expense incurred therefor for the most recent fiscal
year.
(e) Each Benefit Plan complies in form and has been operated in substantial
compliance with its terms and the requirements of ERISA, the Code and other
applicable Laws. Each Benefit Plan which is subject to ERISA (the "ERISA Plans")
that is an "employee pension benefit plan" within the meaning of Section 3(2) of
ERISA ("Pension Plan") and that is intended to be qualified under Section 401(a)
of the Code, has received a favorable determination letter from the IRS, or is
comprised of a master or prototype plan that has received an opinion from the
IRS, covering all tax Law changes prior to the Economic Growth and Tax Relief
Reconciliation Act of 2001 or has applied to the IRS for such favorable
determination letter within the applicable remedial amendment period under
Section 401(b) of the Code, and to the best knowledge of MSV no event has
occurred that would reasonably be expected to result in revocation of any such
favorable determination letter or the loss of the qualification of such ERISA
Plan under Section 401(a) of the Code. To the Issuers' knowledge, neither MSV
nor any of its Subsidiaries has engaged in a transaction with respect to any
ERISA Plan that, assuming the taxable period of such transaction expired as of
the date hereof, could subject MSV or any Subsidiary to a tax or penalty imposed
by either Section 4975 of the Code or Section 502(i) of ERISA in an amount which
would be material. Neither MSV nor any of its Subsidiaries has incurred or
reasonably expects to incur a material tax or penalty imposed by Section 4980F
of the Code or Section 502 of ERISA.
(f) Except as set forth in Section 4.25(f) of the Disclosure Schedules, as
of the date hereof, there is no material pending or, to the best knowledge of
the Issuers, threatened litigation relating to the Benefit Plans. Neither MSV
nor any of its Subsidiaries has any obligations for retiree health and life
benefits under any Benefit Plan or collective bargaining agreement. MSV or its
Subsidiaries may amend or terminate any such plan at any time without incurring
any liability thereunder other than in respect of claims incurred prior to such
amendment or termination.
(g) Neither the execution of this Agreement nor the consummation of the
transactions contemplated herein will (w) entitle any employees of MSV or any of
its Subsidiaries to severance pay or any increase in severance pay upon any
termination of employment after the date hereof, (x) accelerate the time of
payment or vesting or result in any payment or funding (through a grantor trust
or otherwise) of compensation or benefits under, increase the amount payable or
result in any other material obligation pursuant to, any of the Benefit Plans,
(y) limit or restrict the right of MSV or any of its Subsidiaries to merge,
amend or terminate any of the Benefit Plans or (z) result in payments under any
of the Benefit Plans which would not be deductible under Section 162(m) or
Section 280G of the Code. No Benefit Plan or other agreement provides any
employee, director or other service provider of MSV or its Subsidiaries with any
amount of additional compensation if such individual is provided amounts subject
to excise or additional taxes imposed under Sections 409A or 4999 of the Code.
(h) Neither MSV nor any of its Subsidiaries has any material liability by
reason of an individual who performs or performed services for MSV or any of its
Subsidiaries in any capacity being improperly excluded from participating in a
Benefit Plan; and each of the employees of MSV and its Subsidiaries has been
properly classified by MSV and its Subsidiaries as "exempt" or "non-exempt"
under applicable Law.
4.26 Labor Matters. Except as set forth in Section 4.26 of the
Disclosure Schedule:
(a) Neither MSV nor any of its Subsidiaries is a party to any collective
bargaining agreement or other labor union contract applicable to persons
employed by MSV or its Subsidiaries, nor are they under any current obligation
to bargain with any bargaining agent on behalf of any such persons, nor, to the
best knowledge of MSV, are there any organizational campaigns, petitions or
other unionization activities seeking recognition of a collective bargaining
unit which could affect MSV or any of its Subsidiaries.
(b) There are no strikes, material organized slowdowns or material
organized work stoppages pending or, to the best knowledge of MSV after due
inquiry, threatened between MSV or any of its Subsidiaries, on the one hand, and
any of their respective employees, on the other hand, and MSV has not
experienced any such strike, slowdown or work stoppage within the past three (3)
years.
(c) Neither MSV nor any of its Subsidiaries has breached or otherwise
failed to comply with the provisions of any collective bargaining or union
contract that could reasonably be expected to have a Material Adverse Effect
and, to the best knowledge of MSV, there are no grievances outstanding against
MSV or any of its Subsidiaries under any such contract that could reasonably be
expected to have a Material Adverse Effect.
(d) There are no unfair labor practice complaints pending against MSV or
any of its Subsidiaries before the US National Labor Relations Board or any
other Governmental Authority or any current union representation questions
involving employees of MSV or any of its Subsidiaries that could have a Material
Adverse Effect.
(e) MSV and its Subsidiaries are currently in compliance in all material
respects with all applicable Laws relating to the employment of labor, including
those related to wages (including the payment of overtime), hours, worker
classifications (including proper classification of any independent contractors
or consultants), collective bargaining, unemployment insurance, workers'
compensation, discrimination and record-keeping.
(f) To the best knowledge of the Issuers, each employee of MSV who is
located in the United States and is not a United States citizen has all
necessary approvals and authorizations necessary to work in the United States in
accordance with applicable Law.
(g) Each of MSV and its Subsidiaries has paid in full to all employees, or
adequately reserved in accordance with MSV's historical accounting practices,
policies and principles consistently applied, all wages, salaries, commissions,
bonuses, benefits and other compensation due to or on behalf of such employees
except to the extent as has not had, and would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
(h) There is no claim with respect to payment of wages, salary or overtime
pay that has been asserted or, to the best knowledge of the Issuers, is now
pending or threatened before any Governmental Authority with respect to any
persons currently or formerly employed by MSV or any of its Subsidiaries except
to the extent as has not had, and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
(i) As of the date hereof, neither MSV nor any of its Subsidiaries is a
party to, or otherwise bound by, any consent decree with, or citation by, any
Governmental Authority relating to employees.
(j) There is no charge or proceeding with respect to a material violation
of any occupational safety or health standards that has been asserted or is now
pending or, to the best knowledge of the Issuers, threatened with respect to MSV
that could reasonably be expected to have a Material Adverse Effect.
(k) As of the date hereof, there is no charge of discrimination in
employment or employment practices, for any reason, including, without
limitation, age, gender, race, religion or other legally-protected category, or
any alleged violation of any privacy Laws, which has been asserted or, to the
best knowledge of the Issuers, is now pending or threatened before the United
States Equal Employment Opportunity Commission, or any other Governmental
Authority in any jurisdiction in which MSV or any of its Subsidiaries has
employed or currently employs any Person that could reasonably be expected to
have a Material Adverse Effect.
(l) As of the date hereof, neither MSV nor any of its Subsidiaries has
received written notice of the intent of any federal, state, local or foreign
Governmental Authority responsible for the enforcement of labor or employment
Laws to conduct an investigation with respect to or relating to MSV or any of
its Subsidiaries and no such investigation is in progress.
(m) Except as set forth in Section 4.26(m) of the Disclosure Schedule, as
of the date hereof, neither MSV nor any of its Subsidiaries is aware that any
officer intends to terminate employment with MSV or its Subsidiaries, as
applicable.
4.27 No Undisclosed Relationships. Except as set forth on Section 4.27
of the Disclosure Schedules, no relationship, direct or indirect, exists
between or among the Issuers, on the one hand, and the directors, officers,
stockholders or other Affiliates of the Issuers, on the other, that would
be required by the Securities Act to be described in a registration
statement to be filed with the SEC that has not been previously disclosed
in an SEC Report.
4.28 Related Party Transactions. Except as disclosed in Section 4.28 of the
Disclosure Schedules, as of the date hereof, no executive officer or director of
the Issuers: (a) has any cause of action or other claim whatsoever against, or
owes any amounts to, the Issuers, except for claims of employees in the ordinary
course of business, such as for accrued vacation pay or for accrued benefits
under an employee benefit plan maintained by the Issuers; (b) owns, directly or
indirectly, in whole or in part, any tangible or intangible property which the
Issuers are using or which is necessary for the business of the Issuers; (c)
owns, other than ownership of less than 1% of the issued and outstanding equity
of a publicly listed company, any direct or indirect interest of any kind in, or
is an Affiliate or employee of, or consultant or lender to, or borrower from, or
has the right to participate in the management, operations or profits of, any
Person that is (i) a competitor, supplier, customer, client, distributor,
lessor, tenant, creditor or debtor of the Issuers, (ii) engaged in a business
related to the business of the Issuers or (iii) participating in any transaction
to which either of the Issuers is a party; or (d) otherwise is or has been a
party to any contract or transaction with the Issuers, except for their
respective employment contracts with the Issuers.
