Exhibit 10.5
NEITHER THIS WARRANT NOR ANY OF THE
SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE
SECURITIES LAW. THE WARRANTS REPRESENTED BY THIS
CERTIFICATE AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF MAY
NOT BE TRANSFERRED, SOLD, ASSIGNED, EXCHANGED, MORTGAGED, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF OR ENCUMBERED WITHOUT
COMPLIANCE WITH THE PROVISIONS OF, AND ARE OTHERWISE RESTRICTED BY
THE PROVISIONS OF, THE ACT, THE RULES AND REGULATIONS THEREUNDER
AND THIS WARRANT.
Warrant
No. [___]
WARRANT
TO
PURCHASE 7,500,000 SHARES OF COMMON STOCK
(SUBJECT TO ADJUSTMENT)
OF
SKYTERRA COMMUNICATIONS, INC.
THIS IS TO CERTIFY
THAT , or its registered
assigns, is entitled, at any time prior to the Expiration Date
(such term, and certain other capitalized terms used herein being
hereinafter defined), to purchase from SKYTERRA COMMUNICATIONS,
INC., a Delaware corporation (the "Company"), 7,500,000 shares of
the Common Stock of the Company, (subject to adjustment as provided
herein), at a purchase price of $.01 per share (the initial
"Exercise Price", subject to adjustment as provided herein).
1.
DEFINITIONS
As used in this
Warrant, the following terms have the respective meanings set forth
below:
"Affiliate" of any
Person means any other Person which directly or indirectly through
one or more intermediaries controls, or is controlled by, or is
under common control with such Person. The term
"control" (including the terms "controlled by" and "under common
control with") as used with respect to any Person 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 the ownership of voting securities, by contract or
otherwise.
"April Warrants"
shall mean warrants to be issued by the Company to Harbinger on
April 1, 2009 (or such other time that the Company and Harbinger
may agree) to purchase an aggregate of 17,500,000 shares of Common
Stock, and all warrants issued upon transfer, division, or
combination of, or in substitution of such warrants.
"Appraised Value"
per share of Common Stock as of a date specified herein shall mean
the value of such a share as of such date as determined by an
investment bank of nationally recognized standing selected by the
Majority Warrant Holders and reasonably acceptable to the
Company. If the investment bank selected by the Majority
Warrant Holders is not reasonably acceptable to the Company, and
the Company and the Majority Warrant Holders cannot agree on a
mutually acceptable investment bank, then the Company and the
Majority Warrant Holders shall each choose one such investment bank
and the respective chosen firms shall jointly select a third
investment bank, which shall make the determination. The
Company shall pay the costs and fees of each such investment bank
(including any such investment bank selected by the Majority
Warrant Holders), and the decision of the investment bank making
such determination of Appraised Value shall be final and binding on
the Company and all affected holders of Warrants or Warrant Stock.
Such Appraised Value shall be determined as a pro rata portion of
the value of the Company taken as a whole, based on the higher of
(A) the value derived from a hypothetical sale of the entire
Company as a going concern by a willing seller to a willing buyer
(neither acting under any compulsion) and (B) the liquidation value
of the entire Company. No discount shall be applied on
account of (i) any Warrants or Warrant Stock representing a
minority interest, (ii) any lack of liquidity of the Common Stock
or the Warrants, (iii) the fact that the Warrants or Warrant Stock
may constitute "restricted securities" for securities law purposes,
(iv) the existence of any call option or (v) any other grounds.
"Business Day"
shall mean any day that is not a Saturday or Sunday or a day on
which banks are required or permitted to be closed in the State of
New York.
"Commission" shall
mean the Securities and Exchange Commission or any other federal
agency then administering the Securities Act and other federal
securities laws.
"Common Stock"
shall mean the Voting Common Stock or the Non-Voting Common Stock,
as constituted on the Original Issue Date, and any capital stock
into which such Common Stock may thereafter be changed, and shall
also include (i) capital stock of the Company of any other class
(regardless of how denominated) issued to the holders of shares of
any Common Stock upon any reclassification thereof which is also
not preferred as to dividends or liquidation over any other class
of stock of the Company and which is not subject to redemption, and
(ii) shares of common stock of any successor or acquiring
corporation received by or distributed to the holders of Common
Stock of the Company in the circumstances contemplated by Section
4.3 hereof.
"Company" means
SkyTerra Communications, Inc., a Delaware corporation, and any
successor corporation.
