Exhibit E
CONFIDENTIAL
------------
Dated July 24, 2008
HARBINGER CAPITAL PARTNERS MASTER FUND I, LTD
and
HARBINGER CAPITAL PARTNERS SPECIAL SITUATIONS FUND, L.P.
and
HARBINGER CAPITAL PARTNERS FUND I, L.P.
and
HARBINGER CO-INVESTMENT FUND, L.P.
and
SKYTERRA COMMUNICATIONS, INC
and
MOBILE SATELLITE VENTURES SUBSIDIARY LLC
and
MOBILE SATELLITE VENTURES L.P.
MASTER CONTRIBUTION AND SUPPORT AGREEMENT
Table of Contents
Page
ARTICLE I
DEFINITIONS
Section 1.1 Certain Definitions..............................................9
Section 1.2 Other Definitional and Interpretive Matters.....................27
ARTICLE II
ASSET CONTRIBUTIONS
Section 2.1 Agreement to Contribute Assets..................................28
Section 2.2 Contribution Closings...........................................29
ARTICLE III
HARBINGER PURCHASED SHARES
Section 3.1 Stock Purchase..................................................31
Section 3.2 Closing.........................................................31
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF HARBINGER
Section 4.1 Corporate Status, Power and Authority...........................31
Section 4.2 No Conflicts....................................................32
Section 4.3 No Consents Required............................................32
Section 4.4 Unregistered Securities.........................................33
Section 4.5 Ownership of Contribution Shares and Convertible Bonds..........34
Section 4.6 Litigation......................................................35
Section 4.7 Advisors........................................................35
Section 4.8 TVCC............................................................35
Section 4.9 FIRPTA..........................................................39
Section 4.10 Tax Matters....................................................39
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND MSV
Section 5.1 Corporate Status................................................39
Section 5.2 Capitalization..................................................40
Section 5.3 Corporate Power and Authority...................................41
Section 5.4 Valid Issuance of Harbinger Shares..............................41
Section 5.5 No Violation....................................................41
Section 5.6 No Consents Required............................................42
Section 5.7 Company Financial Statements; Indebtedness......................42
Section 5.8 Business Plan...................................................42
Section 5.9 Internal Accounting Controls....................................42
Section 5.10 No Material Adverse Effects....................................43
Section 5.11 Independent Accountants........................................43
Section 5.12 Litigation.....................................................43
Section 5.13 Tax Matters....................................................43
Section 5.14 Subsidiaries...................................................44
Section 5.15 Properties.....................................................44
Section 5.16 Authorizations.................................................44
Section 5.17 Permits........................................................45
Section 5.18 Leases.........................................................46
Section 5.19 Intellectual Property..........................................46
Section 5.20 Insurance......................................................47
Section 5.21 No Defaults....................................................47
Section 5.22 Conformity to Securities Act and Exchange Act; No
Misstatement or Omission.......................................47
Section 5.23 Satellites.....................................................47
Section 5.24 Employee Benefits..............................................48
Section 5.25 Labor Matters..................................................50
Section 5.26 No Undisclosed Relationships...................................51
Section 5.27 Related Party Transactions.....................................52
Section 5.28 Company Not an "Investment Company"............................52
Section 5.29 No Unlawful Payments; Compliance with Certain Laws.............52
Section 5.30 No Restriction on Distributions................................53
Section 5.31 No Brokers.....................................................53
Section 5.32 No Other Representations or Warranties.........................53
ARTICLE VI
CLOSING DELIVERIES
Section 6.1 Deliveries by Harbinger at the Closings.........................53
Section 6.2 Deliveries by the Company, and MSV at the Closings..............54
ARTICLE VII
POSSIBLE OFFER FOR TARGET
Section 7.1 Other Agreements................................................55
Section 7.2 Possible Offer Announcement.....................................56
Section 7.3 Legal and Regulatory Requirements in Connection with Possible
Offer Announcement..............................................56
ARTICLE VIII
REGULATORY APPROVALS
Section 8.1 General.........................................................56
Section 8.2 Cooperation.....................................................57
Section 8.3 FCC Approval....................................................58
Section 8.4 HSR Act.........................................................59
Section 8.5 EC Merger Regulation............................................59
Section 8.6 Other Anti-Trust Approvals......................................59
Section 8.7 Other Telecommunications/Frequency Approvals....................60
Section 8.8 Failure to Obtain Initial Agreed Regulatory Approvals...........60
Section 8.9 Conditions to Regulatory Approvals..............................60
Section 8.10 Waiver of Regulatory Approvals without Consent.................61
Section 8.11 Waiver of Initial Agreed Regulatory Approvals with Consent ....61
Section 8.12 Notification of Satisfaction Date..............................61
ARTICLE IX
STOCKHOLDER APPROVALS
Section 9.1 Stockholder Approval............................................61
Section 9.2 Board Approval..................................................62
Section 9.3 Information Statement, Other Filings............................62
Section 9.4 Written Consent of Board and Harbinger Share Ownership..........63
Section 9.5 No Other Stockholder Approvals Required.........................64
Section 9.6 Filing of Certificate of Amendment of Certificate of
Incorporation...................................................64
ARTICLE X
OFFER SHARES
Section 10.1 Offer Shares...................................................64
Section 10.2 Other Procedural Matters relating to the Offer Shares..........65
ARTICLE XI
EQUITY FINANCING
Section 11.1 Funding of the Harbinger Satellite Fund........................66
Section 11.2 Harbinger Purchased Shares.....................................66
Section 11.3 Financing Rights Offering......................................67
Section 11.4 Financing Rights Prospectus, Other Financing Rights Filings....67
Section 11.5 Financing Rights Subscription Privilege and Financing Rights
Subscription Price.............................................69
Section 11.6 Exercise of the Financing Rights Subscription Privilege........69
Section 11.7 Transferability of the Financing Rights Subscription
Privileges.....................................................69
Section 11.8 Irrevocable Exercise...........................................69
Section 11.9 Fractional Shares..............................................69
Section 11.10 Fees and Expenses.............................................69
Section 11.11 Use of Proceeds from the Financing Rights Offering............69
Section 11.13 No Standby Purchase Agreement.................................70
ARTICLE XII
DEBT FINANCING
Section 12.1 Agreement to Procure Financing.................................70
ARTICLE XIII
FIRM OFFER DECISION
Section 13.1 Application of Article XIII....................................72
Section 13.2 Preparation for Notification...................................72
Section 13.3 Notification...................................................73
Section 13.4 Bring Down Certificate.........................................74
Section 13.5 Company's Board Meeting........................................74
Section 13.6 Firm Offer Finalization........................................74
Section 13.7 Firm Offer Announcement........................................75
Section 13.8 Reimbursement of Fees..........................................75
ARTICLE XIV
TERMS OF THE FIRM OFFER
Section 14.1 Terms of the Offer.............................................75
Section 14.2 Waiver, Satisfaction and Invocation of Conditions..............77
Section 14.3 Implementation of Proposal.....................................78
Section 14.4 Advisors to the Firm Offer.....................................78
Section 14.6 Disclosure in Documents........................................79
Section 14.7 Content of Documents...........................................79
Section 14.8 Amendment Veto Matters.........................................79
ARTICLE XV
CONDUCT OF OFFER
Section 15.1 Conduct of the Parties.........................................80
Section 15.2 Implementation Agreement.......................................81
Section 15.3 Potential Payments under the Implementation Agreement..........81
ARTICLE XVI
PRE-CLOSING COVENANTS
Section 16.1 Business Covenants of the Company..............................82
Section 16.2 Communication with Regulatory Authorities......................85
Section 16.3 Information Rights.............................................85
Section 16.4 Access Rights .................................................86
Section 16.5 Supplying Information .........................................86
Section 16.6 Investment Company..............................................86
Section 16.7 Publicity......................................................86
Section 16.8 Blue Sky Compliance............................................86
Section 16.9 No General Solicitation or General Selling Efforts.............87
Section 16.10 Licenses......................................................87
Section 16.11 Non Solicit...................................................87
Section 16.12 Compliance with Laws..........................................87
Section 16.13 Triggering Investments........................................87
Section 16.14 Phase 1 Notice................................................88
Section 16.15 Business Covenants of Harbinger...............................88
Section 16.16 Confidentiality Agreement.....................................89
Section 16.17 Waiver of Right of First Negotiation/ Pro Rata
Participation Rights .........................................89
Section 16.18 Waiver of Antidilution Adjustments ...........................89
Section 16.19 Amendment of 16.5% Notes......................................89
ARTICLE XVII
SPONSOR FEE
Section 17.1 Sponsor Fee....................................................90
ARTICLE XVIII
INDEMNIFICATION
Section 18.1 Indemnification for Misstatements or Omissions in Public
Documents......................................................91
ARTICLE XIX
NO-DEAL RIGHTS OFFERING
Section 19.1 No-Deal Rights Offering........................................92
Section 19.2 No-Deal Rights Prospectus, Other No-Deal Rights Filings........92
Section 19.4 Exercise of the No-Deal Rights Subscription Privilege .........94
Section 19.5 Transferability of the No-Deal Rights Subscription
Privileges.....................................................94
Section 19.6 Adjustment of No-Deal Rights Subscription Price................94
Section 19.7 Irrevocable Exercise...........................................95
Section 19.8 Fractional Shares..............................................95
Section 19.9 No-Deal Over Subscription Rights...............................95
Section 19.10 Fees and Expenses.............................................95
Section 19.11 Proceeds from the No-Deal Rights Offering.....................95
Section 19.12 No Underwriting...............................................95
Section 19.13 No Standby Purchase Agreement.................................96
Section 19.14 Termination of the No-Deal Rights Offering....................96
ARTICLE XX
AMENDED PROPOSALS
Section 20.1 Amended Proposals..............................................96
Section 20.2 Alternative Method of Contributing the Contribution Shares,
the Converted Shares and/or the Convertible Bonds..............96
Section 20.3 Conversion/Exchange of Non-Voting Common Stock.................97
ARTICLE XXI
MISCELLANEOUS
Section 21.1 Governing Law..................................................99
Section 21.2 Jurisdiction...................................................99
Section 21.3 Notices........................................................99
Section 21.4 Further Assurances............................................100
Section 21.5 Specific Performance..........................................101
Section 21.6 Assignments...................................................101
Section 21.7 Counterparts..................................................101
Section 21.8 Waivers.......................................................101
Section 21.9 Entire Agreement..............................................101
Section 21.10 Amendments in Writing........................................101
Section 21.11 Changes in Capital Structure.................................102
Section 21.12 Reimbursement of Costs.......................................102
Section 21.13 Termination..................................................102
Section 21.14 Several Obligations..........................................103
ANNEX A
OWNERSHIP OF CONTRIBUTION SHARES AND CONVERTIBLE BONDS.........106
EXHIBIT A
STOCK PURCHASE AGREEMENT.......................................107
EXHIBIT B
SECURITIES PURCHASE AGREEMENT..................................108
EXHIBIT C
POSSIBLE OFFER ANNOUNCEMENT....................................109
EXHIBIT D
REGISTRATION RIGHTS AGREEMENT..................................110
EXHIBIT E
CONSULTING AGREEMENT...........................................111
EXHIBIT F
HARBINGER CERTIFICATE..........................................112
EXHIBIT G
BRING DOWN CERTIFICATE.........................................113
EXHIBIT H
TVCC CERTIFICATE...............................................114
This MASTER CONTRIBUTION AND SUPPORT AGREEMENT (this "Agreement") is
dated as of July 24, 2008, by and among (i) HARBINGER CAPITAL PARTNERS MASTER
FUND I, LTD, an exempted company organized under the Laws of the Cayman Islands
("Harbinger Master"), (ii) HARBINGER CAPITAL PARTNERS SPECIAL SITUATIONS FUND,
L.P., a Delaware limited partnership ("Harbinger Special"), (iii) HARBINGER
CAPITAL PARTNERS FUND I, L.P., a Delaware Limited partnership ("Harbinger
Fund"), (iv) HARBINGER CO-INVESTMENT FUND, L.P., a Delaware limited partnership
(the "Harbinger Satellite Fund", and together with Harbinger Master, Harbinger
Special and Harbinger Fund, "Harbinger"), (v) SKYTERRA COMMUNICATIONS, INC., a
Delaware corporation (the "Company"), (vi) MOBILE SATELLITE VENTURES SUBSIDIARY
LLC, a Delaware limited liability company ("MSV LLC"), and (vii) MOBILE
SATELLITE VENTURES L.P., a Delaware limited partnership ("MSV"). Each of
Harbinger Master, Harbinger Special, Harbinger Fund, Harbinger Satellite Fund,
the Company, MSV LLC and MSV is hereinafter referred to as a "Party" and
collectively as the "Parties".
WHEREAS, Harbinger Master and Harbinger Special, as outlined in Annex
A, currently owns or has the power to cause the disposition (or, in the case of
the TVCC LLC Interests, will, as of the Option Closing Date, own or have the
power to cause the disposition) of (i) 132,041,000 ordinary voting shares (the
"Contribution Shares") issued by Inmarsat plc (the "Target"), (ii) 1.75%
convertible bonds due 2017 issued by the Target having an aggregate principal
value of $37,600,000 or such other principal value as is at the relevant time
owned by Harbinger Master and Harbinger Special (the "Convertible Bonds") and
(iii) 150,000,000 Class A Preferred Units (the "Class A Preferred Units") issued
by TVCC Holding Company, LLC, a Delaware limited liability company ("TVCC"),
50,000,000 Class B Preferred Units (the "Class B Preferred Units") issued by
TVCC and 300,000,000 Common Units issued by TVCC (the "Common Units" and,
together with the Class A Preferred Units and the Class B Preferred Units, the
"TVCC LLC Interests" and, together with the Contribution Shares and the
Convertible Bonds, the "Contribution Assets"). As of the Option Closing Date
TVCC will control 5MHz of nationwide (US), contiguous unpaired spectrum from
1670-1675 MHz (the "1.6 Spectrum");
WHEREAS, Harbinger and the Company are considering the proposed
acquisition of up to the entire issued and to be issued share capital of the
Target (other than the shares already held by Harbinger Master and Harbinger
Special, or the Company or any of its Subsidiaries, whether pursuant to this
Agreement or otherwise, in the capital of the Target) (the "Proposal"). In
conjunction with the Proposal, subject to the terms and conditions set forth
herein, Harbinger wishes to contribute the Contribution Assets to the Company in
exchange for shares of voting common stock of par value $0.01 per share of the
Company (the "Voting Common Stock") and the Company wishes to acquire the
Contribution Assets in exchange for shares of Voting Common Stock subject to the
terms and conditions set forth in this Agreement (the "Contribution");
WHEREAS, Harbinger Satellite Fund and the Company are
contemporaneously entering into a stock purchase agreement, dated as of even
date herewith (the "Stock Purchase Agreement"), in the form of Exhibit A, that
provides Harbinger Satellite Fund with the right and obligation, in each case
subject to the terms and conditions set forth in the Stock Purchase Agreement,
on the Closing Date (as hereinafter defined) to purchase shares of Voting Common
Stock at the Agreed Issue Price (as hereinafter defined);
WHEREAS, the Company has agreed, in the circumstances and subject to
the conditions set forth in Article XIX, to undertake a rights offering in
accordance with the terms and conditions set forth in Article XIX;
WHEREAS, Harbinger Master, Harbinger Special, the Company and MSV, and
Mobile Satellite Ventures Finance Co., a Delaware corporation ("MSV Finance")
are contemporaneously entering into a securities purchase agreement dated as of
even date herewith (the "Securities Purchase Agreement") in the form of Exhibit
B, that provides for Harbinger Master and Harbinger Special to purchase, and for
MSV and MSV Finance to issue, up to $500,000,000 in principal amount of 16%
Senior Notes due July 1, 2013, and for the Company to issue warrants to purchase
up to 25,000,000 shares of Voting Common Stock or Non-Voting Common Stock, or a
combination thereof, at an exercise price of $0.01 per share of Voting Common
Stock, subject to certain antidilution adjustments, in each case upon the terms
and subject to the conditions set forth in the Securities Purchase Agreement;
WHEREAS, prior to the date of this Agreement (a) the Special
Independent Committee of the Company's Board, after obtaining advice from an
independent financial advisor, has (i) determined that this Agreement and the
agreements and transactions contemplated hereunder and under the Stock Purchase
Agreement and the Securities Purchase Agreement (the "Transactions"), including
the Contribution, are fair to the Company and its stockholders other than
Harbinger and (ii) recommended that the Company's Board approve this Agreement,
the Stock Purchase Agreement, the Securities Purchase Agreement, and the
Transactions, and (b) the Company's Board has unanimously approved this
Agreement, the Stock Purchase Agreement, the Securities Purchase Agreement, and
the Transactions; and
WHEREAS, the Parties intend that the Transactions, taken together,
shall qualify as an exchange governed by Section 351(a) of the Code.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, each of the Parties
hereby agrees as follows.
ARTICLE I
DEFINITIONS
-----------
Section 1.1. Certain Definitions. For the purposes of this Agreement,
the following terms shall have the meanings specified in this Section 1.1.
"1.6 Spectrum" has the meaning set forth in the recitals.
"14% Notes" means the 14% Senior Secured Discount Notes due 2013
issued under the 14% Notes Indenture.
"14% Notes Indenture" means the Indenture, among MSV and MSV Finance,
as issuers, the guarantors named therein and The Bank of New York, as trustee,
dated as of March 30, 2006.
"16% Notes" means the 16% Senior Unsecured Notes due 2013 to be issued
under the 16% Notes Indenture.
"16% Notes Indenture" means the Indenture, among MSV and MSV Finance,
as issuers, the guarantors named therein and a trustee to be named therein, to
be entered into on or about January 6, 2009 in connection with the 16% Notes to
be issued pursuant to the Securities Purchase Agreement.
"16.5% Notes" means the 16.5% Senior Notes due 2013 issued under the
16.5% Notes Indenture.
"16.5% Notes Indenture" means the Indenture, among MSV and MSV
Finance, as issuers, the guarantors named therein and The Bank of New York, as
trustee, dated as of January 7, 2008.
"Affiliate" means, with respect to any Person, any other Person that,
directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such Person, and the term
"control" (including the terms "controlled by" and "under common control with")
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether through
ownership of voting securities, by contract or otherwise.
"Agreed Issue Price" means the Company Per Share Value multiplied by
the Target Adjustment Ratchet.
"Agreement" has the meaning set forth in the preamble.
"Amended Proposal" has the meaning set forth in Section 20.1.
"Amendment Notification" has the meaning set forth in Section 14.1(a).
"Amendment Veto Matters" has the meaning set forth in Section 14.8.
"Apollo Transaction" means the transaction detailed in the Company's
Current Report on Form 8-K filed with the SEC on April 10, 2008, in which
Harbinger entered into a securities purchase agreement with a number of Apollo
funds and pursuant to which Harbinger agreed to purchase from such funds a
number of shares of Voting Common Stock and Non-Voting Common Stock and warrants
in the Company.
"Assets" means all of the properties and assets (including, but not
limited to, real, personal or mixed, tangible or intangible, and Intellectual
Property) used or held for use in connection with or material to the continued
operation of the business of the Company and/or its Subsidiaries.
"Authorities" refers to any Regulatory Authorities and Competition
Authorities as relevant.
"Authorizations" has the meaning set forth in Section 5.16(a).
"Benefit Plans" has the meaning set forth in Section 5.24(a).
"Bring Down Certificate" has the meaning set forth in Section 13.4.
"Bring Down Date" has the meaning set forth in Section 13.4.
"Business Day" means any day excluding (i) Saturday, (ii) Sunday and
(iii) any day on which banking institutions located in the State of New York or
London are required to be closed for the conduct of regular business.
"Business Plan" means the business plan referred to in Section 5.8,
subject to such additions or amendments as may be made with the prior written
approval of Harbinger.
"Canadian Joint Venture Companies" means Mobile Satellite Ventures
(Canada) Inc. and Mobile Satellite Ventures Holdings (Canada) Inc.
"Cash Confirmation Amount" means the total amount of cash available to
the Company on a Certain Funds Basis for the purposes of satisfying the cash
consideration payable pursuant to the Firm Offer, as confirmed in writing by the
Financial Advisor in accordance with the terms of this Agreement, being the
aggregate of the Debt Cash Confirmation Amount and the Equity Cash Confirmation
Amount.
"Cash Confirmation Statement" has the meaning set forth in Section
11.2(a).
"Cash Offer Price" has the meaning set forth in Section 11.2(b).
"Cash Purchase Price" has the meaning set forth in Section 11.2(b).
"Cash Redemption Amount" shall mean the cash amount that Harbinger
would receive if the Convertible Bonds were redeemed at their Accreted Principal
Amount on the Change of Control Event Put Date, as each such term is defined in,
and in accordance with, the conditions of the Convertible Bonds.
"Certain Funds Basis" means "certain funds basis" as such expression
is customarily understood in the context of transactions subject to the UK
Takeover Code and the jurisdiction of the UK Takeover Panel.
"Class A Preferred Units" has the meaning set forth in the recitals.
"Class B Preferred Units" has the meaning set forth in the recitals.
"Closing Date" means the date that is three (3) Business Days after
Completion.
"Code" means the US Internal Revenue Code of 1986, as amended.
"COI Amendments" has the meaning set forth in Section 9.1.
"Common Stock" means the Voting Common Stock and the Non-Voting Common
Stock.
"Common Units" has the meaning set forth in the recitals.
"Communications Act" means the US Communications Act of 1934, as
amended, and the rules and published policies of the FCC promulgated thereunder.
"Communications Assistance for Law Enforcement Act" means the US
Communications Assistance for Law Enforcement Xxx 0000, as amended.
"Companies Acts" means the English Companies Xxx 0000 and the
Companies Xxx 0000, in each case as amended or re-enacted and to the extent in
force or applicable from time to time.
"Company" has the meaning set forth in the preamble.
"Company Approval" has the meaning set forth in Section 13.5.
"Company Disclosure Schedule" has the meaning set forth in the
preamble to Article V.
"Company Financial Statements" has the meaning set forth in Section
5.7(a).
"Company Per Share Value" means $10.00.
"Company's Board" means the board of directors of the Company.
"Competition Authorities" means any Governmental Entity or other trade
or regulatory body responsible for any matter involving antitrust or competition
issues.
"Completion" means the date, if any, upon which: (i) the Scheme
becomes effective in accordance with its terms; or (ii) if Harbinger elects to
implement the Proposal by way of an Offer in accordance with the terms of this
Agreement, the Offer becomes or is declared unconditional in all respects.
"Confidentiality Agreement" has the meaning set forth in Section
16.16.
"Confidentiality Side Letter" has the meaning set forth in Section
16.16.
"Consulting Agreement" means the consulting agreement to be entered
into between the Company and LeaseCo on the Option Closing Date relating to the
management of the 1.6 Spectrum for the period set forth in the Consulting
Agreement in substantially the form attached hereto as Exhibit E.
"Contract" means any written contract, agreement, mortgage, indenture,
note, bond, loan, instrument, lease, commitment or other legally binding
arrangement or agreement.
"Contribution" has the meaning set forth in the recitals.
"Contribution Assets" has the meaning set forth in the recitals.
"Contribution Closings" means the Contribution Shares Closing, the
Convertible Bonds Closing and the TVCC Contribution Closing.
"Contribution Closing Date" means the Contribution Shares Closing
Date, the Convertible Bonds Closing Date or the TVCC Contribution Closing Date,
as applicable.
"Contribution Shares" has the meaning set forth in the recitals.
"Contribution Shares Closing" has the meaning set forth in Section
2.2(a).
"Contribution Shares Closing Date" has the meaning set forth in
Section 2.2(a).
"Contribution Shares Value" means the Target Base Price multiplied by
the Target Adjustment Ratchet multiplied by the number of Contribution Shares
multiplied by the Exchange Rate.
"Converted Shares" has the meaning set forth in Section 2.1(a)(ii)(B).
"Converted Shares Value" means the Target Base Price multiplied by the
Target Adjustment Ratchet multiplied by the number of Converted Shares
multiplied by the Exchange Rate.
"Convertible Bonds" has the meaning set forth in the recitals.
"Convertible Bonds Amount" means the number of Convertible Bonds as is
at the relevant time owned by Harbinger.
"Convertible Bonds Closing" has the meaning set forth in Section
2.2(b).
"Convertible Bonds Closing Date" has the meaning set forth in Section
2.2(b).
"Convertible Bonds Value" means the Convertible Bonds Amount
multiplied by the Target Appropriate Offer Price.
"Court" means the High Court of Justice in England and Wales.
"Court Order" means the order of the Court sanctioning the Scheme
under section 899 of the Companies Xxx 0000 and the order of the Court
confirming the reduction of the Target's share capital provided for by the
Scheme under section 137 of the Companies Xxx 0000 or, if then in force, section
648 of the Companies Xxx 0000, respectively or, where the context requires,
either of them.
"CREST" means the relevant system (as defined in the Uncertified
Securities Regulations 2001 (SI 2001 No. 3755)) to facilitate the transfer of
title to shares in uncertified form in respect of which CRESTCo is the Operator
(as defined in the Uncertified Securities Regulations 2001 (SI 2001 No. 3755)).
"CRESTCo" means CRESTCo Limited.
"Debt Cash Confirmation Amount" has the meaning set forth in Section
12.1(f).
"Debt Commitment Letter" has the meaning set forth in Section 12.1(f).
"Debt Financing" shall mean the debt financing in connection with the
Firm Offer by way of the issuance of the Senior Debt and the Mezzanine Debt or
any other such form of debt financing as Harbinger may request in accordance
with Section 14.1.
"Debt Offering" has the meaning set forth in Section 12.1(a).
"DGCL" means the Delaware General Corporation Law.
"Directors" means the directors of the Company from time to time.
"DoJ" means the US Department of Justice.
"Effective Date" has the meaning set forth in Section 16.13.
"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, 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 materially
impair the operations of a Person or materially interfere with the use of such
property or asset.
"Environmental Protection Laws" means any Law enacted as of the date
hereof in any jurisdiction in connection with or relating to the protection or
regulation of the environment, including those Laws, statutes and regulations
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.
"Equity Cash Confirmation Amount" has the meaning set forth in Section
11.2(a).
"Equity Commitment Letter" has the meaning set forth in Section
11.2(a).
"ERISA" has the meaning set forth in Section 5.24(a).
"ERISA Plans" has the meaning set forth in Section 5.24(e).
"EU" means the European Union.
"European Commission" has the meaning set forth in Section 8.5.
"Exchange Act" means the US Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations of the SEC promulgated
thereunder.
"Exchange Act Reports" means the following documents filed by the
Company with the SEC since September 1, 2006 and prior to the Closing Date: (i)
the Company's Form 10-K annual report, (ii) all quarterly reports on Form 10-Q
and any periodic reports on Form 8-K, (iii) all definitive proxy statements, and
(iv) all amendments or supplements to any of the foregoing.
"Exchange Rate" means a (pound) to $ exchange rate as reported by
Bloomberg at noon New York time three (3) Business Days prior to the
Contribution Shares Closing Date, the Closing Date or such other date, as
applicable.
"FCC" means the US Federal Communications Commission.
"FCC Approval" means the consent and other actions of the FCC
(including any action duly taken by the FCC's staff pursuant to delegated
authority) granting its consent to all applications or petitions as may be
required to be filed with the FCC to effect the transactions referred to in
Section 8.1 and consummate the Transactions.
"FCC Parties" means Harbinger, the Company and MSV LLC.
"FCC Rules" means Title 47 of the Code of Federal Regulations, as
amended at any time and from time to time, and FCC decisions, published
policies, reports and orders.
"FCC Spectrum Lease Rules" has the meaning set forth in Section
4.8(l)(ii).
"Filed SEC Reports" has the meaning set forth in the preamble to
Article V.
"Financial Advisor" means Xxxxxxx Xxxxx International, or such other
financial advisor agreed to be appointed by the Parties from time to time in
connection with the transactions contemplated by Articles XI, XII, XIII, XIV and
XV.
"Financing Rights Amount" has the meaning set forth in Section 11.3.
"Financing Rights Offering" has the meaning set forth in Section 11.3.
"Financing Rights Prospectus" has the meaning set forth in Section
11.4.
"Financing Rights Registration Statement" has the meaning provided in
Section 11.4(a).
"Financing Rights Subscription Price" has the meaning set forth in
Section 11.5.
"Financing Rights Subscription Privilege" has the meaning set forth in
Section 11.5.
"Firm Offer" means an offer by the Company to implement the Proposal
by way of Offer or Scheme in accordance with the terms of the UK Takeover Code,
the Companies Acts and the requirements of the UK Takeover Panel, as such offer
may be amended from time to time after the Firm Offer Date, with any such
amendments being in accordance with the terms of this Agreement, the UK Takeover
Code, the Companies Acts and the requirements of the UK Takeover Panel.
"Firm Offer Announcement" means the announcement to be made by the
Parties, subject to the terms and conditions of this Agreement, of a firm
intention to proceed with the Firm Offer made in accordance with Rule 2.5 of the
UK Takeover Code.
"Firm Offer Costs" has the meaning set forth in Section 11.2(b).
"Firm Offer Date" means the date on which the Firm Offer Announcement
is made.
"Firm Offer Price" means the price offered by the Company for the
Target Shares as set out in the Firm Offer Announcement.
"FSA" means the UK Financial Services Authority.
"FSA Approval" has the meaning set forth in Section 10.1.
"FSMA" means the UK's Financial Services and Markets Xxx 0000.
"Further COI Amendment" has the meaning set forth in Section 9.1.
"FTC" means US Federal Trade Commission.
"GAAP" means US generally accepted accounting principles.
"Governmental Authorizations" means all approvals, concessions,
consents, franchises, licenses, Permits, registrations and other authorizations
of all Governmental Entities.
"Governmental Entity" means any governmental body, whether
administrative, executive, judicial, legislative or other, or any combination
thereof, including any federal, state, territorial, county, local, municipal or
other governmental agency, arbitral body, administrative authority, body,
branch, bureau, or comparable agency, commission, tribunal, court, department or
instrumentality of any of the foregoing, whether US or non-US.
"Group" means the Company and its controlled Affiliates from time to
time.
"Harbinger" has the meaning set forth in the preamble.
"Harbinger Certificate" has the meaning set forth in Section 13.3(h).
"Harbinger Contribution Shares" means the aggregate number of shares
of Voting Common Stock determined in accordance with Section 2.1(a), Section
2.1(b) and Section 2.1(c).
"Harbinger Designee" means one or more entities that is wholly-owned,
directly or indirectly, by Harbinger.
"Harbinger Disclosure Schedule" has the meaning set forth in the
preamble to Article IV.
"Harbinger Fund" has the meaning set forth in the preamble.
"Harbinger Master" has the meaning set forth in the preamble.
"Harbinger Material Adverse Effect" means any events, facts, changes
or circumstances which would be reasonably expected to have a material adverse
effect on the business, assets, liabilities, properties, condition (financial or
other), or results of operations of Harbinger and/or its Subsidiaries taken as a
whole.
"Harbinger Purchased Shares" has the meaning set forth in Section 3.1.
"Harbinger Satellite Fund" has the meaning set forth in the preamble.
"Harbinger Shares" means the aggregate of (i) the Harbinger
Contribution Shares; (ii) the Harbinger Purchased Shares; and (iii) the Sponsor
Fee Shares.
"Harbinger Special" has the meaning set forth in the preamble.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
"Implementation Agreement" has the meaning set forth in Section 15.2.
"Increased Firm Offer Price" has the meaning set forth in Section
14.1(b).
"Indebtedness" means with respect to any Person, all (i) obligations
of that Person for borrowed money, whether current or funded, or secured or
unsecured; (ii) obligations of that Person evidenced by bonds, debentures, notes
or similar instruments and the principal component in respect of mandatorily
redeemable capital stock; (iii) obligations of that Person under conditional
sale or other title retention agreements (other than trade payables incurred in
the ordinary course of business) relating to any property purchased by that
Person, in each case only and to the extent due more than 12 months after the
delivery of property; (iv) obligations of that Person issued or assumed as the
deferred purchase price of assets, property or services, in each case only and
to the extent due more than 12 months after the delivery of property; (v) lease
obligations of that Person capitalized on the books and records of that Person;
(vi) obligations of others secured by an Encumbrance on property or assets owned
or acquired by that Person, whether or not the obligations secured thereby have
been assumed; (vii) obligations of that Person under interest rate, currency or
commodity derivatives or hedging transactions; (viii) letters of credit or
performance bonds issued for the account of that Person (other than letters of
credit entered into in the ordinary course of business to the extent not drawn
upon or reimbursed within 10 Business Days); (ix) guarantees and support and
keep well arrangements having the economic effect of a guarantee of that Person
of any Indebtedness of any other Person; and (x) construction payment deferrals
and other deferrals of progress payments owed to vendors, in each case,
including the outstanding principal amount of such Indebtedness, together with
all interest accrued thereon and all costs and charges associated therewith.
"Indemnified Party" has the meaning set forth in Section 18.1.
"Indemnifying Party" has the meaning set forth in Section 18.1.
