Exhibit 10.2
Execution Version
SKYTERRA COMMUNICATIONS, INC.
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is made as of
December 23, 2004 by and among SKYTERRA COMMUNICATIONS, INC., a Delaware
corporation (the "COMPANY"), and each investor listed on Schedule 1 hereto
(each such investor, individually, an "INVESTOR" and, collectively, the
"INVESTORS").
WHEREAS, the Company has agreed to issue and sell to the Investors (other
than Tejas Securities Group, Inc. ("Tejas"), and the Investors (other than
Tejas) have agreed to purchase from the Company, an aggregate of 2,000,000
shares (the "SHARES") of the Company's voting common stock, par value $0.01 per
share (the "COMMON STOCK"), at a per share price and upon the terms and
conditions set forth in the Securities Purchase Agreement, dated as of the date
hereof, between the Company and the Investors (other than Tejas) (the
"SECURITIES PURCHASE AGREEMENT"); and
WHEREAS, the terms of the Securities Purchase Agreement provide that it
shall be a condition precedent to the closing of the transactions thereunder,
for the Company and the Investors to execute and deliver this Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties hereto hereby agree as follows:
1. DEFINITIONS. The following terms shall have the meanings provided
therefor below or elsewhere in this Agreement as described below:
"AFFILIATE" means any Person that, directly or indirectly, through one or
more intermediaries, controls, is controlled by, or is under common control
with, a Person, as such terms are used and construed under Rule 144, and in all
cases including, without limitation, any Person that serves as a general
partner and/or investment adviser or in a similar capacity of a Person.
"BOARD" means the board of directors of the Company 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.
"CLOSING DATE" has the meaning set forth in the Securities Purchase
Agreement.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and
all of the rules and regulations promulgated thereunder.
"PERSON" (whether or not capitalized) means an individual, partnership,
limited liability company, corporation, association, trust, joint venture,
unincorporated organization, and any government, governmental department or
agency or political subdivision thereof.
"PROSPECTUS" means the prospectus included in any Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective Registration
Statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Shares covered by such
Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference in such Prospectus.
"REGISTRABLE SHARES" means, at the relevant time of reference thereto, the
Shares and the Warrant Shares (including any shares of capital stock that may
be issued in respect thereof pursuant to a stock split, stock dividend,
recombination, reclassification or the like), PROVIDED, HOWEVER, that the term
"Registrable Shares" shall not include any of the Shares or Warrant Shares that
are actually sold pursuant to a registration statement that has been declared
effective under the Securities Act by the SEC or that may be sold pursuant to
Rule 144(k) under the Securities Act.
"REGISTRATION STATEMENT" means the Mandatory Registration Statement and
any additional registration statements contemplated by Section 2A of this
Agreement, including (in each case) the Prospectus, amendments and supplements
to such registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference in
such registration statement or Prospectus.
"RULE 144" means Rule 144 promulgated under the Securities Act and any
successor or substitute rule, law or provision.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and all of
the rules and regulations promulgated thereunder.
"WARRANT SHARES" means the shares of Common Stock issued or issuable upon
the exercise of the Warrants.
"WARRANTS" means the warrants to purchase Common Stock, dated as of the
date hereof, issued by the Company to the Investors (other than Tejas) pursuant
to the Securities Purchase Agreement, a form of which is attached hereto as
Exhibit A and, in the case of Tejas, the warrant to purchase 110,000 shares of
Common Stock, dated as of the date hereof, issued by the Company to Tejas
pursuant to the Placement Agent Agreement, dated as of December 13, 2004, by
and between the Company and Tejas.
2. MANDATORY REGISTRATION STATEMENT.
(a) As promptly as possible after the Closing Date, and in any event
on or prior to May 12, 2005 (the "MANDATORY FILING DATE"), the Company shall
prepare and file with the SEC a Registration Statement on Form S-1 or, if
eligible, on Form S-3 for the purpose of registering under the Securities Act
all of the Registrable Shares for resale by, and for the account of, each
Investor as an initial selling stockholder thereunder (the "MANDATORY
REGISTRATION STATEMENT"), which the Investors acknowledge may also register
300,000 shares (including any shares of capital stock that may be issued in
respect thereof pursuant to a stock split, stock dividend, recombination,
reclassification or the like) of Common Stock to be issued to DirecTV Group
pursuant to the Company's agreement to acquire a 50% interest in Xxxxxx Network
Systems, LLC. The Mandatory Registration Statement shall conform in form and
substance to all applicable instructions for the relevant registration form and
with all applicable SEC regulations. The Mandatory Registration Statement shall
permit the Investors to offer and sell, on a delayed or continuous basis
pursuant to Rule 415 under the Securities Act, any or all of their Registrable
Shares. The Company agrees to use its best efforts to cause the Mandatory
Registration Statement to be declared effective as soon as practicable after
the date of such filing but in any event on or prior to June 30, 2005 (the
"MANDATORY EFFECTIVE DATE") (including filing with the SEC, within three (3)
Business Days of the date that the Company is notified (orally or in writing,
whichever is earlier) by the SEC that the Mandatory Registration Statement will
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not be "reviewed" or will not be subject to further review, a request for
acceleration of effectiveness in accordance with Rule 461 promulgated under the
Securities Act (an "ACCELERATION REQUEST"), which request shall request an
effective date that is within three (3) Business Days of the date of such
request). The Company shall notify each Investor in writing promptly (and in
any event within one (1) Business Day) after the Company's submission of an
Acceleration Request to the SEC. The Company shall be required to keep the
Mandatory Registration Statement continuously effective (including through the
filing of any required post-effective amendments) until the earliest to occur
of (i) the date after which all of the Registrable Shares registered thereunder
shall have been sold, (ii) the third (3rd) anniversary of the Closing Date and
(iii) the date on which each Investor may sell all Registrable Shares then held
by such Investor without restriction under Rule 144(k) of the Securities Act;
provided, that in any case such date shall be extended by the amount of time of
any Suspension Period (as defined below) (the "EFFECTIVENESS PERIOD").