"Current Market
Price" shall mean as of any specified date the average of the daily
market price of one share of the Common Stock for the shorter of
(x) the twenty (20) consecutive Business Days immediately preceding
such date or (y) the period commencing on the Business Day next
following the first public announcement by the Company of any event
giving rise to an adjustment of the Exercise Price pursuant to
Section 5 below and ending on the date of such
event. The "daily market price" of one share of Common
Stock for each such Business Day shall be: (i) if the
Common Stock is then listed on a national securities exchange, the
last sale price of one share of Common Stock, regular way, on such
day on the principal stock exchange
or market system on which such Common Stock is
then listed or admitted to trading, or, if no such sale takes place
on such day, the average of the closing bid and asked prices for
one share of Common Stock on such day as reported on such stock
exchange or market system or (ii) if the Common Stock is not then
listed or admitted to trading on any national securities exchange
but is traded over-the-counter, the average of the closing bid and
asked prices for one share of Common Stock as reported on the
Electronic Bulletin Board or in the National Daily Quotation
Sheets, as applicable.
"Designated Office"
shall have the meaning set forth in Section 10 hereof.
"Encumbrance" means
any mortgage, pledge, hypothecation, claim, charge, security
interest, encumbrance, option, lien, put or call right, right of
first offer or refusal, proxy, voting right or other restrictions
or limitations of any nature whatsoever in respect of any property
or asset, whether or not filed, recorded or otherwise perfected
under applicable law, other than (a) those resulting from Taxes
which have not yet become delinquent or (b) minor liens and
encumbrances that do not materially detract from the value of the
property or asset, or materially impair the operations of MSV or
the Company or materially interfere with the use of such property
or asset.
"Exchange Act"
shall mean the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission thereunder, all as the same
shall be in effect from time to time.
"Exercise Date"
shall have the meaning set forth in Section 2.1 hereof.
"Exercise Notice"
shall have the meaning set forth in Section 2.1 hereof.
"Exercise Price"
shall mean $0.01 per share of Common Stock, subject to adjustment
as provided herein.
"Expiration Date"
shall mean January 6, 2014.
"Fair Value" per
share of Common Stock as of any specified date shall mean (A) if
the Common Stock is publicly traded on such date, the Current
Market Price per share, or (B) if the Common Stock is not publicly
traded on such date, (1) the fair market value per share of Common
Stock as determined in good faith by the Board of Directors of the
Company and set forth in a written notice to each Holder or (2) if
the Majority Warrant Holders object in writing to such price as
determined by the Board of Directors within thirty (30) days after
receiving notice of same, the Appraised Value per share as of such
date. For the avoidance of doubt and notwithstanding the
foregoing, the Fair Value per share of Voting Common Stock and
Non-Voting Common Stock shall, at all times, be deemed to be the
same. Fair Value with respect to property, services or
other consideration shall be calculated in a similar manner.
"FCC" shall mean
the Federal Communications Commission.
"Harbinger" shall
mean Harbinger Capital Partners Master Fund I, Ltd. or Harbinger
Capital Partners Special Situations Fund, L.P. or any of their
respective Affiliates.
"Holder" shall mean
(a) with respect to this Warrant, the Person in whose name the
Warrant set forth herein is registered on the books of the Company
maintained for such purpose and (b) with respect to any other
Warrant or shares of Warrant Stock, the Person in whose name such
Warrant or Warrant Stock is registered on the books of the Company
maintained for such purpose.
“HSR
Act” means the Hart-Scott-Rodino Antitrust Improvements Act
of 1976.
"Majority Warrant
Holders", with respect to a given determination, shall mean the
Holders of Warrants and April Warrants (to the extent issued)
representing more than fifty percent (50%) of all Common Stock
issuable upon exercise of all outstanding Warrants and April
Warrants (taken together).
“Master
Contribution Agreement” shall mean the Master Contribution
and Support Agreement dated July 24, 2008, 2008 among Harbinger
Capital Partners Master Fund I, Ltd., Harbinger Capital Partners
Special Situations Fund, L.P., Harbinger Co-Investment Fund, L.P.,
the Company, MSV and Mobile Satellite Ventures Subsidiary LLC.
"MSV" shall mean
Mobile Satellite Ventures LP, a Delaware limited partnership.
"MSV Finance Co."
shall mean Mobile Satellite Ventures Finance Co., a Delaware
corporation.
"Non-Voting Common
Stock" shall mean the non-voting common stock, par value $0.01 per
share, of the Company.
"Notes" shall mean
the 16.0% Senior Notes due 2013 of MSV and MSV Finance Co.