"Inducement Fee" has the meaning set forth in Section 15.3(b).
"Industry Canada" means the Canadian Federal Department of Industry or
any successor government department or agency thereto.
"Information Statement" has the meaning set forth in Section 9.3(a).
"Initial Agreed Regulatory Approvals" means those regulatory and
anti-trust approvals set out in Section 8.1.
"Initial COI Amendment" has the meaning set forth in Section 9.1.
"Intellectual Property" has the meaning set forth in .
"Investment Company Act" means the US Investment Company Act of 1940,
as amended from time to time, and the rules and regulations of the SEC
promulgated thereunder.
"IRS" means the US Internal Revenue Service.
"Law" means any applicable domestic or foreign federal, state,
provincial, local, municipal or other law, constitution, treaty, statute,
ordinance, regulation, rule, standard, code, rule of common law, decree,
directive, order or other requirement or rule enacted, implemented or
promulgated by any Governmental Entity.
"LeaseCo" means TVCC One Six Holdings LLC, a Delaware limited
liability company.
"LeaseCo Financial Statements" has the meaning set forth in Section
4.8(j).
"Legal Proceeding" means any judicial, administrative or arbitral
actions, suits, investigations, proceedings (public or private) or claims or
proceedings by or before a Governmental Entity.
"Listing Rules" means the Listing Rules of the UKLA.
"LLC Interest Holders" means each of (i) Harbinger Master, (ii)
Harbinger Special, (iii) Columbia Capital Equity Partners IV (QP), L.P., a
Delaware limited partnership, (iv) Columbia Capital Equity Partners IV (QPCO),
L.P., a Delaware limited partnership, (v) Columbia Capital Employee Investors
IV, L.P., a Delaware limited partnership, and (vi) CCTV One Four Holdings, LLC,
a Delaware limited liability company.
"LLC Note" means the promissory note dated on or about the Option
Closing Date, with an initial principal amount of $105,000,000 executed by
Harbinger Master and Harbinger Special in favor of the LLC Interest Holders
(other than Harbinger Master and Harbinger Special).
"Losses" means any loss, liability, damages, cost or expense
(including legal fees and expenses and any amounts paid in settlement or as a
result of any judgment or order).
"Material Adverse Effect" means any events, facts, changes or
circumstances which would reasonably be expected to have a material adverse
effect on the business, assets, liabilities, properties, operations, or
financial condition of the Company and its Subsidiaries, taken as a whole,
except to the extent that such adverse effect results from (i) general economic,
regulatory or political conditions or changes therein in the United States or
the other countries in which such Party operates; (ii) financial or securities
market fluctuations or conditions; (iii) changes in, or events or conditions
affecting, the satellite telecommunications industry generally; (iv) changes in
applicable Law or in GAAP; (v) compliance with the terms of, or the taking of
any action required by, this Agreement or the failure to take any actions for
which Harbinger has withheld its consent pursuant to Section 16.1(k); or (vi)
the failure of any in-orbit assets of the Company 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 the Company and its Subsidiaries to obtain material new permits, licenses,
certificates, registrations or other similar authorization; provided, however,
that the exclusions set forth in paragraphs (i) to (iv) above shall not apply if
the impact on the Company and its Subsidiaries, taken as a whole, is
disproportionate to the impact on other MSS/ATC mobile satellite companies.
"Merger Regulation" has the meaning set forth in Section 8.5.
"Mezzanine Debt" has the meaning set forth in Section 12.1(b).
"Money Laundering Laws" has the meaning set forth in Section 5.29(b).
"MSV" has the meaning set forth in the preamble.
"MSV Finance" has the meaning set forth in the recitals.
"MSV LLC" has the meaning set forth in the preamble.
"MSV FCC Licenses" means all licenses, permits and authorizations
issued by the FCC and held by MSV LLC or any Affiliate of MSV LLC.
"MSV Option Exchange" means the revised offer by the Company 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 the Company
with the SEC pursuant to Rule 424(b)(3) under the Securities Act on Registration
Statement No. 333-144093.
"MSV/Target Cooperation Agreement" has the meaning set forth in
Section 16.13.
"NewCo" and "NewCos" have the meaning set forth in Section 20.2.
"New Parent" has the meaning set forth in Section 20.3(c).
"No-Deal Over Subscription Rights" has the meaning set forth in
Section 19.9.
"No-Deal Rights Offering" has the meaning set forth in Section 19.1.
"No-Deal Rights Proceeds" has the meaning set forth in Section
19.11(b).
"No-Deal Rights Prospectus" has the meaning set forth in Section
19.2(a).
"No-Deal Rights Registration Statement" has the meaning set forth in
Section 19.2(a).
"No-Deal Rights Subscription Price" has the meaning set forth in
Section 19.3.
"No-Deal Rights Subscription Privilege" has the meaning set forth in
Section 19.3.
"Non-US Benefit Plans" has the meaning set forth in Section 5.24(a).
"Non-Voting Common Stock" means the shares of non-voting common stock,
par value $0.01 per share, of the Company.
"Non-Voting Common Stock Conversion" has the meaning set forth in
Section 20.3(a).
"Notification" has the meaning set forth in Section 13.2.
"Notification Date" has the meaning set forth in Section 13.2.
"OFAC" has the meaning set forth in Section 5.29(c).
"Offer" means, should Harbinger elect to implement the Proposal by way
of a general offer in accordance with the terms of this Agreement (instead of by
way of Scheme), an offer made by the Company, or a Subsidiary of the Company, to
purchase all the Target Shares other than the Contribution Shares and other
Target Shares held by Harbinger, the Company or their Subsidiaries or controlled
Affiliates on such terms and subject to such conditions as are determined in
accordance with the terms of this Agreement.
"Offer Document" means the document to be dispatched to (amongst
others) the Target's shareholders (and holders of other securities in the Target
to which the Offer relates) pursuant to which the Offer would be made and, where
the context so admits, includes any form of acceptance, election, notice, or
other document required in connection with the Offer.
"Offer Parties" means the Parties and the Target.
"Offer Shares" means such amount of Voting Common Stock which is
offered to the Target's shareholders as part of the Firm Offer, if at all, as
determined in accordance with the terms of this Agreement.
"Offer Shares Registration Statement" has the meaning set forth in
Section 10.1.
"Option Agreement" means the Option Agreement by and among TVCC, the
equity holders of LeaseCo, Harbinger Master and Harbinger Special dated as of
January 30, 2008.
"Option Closing Date" means the Closing Date as defined in the Option
Agreement.
"Order" means any order, injunction, judgment, decision, decree,
ruling, writ, assessment or arbitration award of a Governmental Entity.
"Organizational Documents" means, as to any Person, the certificate or
articles of incorporation, certificate of limited partnership, certificate of
formation, articles of organization, operating agreement, limited partnership
agreement, limited liability company agreement, stockholders agreement or bylaws
or other similar documents of such Person, as applicable.
"Other Debt" has the meaning set forth in Section 12.1(d).
"Other Filings" has the meaning set forth in Section 9.3(a).
"Other Financing Rights Filings" has the meaning set forth in Section
11.4.
"Other No-Deal Rights Filings" has the meaning set forth in Section
19.2(a).
"Other Regulatory Approvals" means those regulatory and anti-trust
approvals set out in Section 8.1.
"Party" and "Parties" have the meanings set forth in the preamble.
"Pension Plan" has the meaning set forth in Section 5.24(e).
"Permits" has the meaning set forth in Section 5.17.
"Person" means any individual, corporation, limited liability company,
partnership, firm, joint venture, association, joint-stock company, variable
interest entity, trust, unincorporated organization, Governmental Entity or
other entity.
"Phase I Notice" has the meaning set forth in Section 16.14.
"Possible Offer Announcement" means the possible offer announcement to
be made by the Parties, in the form attached hereto as Exhibit C, outlining the
intention of Harbinger to implement the Proposal, and subject to such amendments
to which each of the Parties may consent.
"Proposal" has the meaning set forth in the recitals.
"Proposed Amendments" has the meaning set forth in Section 16.19.
"Prospectus" has the meaning set forth in Section 10.1.
"Prospectus Rules" means the rules made for the purposes of Part VI of
the UK Financial Services and Markets Xxx 0000, as amended, in relation to the
offer of transferable securities to the public.
"PUC" has the meaning set forth in Section 5.16(a).
"Qualified Underwriter" means any of the following financial
institutions: (i) Xxxxxxx Xxxxx International, (ii) Xxxxxx Xxxxxxx, (iii) The
Royal Bank of Scotland PLC, (iv) Barclays Bank PLC, (v) JPMorgan, (vi) Credit
Suisse, or (vii) any other financial institution selected by Harbinger and
reasonably satisfactory to the Company in connection with the transactions
contemplated by Article XII.
"Record Date" has the meaning set forth in Section 19.1.
"Registration Rights Agreement" means the agreement dated as of the
date hereof in the form attached hereto as Exhibit D.
"Registration Statements" means the Company's registration statements
filed with the SEC since September 1, 2006, pursuant to the Securities Act.
"Regulation D" means Regulation D under the Securities Act.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S-X" means Regulation S-X under the Securities Act.
"Regulatory Approvals" means the Initial Agreed Regulatory Approvals
and the Other Regulatory Approvals as referred to in Section 8.1.
"Regulatory Authorities" means any Governmental Entity or other trade
or regulatory body responsible for any matter other than those involving
antitrust or competition issues.
"Regulatory Information Service" means an information dissemination
provider approved by the FSA and whose name is set out in Appendix 3 to the
Listing Rules from time to time.
"Reimbursement Event" shall mean any of the following events: (i)
following receipt of a Notification complying with Section 13.3, the Company
declining to make a Firm Offer pursuant to Section 13.4, or (ii) following
receipt of an Amendment Notification complying with Section 14.1, the Company
declining to approve the required amendment(s) set out therein, or (iii)
following receipt of a Waiver Notification complying with Section 14.2, the
Company declining to approve the requested action stated therein, or (iv)
following the Company's failure to deliver a Bring Down Certificate in
compliance with Section 13.4 as a result of an event that constitutes a Material
Adverse Effect, Harbinger withdrawing a Notification it has previously made, or
(v) following a breach by the Company and/or MSV at any time after the date
hereof and prior to the Firm Offer Date, of any representation, warranty,
covenant or agreement contained in this Agreement (including, for this purpose,
a breach of any representation or warranty contained in this Agreement that
would have occurred had such representation or warranty been deemed to continue
down to the Firm Offer Date) where (a) such breach constitutes, or results from
an event, fact, change or circumstance that constitutes, a Material Adverse
Effect, (b) such breach is incapable of being cured, or if capable of being
cured without a Legal Proceeding, is not cured within 30 days of notice
requiring such breach to be cured being given to the Company and MSV, provided
that such breach is cured by the Notification Date (or, if not cured by the
Notification Date, reasonable steps have been taken to cure such breach, and
such breach is likely to be cured within a 30 day period), or if capable of
being cured only through a Legal Proceeding, is not cured within 180 days of
notice requiring such breach to be cured being given to the Company and MSV,
provided that such breach is cured by the Notification Date and (c) the
occurrence of such breach is within the reasonable control of either the Company
or MSV, Harbinger determining not to give a Notification or Harbinger
withdrawing a Notification it has previously made (unless, in the case of (i) or
(ii) the decision of the Company's Board was made as a result of the terms of
the Debt Financing being non-compliant pursuant to Section 12.1(d)).
"Reimbursement Payments" has the meaning set forth in Section 15.3(a).
"Satellite Contracts" has the meaning set forth in Section 5.23(a).
"Satisfaction Date" means the date on which all of the Regulatory
Approvals have either been (i) granted or satisfied, or in respect of which all
applicable waiting periods have expired or been terminated, on terms
satisfactory to Harbinger, or (ii) waived by Harbinger and/or the Company as the
case may be.
"Scheme" means, should Harbinger elect to implement the Proposal in
such way, a scheme of arrangement under Part 26 of the Companies Xxx 0000,
between the Target and its shareholders (or shareholders of a particular class
or classes of its shares), and any other holders of securities in the capital of
the Target to which the Proposal relates, the full terms of which will be set
out in the Scheme Document.
"Scheme Document" means the document to be dispatched to (amongst
others) the Target's shareholders (or shareholders of a particular class or
classes of shares), and holders of any other securities in the capital of the
Target to which the Scheme relates, setting out the full terms of the Scheme
and, where the context so admits, includes any form of proxy, election, notice,
application, witness statement, court document or other document required in
connection with the Scheme.
"SEC" means the US Securities and Exchange Commission.
"SEC Approval" has the meaning set forth in Section 10.1.
"SEC Reports" means the Exchange Act Reports and the Registration
Statements.
"Securities Act" means the US Securities Act of 1933, as amended from
time to time, and the rules and regulations of the SEC promulgated thereunder.
"Securities Purchase Agreement" has the meaning set forth in the
recitals.
"Senior Debt" has the meaning set forth in Section 12.1(a).
"Significant Subsidiary" means any "significant subsidiary" of the
Company within the meaning of Rule 1-02 under Regulation S-X, including, for the
avoidance of doubt, MSV, MSV LLC and, for the purposes of this Agreement, the
Canadian Joint Venture Companies, provided that nothing in this Agreement shall
be construed to mean that the Company exercises de jure or de facto control over
the Canadian Joint Venture Companies.
"Signing Date" has the meaning set forth in Section 16.13.
"Special Independent Committee" means the special committee of the
Company's Board consisting solely of independent directors not affiliated with
Harbinger.
"Sponsor Fee" means $26,410,000.
"Sponsor Fee Payees" has the meaning set forth in Section 17.1(a).
"Sponsor Fee Shares" has the meaning set forth in Section 17.1(a).
"Stamp Duty" means stamp duty or stamp duty reserve Tax payable under
the Laws of the United Kingdom.
"Stockholder Approval" has the meaning set forth in Section 9.1.
"Stock Purchase Agreement" has the meaning set forth in the recitals.
"Stock Purchase Closing" has the meaning set forth in Section 3.2.
"Stock Purchase Price" means $2,400,000,000.
"Subsidiary" means, with respect to any Person, any corporation,
limited liability company, partnership, firm, joint venture, association,
joint-stock company, variable interest entity, trust, or other organization,
whether incorporated or unincorporated, (i) of which such Person or any other
Subsidiary of such Person is a general partner, or (ii) at least a majority of
the outstanding equity or voting securities or other interest is directly or
indirectly owned or controlled by such Person or by any one or more of its
Subsidiaries, or by such Person and one or more of its Subsidiaries, or (iii) of
which such Person or any other Subsidiary of such Person has the right, directly
or indirectly, to elect a majority of the board of directors or other body
performing similar functions with respect to such corporation or organization,
or (iv) of which such Person or any other Subsidiary of such Person is the
primary beneficiary. "Subsidiary" shall, in the case of the Company, for the
avoidance of doubt, include MSV, MSV LLC and, for the purposes of this
Agreement, the Canadian Joint Venture Companies, provided that nothing in this
Agreement shall be construed to mean that the Company exercises de jure or de
facto control over the Canadian Joint Venture Companies, and the Company shall
not be deemed for purposes of this Agreement to be a Subsidiary of Harbinger.
"Target" has the meaning set forth in the recitals.
"Target Adjustment Ratchet" means the quotient of the Target Offer
Price divided by the Target Base Price.
"Target Appropriate Offer Price" means the price offered by the
Company for each Target Convertible Bond, being an "appropriate offer" for the
purposes of the UK Takeover Code on the basis of an offer price for each Target
Share equal to the Target Offer Price.
"Target Base Price" means 535.3 xxxxx.
"Target FCC Licenses" means all licenses, permits and authorizations
issued by the FCC and held by the Target or any Affiliate of the Target.
"Target Offer Price" means the price at which the Offer becomes or is
declared wholly unconditional.
"Target Shares" means the issued and to be issued ordinary shares of
(euro)0.0005 in the capital of the Target.
"Tax" means all federal, state, local and foreign income, profits,
franchise, gross receipts, environmental, customs duties, capital stock,
severances, stamp, payroll, sales, employment, unemployment, disability, use,
property, withholding, excise, production, value added, occupancy, license,
estimated, real property, personal property, windfall profits or other taxes,
duties, fees or assessments of any nature whatsoever, together with all
interest, penalties and additions imposed with respect to such amounts and any
interest in respect of such penalties and additions.
"Tax Return" means all returns and reports (including elections,
declarations, disclosures, schedules, estimates and information returns)
supplied or required to be supplied to a Tax authority relating to Taxes,
including any schedule or attachment thereto, and including any amendment
thereof.
"Tax Saving" has the meaning set forth in Section 20.1.
"Taxing Authority" means the IRS and any other Governmental Entity
responsible for the administration of any Tax.
"Termination Date" has the meaning set forth in Section 21.13.
"Third-Party Interests" has the meaning set forth in Section 4.8(g).
"Total Commitment" has the meaning set forth in Section 12.1(g).
"Traditional Financial Institution" means a "financial institution" as
defined in Clause A of Title 11 of the US Code ss. 101(22) with assets of at
least $5,000,000,000, or the international equivalent thereof.
"Transactions" has the meaning set forth in the recitals.
"Triggering Investment" has the meaning set forth in Section 16.13.
"TTE instruction" means a Transfer to Escrow instruction (as defined
by the CREST Manual issued by CRESTCo).
"TVCC" has the meaning set forth in the recitals.
"TVCC Certificate" has the meaning set forth in Section 2.1(c).
"TVCC Contribution Closing" has the meaning set forth in Section
2.2(c).
"TVCC Contribution Closing Date" has the meaning set out in Section
2.2(c).
"TVCC LLC Agreement" has the meaning set forth in Exhibit H.
"TVCC LLC Interests" has the meaning set forth in the recitals.
"TVCC LLC Interests Value" means $239,870,000.
"TVCC Lease" means collectively, (i) the Master Agreement, dated July
16, 2007, between LeaseCo, Crown Castle MM Holding, LLC, and its subsidiary, OP
LLC, and (ii) the Long-Term De Facto Transfer Lease Agreement, dated July 23,
2007, between LeaseCo and OP LLC.
"TVCC Material Adverse Effect" means any event that has occurred and
remains uncured that has had, or is likely to have, a materially adverse effect
on LeaseCo's rights to use the TVCC Spectrum License, other than a material
adverse effect that results from (a) conditions generally affecting the industry
in which LeaseCo principally operates, (b) changes in Law or policy (including
FCC rules and policies) generally affecting similarly situated FCC licensees or
lessees in the wireless communications industry, (c) general economic
conditions, or (d) a breach of the Consulting Agreement resulting from the gross
negligence or willful misconduct of the Company.
"TVCC Spectrum License" means the nationwide license issued by the FCC
(FCC Call Sign WPYQ831) for 1670-1675 MHz spectrum leased to LeaseCo pursuant to
the TVCC Lease.
"UKLA" means the UK Listing Authority, being the Financial Services
Authority Limited acting in its capacity as the competent authority for the
purposes of Part IV of the Financial Services and Markets Xxx 0000.
"UK Takeover Code" means the UK's City Code on Takeovers and Mergers.
"UK Takeover Panel" means the UK's Panel on Takeovers and Mergers.
"US" means the United States of America.
"Voting Common Stock" has the meaning set forth in the recitals.
"Waiver Notification" has the meaning set forth in Section 14.2(a).
"$" or "dollars" means dollars and cents, the lawful currency of the
United States of America.
"(pound)" or "xxxxx" means pounds sterling and xxxxx, the lawful
currency of the United Kingdom.
"(euro)" or "euro" means the lawful currency of those member countries
of the European Economic and Monetary Union that have opted to adopt the single
European currency.
Section 1.2 Other Definitional and Interpretive Matters. Unless
otherwise expressly provided, for purposes of this Agreement, the following
rules of interpretation shall apply.
(a) Calculation of Time Period. When calculating the period of
time before which, within which or following which any act is to be done or step
taken pursuant to this Agreement, the date that is the reference date in
calculating such period shall be excluded. If the last day of such period is not
a Business Day, the period in question shall end on the next succeeding Business
Day.
(b) Exhibits. The Exhibits to this Agreement are hereby
incorporated and made a part hereof and are an integral part of this Agreement.
Any capitalized terms used in any Exhibit but not otherwise defined therein are
used therein with the definition set forth in the body of this Agreement.
(c) Gender. Any reference in this Agreement to gender shall
include all genders.
(d) Headings. The division of this Agreement into Articles,
Sections and other subdivisions and the insertion of headings are for
convenience of reference only and shall not affect or be utilized in construing
or interpreting this Agreement. All references in this Agreement to any
"Article" or "Section" are to the corresponding Article or Section of this
Agreement unless otherwise specified.
(e) Herein. The words such as "herein," "hereinafter," "hereof,"
and "hereunder" refer to this Agreement as a whole and not merely to a
subdivision in which such words appear unless the context otherwise requires.
(f) Including. The word "including" or any variation thereof
means "including without limitation" and shall not be construed to limit any
general statement that it follows to the specific or similar items or matters
immediately following it.
(g) No Strict Construction. The language used in this Agreement
is the language chosen by the Parties to express their mutual intent, and no
rule of strict construction will be applied against any Party.
(h) Singular and Plural. Each definition used in this Agreement
includes the singular and the plural.
ARTICLE II
ASSET CONTRIBUTIONS
-------------------
Section 2.1 Agreement to Contribute Assets.
(a) Subject to the terms and conditions set forth in this
Agreement, and subject to the receipt of the requisite Regulatory Approvals and
Stockholder Approval and subject to Completion occurring:
(i) at the Contribution Shares Closing, subject to Section
2.1(b), Harbinger Master and Harbinger Special shall assign, transfer and
deliver to the Company all, but not less than all, of the Contribution
Shares, in exchange for which the Company shall indefeasibly issue a number
of fully-paid, non-assessable shares of Voting Common Stock equal to the
quotient of the Contribution Shares Value divided by the Agreed Issue Price
(rounded to the nearest whole number of shares of Voting Common Stock), to
Harbinger Master, Harbinger Special, the Harbinger Satellite Fund and/or
one or more Harbinger Designees, as instructed in writing by Harbinger at
least one (1) Business Day prior to the Contribution Shares Closing Date;
(ii) at the Convertible Bonds Closing:
(A) Harbinger Master and Harbinger Special shall assign,
transfer and deliver to the Company all, but not less than all, of the
Convertible Bonds, in exchange for which the Company shall indefeasibly
issue a number of fully-paid, non-assessable shares of Voting Common Stock
equal to the quotient of the Convertible Bonds Value divided by the Agreed
Issue Price to Harbinger Master, Harbinger Special, Harbinger Satellite
Fund and/or one or more Harbinger Designees, as instructed in writing by
Harbinger at least one (1) Business Day prior to the Convertible Bonds
Closing Date; or
(B) if the Convertible Bonds convert into Target Shares
following the execution and delivery of this Agreement but prior to the
Convertible Bonds Closing Date, Harbinger Master and Harbinger Special
shall, subject to Section 2.1(b), assign, transfer and deliver to the
Company all, but not less than all, of such Target Shares (the "Converted
Shares"), in ----------------- exchange for which the Company shall
indefeasibly issue a number of fully-paid, non-assessable shares of Voting
Common Stock equal to the quotient of the Converted Shares Value divided by
the Agreed Issue Price, to Harbinger Master, Harbinger Special, Harbinger
Satellite Fund and/or one or more Harbinger Designees, as instructed in
writing by Harbinger at least one (1) Business Day prior to the Convertible
Bonds Closing Date; or
(C) if the Convertible Bonds are redeemed, following the
execution and delivery of this Agreement but prior to the Convertible Bonds
Closing Date, at their Accreted Principal Amount on the Final Maturity Date
(as each such term is defined in the terms and conditions of the
Convertible Bonds), Harbinger Master and Harbinger Special shall transfer
to the Company an amount equal to the Cash Redemption Amount, payable by
wire transfer to an account notified in writing by the Company to Harbinger
at least three (3) Business Days prior to the Convertible Bonds Closing
Date, in exchange for which the Company shall indefeasibly issue a number
of fully-paid, non-assessable shares of Voting Common Stock equal to the
quotient of the Cash Redemption Amount divided by the Agreed Issue Price,
to Harbinger Master, Harbinger Special, the Harbinger Satellite Fund and/or
one or more Harbinger Designees, as instructed in writing by Harbinger at
least one (1) Business Day prior to the Convertible Bonds Closing Date.
For the avoidance of doubt, Harbinger shall have the right, in its sole
discretion, to determine whether to transfer, convert or redeem the Convertible
Bonds, provided it complies with its respective obligations set forth in this
Section 2.1(a)(ii).
(b) If the Proposal is successfully implemented by way of a
Scheme, Harbinger Master and Harbinger Special may discharge their respective
obligations pursuant to Sections 2.1(a)(i) and 2.1(a)(ii)(B) by agreeing to the
cancellation of the Contribution Shares and any Converted Shares pursuant to the
Scheme (or any separate scheme of arrangement that is conditioned upon the
Scheme), provided that the consideration to which each of Harbinger Master and
Harbinger Special shall be entitled in connection with such cancellation shall
be the issue of the number of shares of Voting Common Stock to which each of
them is respectively entitled pursuant to Sections 2.1(a)(i) and 2.1(a)(ii)(B),
and not the consideration available pursuant to the Scheme.
(c) Subject to the terms and conditions set forth in this
Agreement and the delivery by Harbinger Master and Harbinger Special of a
certificate dated as of the TVCC Contribution Closing Date, substantially in the
form set forth in Exhibit H (the "TVCC Certificate"), at the TVCC Contribution
Closing, Harbinger Master and Harbinger Special shall assign, transfer and
deliver, or shall cause the assignment, transfer and delivery, to the Company of
all, but not less than all, of the TVCC LLC Interests, in exchange for which the
Company shall indefeasibly issue a number of fully-paid, non-assessable shares
of Voting Common Stock equal to the quotient of the TVCC LLC Interests Value
divided by the Agreed Issue Price to Harbinger Master, Harbinger Special, the
Harbinger Satellite Fund and/or one or more Harbinger Designees, as instructed
in writing by Harbinger at least one (1) Business Day prior to the TVCC
Contribution Closing Date. Subject to the TVCC Contribution Closing occurring,
the Company shall assume responsibility for all payments accruing as from the
TVCC Contribution Closing Date under the TVCC Lease and at the TVCC Contribution
Closing the Company shall pay to Harbinger an amount in cash equal to prepaid
annual lease fees paid in accordance with Section 5(a) of the Long Term De Facto
Lease Agreement dated July 23, 2007 by and between OP LLC and LeaseCo as of the
TVCC Contribution Closing Date with respect to periods after the TVCC
Contribution Closing Date.
(d) Notwithstanding the transfer of the TVCC LLC Interests,
Harbinger Master and Harbinger Special shall retain all their respective
obligations under the LLC Note.
Section 2.2 Contribution Closings.
(a) Subject to receipt of the requisite Regulatory Approvals and
Stockholder Approval and subject to Completion occurring, the closing of the
contribution of the Contribution Shares and the issuance of the relevant portion
of the Harbinger Contribution Shares pursuant to Section 2.1(a)(i) and/or 2.1(b)
(together, the "Contribution Shares Closing") shall occur on:
(i) the date of Completion, if the Proposal is successfully
implemented by way of a Scheme and Harbinger elects to discharge its
obligations in accordance with Section 2.1(b);
(ii) the date that is three (3) Business Days after the expiry of
the Offer, if the Proposal is successfully implemented by way of an Offer;
or
(iii) such other date as the Company and Harbinger may agree.
Such date is herein referred to as the "Contribution Shares Closing
Date".
(b) Subject to receipt of the requisite Regulatory Approvals and
Stockholder Approval and subject to Completion occurring, the closing of the
contribution of the Convertible Bonds, Converted Shares or Cash Redemption
Amount (as the case may be) and the issuance of the relevant portion of the
Harbinger Contribution Shares pursuant to Section 2.1(a)(ii) and/or Section
2.1(b) (together, the "Convertible Bonds Closing") shall occur on:
(i) the date of Completion, if the Proposal is successfully
implemented by way of a Scheme and Harbinger elects to discharge its
obligations in accordance with Section 2.1(b);
(ii) the date that is three (3) Business Days after the expiry of
the Offer, if the Proposal is successfully implemented by way of an Offer
and Harbinger determines to transfer or convert the Convertible Bonds;
(iii) the date that is five Business Days following the Change of
Control Event Put Date (as defined in the conditions of the Convertible
Bonds) if Harbinger determines to redeem the Convertible Bonds;
(iv) such other date as the Company and Harbinger may agree.
Such date is herein referred to as the "Convertible Bonds Closing
Date".
(c) Subject to receipt of the requisite Regulatory Approvals and
Stockholder Approval, delivery by Harbinger Master and Harbinger Special of a
duly executed TVCC Certificate, and subject to Completion occurring, the closing
of the contribution of the TVCC LLC Interests and the issuance of the Harbinger
Contribution Shares pursuant to Section 2.2(c) (the "TVCC Contribution Closing")
shall occur on:
(i) the Closing Date; or
(ii) such other date as the Company and Harbinger may agree.
Such date is herein referred to as the "TVCC Contribution Closing
Date".
(d) Each of the Contribution Closings shall be held at the
offices of Weil, Gotshal & Xxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, at
10:00 a.m. on the Contribution Shares Closing Date, the Convertible Bonds
Closing Date or the TVCC Closing Date, as the case may be, or at such other time
and at such other place as the Company and Harbinger may agree.
ARTICLE III
HARBINGER PURCHASED SHARES
--------------------------
Section 3.1 Stock Purchase. Subject to the terms and conditions set
forth in the Stock Purchase Agreement, the Harbinger Satellite Fund or one or
more Harbinger Designees shall purchase from the Company for the Cash Purchase
Price, and the Company shall indefeasibly issue and sell to the Harbinger
Satellite Fund or the relevant Harbinger Designee, on the Closing Date the
number of shares of Voting Common Stock as is determined in accordance with the
provisions of the Stock Purchase Agreement (the "Harbinger Purchased Shares").
Section 3.2 Closing. The closing (the "Stock Purchase Closing") of the
issuance of the Harbinger Purchased Shares shall occur on the Closing Date
subject to and upon the terms and conditions set forth in the Stock Purchase
Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF HARBINGER
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Harbinger acknowledges that (i) the representations and warranties in
this Article IV have been a material and necessary inducement for the Company
and MSV to agree to enter into this Agreement and the Stock Purchase Agreement
and to accept the contribution of the Contribution Assets and to issue the
Harbinger Shares and (ii) the Company and MSV are relying on such
representations and warranties. Except as set forth in the corresponding
sections or subsections of the disclosure schedule delivered to the Company by
Harbinger concurrently with the execution and delivery of this Agreement (the
"Harbinger Disclosure Schedule"), or to the extent that the qualifying nature of
such disclosure with respect to another section or subsection is reasonably
apparent on the face of the Harbinger Disclosure Schedule, each of Harbinger
Master, Harbinger Special, Harbinger Fund and Harbinger Satellite Fund
represents and warrants to the Company and MSV as of the date hereof and, other
than with respect to Section 4.3, as of the Notification Date:
Section 4.1 Corporate Status, Power and Authority.
(a) Each of Harbinger Master, Harbinger Special, Harbinger Fund
and Harbinger Satellite Fund (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, except where any such failure to be so organized, existing or in
good standing or to have such power or authority would not prevent, materially
delay or materially impede the consummation of the Transactions 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 not prevent, materially delay or materially impede the
consummation of the Transactions. None of Harbinger Master, Harbinger Special,
Harbinger Fund and Harbinger Satellite Fund is currently in violation of any of
the provisions of its Organizational Documents, each as amended to date.
(b) All corporate or other, as applicable, action on the part of
each of Harbinger Master, Harbinger Special, Harbinger Fund or Harbinger
Satellite Fund necessary for the authorization, execution, delivery and
performance of this Agreement and the Stock Purchase Agreement has been taken.
Each of Harbinger Master, Harbinger Special, Harbinger Fund and Harbinger
Satellite Fund has all requisite corporate or other power and authority to enter
into this Agreement and the Stock Purchase Agreement and to carry out and
perform its obligations under the terms hereof and thereof.
Section 4.2 No Conflicts. None of the execution, delivery and
performance by each of Harbinger Master, Harbinger Special, Harbinger Fund and
Harbinger Satellite Fund of this Agreement and the Stock Purchase Agreement or
compliance by each of Harbinger Master, Harbinger Special, Harbinger Fund and
Harbinger Satellite Fund 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 any of Harbinger Master,
Harbinger Special, Harbinger Fund or Harbinger Satellite Fund pursuant to the
terms of, any indenture, mortgage, deed of trust, agreement or other material
instrument to which any of Harbinger Master, Harbinger Special, Harbinger Fund
or Harbinger Satellite Fund 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 Harbinger Master, Harbinger Special, Harbinger Fund or
Harbinger Satellite Fund or (c) will violate any provision of its Organizational
Documents, each as amended to date, except in the case of (a) or (b), where such
breach or conflict would not prevent, materially delay or materially impede the
consummation of the Transactions.