Thereafter, the Company shall be entitled to withdraw the Mandatory
Registration Statement and, upon such withdrawal, the Investors shall have no
further right to offer or sell any of the Registrable Shares pursuant to the
Mandatory Registration Statement (or any prospectus relating thereto).
(b) Notwithstanding anything in this Section 2 to the contrary, if
the Company shall during the Effectiveness Period furnish to the Investors a
certificate signed by the President or Chief Executive Officer of the Company
stating that the Board has made the good faith determination upon the advice of
counsel (x)(i) that the continued use by the Investors of the Mandatory
Registration Statement for purposes of effecting offers or sales of Registrable
Shares pursuant hereto would require, under the Securities Act, premature
disclosure in the Mandatory Registration Statement (or the Prospectus relating
thereto) of material, nonpublic information concerning the Company, its
business or prospects or any proposed material transaction involving the
Company and (ii) that such premature disclosure would be materially adverse to
the Company, its business or prospects or any such proposed material
transaction, (y) that the Company is required to prepare audited financial
statements as of a date other than its fiscal year end or is otherwise unable
to comply with applicable SEC disclosure requirements as a result of an
extraordinary corporate transaction (such as a requirement to provide pro forma
financials giving effect to such transaction or historical financials of
another constituent entity in such transaction), or (z) if the Registration
Statement has been filed on Form S-1 and the same must be amended or
supplemented in order to comply with Section 10(a)(3) of the Securities Act,
then the right of the Investors to use the Mandatory Registration Statement
(and the Prospectus relating thereto) for purposes of effecting offers or sales
of Registrable Shares pursuant thereto or the filing of the Mandatory
Registration Statement shall be suspended for a period (the "SUSPENSION
PERIOD") not greater than thirty (30) consecutive Business Days and not more
than sixty (60) Business Days during any consecutive twelve (12) month period.
During the Suspension Period, the Investors shall not offer or sell any
Registrable Shares pursuant to or in reliance upon the Mandatory Registration
Statement (or the Prospectus relating thereto). The Company agrees that, as
promptly as possible, but in no event later than one (1) Business Day after the
consummation, abandonment, public disclosure or other appropriate resolution of
the event or transaction that caused the Company to suspend the use of or delay
the filing of the Mandatory Registration Statement (and the Prospectus relating
thereto) pursuant to this Section 2(b), the Company will as promptly as
possible lift any suspension, provide the Investors with revised Prospectuses,
if required, and will notify the Investors of their ability to effect offers or
sales of Registrable Shares pursuant to or in reliance upon the Mandatory
Registration Statement.
(c) It shall be a condition precedent to the obligations of the
Company to register Registrable Shares for the account of an Investor pursuant
to this Section 2 or Section 2A that such Investor furnish to the Company such
information regarding itself, the Registrable Shares held by it, and the method
of disposition of such securities as shall be reasonably required to effect the
registration of such Investor's Registrable Shares.
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(d) Notwithstanding anything in this Agreement to the contrary, the
Investors' sole remedy for the failure of the Company to file the Mandatory
Registration Statement as promptly as possible after the date hereof, and in
any event on or prior to the Mandatory Filing Date, for the failure of the
Company to make effective the Mandatory Registration Statement on or prior to
the Mandatory Effective Date or for the failure to maintain the effectiveness
of the Mandatory Registration Statement during the Effectiveness Period (other
than during any Suspension Period), after such Mandatory Registration Statement
initially becomes effective shall be the vesting of the Warrants as provided
for therein.
2A "PIGGYBACK REGISTRATION".
(a) If, during the Effectiveness Period the Mandatory Registration
Statement is not or ceases to be effective and continues to be not effective
and during such time the Company proposes to register any of its Common Stock
under the Securities Act, whether as a result of an offering for its own
account or the account of others (but excluding any registrations to be
effected on Forms S-4 or S-8 or other applicable successor Forms) on a
Registration Statement that is to become effective prior to the expiration of
such Effectiveness Period, the Company shall, each such time, give to the
Investors twenty (20) days' prior written notice of its intent to do so, and
such notice shall describe the proposed registration and shall offer such
Investors the opportunity to include in such Registration Statement such number
of Registrable Shares as each such Investor may request. Upon the written
request of any Investor given to the Company within fifteen (15) days after the
receipt of any such notice by the Company, the Company shall include in such
Registration Statement all or part of the Registrable Shares of such Investor,
to the extent requested to be registered, subject to Section 2A(b).