"Opinion of
Counsel" means a written opinion of outside counsel experienced in
Securities Act matters chosen by the Holder of this Warrant or
Warrant Stock issued upon the exercise hereof and reasonably
acceptable to the Company.
"Original Issue
Date" shall mean January 6, 2009.
"Original Warrants"
shall mean all of the Warrants issued by the Company to Harbinger
on January 6, 2009 to purchase an aggregate of 7,500,000 shares of
Common Stock.
"Outstanding" shall
mean, when used with reference to Common Stock, at any date as of
which the number of shares thereof is to be determined, all issued
shares of Common Stock, whether Voting Common Stock or Non-Voting
Common Stock, as the case may be, except shares then owned or held
by or for the account of the Company or any Subsidiary, and shall
include all shares issuable in respect of outstanding scrip or any
certificates representing fractional interests in shares of Common
Stock.
"Person" shall mean
any individual, sole proprietorship, partnership, limited liability
company, joint venture, trust, incorporated organization,
association, corporation, institution, public benefit corporation,
entity or government (whether federal, state, county, city,
municipal
or otherwise, including, without limitation,
any instrumentality, division, agency, body or department
thereof).
"Restricted Common
Stock" shall mean shares of Common Stock which are, or which upon
their issuance on the exercise of this Warrant would be, evidenced
by a certificate bearing the restrictive legend set forth in
Section 8.2(a) hereof.
"Securities Act"
shall mean the Securities Act of 1933, as amended, and the rules
and regulations of the Commission thereunder, all as the same shall
be in effect at the time.
"Share Withholding
Option" has the meaning set forth in Section 2.1 hereof.
"Subsidiary" shall
mean any corporation, association or other business entity (i) at
least 50% of the outstanding voting securities of which are at the
time owned or controlled directly or indirectly by the Company; or
(ii) with respect to which the Company possesses, directly or
indirectly, the power to direct or cause the direction of the
affairs or management of such person.
“Tax”
or “Taxes” means any and all taxes, charges, fees,
levies, imposts, duties or other assessments of any kind
whatsoever, imposed by or payable to any federal, state,
provincial, local, or foreign tax authority, including any gross
income, net income, alternative or add on minimum, franchise,
profits or excess profits, gross receipts, estimated, capital,
goods, services, documentary, use, transfer, ad valorem, business
rates, value added, sales, customs, real or personal property,
capital stock, license, payroll, withholding or back up
withholding, employment, social security, workers’
compensation, unemployment compensation, utility, severance,
production, excise, stamp, occupation, premium, windfall profits,
occupancy, transfer, gains taxes, together with any interest,
penalties, additions to tax or additional amounts imposed with
respect thereto.
"Transfer" shall
mean any disposition of any Warrant or Warrant Stock or of any
interest therein, which would constitute a "sale" thereof or a
transfer of a beneficial interest therein within the meaning of the
Securities Act.
"Voting Common
Stock" shall mean the voting common stock, par value $0.01 per
share, of the Company.
"Warrant Price"
shall mean an amount equal to (i) the number of shares of Common
Stock being purchased upon exercise of this Warrant pursuant to
Section 2.1 hereof, multiplied by (ii) the Exercise Price as of the
date of such exercise.
"Warrants" shall
mean the Original Warrants and all warrants issued upon transfer,
division or combination of, or in substitution for, such Original
Warrants. All Warrants shall at all times be identical
as to terms and conditions, except as to the number of shares of
Common Stock for which they may be exercised and their date of
issuance.
"Warrant Stock"
generally shall mean the shares of Common Stock issued, issuable or
both (as the context may require) upon the exercise of
Warrants.
2.
EXERCISE
OF WARRANT
2.1
Manner of Exercise
.
(a)
From and after the Original Issue Date
and until 5:00 P.M., New York time, on the Expiration Date, the
Holder of this Warrant may, from time to time, exercise this
Warrant, on any Business Day, for up to 7,500,000 shares of Common
Stock. In order to exercise this Warrant, in whole or in
part, the Holder shall (i) deliver to the Company at its Designated
Office a written notice of the Holder's election to exercise this
Warrant (an "Exercise Notice"), which Exercise Notice shall be
irrevocable and specify the number of shares of Non-Voting Common
Stock and/or Voting Common Stock to be purchased, together with
this Warrant and (ii) pay to the Company the Warrant Price (the
date on which both such delivery and payment shall have first
taken place being hereinafter sometimes referred to as the
"Exercise Date"). Such Exercise Notice shall be in the
form of the subscription form appearing at the end of this Warrant
as Annex A, duly executed by the Holder or its duly
authorized agent or attorney. For the avoidance of
doubt, subject to the other conditions set forth in Sections
2.1(b), 2.1(c) or elsewhere herein, the Holder may, at its sole
discretion, exercise the Warrant for shares of Voting Common Stock,
shares of Non-Voting Common Stock or any combination
thereof.