Section 4.3 No Consents Required. No consent, approval, authorization,
order, registration or qualification of or with any court or arbitrator or
governmental or regulatory authority is required for the execution, delivery and
performance by Harbinger Master, Harbinger Special, Harbinger Fund or Harbinger
Satellite Fund of this Agreement and the Stock Purchase Agreement, the
contribution of the Contribution Assets and the acceptance of the Harbinger
Shares and compliance by Harbinger Master, Harbinger Special, Harbinger Fund and
Harbinger Satellite Fund with the terms hereof and the consummation of the
Transactions, except for (i) the consents, approvals, authorizations, orders,
registrations or qualifications set forth in Section 8.1, including the FCC
Approvals and Other Regulatory Approvals; and (ii) such consents, approvals,
authorizations, orders, registrations or qualifications the failure of which to
obtain or make, individually or in the aggregate, would not prevent, materially
delay or materially impede the consummation of the Transactions or could be
obtained in the period from the Firm Offer Date up to but not including
Completion.
Section 4.4 Unregistered Securities.
(a) Investment. Except insofar as rights are conferred on any
other participants of Harbinger Master, Harbinger Special, Harbinger Fund or
Harbinger Satellite Fund under the rules of those funds, the Harbinger Shares
are being acquired for their own accounts and with no intention of distributing
the Harbinger Shares or any part thereof, and none of Harbinger Master,
Harbinger Special, Harbinger Fund or Harbinger Satellite Fund has any present
intention of selling or granting any participation in or otherwise distributing
the same in any transaction in violation of the Securities Act or the securities
or blue sky laws of any other jurisdiction. If any of Harbinger Master,
Harbinger Special, Harbinger Fund, Harbinger Satellite Fund or any Harbinger
Designee should in the future decide to dispose of any of the Harbinger Shares,
each of Harbinger Master, Harbinger Special, Harbinger Fund and Harbinger
Satellite Fund understands and hereby agrees that it may do so only in
compliance with the Securities Act and applicable securities and blue sky laws
of any other jurisdiction, as then in effect, which may include a sale
contemplated by any registration statement pursuant to which the Harbinger
Shares are then being offered.
(b) Exemption. Each of Harbinger Master, Harbinger Special,
Harbinger Fund and Harbinger Satellite Fund understands that (i) the Harbinger
Shares (A) have not been registered under the Securities Act or any state
securities Laws, (B) will be issued in reliance upon an exemption from the
registration and prospectus delivery requirements of the Securities Act pursuant
to Section 4(2) thereof and/or Regulation D promulgated thereunder and (C) will
be issued in reliance upon exemptions from the registration and prospectus
delivery requirements of state securities Laws which relate to private
offerings, and (ii) each of Harbinger Master, Harbinger Special, Harbinger Fund,
Harbinger Satellite Fund and any Harbinger Designee must therefore bear the
economic risk of such investment indefinitely unless a subsequent disposition
thereof is registered under the Securities Act and applicable state securities
Laws or is exempt therefrom. Each of Harbinger Master, Harbinger Special,
Harbinger Fund and Harbinger Satellite Fund acknowledges that each of the
Company and MSV is relying in part upon the truth and accuracy of, and each of
Harbinger Master's, Harbinger Special's, Harbinger Fund's and Harbinger
Satellite Fund's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of each of Harbinger Master, Harbinger
Special, Harbinger Fund and Harbinger Satellite Fund set forth herein in order
to determine the availability of such exemptions and eligibility of Harbinger
Master, Harbinger Special, Harbinger Fund, Harbinger Satellite Fund or any
Harbinger Designee to acquire the Harbinger Shares.
(c) Investor Representations. Each of Harbinger Master, Harbinger
Special, Harbinger Fund and Harbinger Satellite Fund represents and warrants to
the Company and MSV that (i) it is and any Harbinger Designee will be an
"accredited investor" as defined in Rule 501(a) promulgated under the Securities
Act, (ii) by reason of its business and financial experience, it has such
knowledge, sophistication and experience in making similar investments and in
business and financial matters generally so as to be capable of evaluating the
merits and risks of the prospective investment in the Harbinger Shares, is able
to bear the economic risk of such investment and, at the present time, would be
able to afford a complete loss of such investment; and (iii) it is an existing
security holder of the Company (except for Harbinger Satellite Fund), has
reviewed the information contained in the Registration Statements, is relying
solely upon the advice of its own financial, legal and tax advisors, and has
made its own independent investigation and evaluation of the merits and risks of
the investments in the Harbinger Shares.
(d) Legend. It is understood that any certificates evidencing the
Harbinger Shares will bear the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON
TRANSFER UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND STATE SECURITIES
LAWS, AND MAY NOT BE OFFERED FOR SALE, SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR
OTHERWISE DISPOSED OF UNLESS (I) REGISTERED UNDER THE APPLICABLE SECURITIES LAWS
OR (II) SUCH TRANSACTION IS EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND AN OPINION OF COUNSEL, WHICH OPINION IS REASONABLY
SATISFACTORY TO THE COMPANY, HAS BEEN DELIVERED TO THE COMPANY AND SUCH OPINION
STATES THAT THE SECURITIES MAY BE TRANSFERRED WITHOUT SUCH REGISTRATION."
The certificates evidencing the Harbinger Shares shall not be required
to contain such legend or any other legend after (i) such securities are
registered for resale under the Securities Act, (ii) following any sale of such
securities pursuant to and in accordance with Rule 144 or (iii) if such legend
is not required under applicable requirements of the Securities Act (including
controlling judicial interpretations and pronouncements issued by the Staff of
the SEC).
(e) No General Solicitation or Advertising. Each of Harbinger
Master, Harbinger Special, Harbinger Fund and Harbinger Satellite Fund
acknowledges that neither it nor any Harbinger Designee is purchasing the
Harbinger Shares as a result of any advertisements, articles, notices or other
communications published in any newspaper, magazine or similar media or
broadcast over radio or television.
(f) Independent Evaluation. Each of Harbinger Master, Harbinger
Special, Harbinger Fund and Harbinger Satellite Fund has independently evaluated
the merits of its decision to purchase or to cause a Harbinger Designee to
purchase the Harbinger Shares. Each of Harbinger Master, Harbinger Special,
Harbinger Fund and Harbinger Satellite Fund has been afforded the opportunity,
directly and through any advisors, to ask questions of the Company and MSV.
Section 4.5 Ownership of Contribution Shares and Convertible Bonds.
Harbinger owns, as of the date hereof, and as of the Notification Date, the
Contribution Shares Closing Date and the Convertible Bonds Closing Date,
respectively, good and valid title to the Contribution Shares and (subject to
Sections 2.1(a)(ii) and 2.1(b)) the Convertible Bonds, in each case, free and
clear of all Encumbrances. On the Contribution Shares Closing Date and the
Convertible Bonds Closing Date, Harbinger Master and Harbinger Special will have
transferred to the Company, and the Company will have acquired with full title
guarantee (as such expression is interpreted under English law), good and valid
title to, respectively, the Contribution Shares and the Convertible Bonds (or,
as the case may be, the Converted Shares), in each case, free and clear of all
Encumbrances.
Section 4.6 Litigation. As of the date hereof, there are no civil,
criminal or administrative actions, suits, claims, hearings, investigations or
proceedings pending or, to the knowledge of Harbinger, threatened against
Harbinger Master, Harbinger Special or Harbinger Satellite Fund that would
prevent, materially delay or materially impede the consummation of the
transactions contemplated by this Agreement. As of the date hereof none of
Harbinger Master, Harbinger Special, Harbinger Fund or Harbinger Satellite Fund,
or any material property or asset of Harbinger Master, Harbinger Special,
Harbinger Fund and Harbinger Satellite Fund, is subject to any settlement or
similar agreement with any Governmental Entity, or to any order, judgment,
decree, injunction or award of any Governmental Entity that would prevent,
materially delay or materially impede the consummation of the transactions
contemplated by this Agreement.
Section 4.7 Advisors. No agent, broker, investment banker, financial
advisor, legal advisor or other Person is, or shall be entitled, as a result of
the Company's failure to deliver the Company Approval in accordance with Section
13.5, to fees or commissions that are greater than the fees or commissions such
advisors would be entitled to receive in connection with the successful
completion of the Transactions.
Section 4.8 TVCC.
(a) TVCC LLC Interests. On the TVCC Contribution Closing Date,
Harbinger will have transferred or will have caused to be transferred to the
Company and the Company will have acquired, good and valid title to the TVCC LLC
Interests, free and clear of all Encumbrances.
(b) Organization and Standing. TVCC and each of its Subsidiaries
is a legal entity duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization and has all requisite limited
liability company or corporate power and authority to own, lease and operate its
properties and assets and to carry on its business as now conducted. TVCC and
each of its Subsidiaries is duly qualified or authorized to do business as a
foreign limited liability company or corporation and is in good standing under
the laws of each jurisdiction in which the conduct of its business or the
ownership of its properties requires such qualification or authorization, except
where the failure to be so qualified, authorized or in good standing would not
have a TVCC Material Adverse Effect.
(c) Capitalization. From and after the Option Closing Date, (i)
the authorized capitalization of TVCC will consist of 150,000,000 Class A
Preferred Units, 50,000,000 Class B Preferred Units and 300,000,000 Common Units
and (ii) Harbinger Master and Harbinger Special will own 150,000,000 Class A
Preferred Units and 225,000,000 Common Units. At the TVCC Contribution Closing
Harbinger will transfer or cause to be transferred to the Company all of the
outstanding equity interests in TVCC free and clear of any Encumbrance. As of
the TVCC Contribution Closing Date, (i) TVCC will own, through wholly-owned
Subsidiaries, all of the outstanding equity interests of LeaseCo, free and clear
of any Encumbrance, (ii) there will be no existing option, warrant, call, right
or Contract of any character to which either TVCC or LeaseCo is a party or by
which it is bound requiring the issuance, delivery, sale, repurchase, redemption
or transfer of any equity securities of TVCC or LeaseCo, (iii) there will be no
outstanding or authorized stock appreciation, phantom stock, profit
participation or similar rights with respect to TVCC or LeaseCo or the equity
interests of either of them, and (iv) neither Harbinger, TVCC nor LeaseCo will
be a party to any Contract with respect to the voting, redemption, repurchase,
sale, transfer or other disposition of the equity securities of TVCC or LeaseCo.
(d) No Conflicts. Assuming the receipt of the requisite
Regulatory Approvals, none of the execution and delivery by Harbinger of this
Agreement, or the consummation of the transactions to be effected hereunder will
conflict with or result in any breach, violation of or default (with or without
notice or lapse of time, or both) under, or give to others a right of
termination, cancellation or acceleration of any obligation under, or result in
the creation of any Encumbrances upon the properties or assets of TVCC or any of
its Subsidiaries under any provision of (i) the Organizational Documents of TVCC
or any of its Subsidiaries; (ii) any Contract to which TVCC or any of its
Subsidiaries is a party or by which any of the properties or assets of TVCC or
any of its Subsidiaries are bound; (iii) any Governmental Authorization or Order
of any Governmental Entity applicable to TVCC or any of its Subsidiaries or (iv)
any applicable Law.
(e) Consents of Third Parties. Except for the Regulatory
Approvals, no Order, Permit or declaration or filing with, or notification to,
consent, waiver or approval of any Person or Governmental Entity is required on
the part of TVCC or any of its Subsidiaries in connection with the execution and
delivery of this Agreement or the consummation of the transactions to be
effected at the TVCC Contribution Closing.
(f) Absence of Encumbrances. After consummation of the
transactions to be effected at the TVCC Contribution Closing, the Company will
own all of the outstanding equity interests of TVCC free and clear of any
Encumbrance.
(g) TVCC Subsidiaries. Section 4.8(g) of the Harbinger Disclosure
Schedule sets forth the name of each Subsidiary of TVCC, the jurisdiction of its
organization and the percentage of the outstanding capital stock (or membership
interest or partnership interest) of each Subsidiary owned by TVCC. Except as
set forth in Section 4.8(g) of the Harbinger Disclosure Schedule, neither TVCC
nor any of its Subsidiaries owns, directly or indirectly, any shares of capital
stock or equity or ownership interests in, or any interest convertible into or
exchangeable or exercisable for any equity interest in, any other Person
(collectively, "Third-Party Interests"). Neither TVCC nor any of its
Subsidiaries has any rights or is bound by any Contract to acquire, directly or
indirectly, any Third-Party Interests or to make any investment in any Person.
(h) Litigation. As of the date hereof, except as set forth in
Section 4.8(h) of the Harbinger Disclosure Schedule there are (a) no Legal
Proceedings pending or, to the knowledge of Harbinger, threatened against TVCC
or any of its Subsidiaries, and (b) no Orders of any Governmental Entity
outstanding against TVCC or any of its Subsidiaries.
(i) No Undisclosed Liabilities. As of the date hereof, except (a)
for the obligations of LeaseCo under the TVCC Lease and any Contract set forth
in Section 4.8(i) of the Harbinger Disclosure Schedule, (b) as set forth in this
Agreement, or (c) as set forth in the LeaseCo Financial Statements, neither TVCC
nor any of its Subsidiaries has any Liabilities that are, or would reasonably be
expected to be, material to TVCC and its Subsidiaries taken as a whole.
(j) LeaseCo Financial Statements. Harbinger has delivered to the
Company the unaudited consolidated balance sheets and related statements of
income of LeaseCo as of December 31, 2007 (the "LeaseCo Financial Statements").
The LeaseCo Financial Statements are accurate and complete in all material
respects as at December 31, 2007 and were prepared from the books and records of
LeaseCo as at that date. The LeaseCo Financial Statements and any notes related
thereto fairly present in all material respects the consolidated financial
condition and the results of operations of LeaseCo at December 31, 2007 and for
the periods referred to in such financial statements. Since December 31, 2007,
no event has occurred that has had or is likely to have a material adverse
effect on LeaseCo's rights to use the TVCC Spectrum License, other than a
material adverse effect that results from conditions generally affecting the
industry in which LeaseCo principally operates, or from changes in law,
regulation or policy (including, without limitation, FCC Rules and policies)
generally affecting similarly situated FCC licensees or lessees in the wireless
communications industry or general economic, political or market conditions.
(k) Taxes. LeaseCo has prepared and filed with all appropriate
Governmental Entities all material Tax Returns by the Tax date such Tax Returns
were due to be filed (after giving effect to extensions timely filed), and all
such Tax Returns are correct and complete in all material respects. LeaseCo has
paid in full all Taxes due and payable, whether or not shown on such Tax
Returns, or has made adequate provisions for all material Taxes on the latest
balance sheet date included in the LeaseCo Financial Statements. No examination
or audit of any Tax Return relating to any Taxes of LeaseCo or with respect to
any Taxes due from or with respect to LeaseCo by any Taxing Authority is
currently in progress and no written notice thereof has been received. No
assessment of Tax has been proposed in writing against LeaseCo or any of its
assets or properties. There are no outstanding agreements, waivers or
arrangements extending the statutory period of limitation applicable to any
claim for, or the period for the collection or assessment of, Taxes due from or
with respect to LeaseCo for any Taxable period. LeaseCo has always been
classified as a partnership or a disregarded entity, and not as a corporation,
for US federal income tax purposes and for purposes of all applicable state and
local income and franchise Taxes imposed on (or measured by) the net income of
LeaseCo.
(l) TVCC Lease.
(i) LeaseCo has entered into the TVCC Lease, complete and
accurate copies of which have been delivered to the Company. LeaseCo is
qualified under the FCC Rules and the Communications Act to lease the TVCC
Spectrum License and the FCC has consented to the TVCC Lease. There is no
Order outstanding against LeaseCo relating to or involving the TVCC
Spectrum License that will, or would reasonably be expected to, materially
impair or otherwise materially and adversely affect LeaseCo's interest in
the TVCC Spectrum License (other than Encumbrances that are imposed
generally by the FCC on all licenses and spectrum leases in the same class
of service as the TVCC Spectrum License).
(ii) LeaseCo has performed as of the date of this Agreement, and
will have performed as of the TVCC Contribution Closing Date, all of its
obligations required to have been performed under the TVCC Lease and
applicable FCC rules and regulations regarding spectrum leasing ("FCC
Spectrum Lease Rules"), except for those the non-performance of which would
not have a TVCC Material Adverse Effect. No event has occurred or condition
or state of facts exists that constitutes or, after notice or lapse of time
or both, would constitute a breach or default under the TVCC Lease or FCC
Spectrum Lease Rules, which permits or, after notice or lapse of time or
both, would permit revocation, cancellation, suspension or adverse
modification of the TVCC Lease, or which might adversely affect the rights
of LeaseCo under the TVCC Lease, except for those the occurrence of which
would not have a TVCC Material Adverse Effect.
(iii) As of the date hereof, LeaseCo has made all regulatory
filings required, and paid all applicable fees and assessments imposed,
with respect to the TVCC Lease by any Governmental Entity, 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.
(iv) Harbinger has no reason to believe, based on conditions or
events existing prior to or at the date of this Agreement, that the TVCC
Spectrum License will be or is reasonably likely to be terminated or
otherwise revoked prior to its scheduled termination date.
(m) LeaseCo Insurance. LeaseCo's insurance policies are in full
force and effect and LeaseCo has timely paid all applicable premiums thereunder.
(n) LeaseCo Contracts and Obligations. Section 4.8(n) of the
Harbinger Disclosure Schedule sets forth a list of all Contracts to which
LeaseCo is a party or by which LeaseCo is bound as of the date hereof, other
than immaterial contracts that can be cancelled by LeaseCo on 30 days' notice or
less, without any penalty or continued liability. As at the date hereof all of
such Contracts are valid, binding and in full force and effect on LeaseCo.
Except as set forth in Section 4.8(n) of the Harbinger Disclosure Schedule,
LeaseCo is not in default under any material provision of any of such Contracts
and, to the knowledge of Harbinger, no other party to any such Contracts is in
default under any material provision thereof.
(o) LeaseCo Compliance. As at the date hereof to the best of
Harbinger's knowledge, LeaseCo has, in all material respects, complied with all
Laws and Orders applicable to LeaseCo including its business. To the best
knowledge of Harbinger, LeaseCo has all material Permits required by applicable
Laws.
(p) LeaseCo Environmental Matters. To the best of Harbinger's
knowledge, LeaseCo is in material compliance with all Laws promulgated (i) to
prohibit, regulate or control hazardous materials or (ii) to protect the
environment.
(q) OP LLC. To the best of Harbinger's knowledge, all of the
warranties made in this Article IV, insofar as they relate to LeaseCo's
compliance with the Communications Act, FCC Rules, and the TVCC Lease, are also
true and correct with respect to OP LLC's compliance with the Communications
Act, FCC Rules, and the TVCC Lease.
Section 4.9 FIRPTA
None of the Contribution Assets constitutes, in whole or in part, a
"United States real property interest" as determined pursuant to Section 897 of
the Code and the Treasury Regulations thereunder.
Section 4.10 Tax Matters.
Harbinger is not aware of any fact or circumstance that would, if
Harbinger elects to exercise its rights pursuant to Section 20.3(a) or (c),
prevent the contribution of the Contribution Assets and, with respect to the
transaction described in Section 20.3(c), the contribution of the Common Stock
to New Parent that is deemed to occur as a consequence of the transactions
described therein from qualifying as an exchange governed by Section 351(a) of
the Code.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND MSV
-----------------------------------------------------
Each of the Company and MSV acknowledges that (i) the representations
and warranties in this Article V have been a material and necessary inducement
for Harbinger to agree to enter into this Agreement and the Stock Purchase
Agreement and to contribute the Contribution Assets and to acquire the Harbinger
Shares and (ii) Harbinger is relying on such representations and warranties.
Except (i) as set forth in the corresponding sections or subsections of the
disclosure schedule delivered to Harbinger by the Company concurrently with the
execution and delivery of this Agreement (the "Company Disclosure Schedule"), or
to the extent that the qualifying nature of such disclosure with respect to
another section or subsection is reasonably apparent on the face of the Company
Disclosure Schedule and (ii) as disclosed in the SEC Reports filed after
December 31, 2007 but prior to the date of this Agreement (the "Filed SEC
Reports") (excluding any disclosures set forth in any section of a Filed SEC
Report entitled "Risk Factor" or "Forward-Looking Statements"), each of the
Company and MSV hereby represents and warrants to Harbinger as of the date
hereof and, other than with respect to Section 5.6, as of the Bring Down Date.
Section 5.1 Corporate Status. Each of the Company and MSV and its
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 entity, as applicable, power to own its property
and assets and to transact the business in which it is engaged and presently
proposed 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, individually or in the aggregate, a Material Adverse Effect.
Neither of the Company nor any of its Significant Subsidiaries is currently in
violation of any of the provisions of its Organizational Documents, each as
amended to date. Section 5.1 of the Company Disclosure Schedule contains a
correct and complete list as of the date hereof of each jurisdiction where the
Company and/or each of its Subsidiaries is organized and/or qualified to do
business.
Section 5.2 Capitalization.
(a) Section 5.2(a) of the Company Disclosure Schedule discloses
the number of authorized, issued and outstanding shares of capital stock of the
Company, and outstanding warrants and options to purchase capital stock of the
Company 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 at
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 the Company. 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 the Company. As of the date hereof, except as
further disclosed in Section 5.2(a) of the Company Disclosure Schedule, there
are no other outstanding options, warrants, rights (including conversion or
preemptive rights) or any agreement for the purchase or acquisition from the
Company of any shares of the Company's capital stock or voting agreements with
respect to equity of the Company or any of its Subsidiaries. All outstanding
shares of the capital stock of the Company have been duly authorized, validly
issued, fully paid and non-assessable. Except as disclosed in Section 5.2(a) of
the Company Disclosure Schedule, there are no obligations, contingent or
otherwise, of the Company or its Subsidiaries to repurchase, redeem or otherwise
acquire any shares of Common Stock or other equity securities of the Company or
its Subsidiaries. Except as disclosed in Section 5.2(a) of the Company
Disclosure Schedule, there are no anti-dilution or price adjustment provisions
contained in any security issued by the Company (or in any agreement providing
rights to security holders). None of the outstanding shares of capital stock of
the Company were issued in violation of the Securities Act or any state
securities Laws.
(b) Section 5.2(b) of the Company Disclosure Schedule 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 5.2(b) of the Company Disclosure Schedule, 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
non-assessable. Except as disclosed in Section 5.2(b) of the Company Disclosure
Schedule, 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.
Section 5.3 Corporate Power and Authority. All corporate action on the
part of each of the Company, MSV and MSV LLC necessary for the authorization,
execution, delivery and performance of this Agreement, the Stock Purchase
Agreement, the Consulting Agreement and the Registration Rights Agreement has
been taken. Each of the Company, MSV and MSV LLC has all requisite corporate
power and authority to enter into this Agreement, the Stock Purchase Agreement,
the Consulting Agreement and the Registration Rights Agreement and to carry out
and perform its obligations under the terms hereof and thereof. The Boards of
the Company, MSV and MSV LLC have each approved the entering into of this
Agreement, the Stock Purchase Agreement, the Consulting Agreement and the
Registration Rights Agreement and the performance of their obligations hereunder
and thereunder in accordance with the terms of this Agreement, the Stock
Purchase Agreement, the Consulting Agreement and the Registration Rights
Agreement and have approved (i) the making of the Possible Offer Announcement
pursuant to Section 7.2; (ii) the obtaining of the Regulatory Approvals subject
to the terms and conditions set forth in Article VIII; (iii) the obtaining of
the Stockholder Approval to increase the Company's authorized share capital
subject to the terms and conditions set forth in Article IX; (iv) the raising of
the Debt Financing subject to the terms and conditions set forth in Article XII;
(v) the Contribution Closing subject to the terms and conditions set forth in
Article II; (vi) the issuance of the Harbinger Purchased Shares subject to the
terms and conditions set forth in the terms of the Stock Purchase Agreement;
(vii) the issuance of the Sponsor Fee Shares subject to the terms and conditions
set forth in Article XVII; and (viii) the implementation of the No-Deal Rights
Offering subject to the terms and conditions set forth in Article XIX.
Section 5.4 Valid Issuance of Harbinger Shares. The Harbinger Shares
issuable on the relevant Contribution Closing Date or the Closing Date or such
other date as may be agreed subject to the terms and conditions set forth in
this Agreement and the Stock Purchase Agreement against receipt from Harbinger
of the Contribution Assets and from Harbinger Satellite Fund or a Harbinger
Designee of the Cash Purchase Price will, subject to obtaining the Stockholder
Approval in accordance with Article IX, have been duly authorized and, when
issued upon the relevant Contribution Closing Date, the Closing Date or such
other date as may be agreed subject to the terms and conditions set forth in
this Agreement and the Stock Purchase Agreement will be validly issued, fully
paid and non-assessable and free of any Encumbrances, other than any such
Encumbrances created by Harbinger.
Section 5.5 No Violation. None of the execution, delivery and
performance by each of the Company, MSV and MSV LLC of this Agreement, the Stock
Purchase Agreement, the Consulting Agreement and the Registration Rights
Agreement 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 any of the Company, MSV, MSV LLC or any of their
Significant Subsidiaries pursuant to the terms of any indenture, mortgage, deed
of trust, agreement or other material instrument to which any of the Company,
MSV, MSV LLC 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 Company, MSV,
MSV LLC or any of their Significant Subsidiaries or (c) will violate any
provision of its Organizational Documents, 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.
Section 5.6 No Consents Required. Assuming the accuracy of Harbinger's
representations and warranties set forth in this Agreement, no consent,
approval, authorization, order, registration or qualification of or with any
court or arbitrator or governmental or regulatory authority is required for the
execution, delivery and performance by the Company, MSV or MSV LLC of this
Agreement, the Stock Purchase Agreement and the Registration Rights Agreement,
the acceptance of the Contribution Assets and the issuance of the Harbinger
Shares and compliance by the Company with the terms hereof and the consummation
of the Transactions, except for (i) the consents, approvals, authorizations,
orders, registrations or qualifications detailed in Section 8.1, including the
FCC Approvals and other Regulatory Approvals; (ii) the consents, approvals,
authorizations, orders, registrations, qualifications, notices or filings set
forth on Section 5.6 of the Company Disclosure Schedule; and (iii) such
consents, approvals, authorizations, orders, registrations or qualifications the
failure of which to obtain or make, individually or in the aggregate, has not
had and would not reasonably be expected to have a Material Adverse Effect, or
could be obtained in the period from the Firm Offer Date up to but not including
Completion.
Section 5.7 Company Financial Statements; Indebtedness.
(a) The financial statements and supporting schedules included in
the Filed SEC Reports (the "Company Financial Statements") present fairly, in
all material respects, the consolidated financial position of the Company and
its Subsidiaries 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 5.7(b) of the
Company Disclosure Schedule or the Company Financial Statements, the Company and
its Significant Subsidiaries, taken as a whole, have no Indebtedness outstanding
at the date hereof.
Section 5.8 Business Plan. The Company has provided to Harbinger a
complete and accurate copy of its current Business Plan as of the date hereof.
Section 5.9 Internal Accounting Controls. The Company 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. The Company has established disclosure controls and procedures (as
defined in Exchange Act Rule 13a-15(e)) for the Company and designed such
disclosure controls and procedures to reasonably ensure that information
required to be disclosed by the Company 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 the Company's management as appropriate to allow timely
decisions regarding required disclosure. The Company has carried out evaluations
of the effectiveness of their disclosure controls and procedures as required by
Rule 13a-15 of the Exchange Act.
Section 5.10 No Material Adverse Effects. Except as set forth on
Schedule 5.10, (a) since December 31, 2007 no event or events have occurred
which, either alone or together with other events or circumstances have had, or
would reasonably be expected to have, a Material Adverse Effect and (b) since
December 31, 2007 through the date hereof, no event has occurred, and the
Company has not taken any action, that would have required the consent of
Harbinger pursuant to Section 16.1 had such event or action occurred after the
date of this Agreement. For the avoidance of doubt, the Filed SEC Reports do not
disclose the occurrence of any event or events that have had, or would
reasonably be expected to have, a Material Adverse Effect.
Section 5.11 Independent Accountants. As of the date hereof, Ernst &
Young LLP, who has certified certain financial statements of the Company, is the
independent registered public accounting firm with respect to the Company within
the applicable rules and regulations adopted by the SEC and the Public Company
Accounting Oversight Board (United States) and as required by the Securities
Act.
Section 5.12 Litigation. As of the date hereof other than as set forth
in Section 5.12 of the Company Disclosure Schedule, there are no civil, criminal
or administrative actions, suits, claims, hearings, investigations or
proceedings pending or, to the best knowledge of the Company, threatened against
the Company or any of its Subsidiaries. As of the date hereof neither the
Company nor any of its Subsidiaries, or any material property or Assets of the
Company or any of its Subsidiaries, is subject to any settlement or similar
agreement with any Governmental Entity, or to any order, judgment, decree,
injunction or award of any Governmental Entity.
Section 5.13 Tax Matters. Except as would not reasonably be expected
to have a Material Adverse Effect and except as disclosed in Section 5.13 of the
Company Disclosure Schedule, (a) each of the Company and its Subsidiaries has
filed all Tax Returns required to be filed by it, all such Tax Returns are true
and correct, and the Company and each of its Subsidiaries has paid all Taxes due
and payable, whether or not shown on such Tax Returns, or has made adequate
provision (in accordance with GAAP) for all Taxes on the latest balance sheet
included in the Company Financial Statements; (b) there is no pending
examination, investigation, audit, suit, action, claim or proceeding relating to
Taxes of the Company or any of its Subsidiaries, and no written notice thereof
has been received by the Company and any Subsidiary; (c) neither the Company nor
any of its Subsidiaries has received written notice of a determination by any
Taxing Authority that any Tax amounts are owed by the Company or any of its
Subsidiaries, which determination has not been paid, compromised, or otherwise
finally disposed of, and, to the knowledge of the Company, no such determination
is proposed or threatened; (d) there are no Encumbrances arising from or related
to Taxes on or pending against the Company or any of its Subsidiaries, or any of
their properties, other than statutory liens for Taxes that are not yet due and
payable; (e) neither the Company nor any of its Subsidiaries has constituted
either a "distributing corporation" or a "controlled corporation" (within the
meaning of Section 355(a)(1)(A) of the Code) in a distribution of stock
qualifying or intended to qualify for tax-free treatment under Section 355(a) of
the Code within the two-year period prior to the date of this Agreement; and (f)
the Company is not aware of any fact or circumstance that would, if Harbinger
elects to exercise its rights pursuant to Section 20.3(a) or (c), prevent the
contribution of the Contribution Assets and, with respect to the transaction
described in Section 20.3(c), the contribution of the Common Stock to New Parent
that is deemed to occur as a consequence of the transactions described therein,
from qualifying as an exchange governed by Section 351(a) of the Code.
Section 5.14 Subsidiaries. As of the date hereof, the Company has no
directly or indirectly held Subsidiaries other than those disclosed in Section
5.14(a) of the Company Disclosure Schedule. A true and complete list as of the
date hereof of all of the Company's Subsidiaries, together with the percentage
of the outstanding capital stock (or membership interest or partnership
interest) of each such Subsidiary owned by the Company and each other
Subsidiary, is set forth on Section 5.14(b) of the Company Disclosure Schedule.
Each of the Company and its Subsidiaries has good and marketable title to all of
the shares (or other equity interests) it purports to own of the stock or other
equity interest of each Subsidiary, free and clear in each case of any
Encumbrance except as otherwise pledged in the 14% Notes Indenture. All such
shares have been duly authorized, validly issued and are fully paid and
non-assessable. Except as disclosed in Section 5.14(c) of the Company Disclosure
Schedule, the Company does not directly or indirectly own any equity or similar
interest in, or any interest convertible into or exchangeable or exercisable for
any equity or similar interest in, any corporation, partnership, joint venture
or other business association or entity.
Section 5.15 Properties. Except as disclosed in Section 5.15 of the
Company Disclosure Schedule, the Company and each of its Subsidiaries owns (a)
all of its respective Assets purported to be owned by it and (b) all of its
Assets, other than Assets that are not material and that have a book value equal
to or less than $100,000. Except as disclosed in Section 5.15 of the Company
Disclosure Schedule, the Assets referred to in clause (b) of the preceding
sentence are owned by the Company and its Subsidiaries free and clear of all
Encumbrances. With respect to leased property and assets, except as disclosed in
Section 5.15 of the Company Disclosure Schedule, the Company and its
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.
Section 5.16 Authorizations.
(a) Authorizations. Section 5.16(a)(i) of the Company Disclosure
Schedule lists all material FCC, US state public utility commission ("PUC") and
foreign regulatory authority permits, licenses, certificates, registrations and
other similar material authorizations held by the Company and its Significant
Subsidiaries (collectively, the "Authorizations") as of the date hereof. Except
as disclosed in Section 5.16(a)(ii) of the Company Disclosure Schedule, the
Authorizations consist of all such authorizations necessary or appropriate for
the conduct of the Company's and its Significant Subsidiaries' business as such
business is being conducted, without regard to the implementation of the
Proposal and without regard to Authorizations which require the consent or
approval of Harbinger, which consent or approval has been denied by Harbinger.