(b) If a registration pursuant to Section 2A hereof involves an
underwritten offering and the managing underwriter shall advise the Company in
writing that, in its opinion, the number of shares of Common Stock requested by
the Investors to be included in such registration is likely to materially and
adversely affect the success of the offering or the price that would be
received for any shares of Common Stock included in such offering, then,
notwithstanding anything in this Section 2A to the contrary, the Company shall
only be required to include in such registration, to the extent of the number
of shares of Common Stock which the Company is so advised can be sold in such
offering, (i) first, any shares of Common Stock proposed to be included in such
registration for the account of the Company, and (ii) second, the number of
shares of Common Stock requested to be included in such registration for the
account of any stockholders of the Company (including the Investors), pro rata
among such stockholders on the basis of the number of shares of Common Stock
(including Warrant Shares) that each of them has requested to be included in
such registration.
(c) In connection with any offering involving an underwriting of
shares, the Company shall not be required under this Section 2A or otherwise to
include the Registrable Shares of any Investor therein unless such Investor
accepts and agrees to the terms of the underwriting, which shall be reasonable
and customary, as agreed upon between the Company and the underwriters selected
by the Company (which underwriters shall be reasonably acceptable to holders of
a majority of the then outstanding Registrable Shares).
3. OBLIGATIONS OF THE COMPANY. In connection with the Company's
registration obligations hereunder, the Company shall:
(a) as expeditiously as practicable (i) furnish to each Investor
copies of all documents to be filed with the SEC in connection with such
registration within a reasonable period prior to their being filed with the SEC
(and provide the Investors with a reasonable opportunity to review and comment
on such documents), (ii) use its best efforts to cause its officers and
directors, counsel and certified public accountants to respond to such
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inquiries as shall be necessary, in the reasonable opinion of such Investor, to
conduct a reasonable investigation within the meaning of the Securities Act,
and (iii) notify the Investors of any stop order issued or threatened by the
SEC and use best efforts to prevent the entry of such stop order or to remove
it if entered. (b) as expeditiously as practicable (i) prepare and file with
the SEC such amendments and supplements, including post-effective amendments,
to each Registration Statement and the Prospectus used in connection therewith
as may be necessary to comply with the Securities Act and to keep the
Registration Statement continuously effective as required herein, and prepare
and file with the SEC such additional Registration Statements as required by
this Agreement to register for resale under the Securities Act all of the
Registrable Shares (including naming any permitted transferees of Registrable
Shares as selling stockholders in such Registration Statement); (ii) cause any
related Prospectus to be amended or supplemented by any required Prospectus
supplement, and as so supplemented or amended to be filed pursuant to Rule 424
(including naming any permitted transferees of Registrable Shares as selling
stockholders in such Prospectus); (iii) respond as promptly as possible to any
comments received from the SEC with respect to each Registration Statement or
any amendment thereto, or any document filed with the SEC that would suspend
the effectiveness of the Registration Statement, and, if requested by any
Investor, as promptly as reasonably possible provide such Investor with true
and complete copies of all correspondence from and to the SEC relating to the
Registration Statement (other than those portions of any correspondence
containing material nonpublic information on the basis that, notwithstanding
the Company's offer to disclose and discuss material non-public information
with each Investor upon such Investor's entering into a mutually satisfactory
confidentiality agreement, at each Investor's request, if so requested, the
Company shall not, and shall cause each of its subsidiaries and its and each of
their respective officers, directors and employees, not to, provide any
Purchaser with any material nonpublic information regarding the Company or any
of its subsidiaries); and (iv) comply with the provisions of the Securities Act
and the Exchange Act with respect to the disposition of all Registrable Shares
covered by such Registration Statement as so amended or in such Prospectus as
so supplemented.
(c) Notify the Investors and Investors' counsel as promptly as
reasonably possible:
(i) when the SEC notifies the Company whether there will be a
"review" of each Registration Statement and whenever the SEC comments in
writing on such Registration Statement; and
(ii) when a Registration Statement, or any post-effective
amendment or supplement thereto, has become effective, and after the
effectiveness thereof: (A) of any request by the SEC or any other federal or
state governmental authority for amendments or supplements to the Registration
Statement or Prospectus or for additional information; (B) of the issuance by
the SEC or any state securities commission of any stop order suspending the
effectiveness of the Registration Statement covering any or all of the
Registrable Shares or the initiation of any proceedings for that purpose; and
(C) of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Registrable Shares for sale in any jurisdiction, or the initiation or
threatening of any proceeding for such purpose. Without limitation of any
remedies to which the Investors may be entitled under this Agreement, if any of
the events described in Section 3(c)(ii)(A), 3(c)(ii)(B), and 3(c)(ii)(C)
occur, the Company shall use its best efforts to respond to and correct the
event.
