Exhibit 4.3
Participation Rights Agreement
THIS PARTICIPATION RIGHTS AGREEMENT (this "Agreement") is made as of
December 31, 1997, by and among Motorola, Inc., a Delaware corporation (the
"Investor"), American Mobile Satellite Corporation, a Delaware corporation (the
"Company"), and the parties listed on Schedule A attached hereto (the
"Stockholders").
American Mobile Satellite Corporation, a Delaware corporation, the Investor
and certain others are parties to a Stock Purchase Agreement dated as of
December 31, 1997 (the "Purchase Agreement"). In order to induce the Investor to
enter into the Purchase Agreement, the Stockholders have agreed to the
provisions set forth in this Agreement. Unless otherwise provided in this
Agreement, capitalized terms used herein shall have the meanings set forth in
Section 5 hereof.
The parties hereto agree as follows:
1. Investor Participation Rights. At any time after the Closing Date and
prior to the date on which the Investor beneficially owns less than 5% of the
Common Stock on a fully-diluted basis:
(a) At least 30 days prior to any transfer, assignment or any other
disposition of Stockholder Shares (other than a transfer (i) to the public
pursuant to Rule 144 under the Securities Act (or any similar rule then in
force) or (ii) in other sales through a broker or dealer in the public stock
market over an exchange or the Nasdaq Stock Market (a "Transfer"), the
transferring Stockholder (the "Transferring Stockholder") shall deliver a
written notice (the "Sale Notice") to the Investor, specifying in reasonable
detail the identity of the prospective transferee(s), the number of Stockholder
Shares to be transferred and the terms and conditions of the Transfer (including
the proposed price at which the Stockholder Shares is to be transferred). The
Investor may elect to participate in the contemplated Transfer by delivering
written notice of such election to the Transferring Stockholder within 30 days
after delivery of the Sale Notice. If the Investor elects to participate in such
Transfer, each of the Transferring Stockholder and the Investor shall be
entitled to sell in the contemplated Transfer, at the same price and on the same
terms, a number of Stockholder Shares equal to the product of (A) the quotient
determined by dividing the number of Stockholder Shares owned by such Person by
the aggregate number of Stockholder Shares owned by the Transferring Stockholder
and the Investor and (B) the number of Stockholder Shares to be sold in the
contemplated Transfer.
For example (by way of illustration only), if the Sale Notice contemplated
a sale of 100 shares of Common Stock by the Transferring Stockholder, and if the
Transferring Stockholder at such time owns shares which constitute 30% of all
Common Stock which are Stockholder Shares and if the Investor elects to
participate in such Transfer and the Investor owns shares of Common Stock which
constitutes 10% of all of the Common Stock which are Stockholder Shares, the
Transferring Stockholder would be entitled to sell 75 shares of Common Stock
(30% / 40% x 100 shares) and the Investor would be entitled to sell 25 shares of
Common Stock (10% / 40% x 100 shares).
(b) The Transferring Stockholder will use its best efforts to obtain the
agreement of the prospective transferee(s) to the participation of the Investor
in any contemplated Transfer, and the Transferring Stockholder will not Transfer
any of its Stockholder Shares to the prospective transferee(s) unless (i)
simultaneously with such Transfer, the prospective transferee(s) purchases from
the Investor at the same price and on the same terms, the number of Stockholder
Shares which it is entitled to sell to such prospective transferee pursuant to
Section 1 above or (ii) simultaneously with such Transfer, the Transferring
Stockholder purchases the number of Stockholder Shares from the Investor at the
same price and on the same terms which the Investor would have been entitled to
sell pursuant to Section 1 above.
2. Shareholder Participation Rights. At any time after the Closing Date and
prior to the date on which the Investor beneficially owns less than 5% of the
Common Stock on a fully-diluted basis:
(a) At least 30 days prior to any transfer, assignment or any other
disposition of Stockholder Shares by the Investor (other than a transfer (i) to
the public pursuant to Rule 144 under the Securities Act (or any similar rule
then in force) or (ii) in other sales through a broker or dealer in the public
stock market over an exchange or the Nasdaq Stock Market) (a "Transfer"), the
Investor shall deliver a written notice (the "Sale Notice") to the Stockholders,
specifying in reasonable detail the identity of the prospective transferee(s),
the number of Stockholder Shares to be transferred and the terms and conditions
of the Transfer (including the proposed price at which the Stockholder Shares is
to be transferred). The Stockholders may elect, pro rata based on the number of
Stockholder Shares owned by them, to participate in the contemplated Transfer by
delivering written notice of such election to the Investor within 30 days after
delivery of the Sale Notice. If any Stockholder elects to participate in such
Transfer, the Investor and each such electing Stockholder (an "Electing
Stockholder") shall be entitled to sell in the contemplated Transfer, at the
same price and on the same terms, a number of Stockholder Shares equal to the
product of (A) the quotient determined by dividing the number of Stockholder
Shares owned by such Person by the aggregate number of Stockholder Shares owned
by the Electing Stockholders and the Investor and (B) the number of Stockholder
Shares to be sold in the contemplated Transfer.