The Company and its Significant Subsidiaries have maintained and kept in force
and effect, and, to the extent necessary, have applied in a timely manner for
the renewal of all such Authorizations. Except as disclosed in Section
5.16(a)(ii) of the Company Disclosure Schedule, the Company and its 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 5.16(a)(ii) of the
Company Disclosure Schedule, each Authorization that is material to the business
of the Company is valid and in full force and effect, and the Company and its
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 5.16(a)(ii)
of the Company Disclosure Schedule, to the Company's knowledge, 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 Company's or its
Significant Subsidiaries' material rights under any of its Authorizations.
(b) Compliance with Laws. Except as disclosed in Section 5.16(b)
of the Company Disclosure Schedule, the conduct of the Company's and its
Significant Subsidiaries' business complies with all applicable US, state, local
and foreign Laws (including, without limitation, the Communications Act 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 5.16(b) of the Company Disclosure Schedule, neither the Company nor any
of its Significant Subsidiaries is in violation of any applicable Environmental
Protection Laws, and to the knowledge of the Company, 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 Company and
its 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.
Section 5.17 Permits. The Company and its Significant Subsidiaries
have all franchises, permits, licenses and any similar authorities (the
"Permits") reasonably necessary for the conduct of their business as being
conducted by them, the absence 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
Company, threatened, which would, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect. To its knowledge, the Company and
its Significant Subsidiaries are not in default in any material respect under
any of such Permits.
Section 5.18 Leases. Each of the Company and its Significant
Subsidiaries has complied with all material obligations under all material
leases for real property to which it is a party as a lessee. All leases relating
to the material leasehold estates of each of the Company and its Significant
Subsidiaries necessary for the conduct of the business of such Person are, with
respect to the Company and its Significant Subsidiaries, valid and enforceable,
and, to the knowledge of the Company, are, valid and enforceable with respect to
the lessor, and each of the Company and its Significant Subsidiaries that is the
lessee in respect thereof currently enjoys peaceful and undisturbed possession
of the premises subject thereto.
Section 5.19 Intellectual Property.
(a) Except as disclosed in Section 5.19(a) of the Company
Disclosure Schedule, the Company and each of its 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 conduct of
its business as of the date hereof.
(b) Except as disclosed in Section 5.19(b) of the Company
Disclosure Schedule as of the date hereof, there are no material licenses or
agreements granting any Person any rights in or under the Company's and/or its
Significant Subsidiaries' owned Intellectual Property with the exception of
agreements for the sale or license of the Company's products or services in the
ordinary course of business.
(c) Except as disclosed in Section 5.19(c) of the Company
Disclosure Schedule as of the date hereof, neither the Company nor any of its
Significant Subsidiaries is a party to any agreement or license under which the
Company or any Significant Subsidiary acquires any right, license, title or
interest in, under or to any material third party Intellectual Property
(including without limitation any material 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 with respect to material 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) Neither the Company nor any Significant Subsidiary has as of
the date hereof received any written or, to the knowledge of the Company, oral,
communications alleging that the Company or any Significant Subsidiary has
violated, infringed or misappropriated or, by conducting its business as
presently conducted, to the knowledge of the Company, would violate, infringe or
misappropriate any of the Intellectual Property of any other Person.
(e) Except as disclosed in Section 5.19(e) of the Company
Disclosure Schedule, to the best knowledge of the Company and its Significant
Subsidiaries as of the date hereof, no Person is materially infringing or
misappropriating the Intellectual Property of the Company or any of its
Significant Subsidiaries.
(f) Except as disclosed in Section 5.19(f) of the Company
Disclosure Schedule as of the date hereof, neither the Company nor any
Significant Subsidiary is subject or a party to any order, decree, judgment,
stipulation or agreement restricting its ability to use any of the material
Intellectual Property, in any geographic area, market or field material to the
conduct of the business of the Company or any Significant Subsidiaries.
Section 5.20 Insurance. Except as disclosed in Section 5.20 of the
Company Disclosure Schedule, the Company and its 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 Company and its Significant
Subsidiaries are currently engaged. Except as disclosed in Section 5.20 of the
Company Disclosure Schedule, to the Company's knowledge there are no facts or
circumstances that would reasonably be expected to result in the Company not
being 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.
Section 5.21 No Defaults. Except as disclosed in Section 5.21 of the
Company Disclosure Schedule, each of the Company and its 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 Company or any of its Significant Subsidiaries.
Except as disclosed in Section 5.21 of the Company Disclosure Schedule, none of
the Company or its Significant Subsidiaries is in default in the performance or
compliance with any provisions thereof, and no event has occurred, or facts and
circumstances exist, which, after passage of time, would result in a default,
except as would not reasonably be expected to have a Material Adverse Effect.
Except as disclosed in Section 5.21 of the Company Disclosure Schedule, all
instruments evidencing outstanding Indebtedness of the Company and its
Significant Subsidiaries are in full force and effect and have not been
terminated, rescinded or withdrawn, except as would not reasonably be expected
to have a Material Adverse Effect.
Section 5.22 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 did 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 September 1, 2006, the Company 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.
Section 5.23 Satellites.
(a) Section 5.23(a) of the Company Disclosure Schedule sets forth
a list of all material contracts to which the Company or any of its 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
Company or any of its Subsidiaries, and the frequencies authorized for such use,
including for terrestrial services (the "Satellite Contracts") as of the date
hereof. All Satellite Contracts are valid, binding and in full force and effect
and the Company, and, to the knowledge of the Company, 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
5.23(b) of the Company Disclosure Schedule are, as of the date hereof, the most
recent satellite health reports issued for each of the satellites used by the
Company or any of its Subsidiaries. The Company has provided to Harbinger
complete copies of such reports, and such reports fairly and accurately describe
the health and anticipated remaining life of each such satellite.
(c) Section 5.23(c) of the Company Disclosure Schedule provides a
summary of the licensed spectrum actually available for use by the Company and
its Subsidiaries in accordance with the coordination agreements to which the
Company or any of its Subsidiaries is subject.
Section 5.24 Employee Benefits.
(a) All benefit and compensation plans, contracts, policies or
arrangements covering current or former employees or other service providers of
the Company and its Subsidiaries and current or former directors of the Company,
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 5.24(a) of the Company Disclosure Schedule, 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 5.24(a) of the Company
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 Harbinger.
(b) Section 5.24(b) of the Company Disclosure Schedule also sets
forth the names, corporate and functional titles, hire dates and the 2007 and
target 2008 annual salaries, incentive compensation, bonuses and other
compensation of all executive officers and current directors of the Company as
of the date hereof.
(c) Neither the Company nor any or its Subsidiaries nor any
entity which is considered one employer with the Company 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 the Company
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 knowledge of the Company no event
has occurred that could 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 Company's knowledge, neither
the Company 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 the Company 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 the Company 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 on Section 5.24(f) of the Company
Disclosure Schedule, as of the date hereof, there is no material pending or, to
the best knowledge of the Company, threatened litigation relating to the Benefit
Plans. Neither the Company nor any of its Subsidiaries has any obligations for
retiree health and life benefits under any Benefit Plan or collective bargaining
agreement. The Company 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 or the Stock Purchase
Agreement nor the consummation of the Transactions will (w) entitle any
employees of the Company 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 the
Company 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 the Company 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 the Company nor any of its Subsidiaries has any
material liability by reason of an individual who performs or performed services
for the Company or any of its Subsidiaries in any capacity being improperly
excluded from participating in a Benefit Plan; and, except as would not
reasonably be expected to have a Material Adverse Effect, each of the employees
of the Company and its Subsidiaries has been properly classified by the Company
and its Subsidiaries as "exempt" or "non-exempt" under applicable Law.
Section 5.25 Labor Matters. Except as set forth in Section 5.25 of the
Company Disclosure Schedule:
(a) Neither the Company nor any of its Subsidiaries is a party to
any collective bargaining agreement or other labor union contract applicable to
persons employed by the Company 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 the Company, are there any organizational
campaigns, petitions or other unionization activities seeking recognition of a
collective bargaining unit which could affect the Company 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 the
Company after due inquiry, threatened between the Company or any of its
Subsidiaries, on the one hand, and any of their respective employees, on the
other hand, and the Company has not experienced any such strike, slowdown or
work stoppage within the past three (3) years.
(c) Neither the Company 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 the Company, there are no grievances
outstanding against the Company 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
the Company or any of its Subsidiaries before the US National Labor Relations
Board or any other Governmental Entity or any current union representation
questions involving employees of the Company or any of its Subsidiaries that
could have a Material Adverse Effect.
(e) The Company and its Subsidiaries are currently in material
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, record-keeping and the
payment.
(f) To the best knowledge of the Company, each employee of the
Company 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 the Company and its Subsidiaries has paid in full to
all employees, or adequately reserved in accordance with the Company'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 Company, is
now pending or threatened before any Governmental Entity with respect to any
persons currently or formerly employed by the Company 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 the Company nor any of its
Subsidiaries is a party to, or otherwise bound by, any consent decree with, or
citation by, any Governmental Entity 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 Company, threatened with
respect to the Company 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 Company, is now pending or threatened before the United
States Equal Employment Opportunity Commission, or any other Governmental Entity
in any jurisdiction in which the Company or any of its Subsidiaries has employed
or currently employs any Person that could reasonably expected to have a
Material Adverse Effect.
(l) As of the date hereof, neither the Company nor any of its
Subsidiaries has received written notice of the intent of any federal, state,
local or foreign Governmental Entity responsible for the enforcement of labor or
employment Laws to conduct an investigation with respect to or relating to the
Company or any of its Subsidiaries and no such investigation is in progress.
(m) Except as set forth in Section 5.25(m) of the Company
Disclosure Schedule, as of the date hereof, neither the Company nor any of its
Subsidiaries is aware that any officer intends to terminate employment with the
Company or its Subsidiaries, as applicable.
Section 5.26 No Undisclosed Relationships. Except as set forth on
Section 5.26 of the Company Disclosure Schedule, no relationship, direct or
indirect, exists between or among the Company, on the one hand, and the
directors, officers, stockholders or other Affiliates of the Company, 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.
Section 5.27 Related Party Transactions. Except as disclosed in
Section 5.27 of the Company Disclosure Schedule, as of the date hereof, no
executive officer or director of the Company: (a) has any cause of action or
other claim whatsoever against, or owes any amounts to, the Company; (b) owns,
directly or indirectly, in whole or in part, any tangible or intangible property
which the Company is using or which is necessary for the business of the
Company; (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 Company, (ii) engaged in
a business related to the business of the Company or (iii) participating in any
transaction to which the Company is a party; or (d) otherwise is or has been a
party to any contract or transaction with the Company, except for their
respective employment contracts with the Company.
Section 5.28 Company Not an "Investment Company". The Company is not,
nor after receipt of the Contribution Assets and consummation of the other
Transactions will then be, required to register as an "investment company" under
the Investment Company Act.
Section 5.29 No Unlawful Payments; Compliance with Certain Laws.
(a) Neither the Company nor, to the knowledge of the Company, any
director, officer, agent, employee or other Person associated with or acting on
behalf of the Company, in each case in their capacity as such with the Company,
has (i) used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expense relating to political activity; (ii)
made any direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; (iii) violated or is in
violation of any provision of the US Foreign Corrupt Practices Act of 1977; or
(iv) made any bribe, rebate, payoff, influence payment, kickback or other
unlawful payment.
(b) The operations of the Company are and have been conducted at
all times in compliance, in all material respects, with applicable financial
recordkeeping and reporting requirements of the US Currency and Foreign
Transactions Reporting Act of 1970, as amended, the money laundering statutes of
all jurisdictions, the rules and regulations thereunder and any related or
similar rules, regulations or guidelines, issued, administered or enforced by
any governmental agency (collectively, the "Money Laundering Laws") and no
action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company with respect to the
Money Laundering Laws is pending or, to the knowledge of the Company,
threatened.
(c) None of the Company or, to the knowledge of the Company, any
director, officer, agent, employee or Affiliate of the Company, excluding
Harbinger, in each case in their capacity as such with the Company, is currently
subject to any US sanctions administered by the Office of Foreign Assets Control
of the US Department of the Treasury ("OFAC"); and the Company will not directly
or indirectly use the Contribution Assets hereunder or the proceeds from the
issuance of the Harbinger Purchased Shares or the proceeds from the Debt
Financing, or lend, contribute or otherwise make available such proceeds to any
Subsidiary, joint venture partner or other Person or entity, for the purpose of
financing the activities of any Person currently subject to any US sanctions
administered by OFAC.
Section 5.30 No Restriction on Distributions. Except as set forth in
the Company's outstanding Indebtedness on the date hereof listed in Section
5.7(b) of the Company Disclosure Schedule, pursuant to applicable Law or as
disclosed in Section 5.30 of the Company Disclosure Schedule, no Subsidiary of
the Company is currently prohibited, directly or indirectly, from paying any
dividends to the Company, from making any other distribution on such
Subsidiary's capital stock, from repaying to the Company any loans or advances
to such Subsidiary from the Company or from transferring any of such
Subsidiary's property or assets to the Company or any other Subsidiary of the
Company.
Section 5.31 No Brokers. As of the date hereof, no agent, broker,
investment banker, financial advisor or other Person (other than Xxxxxx Xxxxxxx
& Co. Incorporated) is or shall be entitled, as a result of any action,
agreement or commitment of the Company or of any of its Affiliates, to any
broker's, finder's, financial advisor's or other similar fee or commission in
connection with any of the Transactions. The Company has provided to Harbinger a
complete copy of the engagement letter it has entered into with Xxxxxx Xxxxxxx &
Co. Incorporated.
Section 5.32 No Other Representations or Warranties. Except as
otherwise expressly set forth in this Article V, as supplemented by the Company
Disclosure Schedule, none of the Company, its Subsidiaries or MSV, nor any other
Person acting on their behalf, makes any representation or warranty, express or
implied, in connection with this Agreement.
ARTICLE VI
CLOSING DELIVERIES
------------------
Section 6.1 Deliveries by Harbinger at the Closings. Harbinger Master,
Harbinger Special, and Harbinger Satellite Fund shall deliver, or cause a
Harbinger Designee to deliver, as applicable, to the Company:
(a) at the Contribution Shares Closing, (i) duly executed
transfers in favor of the Company or its nominee(s) in respect of all of the
Contribution Shares, together with the share certificates representing the
Contribution Shares and/or any and all other instruments and documents
reasonably necessary to effect the indefeasible transfer to the Company or its
nominee(s) of the Contribution Shares being contributed to the Company pursuant
to this Agreement and to cause the Contribution Shares to be registered in the
name of the Company (following payment by the Company of any Stamp Duty payable
in respect of the transfer of, or agreement to transfer, the Contribution
Shares) which if the Contribution Shares are held in CREST at the Contribution
Shares Closing shall mean giving TTE instructions to CRESTCo to transfer the
Contribution Shares to the original available balance of the Company so that the
TTE instructions settle no later than 3:00 pm (London time) on the Contribution
Shares Closing Date; or (ii) if Section 2.1(b) applies, any and all instruments
as may be necessary to comply with the terms of the Scheme (or, as the case may
be, any separate scheme of arrangement that is conditioned on the Scheme);
(b) at the Convertible Bonds Closing, if Section 2.1(a)(ii)(A)
applies, all instruments necessary to credit the Convertible Bonds to the
relevant account of the Company at Euroclear Bank S.A./N.V. or Clearstream
Banking, societe anonyme, as applicable, and as notified by the Company to
Harbinger in accordance with Section 21.3 at least two (2) Business Days prior
to the Convertible Bonds Closing, to effect the indefeasible transfer to the
Company of the Convertible Bonds pursuant to this Agreement;
(c) at the Convertible Bonds Closing, if Section 2.1(a)(ii)(B)
applies, (i) any and all instruments reasonably necessary to effect the
indefeasible transfer to the Company of the Converted Shares being contributed
to the Company pursuant to this Agreement and to cause the Converted Shares to
be registered in the name of the Company (following payment of any Stamp Duty
payable in respect of the transfer of, or agreement to transfer, the Converted
Shares) which if the Contribution Shares are held in CREST at the Contribution
Shares Closing shall mean giving TTE instructions to CRESTCo to transfer the
Contribution Shares to the available balance of the Company so that the TTE
instructions settle no later than 3:00 pm (London time) on the Contribution
Shares Closing Date; or (ii) if Section 2.1(b) applies, any and all instruments
as may be necessary to comply with the terms of the Scheme (or, as the case may
be, any separate scheme of arrangement that is conditioned on the Scheme);
(d) at the Convertible Bonds Closing, if Section 2.1(a)(ii)(C)
applies, an amount equal to the Cash Redemption Amount, payable by wire transfer
to an account notified in writing by the Company to Harbinger at least three (3)
Business Days prior to the Convertible Bonds Closing Date;
(e) at the TVCC Contribution Closing, the TVCC Certificate duly
executed by Harbinger and any and all instruments reasonably necessary to effect
the indefeasible assignment, transfer and delivery to the Company of the TVCC
LLC Interests being contributed to the Company pursuant to this Agreement and to
cause the TVCC LLC Interests to be registered in the name of the Company;
(f) at each Contribution Closing, one or more certificates, given
by a director of Harbinger Master and/or the secretary of the general partner of
Harbinger Special (as the case may be), in form and substance reasonably
satisfactory to the Company, dated as of the Contribution Shares Closing Date,
the Convertible Bonds Closing Date or the TVCC Contribution Closing Date, as the
case may be, certifying as to (i) the Organizational Documents of Harbinger
Master and Harbinger Special; (ii) the resolutions of the governing boards of
each of Harbinger Master and Harbinger Special authorizing the execution and
performance of this Agreement and the relevant Contribution; and (iii) the
incumbency and signatures of the relevant directors or other persons of
Harbinger Master and the secretary of the general partner of Harbinger Special
executing this Agreement and any related documents or certificates; and
(g) at the Stock Purchase Closing, any and all instruments and
documents required pursuant to the Stock Purchase Agreement.
Section 6.2 Deliveries by the Company, and MSV at the Closings. The
Company and MSV shall deliver to Harbinger:
(a) at each Contribution Closing, one or more certificates
evidencing the Harbinger Contribution Shares to be issued at such Contribution
Closing registered in the name of Harbinger Master, Harbinger Special, Harbinger
Fund, Harbinger Satellite Fund and/or a Harbinger Designee, as instructed in
writing by Harbinger at least one (1) Business Day prior to the Contribution
Shares Closing Date, the Convertible Bonds Closing Date or the TVCC Contribution
Closing Date, as the case may be;
(b) at each Contribution Closing, an opinion from Skadden, Arps,
Slate, Xxxxxxx & Xxxx LLP, special counsel for the Company, dated the
Contribution Shares Closing Date, the Convertible Bonds Closing Date or the TVCC
Contribution Closing Date, as the case may be, and addressed to Harbinger
Master, Harbinger Special, Harbinger Fund, Harbinger Satellite Fund and any
relevant Harbinger Designee, in a form reasonably acceptable to Harbinger;
(c) at each Contribution Closing, a certificate, in form and
substance reasonably satisfactory to Harbinger, dated as of the Contribution
Shares Closing Date, the Convertible Bonds Closing Date or the TVCC Contribution
Closing Date, as the case may be, certifying as to (i) the Organizational
Documents of the Company and MSV; (ii) the resolutions of the Company's Board
and the general partner of MSV authorizing the execution and performance of this
Agreement and the issuance of the Harbinger Contribution Shares to be issued at
such Contribution Closing; and (iii) the incumbency and signatures of the
officers of the Company, MSV and MSV LLC executing this Agreement and any
related documents or certificates;
(d) at the Stock Purchase Closing, any and all instruments and
documents required pursuant to the Stock Purchase Agreement; and
(e) on the Closing Date, the Company shall deliver to the
relevant Sponsor Fee Payees one or more certificates evidencing the issuance of
the Sponsor Fee Shares registered in the name of the applicable Sponsor Fee
Payees.
ARTICLE VII
POSSIBLE OFFER FOR TARGET
-------------------------
Section 7.1 Other Agreements.
(a) On the date of this Agreement, Harbinger and the Company
shall enter into the Securities Purchase Agreement.
(b) On the date of this Agreement, Harbinger and the Company
shall enter into the Stock Purchase Agreement.
(c) On the date of this Agreement, Harbinger and the Company
shall enter into the Registration Rights Agreement.
(d) On the Option Closing Date, LeaseCo and the Company shall
enter into the Consulting Agreement.
Section 7.2 Possible Offer Announcement. The Parties shall procure the
release of the Possible Offer Announcement to a Regulatory Information Service
at or about 7.00 a.m. (London time) on the Business Day immediately following
the date of this Agreement, or at such other time and date as may be agreed by
the Parties.
Section 7.3 Legal and Regulatory Requirements in Connection with
Possible Offer Announcement. The Parties shall use their reasonable best efforts
to comply with all necessary and applicable legal and/or regulatory requirements
in connection with the issuance of the Possible Offer Announcement, including
(i) making all necessary filings as are required with the SEC or any other
securities regulatory authority or stock exchange, and (ii) seeking and
obtaining from the SEC or any other securities regulatory authority or stock
exchange such "no-action", exemptive or other interpretive relief as may be
necessary in connection with the performance by the Parties of this Agreement or
the Stock Purchase Agreement or the Transactions. The Parties shall procure that
the Possible Offer Announcement complies with the requirements of the UK
Takeover Code and that the Possible Offer Announcement is only released after
due consultation with the UK Takeover Panel and in compliance with the
requirements of the UK Takeover Panel.
ARTICLE VIII
REGULATORY APPROVALS
--------------------
Section 8.1 General. The Parties will, as soon as reasonably
practicable, except if in Harbinger's discretion a filing or notification should
be delayed in order for the relevant Regulatory Approval to remain effective,
seek to obtain all Regulatory Approvals for (i) the change in control of the
Company pursuant to the Apollo Transaction and as contemplated herein; (ii) the
increase in foreign ownership of the Company up to 100% through the issuance of
the Harbinger Shares and/or any other shares of Common Stock to be issued to
Harbinger pursuant to the Transaction; (iii) the Contribution; and (iv) the
making and implementation of the Proposal, in each case as contemplated by this
Agreement, the Stock Purchase Agreement, the Securities Purchase Agreement, the
Possible Offer Announcement and the Apollo Transaction. For the purposes of this
Agreement, (A) "Initial Agreed Regulatory Approvals" means: (1) FCC approval for
transfer of control of the MSV FCC Licenses and the Target FCC Licenses; (2) FCC
approval for transfer of control of the TVCC Lease; (3) HSR Act notification for
change of control of the Target; (4) notification to the European Commission of
the concentration, or equivalent filings with Member States, as determined, on
or prior to the Notification Date, by Harbinger and/or (in the case of a
notification or equivalent filing that may be made on the basis of the Possible
Offer Announcement) the Company; and (B) "Other Regulatory Approvals" means: (1)
other required non-US/non-EU antitrust or regulatory approvals for the
acquisition of the Target, as determined, on or prior to the Notification Date,
by Harbinger and/or (in the case of an approval that may be obtained on the
basis of the Possible Offer Announcement) the Company and (2) other non-US
satellite regulatory approvals, waivers, directions, consents, orders decisions
(or any similar action) in respect of the change of control of any licenses
and/or frequency assignments held by, or on behalf of, the Company and the
Target or any of their Subsidiaries, as determined, on or prior to the
Notification Date, by Harbinger and/or (in the case of any regulatory approval,
waiver, direction, consent, orders decision (or any similar action) that may be
obtained on the basis of the Possible Offer Announcement) the Company.
Section 8.2 Cooperation. The Parties agree to cooperate with each
other in obtaining the Regulatory Approvals. To the extent permitted by relevant
regulatory requirements, Harbinger will take the lead in making all filings and
notifications to, and discussions with and responses to, the relevant
Competition Authorities and Regulatory Authorities in order to obtain the
Regulatory Approvals.
(a) Where Harbinger takes the lead in making a filing or
notification, Harbinger or a Harbinger-nominated advisor will (A): (i) prepare
the relevant filing or notification, provided, however, that the Company (and/or
its Subsidiaries as appropriate) shall have the right to review and comment on
any filings or notifications and Harbinger shall consider the Company's comments
(and/or the comments of the Company's Subsidiaries as appropriate) in good
faith, (ii) make the relevant filing or notification, provided, that if the
Company (and/or one of its Subsidiaries, as appropriate) is required to be a
party to such filing or notification, the Company shall be reasonably satisfied
with factual statements relating to the Company and/or its Subsidiaries as the
case may be, (iii) discuss the filing or notification with the relevant
Authorities, and (iv) prepare any necessary responses to the relevant
Authorities; and (B): (i) keep the Company apprised of the status of any
communications with, and inquiries for additional information from, such
Authorities and promptly provide the Company with copies of all relevant
documentation in relation thereto, (ii) consult with the Company (and its
Subsidiaries as appropriate) with respect to the application process and the
contents of any filing or notification, and (iii) provide the Company with
reasonable notice informing it in advance of any meeting with any Authority so
that the Company and its Subsidiaries as appropriate and (subject to the
parties' working together to eliminate unnecessary duplication of costs) their
legal advisors, as appropriate, may attend and participate at any meeting or
conference with such Authority. The Company shall use reasonable best efforts:
(i) to assist Harbinger to effect (a)(A) above, (ii) to promptly supply
Harbinger with any information that may be required to make such filings or
notifications, and (iii) to keep Harbinger apprised of the status of any
communications with, and inquiries or requests for additional information from,
such Authorities and to promptly provide Harbinger with copies of all
documentation in relation thereto.
(b) To the extent Harbinger is not permitted by the relevant
regulatory requirements to take the lead in making any such filings and
notifications, the Company (or its Subsidiaries as the case may be) will be
responsible for the preparation of all filings and notifications to, and
discussions with and responses to, the relevant Authorities in order to obtain
the Regulatory Approvals. Where the Company (or its Subsidiaries as the case may
be) is responsible for making a filing or notification, the Company (or its
Subsidiaries as the case may be) and its legal advisors shall (A): (i) make the
filing or notification, provided that Harbinger shall be reasonably satisfied
with factual statements relating to Harbinger, (ii) discuss the filing or
notification with the relevant Authorities, and (iii) file any necessary
responses with the relevant Authorities; (B): (i) keep Harbinger apprised of the
status of any communications with, and inquiries or requests for additional
information from, such Authorities and promptly provide Harbinger with copies of
all documentation in relation thereto, (ii) consult with Harbinger with respect
to the application process and the contents of any filing or notification, and
(iii) provide Harbinger with reasonable notice informing Harbinger in advance of
any meeting or conference with any Authority so that Harbinger and Harbinger's
advisors may attend and participate, to the extent permissible, at any such
meeting. Harbinger will (i) prepare drafts of the relevant filings or
notifications, (ii) prepare drafts of any responses to any Authorities, (iii)
have the right to review and comment on any filings or notifications to be filed
by the Company (or its Subsidiaries as the case may be), and the Company shall
consider Harbinger's comments in good faith, (iv) use its reasonable best
efforts to assist the Company (or its Subsidiaries as the case may be) to effect
(b)(A) above, (v) use its reasonable best efforts to promptly supply the Company
with any information that may be required to make such filings or notifications,
and (vi) have the right to attend any meetings or conferences with any
Authorities and veto any submissions or final filings to be made by the Company
or its Subsidiaries as the case may be. The Company (or its Subsidiaries as the
case may be) shall permit duly authorized representatives of Harbinger to be
present and participate at any meeting or conference with any Authority.
(c) Harbinger and the Company (or its Subsidiaries as the case
may be) will together use their reasonable best efforts (including, without
limitation, meeting with any Authorities and providing the relevant materials
and making available relevant employees) to seek to resolve promptly any
objections that may be asserted by any Authority or any other Governmental
Entity; provided however that Harbinger shall not be required to agree to any
fine, divestiture or any other penalty or remedy, or the impositions of any
limitation on its ability to conduct any of its businesses or to own or exercise
control of any of its assets and properties. Subject to Sections 13.8, 21.12(a)
and Section 21.12(b), all of the costs and expenses to be borne by the Parties
in connection with obtaining the Regulatory Approvals shall be borne by the
Party incurring the relevant cost and expense, provided that the Parties and
their advisors shall work together to eliminate or minimize any unnecessary
duplication of costs.
Section 8.3 FCC Approval. Each of the FCC Parties shall use its
reasonable best efforts to file the FCC applications seeking the FCC Approval,
with the exception of the FCC application seeking FCC approval for transfer of
control of the TVCC Lease, on or before the date that is 30 days after the
Possible Offer Announcement or such later date as the FCC Parties may mutually
agree. Each of the FCC Parties shall file the FCC application seeking the FCC
Approval for transfer of control of the TVCC Lease at such time as is determined
by Harbinger. Each of the FCC Parties shall use its reasonable best efforts to
prosecute the FCC applications and obtain the FCC Approvals, cooperate in
providing all information requested by the FCC and take all steps reasonably
necessary or appropriate to prepare, file and prosecute such applications and
obtain the FCC Approvals in each case in accordance with the terms and
conditions set forth in this Section 8.3 and subject at all times to the terms
and conditions set forth in Section 8.2. If any Person petitions the FCC to deny
or otherwise challenges the applications for the FCC Approvals or any other
application filed or amended to effectuate the purposes of this Agreement, the
Stock Purchase Agreement or the consummation of the Transactions, or in the
event the FCC grants the applications for the FCC Approvals or any other
application filed or amended to effectuate the purposes of this Agreement, or
the Stock Purchase Agreement or the consummation of the Transactions and any
Person petitions for stay, review or reconsideration of such grant before the
FCC, or seeks judicial stay or review of such grant, then each of the FCC
Parties shall use its reasonable best efforts to oppose such petition or
challenge before the FCC and vigorously defend the grant of such applications by
the FCC diligently and in good faith, provided that the FCC Parties shall not
have any obligation to participate in any evidentiary hearing on any such
application. Should the FCC deny any such application or grant any such
application subject to material adverse conditions, each of the FCC Parties
shall utilize its reasonable best efforts to secure timely reconsideration or
review of such denial or conditions, provided that the FCC Parties shall not
have any obligation to participate in any evidentiary hearing on any such denial
or imposition of conditions. The FCC Parties shall give each other a reasonable
opportunity to review any and all pleadings, documents, applications and other
materials filed by the FCC Parties with respect to any of the foregoing prior to
its filing, provided that no such filing will be made without the prior review
and approval of Harbinger, and further provided that if the Company or any of
its Subsidiaries is required to be a party to such filing, the Company shall be
reasonably satisfied with the factual statements therein relating to the Company
or any of its Subsidiaries, as the case may be. The FCC Parties shall promptly
provide to each other copies of all material communications with the FCC related
to the applications for the FCC Approval and provide to each other a reasonable
opportunity to contribute to and review any and all pleadings, documents,
applications and other materials filed with the FCC by each other. If
consummation of the Transactions referred to in Section 8.1(i) to (iv) above or
otherwise contemplated by this Agreement or the Stock Purchase Agreement
requires the approval of Industry Canada and other Authorities in Canada
including the Competition Bureau and Investment Canada, the obligations of
Harbinger and the Company under this Article VIII shall apply mutatis mutandis
to applications, pleadings, documents and other materials and communications
required to be filed with Industry Canada. The FCC Parties further agree that
they will use their reasonable best efforts to assist in any further
applications that Harbinger or its Affiliates may make in the future with FCC
and Industry Canada relating to the FCC Parties.
Section 8.4 HSR Act. As soon as reasonably practicable after the date
hereof, and in any event no later than 30 days following the date of the
Possible Offer Announcement (or such later date as the Parties may mutually
agree), Harbinger and the Company shall file or cause to be filed with the FTC
and the Antitrust Division of the DoJ, the notifications under the HSR Act
required in connection with the transactions described in Section 8.1(i) to (iv)
and otherwise as contemplated by this Agreement or the Stock Purchase Agreement.
Such filing process shall be conducted in accordance with Section 8.2.
Section 8.5 EC Merger Regulation. If the transactions referred to in
Section 8.1(i) to (iv) and otherwise as contemplated by the Agreement or the
Stock Purchase Agreement give rise to a concentration with a Community dimension
pursuant to Council Regulation (EC) 139/2004 (the "Merger Regulation"), or are
to be examined by the European Commission (the "European Commission") as a
result of a referral under Articles 4(5) or 22(3) of the Merger Regulation,
Harbinger Master, Harbinger Special, Harbinger Fund and Harbinger Satellite Fund
shall file a notification with the European Commission for a decision approving
the concentration constituted by the acquisition of the Target. Such filing
process shall be conducted in accordance with Section 8.2.