(d) Immediately notify the Investors and their counsel of the
happening of any event as a result of which the Prospectus included in or
relating to a Registration Statement contains an untrue statement of a material
fact or omits any fact necessary to make the statements therein not misleading;
and, thereafter, the Company will as promptly as possible prepare (and, when
completed, promptly give written notice to each Investor) a supplement to such
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Prospectus so that, as thereafter delivered to the purchasers of such
Registrable Shares, such Prospectus will not contain an untrue statement of a
material fact or omit to state any fact necessary to make the statements
therein not misleading; provided that upon receipt of such notification from
the Company, the Investors will not offer or sell Registrable Shares pursuant
to such Prospectus until the Company has notified the Investors that it has
prepared a supplement to such Prospectus and delivered copies of such
supplement to the Investors (it being understood and agreed by the Company that
the foregoing proviso shall in no way diminish or otherwise impair the
Company's obligation to as promptly as possible prepare a Prospectus supplement
as above provided in this Section 3(d) and deliver copies of same as provided
in Section 3(h) hereof), and it being further understood that, in the case of
the Mandatory Registration Statement, any such period during which the
Investors are restricted from offering or selling Registrable Shares shall
constitute a Suspension Period.
(e) Upon the occurrence of any event described in Section 3(d)
hereof, as promptly as possible, prepare a post-effective amendment to the
Registration Statement or a supplement to the related Prospectus or any
document incorporated or deemed to be incorporated therein by reference, and
file any other required document so that, as thereafter delivered, neither the
Registration Statement nor such Prospectus will contain an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances
under which they are made, not misleading.
(f) Use its best efforts to avoid the issuance of or, if issued,
obtain the withdrawal of, (i) any order suspending the effectiveness of any
Registration Statement or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Shares for sale in any
jurisdiction, as promptly as possible (it being understood that, in the case of
the Mandatory Registration Statement, any period during which the effectiveness
of the Mandatory Registration Statement or the qualification of any Registrable
Shares is suspended shall constitute a Suspension Period).
(g) Furnish to the Investors and their counsel, without charge, at
least one conformed copy of each Registration Statement and each amendment
thereto, and all exhibits to the extent requested by such Investor or their
counsel (including those previously furnished or incorporated by reference) as
promptly as possible after the filing of such documents with the SEC.
(h) As promptly as possible furnish to each selling Investor,
without charge, such number of copies of a Prospectus, including a preliminary
Prospectus, in conformity with the requirements of the Securities Act, and such
other documents (including, without limitation, Prospectus amendments and
supplements) as each such selling Investor may reasonably request in order to
facilitate the disposition of the Registrable Shares covered by such Prospectus
and any amendment or supplement thereto. The Company hereby consents to the use
of such Prospectus and each amendment or supplement thereto by each of the
selling Investors in connection with the offering and sale of the Registrable
Shares covered by such Prospectus and any amendment or supplement thereto to
the extent permitted by federal and state securities laws and regulations.
(i) Use its best efforts to register and qualify (or obtain an
exemption from such registration and qualification) the Registrable Shares
under such other securities or blue sky laws of the states of residence of each
Investor and such other U.S. jurisdictions as each Investor shall reasonably
request, to keep such registration or qualification (or exemption therefrom)
effective during the periods each Registration Statement is effective, and do
any and all other acts or things which may be reasonably necessary or advisable
to enable each Investor to consummate the public sale or other disposition of
Registrable Shares in such jurisdictions, provided that the Company shall not
be required in connection therewith or as a condition thereto to qualify to do
business, subject itself to taxation or to file a general consent to service of
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process in any such states or jurisdictions where it is not then qualified or
subject to process.
(j) Cooperate with the Investors to facilitate the timely
preparation and delivery of certificates representing the Registrable Shares to
be delivered to a transferee pursuant to a Registration Statement, which
certificates shall be free, to the extent permitted by the Securities Purchase
Agreement and applicable law, of all restrictive legends, and to enable such
Registrable Shares to be in such denominations and registered in such names as
such Investors may request.
(k) Cooperate with any reasonable due diligence investigation
undertaken by the Investors, any managing underwriter participating in any
disposition pursuant to a Registration Statement, Investors' counsel and any
attorney, accountant or other agent retained by Investors or any managing
underwriter, in connection with the sale of the Registrable Shares, including,
without limitation, making available any documents and information.
Notwithstanding the Company's offer to disclose and discuss material non-public
information with each Investor upon such Investor's entering into a mutually
satisfactory confidentiality agreement, at each Investor's request, if so
requested, the Company shall not, and shall cause each of its subsidiaries and
its and each of their respective officers, directors and employees, not to,
provide any Purchaser with any material nonpublic information regarding the
Company or any of its subsidiaries.
(l) At the request of an Investor to include any Affiliate of such
Investor as a selling stockholder, the Company shall amend any Registration
Statement to include such Affiliate as a selling stockholder in such
Registration Statement.
(m) Comply with all applicable rules and regulations of the SEC in
all material respects.