(b)
Upon receipt by the Company of such
Exercise Notice, Warrant and payment, the Company shall, as
promptly as practicable, and in any event within five (5) Business
Days thereafter, execute (or cause to be executed) and deliver (or
cause to be delivered) to the Holder a certificate or certificates
representing the aggregate number of full shares of Common Stock
issuable upon such exercise, together with cash in lieu of any
fraction of a share, as hereafter provided. The stock
certificate or certificates so delivered shall be, to the extent
possible, in such denomination or denominations as the exercising
Holder shall reasonably request in the Exercise Notice and shall be
registered in the name of the Holder or, subject to Section 8
below, such other name as shall be designated in the Exercise
Notice. This Warrant shall be deemed to have been
exercised and such certificate or certificates shall be deemed to
have been issued, and the Holder or any other Person so designated
to be named therein shall be deemed to have become a holder of
record of such shares for all purposes, as of the Exercise
Date. Notwithstanding the foregoing, in the event that
the rules of any stock exchange or automatic quotation system on
which the Company's Common Stock is then listed, traded or
quoted requires shareholder approval prior to the issuance of any
or all of the Warrant Stock (or the conversion of Non-Voting Common
Stock into Voting Common Stock), the Company shall issue on the
Exercise Date the maximum number of shares of Warrant Stock
that can be issued without shareholder approval, without regard to
any shares of Warrant Stock otherwise required to be issued in
excess of such maximum number of shares of Warrant Stock, and shall
promptly after receipt of such shareholder approval issue the
balance of the number of shares of Warrant Stock for which this
Warrant has been exercised. The Company shall use its
reasonable best efforts to obtain such shareholder approval as soon
as reasonably possible, including, without limitation, filing all
proxy statements or information statements, necessary or convenient
to obtain such consent.
(c)
Notwithstanding anything to the contrary
contained herein, prior to the issuance of the Warrant Stock or, in
the event that the Warrant Stock is Non-Voting Common Stock, the
Voting Common Stock issuable upon exchange of such Warrant Stock,
the Holder or
its permitted
assigns on the one hand, and the Company on the other hand, shall
have satisfied any and all applicable legal or regulatory
requirements for conversion, including compliance with the HSR Act
and FCC requirements. The Company shall use its
reasonable best efforts in cooperating with such Holder to obtain
such legal or regulatory approvals to the extent its cooperation is
necessary. The Company shall pay all necessary filing
fees and reasonable out-of-pocket expenses to obtain such legal or
regulatory approvals.
(d)
Payment of the Warrant Price shall be
made at the option of the Holder by one or more of the following
methods: (i) by delivery of a certified or official bank check in
the amount of such Warrant Price payable to the order of the
Company, (ii) by instructing the Company to withhold a number of
shares of Warrant Stock then issuable upon exercise of this
Warrant with an aggregate Fair Value equal to such Warrant Price
(the "Share Withholding Option"), (iii) by surrendering to the
Company, Notes previously acquired by the Holder with an aggregate
fair market value equal to such Warrant Price; it
being understood that the fair market value of the Note shall
be its principal amount plus any accrued interest to that day, or
(iv) by surrendering to the Company shares of Common Stock
previously acquired by the Holder with an aggregate Fair Value
equal to such Warrant Price. In the event of any
withholding of Warrant Stock or surrender of Notes or Common Stock
pursuant to clause (ii), (iii) or (iv) above where the number of
shares whose Fair Value (as measured on the Exercise Date) is equal
to the Warrant Price is not a whole number, the number of shares
withheld by or surrendered to the Company shall be rounded up to
the nearest whole share and the Company shall make a cash payment
to the Holder based on the incremental fraction of a share being so
withheld by or surrendered to the Company in an amount determined
in accordance with Section 2.3 hereof. Notwithstanding
any provision herein to the contrary, the Company shall not be
required to register shares of Common Stock in the name of any
Person who acquired this Warrant (or part hereof) or any shares of
Warrant Stock otherwise than in accordance with this
Warrant.