4.29 Solvency. As of the date hereof (after giving effect to the
transactions contemplated herein) and on each of the First Closing Date and the
Second Closing Date (after giving effect to the transactions contemplated on
such dates), MSV will be Solvent giving effect to any right of subrogation or
contribution. As used in this paragraph, the term "Solvent" means, with respect
to a particular date and with respect to a particular entity, that on such date
(i) the then present fair market value (or then present fair saleable value) of
the assets of such entity is not less than the total amount required to pay the
liabilities of such entity on its total then existing debts and liabilities
(including contingent liabilities) as they become absolute and matured
considering all financing alternatives and potential asset sales reasonably
available to such entity; (ii) assuming consummation of the issuance of the
Harbinger Shares (as defined in the MCSA) as contemplated by the MCSA and this
Agreement, such entity does not intend to incur, or believe that it will incur,
debts or liabilities beyond its ability to pay as such debts and liabilities
mature; (iii) such entity is not engaged in any business or transaction, and
does not propose to engage in any business or transaction, for which its
property would constitute unreasonably small capital after giving due
consideration to the prevailing practice in the industry in which such entity is
engaged; and (iv) such entity is not a defendant in any civil action that would
result in a judgment that such entity is or would become unable to satisfy.
4A Representations and Warranties of SkyTerra. Except as disclosed in the
Disclosure Schedules, SkyTerra hereby makes the following representations and
warranties:
4A.1 Corporate Status. SkyTerra (a) has been duly organized, and is
validly existing and in good standing under the Laws of the jurisdiction of
its organization and has all requisite corporate power and authority to own
its property and assets and to transact the business in which it is engaged
and presently proposes to engage, and (b) has duly qualified to do business
and is in good standing in each jurisdiction where it is required to be so
qualified, except where the failure to be so qualified or be in good
standing would reasonably be expected to have a Material Adverse Effect.
SkyTerra is not currently in violation of any of the provisions of its
Certificate of Incorporation or By-laws, each as amended to date.
4A.2 Corporate Power and Authority. All corporate action on the part
of SkyTerra necessary for the authorization, execution, delivery and
performance of this Agreement and the issuance of the Warrants and the
consummation of the transactions contemplated herein and therein have been
taken or will be taken prior to the First Closing Date. The Warrants when
executed and delivered by SkyTerra, shall constitute the legal, valid and
binding obligation of SkyTerra and shall be enforceable against SkyTerra in
accordance with their respective terms and the terms of this Agreement,
except as such may be limited by bankruptcy, insolvency, reorganization or
other laws affecting creditors' rights generally and by general equitable
principles. SkyTerra has all requisite corporate power and authority to
enter into this Agreement and the Warrants and to carry out and perform its
obligations under the terms hereof and thereof.
4A.3 No Violation. None of the execution, delivery and performance by
SkyTerra of this Agreement and the Warrants, or compliance with the terms
and provisions hereof and thereof (a) will contravene any applicable
provision of any applicable Law, (b) will conflict with or result in any
breach of, any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or
the obligation to create or impose) any Encumbrance upon any of the
property or assets of SkyTerra or any of its Subsidiaries pursuant to the
terms of, any indenture, mortgage, deed of trust, agreement or other
material instrument to which SkyTerra or any of its Subsidiaries is a party
or by which it or any of its property or assets are bound or to which it
may be subject or result in the acceleration of any obligation of SkyTerra
or (c) will violate any provision of the Certificate of Incorporation or
By-laws of SkyTerra or any of its Subsidiaries, each as amended to date,
except in the case of (a) and (b), where such breach or conflict would not
reasonably be expected to have a Material Adverse Effect.
4A.4 Capitalization. Section 4A.4 of the Disclosure Schedules
discloses the number of authorized, issued and outstanding shares of
capital stock of SkyTerra, and outstanding warrants and options to purchase
capital stock of SkyTerra as of the date hereof. As of the date hereof,
1,596,571 shares of Common Stock are reserved for future issuance pursuant
to outstanding options. As of the date hereof, 12,828,411 shares of Common
Stock are reserved for the MSV Option Exchange and up to 13,139,696 shares
of Common Stock are reserved for future issuance pursuant to outstanding
warrants issued by SkyTerra. As of the date hereof, a total of 11,030,259
additional shares of Common Stock are authorized and reserved for future
issuance pursuant to option and other equity plans adopted or approved by
SkyTerra. As of the date hereof, except as further disclosed in Section
4A.4 of the Disclosure Schedules or for the right to purchase SkyTerra
Common Stock upon exercise of the Warrants, there are no other outstanding
options, warrants, rights (including conversion or preemptive rights) or
any agreement for the purchase or acquisition from SkyTerra of any shares
of SkyTerra's capital stock or voting agreements with respect to equity of
SkyTerra or any of its Subsidiaries. All outstanding shares of the capital
stock of SkyTerra have been duly authorized, validly issued, fully paid and
nonassessable. Except as disclosed in Section 4A.4 of the Disclosure
Schedules, there are no obligations, contingent or otherwise, of SkyTerra
or its Subsidiaries to repurchase, redeem or otherwise acquire any shares
of Common Stock or other equity securities of SkyTerra or its Subsidiaries.
Except as disclosed in Section 4A.4 of the Disclosure Schedules, the sale
of the Warrants, and the issuance of any Common Stock upon exercise of the
Warrants, will not result in SkyTerra being obligated to issue, sell or
purchase, pursuant to any existing pre-emptive, anti-dilution, redemption
or other right of third parties, shares of Common Stock or other securities
to or from any Person (other than the Purchasers), and will not result in a
right of any holder of convertible or contingent securities issued by
SkyTerra to adjust the exercise, conversion, exchange or reset price under
such securities, including, in any such case, pursuant to any "poison pill"
or shareholders rights plan. As of the date hereof, except as set forth in
outstanding warrants or as disclosed in Section 4A.4 of the Disclosure
Schedules, there are no anti-dilution or price adjustment provisions
contained in any security issued by SkyTerra (or in any agreement providing
rights to security holders). None of the outstanding Common Stock was
issued in violation of the Securities Act or any state securities laws.
4A.5 Valid Issuance of the Common Stock.
(a) The shares of Common Stock issuable upon exercise of the Warrants in
accordance with the terms of the Warrants have been (or will, by the First
Closing Date, be) duly authorized by SkyTerra and, when delivered in accordance
with the terms of the Warrants (a) will be validly issued, fully paid and
nonasessable, (b) assuming the waiver by the Purchasers of certain preemptive
rights pursuant to Section 16.17 of the MCSA, will not be subject to any
preemptive rights or any other similar contractual rights of the stockholders of
SkyTerra or any other Person, and (c) will be delivered to the Purchasers or
their designated transferee, free and clear of any Encumbrances (defined for
purposes hereof without regard to the exceptions set forth in clauses (a) and
(b) of the definition of Encumbrance) which are imposed by SkyTerra, or arise as
a result of SkyTerra's action or omission. SkyTerra has reserved from its duly
authorized capital stock the number of shares of Common Stock issuable upon the
exercise in full of the Warrants.
(b) The shares of Voting Common Stock issuable upon exchange of the shares
of Non-Voting Common Stock in accordance with the terms of Section 8.1 hereof
have been duly authorized by SkyTerra and, when delivered in accordance with the
terms of this Agreement (a) will be validly issued, fully paid and nonasessable,
(b) will not be subject to any preemptive rights or any other similar
contractual rights of the stockholders of SkyTerra or any other Person, and (c)
will be delivered to the Purchasers or their designated transferee, free and
clear of any Encumbrances (defined for purposes hereof without regard to the
exceptions set forth in clauses (a) and (b) of the definition of Encumbrance)
which are imposed by SkyTerra, or arise as a result of SkyTerra's action or
omission. SkyTerra has reserved from its duly authorized capital stock the
number of shares of Common Stock issuable upon the exchange in full of the
Non-Voting Common Stock.