(n) Make available for inspection by each Investor, any underwriter
participating in any disposition pursuant to any registration hereunder, and
any attorney, accountant or other agent retained by such Investor or any such
underwriter (collectively, the "INSPECTORS"), all financial and other records,
pertinent corporate documents and properties of the Company and any of its
subsidiaries (collectively, the "RECORDS") as shall be reasonably necessary to
enable them to exercise their due diligence responsibility, and cause the
officers, directors and employees of the Company to supply all information
reasonably requested by any such Inspector in connection with any registration
hereunder, provided, however, that (i) in connection with any such inspection,
any such Inspectors shall cooperate to the extent reasonably practicable to
minimize any disruption to the operation by the Company of its business and
shall comply with all Company site safety rules, (ii) Records and information
obtained hereunder shall be used by such Inspectors only to exercise their due
diligence responsibility and (iii) Records or information furnished or made
available hereunder shall be kept confidential and shall not be disclosed by
such Investor or Inspectors unless (A) the disclosing party advises the other
party that the disclosure of such Records or information is necessary to avoid
or correct a misstatement or omission in a Registration Statement or is
otherwise required by law, (B) the release of such Records or information is
ordered pursuant to a subpoena or other order from a court or governmental
authority of competent jurisdiction, or (C) such Records or information
otherwise become generally available to the public other than through
disclosure by such Investor or Inspector in breach hereof or by any Person in
breach of any other confidentiality arrangement.
(o) Use all reasonable efforts to furnish to each Investor and to
the managing underwriter, if any, a signed counterpart, addressed to such
Investor and the managing underwriter, if any, of (i) an opinion or opinions of
counsel to the Company and (ii) a comfort letter or comfort letters from the
Company's independent public accountants pursuant to Statement on Auditing
Standards No. 72, each in customary form and covering such matters of the type
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customarily covered by opinions or comfort letters, as the case may be, as each
such Investor and the managing underwriter, if any, reasonably requests.
(p) In connection with any registration hereunder, provide officers'
certificates and other customary closing documents.
(q) Cooperate with each seller of Registrable Shares, Investor and
any underwriter in the disposition of such Registrable Shares and cooperate
with underwriters' counsel, if any, in connection with any filings required to
be made with the National Association of Securities Dealers, Inc.
(r) With respect to an underwritten offering of Registrable Shares,
use its reasonable best efforts to cause all such Registrable Shares to be
listed on each securities exchange on which similar securities issued by the
Company are then listed.
4. EXPENSES OF REGISTRATION. The Company shall pay for all expenses
incurred in connection with a registration pursuant to this Agreement and
compliance with Section 3 of this Agreement, including without limitation (i)
all registration, filing and qualification fees and expenses (including without
limitation those related to filings with the SEC, The NASDAQ Stock Market, or
any national securities exchange upon which the Company's securities are listed
and in connection with applicable state securities or blue sky laws), (ii) all
printing expenses, (iii) all messenger, telephone and delivery expenses
incurred by the Company, (iv) all reasonable fees and disbursements of one (1)
counsel for the Investors, and (v) all reasonable fees and expenses of all
other Persons retained by the Company in connection with the consummation of
the transactions contemplated by this Agreement.
5. DELAY OF REGISTRATION. Subject to Section 10(d) hereof, the Investors
and the Company (other than with respect to Sections 2(d) or 3(d) hereof) shall
not take any action to restrain, enjoin or otherwise delay any registration as
the result of any controversy which might arise with respect to the
interpretation or implementation of this Agreement.
6. INDEMNIFICATION. In the event that any Registrable Shares of the
Investors are included in a Registration Statement pursuant to this Agreement:
(a) To the fullest extent permitted by law, the Company will
indemnify and hold harmless each Investor and each officer, director,
fiduciary, employee, member, agent, investment advisor, (or other equity
holder), general partner and limited partner (and affiliates thereof) of such
Investor, each broker, underwriter or other person acting on behalf of such
Investor and each person, if any, who controls such Investor within the meaning
of the Securities Act, against any expenses, losses, claims, damages, actions
or liabilities, joint or several, (the "LOSSES") to which they may become
subject under the Securities Act or otherwise, insofar as such Losses (or
actions in respect thereof) arise out of or relate to any untrue or alleged
untrue statement of any material fact contained in the Registration Statement,
or arise out of or relate to the omission or alleged omission to state therein
a material fact required to be stated therein, or necessary to make the
statements therein not misleading, or any violation by the Company of the
Securities Act or state securities or blue sky laws applicable to the Company;
and, subject to the provisions of Section 6(c) hereof, the Company will
reimburse on demand such Investor, such broker or other person acting on behalf
of such Investor and such officer, director, fiduciary, agent, investment
advisor, employee, member (or other equity holder), general partner, limited
partner, affiliate or controlling person for any legal or other expenses
reasonably incurred by any of them in connection with investigating or
defending any such Loss; provided, however, that the indemnity agreement
contained in this Section 6(a) shall not apply to amounts paid in settlement of
any such Losses if such settlement is effected without the consent of the
Company (which consent shall not be unreasonably withheld), nor shall the
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Company be liable in any such case for any such Loss to the extent that it
solely arises out of or is based upon an untrue statement of any material fact
contained in the Registration Statement or omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent that such untrue statement or
alleged untrue statement or omission or alleged omission was made in the
Registration Statement, in reliance upon and in conformity with written
information furnished by such Investor expressly for use in connection with
such Registration Statement.