(e)
If this Warrant shall have been exercised
in part, the Company shall, at the time of delivery of the
certificate or certificates representing the shares of Common Stock
being issued, deliver to the Holder a new Warrant evidencing the
rights of the Holder to purchase the unpurchased shares of Common
Stock called for by this Warrant. Such new Warrant shall
in all other respects be identical to this Warrant.
(f)
Subject to Section 2.1(g), all Warrants
delivered for exercise shall be canceled by the Company.
(g)
Notwithstanding anything to the contrary
in this Warrant, if, at the time that the Holder of this Warrant
elects to exercise this Warrant, in whole or in part, the Company
does not have a sufficient number of authorized and issued shares
of Non-Voting Common Stock sufficient to permit such Holder to
receive a complete allotment of Non-Voting Common Stock pursuant
its election under Section 2.1(a), such election shall be deemed to
be for a number of shares of Non-Voting Common Stock equal to the
number of shares of Non-Voting Common Stock then authorized but
unissued by the Company.
2.2
Payment of Taxes
. All shares of Warrant Stock issuable upon the exercise
of this Warrant pursuant to the terms hereof shall be validly
issued, fully paid and nonassessable, issued without violation of
any preemptive or similar rights of any stockholder of
the Company and free and clear of all
Encumbrances (other than any created by actions of the Holder). The
Company shall pay all expenses in connection with, and all Taxes
and other governmental charges that may be imposed with respect to,
the issue or delivery thereof, unless such Tax or charge is imposed
by law upon the Holder. The Company shall not, however, be required
to pay any Tax or governmental charge which may be payable in
respect of any Transfer involved in the issue and delivery of
shares of Warrant Stock issuable upon exercise of this Warrant in a
name other than that of the holder of the Warrants to be exercised,
and no such issue or delivery shall be made unless and until the
Person requesting such issue has paid to the Company the amount of
any such Tax, or has established to the satisfaction of the Company
that such Tax has been paid. The Company shall not be required to
reimburse the Holder or any other Person for any income,
withholding, franchise, or similar Taxes or governmental charges
(whether collected by withholding or otherwise and whether imposed
on the gross amount of any payment or otherwise) paid by the
Company or imposed on the Holder with respect to the exercise or
issuance of the Warrant or issuance of any Warrant Stock or on or
with respect to any payments made on or with respect to the Warrant
or Warrant Stock.
2.3
Fractional Shares
. The Company shall not be required to issue a
fractional share of Common Stock upon exercise of any
Warrant. As to any fraction of a share that the Holder
of one or more Warrants, the rights under which are exercised in
the same transaction, would otherwise be entitled to purchase upon
such exercise, the Company shall pay to such Holder an amount in
cash equal to such fraction multiplied by the Fair Value of one
share of Common Stock on the Exercise Date.
3.
TRANSFER,
DIVISION AND COMBINATION
3.1
Transfer
. Subject to compliance with Section 8 hereof, each
transfer of this Warrant and all rights hereunder, in whole or in
part, shall be registered on the books of the Company to be
maintained for such purpose, upon surrender of this Warrant at the
Designated Office, together with a written assignment of this
Warrant in the form of Annex B hereto duly executed by the Holder
or its agent or attorney and funds sufficient to pay any transfer
Taxes described in Section 2.2 in connection with the making of
such transfer. Upon such surrender and delivery and, if
required, such payment, the Company shall, subject to Section 8,
execute and deliver a new Warrant or Warrants in the name of the
assignee or assignees and in the denominations specified in such
instrument of assignment, and shall issue to the assignor a new
Warrant evidencing the portion of this Warrant not so assigned and
this Warrant shall promptly be cancelled. A Warrant, if
properly assigned in compliance with Section 8, may be exercised by
the new Holder for the purchase of shares of Common Stock without
having a new Warrant issued.
3.2
Division and Combination
. Subject to compliance with the applicable provisions
of this Warrant including, without limitation, Section 8, this
Warrant may be divided or combined with other Warrants upon
presentation hereof at the Designated Office, together with a
written notice specifying the names and denominations in which new
Warrants are to be issued, signed by the Holder or its agent or
attorney. Subject to compliance with the applicable
provisions of this Warrant as to any transfer which may be involved
in such division or combination, the Company shall execute and
deliver a new Warrant or Warrants in exchange for the Warrant or
Warrants to be divided or combined in accordance with such
notice.
3.3
Expenses . The
Company shall prepare, issue and deliver at its own expense any new
Warrant or Warrants required to be issued under this Section 3
(other than pursuant to Section 2.2 and 3.1 hereof).