Section 8.6 Other Anti-Trust Approvals. In respect of all other
Regulatory Approvals where Harbinger is permitted under relevant regulatory
requirements to take the lead in making the filings and notifications, Harbinger
Master, Harbinger Special and Harbinger Satellite Fund shall file with the
relevant Competition Authorities such other merger control filings, if any,
required to be made in relation the transactions referred to in Section 8.1(i)
to (iv) and otherwise as contemplated by this Agreement or the Stock Purchase
Agreement, or as otherwise determined, on or prior to the Notification Date, by
Harbinger and/or (in the case of a filing that may be made on the basis of the
Possible Offer Announcement) the Company. To the extent legally required by any
such filing, the Parties shall suspend the completion of the transactions
referred to in Section 8.1(i) to (iv) until clearance is expressly obtained with
the adoption by each of the Competition Authorities of a decision of equivalent
effect to any of those set out in Section 8.5 or there is deemed clearance. In
respect of all Regulatory Approvals where Harbinger is not permitted under
relevant regulatory requirements to take the lead in making the filings and
notifications, the Company (or its Subsidiaries as the case may be) shall file
with the Competition Authorities such additional merger control filings, if any,
required to be made in relation to the transactions referred to in (i) to (iv)
and otherwise as contemplated by this Agreement or the Stock Purchase Agreement,
or as otherwise determined, on or prior to the Notification Date, by Harbinger
and/or (in the case of a filing that may be made on the basis of the Possible
Offer Announcement) the Company. To the extent that such filing legally
requires, the Parties shall suspend the completion of the transactions referred
to in Section 8.1(i) to (iv) until clearance is expressly obtained, with the
adoption by each of the Competition Authorities of a decision of equivalent
effect to any of those set out in Section 8.5 or there is deemed clearance. Such
filing process, whether effected by Harbinger or the Company, shall be made in
accordance with Section 8.2.
Section 8.7 Other Telecommunications/Frequency Approvals. Harbinger
Master, Harbinger Special and Harbinger Satellite Fund and/or the Company (or
its Subsidiaries as the case may be) shall make filings, applications and
notifications to any other relevant Regulatory Authorities (including, without
limitation, the British National Space Centre) to obtain such other regulatory
consents, authorizations, approvals, permits or waivers as Harbinger, and/or the
Company identify as being necessary or desirable in connection with the
transactions referred to in Section 8.1(i) to (iv) and otherwise as contemplated
by this Agreement or the Stock Purchase Agreement. Where it is not possible for
Harbinger and/or the Company (or its Subsidiaries as the case may be) to make
such filings, applications and notifications to the relevant Regulatory
Authorities in order to seek formal regulatory consents, authorizations,
approvals, permits or waivers, then Harbinger may, or may direct that it and/or
the Company (or its Subsidiaries as the case may be) shall, commence any
informal procedures which can be pursued with the relevant Regulatory
Authorities until such time as formal regulatory consents, authorizations,
approvals, permits or waivers can be sought from such relevant Regulatory
Authorities. Such filings, applications and notifications shall be made in
accordance with Section 8.2.
Section 8.8 Failure to Obtain Initial Agreed Regulatory Approvals.
This Agreement may be terminated upon notice by either the Company or Harbinger
to the other (provided that no Party that is in material breach of this
Agreement may terminate this Agreement hereunder) in the event that an Initial
Agreed Regulatory Approval cannot be obtained on or before the Closing Date and
the failure to so obtain such Initial Agreed Regulatory Approval would be
reasonably expected to have a Material Adverse Effect on the combined business
of the Target and the Company. In the event that a Party decides to terminate
the Agreement pursuant to this Section 8.8, such Party shall be required to
notify the other Party, in writing, of its decision to terminate the Agreement.
Prior to giving any such written notification, the terminating Party shall
consult with the other Party with respect to its decision to terminate the
Agreement.
Section 8.9 Conditions to Regulatory Approvals. This Agreement may be
terminated upon notice by either the Company or Harbinger to the other (provided
that no Party that is in material breach of this Agreement may terminate this
Agreement hereunder) in the event that an Authority or Governmental Entity
imposes any condition on a Regulatory Approval which would be reasonably
expected to have a Material Adverse Effect on the combined business of the
Target and the Company. In the event that a Party decides to terminate the
Agreement pursuant to this Section 8.9 such Party shall be required to notify
the other Party, in writing, of its decision to terminate the Agreement. Prior
to giving any such written notification, the terminating Party shall consult
with the other Party with respect to its decision to terminate the Agreement.
Section 8.10 Waiver of Regulatory Approvals without Consent. Subject
to Section 8.11, Harbinger shall have the right to determine, in its sole
discretion, whether to waive any Regulatory Approvals, provided that Harbinger
shall not be permitted to waive a Regulatory Approval without the Company's
prior written consent if (i) failure to obtain such Regulatory Approval would be
reasonably expected to have a Material Adverse Effect on the combined business
of the Target and the Company, or (ii) the matters specified in any of (i) to
(iv) of Section 8.1 could not be consummated in the absence of obtaining the
relevant Regulatory Approval without the Company breaching any applicable Laws.
Harbinger shall notify the Company promptly of any determination it makes with
respect to this Section 8.10.
Section 8.11 Waiver of Initial Agreed Regulatory Approvals with
Consent. Harbinger shall have the right to determine that an Initial Agreed
Regulatory Approval is obtainable within the Offer timetable ordinarily
permitted under the UK Takeover Code (and is therefore to be waived for the
purposes of this Article VIII and instead to be included as a condition of the
Firm Offer) only with the Company's prior written consent, with such consent not
to be unreasonably withheld.
Section 8.12 Notification of Satisfaction Date. Harbinger shall notify
the Company that the Satisfaction Date has occurred when Harbinger determines,
in its sole discretion, that all of the Regulatory Approvals have been granted
or satisfied on terms satisfactory to Harbinger or Harbinger has determined to
waive any or all of the Regulatory Approvals in accordance with Sections 8.10 or
8.11.
ARTICLE IX
STOCKHOLDER APPROVALS
---------------------
Section 9.1 Stockholder Approval. The Company shall take, in
accordance with all applicable Law and its certificate of incorporation and
bylaws, all actions reasonably necessary or advisable to obtain the approval of
the holders of a majority of the issued and outstanding shares of Voting Common
Stock to (A) approve an amendment to the certificate of incorporation of the
Company to increase its authorized shares of Non-Voting Common Stock (the
"Initial COI Amendment") such that the aggregate number of outstanding but
unissued shares of Non-Voting Common Stock is such amount as may be issued
pursuant to the Warrants (as such term in defined in the Securities Purchase
Agreement) and (B) an amendment to the certificate of incorporation of the
Company to increase its authorized shares of Common Stock (the "Further COI
Amendment" and together with the Initial COI Amendment, the "COI Amendments") to
700,000,000 shares of Voting Common Stock, being such amount as is needed for
the issuance of: (i) the Harbinger Purchased Shares; (ii) the Harbinger
Contribution Shares; (iii) the Sponsor Fee Shares; (iv) the Offer Shares; and
(v) the Non-Voting Common Stock Conversion (the "Stockholder Approval"). The
Company shall use its reasonable best efforts to obtain within 10 Business Days
after the date hereof sufficient consents in writing of stockholders of the
Company pursuant to Section 228 of the DGCL as are necessary to cause the
Stockholder Approval to be obtained in accordance with Section 9.4 below.
Section 9.2 Board Approval. The Company's Board by resolutions duly
adopted at a meeting duly called and held, which resolutions have not been
subsequently rescinded, modified or withdrawn in any way, has by unanimous vote
(i) determined that the COI Amendments are fair to, advisable and in the best
interests of the Company's stockholders other than Harbinger, (ii) approved the
COI Amendments and (iii) recommended approval and adoption of the COI Amendments
by the stockholders of the Company.
Section 9.3 Information Statement, Other Filings.
(a) (i) The Company shall prepare and file with the SEC as
promptly as practicable (and in any event use its reasonable best efforts to
file within 60 Business Days after the date of this Agreement) one or more
preliminary information statements on Schedule 14C of the Exchange Act relating
to the Stockholder Approval of the Initial COI Amendment and the Further COI
Amendment (each as amended or supplemented from time to time, the "Information
Statement"), provided, however, that if the Company is required by the SEC to
include historical financial information of the Target and/or prepare pro-forma
financial information relating to the combination of the Company with the Target
as part of either Information Statement, such time shall be extended for a
reasonable period to allow the Company to obtain or prepare such financial
information and (ii) as promptly as practicable, each of the Company, Harbinger
Master, Harbinger Special, Harbinger Fund and Harbinger Satellite Fund shall, or
shall cause its respective Affiliates to, prepare and file with the SEC all
other documents that are required to be filed by such Party in connection with
the Transactions (the "Other Filings") including amending the Information
Statement as may be required so as to obtain the approval of the SEC to mail the
Information Statement to the stockholders of the Company. Each of the Company,
Harbinger Master, Harbinger Special, Harbinger Fund and Harbinger Satellite Fund
shall promptly obtain and furnish to the others such information concerning
itself and its Affiliates that is required to be included in the Information
Statement or, to the extent applicable, the Other Filings, or that is
customarily included therein. Each of the Company, Harbinger Master, Harbinger
Special, Harbinger Fund and Harbinger Satellite Fund shall use its reasonable
best efforts to respond as promptly as practicable to any comments of the SEC
with respect to the Information Statement or the Other Filings, and the Company
shall use its reasonable best efforts to cause the definitive Information
Statement to be mailed to the Company's stockholders within two (2) Business
Days after the SEC clears the Information Statement. Each Party shall
immediately notify the other Party upon the receipt of any comments from the SEC
or its staff or any request from the SEC or its staff for amendments or
supplements to the Information Statement or the Other Filings and shall provide
the other Party with copies of all correspondence between it and its
representatives, on the one hand, and the SEC and its staff, on the other hand,
relating to the Information Statement or the Other Filings. If any information
relating to the Company, Harbinger or any of their respective Affiliates,
officers or directors, should be discovered by the Company or Harbinger which
should be set forth in an amendment or supplement to the Information Statement
or the Other Filings, so that the Information Statement or the Other Filings
shall not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading, the Party that discovers such information shall immediately notify
the other Party, and an appropriate amendment or supplement describing such
information shall be filed with the SEC and, to the extent required by
applicable Law, disseminated to the stockholders of the Company. Notwithstanding
anything to the contrary stated above, prior to filing or mailing the
Information Statement (or filing the Other Filings (or, in each case, any
amendment or supplement thereto)) or responding to any comments of the SEC with
respect thereto, the Company shall provide Harbinger an opportunity to review
and comment on the Information Statement and shall include in the Information
Statement comments proposed by Harbinger, unless the Company has a reasonable
objection to the inclusion of such comments in the Information Statement.
(b) The Information Statement and the Other Filings that are
filed by the Company will comply as to form in all material respects with the
requirements of the Exchange Act, and the rules and regulations promulgated
thereunder. The Company hereby covenants and agrees that none of the information
included or incorporated by reference in the Information Statement or in the
Other Filings, other than that information with respect to Harbinger included in
the form specified or provided by Harbinger specifically for inclusion in the
Information Statement or the Other Filings, will, in the case of the Information
Statement, at the date it is first mailed to the Company's stockholders or at
the time of any amendment or supplement thereof, or, in the case of any Other
Filing, at the date it is first mailed to the Company's stockholders or at the
date it is first filed with the SEC, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they are made, not misleading. Harbinger hereby covenants and agrees
that none of the information with respect to Harbinger included in the form
specified or provided by Harbinger or incorporated by reference by or at the
direction of Harbinger in the Information Statement or in the Other Filings
will, in the case of the Information Statement, at the date it is first mailed
to the Company's stockholders or at the time of any amendment or supplement
thereof, or, in the case of any Other Filing, at the date it is first mailed to
the Company's stockholders or at the date it is first filed with the SEC,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading.
Section 9.4 Written Consent of Board and Harbinger Share Ownership.
(a) The Company shall use its reasonable best efforts to procure
that each member of the Company's Board provides written consents with respect
to his or her shares of Voting Common Stock in favor of the Stockholder
Approval.
(b) The Company agrees that Harbinger shall be entitled, pursuant
to the Company's certificate of incorporation and by-laws, the DGCL and all
other applicable Laws, and any judicial interpretation of the foregoing, to
provide written consents with respect to its shares of Voting Common Stock in
connection with the Stockholder Approval, and that such written consents shall
be given full legal effect to the same extent as any other stockholder of the
Company.
Section 9.5 No Other Stockholder Approvals Required. The Company
represents and warrants that, other than the Stockholder Approval, no other
approval by the Company's stockholders is necessary to adopt this Agreement or
consummate the Transactions under the DGCL, the Company's certificate of
incorporation or bylaws or any other applicable Law or any contract to which the
Company or any of its Subsidiaries is a party or by which it is bound.
Section 9.6 Filing of Certificate of Amendment of Certificate of
Incorporation. The Company shall promptly file a certificate of amendment to its
certificate of incorporation, and take any and all other steps and actions as
are necessary to give legal effect to the Initial COI Amendment, immediately
following the effectiveness of the Stockholder Approval. The Company shall
promptly file a certificate of amendment to its certificate of incorporation,
and take any and all other steps and actions as are necessary to give legal
effect to the Further COI Amendment, immediately following the effectiveness of
the Stockholder Approval and the dissemination of the definitive Information
Statement relating to the Further COI Amendment and in accordance with
applicable Law and subject to the rules and requirements of the SEC.
ARTICLE X
OFFER SHARES
------------
Section 10.1 Offer Shares. Harbinger may elect to implement the
Proposal by way of Offer, and Harbinger may, subject to the terms and conditions
set forth in Article XIII, elect that all or part of the consideration for the
Offer consists of Offer Shares. In connection with an Offer which includes Offer
Shares, the Company shall file with the SEC a registration statement on Form S-4
relating to the Offer Shares and the Offer (together with any amendments
thereto, and including any documents incorporated by reference therein, the
"Offer Shares Registration Statement"), within 60 days of a request in writing
by Harbinger, provided, however, that if the Company requires additional time to
prepare the financial information required to be included in the Offer Shares
Registration Statement, such time shall be extended for a reasonable period to
allow the Company to prepare the financial information required to be included
therein. If Harbinger determines to make a request to the Company to file the
Offer Shares Registration Statement, Harbinger shall make such request to the
Company at least four (4) calendar months prior to the date that, in the good
faith opinion of Harbinger, the Regulatory Approvals are likely to be obtained.
The Company will cause the Offer Shares Registration Statement to comply with
the applicable provisions of the Securities Act and the rules and regulations
thereunder. In addition, the Company shall, upon no less than 60 days notice in
writing from Harbinger submit a draft prospectus (the "Prospectus") to the FSA
for approval in accordance with the Prospectus Rules, provided, however, that if
the Company requires additional time to prepare the financial information
required to be included in the Prospectus, such time shall be extended for a
reasonable period to allow the Company to prepare the financial information
required to be included therein. The Company will use its reasonable best
efforts to have the Offer Shares Registration Statement declared effective by
the SEC under the Securities Act as soon as reasonably practicable following the
filing of the Offer Shares Registration Statement and to have the Prospectus
approved by the FSA in accordance with the Prospectus Rules as soon as
reasonably practicable following submission of the Prospectus to the FSA.
Harbinger and its counsel shall participate along with and shall co-operate in
good faith with the Company and its counsel in the preparation of the Offer
Shares Registration Statement and the Prospectus, and the Offer Shares
Registration Statement shall only be filed, and the Prospectus shall only be
submitted, with the consent of Harbinger, such consent not to be unreasonably
withheld, rendered subject to conditions, or delayed. Upon the SEC declaring the
Offer Shares Registration Statement effective under the Securities Act (the "SEC
Approval") and the FSA approving the Prospectus for the purpose of the
Prospectus Rules (the "FSA Approval") the Company shall immediately notify
Harbinger of such approval.
Section 10.2 Other Procedural Matters relating to the Offer Shares.
The Company and its counsel shall take the lead in preparing and reviewing each
letter or submission written by or on behalf of the Company to the SEC, the
staff of the SEC or the FSA (or other governmental agency or self-regulatory
body or other body having jurisdiction, including any domestic or foreign
securities exchange), relating to the Offer Shares Registration Statement or the
Prospectus, as applicable. The Company shall use its reasonable best efforts to
promptly respond to any and all comments received from the SEC or the FSA, with
a view towards causing the Offer Shares Registration Statement or any amendment
thereto to be declared effective by the SEC, and the Prospectus to be approved
by the FSA, as soon as practicable. The Company shall not permit any officer,
manager, broker or any other Person acting on behalf of the Company to use any
free writing prospectus (as defined in Rule 405 under the Securities Act) in
connection with the Offer Shares Registration Statement filed pursuant to this
Agreement without the prior written consent of Harbinger, such consent not to be
unreasonably withheld. All expenses in relation to the Offer Shares Registration
Statement and the Prospectus shall be borne by the Company. The Company shall
use its reasonable best efforts to promptly make such other SEC and FSA filings
and submissions as are necessary in connection with the use of Offer Shares as
consideration for the Offer, including without limitation filings pursuant to
Rule 425 under the Securities Act, and requests for relief from the staff of the
SEC or from the FSA in relation to any particular aspect of the Offer. Any
filings, submissions, responses or other communications pursuant to this Section
10.2 shall only be made after consultation with Harbinger and its counsel. The
Company shall ensure that Harbinger and its advisors are kept fully apprised of
the status of any filings, submissions, responses or other communications
pursuant to this Section 10.2, and shall consult Harbinger and its counsel with
respect thereto. Harbinger and its counsel shall have the right to review and
comment on each such filing, submission, response and other communication, and
the Company shall take account any comments so received.
Section 10.3 Stock Exchange Listing and Legal Requirements. If
Harbinger requests a listing of the Offer Shares on a stock exchange, the
Company shall use its reasonable best efforts to obtain such listing, to the
extent the consideration for the Firm Offer comprises Offer Shares (and for the
avoidance of doubt regardless of whether the Firm Offer proceeds by way of a
Scheme or an Offer). The Company shall, with such assistance from Harbinger as
may be necessary for the purpose, comply with all applicable legal and
regulatory requirements in connection with the issuance and listing of the Offer
Shares. Without limiting the foregoing, (i) to the extent the Firm Offer
proceeds by way of a Scheme which includes Offer Shares, the Company shall use
its reasonable best efforts to perfect the exemption from the registration
requirements of the Securities Act afforded by Section 3(a)(10) thereunder, and
(ii) the Company, with such assistance from Harbinger as may be necessary for
the purpose, shall comply with the Listing Rules, the Prospectus Rules, FSMA,
and all applicable state securities or blue sky laws.
ARTICLE XI
EQUITY FINANCING
----------------
Section 11.1 Funding of the Harbinger Satellite Fund. It is presently
contemplated that the Harbinger Satellite Fund will be funded with a total of
the Stock Purchase Price from a to-be-determined combination of Harbinger
Master, Harbinger Special and third party investors. The Harbinger Satellite
Fund shall retain the ability to change the composition of its investors at any
time, provided that if, on the advice of its counsel, such new third party
investors' investment has an impact on the Regulatory Approvals pursuant to
Article VIII then the Parties shall cooperate with each other to make such
filings and notifications, or amendments to existing filings and notifications,
with any relevant Competition Authorities or Regulatory Authorities, so as to
obtain the relevant Regulatory Approvals, in accordance with Article VIII.
Section 11.2 Harbinger Purchased Shares.
(a) Subject to the terms and conditions set forth in Article
VIII, concurrent with the delivery of a Notification in accordance with Article
XIII, the Harbinger Satellite Fund shall, or shall procure that any relevant
investor will, provide an equity commitment letter to the Company's Board and to
the Financial Advisor (the "Equity Commitment Letter"). The Equity Commitment
Letter shall confirm the amount of committed equity financing (such amount, as
may be increased pursuant to Article XIV, the "Equity Cash Confirmation Amount")
which will be available to the Company on the Closing Date on a Certain Funds
Basis pursuant to Section 11.2(b). The Equity Cash Confirmation Amount shall be
such amount as, when taken together with the Debt Cash Confirmation Amount,
shall enable the Company to satisfy the cash consideration payable pursuant to
the Firm Offer in full, including, in the case of an Offer, any amounts which
may become payable by virtue of acquisitions of Target Shares in accordance with
the provisions of Chapter 3 of Part 28 of the Companies Xxx 0000. The terms of
the Equity Commitment Letter, and other supporting information provided by
Harbinger to the Company's Board and to the Financial Advisor shall be such as
is reasonable and customary in the UK so as to enable the Financial Advisor,
when taken together with the Debt Commitment Letter, to provide the cash
confirmation statement with respect to the Equity Cash Confirmation Amount to be
included in the Firm Offer Announcement in compliance with the terms of Rule
2.5(c) of the UK Takeover Code and to be included in the Offer Document or
Scheme Document in compliance with the terms of Rule 24.7 of the UK Takeover
Code (the "Cash Confirmation Statement").
(b) Subject to the Firm Offer Announcement being made pursuant to
and in accordance with Article XIII and the Firm Offer proceeding and the
Company performing its obligations under Article XIV and in all material
respects, the Harbinger Satellite Fund shall, or shall cause a Harbinger
Designee to, purchase from the Company the Harbinger Purchased Shares, each at
the Agreed Issue Price, upon and subject to Completion, in accordance with the
Stock Purchase Agreement. The aggregate of such purchase price (the "Cash
Purchase Price") pursuant to the Stock Purchase Agreement shall be no less than
the Equity Cash Confirmation Amount less the Financing Rights Amount to the
extent such amount is received prior to Completion, provided that, to the extent
the Target's shareholders have elected to take Offer Shares rather than cash,
the Cash Purchase Price will be reduced on a proportionate basis to reflect the
reduction in the amount of cash payable to holders of Target Shares pursuant to
the Firm Offer. The Company hereby agrees to segregate the Cash Purchase Price
received from the Harbinger Satellite Fund or a Harbinger Designee from all
other assets of the Company, other than the proceeds of the Debt Financing
raised in accordance with this Agreement, and to use such cash proceeds solely
(i) to satisfy in full the cash consideration payable to holders of the Target
Shares pursuant to the Firm Offer (the "Cash Offer Price"), (ii) to pay expenses
resulting from and relating to the Firm Offer, and (iii) to repay any
accelerated debt of the Target resulting from the Firm Offer (together, the
"Firm Offer Costs").
Section 11.3 Financing Rights Offering.
(a) Subject to the Firm Offer Announcement being made pursuant to
and in accordance with Article XIII, the Financing Rights Prospectus being
declared effective by the SEC in accordance with Section 11.4 and the Firm Offer
proceeding, the Company may make a subscription offering to its stockholders
other than Harbinger and its controlled Affiliates (the "Financing Rights
Offering") to purchase a number of shares of Voting Common Stock such that the
aggregate gross proceeds of such Financing Rights Offering is $100,000,000 (the
"Financing Rights Amount"). The Financing Rights Offering shall be open to each
holder of record of shares of Common Stock as at the Firm Offer Date (other than
Harbinger and its controlled Affiliates), and shall confer on each such holder a
right to receive, pro rata to the number of shares of Common Stock held by such
holder, the non-transferable subscription rights referred to in Section 11.5.
Harbinger and its controlled Affiliates and all of its and their direct and
indirect transferees and assigns (and subsequent transferees and assigns) of
Common Stock shall not have subscription privileges, and shall not exercise any
rights (or exercise any over-subscription privilege) made available to
stockholders in the Financing Rights Offering.
(b) It shall be a condition precedent to the consummation of the
Financing Rights Offering that is completed within 90 days of the Firm Offer
Date and the Firm Offer proceeding.
Section 11.4 Financing Rights Prospectus, Other Financing Rights
Filings.
(a) The Company shall prepare and file with the SEC a
registration statement on Form S-3, or if Form S-3 is not then available to the
Company, such form of registration statement that is then available to the
Company to effect registration of securities (the "Financing Rights Registration
Statement") including a form prospectus relating to the Financing Rights
Offering (as amended or supplemented from time to time, the "Financing Rights
Prospectus"). The Company, Harbinger Master, Harbinger Special, Harbinger Fund
and Harbinger Satellite Fund shall, or shall cause their respective Affiliates
to, prepare and file with the SEC as promptly as practicable all other documents
that are required to be filed by such Party in connection with the Financing
Rights Offering (the "Other Financing Rights Filings"), including amending the
Financing Rights Registration Statement and the Financing Rights Prospectus as
may be required, so as to obtain the approval of the SEC to mail the Financing
Rights Prospectus to the stockholders of the Company. Each of the Company,
Harbinger Master, Harbinger Special, Harbinger Fund and Harbinger Satellite Fund
shall promptly obtain and furnish to the others such information concerning
itself and its Affiliates that is required to be included in the Financing
Rights Registration Statement, the Financing Rights Prospectus or, to the extent
applicable, the Other Financing Rights Filings, or that is customarily included
therein. Each of the Company, Harbinger Master, Harbinger Special, Harbinger
Fund and Harbinger Satellite Fund shall use its reasonable best efforts to
respond as promptly as reasonably practicable to any comments of the SEC with
respect to the Financing Rights Registration Statement, the Financing Rights
Prospectus and Other Financing Rights Filings, and the Company shall use its
reasonable best efforts to cause the Financing Rights Prospectus to be mailed to
the Company's stockholders by the later of (i) the day that is 28 days after the
Firm Offer Date (or such longer period as permitted by the UK Takeover Panel
after the Firm Offer Date for posting of the Offer Document or the Scheme
Document, as the case may be) and (ii) two (2) Business Days after the SEC
declares the Financing Rights Prospectus effective. The Company shall promptly
notify Harbinger upon the receipt of any comments from the SEC or its staff or
any request from the SEC or its staff for amendments or supplements to the
Financing Rights Prospectus, the Financing Rights Registration Statement and
Other Financing Rights Filings and shall provide Harbinger with copies of all
correspondence between the Company and its representatives, on the one hand, and
the SEC and its staff, on the other hand, relating to the Financing Rights
Prospectus, the Financing Rights Registration Statement or the Other
Registration Rights Filings. If any information relating to the Company,
Harbinger or any of their respective Affiliates, officers or directors, should
be discovered by the Company or Harbinger which should be set forth in an
amendment or supplement to the Financing Rights Registration Statement, the
Financing Rights Prospectus or the Other Financing Rights Filings, so that the
Financing Rights Registration Statement, the Financing Rights Prospectus or the
Other Financing Rights Filings shall not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading, the Party that
discovers such information shall promptly notify the other Party, and an
appropriate amendment or supplement describing such information shall be filed
with the SEC and, to the extent required by applicable Law, disseminated to the
stockholders of the Company. Notwithstanding anything to the contrary stated
above, prior to filing or mailing the Financing Rights Prospectus or filing the
Financing Rights Registration Statement or the Other Financing Rights Filings
(or, in each case, any amendment or supplement thereto, but not including any
Exchange Act filings incorporated by reference in the Financing Rights
Prospectus, Financing Rights Registration Statement or the Other Financing
Rights) or responding to any comments of the SEC with respect thereto, the
Company shall provide Harbinger an opportunity to review and comment on the
Financing Rights Registration Prospectus, the Financing Rights Registration
Statement and the Other Financing Rights Filings and shall give due
consideration to the comments proposed by Harbinger.
(b) The Financing Rights Registration Statement, the Financing
Rights Prospectus and the Other Financing Rights Filings that are filed by the
Company will comply as to form in all material respects with the requirements of
the Securities Act, and the rules and regulations promulgated thereunder. The
Company hereby covenants and agrees that none of the information included or
incorporated by reference in the Financing Rights Registration Statement, the
Financing Rights Prospectus or in the Other Financing Rights Filings to be made
by the Company will, in the case of the Financing Rights Registration Statement
or any amendment or supplement thereto, at the date it is filed with the SEC, in
the case of the Financing Rights Prospectus, at the date it is first mailed to
the Company's stockholders or at the time of any amendment thereof or supplement
thereto, or, in the case of any Other Financing Rights Filing, at the date it is
first mailed to the Company's stockholders or at the date it is first filed with
the SEC, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading. Notwithstanding anything to the contrary contained herein, the
Company makes no representation or covenant with respect to any information
provided by or on behalf of Harbinger Master, Harbinger Special, Harbinger Fund
or Harbinger Satellite Fund specifically for inclusion in the Financing Rights
Prospectus or the Other Financing Rights Filings and so included in the
Financing Rights Prospectus or any Other Financing Rights Filings in the form
and context in which it was provided by Harbinger.
Section 11.5 Financing Rights Subscription Privilege and Financing
Rights Subscription Price. Each non-transferable subscription right shall
entitle the relevant holder to purchase one share of Common Stock at the same
net per share price being paid by Harbinger pursuant to the Stock Purchase
Agreement (the "Financing Rights Subscription Price"). Such right is referred to
as the "Financing Rights Subscription Privilege". The Financing Rights
Subscription Privileges shall be evidenced by non-transferable subscription
rights certificates.
Section 11.6 Exercise of the Financing Rights Subscription Privilege.
The Financing Rights Subscription Privilege shall be exercisable by each initial
holder thereof in whole or in part.
Section 11.7 Transferability of the Financing Rights Subscription
Privileges. The Financing Rights Subscription Privileges may not be sold,
transferred, or assigned to any Person, other than by operation of law or
testamentary transfer and shall not be listed for trading on any stock exchange
or market or on the OTC Bulletin Board.
Section 11.8 Irrevocable Exercise. To the extent permitted by
applicable Law, the terms of the Financing Rights Offering shall provide that
the exercise of Financing Rights Subscription Privileges by the Company's
stockholders is irrevocable.
Section 11.9 Fractional Shares. Fractional Financing Rights
Subscription Privileges shall not be allocated to holders, and the pro rata
entitlements of holders shall be eliminated by rounding down to the nearest
whole number. No cash will be issued in lieu of fractional shares.
Section 11.10 Fees and Expenses. All of the costs and expenses of the
Company in connection with the Financing Rights Offering shall be borne solely
by the Company.
Section 11.11 Use of Proceeds from the Financing Rights Offering.
(a) The subscription agent for the Financing Rights Offering
shall be required to hold funds received in payment for shares of the Common
Stock in a segregated account pending completion of the Financing Rights
Offering. The subscription agent shall hold such funds in escrow until the
Financing Rights Offering is completed or is withdrawn and canceled. The Company
may invest such proceeds in liquid securities with an AAA rating, or its
equivalent, from a reputable rating agency pending use thereof.
(b) The Company shall be required to use the net proceeds of the
Financing Rights Offering solely to fund, in part, the Firm Offer Costs, or to
the extent that the Firm Offer Costs have been funded prior to consummation of
the Financing Rights Offering, to reimburse the providers of Equity Financing
pursuant to Article XI or the providers of Debt Financing pursuant to Article
XII for a portion of the amounts provided by those providers towards the Firm
Offer Costs.
Section 11.12 No Underwriting. The Financing Rights Offering shall not
be underwritten by any third parties.
Section 11.13 No Standby Purchase Agreement. The Company shall not
enter into any standby purchase agreement with any standby purchasers in
connection with the Financing Rights Offering.
ARTICLE XII
DEBT FINANCING
--------------
Section 12.1 Agreement to Procure Financing.
(a) Following written notification from Harbinger to the Company
of Harbinger's good faith estimate of the date it is targeting as the Firm Offer
Date, the Company agrees to use its reasonable best efforts, in accordance with
this Article XII, to assist Harbinger to arrange an offering of the Company's
senior debt in a principal amount of $2,400,000,000, or such other amount, as is
requested by Harbinger, (the "Senior Debt") in an offering (the "Debt Offering")
on such terms and conditions as Harbinger may determine following consultation
with the Company. Such Senior Debt shall not be irrevocably committed until the
decision to make a Firm Offer has been made in accordance with Article XIII of
this Agreement subject to the Company executing all documentation required to
implement the Debt Financing. Any such Debt Offering shall be underwritten on a
firm commitment basis by a Qualified Underwriter on such terms so that the
Financial Advisor can provide the Cash Confirmation Statement with respect to
the Debt Cash Confirmation Amount in accordance with Section 12.1(f) below.
(b) Following written notification from Harbinger to the Company
of Harbinger's good faith estimate of the date it is targeting as the Firm Offer
Date, the Company agrees to use its reasonable best efforts, in accordance with
this Article XII, to assist Harbinger to arrange an offering and issuance of its
mezzanine debt for a principal amount of $300,000,000 or such other amount, as
is requested by Harbinger, (the "Mezzanine Debt") with such offering and
Mezzanine Debt being on such terms and conditions as Harbinger may determine
following consultation with the Company. Such Mezzanine Debt shall not be
irrevocably committed until the decision to make a Firm Offer has been made in
accordance with Article XIII of this Agreement. Any such issuance shall be
underwritten on a firm commitment basis by a Qualified Underwriter on such terms
so that the Financial Advisor can provide the Cash Confirmation Statement with
respect to the Debt Cash Confirmation Amount in accordance with Section 12.1(f)
below.