(b) To the fullest extent permitted by law, each Investor, severally
(as to itself) and not jointly, will indemnify and hold harmless the Company,
each of its directors, each of its officers who have signed the Registration
Statement, each person, if any, who controls the Company within the meaning of
the Securities Act, and all other Investors against any Losses to which the
Company or any such director, officer or controlling person or other Investor
may become subject to, under the Securities Act or otherwise, insofar as such
Losses (or actions in respect thereto) solely arise out of or are based upon
any untrue statement of any material fact contained in the Registration
Statement, or solely arise out of or relate to the omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent that such untrue statement
or alleged untrue statement or omission or alleged omission was made in the
Registration Statement in reliance upon and in conformity with written
information furnished by such Investor expressly for use in connection with
such Registration Statement; and, subject to the provisions of Section 6(c)
hereof, such Investor will reimburse on demand any legal or other expenses
reasonably incurred by the Company or any such director, officer, controlling
person, or other Investor in connection with investigating or defending any
such Losses, provided, however, that the maximum aggregate amount of liability
of such Investor under this Section 6 shall be limited to the proceeds (net of
underwriting discounts and commissions, if any) actually received by such
Investor from the sale of Registrable Shares covered by such Registration
Statement; and provided, further, however, that the indemnity agreement
contained in this Section 6(b) or 6(e) shall not apply to amounts paid in
settlement of any such Losses if such settlement is effected without the
consent of such Investor against which the request for indemnity is being made
(which consent shall not be unreasonably withheld).
(c) As promptly as possible after receipt by an indemnified party
under this Section 6 of notice of the threat, assertion or commencement of any
action, such indemnified party will, if a claim in respect thereof is to be
made against any indemnifying party under this Section 6, notify the
indemnifying party in writing of the commencement thereof and the indemnifying
party shall have the right to participate in and, to the extent the
indemnifying party desires, jointly with any other indemnifying party similarly
noticed, to assume at its expense the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that, the failure to notify an
indemnifying party promptly of the threat, assertion or commencement of any
such action shall not relieve such indemnifying party of any liability to the
indemnified party under this Section 6 except (and only) to the extent that it
shall be finally determined by a court of competent jurisdiction (which
determination is not subject to appeal or further review) that such failure
shall have proximately and materially adversely prejudiced the indemnifying
party.
(d) If any indemnified party shall have reasonably concluded that
there may be one or more legal defenses available to such indemnified party
which are different from or additional to those available to the indemnifying
party, or that such claim or litigation involves or could have an effect upon
matters beyond the scope of the indemnity agreement provided in this Section 6,
the indemnifying party shall not have the right to assume the defense of such
action on behalf of such indemnified party, and such indemnifying party shall
reimburse such indemnified party and any person controlling such indemnified
party for the fees and expenses of counsel retained by the indemnified party
which are reasonably related to the matters covered by the indemnity agreement
provided in this Section 6. Subject to the foregoing, an indemnified party
-9-
shall have the right to employ separate counsel in any such action and to
participate in the defense thereof but the fees and expenses of such counsel
shall not be at the expense of the Company. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written
consent, which consent shall not be unreasonably withheld. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending proceeding in respect of which any indemnified
party is a party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding
(e) If the indemnification provided for in this Section 6 from the
indemnifying party is applicable by its terms but unavailable to an indemnified
party hereunder in respect of any Losses, then the indemnifying party, in lieu
of indemnifying such indemnified party, shall, subject to the maximum aggregate
liability of any Investor as set forth in Section 6(b), contribute to the
amount paid or payable by such indemnified party as a result of such Losses in
such proportion as is appropriate to reflect the relative fault of the
indemnifying party and indemnified party in connection with the actions which
resulted in such Losses, as well as any other relevant equitable
considerations. The relative faults of such indemnifying party and indemnified
party shall be determined by reference to, among other things, whether any
action in question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such indemnifying party or
indemnified party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid
or payable by a party as a result of the Losses referred to above shall be
deemed to include, subject to the limitations set forth in Sections 6(a), 6(b),
6(c) and 6(d), any legal or other fees, charges or expenses reasonably incurred
by such party in connection with any investigation or proceeding. No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation. The parties hereto agree that
it would not be just and equitable if contribution pursuant to this Section
6(e) were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred
to in the immediately preceding paragraph.
(f) The indemnity and contribution agreements contained in this
Section 6 are in addition to any liability that any indemnifying party may have
to any indemnified party.
7. REPORTS UNDER THE EXCHANGE ACT. With a view to making available to the
Investors the benefits of Rule 144 and any other rule or regulation of the SEC
that may at any time permit the Investors to sell the Registrable Shares to the
public without registration, the Company agrees to use its best efforts to: (i)
make and keep public information available, as those terms are understood and
defined in Rule 144, (ii) file with the SEC in a timely manner all reports and
other documents required to be filed by an issuer of securities registered
under the Securities Act or the Exchange Act; (iii) as long as any Investor
owns any Shares or Warrant Shares, to furnish in writing upon an Investor's
request in writing to the Company a written statement by the Company that it
has complied with the reporting requirements of Rule 144 and of the Securities
Act and the Exchange Act, and to furnish to such Investor a copy of the most
recent annual and quarterly reports of the Company, and such other reports and
documents so filed by the Company as may be reasonably requested in writing to
the Company by the Investor in availing such Investor of any rule or regulation
of the SEC permitting the selling of any such Shares and Warrant Shares without
registration, and (iv) undertake any additional actions reasonably necessary to
maintain the availability of a Registration Statement, including any successor
or substitute forms, or the use of Rule 144.