3.4
Maintenance of Books
. The Company agrees to maintain, at the Designated
Office, books for the registration and transfer of the
Warrants.
4.
ANTIDILUTION
PROVISIONS
The Exercise Price
shall be subject to adjustment from time to time as follows:
4.1
Upon Stock Dividends, Subdivisions or
Splits . If, at any time after the Original
Issue Date, the number of shares of Common Stock outstanding is
increased by a stock dividend payable in shares of Common Stock or
by a subdivision or split-up of shares of Common Stock, then,
following the record date for the determination of holders of
Common Stock entitled to receive such stock dividend, or to be
affected by such subdivision or split-up, the number of shares
issuable upon exercise of the Warrant shall be proportionately
increased by multiplying such number by a fraction, the numerator
of which is the number of shares of Common Stock Outstanding
immediately after such increase in Outstanding shares and the
denominator of which is the number of shares of Common Stock
Outstanding immediately prior to such increase.
4.2
Upon Combinations or Reverse Stock
Splits . If, at any time after the Original
Issue Date, the number of shares of Common Stock Outstanding is
decreased by a combination or reverse stock split of the
Outstanding shares of Common Stock into a smaller number of shares
of Common Stock, then, upon the record date to determine shares
affected by such combination or reverse stock split, (a) the
Exercise Price shall be increased by multiplying the Exercise Price
by a fraction, the numerator of which is the number of shares of
Common Stock Outstanding immediately prior to such decrease and the
denominator of which is the number of shares of Common Stock
Outstanding immediately after such decrease in Outstanding shares,
and (b) the number of shares issuable upon exercise of the Warrant
shall be proportionately decreased by multiplying the same by the
inverse of such fraction.
4.3
Upon Reclassifications,
Reorganizations, Consolidations or Mergers
. In the event of any capital reorganization of the
Company, any reclassification of the stock of the Company (other
than a change in par value or from par value to no par value or
from no par value to par value or as a result of a stock dividend
or subdivision, split up or combination of shares), or any
consolidation or merger of the Company with or into another Person
(where the Company is not the surviving Person or where there is a
change in or distribution with respect to the Common Stock), each
Warrant shall after such reorganization, reclassification,
consolidation, or merger be exercisable for the kind and number of
shares of stock or other securities or property of the Company or
of the successor Person resulting from such consolidation or
surviving such merger, if any, to which the holder of the number of
shares of Common Stock deliverable (immediately prior to the time
of such reorganization, reclassification, consolidation or merger)
upon exercise of such Warrant would have been entitled upon such
reorganization, reclassification, consolidation or
merger. The provisions of this Section 4.3 shall
similarly apply to successive reorganizations, reclassifications,
consolidations, or mergers. The
Company shall not effect any such
reorganization, reclassification, consolidation or merger unless,
prior to the consummation thereof, the successor Person (if other
than the Company) resulting from such reorganization,
reclassification, consolidation or merger, shall assume, by written
instrument, the obligation to deliver to the Holders of the Warrant
such shares of stock, securities or assets, which, in accordance
with the foregoing provisions, such Holders shall be entitled to
receive upon such conversion.
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NO IMPAIRMENT; REGULATORY COMPLIANCE AND
COOPERATION; NOTICE OF EXPIRATION
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(a)
The Company shall not by any action,
including, without limitation, amending its charter documents or
through any reorganization, reclassification, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or
any other similar voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but
will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such actions as may be
necessary or appropriate to protect the rights of the Holder
against impairment. Without limiting the generality of
the foregoing, the Company shall take all such action as may be
necessary or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable shares of Common Stock
upon the exercise of this Warrant, free and clear of all
Encumbrances (other than any created by actions of the
Holder), and shall use its best efforts to obtain all such
authorizations, exemptions or consents from any public regulatory
body having jurisdiction thereof as may be necessary to enable the
Company to perform its obligations under this Warrant.
(b)
The Company shall deliver to each Holder
of Warrants after the 60 th day but before the 30 th day prior to the Expiration Date, advance notice of
such Expiration Date. If the Company fails to fulfill in
a timely manner the notice obligation set forth in the prior
sentence, it shall provide such notice as soon as possible
thereafter.