4A.6 Approvals. Assuming the accuracy of the Purchasers'
representations and warranties set forth in Section 5 below, except (a) in
connection with or in order to comply with the applicable provisions of the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 0000 (xxx "XXX Xxx") and,
if necessary, similar foreign competition or Antitrust Laws, and if
necessary, any required stock exchange approvals, (b) for any required
filings and recordings which have been made and are in full force and
effect, (c) for applicable blue sky notice filings, and (d) the consents,
approvals, authorizations, orders, registrations, qualifications, notices
or filings disclosed in Section 4A.6 of the Disclosure Schedules, no order,
consent, approval, license, authorization or validation of, or filing,
recording or registration with, or exemption by, any Person or Governmental
Authority, is required to authorize or is required for or as a condition to
(i) the execution and delivery of the Transaction Documents or the
consummation of the issuance and sale of the Warrants contemplated hereby
or (ii) the legality, validity, binding effect or enforceability of the
Transaction Documents. The execution and delivery by SkyTerra of this
Agreement and the issuance of the Warrants do not require the consent or
approval of the security holders of SkyTerra or of any other Person.
4A.7 Conformity to Securities Act and Exchange Act; No Misstatement or
Omission. As of its filing date or, if amended prior to the date of this
Agreement, as of the date of the last such amendment prior to the date of
this Agreement, each of the SEC Reports complied in all material respects
with the applicable requirements of the Securities Act or the Exchange Act
(as applicable) and the respective rules and regulations of the SEC
thereunder, as in effect on the date so filed, and does not contain an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading. Since
December 31, 2007, SkyTerra has filed all reports, schedules, forms,
statements and other documents required to be filed by it with the SEC
pursuant to the reporting requirements of the Exchange Act.
4A.8 Financial Statements; Indebtedness.
(a) Except as disclosed in Section 4A.8(a) of the Disclosure Schedules, the
financial statements and supporting schedules included in SkyTerra's Annual
Report on Form 10-K for the year ended December 31, 2007 and the Amendment to
the SkyTerra 's Annual Report for the year ended December 31, 2007 on Form
10-K/A, and in SkyTerra's Quarterly Report on Form 10-Q for the quarter ended
March 31, 2008, in each case filed with the SEC present fairly, in all material
respects, the consolidated financial position of SkyTerra as of the dates
specified and the consolidated results of their operations and cash flows for
the periods specified, in each case, in conformity with GAAP applied on a
consistent basis during the periods involved, except as indicated therein or in
the notes thereto.
(b) Except for Indebtedness disclosed in Section 4A.8(b) of the Disclosure
Schedules and in SkyTerra's Annual Report on Form 10-K for the year ended
December 31, 2007, and in SkyTerra's Quarterly Report on Form 10-Q for the
quarter ended March 31, 2008, SkyTerra has no material Indebtedness outstanding
at the date hereof. SkyTerra is not in default with respect to any outstanding
Indebtedness or any instrument relating thereto, and no event has occurred, or
facts and circumstances exist, which, after passage of time or giving of notice,
would result in such a default.
4A.9 Internal Accounting Controls. SkyTerra maintains a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
or specific authorizations, (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP and to
maintain asset accountability, (iii) access to assets is permitted only in
accordance with management's general or specific authorization, and (iv)
the recorded accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with respect to any
differences. SkyTerra has established disclosure controls and procedures
(as defined in Exchange Act Rule 13a-15(e)) for SkyTerra and designed such
disclosure controls and procedures to ensure that information required to
be disclosed by SkyTerra in reports that it files or submits under the
Exchange Act is recorded, processed, summarized and reported within the
time periods specified in the SEC's rules and forms, including controls and
procedures designed to ensure that such information is accumulated and
communicated to SkyTerra's management as appropriate to allow timely
decisions regarding required disclosure. SkyTerra has carried out
evaluations of the effectiveness of their disclosure controls and
procedures as required by Rule 13a-15 of the Exchange Act.
5. Representations and Warranties of the Purchasers. The Purchasers hereby
make the following representations and warranties, as of the date hereof and as
of each of the Closing Dates:
5.1 Authorization. All corporate, partnership or limited liability
company action on the part of each of the Purchasers necessary for the
authorization, execution, delivery and performance of this Agreement and
the other Transaction Documents and the consummation of the transactions
contemplated herein and therein, has been taken. When executed and
delivered by such Purchasers, each of this Agreement and the other
Transaction Documents shall constitute the legal, valid and binding
obligation of each of the Purchasers, enforceable against each of the
Purchasers in accordance with its terms, except as such may be limited by
bankruptcy, insolvency, reorganization or other laws affecting creditors'
rights generally and by general equitable principles. Each of the
Purchasers has all the requisite corporate power and authority to enter
into each of this Agreement and the other Transaction Documents and to
carry out and perform its obligations under the terms hereof and thereof.
5.2 Purchase Entirely for Own Account. Each of the Purchasers is
acquiring the Securities for its own account for investment and not for the
account of any other Person or with a view to any resale,
fractionalization, division, or distribution thereof in a manner that would
require registration thereof or the transactions contemplated hereby under
the Securities Act, and neither Purchaser presently has any reason to
anticipate any change in such Purchaser's circumstances or other particular
occasion or event which would cause such Purchaser to sell the Securities
other than in compliance with the requirements of the Securities Act. The
Purchasers have no contract, undertaking, agreement, understanding or
arrangement with any Person to sell, transfer, or pledge to any Person any
part or all of the Securities which such Purchasers are acquiring, or any
interest therein, and have no present plans to enter into the same. The
Securities were not offered or sold to the Purchasers by means of any
general solicitation or general advertisement.
5.3 Investor Status; Etc. The Purchasers certify and represent to the
Issuers that (i) they are each an "accredited investor" as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D promulgated under the Securities
Act and were not organized for the purpose of acquiring any of the
Securities. The Purchasers have adequate means of providing for their
current needs and personal contingencies, have no need now, and anticipate
no need in the foreseeable future, to sell the Securities, and currently
have sufficient net worth and financial liquidity to afford a complete loss
of their investment in the Issuers and SkyTerra. The Purchasers have such
knowledge and experience in financial and business matters so that the
Purchasers are capable of evaluating the merits and risks of an investment
in the Issuers and SkyTerra and have made such evaluation. The Purchasers
fully understand that the Securities are speculative investments which
involve a high degree of risk of loss of the Purchasers' entire investment.
No Person or entity, other than the Issuers or their authorized
representatives, have offered the Securities to the Purchasers. The
Purchasers are able to bear the economic risk of an investment in the
Securities.
5.4 Securities Not Registered. The Purchasers understand that neither
the Securities nor the Warrant Stock issuable upon exercise of the Warrants
or the Voting Common Stock issuable upon exchange of Warrant Stock that is
Non-Voting Common Stock have been registered under the Securities Act, by
reason of their issuance by the Issuers in a transaction exempt from the
registration requirements of the Securities Act, and that the Securities
must continue to be held by the Purchaser unless a subsequent disposition
thereof is registered under the Securities Act or is exempt from such
registration. The Purchasers understand that the exemptions from
registration afforded by Rule 144 promulgated under the Securities Act (the
provisions of which are known to it) depend on the satisfaction of various
conditions, and that, if applicable, Rule 144 may afford the basis for
sales only in limited amounts. The Purchasers have had an opportunity to
ask questions of and receive answers from the management and authorized
representatives of the Issuers and SkyTerra, and to review any other
relevant documents and records concerning the business of the Issuers and
SkyTerra and the terms and conditions of this investment, and that any such
questions have been answered to the Purchasers' satisfaction. The
Purchasers understand that no federal or state agency has passed upon or
made any recommendation or endorsement of an investment in the Securities.
5.5 No Violation. Neither the execution, delivery and performance by
such Purchasers of this Agreement or the Transaction Documents nor
compliance with the terms and provisions hereof and thereof by the
Purchasers (a) will contravene any applicable provision of any Law
applicable to the Purchasers, except as would not have a material adverse
effect on the Purchasers' ability to consummate the transactions
contemplated hereby or (b) will violate any provision of the organizational
documents of the Purchasers, except as would not have a material adverse
effect on the Purchasers' ability to consummate the transactions
contemplated hereby.
5.6 Brokers. The Purchasers have no liability to pay any fees,
commissions or other similar compensation to any broker, finder, investment
banker, financial advisor or other similar Person in connection with the
transactions contemplated by this Agreement, other xxxx Xxxxxxx Xxxxx &
Co., all fees of which shall be paid by the Purchasers.
5.7 Consents. Except (a) in connection with or in order to comply with
the applicable provisions of the HSR Act and, if necessary, similar foreign
competition or Antitrust Laws, and (b) for any required filings and
recordings with Governmental Authorities under Section 6, all consents,
approvals, orders and authorizations required on the part of the Purchasers
in connection with the execution, delivery or performance of this Agreement
and the consummation of the transactions contemplated herein have been
obtained and are effective as of the date hereof.