8. TRANSFER OF REGISTRATION RIGHTS. Each Investor may assign or transfer
any or all of its rights under this Agreement to any Person to the extent a
transfer of the Shares, Warrant Shares or Warrant Shares, as applicable, is
-10-
permitted under the Securities Purchase Agreement with respect to the Shares,
Warrant Shares or the Warrant, provided such assignee or transferee agrees in
writing to be bound by the provisions hereof that apply to such assigning or
transferring Investor. Upon any such, and each successive, assignment or
transfer to any permitted assignee or transferee in accordance with the terms
of this Section 8, such permitted assignee or transferee shall be deemed to be
an "Investor" for all purposes of this Agreement.
9. ENTIRE AGREEMENT. This Agreement, the Securities Purchase Agreement
and the Warrants constitute the entire agreement between the parties hereto and
thereto respecting the subject matter hereof and thereof and supersede all
prior agreements, negotiations, understandings, representations and statements
respecting the subject matter hereof and thereof, whether written or oral,
including but not limited to the various Term Sheets dated December 2004
between the Company and the Investors.
10. MISCELLANEOUS.
(a) This Agreement, and any right, term or provision contained
herein, may not be amended, modified or terminated, and no right, term or
provision may be waived, except with the written consent of (i) the holders of
a majority of the then outstanding Registrable Shares and (ii) the Company;
provided that any amendment or modification that is materially and
disproportionately adverse to any particular Investor (as compared to all
Investors as a group) shall require the consent of such Investor.
(b) This Agreement shall be governed by and construed and enforced
in accordance with the laws of the State of New York without regard to any
conflicts of laws concepts which would apply the substantive law of another
jurisdiction. This Agreement shall be binding upon the parties hereto and their
respective heirs, personal representatives, successors and permitted assigns
and transferees, provided that the terms and conditions of Section 8 hereof are
satisfied. The Company may not assign this Agreement or its rights and
obligations hereunder without the consent of holders of a majority of the then
outstanding Registrable Shares. Notwithstanding anything in this Agreement to
the contrary, if at any time any Investor (including any successors or assigns)
shall cease to own any Registrable Shares, all of such Investor's rights under
this Agreement shall immediately terminate.
(c) 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.
All correspondence to the Company shall be addressed as follows:
SkyTerra Communications, Inc.
00 Xxxx 00xx Xxxxxx, Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: 000-000-0000
Attn: Chief Executive Officer
-11-
with copies (which shall not constitute notice) to:
SkyTerra Communications, Inc.
00 Xxxx 00xx Xxxxxx, Xxxxx 000
Xxx Xxxx, Xxx Xxxx 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
All correspondence to the Investors shall be addressed pursuant to the contact
information set forth on Schedule I attached hereto.
Any entity may change the address to which correspondence to it is to be
addressed by notification as provided for herein.
(d) Except as provided for in Section 2(d), the parties acknowledge
and agree that in the event of any breach of this Agreement, remedies at law
will be inadequate, and each of the parties hereto shall be entitled to
specific performance of the obligations of the other parties hereto and to such
appropriate injunctive relief as may be granted by a court of competent
jurisdiction. All remedies, either under this Agreement or by law or otherwise
afforded to any of the parties, shall be cumulative and not alternative, except
as otherwise provided in Section 2(d).
(e) This Agreement may be executed in a number of counterparts. All
such counterparts together shall constitute one Agreement, and shall be binding
on all the parties hereto notwithstanding that all such parties have not signed
the same counterpart. 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.
(f) Except as contemplated in Section 8 hereof, this Agreement is
intended solely for the benefit of the parties hereto 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 Company)
other than the parties hereto.
(g) If any provision of this Agreement is invalid, illegal or
unenforceable, such provision shall be ineffective to the extent, but only to
the extent of, such invalidity, illegality or unenforceability, without
invalidating the remainder of such provision or the remaining provisions of
this Agreement, unless such a construction would be unreasonable.
[Signature Pages Follow]
-12-
IN WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement as of the date and year first above written.
SKYTERRA COMMUNICATIONS, INC.
By: /s/ Xxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
INVESTORS:
Entities:
--------
LC CAPITAL MASTER FUND, LTD
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Director
YORK CAPITAL MANAGEMENT, L.P.
By: /s/ Xxxx X. Xxxxxx
---------------------------------
Name: Xxxx X. Xxxxxx
Title: CFO
YORK INVESTMENT LIMITED
By: /s/ Xxxx X. Xxxxxx
---------------------------------
Name: Xxxx X. Xxxxxx
Title: CFO of its investment
manager
YORK CREDIT OPPORTUNITIES FUND, L.P.
By: /s/ Xxxx X. Xxxxxx
---------------------------------
Name: Xxxx X. Xxxxxx
Title: CFO
YORK SELECT, L.P.