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RESERVATION AND AUTHORIZATION OF COMMON
STOCK; REGISTRATION WITH OR APPROVAL OF ANY GOVERNMENTAL
AUTHORITY
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From and after the
Original Issue Date, the Company shall use its best efforts to
reserve and keep available for issuance upon the exercise of the
Warrants such number of its authorized but unissued shares of
Non-Voting Common Stock and Voting Common Stock, as will be
sufficient to permit the exercise in full of all outstanding
Warrants; provided that if, at any time after the Original Issue
Date, the Company does not have available for issuance authorized
but unissued shares of Non-Voting Common Stock and Voting Common
Stock, as will be sufficient to permit the exercise in full of all
outstanding Warrants, and the Company shall pay a dividend (other
than a dividend for which an adjustment is made pursuant to Section
4.1) or otherwise distribute to all holders of its shares of Common
Stock cash, evidences of its indebtedness or assets, then the
Holder shall be entitled to also receive such dividend or
distribution on the date it is paid in an amount which it would
have received if the Holder had exercised the Warrants held by the
Holder immediately prior to the date of such dividend or
distribution without duplication of any right of the Holder to
receive such dividend or distribution pursuant to the Master
Contribution Agreement.
All shares of
Common Stock issuable pursuant to the terms hereof, when issued
upon exercise of this Warrant with payment therefor in accordance
with the terms hereof, shall be duly and validly issued and fully
paid and nonassessable, not subject to preemptive rights and shall
be free and clear of all Encumbrances (other than Encumbrances
created by actions of a Holder). Before taking any
action that would result in an adjustment in the number of shares
of Common Stock for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or
exemptions thereof, or consents thereto, as may be necessary from
any public regulatory body or bodies having jurisdiction over such
action. Subject to the provisos in Section 2.1(b) and
(c) herein, if any shares of Common Stock required to be reserved
for issuance upon exercise of Warrants require registration or
qualification with any governmental authority under any federal or
state law (other than under the Securities Act or any state
securities law) before such shares may be so issued, the Company
will in good faith and as expeditiously as possible and at its
expense endeavor to cause such shares to be duly registered.
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NOTICE OF CORPORATE ACTIONS; TAKING OF
RECORD; TRANSFER BOOKS
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7.1
Notices of Corporate
Actions .
In case:
(a)
the Company shall take an action or an
event shall occur, that would require an Exercise Price adjustment
pursuant to Section 4; or
(b)
the Company shall grant to the holders of
its Common Stock rights or warrants to subscribe for or purchase
any shares of capital stock of any class; or
(c)
of any reclassification of the Common
Stock (other than a subdivision or combination of the Outstanding
shares of Common Stock), or of any consolidation, merger or share
exchange to which the Company is a party and for which approval of
any stockholders of the Company is required, or of the sale or
transfer of all or substantially all of the assets of the Company;
or
(d)
of the voluntary or involuntary
dissolution, liquidation or winding up of the Company;
or
(e)
the Company or any Subsidiary shall
commence a tender offer for all or a portion of the Outstanding
shares of Common Stock (or shall amend any such tender offer to
change the maximum number of shares being sought or the amount or
type of consideration being offered therefor);
then the Company shall cause to be filed at
each office or agency maintained for such purpose, and shall cause
to be mailed to all Holders at their last addresses as they shall
appear in the stock register, at least 10 days prior to the
applicable record, effective or expiration date hereinafter
specified, a notice stating (x) the date on which a record is to be
taken for the purpose of such dividend, distribution or granting of
rights or warrants, or, if a record is not to be taken, the date as
of which the holders of Common Stock of record who will be entitled
to such dividend, distribution, rights or warrants are to be
determined, (y) the date on which such reclassification,
consolidation, merger, share exchange, sale,
transfer, dissolution, liquidation or winding up is expected to
become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange
their shares of Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger,
share exchange, sale, transfer, dissolution, liquidation or winding
up, or (z) the date on which such tender offer commenced, the date
on which such tender offer is scheduled to expire unless extended,
the consideration offered and the other material terms thereof (or
the material terms of the amendment thereto). Such notice shall
also set forth such facts with respect thereto as shall be
reasonably necessary to indicate the effect of such action on the
Exercise Price and the number and kind or class of shares or other
securities or property which shall be deliverable or purchasable
upon the occurrence of such action or deliverable upon exercise of
the Warrants. Neither the failure to give any such notice nor any
defect therein shall affect the legality or validity of any action
described in clauses (a) through (e) of this Section 7.1.
7.2
Taking of Record
. In the case of all dividends or other distributions by
the Company to the holders of its Common Stock with respect to
which any provision of any Section hereof refers to the taking of a
record of such holders, the Company will in each such case take
such a record as of the close of business on a Business Day.