5.8 Reliance. The Purchasers are relying solely upon the advice of
their own financial, legal and Tax advisors and their entering into the
transactions contemplated by this Agreement is the result of independent
arm's length negotiations among the Purchasers, SkyTerra and the Issuers.
The Purchasers acknowledge that the Issuers and SkyTerra are relying on the
representation and warranties of the Purchaser contained in this Section 5
and would not consummate the transactions contemplated by this Agreement in
the absence of the representations and warranties of the Purchaser
contained in this Section 5.
5.9 Material Non-Public Information. The Purchasers hereby acknowledge
that they are familiar with their responsibilities under federal and state
securities laws relating to restrictions on trading in securities of an
issuer while in possession of material, non-public information, and
restrictions on sharing such information with other Persons who may engage
in such trading.
5.10 16.5% Notes. The Purchasers represent and warrant that they are
the sole holders of all of the Issuers' outstanding 16.5% Notes due 2013
(the "16.5% Notes"), including any additional 16.5% Notes issued after
January 7, 2008 as paid-in-kind interest, issued pursuant to the 16.5%
Notes Indenture, free and clear of any lien, pledge or encumbrance of any
kind. Each Purchaser consents to amend the 16.5% Notes Indenture as set
forth in the 16.5% Notes Supplemental Indenture and agrees to take such
actions as are reasonably necessary in order to effectuate the 16.5% Notes
Supplemental Indenture as soon as reasonably practicable after the date
hereof.
6. Governmental and FCC Approval. The parties will promptly execute and
file, or join in the execution and filing of, any application, notification or
other document that may be necessary in order to obtain the authorization,
approval or consent of any Governmental Authority, which may be reasonably
required in connection with the consummation of the transactions contemplated by
this Agreement. Any fees associated with such notifications or applications
shall be borne by the Issuers. Each party shall, in connection with its
obligation to use commercially reasonable efforts to obtain, or assist the other
parties in obtaining, all such requisite authorizations, approvals or consents,
use commercially reasonable efforts to (i) cooperate in all reasonable respects
with the other parties in connection with any filing or submission and in
connection with any investigation or other inquiry, including any proceeding
initiated by a private party, (ii) promptly inform the other parties of any
communication received by such party from, or given by such party to, the United
States Department of Justice (the "DOJ"), the United States Federal Trade
Commission (the "FTC"), the FCC or any other Governmental Authority or
quasi-governmental entity and of any material communication received or given in
connection with any proceeding by a private party, in each case regarding any of
the transactions contemplated hereby, (iii) permit the other parties, or the
other parties' legal counsel, to review any communication given by it to, and
consult with the other parties in advance of any meeting or conference with, the
DOJ, the FTC, the FCC or any such other Governmental Authority or
quasi-governmental entity or, in connection with any proceeding by a private
party, with any other Person and (iv) to the extent permitted by any applicable
Governmental Authority, give the other parties the opportunity to attend and
participate in such meetings and conferences.
7. Conditions Precedent.
7.1 Conditions to the Obligation of the Purchasers to Consummate the
Closings. The obligation of the Purchasers to consummate each Closing on
the respective Closing Date therefor and to purchase and pay for the
Securities to be purchased by them on such Closing Date is subject to the
satisfaction (or waiver by such Purchasers) of the following conditions
precedent:
(a) (i) On the First Closing Date and the Second Closing Date, the
representations and warranties of the Issuers and SkyTerra contained herein
shall be true and correct in all material respects, provided that if any
representation and warranty includes a materiality qualification (including the
words "Material Adverse Effect," "material," "in all material respects" or like
words) then, such representation and warranty shall be true and correct in all
respects, as of such Closing Date with the same effect as though made on and as
of such Closing Date (except for representations and warranties made as of an
earlier date, in which case as of such earlier date) and provided solely for
purposes of this Section 7.1(a)(i), the Issuers may update Section 4.10 of the
Disclosure Schedules, and the Issuers and SkyTerra shall have performed all
obligations and conditions herein required to be performed or complied with by
the Issuers and SkyTerra on or prior to such Closing Date.
(ii) On the Third Closing Date and the Fourth Closing Date, the
representations and warranties of the Issuers and SkyTerra contained herein
shall be true and correct in all respects (without giving effect to any
limitation on any representation and warranty indicated by a materiality
qualification, including the words "Material Adverse Effect," "material,"
"in all material respects" or like words) as of such Closing Date with the
same effect as though made on and as of such Closing Date (except for
representations and warranties made as of an earlier date, in which case as
of such earlier date), except with regard to the representations and
warranties contained in Section 4.29 above as to which the Issuers shall
not be providing any representation or warranty on such Closing Dates, and
except where the failure of such representations and warranties to be so
true and correct (without giving effect to any limitation on any
representation and warranty indicated by a materiality qualification,
including the words "Material Adverse Effect," "material," "in all material
respects" or like words) would not, individually or in the aggregate, have
a Material Adverse Effect and provided solely for purposes of this Section
7.1(a)(ii), the Issuers may update Section 4.10 of the Disclosure
Schedules, and the Issuers and SkyTerra shall have performed all
obligations and conditions herein required to be performed or complied with
by the Issuers and SkyTerra on or prior to such Closing Date.
(b) There shall not be any Law, injunction, order or decree, enacted,
enforced, promulgated, entered, issued or deemed applicable to this Agreement or
the transactions contemplated hereby by any Governmental Authority prohibiting
or enjoining the transactions contemplated by this Agreement or the Transaction
Documents.
(c) The sale of the Securities to be issued on a particular Closing Date by
the Issuers or SkyTerra, as applicable, shall not be prohibited by any Law on
such Closing Date. All necessary consents, approvals, licenses, permits, orders
and authorizations of, or registrations, declarations and filings with, any
Governmental Authority or of or with any other Person, including, without
limitation, all filings in accordance with Section 6 hereof, with respect to the
purchase and sale of the Securities to be issued on a particular Closing Date
shall have been duly obtained or made and shall be in full force and effect on
such Closing Date; provided, however, that this shall not require all approvals
needed to issue Voting Common Stock.
(d) On the First Closing Date, the Purchasers shall have received from
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, special counsel to the Issuers and
SkyTerra, an opinion, dated as of the First Closing Date, substantially in the
form of the opinion letter dated January 7, 2008 delivered to the Purchasers,
modified as appropriate to reflect the terms of this transaction.
(e) MSV shall have delivered to the Purchasers a certificate dated as of
each Closing Date and signed by the secretary or other officer of MSV GP,
certifying (i) that the copies of the Limited Partnership Agreement and
resolutions of the Board approving this Agreement, the Transaction Documents and
the transactions contemplated hereby and thereby attached thereto, are all true,
complete and correct and remain in full force and effect as of such date, and
(ii) (A) on the First Closing Date, the incumbency and specimen signature of
each officer of MSV executing this Agreement, the Transaction Documents and any
other document delivered in connection herewith on behalf of MSV, and (B) on
each Closing following the First Closing Date, the incumbency and specimen
signature of each officer of MSV executing any Notes in connection with such
Closing.
(f) MSV Finance Co. shall have delivered to the Purchasers a certificate
dated as of the Closing Date and signed by the secretary or another officer of
MSV Finance Co., certifying (i) that the copies of the Certificate of
Incorporation, the By-Laws and resolutions of the Board of Directors of MSV
Finance Co. approving this Agreement, the Transaction Documents and the
transactions contemplated hereby and thereby attached thereto, are all true,
complete and correct and remain in full force and effect as of such date, and
(ii) (A) on the First Closing Date, the incumbency and specimen signature of
each officer of MSV Finance Co. executing this Agreement, the Transaction
Documents and any other document delivered in connection herewith on behalf of
MSV Finance Co., and (B) on each Closing following the First Closing Date, the
incumbency and specimen signature of each officer of MSV Finance Co. executing
any Notes in connection with such Closing.
(g) Each of the Issuers shall have delivered to the Purchasers a
certificate dated as of such Closing Date and signed by the Issuer's respective
chief financial officer or chief executive officer, certifying that (i) each of
the Issuers has performed and complied with all of the agreements and conditions
set forth or contemplated herein that are required to be performed or complied
with by the Issuers on or before such Closing Date and (ii) that the conditions
set forth in Sections 7.1(a) and 7.1(b) have been met.