(c) The Company shall assist in the facilitation of the Debt
Financing. In order to assist Harbinger in the timely consummation of the Debt
Financing, the Company, upon Harbinger's reasonable request, and in addition to
its obligations pursuant to Section 16.3 to Section 16.5, shall (i) promptly
provide to Harbinger all requested financial and other information in the
Company's possession relating to the Company and Group, including information
and projections prepared by the Company or its advisors relating to the Company
and Group and all relevant transactions including the Transactions; (ii) ensure
that senior officers and representatives of the Group are available to Harbinger
and to the Qualified Underwriter and to their respective advisors in connection
with the Debt Financing, including ensuring their availability to assist in the
preparation of any relevant documents relating to the Debt Financing (including
assistance in obtaining industry data), and ensuring their availability to
participate in due diligence sessions and in one or more roadshows to market the
Debt Financing, in each case, at reasonable times and following reasonable
notice; (iii) prepare a prospectus, offering circular, private placement
memorandum or other document, in form and scope that is reasonable and customary
for transactions of this type and as is deemed reasonably appropriate by
Harbinger and the Qualified Underwriter, to be used in connection with the Debt
Financing; and (iv) assist Harbinger and the Qualified Underwriter in preparing
other appropriate marketing materials, in each case to be used in connection
with the Debt Financing. Harbinger may rely, without independent verification,
upon the accuracy and completeness of the information provided by the Company
pursuant to this Article XII and Harbinger accepts no responsibility for any
such information, except for such information provided by or on behalf of
Harbinger in the form provided.
(d) Harbinger shall not be obliged to provide any financial
accommodation, but shall have the option to participate in the Senior Debt
and/or the Mezzanine Debt and/or any other such form of debt financing as
Harbinger may request in accordance with Section 14.1 (the "Other Debt") if
applicable. For the purposes of this Section, the Senior Debt, the Mezzanine
Debt and the Other Debt, if applicable, shall be treated independently of each
other and the references herein to "Debt Financing" shall be a reference to
either the Senior Debt, the Mezzanine Debt or the Other Debt, as appropriate. If
Harbinger does participate in the Debt Financing, the Senior Debt, the Mezzanine
Debt or the Other Debt, as applicable, shall be regarded as non-compliant
unless: (i) more than one-half of the total principal amount of the relevant
Debt Financing is provided by one or more unaffiliated third parties, and
Harbinger participates in such Debt Financing on terms at least as favorable to
the Company as such unaffiliated third parties; or (ii) if less than one-half of
the total principal amount of the relevant Debt Financing is provided by one or
more unaffiliated third parties, then (1) a Traditional Financial Institution is
one of such unaffiliated third parties providing the relevant Debt Financing and
Harbinger participates on terms at least as favorable to the Company as such
Traditional Financial Institution or (2) the Company has the right (subject to
the overriding requirement that committed Senior Debt, Mezzanine Debt and Other
Debt, if applicable, is required to be available as soon as reasonably practical
after the Satisfaction Date (and in any event no later than the Business Day
prior to making the Firm Offer Announcement)), to seek an alternative
participant in the relevant Debt Financing in place of Harbinger on terms at
least as favorable, taken as a whole, to the Company as the terms offered by
Harbinger or (3) Harbinger's participation in the relevant Debt Financing is on
commercially reasonable terms in the opinion of Xxxxxx Xxxxxxx or another
investment bank acceptable to the Parties.
(e) The Company agrees to segregate all proceeds received from
the Debt Financing from all other assets of the Company, other than the Cash
Purchase Price received from the Harbinger Satellite Fund or Harbinger Designee
pursuant to this Agreement and the Stock Purchase Agreement and the Financing
Rights Amount, and (subject to Section 12.1(g) below) to use such proceeds
solely to satisfy the Firm Offer Costs. The Company has the ability to invest
the proceeds in liquid securities with a rating of AAA, or its equivalent, from
a reputable credit rating agency pending use thereof.
(f) The Company shall take all of the actions reasonably
requested by Harbinger pursuant to Section 12.1(c) with a view to (i) obtaining
the committed Debt Financing as soon as reasonably practicable after the
Satisfaction Date (and in any event so that committed Debt Financing is
available by no later than the Business Day prior to the date for release of the
Firm Offer Announcement in accordance with Section 13.7), and (ii) no later than
the Business Day prior to the making of the Firm Offer Announcement in
accordance with Article XIII, providing a debt commitment letter to the
Financial Advisor (the "Debt Commitment Letter"). The Debt Commitment Letter
shall confirm the level of committed debt financing available to the Company on
a Certain Funds Basis pursuant to the Debt Financing documentation (the "Debt
Cash Confirmation Amount"). The terms of the Debt Commitment Letter, and other
supporting information provided by the Company to the Financial Advisor shall be
such as is reasonable and customary in the UK so as to enable, when taken
together with the Equity Commitment Letter, the Financial Advisor to provide the
Cash Confirmation Statement in accordance with the UK Takeover Code. The Debt
Commitment Letter shall confirm that the Company will have available the Debt
Cash Confirmation Amount on or prior to the Firm Offer Date so that, taken
together with the Equity Cash Confirmation Amount, it can comply with its
obligations to satisfy the cash consideration payable pursuant to the Firm Offer
in full, including, in the case of an Offer, any amounts which may become
payable by virtue of acquisitions of Target Shares in accordance with the
provisions of Chapter 3 of Part 28 of the Companies Xxx 0000.
(g) To the extent the aggregate of the Debt Financing and the
Cash Purchase Price (the "Total Commitment") is in excess of the Firm Offer
Costs, then such excess may be used to finance the Company's and the Target's
working capital requirements following the Closing Date.
ARTICLE XIII
FIRM OFFER DECISION
-------------------
Section 13.1 Application of Article XIII. This Article XIII shall
apply upon (i) the Regulatory Approvals being obtained in accordance with
Article VIII or Harbinger serving a notice in accordance with Section 8.12
notifying the Company of the occurrence of the Satisfaction Date, and (ii) the
Stockholder Approval being obtained.
Section 13.2 Preparation for Notification. Harbinger shall consult in
good faith with the Company and keep it informed as to Harbinger's intentions
with respect to the making of the Firm Offer, including the terms of any such
Firm Offer and the proposed timing for it to give in writing to the Company's
Board the proposed terms and conditions of a Firm Offer (the "Notification").
The date of such Notification is herein referred to as the "Notification Date".
Harbinger may elect to give a Notification subject to Harbinger concurrently
delivering to the Company (i) one or more Equity Commitment Letters in respect
of an aggregate amount that is no less than the difference between the Cash
Offer Price and the aggregate of the proposed amount of Debt Financing, and (ii)
notice from the Financial Advisor that it is prepared to deliver confirmation
that the Company has available to it sufficient financing on a Certain Funds
Basis to pay the Cash Offer Price, subject only to the Company entering into the
Debt Financing documentation substantially in the form appended to the
Notification, such terms being in accordance with Article XII, and the Company
entering into the Debt Commitment Letter with respect to the amount of the Debt
Financing on signing of such Debt Financing documentation.
Section 13.3 Notification. The Notification shall set out:
(a) the proposed Firm Offer Price. The aggregate Firm Offer Price
shall: (a) not be in excess of the Financial Advisor's good faith estimate of
the Cash Confirmation Amount; and (b) be such as to enable the Parties'
accounting advisers to confirm that the aggregate of the Total Commitment and
the available cash and operating cashflow of the Group and the Target are
sufficient to meet the Firm Offer Costs and the present working capital
requirements of the Company and (provided the Target has provided sufficient
information to enable the accounting advisers to give such confirmation) the
Target;
(b) the number of Offer Shares, if any, to be offered as an
equity alternative in exchange for each Target Share as part of the Firm Offer
and confirmation that the SEC Approval and FSA Approval of the Offer Shares
Registration Statement and the Prospectus, respectively, have been received. The
increased number of Offer Shares shall not exceed the number of Offer Shares
available for issue pursuant to the terms of the Stockholder Approval, the Offer
Shares Registration Statement, the Prospectus and this Agreement (after taking
account of the number of Harbinger Shares required to be issued);
(c) the Cash Purchase Price;
(d) the proposed terms of the Debt Financing and whether those
terms are non-compliant pursuant to Section 12.1(d);
(e) whether the Firm Offer is to be implemented by way of Scheme
or Offer;
(f) all other terms and conditions of the Firm Offer;
(g) a draft of the Firm Offer Announcement;
(h) one or more certificates, executed by a director of Harbinger
Master and/or the secretary of the general partner of Harbinger Special and/or
an authorized signatory for the Harbinger Satellite Fund (as the case may be)
dated as of the Notification Date and substantially in the form set forth in
Exhibit F (the "Harbinger Certificate"); and
(i) confirmation from the Financial Advisor that it is prepared
to deliver a Cash Confirmation Statement, subject only to the Company entering
into the Debt Financing documentation and the Debt Commitment Letter with
respect to the amount of the Debt Financing.
Section 13.4 Bring Down Certificate. On the Business Day immediately
following the Notification Date (the "Bring Down Date"), the Company shall
deliver to Harbinger a certificate, dated as of the Bring Down Date,
substantially in the form set forth in Exhibit G (the "Bring Down Certificate")
executed by a duly authorized officer of the Company, together with an opinion
from Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, special counsel for the Company,
dated as of the Bring Down Date, and addressed to Harbinger in a form reasonably
acceptable to Harbinger. If the Company fails to deliver a Bring Down
Certificate and/or an opinion in compliance with this Section 13.4 Harbinger may
decide whether it wishes to reconfirm the Notification, amend the Notification
(in which case the amended Notification shall be considered by the Company's
Board pursuant to Section 13.5) or withdraw the Notification (in which case,
there shall be no Notification falling to be considered by the Company's Board
pursuant to Section 13.5).
Section 13.5 Company's Board Meeting. The Company shall convene a
meeting of the Company's Board to consider and make a determination as to
whether to proceed with the Firm Offer within five (5) Business Days after the
Notification. If the Company's Board requests, Harbinger will make itself
available to attend such meeting and to discuss the Notification and shall
procure that the Financial Advisor delivers a confirmation that it is prepared
to deliver, subject to the Company entering into the Debt Commitment Letter
relating to the Debt Financing in accordance with Section 12.1(f), a Cash
Confirmation Statement within twenty-four (24) hours of the Company executing
all documentation with respect to the Debt Financing and providing evidence to
the Financial Adviser of the execution of the relevant documentation. If the
Company's Board concludes, after receiving advice from outside counsel and an
independent financial adviser, that the Firm Offer is not fair to the Company
and its stockholders other than Harbinger (taking into account, among other
things, the proposed terms and quantum of the Debt Financing), the Company may
decline to make the Firm Offer and will give prompt notice to Harbinger that the
Company will not make the Firm Offer. If the Company's Board approves making the
Firm Offer on the terms and conditions set forth in the Notification (subject
only to the Financial Advisor providing a cash confirmation in respect of the
Cash Confirmation Amount) it shall so notify Harbinger immediately following its
decision (the "Company Approval"). If (i) the Financial Adviser fails to deliver
a Cash Confirmation Statement within twenty-four (24) hours after the Company
executing all documentation with respect to the Debt Financing, and providing
evidence to the Financial Adviser of the execution of the relevant documentation
or (ii) the lenders have withdrawn their commitment to provide the Debt
Financing for a reason other than failure of the Company to satisfy a condition
to funding set forth in the Debt Commitment Letter, then the Notification shall
be deemed to be withdrawn.
Section 13.6 Firm Offer Finalization. Following notification of the
Company Approval, the content and the terms and conditions of the Firm Offer
Announcement shall be determined by Harbinger in consultation with the Company,
provided that the terms and conditions of the Firm Offer shall not vary in any
material respect from those set out in the Notification approved by the Company.
Section 13.7 Firm Offer Announcement. Subject to the preceding
provisions of this Article XIII and subject to the Financial Advisor confirming
that it is prepared to deliver a Cash Confirmation Statement, subject to the
Company entering into the Debt Commitment Letter relating to the Debt Financing
in accordance with Section 12.1(f), the Parties, shall promptly procure the
release of the Firm Offer Announcement to a Regulatory Information Service at
such time and on such date as may be agreed by the Parties. The date of such
release shall be: (i) no later than 21 days after the Satisfaction Date or (ii)
such later date as is permitted by the UK Takeover Panel for the release of the
Firm Offer Announcement.
Section 13.8 Reimbursement of Fees. Upon the occurrence of a
Reimbursement Event, the Company shall reimburse Harbinger's reasonably incurred
and documented fees and expenses, provided that the aggregate amount of
Reimbursement Payments to be made by the Company pursuant to this Section 13.8
and Section 15.3 shall not exceed $40,000,000. If the Reimbursement Payments
exceed $40,000,000, then Harbinger shall promptly notify the Company of the
allocation of such Reimbursement Payments between this Section 13.8 and Section
15.3 provided that such allocation shall not exceed an aggregate amount of
$40,000,000. Such expenses shall be payable in cash to the extent available from
the Company's cash resources (after taking into account the funding requirements
to implement the Company's Business Plan for the period up to March 31, 2010) or
from the proceeds from the No-Deal Rights Offering, if applicable. To the extent
that the Company has insufficient cash from such sources to satisfy its
obligation to make the Reimbursement Payments, then the shortfall shall be
reimbursed by the issuance of further shares of Voting Common Stock at the
Company Per Share Value. Prior to the payment of any Reimbursement Payments,
Harbinger shall deliver the forms and such other certificates and information
set forth in Section 17.1(b) in respect of such Reimbursement Payments. For
purposes of determining the amount of any Reimbursement Payments due hereunder,
such payments shall be deemed to include any amounts required to be withheld by
the Company (as determined in good faith by the Company) in respect of Taxes
thereon that are withheld and paid over to the appropriate Taxing Authority. In
addition, to the extent that any withholding in respect of Taxes is required
with respect to any Reimbursement Payment comprised in part of shares of Voting
Common Stock, and the cash component of such Reimbursement Payment is
insufficient to satisfy the withholding Tax liability in respect of such
Reimbursement Payment, procedures similar to those set forth in Section 17.1(b)
(including the delivery of cash to satisfy any liability in respect of
withholding Taxes) shall apply.
ARTICLE XIV
TERMS OF THE FIRM OFFER
-----------------------
Section 14.1 Terms of the Offer.
(a) Amendments and Variations. If Harbinger wishes to make any
amendment to the terms and conditions of the Firm Offer, then it shall consult
with the Company's Board and shall provide in writing to the Company's Board a
notification of the required amendment(s) (the "Amendment Notification"). The
Amendment Notification shall set out: (i) the reconfirmed Firm Offer Price, or
any proposed increase; (ii) the reconfirmed number of Offer Shares, if any, to
be offered as an equity alternative in exchange for each Target Share as part of
the Firm Offer, or any proposed increase; (iii) the reconfirmed Cash Purchase
Price, or any proposed increase; (iv) the reconfirmed terms of the Debt
Financing or any proposed change (including whether any such proposed change
introduces terms that are non-compliant pursuant to Section 12.1(d)); (v)
reconfirmation of whether the Firm Offer is to be implemented by way of Scheme
or Offer; (vi) reconfirmation of all other terms and conditions of the Firm
Offer or notification of any proposed change (including, specifically, any
Amendment Veto Matters); and (vii) a draft of the announcement of the proposed
amendments to the Firm Offer.
(b) Increased Firm Offer Price. Harbinger may notify an increase
in the Firm Offer Price if: (i) the increased Firm Offer Price (the "Increased
Firm Offer Price") is covered by the Cash Confirmation Amount or is covered by
an additional Cash Confirmation Statement from the Financial Advisor; and (ii)
the Parties' accounting advisers are able to confirm that the aggregate of the
Total Commitment and the available cash and operating cashflow of the Group and
the Target are sufficient to meet the increased Firm Offer Costs and the present
working capital requirements of the Company and (provided the Target has
provided sufficient information to enable the accounting advisers to give such
confirmation) the Target. If (i) and/or (ii) is not satisfied, then Harbinger
may agree to increase the Equity Cash Confirmation Amount that the Harbinger
Satellite Fund or Harbinger Designee has provided pursuant to Article XI or may
require the Company to use its reasonable best efforts to increase the amounts
available under the Debt Financing, so as to enable Harbinger to require an
increase in the Firm Offer Price. For the avoidance of doubt, Harbinger shall
have no obligation to raise any further equity or debt finance.
(c) Increase in Offer Shares. Harbinger may only notify an
increase in the number of Offer Shares being offered to Target shareholders in
exchange for Target Shares, if: (i) the Stockholder Approval is sufficient to
allow such increase in the number of Offer Shares (taking into account the
number of Harbinger Shares required to be issued); and (ii) the Offer Shares
Registration Statement and the Prospectus are amended to reflect such increase
and such amendments receive SEC Approval and FSA Approval respectively.
(d) Harbinger's Amendment Right. Subject to Section 14.1(e),
Harbinger shall have the right to require the Company to amend or revise any or
all of the terms of any Offer or Scheme, as applicable, provided that such
amendments and/or revisions, do not constitute Amendment Veto Matters and are
made in accordance with all applicable Laws and regulations and are permitted by
the UK Takeover Panel. Immediately following the receipt of an Amendment
Notification regarding any such amendment or revision, the Parties shall take
all such steps as are reasonably necessary to implement any revised or amended
Offer or Scheme, as applicable.
(e) Company's Response. If the Amendment Notification contains
amendments and/or revisions that constitute Amendment Veto Matters, the Company
shall convene a meeting of the Company's Board to be held within two (2)
Business Days of the Amendment Notification or such shorter period as is
reasonable under the circumstances to consider the contents of the Amendment
Notification. If the Company's Board requests, Harbinger will make itself
available to attend such meeting and to discuss the Amendment Notification and
shall procure that, if the Cash Confirmation Statement does not cover the
Increased Firm Offer Price, the Financial Advisor delivers a confirmation, that
subject to (if applicable) the Company entering into revised Debt Financing
documentation in respect of the increased amounts available to the Company under
the Debt Financing pursuant to Section 14.1(b) and the Company entering into a
Debt Commitment Letter relating to such increased Debt Financing, it is prepared
to deliver a Cash Confirmation Statement in respect of the increased Cash Offer
Price within twenty-four (24) hours of the Company's executing all documents
with respect to the Debt Financing and providing evidence to the Financial
Advisor of the execution of the relevant documentation. If the Company's Board
concludes, after receiving advice from outside counsel and from an independent
financial advisor, that the adoption of any Amendment Veto Matter contained in
the Amendment Notification is not fair to the Company and its stockholders other
than Harbinger (taking into account, among other things, the proposed terms and
quantum of the Debt Financing), the Company may reject the Amendment
Notification and will give prompt notice thereof to Harbinger. If the Company's
Board approves the Amendment Notification and (subject only to the Financial
Advisor confirming the increased Cash Confirmation Amount) the making of the
Firm Offer, then it shall so notify Harbinger immediately following its
decision. If (i) the Financial Adviser fails to deliver a Cash Confirmation
Statement within twenty-four (24) hours of the Company executing all
documentation with respect to the Debt Financing and providing evidence to the
Financial Advisor of the execution of the relevant documentation or (ii) the
lenders have withdrawn their commitment to provide the Debt Financing for a
reason other than failure of the Company to satisfy a condition to funding set
forth in the Debt Commitment Letter, then the Amendment Notification shall be
deemed to be withdrawn.
(f) Company's Amendments. The Company shall not make any
amendments to the terms and conditions of the Firm Offer without the prior
written instruction or consent of Harbinger.
Section 14.2 Waiver, Satisfaction and Invocation of Conditions.
(a) If Harbinger wishes to waive, determine to be satisfied or
invoke a condition to the Firm Offer, Harbinger shall consult with the Company's
Board and shall provide in writing to the Company's Board a notification of the
required action (the "Waiver Notification"). Subject to Section 14.2(b),
Harbinger shall have the right to require the Company (i) to waive any condition
of the Firm Offer or (ii) to determine that a condition of the Firm Offer shall
be declared to be, or treated as, satisfied or continuing to be satisfied; or
(iii) to invoke any condition of the Firm Offer (subject to the requirements of
the UK Takeover Panel).
(b) If the Waiver Notification contains any proposed waiver or
determination that constitutes an Amendment Veto Matter, the Company shall
convene a meeting of the Company's Board, to be held within two (2) Business
Days of such Waiver Notification, or such shorter period as is reasonable under
the circumstances, to consider the contents of the Waiver Notification. If the
Company's Board requests, Harbinger will make itself available to attend such
meeting and to discuss the Waiver Notification. If the Company's Board
concludes, after receiving advice from outside counsel and from an independent
financial advisor, that the adoption of any Amendment Veto Matter contained in
the Waiver Notification is not fair to the Company and its stockholders other
than Harbinger, the Company may reject such Waiver Notification and will give
prompt notice thereof to Harbinger. If the Company's Board approves the Waiver
Notification, then it shall so notify Harbinger immediately following its
decision.
(c) The Company shall not waive any condition of the Firm Offer,
determine that a condition of the Firm Offer shall be declared to be, or treated
as satisfied or continuing to be satisfied, or (except with respect to any
condition whose waiver was proposed in a Waiver Notification and was rejected by
the Company's Board in accordance with Section 14.2(b)) invoke any condition of
the Firm Offer, without in each case the prior written instruction or consent of
Harbinger.
Section 14.3 Implementation of Proposal. If Harbinger has elected to
implement the Proposal by way of Scheme, it reserves the right, and may elect at
any time, to require the Proposal to be implemented by way of an Offer, whether
or not the Scheme Document has been dispatched, provided that Harbinger consults
with the Company before making such election and subject to the requirements of
the UK Takeover Panel. If Harbinger elects to require the Proposal to be
implemented by way of an Offer the Parties agree to assist and co-operate in
preparing all such documents and taking all such steps as are reasonably
necessary for the implementation of such Offer consistent with the provisions of
this Agreement. If Harbinger has elected to implement the Proposal by way of an
Offer, it reserves the right and may elect at any time to require the Proposal
to be implemented by way of a Scheme, whether or not the Offer Document has been
dispatched, provided that Harbinger consults with the Company before making such
election and subject to the requirements of the UK Takeover Panel. If Harbinger
elects to require the Proposal to be implemented by way of a Scheme the Parties
agree to assist and co-operate in preparing all such documents and taking all
such steps as are reasonably necessary for the implementation of such Scheme
consistent with the provisions of this Agreement.
Section 14.4 Advisors to the Firm Offer. The Company shall appoint
Xxxxxx Xxxxxxx as its financial advisor and Skadden, Arps, Slate, Xxxxxxx & Xxxx
LLP as its legal advisor in relation to the Firm Offer. Pillsbury Xxxxxxxx Xxxx
Xxxxxxx LLP shall act as the Company's US regulatory legal advisor to the Firm
Offer. Harbinger shall appoint Xxxxxxx Xxxxx International as its financial
advisor and Linklaters LLP and Weil, Gotshal & Xxxxxx LLP shall act as its legal
advisors in relation to the Firm Offer. Goldberg, Godles, Wiener and Xxxxxx
shall act as Harbinger's US regulatory legal advisor to the Firm Offer. Xxxxx &
Xxxxxx PLLC and Xxxxxxx and Xxxxxx LLP shall act as Harbinger's joint US
antitrust legal advisors to the Firm Offer. Harbinger shall also have the right
to appoint such other financial, legal and other advisors (including media
relations firms and proxy solicitation agents) as it considers necessary or
desirable to assist in implementing the Firm Offer in accordance with this
Agreement, and the terms of the Firm Offer. Subject to the terms and conditions
set forth in Article VIII, Harbinger's appointed advisors shall take primary
responsibility for all filings, submissions, correspondence and discussions with
regulatory and government authorities, including the UK Takeover Panel, the SEC
(but only with respect to the Firm Offer), the FCC and the DoJ. The Company and
its advisors shall have full participation rights in all such communications and
Harbinger and its advisors shall keep the Company and its advisors fully
informed of all communications, consult with the Company and its advisors in
relation to any communications and allow the Company and (subject to the
Parties' agreeing, to the extent possible, to work together to eliminate or
minimize the duplication of advisor costs) its advisors to participate in any
discussions. If the Company and its advisors receive any direct communication
from any regulatory or government authority, they shall promptly notify
Harbinger and its advisors and allow them to participate and lead in any
discussions or correspondence.
Section 14.5 Preparation of Documents. Each Party shall use reasonable
best efforts, and procure that its Affiliates, directors, employees and its
relevant professional advisors assist it, in preparing all such documents and
taking all such steps as are necessary or desirable to implement the Firm Offer
in accordance with, and subject to the terms and conditions of, this Agreement
and in accordance with the Companies Acts, the UK Takeover Code and the
requirements of the UK Takeover Panel, the Securities Act, the Exchange Act,
FSMA, the Listing Rules and any other applicable Laws and/or regulations. Each
of the Parties shall take all such steps as are necessary or desirable promptly
to provide all such information about itself, its Affiliates and its directors,
officers and employees as may reasonably be necessary and which is required for
the purpose of inclusion in the Scheme Document or Offer Document or any other
document required for the purposes of implementing the Scheme or Offer
(including the Offer Shares Registration Statement and the Prospectus, if
applicable), having regard to the requirements of the Companies Acts, the UK
Takeover Code and the requirements of the UK Takeover Panel, the Securities Act,
the Exchange Act, FSMA, the Listing Rules and any other applicable Laws and/or
regulations, and to provide all other assistance as may be required in
connection with the preparation of the Scheme Document, the Offer Document, or
the Offer Shares Registration Statement or the Prospectus including access to
and ensuring reasonable assistance is provided by the relevant professional
advisors.
Section 14.6 Disclosure in Documents. The Company, Harbinger Master,
Harbinger Special, Harbinger Fund and the Harbinger Satellite Fund shall ensure
that all documents necessary for implementing the Offer or Scheme, including the
Offer Document or Scheme Document and the Offer Shares Registration Statement or
Prospectus, if applicable, shall be prepared to the highest standard of care and
accuracy and that all information necessary to be contained in such document
shall be adequately and fairly presented and provided as soon as reasonably
practicable.
Section 14.7 Content of Documents. Subject to determining the terms
and conditions of the Firm Offer in accordance with Article XIII and Section
14.1 and Section 14.2, the Parties shall jointly agree the contents of all
documents that are prepared, and considered by the Parties to be desirable or
necessary, for the purposes of the Firm Offer. In relation to the information
contained in the Prospectus, the Offer Document and the Scheme Document: (i)
Harbinger will procure that the relevant directors, investment committee
members, or other persons at Harbinger acceptable to the UK Takeover Panel
accept responsibility for all of the information contained in such documents
other than the information relating to the Company and the Target, or otherwise
as required by the UK Takeover Panel; and (ii) the Company will procure that
directors and/or officers of the Company acceptable to the UK Takeover Panel
accept responsibility for all of the information contained in such documents
relating to the Company, or otherwise as required by the UK Takeover Panel.
Section 14.8 Amendment Veto Matters. The following shall constitute
"Amendment Veto Matters" for the purposes of this Article XIV: (i) an Increased
Firm Offer Price, (ii) a change in the mix of cash and Offer Shares being
offered to the Target's shareholders in the Firm Offer Price, (iii) any waiver
or amendment to the acceptance condition of an Offer, (iv) and waiver of any
condition to the Firm Offer where the UK Takeover Panel would have permitted the
Parties to rely on such condition to lapse the Offer (or any amendment to any
condition to the Firm Offer that has a similar effect to any such waiver).
ARTICLE XV
CONDUCT OF OFFER
----------------
Section 15.1 Conduct of the Parties.
(a) Subject to the terms and conditions set forth in this
Agreement, and in accordance with the Companies Acts, the UK Takeover Code, the
Securities Act, the Exchange Act, FSMA, the Listing Rules and any other
applicable Law, each of the Parties agrees to use reasonable best efforts to
take, or cause to be taken, or procure that its Affiliates, directors, employees
and relevant professional advisors take all actions, and do, or cause to be
done, and assist and cooperate with the other Parties in doing, all things
reasonably necessary, proper or advisable to consummate and make effective, in
the most expeditious manner practicable and in accordance with the prescribed
timetable, the Transactions, provided that such action does not extend to
requiring Harbinger to procure equity financing or give Notification initiating
the Firm Offer. Each of the Parties shall with such assistance as it shall
reasonably require from the other Parties procure that the Firm Offer is
conducted in accordance with the applicable requirements of the UK Takeover
Panel, the UK Takeover Code, FSMA, the Companies Acts, the Listing Rules, and
any other applicable Law.
(b) Upon the terms and subject to the conditions set forth in
this Agreement, and in accordance with the Companies Acts, the UK Takeover Code,
the Securities Act, the Exchange Act and any other applicable Law, each of the
Parties agrees to use reasonable best efforts, subject to the process set forth
in Section 8.2, to take, or cause to be taken, or procure that its Affiliates,
directors, employees and relevant professional advisors take all actions, and
do, or cause to be done, and assist and cooperate with the other Party in doing,
all things reasonably necessary, proper or advisable to obtain any Regulatory
Approvals to effect the transactions referred to in Section 8.1 and otherwise as
contemplated by this Agreement or the Stock Purchase Agreement, which would be
obtainable within the Offer timetable ordinarily permitted under the UK Takeover
Code, in the most expeditious manner practicable. The provisions of Article VIII
shall apply mutatis mutandis to any filings, applications, pleadings, documents
and other communications required to be filed with the Authorities in order to
obtain such approvals, and any filing process shall be conducted in accordance
with Section 8.2.
(c) Each Party undertakes promptly to notify each other Party
(and supply copies of all relevant information) of any fact, matter or event of
which it becomes aware which has had or could reasonably be expected to have a
material adverse effect on the financial, trading or business position or
prospects of the Target or otherwise be relevant to any determination as to
satisfaction of the conditions of the Firm Offer, and each Party undertakes to
notify each other Party (and supply copies of all relevant information) of any
event or circumstance of which it becomes aware that would be likely to have a
significant impact on the satisfaction of the conditions of the Firm Offer or on
the implementation of the Firm Offer in accordance with its terms.
(d) To the extent permitted in the time available, Harbinger
shall consult with and shall keep the Company fully and promptly informed in
relation to any discussions it may have with the UK Takeover Panel or other
authorities concerning the offer process and in relation to any material
developments in respect of the Firm Offer and, to the extent permitted in the
time available, Harbinger shall use its reasonable best efforts to enable the
Company jointly to participate in any such discussions.
(e) Each Party undertakes, in favor of each other Party, for
itself and on behalf of each Person with whom it may be deemed to be acting in
concert in connection with the Firm Offer for the purposes of the UK Takeover
Code that it and they shall not, from the date hereof, take or omit to take any
step that would or might reasonably be expected to give rise to (i) any
obligation under the UK Takeover Code on the part of that other Party to make an
offer for any of the shares of the Target or to resist, vary, extend or withdraw
such an offer once made; or (ii) any restriction under the UK Takeover Code on
the ability of that other Party to make an offer for any of the shares of the
Target or restrict the terms on which an offer must be made by that other Party;
or (iii) any breach of the UK Takeover Code (by that other Party), in any such
case without the consent of Harbinger and the Company.
(f) In relation to any announcement, public statement, circular
or other document issued by any of the Parties or on its behalf in connection
with the Firm Offer, the relevant Party shall, before making the same, to the
extent permitted by applicable Law, inform the other Parties in writing of any
proposed disclosures in the announcement, public statement, circular or other
document in respect of such other Party or Parties and the announcement, public
statement, circular or other document shall be, to the extent permitted in the
time available subject to the approval of such other Party or Parties (not to be
unreasonably withheld or delayed), save that a Party may not withhold its
approval of the content of any announcement, public statement, circular or other
document to the extent that such content reflects a matter that is within the
discretion of the other Party in accordance with the terms and conditions of
this Agreement.
Section 15.2 Implementation Agreement. On a date subsequent to this
Agreement, but on or prior to the Firm Offer Date, the Parties and the Target
may enter into an implementation agreement (the "Implementation Agreement") to
document the obligations of the Target and the Parties in relation to the
conduct of the Firm Offer.
Section 15.3 Potential Payments under the Implementation Agreement.
(a) If the Parties enter into a termination fee arrangement then
payment of such termination fee pursuant to the Implementation Agreement shall
be made in accordance with Section 13.8. Upon the occurrence of a Reimbursement
Event, the Company shall promptly reimburse Harbinger for any part of the
termination fee paid to the Target provided that the aggregate of the payments
pursuant to Section 13.8 and this Section 15.3 (the "Reimbursement Payments") to
be made by the Company to Harbinger shall not exceed $40,000,000. If the
Reimbursement Payments exceed $40,000,000 then Harbinger shall promptly notify
the Company of the allocation of the Reimbursement Payments between Section 13.8
and this Section 15.3 provided that such allocation shall not exceed an
aggregate amount of $40,000,000. The Reimbursement Payments shall be payable by
the Company in cash or through the issuance of shares of Voting Common Stock, in
each case in accordance with the provisions set forth in Section 13.8.
(b) Under the Implementation Agreement, the Target may agree to
pay an inducement or break fee to the Parties (the "Inducement Fee"). If such
Inducement Fee is in fact paid by the Target pursuant to the terms of the
Implementation Agreement, then the proceeds of this Inducement Fee shall be
shared between the Parties on a pro rata basis, determined by reference to the
ratio of $40,000,000 to the termination fee payable under Section 15.3(a).