For example (by way of illustration only), if the Sale Notice contemplated
a sale of 100 shares of Common Stock by the Investor, and if the Investor at
such time owns shares which constitute 30% of all Common Stock which are
Stockholder Shares and if Electing Stockholders elect to participate in such
Transfer and the Electing Stockholders own shares of Common Stock which
constitutes 10% of all of the Common Stock which are Stockholder Shares, the
Investor would be entitled to sell 75 shares of Common Stock (30% / 40% x 100
shares) and the Electing Stockholders would be entitled to sell 25 shares of
Common Stock (10% / 40% x 100 shares).
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(b) The Investor will use its best efforts to obtain the agreement of the
prospective transferee(s) to the participation of the Electing Stockholders in
any contemplated Transfer, and the Investor will not Transfer any of its
Stockholder Shares to the prospective transferee(s) unless (i) simultaneously
with such Transfer, the prospective transferee(s) purchases from the Electing
Stockholders at the same price and on the same terms, the number of Stockholder
Shares which they are entitled to sell to such prospective transferee pursuant
to Section 2 above or (ii) simultaneously with such Transfer, the Investor will
purchase the number of Stockholder Shares from the Electing Stockholders at the
same price and on the same terms which the Electing Stockholders would have been
entitled to sell pursuant to Section 2 above.
3. Agreement to Vote for Transaction. Each Stockholder agrees that it shall
vote all of its Stockholder Shares in favor of and take such other action as may
be necessary to approve, and hereby consents to the Company entering into, all
of the transactions contemplated by the Purchase Agreement, including the
issuance of shares of Common Stock to the Investor.
4. Registration Rights Agreement. Pursuant to the Purchase Agreement, the
Company shall provide the Investor with certain registration rights under a
registration rights agreement substantially in the form of Schedule B attached
hereto (the "Registration Rights Agreement"). Each Stockholder agrees and
acknowledges that pursuant to the Registration Rights Agreement, the Company
shall provide the Investor with Demand Registrations and Piggyback Registrations
(each as defined in the Registration Rights Agreement), for which the Investor
shall have a priority of sale of its Registrable Securities (as defined in the
Registration Rights Agreement) over all other unregistered securities held by
any other stockholder of the Company. Each Stockholder agrees to subordinate any
registration rights granted with respect to the unregistered securities of the
Company owned by it (including any unregistered securities it may acquire in the
future), to the Investor under the Registration Rights Agreement, and agrees
that it shall be bound by Sections 1(b) and 2(c) therein until the end of the
42nd month after the month in which the Closing under the Purchase Agreement
occurs (the "Subordination Termination Date"). After the Subordination
Termination Date, the Investor and the Stockholders will be pari passu with
respect to the priority of sale in any piggyback registration rights granted to
such parties as set forth in the Registration Rights Agreement.
5. Definitions.
(a) "Common Stock" means the Common Stock, par value $.01 per share, of the
Company.
(b) "Stockholder Shares" means (i) any shares of Common Stock issued to the
Stockholders and the Investor (including shares issuable upon the exercise of
any AMSC Warrants) and (ii) any equity securities issued or issuable directly or
indirectly with respect to the Common Stock referred to in clause (i) above
(including by way of stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization). As to any particular shares constituting Stockholder Shares,
such shares will cease to be Stockholder Shares when they have been (x)
effectively registered under the Securities Act and disposed of in accordance
with the registration statement covering them, or (y) sold to the public through
a broker, dealer or market maker pursuant to Rule 144 (or by similar provision
then in force) under the Securities Act.
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(c) Unless otherwise stated, other capitalized terms contained herein have
the meanings set forth in the Purchase Agreement.
6. Miscellaneous.
(a) Entire Agreement; No Inconsistent Agreements. This Agreement contains
the entire agreement between the parties hereto with respect to the transactions
contemplated herein and supersede all previous negotiations, commitments and
writings. The Company shall not hereafter enter into any agreement with respect
to its securities which is inconsistent with or violates the rights granted to
the Investor in this Agreement.
(b) Remedies. Any Person having rights under any provision of this
Agreement shall be entitled to enforce such rights specifically to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that any party may in its sole discretion
apply to any court of law or equity of competent jurisdiction (without posting
any bond or other security) for specific performance and for other injunctive
relief in order to enforce or prevent violation of the provisions of this
Agreement.
(c) Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement may be amended or waived only upon the prior
written consent of the Investor and the Stockholders.
(d) Successors and Assigns. All covenants and agreements in this Agreement
by or on behalf of any of the parties hereto shall bind and inure to the benefit
of the respective successors and assigns of the parties hereto whether so
expressed or not. In addition, whether or not any express assignment has been
made, the provisions of this Agreement which are for the benefit of purchasers
or holders of the Investor's Stockholder Shares are also for the benefit of, and
enforceable by, any subsequent holder of such shares.
(e) Severability. Whenever possible, each provision of this Agreement shall
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or the effectiveness or validity of any provision in any
other jurisdiction, and this Agreement shall be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.