(h) SkyTerra shall have delivered to the Purchasers a certificate dated as
of the Closing Date and signed by the secretary or another officer of SkyTerra,
certifying (i) that the copies of the Certificate of Incorporation, the By-Laws
and resolutions of the Board of Directors of SkyTerra approving this Agreement,
the Transaction Documents and the transactions contemplated hereby and thereby
attached thereto, are all true, complete and correct and remain in full force
and effect as of such date, (ii) that the conditions set forth in Sections
7.1(a) and 7.1(b) have been met; and (iii) (A) on the First Closing Date and the
Second Closing Date, the incumbency and specimen signature of each officer of
SkyTerra executing this Agreement, the Transaction Documents and any other
document delivered in connection herewith on behalf of SkyTerra, and (B) on each
Closing following the First Closing Date, the incumbency and specimen signature
of each officer of SkyTerra executing any Warrants in connection with such
Closing.
(i) Each of the Issuers and SkyTerra shall have delivered to the Purchasers
a certificate of good standing for each of the Issuers and SkyTerra from the
Secretary of State of the State of Delaware, in each case dated within one week
of such Closing Date.
(j) The MCSA shall have been executed by Mobile Satellite Ventures
Subsidiary LLC, SkyTerra and MSV and none of them shall have committed a
material breach of its obligations thereunder which has not been cured.
(k) The Registration Rights Agreement shall have been executed and SkyTerra
shall not have committed a willful breach of its registration obligations
thereunder prior to the relevant Closing Date.
(l) There shall be no Material Adverse Effect not otherwise cured on the
relevant Closing Date (without regard to any amendment to Section 4.10 of the
Disclosure Schedules permitted pursuant to Section 7.1(a) of this Agreement).
(m) Each of the Issuers and SkyTerra will have provided reasonable
cooperation in providing the Purchasers with all the information available to
them reasonably requested by the Purchasers in writing to verify the
satisfaction of any closing condition or otherwise to consummate the Closings.
(n) On each Closing Date following the First Closing Date, all previously
scheduled Closings shall have occurred.
7.2 Conditions to the Obligation of the Issuers and SkyTerra to
Consummate the Closings. The obligation of the Issuers and SkyTerra to
consummate each Closing on the respective Closing Date therefor and to
issue and sell the Securities to the Purchasers on such Closing Date is
subject to the satisfaction (or waiver by the Issuers and SkyTerra) of the
following conditions precedent:
(a) The representations and warranties of the Purchasers contained herein
shall be true and correct in all material respects, provided that if any
representation and warranty includes a materiality qualification (including the
words "Material Adverse Effect," "material," "in all material respects" or like
words) then, such representation and warranty shall be true and correct in all
respects, as of such Closing Date.
(b) The Purchasers shall have performed all obligations and conditions
herein required to be performed or complied with by the Purchasers on or prior
to such Closing Date.
(c) The Purchasers shall have delivered to the Issuers and SkyTerra a
certificate dated such Closing Date, executed by an authorized officer,
certifying the satisfaction of the conditions specified in paragraphs (a) and
(b) of this Section 7.2.
(d) There shall not be any Law, injunction, order or decree, enacted,
enforced, promulgated, entered, issued or deemed applicable to this Agreement or
the transactions contemplated hereby by any Governmental Authority prohibiting
or enjoining the transactions contemplated by this Agreement or the Transaction
Documents.
(e) The sale of the Securities by the Issuers and SkyTerra shall not be
prohibited by any Law. All necessary consents, approvals, licenses, permits,
orders and authorizations of, or registrations, declarations and filings with,
any Governmental Authority or of or with any other Person with respect to any of
the transactions contemplated hereby shall have been duly obtained or made and
shall be in full force and effect.
(f) The Purchasers shall have delivered to SkyTerra, MSV and MSV Finance
Co. each of a Form W-9 or Form W-8, as applicable.
8. Certain Covenants and Agreements.
8.1 Non-Voting Common Stock.
(a) SkyTerra shall reserve and keep available for issuance upon and until
the exercise of the January Warrants at least such number of its authorized but
unissued shares of Non-Voting Common Stock as would be sufficient to exercise
the January Warrants in full for shares of Non-Voting Common Stock then issuable
pursuant to the January Warrants. SkyTerra shall use its commercially reasonable
best efforts to cause its Certificate of Incorporation to be amended to increase
the number of shares of Non-Voting Common Stock authorized for issuance
thereunder so as to permit the April Warrants to be exercised in full for shares
of Non-Voting Common Stock (the "Amendment"). From and after the effective date
of the Amendment under Delaware law (the "Effective Date"), SkyTerra shall
reserve and keep available for issuance upon and until the exercise of the
Warrants at least such number of its authorized but unissued shares of
Non-Voting Common Stock as would be sufficient to exercise the Warrants in full
for shares of Non-Voting Common Stock then issuable pursuant to the Warrants.
(b) The Purchasers shall, and shall cause all of their Affiliates to, vote
in favor of or consent in writing to the Amendment in respect of all shares of
Common Stock over which they and their Affiliates have the power to vote.
(c) If, on the First Closing Date and thereafter until (but excluding) the
Second Closing Date, SkyTerra does not have at least 7,500,000 shares of
Non-Voting Common Stock (such amount to be adjusted to reflect any changes in
the amount of shares of Common Stock for which the Warrants may be exercised as
a result of the antidilution provisions of the Warrants) authorized but unissued
(and not otherwise reserved for issuance), less the number of shares of Common
Stock for which Warrants have theretofore been exercised, then, during the
period from the First Closing Date to the Effective Date, the rate of interest
paid by the Issuers on the Notes pursuant to Section 2 hereof shall increase to
16.50% per annum for a period of 90 days, and to 17.0% thereafter, until the
Effective Date.
(d) If, on the Second Closing Date and thereafter until the earlier of the
Effective Date and July 1, 2013, SkyTerra does not have at least 25,000,000
shares of Non-Voting Common Stock (such amount to be adjusted to reflect any
changes in the amount of shares of Common Stock for which the Warrants may be
exercised as a result of the antidilution provisions of the Warrants) authorized
but unissued (and not otherwise reserved for issuance), less the number of
shares of Common Stock for which Warrants have theretofore been exercised, then,
during the period from the Second Closing Date to the earlier of the Effective
Date or the date of the repayment in full of the Notes, the rate of interest
paid by the Issuers on the Notes pursuant to Section 2 hereof shall be 16.50%
per annum for a period of 90 days, and shall increase to 17.0% thereafter;
provided, that if the interest rate on the Notes is 17.0% on the day prior to
the Second Closing Date, such rate shall remain 17.0% until the earlier of the
Effective Date and the date of repayment in full of the Notes.
(e) On and after the Effective Date, the rate of interest on the Notes
shall be permanently readjusted to 16.0% per annum.
(f) The parties agree to execute supplements or amendments to the Indenture
required to effect this Section 8.1, if and when necessary.
(g) Notwithstanding the foregoing, this Section 8.1 shall be of no effect
during any period that: (i) the reason that SkyTerra is unable to cause the
Amendment to become effective is due to (x) SkyTerra's inability to obtain
required information from the Purchasers or Inmarsat plc in connection with
SkyTerra's filing of a proxy or information statement with the SEC, if and as
required by law, or (y) SkyTerra's inability to obtain required information from
the Purchasers or Inmarsat plc in connection with the resolution of any comments
or questions from the SEC with respect to such proxy or information statement;
or (ii) SkyTerra effects a tax-free reorganization of its capital structure
pursuant to Section 368(a)(1)(E) of the Code such that there are no shares of
Non-Voting Common Stock outstanding subsequent to such reorganization.
8.2 Exchange of Non-Voting Common Stock for Common Stock.
(a) To the extent any holder of a Warrant or its permitted assigns, obtains
shares of Non-Voting Common Stock issued upon exercise of a Warrant, SkyTerra
will promptly upon the request of such holder or its permitted assign, exchange
such shares of Non-Voting Common Stock for shares of Voting Common Stock on a
one-for-one basis. Upon surrender of certificates representing the shares of
Non-Voting Common Stock that are being exchanged as part of such transfer,
SkyTerra will issue to such Person certificates representing the appropriate
number of shares of Common Stock. For the avoidance of doubt, other than as to
voting and listing or quotation on a stock exchange, automatic quotation system
or the OTC Bulletin Board, the Common Stock and Non-Voting Common Stock shall
have identical rights and terms.