ARTICLE XVI
PRE-CLOSING COVENANTS
---------------------
Section 16.1 Business Covenants of the Company. Except (i) as
expressly contemplated or required by this Agreement, the Consulting Agreement
or the Securities Purchase Agreement (including the provisions therein with
respect to a "Superior Proposal"), (ii) as required by Law, the Company shall
not, and it shall procure that no member of its Group will, without the prior
written consent of Harbinger (which consent shall not be unreasonably withheld,
conditioned or delayed):
(a) except as set forth in Section 16.1(a) of the Company
Disclosure Schedule, carry on its business otherwise than in the ordinary course
and in all material respects consistent with past practice, provided that
Harbinger acknowledges that although certain activities that the Group will be
undertaking in developing its next generation satellite system and L-band system
have not previously been undertaken by the Group they will not thereby be deemed
to be outside the ordinary course or inconsistent with past practice; or
(b) except as set forth in Section 16.1(b) of the Company
Disclosure Schedule, alter in any material respects the nature or scope of its
business; provided that Harbinger acknowledges that the Group will be developing
its next generation satellite system and L-band system beyond the existing scope
of its business and such activities will not be deemed to be in violation of
this provision; or
(c) commence any negotiations or enter into any binding
commitments in connection with any action that is reasonably likely to (i)
delay, prejudice, or increase the cost of, obtaining the Debt Financing; (ii)
prejudice the ability of Harbinger to procure the Equity Commitment Letter or
delay its procurement in any way; or (iii) prejudice the ability of the Parties
to complete the Offer, or delay completion of the Offer in any way; or
(d) except as set forth in Section 16.1(d) of the Company
Disclosure Schedule, enter into any binding commitments (i) in connection with
any disposal of its business or any material asset of its business; or (ii) in
connection with any acquisition of a material asset with a value of greater than
$20 million; or (iii) which encumbers or creates an Encumbrance over any
material asset of its business with a value greater than $20 million, provided
that Harbinger is expressly authorized to bring business opportunities,
including potential strategic business opportunities, to the Company and engage
in discussions and/or negotiations concerning such potential strategic business
opportunities for the Company following Completion, subject to Harbinger not
breaching any applicable Laws in engaging in such discussions and/or
negotiations and agreeing to involve or consult with the senior management of
the Company at the appropriate time, and subject further to any agreement
reached as a result of such discussions and/or negotiations not being binding on
the Company unless and until approved by the Company's Board; or
(e) except as set forth in of the Company Disclosure Schedule,
enter into any substantial transaction out of the ordinary course of business of
the Company (with Harbinger acknowledging that certain activities that the Group
will be undertaking in developing its next generation satellite system and
L-band system have not previously been undertaken by the Group and therefore
they will not thereby be deemed to be outside the ordinary course), the value of
which is in excess of 10% of the Company's enterprise value as at the date of
such transaction; or
(f) except for dividends and distributions (i) made by any of its
direct wholly owned Subsidiaries to the Company or another Subsidiary as
permitted by the 14% Notes Indenture, the 16% Notes Indenture and the 16.5%
Notes Indenture or (ii) made between MSV, MSV LLC and MSV Finance, resolve,
declare, set aside or pay any dividends on or make any other distribution
(whether in cash, stock or other property) in respect of any capital stock; or
(g) except as set forth in Section 16.1(g) of the Company
Disclosure Schedule and except for (i) the issuance of the Harbinger Shares or
the issuance of equity securities or securities convertible into equity
securities in furtherance of the Transactions (including the issuance of shares
of Voting Common Stock or Non-Voting Common Stock under the Securities Purchase
Agreement, the grant of warrants under the Securities Purchase Agreement and the
issuance of shares of Voting Common Stock and/or Non-Voting Common Stock upon
exercise thereof, and the issuance of shares of Voting Common Stock in the
No-Deal Rights Offering), (ii) the issuance of equity securities pursuant to
contractual obligations (including the issuance of shares of Voting Common Stock
in exchange for shares of Non-Voting Common Stock in accordance with the terms
thereof, and the issuance of shares of Voting Common Stock upon the exercise of
outstanding warrants) as of the date hereof, and (iii) the issuance of shares of
Voting Common Stock or Non-Voting Common Stock or debt securities or warrants
convertible, exchangeable or exercisable into shares of Voting Common Stock or
Non-Voting Common Stock, in an aggregate amount not to exceed 5 million shares
of Common Stock in order to finance the Company's Business Plan with respect to
the period after March 31, 2010, allot, issue, or authorize or propose the
issuance of any capital stock or any securities convertible into capital stock,
or rights, warrants or options to acquire any capital stock, or any securities
convertible into capital stock, or transfer any stock out of treasury, or permit
any Subsidiary to do any of the foregoing, whether with respect to its own stock
capital (or securities convertible into or rights exercisable therefore or
otherwise obligating the issuance thereof) or the capital stock of the Company
(or securities convertible into the same or rights exercisable therefore or
otherwise obligating the issuance thereof) other than (x) the allotment and
issue of stock pursuant to the exercise or vesting of options or awards
outstanding as at the date hereof under the Company's employee stock plans,
(y)(a) the granting of options or awards under the Company's employee stock
plans to newly hired employees consistent with past practice (such past practice
to include awards granted under the equity incentive plan of MSV and the
conversion of such award into equity securities of the Company), (y)(aa) annual
grants to Board members consistent with past practice of up to 200,000 shares of
Common Stock in total, and (z) the granting of up to 2 million new options or
awards under the Company's employee stock plans to officers, directors and
employees consistent with past practice, provided that in the case of option
grants pursuant to (y) and (z), such options shall be at a per share exercise
price that is no less than the then-current market price of a share of Common
Stock and shall not be subject to any accelerated vesting or other provision
that would be triggered solely as a result of the consummation of the
Transactions; or
(h) except as set forth in Section 16.1(h) of the Company
Disclosure Schedule, enter into a contract or transaction to which an Affiliate
of the Company (other than a member of the Group or Harbinger) is a party;
(i) except as may be required by applicable Law, adopt or amend
any employee stock plans, benefit plans, bonus plans or profit sharing plans in
any manner that materially increases the compensation or benefits payable
thereunder, other than as contemplated by this Agreement; or
(j) except (i) as set forth in Section 16.1(j) of the Company
Disclosure Schedule, (ii) as part of the Debt Financing, and (iii) in order to
raise debt to finance the Company's Business Plan with respect to the period
after March 31, 2010, incur Indebtedness so as to increase net total borrowings
under US GAAP (excluding, for the avoidance of doubt, preference stocks, finance
leases, capitalized debt, issue costs, interest rate derivative instruments, and
foreign exchange derivative instruments) to more than $1,660,000,000 or enter
into any new loan agreement with any bank or other financial institution; or
(k) except as set forth in Section 16.1(k) of the Company
Disclosure Schedule, enter into any new capital expenditure commitments in
excess of $10 million, with third parties; or
(l) change or modify the general terms of employment of any
employee at the vice president level or above or the Company's or such Group
member's management or Directors in any material way, enter into new material
arrangements with such employees, members of management or Directors or make any
material improvements to the terms of any bonus arrangement applicable to such
employees, members of management or Directors, other than in the ordinary course
of business or pursuant to periodic salary or wage reviews in a manner
consistent with past practice; or
(m) carry on its business otherwise than in accordance with the
Business Plan in any way which could alter in any material respect the amounts
needed to finance the Business Plan or the time at which any financial
commitments need to be fulfilled;
(n) make or change any material election concerning Taxes or Tax
Returns, file any material amended Tax Return, enter into any closing agreement
with respect to Taxes, settle any material Tax claim or assessment or surrender
any right to claim a material refund of Taxes or obtain any Tax ruling; or
(o) agree to do any of the foregoing.
The covenants in this Section 16.1 shall cease to apply if and for so long as
Harbinger is in breach of its obligation to provide financing pursuant to the
Securities Purchase Agreement, except if such breach is excused on the grounds
of the Company's breach of the Securities Purchase Agreement or default under
the 16% Notes issued thereunder.
Section 16.2 Communication with Regulatory Authorities. Each of the
Parties agrees that if it or any member of its Group or their respective
advisors has any communication with or from any Regulatory Authority in respect
of any matter in relation to the business or future operations of the Company or
any member of the Company's Group, or on the Proposal or this Agreement, whether
formal or informal, it shall, as soon as reasonably practicable after such
communication and subject to any confidentiality restrictions imposed by such
Regulatory Authority, inform the other Parties of such communication and provide
the other Parties with copies of any written documents or correspondence.
Section 16.3 Information Rights. (a) Each of the Company and MSV
agrees that Harbinger shall be entitled, through its officers, employees and
representatives (including legal advisors and accountants), to make such
reasonable and customary investigation of the properties, businesses and
operations of the Group, such examination of the books, records and financial
condition of such entities (and to make extracts and copies of such books and
records) and to interview such officers and employees of the Group as Harbinger
shall reasonably request. The Company shall cooperate fully with all such
reasonable requests. The Company shall, and shall procure that each other member
of its Group will, from the date of this Agreement provide Harbinger with copies
of:
(i) the monthly management accounts of the Company and, if
prepared, each other member of its Group;
(ii) the audited financial statements of the Company;
(iii) complete copies of any satellite health reports issued for
each of the satellites used by the Company and its Subsidiaries and
received by the Company or its Subsidiaries after the date of this
Agreement; and
(iv) any new information which arises after the date of this
Agreement which the Directors consider is likely to have a material
negative impact on the business or the future operations of the Company,
and its Subsidiaries, taken as a whole,
in each case as soon as reasonably practicable after any such document is
produced. Each of the Company, MSV and MSV LLC shall, upon reasonable notice,
provide Harbinger, or its advisors, access to any documents reasonably requested
by them after the date of this Agreement.
(b) Harbinger agrees that at any time after the Option Closing
Date, the Company shall be entitled, through its officers, employees and
representatives (including legal advisors and accountants), to make such
reasonable and customary investigation of the properties, business and
operations of TVCC LLC and LeaseCo, such examination of the books, records and
financial condition of TVCC LLC and LeaseCo (and to make extracts and copies of
such books and records) and to interview such officers and employees of the TVCC
LLC and LeaseCo as the Company shall reasonably request. Harbinger shall procure
that TVCC LLC and LeaseCo provide the Company with copies of:
(i) the monthly management accounts of LeaseCo (to the extent
that such accounts are prepared by LeaseCo in the ordinary course);
(ii) annual financial statements for TVCC LLC and LeaseCo; and
(iii) any new information which arises after the date of this
Agreement which the directors of TVCC consider is likely to have a material
negative impact on the business or future operations of TVCC LLC and
LeaseCo, taken as a whole,
in each case as soon as reasonably practicable after any such document is
produced. Harbinger shall, upon reasonable notice, provide the Company, or its
advisors, access to any documents relating to the business or operations of TVCC
or LeaseCo reasonably requested by them after the Option Closing Date.
Section 16.4 Access Rights. The Company agrees to consider any
reasonable request of Harbinger or its advisors, to make available:
(a) personnel of the Company or any member of its Group; and
(b) the auditors of the Company,
to discuss and assist Harbinger in relation to planning and financing
arrangements relating to the Proposal.
Section 16.5 Supplying Information. While the Harbinger Shares remain
outstanding and are "restricted securities" within the meaning of Rule 144(a)(3)
under the Securities Act, the Company shall, during any period in which the
Company is not subject to in compliance with Section 13 or 15(d) of the Exchange
Act, furnish to the holders of the Harbinger Shares and prospective purchasers
of the Harbinger Shares designated by such holders, upon the request of such
holders or such prospective purchasers, the information required to be delivered
pursuant to Rule 144A(d)(4) under the Securities Act.
Section 16.6 Investment Company. The Company shall take all reasonable
steps to ensure that it will not become subject to registration as "an
investment company" under the Investment Company Act.
Section 16.7 Publicity. Each of the Company and Harbinger shall not
issue, or permit any of its Affiliates, Directors, employees or advisors to
issue, any press release or public announcement concerning this Agreement or the
Transactions without obtaining the prior written approval of the other Party
(not to be unreasonably withheld or delayed), unless disclosure is otherwise
required by applicable Law or relevant Authority, including the UK Takeover
Panel, provided that, to the extent required by applicable Law, such Party shall
use its commercially reasonable efforts consistent with such applicable Law to
consult with the other Party with respect to the text thereof.
Section 16.8 Blue Sky Compliance. The Company shall use its reasonable
best efforts to qualify the Harbinger Shares for offer and sale under the
securities or blue sky laws of such jurisdictions as Harbinger may reasonably
request and shall continue such qualifications in effect so long as required for
the offering and resale of the Harbinger Shares; provided that the Company shall
not be required to (i) qualify as a foreign corporation or other entity or as a
dealer in securities in any such jurisdiction where it would not otherwise be
required to so qualify, (ii) file any general consent to service of process in
suits in any such jurisdiction or (iii) subject itself to Taxation in any such
jurisdiction if it is not otherwise so subject.
Section 16.9 No General Solicitation or General Selling Efforts. In
connection with the initial issuance of the Harbinger Shares, neither the
Company nor any of its Subsidiaries, officers, directors and agents, and
officers, directors and agents of its Subsidiaries shall (i) solicit offers for,
or offer or sell, the Harbinger Shares by means of any form of general
solicitation or any general advertising within the meaning of Rule 502(c) of
Regulation D or in any manner involving a public offering within the meaning of
Section 4(2) of the Securities Act or (ii) engage in any directed selling
efforts within the meaning of Rule 902 (c) of Regulation S, and all such persons
will comply with the offering restrictions requirement of Regulation S.
Section 16.10 Licenses. The Company shall, and shall procure that each
of its Subsidiaries, officers and directors, and officers and directors of its
Subsidiaries shall, (i) use reasonable best efforts not to surrender, or to
permit a materially adverse modification of, revocation of, forfeiture of, or
failure to renew under regular terms, any of the MSV FCC Licenses that are
material to its business or the business of MSV and its Affiliates, or cause the
FCC to institute any proceedings for the revocation, suspension, or materially
adverse modification of any such MSV FCC Licenses that are material to its
business; and (ii) comply in all material respects with all requirements and
conditions of the MSV FCC Licenses.
Section 16.11 Non Solicit. The Company undertakes that from the date
of this Agreement up to and including Completion it shall not, and shall use its
reasonable best efforts to procure that its Affiliates, Directors, employees and
advisors shall not, without the written consent of Harbinger, directly or
indirectly, solicit or initiate any approach from any Person, or enter into
discussions or negotiations with any Person with regard to any offer for the
Target, and the Company agrees to instruct its Affiliates, Directors, employees
and advisors, during the term of this Agreement, not to solicit, initiate or
negotiate with any such Person in relation to any possible offer for the Target
on behalf of the Company.
Section 16.12 Compliance with Laws. Nothing in this Article XVI shall
require the Company to take any action that would or could reasonably be
regarded as a breach of any applicable Law.
Section 16.13 Triggering Investments. The Company shall use its
commercially reasonable best efforts to cause the Target to agree to extend the
"Effective Date", as defined in the Cooperation Agreement dated as of December
20, 2007 by and among MSV, Mobile Satellite Ventures (Canada) Inc., the Company
and Inmarsat Global Limited (the "MSV/Target Cooperation Agreement"), to not
earlier than three (3) years after the "Signing Date", as defined in the
MSV/Target Cooperation Agreement, and Harbinger shall use its reasonable best
efforts in cooperating with the Company in relation to this. If the Target so
agrees then the Company shall not designate any investment by Harbinger,
including the issuance of the 16% Notes pursuant to the Securities Purchase
Agreement as a "Triggering Investment", as defined in the MSV/Target Cooperation
Agreement, prior to the termination of this Agreement.
Section 16.14 Phase 1 Notice. The Company shall not deliver to
Inmarsat Global Limited a "Phase 1 Notice" as defined in the MSV/Target
Cooperation Agreement. The Company shall ensure that neither MSV or Mobile
Satellite Ventures (Canada) Inc., deliver to Inmarsat Global Limited a "Phase 1
Notice" as defined in the MSV/Target Cooperation Agreement.
Section 16.15 Business Covenants of Harbinger. Except (i) as required
by Law or (ii) as set forth in Section 16.15 of the Harbinger Disclosure
Schedule, at all times after the Option Closing Date, Harbinger shall procure
that neither TVCC nor LeaseCo nor any of their respective Subsidiaries will,
without the prior consent of the Company (which consent shall not be
unreasonably withheld, conditioned or delayed):
(a) carry on its business otherwise than in the ordinary course
and in all material respects consistent with past practice; or
(b) alter the nature or scope of its business in any material
way; or
(c) acquire any material asset or dispose of any material asset,
or create an Encumbrance over any material assets of its business or any of its
equity interests; or
(d) enter into any substantial transaction out of the ordinary
course of business the value of which is in excess of 10% of either TVCC's or
LeaseCo's enterprise value as at the date of such transaction, as applicable; or
(e) allot, issue, or authorize or propose the issuance of any
membership or limited liability company interests or any securities convertible
into membership or limited liability company interests, or rights, warrants or
options to acquire any membership or limited liability company interests, or any
securities convertible into membership or limited liability company interests,
or permit any Subsidiary to do any of the foregoing, whether with respect to its
own membership or limited liability company interests (or securities convertible
into or rights exercisable therefore or otherwise obligating the issuance
thereof) or the membership or limited liability company interests of TVCC or
LeaseCo, as applicable (or securities convertible into the same or rights
exercisable therefore or otherwise obligating the issuance thereof); or
(f) incur borrowings so as to increase net total borrowings under
US GAAP to more than $10 million or enter into any new loan agreement with any
bank or other financial institution; or
(g) enter into any long term commitments that would extend beyond
the TVCC Contribution Date; or
(h) make or change any material election concerning Taxes or Tax
Returns, file any material amended Tax Return, enter into any closing agreement
with respect to Taxes, settle any material Tax claim or assessment or surrender
any right to claim a material refund of Taxes or obtain any Tax ruling; or
(i) agree to do any of the foregoing.
Section 16.16 Confidentiality Agreement.(a) The Confidentiality
Agreement dated April 10, 2008 by and among the Company, Harbinger Master and
Harbinger Special (the "Confidentiality Agreement") and a Side Letter to the
Confidentiality Agreement dated as of the date hereof from the Company to
Harbinger Master and Harbinger Special (the "Confidentiality Side Letter") shall
remain in full force and effect in accordance with, and subject to, their terms.
Section 16.17 Waiver of Right of First Negotiation/ Pro Rata
Participation Rights.(a) Each Harbinger entity, on its own and on behalf of its
controlled Affiliates, hereby irrevocably waives any right of first negotiation,
or preemptive rights contained (i) in Section 8.6 of that certain Securities
Purchase Agreement, dated as of December 15, 2007, by and among Mobile Satellite
Ventures, L.P., Mobile Satellite Ventures Finance Co, Harbinger Capital Partners
Master Fund I, LTD and Harbinger Capital Partners Special Situations Fund, L.P.,
and (ii) in Section 8.7 of the Securities Purchase Agreement, which rights would
arise or result from the issuance or exercise of the warrants or other
securities to be issued under this Agreement, the Securities Purchase Agreement
(except for any preemptive rights arising as a result of the Company or MSV
entering into a Superior Proposal under the Securities Purchase Agreement, as
such term is defined in Section 8.9 of the Securities Purchase Agreement), or
the Stock Purchase Agreement.
Section 16.18 Waiver of Antidilution Adjustments. Each Harbinger
entity, on its own and on behalf of its controlled Affiliates, hereby
irrevocably waives any and all antidilution or similar adjustments contained in
any security or agreement of the Company or any Subsidiary of the Company that
Harbinger, or any such Affiliate, beneficially owns or is a party to on the date
hereof, which adjustment would result from the issuance or exercise of the
warrants or other securities to be issued under this Agreement, the Securities
Purchase Agreement (except for any such rights arising as a result of the
Company or MSV entering into a Superior Proposal under the Securities Purchase
Agreement, as such term is defined in Section 8.9 of the Securities Purchase
Agreement), or the Stock Purchase Agreement.
Section 16.19 Amendment of 16.5% Notes. Harbinger represents and
warrants that it is the sole holder (as such term is defined in the 16.5% Notes
Indenture) of all of MSV's outstanding 16.5% Notes, including any additional
16.5% Notes issued after January 7, 2008 as paid-in-kind interest, free and
clear of any lien, pledge or encumbrance of any kind. Harbinger hereby agrees to
consent to amend the 16.5% Notes Indenture in order to (i) subordinate in right
of payment on customary terms for high yield notes such portion of the 16.5%
Notes and the subsidiary guarantees thereof to the 14% Notes and the related
guarantees, as applicable, as is necessary to permit the 16% Notes and related
guarantees to be issued from time to time pursuant to and in accordance with the
closing schedule set forth in the Securities Purchase Agreement (after MSV first
utilizes all other debt incurrence capacity available under the 14% Notes
Indenture (other than clause (b)(1) of Section 4.09 thereof provided that the
Net Cash Proceeds specified therein were not from the sale of Capital Stock to,
or direct or indirect cash contributions from, Harbinger or its Affiliates)
which would allow the 16% Notes to be issued without being subordinated in right
of payment), and (ii) extend the maturity date of the 16.5% Notes to July 2,
2013 in a form to be mutually agreed upon by the Company and Harbinger ((i) and
(ii), collectively, the "Proposed Amendments"). In the event that the 16% Notes
are issued on one or more dates, the amount of 16.5% Notes that may become
subordinated to the 14% Notes and amended as provided herein will be measured
and adjusted on each issuance date of the 16% Notes. Harbinger agrees and
consents to (1) the issuers entering into a supplemental indenture to amend the
16.5% Notes Indenture in order to effectuate the Proposed Amendments and to take
such further action to effectuate the foregoing if, as and when required; and
(2) to require each Person to which Harbinger transfers any of the 16.5% Notes
prior to the earlier of (a) the Fourth Closing Date (as defined in the
Securities Purchase Agreement) and (b) the termination of Harbinger's obligation
to purchase the 16% Notes pursuant to the Securities Purchase Agreement and to
agree in writing to be bound by the obligations of Harbinger set forth in this
Section 16.19 and to take such further action to effectuate the foregoing if, as
and when required.
ARTICLE XVII
SPONSOR FEE
-----------
Section 17.1 Sponsor Fee.
(a) On the Closing Date, the Company shall make indefeasible
payment of the Sponsor Fee to Harbinger. Payment of the Sponsor Fee shall be
satisfied by issuance by the Company of 2,641,000 shares of Voting Common Stock
(the "Sponsor Fee Shares") to Harbinger Master, Harbinger Special, Harbinger
Fund, Harbinger Satellite Fund and/or one or more Harbinger Designees (such
entity or entities referred to as the "Sponsor Fee Payees"), as directed by
Harbinger in written notice to the Company at least one (1) Business Day prior
to Closing Date.
(b) Prior to payment of the Sponsor Fee, Harbinger shall deliver
to the Company properly executed Internal Revenue Service Forms X-0, X-0XXX or
W-8BEN (or applicable successor form), or W-8IMY (or applicable successor form)
(with all required attachments) (and all applicable state and local forms and
certificates), along with such other certificates, documents and information the
Company determines necessary in connection with the Company's determination of
its obligation to withhold Tax in respect of the Sponsor Fee. Except to the
extent provided in the immediately following sentence, such forms and, in the
case of a Form W-8IMY, any Forms X-0, X-0XXX or W-8BEN furnished therewith (or
with any other Forms W-8IMY furnished therewith), and, as relevant, any other
certificates, documents or information requested by the Company in connection
therewith, shall establish a complete exemption from United States withholding
Taxes (and other applicable Taxes collected through withholding or deductions
from amounts payable) in respect of the Sponsor Fee. Notwithstanding the
preceding sentence, if Harbinger is unable to deliver forms, certifications,
documents and other information establishing a complete exemption from
withholding of such Taxes, prior to the Company's payment of the Sponsor Fee
Harbinger shall deliver to the Company cash, by wire transfer of immediately
available funds, in an amount determined by the Company, based on the
information set forth in such forms, certifications, documents and information,
which the Company shall promptly remit to the Internal Revenue Service (or other
relevant Taxing Authority, as applicable) in payment of the Taxes otherwise
required to be withheld or deducted with respect to the Sponsor Fee. If the
Internal Revenue Service (or other relevant Taxing Authority) prevails in any
claim or proceeding that additional withholding Taxes are due in respect of the
Sponsor Fee, Harbinger shall cooperate with the Company in satisfying such claim
and shall deliver cash proceeds, by wire transfer of immediately available
funds, to the Company not later than 5 days prior to the due date for
satisfaction of such claim, in the amount due in respect of such claim, and the
Company shall remit the amount so delivered to the Internal Revenue Service (or
other relevant Taxing Authority, as applicable) on or prior to the due date for
payment of such claim.
(c) On the Closing Date, the Company shall deliver to the
relevant Sponsor Fee Payees one or more certificates evidencing the issuance of
the Sponsor Fee Shares registered in the name of the applicable Sponsor Fee
Payees.
ARTICLE XVIII
INDEMNIFICATION
---------------
Section 18.1 Indemnification for Misstatements or Omissions in Public
Documents. The Company (an "Indemnifying Party") agrees to indemnify, to the
extent permitted by Law, Harbinger, each Harbinger Designee, any of its or their
Affiliates and its and their respective officers, directors, employees, agents,
attorneys, representatives, successors, assigns (an "Indemnified Party"), and
Harbinger (an "Indemnifying Party") agrees to indemnify, to the extent permitted
by Law, the Company, MSV the Company's Subsidiaries and each of their respective
officers, directors, employees, agents, attorneys, representatives, successors,
assigns and Affiliates (each, an "Indemnified Party") against all Losses arising
out of, or based on (i) any untrue or alleged untrue statement of a material
fact provided by the Indemnifying Party contained or incorporated by reference
in the Information Statement, the Other Filings, the Offer Shares Registration
Statement, the Financing Rights Registration Statement, the No-Deal Rights
Registration Statement, the Offer Shares Prospectus, the Financing Rights
Prospectus, any "issuer free writing prospectus" (as defined in Securities Act
Rule 433), the Offer Document or Scheme Document, as applicable, the No-Deal
Rights Prospectus or the Other No-Deal Rights Filings or any amendment thereof
or supplement thereto; (ii) any omission or alleged omission of a material fact
provided by the Indemnifying Party required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading; or (iii) any violation or alleged violation by an
Indemnifying Party of the Securities Act, the Exchange Act or applicable blue
sky laws in respect of the Information Statement, the Offer Shares Registration
Statement, the Financing Rights Registration Statement, the No-Deal Rights
Registration Statement, the Offer Shares Prospectus, the Financing Rights
Prospectus, any "issuer free writing prospectus" (as defined in Securities Act
Rule 433), the Offer Document or Scheme Document, as applicable, the No-Deal
Rights Prospectus or the Other No-Deal Rights Filings or any amendment thereof
or supplement thereto, or otherwise in connection with the Transactions. Any
Person seeking indemnification pursuant to this Section 18.1 shall notify the
Indemnifying Party of any claim with respect to which it seeks indemnification
(provided that the failure to give notice shall not impair or waive such
Person's right to indemnification hereunder) and unless in such Indemnified
Party's reasonable judgment a conflict of interest between such Indemnified
Party and Indemnifying Party may exist with respect to such claim, permit such
Indemnifying Party to assume the defense of such claim with counsel reasonably
satisfactory to the Indemnified Party. If such defense is assumed, the
Indemnifying Party shall not be subject to any liability for any settlement made
by the Indemnified Party without its consent, unless the relief consists solely
of money damages and does not require an express admission of wrongdoing by the
Indemnified Party. An Indemnifying Party who is not entitled to, or elects not
to, assume the defense of a claim shall not be obligated to pay the fees and
expenses of more than one counsel (in addition to local counsel) for all
Indemnified Parties with respect to such claim, unless in the reasonable
judgment of any Indemnified Party there may be one or more legal or equitable
defenses available to such Indemnified Party that are in addition to or may
conflict with those available to another Indemnified Party with respect to such
claim. Failure to give notice shall not release the Indemnifying Party from its
obligations hereunder. The indemnification provided for under this Section 18.1
shall remain in full force and effect regardless of any investigation made by or
on behalf of the Indemnified Party or any officer, director or controlling
Person of such Indemnified Party. If the indemnification provided under this
Section 18.1 is held by a court to be unavailable or unenforceable in respect of
any Losses referred to herein, then each applicable Indemnifying Party, in lieu
of indemnifying such Indemnified Party, shall 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 on the
one hand and of the Indemnified Party on the other, in connection with the
statements or omissions that result in such Losses, as well as any other
relevant equitable considerations. The relative fault of the Indemnifying Party
on the one hand and of the Indemnified Party on the other shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Indemnifying Party or by the Indemnified
Party, and by such Party 's relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. In no event
shall the liability of the Indemnified Parties for contribution pursuant to this
Section 18.1 be greater than the amount for which the Indemnified Parties would
have been liable pursuant to this Section 18.1 had indemnification been
available and enforceable.
ARTICLE XIX
NO-DEAL RIGHTS OFFERING
-----------------------
Section 19.1 No-Deal Rights Offering. Upon the occurrence of a
Reimbursement Event, the Company shall be required to make a subscription
offering (the "No-Deal Rights Offering") of 250,000,000 shares of Voting Common
Stock. The Company shall commence the No-Deal Rights Offering within 30 days
after the No-Deal Rights Registration Statement is declared effective by the
SEC. The No-Deal Rights Offering shall be open to (i) Harbinger, with respect to
the rights to purchase 50,000,000 shares of Voting Common Stock in the No-Deal
Rights Offering, and (ii) each holder of shares of Voting Common Stock,
Non-Voting Common Stock, unexercised warrants and options granted by the Company
over shares of Common Stock (including, for the avoidance of doubt, Harbinger),
as at the Notification Date (the "Record Date"), with respect to the rights to
purchase the other 200,000,000 shares of Voting Common Stock in the No-Deal
Rights Offering. The No-Deal Rights Offering shall confer on each such holder a
right to receive, pro rata to the number of shares of Common Stock or rights to
subscribe for shares of Common Stock pursuant to such warrants or options that
it holds as at the Record Date, the non-transferable subscription rights
referred to in Section 19.3.
Section 19.2 No-Deal Rights Prospectus, Other No-Deal Rights Filings.
(a) The Company shall prepare and file with the SEC as promptly
as practicable after the occurrence of the Reimbursement Event (and in any event
within 30 Business Days after the occurrence of the Reimbursement Event), a
registration statement on Form S-3, or if Form S-3 is not then available to the
Company, such form of registration statement that is then available to the
Company to effect registration of securities, (the "No-Deal Rights Registration
Statement") including a form prospectus relating to the No-Deal Rights Offering
(as amended or supplemented from time to time, the "No-Deal Rights Prospectus").
Each of the Company, Harbinger Master, Harbinger Special, Harbinger Fund and
Harbinger Satellite Fund shall, or shall cause its respective Affiliates to,
prepare and file with the SEC as promptly as reasonably practicable all other
documents that are required to be filed by such Party in connection with the
No-Deal Rights Offering (the "Other No-Deal Rights Filings") including amending
the No-Deal Rights Registration Statement and the No-Deal Rights Prospectus as
may be required so to obtain the approval of the SEC to mail the No-Deal Rights
Prospectus to the stockholders of the Company. Each of the Company, Harbinger
Master, Harbinger Special, Harbinger Fund and Harbinger Satellite Fund shall
promptly obtain and furnish to the others such information concerning itself and
its Affiliates that is required to be included in the No-Deal Rights
Registration Statement, the No-Deal Rights Prospectus or, to the extent
applicable, the Other No-Deal Rights Filings, or that is customarily included
therein. Each of the Company, Harbinger Master, Harbinger Special. Harbinger
Fund and Harbinger Satellite Fund shall use its reasonable best efforts to
respond as promptly as reasonably practicable to any comments of the SEC with
respect to the No-Deal Rights Registration Statement, the No-Deal Rights
Prospectus and Other No-Deal Rights Filings, and the Company shall use its
reasonable best efforts to cause the definitive No-Deal Rights Prospectus to be
mailed to the Company's stockholders within two (2) Business Days after the SEC
declares the No-Deal Rights Registration Statement effective. The Company shall
promptly notify Harbinger upon the receipt of any comments from the SEC or its
staff or any request from the SEC or its staff for amendments or supplements to
the No-Deal Rights Registration Statement, the No-Deal Rights Prospectus or the
Other No-Deal Rights Filings and shall provide Harbinger with copies of all
correspondence between the Company and its representatives, on the one hand, and
the SEC and its staff, on the other hand, relating to the No-Deal Rights
Registration Statement, the No-Deal Rights Prospectus or the Other No-Deal
Rights Filings. If any information relating to the Company, Harbinger or any of
their respective Affiliates, officers or directors, should be discovered by the
Company or Harbinger which should be set forth in an amendment or supplement to
the No-Deal Rights Registration Statement, the No-Deal Rights Prospectus or the
Other No-Deal Rights Filings, so that the No-Deal Rights Registration Statement,
the No-Deal Rights Prospectus or the Other No-Deal Rights Filings shall not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading, the Party that discovers such information shall promptly notify the
other Party, and an appropriate amendment or supplement describing such
information shall be filed with the SEC and, to the extent required by
applicable Law, disseminated to the stockholders of the Company. Notwithstanding
anything to the contrary stated above, prior to filing the No-Deal Rights
Registration Statement or filing or mailing the No-Deal Rights Prospectus (or
filing the Other No-Deal Rights Filings (or, in each case, any amendment or
supplement thereto, but not including any Exchange Act filings incorporated by
reference in the No-Deal Rights Registration Statement, the No-Deal Rights
Prospectus or any Other No-Deal Rights Filings)) or responding to any comments
of the SEC with respect thereto, the Company shall provide Harbinger an
opportunity to review and comment on the No-Deal Rights Registration Statement,
the No-Deal Rights Prospectus and shall give due consideration to the No-Deal
Rights Prospectus comments proposed by Harbinger.