7.3
Closing of Transfer Books . The Company shall not
at any time, except upon dissolution, liquidation or winding up of
the Company, close its stock transfer books or Warrant transfer
books so as to result in preventing or delaying the exercise or
transfer of any Warrant.
8.
TRANSFER
RESTRICTIONS
The Holder, by
acceptance of this Warrant, agrees to be bound by the provisions of
this Section 8.
8.1
Restrictions on Transfers
. Subject to this Section 8.1, Holder may transfer this
Warrant or any shares of Restricted Common Stock or cause a portion
of this Warrant to be transferred. Neither this Warrant,
any portion hereof nor any shares of Restricted Common Stock issued
upon the exercise hereof shall be transferred, sold, assigned,
exchanged, mortgaged, pledged, hypothecated, or otherwise disposed
of or encumbered without compliance with, and they are otherwise
restricted by, the provisions of the Securities Act, the rules and
regulations thereunder and this Warrant. Each
certificate, if any, evidencing such shares of Restricted Common
Stock issued upon any such Transfer, other than in a public
offering pursuant to an effective registration statement, shall
bear the restrictive legend set forth in Section 8.2(a), and each
Warrant issued upon such Transfer shall bear the restrictive legend
set forth in Section 8.2(b), unless the Holder delivers to the
Company an Opinion of Counsel to the effect that such legend is not
required for the purposes of compliance with the Securities
Act. Holders of the Warrants or the Restricted Common
Stock, as the case may be, shall not be entitled to Transfer such
Warrants or such Restricted Common Stock except in accordance with
this Section 8.1.
8.2
Restrictive Legends
.
(a)
Except as otherwise provided in this
Section 8, each certificate for Warrant Stock initially issued upon
the exercise of this Warrant, each certificate for Warrant Stock
issued to any subsequent transferee of any such certificate, shall
be stamped or otherwise imprinted with two legends in substantially
the following forms: "THE SHARES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES
LAW. THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT
BE TRANSFERRED, SOLD, ASSIGNED, EXCHANGED, MORTGAGED, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF OR ENCUMBERED WITHOUT
COMPLIANCE WITH THE PROVISIONS OF, AND ARE OTHERWISE RESTRICTED BY
THE PROVISIONS OF, THE ACT AND THE RULES AND REGULATIONS
THEREUNDER." "THE SHARES REPRESENTED BY THIS CERTIFICATE
ARE ENTITLED TO THE BENEFIT OF AND ARE SUBJECT TO CERTAIN
OBLIGATIONS SET FORTH IN A CERTAIN WARRANT DATED JANUARY 6, 2009,
ORIGINALLY ISSUED BY SKYTERRA COMMUNICATIONS, INC. (THE "WARRANT")
PURSUANT TO THE EXERCISE OF WHICH SUCH SHARES WERE
ISSUED. A COPY OF THE WARRANT IS AVAILABLE AT THE
EXECUTIVE OFFICES OF SKYTERRA COMMUNICATIONS, INC."
(b)
Except as otherwise provided in this
Section 8, each Warrant shall be stamped or otherwise imprinted
with a legend in substantially the following
form: "NEITHER THIS WARRANT NOR ANY OF THE SECURITIES
ISSUABLE UPON EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE
SECURITIES LAW. THE WARRANTS REPRESENTED BY THIS
CERTIFICATE AND THE STOCK ISSUABLE UPON EXERCISE HEREOF MAY NOT BE
TRANSFERRED, SOLD, ASSIGNED, EXCHANGED, MORTGAGED, PLEDGED,
HYPOTHECATED OF OTHERWISE DISPOSED OF OR ENCUMBERED WITHOUT
COMPLIANCE WITH THE PROVISIONS OF, AND ARE OTHERWISE RESTRICTED BY
THE PROVISIONS OF, THE ACT, THE RULES AND REGULATIONS THEREUNDER
AND THIS WARRANT."
8.3
Termination of Securities Law
Restrictions . Notwithstanding
the foregoing provisions of this Section 8, the
restrictions imposed by Section 8.1 upon the transferability of the
Warrants and the Restricted Common Stock and the legend
requirements of Section 8.2 shall terminate as to any particular
Warrant or shares of Restricted Common Stock when the Company shall
have received from the Holder thereof an Opinion of Counsel to the
effect that such legend is not required in order to ensure
compliance with the Securities Act. Whenever the
restrictions imposed by Sections 8.1 and 8.2 shall terminate as
to