(b) Notwithstanding anything to the contrary contained in this Section 8.1,
prior to the issuance of the Voting Common Stock, the holder of the Warrant or
its permitted assigns shall have satisfied any and all legal or regulatory
requirements for conversion, including compliance with the HSR Act, any
applicable FCC requirements and any required shareholder approval as a result of
a stock exchange where the Common Stock is then so listed or quoted. SkyTerra
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.
SkyTerra shall pay all necessary filing fees and reasonable out-of-pocket
expenses to obtain such approvals.
8.3 Reservation and Authorization of Common Stock; Registration with
and Approval of Any Governmental Authority. From and after the Original
Issue Date, SkyTerra shall reserve and keep available for issuance upon and
until the exercise of the Warrants such number of its authorized but
unissued shares of Voting Common Stock as will be sufficient to permit the
exchange in full of all shares of Non-Voting Common Stock issuable upon
exercise in full of all outstanding Warrants less the number of shares of
Voting Common Stock that have previously been issued pursuant to Section
8.2. All shares of Voting Common Stock issuable pursuant to the terms
hereof, when issued upon (i) exercise of the Warrants, or (ii) exchange of
an equal number of shares of Non-Voting Common Stock 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.
8.4 Legends.
(a) Each certificate for Common Stock initially issued upon the exercise of
the Warrants ("Warrant Stock"), 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 __________, 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) 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 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."
(c) Notwithstanding the foregoing provisions of this Section 8, the legend
requirements of Section 8.4 shall terminate as to any particular Warrant or
shares of Restricted Common Stock when SkyTerra 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 Section 8.4 shall terminate as to the Warrants, as
hereinabove provided, the holder hereof shall be entitled to receive from
SkyTerra, at the expense of SkyTerra, a new Warrant not bearing the restrictive
legend set forth in Section 8.4(b).
(d) 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 SkyTerra at SkyTerra's expense, a new certificate
representing such Common Stock not bearing the restrictive legend set forth in
Section 8.4(a).
8.5 Publicity. Except to the extent required by applicable laws,
rules, regulations, stock exchange requirements or other obligations set
forth in securities agreements outstanding as of the date hereof, neither
the Issuers and SkyTerra, on the one hand, nor the Purchasers, on the other
hand, shall, without the prior written consent of the other, make any
public announcement or issue any press release with respect to the
transactions and other matters contemplated by this Agreement. The
Purchasers agree that the Issuers and SkyTerra may issue a press release
announcing the consummation of the sale of the Notes and Warrants in the
form to be mutually agreed upon by the Issuers, SkyTerra and the
Purchasers.
8.6 Use of Proceeds. The Issuers covenant and agree, and the
Purchasers acknowledge, that the proceeds from the sale of the Notes, shall
be used by the Issuers for lawful corporate purposes in accordance with the
Issuers 2009 business plan, as provided to the Purchasers prior to the
execution of the MCSA.
8.7 Right of Negotiation/Pro-rata Participation Right.
(a) If at any time prior to the earlier of (i) March 1, 2012, and (ii) such
time that Purchasers and their Affiliates cease to collectively beneficially own
at least five percent (5%) of the outstanding Common Stock, SkyTerra or any of
its Subsidiaries proposes to issue any equity securities or options to purchase
or rights to subscribe for any equity securities of SkyTerra or any of its
Subsidiaries (other than Excluded Stock (as defined below)) (the "Offered
Shares") to any bona fide third party, SkyTerra or such Subsidiary shall first
hold discussions with one representative for the Purchasers (the "Right of First
Negotiation") to determine whether a sale of all of the Offered Shares by
SkyTerra (or any of its Subsidiaries) to any or all of the Purchasers is of
interest to the Purchasers, and to determine whether agreement can be reached on
terms reasonably satisfactory to the each of the parties. Upon a good faith
determination by SkyTerra that such an agreement cannot be reached or if an
agreement is not reached within five Business Days after the commencement of the
Right of First Negotiation, SkyTerra may pursue a transaction with a bona fide
third party involving the Offered Shares; provided, however, that to the extent
any such transaction is consummated, the Purchasers shall have the pro-rata
participation right set forth in Section 8.7(b) below. Any sale of Offered
Shares pursuant to this Section 8.7(a) shall be made within sixty (60) days
after the commencement of the Right of First Negotiation. From and after the
sixty-first (61st) day after the commencement of the Right of First Negotiation,
any sale of Offered Shares shall be subject to the provisions of this Section
8.7(a).
(b) Following the completion or termination of the Right of First
Negotiation, if SkyTerra or any of its Subsidiaries proposes to issue Offered
Shares (other than Excluded Stock) to a bona fide third party, SkyTerra shall,
no later than fifteen (15) days prior to the consummation of such transaction (a
"Preemptive Rights Transaction"), give notice in writing (the "Preemptive Rights
Offer Notice") to each Purchaser and to Harbinger Capital Partners Fund I, L.P.
( collectively the "Preemptive Rights Offerees") of such Preemptive Rights
Transaction. The Preemptive Rights Offer Notice shall describe the proposed
Preemptive Rights Transaction, and contain an offer (the "Preemptive Rights
Offer") to sell to the Preemptive Rights Offerees, at the same price and for the
same consideration to be paid by the proposed purchaser (provided, that, in the
event any of such consideration is non-cash consideration, at the election of
the Preemptive Rights Offeree to whom the Preemptive Rights Offer is made, such
Preemptive Right Offeree may pay cash equal to the value of such non-cash
consideration, determined in the manner as Fair Value is determined in the
Warrant), all or any part of such Preemptive Right Offeree's pro rata portion of
the Offered Shares (which shall be a fraction of the Offered Shares determined
by dividing the number of shares of outstanding Common Stock owned by such
Preemptive Right Offeree by the sum of (i) the number of shares of outstanding
Common Stock owned by such Preemptive Right Offeree and (ii) the number of
outstanding shares of Common Stock not held by such Preemptive Right Offeree).
If any Preemptive Right Offeree to whom a Preemptive Rights Offer is made fails
to accept (a "Non-Responding Holder") in writing the Preemptive Rights Offer by
the tenth (10th) day after SkyTerra's delivery of the Preemptive Rights Offer
Notice, such Non-Responding Holder shall have no further rights with respect to
the proposed Preemptive Rights Transaction. For purposes of this Section 8.6(b),
each Preemptive Right Offeree's ownership of SkyTerra shall be deemed to include
the number of shares of Common Stock equal to the product of: (i) the number of
shares of common stock of the TerreStar Corporation ("TerreStar Corporation")
owned by such Preemptive Right Offeree divided by the total number of
outstanding shares of the TerreStar Corporation outstanding on a fully-diluted
basis; and (ii) the shares of Common Stock of SkyTerra held by TerreStar
Corporation. Additionally, notwithstanding the foregoing, no Preemptive Right
Offeree shall be deemed to beneficially own another Preemptive Right Offeree's
Common Stock. Any sale of the Offered Shares pursuant to a Preemptive Rights
Transaction shall be made within sixty (60) days after the delivery of the
Preemptive Rights Offer Notice. From and after the sixty-first (61st) day after
the delivery of the Preemptive Rights Offer Notice, any sale of Offered Shares
pursuant to this Section 8.7(b) shall be subject to a new Right of First
Negotiation pursuant to Section 8.7(a).
(c) "Excluded Stock" shall mean (i) options or similar convertible
securities to employees, consultants, or directors, (ii) securities reserved for
issuance to employees, directors, consultants or other service providers under
arrangements, contracts or plans approved by the Board of Directors of SkyTerra,
(iii) securities issued to any bank, licensor, equipment lessor or strategic
partner, if and to the extent that the transaction in which such sale or grant
is not principally for the purpose of raising equity capital, (iv) shares issued
upon exercise of the Warrants, (v) securities upon exercise, exchange or
conversion of convertible, exchangeable or exercisable securities issued as of
the date hereof, (vi) securities issued in a Public Offering, (vii) securities
issued in an acquisition transaction, (viii) securities issued in connection
with any stock split, stock dividends or recapitalization, in all cases where
shareholders are treated equally and ratably and (ix) securities issued by
Mobile Satellite Ventures Holdings (Canada) Inc. and Mobile Satellite
Ventures(Canada) Inc.