By: /s/ Xxxx X. Xxxxxx
---------------------------------
Name: Xxxx X. Xxxxxx
Title: CFO
YORK SELECT UNIT TRUST
By: /s/ Xxxx X. Xxxxxx
---------------------------------
Name: Xxxx X. Xxxxxx
Title: CFO of its investment
manager
YORK GLOBAL VALUE PARTNERS, L.P.
By: /s/ Xxxx X. Xxxxxx
---------------------------------
Name: Xxxx X. Xxxxxx
Title: CFO
YORK/GREEN CAPITAL PARTNERS, L.P.
By: /s/ Xxxx X. Xxxxxx
---------------------------------
Name: Xxxx X. Xxxxxx
Title: CFO
THE TUDOR BVI GLOBAL PORTFOLIO LTD.
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Managing Director
TUDOR PROPRIETARY TRADING, L.L.C.
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Managing Director
WITCHES ROCK PORTFOLIO LTD.
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Managing Director
FLEET MARITIME, INC.
By: Oz Management, LLC
By: /s/ Xxxxxx X. Och
---------------------------------
Name: Xxxxxx X. Och
Title: Senior Managing Director
OZ MASTER FUND, LTD.
By: Oz Management, LLC
By: /s/ Xxxxxx X. Och
---------------------------------
Name: Xxxxxx X. Och
Title: Senior Managing Director
XXXXXXX DISTRESSED INVESTMENT MASTER
FUND, LTD.
By: Xxxxxxx Distressed Investment
Offshore Manager, LLC
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
GREYWOLF CAPITAL OVERSEAS FUND
By: /s/ Xxxxxxx Xxxx
---------------------------------
Name: Xxxxxxx Xxxx
Title: Chief Operating Officer
GREYWOLF CAPITAL PARTNERS II LP
By: /s/ Xxxxxxx Xxxx
---------------------------------
Name: Xxxxxxx Xxxx
Title: Chief Operating Officer
MILLENNIUM PARTNERS, L.P.
By: Millenium Management, L.L.C.
By: /s/ Xxxxx Xxxxxx
---------------------------------
Name: Xxxxx Xxxxxx
Title: Chief Operating Officer
SECOND XXXX & XXXXX XXXXXX
CHILDREN'S TRUST
By: /s/ Xxxxxx Xxxxxx
---------------------------------
Name: Xxxxxx Xxxxxx
Title: Trustee
ORE HILL HUB FUND LTD.
By: Ore Hill Partners, LLC, its
investment advisor
By: /s/ Xxxxxxxx X. Xxxx
-----------------------------
Name: Xxxxxxxx X. Xxxx
Title: Managing Member
XERION PARTNERS I LLC
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
Paloma GP LLC
Manager
ALPHA US SUB FUND VI, LLC
By: The Harbinger Group, Inc.*
By: /s/ Xxxx X. Pinssick
---------------------------------
Name: Xxxx X. Pinssick
Title: Vice President
* Pursuant to the Investment
Advisory Agreement dated
April 29, 2003
TEJAS SECURITIES GROUP, INC.
By: /s/ Xxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxx X. Xxxxx
Title: Managing Director
Individuals:
-----------
XXXXXX X. XXXXXXX
/s/ Xxxxxx X. Xxxxxxx
------------------------------------
Signature: Xxxxxx X. Xxxxxxx
for XXX
Schedule I
List of Investors
Investor
LC Capital Master Fund, Ltd
X/x Xxxxx, Xxxxxx & Xx LLC
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
York Capital Management, L.P.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
York Investment Limited
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
York Select, L.P.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
York Credit Opportunities Fund, L.P.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
York Select Unit Trust
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
York Global Value Partners, L.P.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
York/Green Capital Partners, L.P.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Xxxxxx X. Xxxxxxx
00 Xxxxxxxx Xxxxxx
Xxx Xxxxxx, XX 00000
The Tudor BVI Global Portfolio Ltd.
C/o Tudor Investments Corporation
00 Xxxxx Xxxxx
0xx Xxxxx
Xxxxxx, XX 00000
Tudor Proprietary Trading, L.L.C.
00 Xxxxx Xxxxx
0xx Xxxxx
Xxxxxx, XX 00000
Witches Rock Portfolio Ltd.
C/o Tudor Investments Corporation
00 Xxxxx Xxxxx
0xx Xxxxx
Xxxxxx, XX 00000
Fleet Maritime, Inc.
C/o OZ Management, L.L.C.
0 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
OZ Master Fund, Ltd.
C/o OZ Management, L.L.C.
0 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Xxxxxxx Distressed Investment Master Fund, Ltd.
X/x 000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Greywolf Capital Overseas Fund
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Greywolf Capital Partners II LP
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Millennium Partners, L.P.
000 Xxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, XX, 00000
Second Xxxx & Xxxxx Xxxxxx Children's Trust
C/o Romulus Holdings, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxxxx Xxxxxx, XX 00000
Ore Hill Hub Fund Ltd.
000 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
Xerion Partners I LLC
X/x Xxxxx Xxxxxxx
0 Xxxxxxxx Xxxx
Xxxxxxxxx, XX 00000-0000
Alpha US Sub Fund VI, LLC
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Xxxxx Securities Group, Inc.
0000 Xxx Xxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