(b) The No-Deal Rights Registration Statement, the No-Deal Rights
Prospectus and the Other No-Deal Rights Filings that are filed by the Company
will comply as to form in all material respects with the requirements of the
Securities Act, and the rules and regulations promulgated thereunder. The
Company hereby covenants and agrees that none of the information included or
incorporated by reference in the No-Deal Rights Registration Statement, the
No-Deal Rights Prospectus or in the Other No-Deal Rights Filings to be made by
the Company will, in the case of the No-Deal Rights Registration Statement or
any amendment or supplement thereto, at the date it is filed with the SEC, in
the case of the No-Deal Rights Prospectus, at the date it is first mailed to the
Company's stockholders or at the time of any amendment or supplement thereof,
or, in the case of any Other No-Deal Rights Filing, at the date it is first
mailed to the Company's stockholders or at the date it is first filed with the
SEC, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading. Notwithstanding anything to the contrary contained herein, the
Company makes no representation or covenant with respect to any information
provided by or on behalf of Harbinger Master, Harbinger Special, Harbinger Fund
or Harbinger Satellite Fund specifically for inclusion in the No-Deal
Registration Statement, the No-Deal Rights Prospectus or any Other No-Deal
Rights Filings and included in the No-Deal Rights Registration Statement, the
No-Deal Rights Prospectus or any Other No-Deal Rights Filings in the form and
context in which it was provided by Harbinger.
Section 19.3 No-Deal Rights Subscription Privilege and No-Deal Rights
Subscription Price. Each non-transferable subscription right shall entitle the
relevant holder to purchase one share of Voting Common Stock for a price of
$4.00 (the "No-Deal Rights Subscription Price"). Such right is referred to as
the "No-Deal Rights Subscription Privilege". The No-Deal Rights Subscription
Privileges shall be evidenced by non-transferable subscription rights
certificates.
Section 19.4 Exercise of the No-Deal Rights Subscription Privilege.
The No-Deal Rights Subscription Privilege shall be exercisable by each initial
holder thereof in whole or in part.
Section 19.5 Transferability of the No-Deal Rights Subscription
Privileges. The No-Deal Rights Subscription Privileges may not be sold,
transferred, or assigned to any Person or entity, other than by operation of law
or testamentary transfer and shall not be listed for trading on any stock
exchange or market or on the OTC Bulletin Board.
Section 19.6 Adjustment of No-Deal Rights Subscription Price. The
No-Deal Rights Subscription Price shall be capable of proportionate adjustment
to reflect any stock consolidations, stock splits, interim rights offerings,
non-cash distributions, spin-offs, reclassifications, schemes of arrangements,
payments of cash dividends or other similar transactions.
Section 19.7 Irrevocable Exercise. To the extent permitted by
applicable Law, the terms of the No-Deal Rights Offering shall provide that the
exercise of No-Deal Rights Subscription Privileges by the Company's stockholders
is irrevocable.
Section 19.8 Fractional Shares. Fractional No-Deal Rights Subscription
Privileges shall not be allocated to holders, and the pro rata entitlements of
holders shall be eliminated by rounding down to the nearest whole number. No
cash will be issued in lieu of fractional shares.
Section 19.9 No-Deal Over Subscription Rights. Harbinger shall have
the right to subscribe for all of the shares of the Voting Common Stock
available to it pursuant to its No-Deal Rights Subscription Privilege under the
No-Deal Rights Offering. Furthermore, Harbinger shall have the right, but not
the obligation, to subscribe for all or any shares of Voting Common Stock that
are not subscribed by the Company's other stockholders through the exercise of
their No-Deal Rights Subscription Privileges (the "No-Deal Over Subscription
Rights"). No Company stockholder, other than Harbinger, shall have any such
No-Deal Over Subscription Rights.
Section 19.10 Fees and Expenses. All of the costs and expenses of the
Company in connection with the No-Deal Rights Offering shall be borne solely by
the Company.
Section 19.11 Proceeds from the No-Deal Rights Offering.
(a) The subscription agent shall be required to hold funds
received in payment for shares of the Voting Common Stock in a segregated
account pending completion of the No-Deal Rights Offering. The subscription
agent shall hold such funds in escrow until the No-Deal Rights Offering is
completed or is withdrawn and canceled. The Company may invest such proceeds in
liquid securities with an AAA rating, or its equivalent, with a reputable credit
rating agency pending use thereof.
(b) The Company shall be required to use the net proceeds of the
No-Deal Rights Offering (the "No-Deal Rights Proceeds") as follows:
(i) the Company shall first discharge all of its costs and
expenses incurred in connection with the No-Deal Rights Offering and the
Transactions, including all Reimbursement Payments;
(ii) following payment of all of its costs and expenses incurred
in connection with the No-Deal Rights Offering, the Transactions and the
Reimbursement Payments the Company shall then be required and entitled to
use the balance of the No-Deal Rights Proceeds to repay any outstanding
principal amount of 16% Notes issued pursuant to the Securities Purchase
Agreement pursuant to the Reimbursement Offer (as such term is defined in
the 16% Notes Indenture); and
(iii) Following the payment of the amounts referred to under (i)
and (ii) above, the balance of the No-Deal Rights Proceeds may be used for
any lawful purpose.
Section 19.12 No Underwriting. The No-Deal Rights Offering shall not
be underwritten by any third parties.
Section 19.13 No Standby Purchase Agreement. The Company shall not
enter into any standby purchase agreement with any standby purchasers in
connection with the No-Deal Rights Offering.
Section 19.14 Termination of the No-Deal Rights Offering.
(a) The No-Deal Rights Offering shall expire on the 20th Business
Day following its commencement.
(b) Subject to the requirements of Law, the Company's Board may
not, without Harbinger's express consent, terminate or cancel the No-Deal Rights
Offering at any time prior to its expiration for any reason, unless the SEC so
requests or the same is mandated by any court of competent jurisdiction.
ARTICLE XX
AMENDED PROPOSALS
-----------------
Section 20.1 Amended Proposals. If following execution of this
Agreement, Harbinger or the Company considers, acting reasonably, that any or
all of the Tax costs associated with the Proposal and/or the Contribution and/or
the group structure post-Completion could be mitigated or reduced (a "Tax
Saving") then Harbinger and the Company shall discuss, in good faith, whether
the Proposal and/or the Contribution could be amended (an "Amended Proposal") so
as to achieve the Tax Saving. Harbinger and the Company shall also negotiate in
good faith with a view to agreeing to such amendment to the terms of this
Agreement which are reasonably necessary or appropriate in order to give effect
to any Amended Proposal. If the Amended Proposal would impose any material
incremental Taxes, costs or expense on the Party not proposing such Amended
Proposal, the Party proposing such Amended Proposal (i) shall indemnify and hold
the other Party harmless from and against any increase in the Tax liability of
the other Party resulting as a consequence of the implementation of such Amended
Proposal over the Tax liability of such other Party reasonably anticipated to
have resulted as a consequence of implementing the transactions as contemplated
by the Proposal and Contribution as set forth in this Agreement as in effect on
the date first set forth hereinabove, and (ii) shall pay the costs and expenses
of the other Party relating to the implementation of such Amended Proposal in
excess of the costs and expenses reasonably anticipated to have been incurred in
connection with implementing the transactions as contemplated by the Proposal
and Contribution as set forth in this Agreement as in effect on the date first
set forth hereinabove.
Section 20.2 Alternative Method of Contributing the Contribution
Shares, the Converted Shares and/or the Convertible Bonds.
Each of Harbinger Master and Harbinger Special shall have the right, prior
to the relevant Contribution Closing Date, to transfer any or all of the
Contribution Shares and/or the Converted Shares and/or the Convertible Bonds
(each an "Interest" and together the "Interests") which it holds to one or more
of its newly organized wholly-owned Subsidiaries, from time to time ("NewCos"
and each a "NewCo"), and instead of directly transferring, or procuring the
direct transfer of, the Interests to the Company pursuant to, and in accordance
with, the terms of this Agreement, the Parties agree that each of Harbinger
Master and Harbinger Special shall have the right to transfer to the Company its
shareholding in the relevant NewCo holding any such Interests, provided such
shareholding is the entire issued share capital of such NewCo and provided
further that such NewCo shall have good and valid title to the relevant Interest
free and clear of all Encumbrances and shall have no other material liabilities.
The Parties agree that the transfer of the entire issued share capital of one or
more NewCos, and the indirect transfer of any or all Interests held by such
NewCos, together with the transfer of any or all remaining Interests which each
of Harbinger Master and Harbinger Special continues to directly hold to the
Company will satisfy each of Harbinger Master's and Harbinger Special's
obligations pursuant to the terms of this Agreement to contribute the Interests
to the Company. The Parties hereby agree that if each of Harbinger Master and
Harbinger Special transfers any or all Interests to a NewCo or NewCos, and
intends to transfer such NewCo or NewCos to the Company, then this Agreement
shall be amended such that: (i) following the date of such transfer to the
relevant NewCos, any of Harbinger's representations, warranties and covenants
with respect to the Interests shall be taken, as relevant, to refer to
Harbinger's shareholdings in the NewCos holding the relevant Interests; (ii)
each of Harbinger Master and Harbinger Special shall receive the same
consideration for the transfer of the NewCos and/or the Interests, as it would
have received had such Interests been transferred directly to the Company by
Harbinger Master and Harbinger Special, together with additional consideration,
to be satisfied by way of an issuance by the Company of shares of Voting Common
Stock at the Agreed Issue Price, equal to the amount of net cash held by the
relevant NewCos at the Contribution Shares Closing Date (subject to a cap of
$2,000,000); (iii) any other consequential amendments to this Agreement shall be
made to the extent necessary to reflect the transfer of the NewCos; and (iv) all
other actions are taken to effect the transfer of the NewCos as contemplated in
this Section 20.2. The Parties hereby agree that if each of Harbinger Master and
Harbinger Special transfers any or all Interests to a NewCo or NewCos, and
intends to transfer such NewCo or NewCos to the Company, then (a) each such
NewCo shall be eligible to be disregarded as an entity separate from its owner
for United States federal income tax purposes, (b) each of Harbinger Master and
Harbinger Special shall cause such NewCo or NewCos to file an election or
elections to be so disregarded for United States federal income tax purposes,
effective on or prior to the date of the transfer of any Interest, and shall
provide a copy of such elections(s) to the Company within ten (10) days of
making such election.
Section 20.3 Conversion/Exchange of Non-Voting Common Stock.
(a) If Harbinger determines to exercise its rights under this
Section 20.3(a), Harbinger shall notify the Company at least four (4) calendar
months prior to the date that, in the good faith opinion of Harbinger, the
Regulatory Approvals are likely to be obtained. Upon receipt of Harbinger's
notification, the Company agrees that it shall use its best efforts to cause (as
soon as reasonably practical but in any event no earlier than the Regulatory
Approvals being obtained in accordance with Article VIII or Harbinger serving a
notice in accordance with Section 8.12 notifying the Company of the occurrence
of the Satisfaction Date) each share of Non-Voting Common Stock either to be
converted into or exchanged for one share of Voting Common Stock (collectively,
the "Non-Voting Common Stock Conversion"). If the Non-Voting Common Stock
Conversion is effected by way of an amendment to the Company's certificate of
incorporation, Harbinger agrees to vote all its shares of Voting Common Stock
that it is entitled to vote on such amendment in favor thereof (but not any
other modification or amendment to the Company's certificate of incorporation).
As a result of the Non-Voting Common Stock Conversion, the Company shall have
only one class of outstanding stock immediately prior to the first Contribution
Closing Date.
(b) It is the intention of the parties that the Non-Voting Common
Stock Conversion shall qualify as a recapitalization under Section 368(a)(1)(E)
of the Code and an exchange under Section 1036 of the Code and in each case the
rules and regulations promulgated thereunder.
(c) If the Company has not, by the time of the Notification Date,
effected the Non Voting Common Stock Conversion, Harbinger shall have the right
to require the Company to effect (by no later than the first Contribution
Closing Date) a reorganization pursuant to Section 251(g) of the DGCL, pursuant
to which (i) all stockholders of the Company (including Harbinger) shall
contribute, or shall be treated as contributing for US federal income tax
purposes, their holdings of Common Stock to a corporation (the "New Parent") in
return for the issue of the same amount of common stock in New Parent; and (ii)
Harbinger shall contribute the Contribution Assets to New Parent in return for
the issue of common stock in New Parent in the same amount as provided in
Section 2.1, in each case in a transaction qualifying as an exchange governed by
Section 351(a) of the Code. The Parties hereby agree that if such a
reorganization occurs, then this Agreement shall be amended such that following
the date of such reorganization, (1) New Parent shall become a Party to this
Agreement and shall be bound by all of the covenants of the Company; (2) any of
the Company's representations, warranties and covenants contained in this
Agreement with respect to its capital structure shall be taken, as relevant, to
refer to New Parent's capital structure; and (3) any other consequential
amendments to this Agreement and the Stock Purchase Agreement shall be made to
the extent necessary to reflect the reorganization.
(d) It shall be a condition to the consummation of the
Transactions as modified pursuant to Section 20.3(c) that each of Harbinger and
the Company shall have received from Weil, Gotshal & Xxxxxx LLP and Skadden,
Arps, Slate, Xxxxxxx & Xxxx LLP, respectively (or other nationally recognized
tax counsel reasonably acceptable to each party) a written opinion, dated the
first Contribution Closing Date, in form and substance reasonably satisfactory
to Harbinger and the Company, as applicable, on the basis of the facts,
representations and assumptions set forth in such opinion, to the effect that
the contribution of the Contribution Assets and the contribution of the Common
Stock to New Parent that is deemed to occur as a consequence of the transactions
described in Section 20.3(c) in connection with the Transactions as so modified
will be treated for United States federal income tax purposes as an exchange
governed by Section 351(a) of the Code. Harbinger and the Company shall furnish
such certificates to such tax counsel, executed by appropriate officers of
Harbinger and the Company, containing representations and covenants as to
certain matters as may reasonably be requested by such counsel in connection
with (i) such opinion, (ii) any opinion rendered by such counsel in connection
with the consummation of the Transactions as modified pursuant to Section
20.3(a) and (iii) any other Tax opinion relating to the Transactions as modified
pursuant to Section 20.3(a) or 20.3(c) as may be required in connection with the
effectiveness of any registration statement, proxy statement, prospectus or
similar document filed with the SEC or FSA, upon which such tax counsel will be
entitled to rely in rendering any such opinion.
ARTICLE XXI
MISCELLANEOUS
-------------
Section 21.1 Governing Law. This Agreement shall be governed by and
construed in accordance with the Laws of the State of New York applicable to
contracts made and performed in such State and without regard to the conflicts
or choice of law provisions thereof that would give rise to the application of
the domestic substantive Law of any other jurisdiction.
Section 21.2 Jurisdiction. The Parties hereby irrevocably submit to
the exclusive jurisdiction of any federal or state court located within the
County, City and State of New York over any dispute arising out of or relating
to this Agreement or any of the Transactions and each Party hereby irrevocably
agrees that all claims in respect of such dispute or any legal proceeding
related thereto may be heard and determined in such courts. Each Party hereby
irrevocably waives, to the fullest extent permitted by applicable Law, any
objection that such Party may now or hereafter have to the laying of venue of
any such dispute brought in such court or any defense of inconvenient forum for
the maintenance of such dispute. EACH PARTY FURTHER HEREBY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL OR EQUITABLE ACTION (WHETHER BASED ON CONTRACT, TORT
OR OTHERWISE) AND ANY OBJECTION THAT SUCH PARTY MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR IN CONNECTION WITH
THIS AGREEMENT BROUGHT IN THE AFOREMENTIONED COURTS. Each of the Parties agrees
that a judgment in any such dispute may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by Law. Each of the Parties
consents to process being served by any other Party in any suit, action or
proceeding by delivery of a copy thereof in accordance with the provisions of
Section 21.3.
Section 21.3 Notices. All notices, requests, payments, instructions or
other documents to be given hereunder will be in writing or by written
telecommunication, and will be deemed to have been duly given if (i) delivered
personally (effective upon delivery), (ii) mailed by registered or certified
mail, return receipt requested, postage prepaid (effective five (5) Business
Days after dispatch), or (iii) sent by a reputable, established courier service
that guarantees next business day delivery (effective the next Business Day),
addressed as follows (or to such other address as the recipient Party may have
furnished to the sending Party for the purpose pursuant to this Section 21.3):
If to Harbinger to:
c/o Harbinger Capital Partners Funds
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx
with a copy, which shall not constitute notice, sent at the
same time and by the same means to:
Xxxxxxx Management Corporation
0000 Xxxxx Xxxxxx Xxxxx Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: General Counsel
and
Weil, Gotshal & Xxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, Xx.
and
Linklaters LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxx
If to the Company or MSV or MSV LLC, to:
SkyTerra Communications, Inc.
00000 Xxxxxxxxx Xxxxxxxxx
Xxxxxx, XX 00000
Attention: General Counsel
with a copy, which shall not constitute notice, sent at the
same time and by the same means to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
0 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxxx, Xxxx Xxxxxxxx, and Xxx Xxxx
Xxxxxxxx
Any Party may change the Person(s) and the address(es) to which
notices or other communications are to be sent by giving written notice of any
such change in the manner provided herein for giving notice.
Section 21.4 Further Assurances. Each of the Parties shall, upon
request of another Party, execute and deliver to the requesting Party any
additional documents and take such further actions (including delivering
instructions to any depositary or securities intermediary) as the requesting
Party may deem to be necessary or desirable to effect the Transactions, provided
that such action does not extend to requiring Harbinger to procure equity
financing or give Notification initiating the Firm Offer. Without limitation of
the foregoing, the Company, MSV and MSV LLC shall cause its Subsidiaries
(provided that, in the case of the Canadian Joint Venture Companies, the
Company, MSV and MSV LLC shall only be required to use their reasonable efforts
to cause the Canadian Joint Venture Companies) to take such actions as are
necessary for the Company to satisfy its commitments under this Agreement.
Section 21.5 Specific Performance. Each of the Parties acknowledges
that it may be impossible to measure in money the damages to it if the other
Parties fail to comply with their obligations under this Agreement or the Stock
Purchase Agreement, and that, in the event of any such failure, such
non-breaching Party may not have an adequate remedy at Law. Accordingly, the
Parties agree that injunctive or other equitable relief, in addition to remedies
at Law or damages, is an appropriate remedy for any such failure and will not
oppose the granting of such relief on the basis that such non-breaching Party
has an adequate remedy at Law. Each of the Parties agrees that it will not seek,
and agree to waive any requirement for, the securing or posting of a bond in
connection with seeking or obtaining such equitable relief. Nothing in this
Section 21.5 is intended to limit or modify the provisions of Section 21.13 in
any respect, and, for the avoidance of doubt, this Section 21.5 shall not
prevent any Party from terminating this Agreement in accordance with Section
21.13.
Section 21.6 Assignments. This Agreement shall bind and inure to the
benefit of the Parties and their respective successors, and permitted assigns.
No Party shall assign any rights or delegate any obligations hereunder without
the consent of the other Parties, other than in the case of Harbinger, which
shall have the right to assign any or all of its rights and/or delegate its
obligations to any fund affiliated with Harbinger Master, Harbinger Special,
Harbinger Fund or the Harbinger Satellite Fund. Except as otherwise expressly
provided herein, nothing in this Agreement is intended to or will confer any
rights or remedies on any Person other than the Parties and their respective
successors and permitted assigns.
Section 21.7 Counterparts. This Agreement may be executed by the
Parties in separate counterparts, each of which when so executed and delivered
will be an original, but all of which together will constitute one and the same
agreement. In pleading or proving this Agreement, it will not be necessary to
produce or account for more than one such counterpart. Facsimile and PDF
signatures hereto shall be deemed to be of the same force and effect as
originals.
Section 21.8 Waivers. No waiver of any breach or default hereunder
will be valid unless such waiver is in writing signed by the waiving Party. No
failure or other delay by any Party in exercising any right, power, or privilege
hereunder will be or operate as a waiver thereof, nor will any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.
Section 21.9 Entire Agreement. This Agreement, the Stock Purchase
Agreement, the Securities Purchase Agreement, the Registration Rights Agreement,
the Consulting Agreement, the Confidentiality Agreement and the Confidentiality
Side Letter contain the entire understanding and agreement between the Company,
MSV and MSV LLC, on the one side, and Harbinger Master, Harbinger Special,
Harbinger Fund and the Harbinger Satellite Fund, on the other side, and
supersedes any prior understandings or agreements between the Company, MSV and
MSV LLC, on the one side, and Harbinger Master, Harbinger Special, Harbinger
Fund and the Harbinger Satellite Fund, on the other side, with respect to the
subject matter hereof.
Section 21.10 Amendments in Writing. This Agreement may not be
amended, modified or supplemented except by a writing duly executed by all of
the Parties.
Section 21.11 Changes in Capital Structure. The issuance of any Voting
Common Stock by the Company to Harbinger in exchange for the Contribution
Shares, the Converted Shares and the Sponsor Fee Shares shall be equitably
adjusted to reflect any changes to the Company's capital structure that may
occur between the date hereof and the date of such issuance, provided, however,
that no such adjustment shall be made for any warrants granted to Harbinger
Master and Harbinger Special pursuant to the Securities Purchase Agreement. Such
changes to the Company's capital structure may include, but are not limited to,
stock consolidations, stock splits, interim rights offerings, non-cash
distributions, spin-offs, reclassifications, schemes of arrangements, payments
of cash dividends or other similar transactions.
Section 21.12 Reimbursement of Costs.
(a) If the Firm Offer is successfully implemented, the Company
shall reimburse Harbinger's reasonably incurred and documented fees and expenses
in an amount not to exceed $40,000,000. Any amounts required to be withheld by
the Company (as determined in good faith by the Company) in respect of Taxes
thereon that are withheld and paid over to the appropriate Taxing Authority
shall be treated as having been paid by the Company to Harbinger pursuant to
this Section. Prior to any reimbursement of expenses hereunder, Harbinger shall
deliver to the Company the forms, certificates and information set forth in
Section 17.1(b) in respect of such Reimbursement Payments.
(b) If a Firm Offer Announcement is made pursuant to Article
XIII, but the Firm Offer is ultimately unsuccessful as a result of the
occurrence of any event set forth in paragraph (ii) or (iii) of Section 21.13,
subject to Harbinger having no separate right to receive any Reimbursement
Payments under Section 13.8 or Section 15.3, the Company shall be required to
reimburse Harbinger's reasonably incurred and documented fees and expenses in an
amount not to exceed $20,000,000. Prior to any reimbursement of expenses
hereunder, Harbinger shall deliver to the Company the forms, certificates and
information set forth in Section 17.1(b) in respect of such Reimbursement
Payments. Any amounts required to be withheld by the Company (as determined in
good faith by the Company) in respect of Taxes thereon that are withheld and
paid over to the appropriate Taxing Authority shall be treated as having been
paid by the Company to Harbinger pursuant to this Section.
(c) Subject to Sections 13.8, 15.3 and 21.12(a) and 21.12(b),
each of the Parties acknowledges and agrees that such Party is responsible for
bearing and paying its own legal fees and expenses incurred in connection with
negotiating, executing and implementing this Agreement, the Stock Purchase
Agreement, the Registration Rights Agreement (except as otherwise provided in
the Registration Rights Agreement) and the Consulting Agreement. Nothing in this
Section 21.12(b) shall preclude a Party from making a claim for or recovering
legal expenses incurred in connection with enforcement of its rights and
remedies under this Agreement, the Stock Purchase Agreement, the Registration
Rights Agreement and the Consulting Agreement in a court of Law or other legal
proceeding, arbitration or mediation.
Section 21.13 Termination. At any time up to the Firm Offer Date, this
Agreement may be terminated at will by Harbinger upon notice to the Company.
Subject to the requirements of the UK Takeover Panel, this Agreement may also be
terminated, upon notice by either the Company or Harbinger to the other
(provided that no Party that is in material breach of this Agreement may
terminate this Agreement hereunder), upon the earlier of (i) service of a
termination notice by the Company or by Harbinger as a result of the failure to
obtain the Regulatory Approvals, provided such notice is in accordance with and
subject to the terms and conditions set forth in Article VIII, (ii) if the Firm
Offer is implemented by way of Scheme, and (A) the Court declines or refuses to
sanction the Scheme, (B) the Court Order sanctioning the Scheme is not granted
or (C) any of the Target shareholder meeting resolutions or any resolutions
required to approve and implement the Scheme at the Court meeting are not
passed, (iii) if the Firm Offer is implemented by way of Offer and the Offer
lapses, (iv) the FCC designating for hearing the FCC applications seeking the
FCC Approval, (v) the agreement of the Parties, (vi) if following the delivery
of a Notification under Section 13.2, an Amendment Notification under Section
14.1(a), or a Waiver Notification under Section 14.2, the Company's Board, in
accordance with Section 13.5, Section 14.1(e) or Section 14.2(b), determines not
to proceed with the making of a Firm Offer, upon completion of the No Deal
Rights Offering and satisfaction by the Company of its obligations under Section
13.8 and Section 15.3 and (vii) September 30, 2010 (the "Termination Date");
provided, that the provisions of Article XVIII, Section 16.19, and Article XXI
shall survive any such termination.
Section 21.14 Several Obligations. Each of Harbinger Master, Harbinger
Special, Harbinger Fund and the Harbinger Satellite Fund shall only have
obligations and liabilities under or in relation to breach of the Agreement on a
several basis and any representations, warranties, notification,
acknowledgements or notifications under this Agreement shall be given by each of
Harbinger Master, Harbinger Special, Harbinger Fund and the Harbinger Satellite
Fund only in respect of itself and not in respect of any other of its
Affiliates.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Parties have duly executed this Agreement as
of the date and year first above written.
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
HARBINGER CAPITAL PARTNERS FUND I,
L.P.
By: /s/ Xxxxxxx X. Xxxxx, Xx.
---------------------------------
Name: Xxxxxxx X. Xxxxx, Xx.
Title: Executive Vice President
HARBINGER CO-INVESTMENT FUND, L.P.
By: Harbinger Co-Investment GP, LLC,
as general partner
By: HMC - New York, Inc., as managing
member
By: /s/ Xxxxxxx X. Xxxxx, Xx.
---------------------------------
Name: Xxxxxxx X. Xxxxx, Xx.
Title: Executive Vice President
SKYTERRA COMMUNICATIONS, INC.
By: /s/ Xxxxxxxxx X. Good
--------------------------------
Name: Xxxxxxxxx X. Good
Title: Chairman, Chief Executive Officer
and President
MOBILE SATELLITE VENTURES SUBSIDIARY
LLC
By: /s/ Xxxxx Xxxxxxx
--------------------------------
Name: Xxxxx Xxxxxxx
Title: Executive Vice President and
Chief Financial Officer
MOBILE SATELLITE VENTURES L.P.
By: /s/ Xxxxx Xxxxxxx
--------------------------------
Name: Xxxxx Xxxxxxx
Title: Executive Vice President and
Chief Financial Officer
ANNEX A
OWNERSHIP OF CONTRIBUTION SHARES AND CONVERTIBLE BONDS
Name Contribution Shares Convertible Bonds
---- ------------------- -----------------
Harbinger Master 89,804,544 25,070,000
Harbinger Special 42,236,456 12,530,000
EXHIBIT A
STOCK PURCHASE AGREEMENT
------------------------
EXHIBIT B
SECURITIES PURCHASE AGREEMENT
-----------------------------
EXHIBIT C
POSSIBLE OFFER ANNOUNCEMENT
---------------------------
EXHIBIT D
REGISTRATION RIGHTS AGREEMENT
-----------------------------
EXHIBIT E
CONSULTING AGREEMENT
--------------------
EXHIBIT F
HARBINGER CERTIFICATE
---------------------
(a) Representations and Warranties. The representations and warranties of
Harbinger Master, Harbinger Special, and Harbinger Satellite Fund contained in
the Master Contribution and Support Agreement and the representations and
warranties of Harbinger Satellite Fund contained in the Stock Purchase Agreement
are 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 "TVCC Material Adverse Effect," "material," "in all material
respects" or like words) as of the date when made and as of the Notification
Date (except for representations and warranties made as of an earlier date, in
which case as of such earlier date), 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 "TVCC Material Adverse Effect," "material,"
"in all material respects" or like words) would not, individually or in the
aggregate, have a Harbinger Material Adverse Effect.
(b) Performance. Each of Harbinger Master, Harbinger Special, Harbinger
Fund and Harbinger Satellite Fund have performed, satisfied and complied in all
material respects with all covenants, agreements and conditions required by this
Agreement or the Stock Purchase Agreement or Securities Purchase Agreement to be
performed, satisfied or complied with by Harbinger Master, Harbinger Special,
Harbinger Fund and Harbinger Satellite Fund on or prior to the Notification
Date.
(c) No Injunction. No statute, rule, regulation, executive order, decree,
ruling, injunction or other prohibition shall have been enacted, entered,
promulgated or endorsed by any court or Governmental Entity of competent
jurisdiction that prohibits the consummation of any of the Transactions.
EXHIBIT G
BRING DOWN CERTIFICATE
----------------------
(a) Representations and Warranties. The representations and warranties
of the Company and MSV contained in the Master Contribution and Support
Agreement and the Stock Purchase Agreement are 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 the date
when made and as of the Bring Down Date (except for representations and
warranties made as of an earlier date, in which case as of such earlier date),
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.
(b) Performance. The Company and MSV have performed and complied in
all material respects with all obligations, covenants and agreements required by
this Agreement or the Stock Purchase Agreement or the Securities Purchase
Agreement to be performed, satisfied or complied with by the Company on or prior
to the relevant Bring Down Date.
(c) No Injunction. No statute, rule, regulation, executive order,
decree ruling, injunction or other prohibition have been enacted, entered,
promulgated or endorsed by any court or any other Governmental Entity of
competent jurisdiction that prohibits the consummation of any of the
Transactions.
(d) No Material Adverse Effect. No Material Adverse Effect (other
than, and to the extent disclosed in Section 5.10 of the Company Disclosure
Schedule) has occurred since December 31, 2007.
(e) Stockholder Approval. Any Stockholder Approval necessary for the
issuance of the Harbinger Shares contemplated to be issued pursuant to this
Agreement has been received by the Company.
(f) Registration Rights. The Registration Rights Agreement shall be in
full force and effect and the Company is not in breach thereof.
(g) Stock Purchase Agreement. The Stock Purchase Agreement shall be in
full force and effect and the Company is not in breach thereof.
EXHIBIT H
TVCC CERTIFICATE
----------------
(a) Representations and Warranties. The representations and warranties
of Harbinger Master, Harbinger Special, Harbinger Fund and Harbinger Satellite
Fund contained in Section 4.8 of the Master Contribution and Support Agreement
are 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 "TVCC Material Adverse Effect," "material," "in all material
respects" or like words) as of the date made and as of the TVCC Contribution
Closing Date (except for representations and warranties made as of an earlier
date, in which case as of such earlier date), 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 "TVCC Material Adverse Effect," "material,"
"in all material respects" or like words) would not, individually or in the
aggregate, have a TVCC Material Adverse Effect.
(b) Option Agreement. Between the date of the Agreement and the Option
Closing Date, Harbinger has not consented to any of the actions set forth in
Section 8.2(a) through 8.2(e) of the Option Agreement, the effect of which would
be to subject TVCC to a material liability as of the TVCC Contribution Closing
Date or result in a TVCC Material Adverse Effect.
(c) Drag Along Notice. Harbinger has given a Drag Along Notice (as
such term is defined in the TVCC Amended and Restated Limited Liability Company
Agreement to be dated on or about the Option Closing Date ("TVCC LLC Agreement")
to each other member of TVCC with respect to all TVCC Interests not owned by
Harbinger, and such Drag Along Notice meets the requirements of Section 7.4(b)
of the TVCC LLC Agreement. Harbinger has not withdrawn such Drag Along Notice.
(d) Tax. TVCC has prepared and filed with all appropriate Governmental
Entities all material Tax Returns in respect of Taxes by the date such returns
were due to be filed (after giving effect to extensions timely filed), and all
such Tax Returns are correct and complete in all material respects. TVCC has
paid in full all material Taxes and other assessments shown as due on such
Returns.
(e) No TVCC Material Adverse Effect. No TVCC Material Adverse Effect
has occurred since the date of the Agreement.