(d) Notwithstanding anything to the contrary contained herein, prior to the
issuance to the Purchasers of any securities pursuant to the Right of First
Negotiation or a Preemptive Rights Offer or, in the event that securities to be
issued are exercisable, convertible or exchangeable for Voting Common Stock, the
Voting Common Stock issuable upon exercise, conversion or exchange of such
securities, the Purchasers or its permitted assigns on the one hand, and
SkyTerra on the other hand, shall have satisfied any and all applicable legal or
regulatory or shareholder approval requirements (including the requirements of
any stock exchange or automatic quotation system on which the Common Stock is
then listed, traded or quoted) for issuance and/or conversion, including
compliance with the HSR Act and FCC requirements. SkyTerra shall use its
reasonable best efforts in cooperating with the Purchasers to obtain such legal
or regulatory approvals to the extent its cooperation is necessary. SkyTerra
shall pay all necessary filing fees and reasonable out-of-pocket expenses to
obtain such legal or regulatory approvals.
(e) Notwithstanding anything to the contrary contained in this Section 8.7,
no party to this Agreement shall have any rights pursuant to this Section 8.7
that are waived pursuant to Section 16.17 of the MCSA.
8.8 Negative Covenants. Prior to the earlier of (i) March 1, 2012, and
(ii) such time that the Purchasers and their Affiliates cease to
beneficially own at least 5% of the outstanding Common Stock, without the
prior consent of the Purchasers;
(a) MSV shall not consolidate with or merge with or into, or convey,
transfer or lease, in one transaction or a series of related transactions,
directly or indirectly, all or substantially all of its assets to any Person (as
defined in the Indenture) unless after immediately giving pro forma effect to
such transaction, the Successor Person (as defined in the Indenture) would have
a Consolidated Leverage Ratio (as defined in the Indenture) at least 10% better
than immediately prior to the transaction.
(b) MSV shall not make any Restricted Payment (as defined in the Indenture)
in violation of the Indenture, except for purposes of Section 4.08(a)(3)(A) of
the Indenture, (i) 100% shall be replaced with 50%, and (ii) the deduction of
1.4 times the Consolidated Interest Expense (as defined in the Indenture) shall
be deleted.
8.9 Go-Shop Period.
(a) Notwithstanding any other provision of this Agreement to the contrary,
during the period (the "Go-Shop Period") beginning on the date hereof and
continuing until 11:59 p.m. (EST) on the day prior to the First Closing Date,
the Issuers, SkyTerra and their respective officers, directors, employees,
consultants, agents, advisors, Affiliates and other representatives
("Representatives") shall have the right to directly or indirectly: (i)
initiate, solicit and encourage Company Transaction Proposals (as hereinafter
defined), including by way of providing access to non-public information
pursuant to one or more customary confidentiality agreements and eliminating any
existing standstill clause of which SkyTerra is a beneficiary, or any other
burden or restriction that would prohibit or inhibit any Person actually or
potentially interested in making an offer to SkyTerra from pursuing such offer;
provided that the Issuers and SkyTerra shall promptly provide to each of the
Purchasers any material non-public information concerning SkyTerra or any of its
Subsidiaries that is provided to any Person given such access that was not
previously provided to the Purchasers; and (ii) enter into and maintain
discussions or negotiations with respect to Company Transaction Proposals or
otherwise cooperate with or assist or participate in, or facilitate any such
inquiries, proposals, discussions or negotiations.
(b) Notwithstanding any other provisions of this Agreement to the contrary,
if, at any time prior to the First Closing Date, any Issuer or SkyTerra receives
a Company Transaction Proposal which the Board of Directors of SkyTerra
concludes in good faith constitutes a Superior Proposal, the Issuers and
SkyTerra may terminate this Agreement prior to the First Closing Date in order
to enter into a definitive agreement implementing such Superior Proposal.
(c) In case of termination of this Agreement under the terms of this
Section 8.9, SkyTerra shall pay the Purchasers, and the Purchasers shall be
entitled to receive from SkyTerra, upon completion of the funding of such
Superior Proposal, notes convertible into shares of voting common stock of
SkyTerra, the principal amount of which shall be equal to 1.5% of the amount
issued or otherwise received by SkyTerra or any of its Subsidiaries in the
transaction contemplated by the Superior Proposal. The financial and certain
other terms of such notes are set forth in Exhibit C hereto. Such payment shall
take place only upon the receipt by SkyTerra or such Subsidiaries of all or part
of the funds, as result of the transaction contemplated by the Superior
Proposal.
(d) In the event that the Purchasers terminate or breach their financing
obligations under this Agreement, SkyTerra shall be entitled to seek alternative
financing whether or not such financing is determined to be a Superior Proposal.
(e) As used in this Agreement, the terms:
"Company Transaction Proposal" means any inquiry, proposal or offer
from any Person or group of Persons other than the Purchasers or their
respective Affiliates relating to any direct or indirect issuance by
SkyTerra or any of its respective Subsidiaries, of any debt or equity
securities or incurrence of other indebtedness with proceeds of such
issuance or incurrence either singularly or in the aggregate exceeding
U.S.$500,000,000 and in which the aggregate amount of shares of Common
Stock being issued or Common Stock issuable through exercise of warrants
does not exceed 20,000,000 shares and no other equity or convertible
securities are issued; and
"Superior Proposal" means a bona fide written Company Transaction
Proposal that the Board of Directors of SkyTerra in good faith determines,
would, if consummated, result in a transaction that is more favorable to
SkyTerra and its existing stockholders than the transactions contemplated
hereby, which determination is made, (x) after receiving the advice of a
financial advisor (who shall be a nationally recognized investment banking
firm), (y) after taking into account the likelihood (and likely timing) of
consummation of such transaction on the terms set forth therein (as
compared to the terms herein) and (z) after taking into account all
appropriate legal (with the advice of outside counsel), financial
(including the financing terms of any such proposal), regulatory or other
aspects of such proposal and any other relevant factors permitted by
applicable Law, including, without limitation, the likelihood that the
Superior Proposal will satisfy applicable financial ratios and tests under
SkyTerra's existing indebtedness.
(f) Nothing contained in this Section 8.9 or elsewhere in this Agreement
shall prohibit the Board of Directors of SkyTerra from complying with its
disclosure obligations under U.S. federal or state Law with respect to a Company
Transaction Proposal.
8.10 Affirmative Covenants. Prior to the earlier of (i) March 1, 2012,
and (ii) such time that the Purchasers and their Affiliates cease to
beneficially own at least 5% of the outstanding Common Stock, without the
prior consent of the Purchasers:
(a) MSV will cause all properties used or useful in the conduct of its
business or the business of any Significant Subsidiary to be maintained and kept
in good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
MSV may be reasonably necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
however, that nothing in this Section 8.10(a) shall prevent MSV or any
Significant Subsidiary from (i) discontinuing the use, operation or maintenance
of any of such properties or disposing of any of them, if such discontinuance or
disposal is, in the judgment of MSV, desirable in the conduct of its business or
the business of any such Significant Subsidiary or (ii) effectuating an Asset
Disposition (as defined in the Indenture) in accordance with the terms of the
Indenture.
(b) MSV shall comply, and shall cause each of its Significant Subsidiaries
to comply, with all applicable statutes, rules, regulations, orders and
restrictions of the United States of America, all states and municipalities
thereof, and of any governmental department, commission, board, regulatory
authority, bureau, agency and instrumentality of the foregoing, in respect of
the conduct of their respective businesses and the ownership of their respective
properties, except for such noncompliances as are not in the aggregate
reasonably likely to have a Material Adverse Effect.
8.11 Cooperation. The parties hereto shall cooperate in good faith and
make all reasonable necessary, proper or advisable efforts to determine
whether any facts or circumstances that could give rise to a Material
Adverse Effect exist. Cooperation under this Section shall not be deemed to
be, or be construed, as a waiver of any right, term or provision under this
Agreement and shall not create any type of estoppel whatsoever, on the
cooperating party, from exercising in full its rights under this Agreement.
9. Miscellaneous Provisions.
9.1 Rights Cumulative. Each and all of the various rights, powers and
remedies of the parties shall be considered to be cumulative with and in
addition to any other rights, powers and remedies which such parties may
have at law or in equity in the event of the breach of any of the terms of
this Agreement. The exercise or partial exercise of any right, power or
remedy shall neither constitute the exclusive election thereof nor the
waiver of any other right, power or remedy available to such party.
9.2 Pronouns. All pronouns or any variation thereof shall be deemed to
refer to the masculine, feminine or neuter, singular or plural, as the
identity of the Person, Persons, entity or entities may require.