(f) Counterparts. This Agreement may be executed simultaneously in two or
more counterparts (including by means of telecopied signature pages), any one of
which need not contain the signatures of more than one party, but all such
counterparts taken together shall constitute one and the same Agreement.
(g) Descriptive Headings. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.
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(h) Governing Law. THIS AGREEMENT AND THE EXHIBITS AND SCHEDULES HERETO
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW RULES OR
PROVISIONS (WHETHER OF THE STATE OF NEW YORK OR ANY OTHER JURISDICTION) THAT
WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE
OF NEW YORK.
(i) Notices. All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given when (i) delivered personally to
the recipient, (ii) sent to the recipient by reputable overnight courier service
(charges prepaid), (iii) sent by facsimile transmission, when transmitted and
receipt is confirmed or (iv) mailed to the recipient by certified or registered
mail, return receipt requested and postage prepaid. Such notices, demands and
other communications shall be sent to the Stockholders at their respective
addresses listed on Schedule A attached hereto and to the Investor at the
address indicated below:
To the Investor:
Motorola, Inc.
0000 Xxxx Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: General Counsel
Facsimile: (000) 000-0000
With a copy (which will not constitute notice) to:
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxx X. Xxxxxxxxxx, Esq.
Facsimile: (000) 000-0000
To the Company:
American Mobile Satellite Corporation
00000 Xxxxxxxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxx 00000-0000
Attn: General Counsel
Facsimile: (000) 000-0000
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With a copy (which will not constitute notice) to:
Xxxxxx & Xxxxxx
000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attn: Xxxxxx X. Xxxx, Esq.
Facsimile: (000) 000-0000
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
* * * * *
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IN WITNESS WHEREOF, the parties have duly executed this Participation
Rights Agreement as of the date first written above.
MOTOROLA, INC., SATELLITE MOBILE TELEPHONE
a Delaware corporation COMPANY, L.P.
By:/s/Xxxxx X. Xxxxx By:/s/Xxxxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxx Name: Xxxxxxx X. Xxxxxxx
Its: Senior Operations Controller Its: VP - External Affairs & Law
XXXXXX COMMUNICATIONS TRANSIT COMMUNICATIONS, INC.
SATELLITE SERVICES, INC.
By:/s/Xxxxx Xxxx By:/s/Xxxxxxx X. Xxxxxxx
Name: Xxxxx Xxxx Name: Xxxxxxx X. Xxxxxxx
Its: Assistant Treasurer, Its: VP - External Affairs & Law
Xxxxxx Electronics
SATELLITE COMMUNICATIONS SINGAPORE
INVESTMENTS CORPORATION TELECOMMUNICATIONS LTD.
By:/s/Xxxxxxx X. Xxxxxxx By:/s/Xxx Xxxx Keong
Name: Xxxxxxx X. Xxxxxxx Name: Xxx Xxxx Keong
Its: VP - External Affairs & Law Its: Group Financial Controller
SPACE TECHNOLOGIES AMERICAN MOBILE SATELLITE
INVESTMENTS, INC. CORPORATION
By:/s/Xxxxxxx X. Xxxxxxx By:/s/Xxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx Name: Xxxx X. Xxxxxxx
Its: VP - External Affairs & Law Its: Chief Executive Officer and
President
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[Continuation of Signature Page
to Participation Rights Agreement]
Solely with respect to its Warrants:
BARON CAPITAL PARTNERS, L.P.
By: Baron Capital Management, Inc.,
a General Partnership
By:/s/Xxxxx Xxxxxx
------------
Name: Xxxxx Xxxxxx
------------
Its: S.V.P.
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For purposes of Sections 3 of the Participation Rights Agreement only:
BARON CAPITAL MANAGEMENT,
INC.
By:/s/Xxxxx Xxxxxx
------------
Name: Xxxxx Xxxxxx
------------
Its: S.V.P.
------
BAMCO, INC.
By:/s/Xxxxx Xxxxxx
------------
Name: Xxxxx Xxxxxx
------------
Its: S.V.P.
------
Schedule A
Xxxxxx Communications Satellite Services, Inc.
0000 Xxxxxx Xxx
Xxxx Xxxxx, Xxxxxxxxxx 00000
Space Technologies Investments, Inc.
0000 Xxxxxxxxxxx Xxxxxx, X.X.
0xx Xxxxx
Xxxxxxxxxx, X.X. 00000
Satellite Communications Investments Corporation
0000 Xxxxxxxxxxx Xxxxxx, X.X.
0xx Xxxxx
Xxxxxxxxxx, X.X. 00000
Satellite Mobile Telephone Company, L.P.
0000 Xxxxxxxxxxx Xxxxxx, X.X.
0xx Xxxxx
Xxxxxxxxxx, X.X. 00000
Transit Communications, Inc.
0000 Xxxxxxxxxxx Xxxxxx, X.X.
0xx Xxxxx
Xxxxxxxxxx, X.X. 00000
Xxxxxxxxx Telecommunications Ltd.
00X Xxxxxx Xxxx
#00-00 Xxxxxxxxx XXX
Xxxxxxxxx 000000
Republic of Singapore
Baron Capital Management, Inc.
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
BAMCO, Inc.
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