9.3 Notices.
(a) Any notices, reports or other correspondence (hereinafter collectively
referred to as "correspondence") required or permitted to be given hereunder
shall be sent by postage prepaid first class mail (sent certified or
registered), overnight courier or facsimile transmission, or delivered by hand
to the party to whom such correspondence is required or permitted to be given
hereunder. The date of giving any notice shall be the date of its actual
receipt.
(b) All correspondence to the Issuers and SkyTerra shall be addressed as
follows:
SkyTerra Communications, Inc.
00000 Xxxxxxxxx Xxxxxxxxx
Xxxxxx XX 00000
Facsimile No.: 000-000-0000
Attn: Chief Financial Officer
with copies (which shall not constitute notice) to:
SkyTerra Communications, Inc.
00000 Xxxxxxxxx Xxxxxxxxx
Xxxxxx XX 00000
Facsimile No.: 000-000-0000
Attn: General Counsel
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: 000-000-0000
Attn: Xxxxxxx Xxxxxxxxx
(c) All correspondence to the Purchasers shall be addressed as follows:
Harbinger Capital Partners Funds
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Senior Vice President and Investment Counsel
Facsimile No.: (000) 000-0000
with a copy to
Xxxxxxx Management Corporation
Xxx Xxxxxxxxxx Xxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: General Counsel
Fax: (000) 000-0000
with copies (which shall not constitute notice) to:
Weil, Gotshal & Xxxxxx, LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
Attn: Xxxxxx X. Xxxxxx, Xx.
Weil, Gotshal & Xxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Facsimile: (000) 000-0000
Attn: Xxxx X. Xxxxxxxx
(d) Any party may change the address to which correspondence to it is to be
addressed by notification as provided for herein.
9.4 Captions. The captions and paragraph headings of this Agreement
are solely for the convenience of reference and shall not affect its
interpretation.
9.5 Severability. Should any part or provision of this Agreement be
held unenforceable or in conflict with the applicable laws or regulations
of any jurisdiction, the invalid or unenforceable part or provisions shall
be replaced with a provision which accomplishes, to the extent possible,
the original business purpose of such part or provision in a valid and
enforceable manner, and the remainder of this Agreement shall remain
binding upon the parties hereto.
9.6 Governing Law; Exclusive Jurisdiction and Venue; Waiver of Jury
Trial. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York. THE PARTIES HERETO HEREBY AGREE THAT ALL
ACTIONS OR PROCEEDINGS ARISING DIRECTLY OR INDIRECTLY FROM OR IN CONNECTION
WITH THIS AGREEMENT SHALL BE LITIGATED ONLY IN THE STATE OR FEDERAL COURTS
LOCATED IN MANHATTAN IN THE STATE OF NEW YORK. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, THE PARTIES HERETO CONSENT TO THE EXCLUSIVE JURISDICTION
AND VENUE OF THE FOREGOING COURTS AND CONSENT THAT ANY PROCESS OR NOTICE OF
MOTION OR OTHER APPLICATION TO EITHER OF SAID COURTS OR A JUDGE THEREOF MAY
BE SERVED INSIDE OR OUTSIDE THE STATE OF NEW YORK BY REGISTERED MAIL,
RETURN RECEIPT REQUESTED, DIRECTED TO SUCH PARTY AT ITS ADDRESS SET FORTH
IN THIS AGREEMENT (AND SERVICE SO MADE SHALL BE DEEMED COMPLETE FIVE (5)
DAYS AFTER THE SAME HAS BEEN POSTED AS AFORESAID) OR BY PERSONAL SERVICE OR
IN SUCH OTHER MANNER AS MAY BE PERMISSIBLE UNDER THE RULES OF SAID COURTS.
THE PARTIES HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT.
9.7 Waiver. No waiver of any term, provision or condition of this
Agreement, whether by conduct or otherwise, in any one or more instances,
shall be deemed to be, or be construed as, a further or continuing waiver
of any such term, provision or condition or as a waiver of any other term,
provision or condition of this Agreement.
9.8 Assignment. The rights and obligations of any party hereto shall
inure to the benefit of and shall be binding upon the authorized successors
and permitted assigns of such party. None of the Issuers, SkyTerra or the
Purchasers may assign this Agreement or any rights or obligations hereunder
without the prior written consent of the other; provided, however, that the
each of Purchasers may assign this Agreement in whole or in part to one or
more Affiliates of the Purchasers, whether presently existing or
hereinafter created by providing notice in writing to the Issuers and
SkyTerra.
9.9 Survival. The respective representations and warranties given by
the parties hereto shall survive each Closing Date and the consummation of
the transactions contemplated herein and shall expire on the date that is
eighteen (18) months after such Closing Date (the "Survival Period").
Accordingly, no claim relating to any representation or warranty given by
the parties hereto applicable to each Survival Period, may be made
following such expiration. If a claim relating to any representation or
warranty given by the parties hereto is made on or prior to the expiration
thereof, then, notwithstanding anything to the contrary contained in this
Section 9.9, such representation or warranty shall not so expire, but
rather shall remain in full force and effect until such time as such claim
has been fully and finally resolved, either by means of a written
settlement agreement executed on behalf of the parties or by means of a
final, non-appealable judgment issued by a court of competent jurisdiction.
The respective covenants and agreements agreed to by a party hereto shall
survive the last Closing Date unless otherwise specified.
9.10 Entire Agreement. This Agreement and the other Transaction
Documents constitute the entire agreement among the parties hereto
respecting the subject matter hereof and supersede all prior agreements,
negotiations, understandings, representations and statements respecting the
subject matter hereof, whether written or oral, among the Issuers and the
Purchasers.
9.11 Amendments. Any amendment, supplement or modification of or to
any provision of this Agreement and any waiver of any provisions of this
Agreement shall be effective only if made or given in writing and signed by
the Issuers and the Purchasers.
9.12 No Third Party Rights. This Agreement is intended solely for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not intended to confer any benefits upon, or create any
rights in favor of, any Person (including, without limitation, any
stockholder or debt holder of the Issuers or SkyTerra) other than the
parties hereto.
9.13 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same document. The parties hereto
confirm that any facsimile copy of another party's executed counterpart of
this Agreement (or its signature page thereof) will be deemed to be an
executed original thereof.
9.14 Expenses. Whether or not the transactions contemplated by the
Transaction Documents are consummated, the Issuers shall pay all
reasonable, documented fees and expenses incurred by the Purchasers in
connection with the negotiation, preparation and execution of the
Transaction Documents and the consummation of the transactions contemplated
hereby.
[Signature pages follow.]
Each of the parties hereto has caused a counterpart of this Agreement to be
duly executed and delivered as of the date first written above.
MOBILE SATELLITE VENTURES LP
By: /s/ Xxxxx Xxxxxxx
-----------------------------------------
Name: Xxxxx Xxxxxxx
Title: Executive Vice President and
Chief Financial Officer
MOBILE SATELLITE VENTURES FINANCE CO.
By: /s/ Xxxxx Xxxxxxx
-----------------------------------------
Name: Xxxxx Xxxxxxx
Title: Executive Vice President and
Chief Financial Officer
SKYTERRA COMMUNICATIONS, INC.
By: /s/ Xxxxx Xxxxxxx
-----------------------------------------
Name: Xxxxx Xxxxxxx
Title: Executive Vice President, Chief
Financial Officer and Treasurer
HARBINGER CAPITAL PARTNERS MASTER FUND I, LTD.
By: Harbinger Capital Partners Offshore
Manager, LLC, as investment manager
By: /s/ Xxxxxxx X. Xxxxx, Xx.
-----------------------------------------
Name: Xxxxxxx X. Xxxxx, Xx.
Title: Executive Vice President
HARBINGER CAPITAL PARTNERS SPECIAL SITUATIONS
FUND, L.P.
By: Harbinger Capital Partners Special
Situations GP, LLC, as general partner
By: /s/ Xxxxxxx X. Xxxxx, Xx.
-----------------------------------------
Name: Xxxxxxx X. Xxxxx, Xx.
Title: Executive Vice President
LIST OF EXHIBITS
Exhibit A-1: Form of January Warrant
Exhibit A-2: Form of April Warrant
Exhibit B: Form of Indenture
Exhibit C: Terms of Convertible Notes
Exhibit D: 16.5% Notes Supplemental Indenture
Exhibit A-1
Form of January Warrant
Exhibit A-2
Form of April Warrant
Exhibit B
Form of Indenture
Exhibit C
Terms of Convertible Notes
Exhibit D
16.5% Notes Supplemental Indenture
