Common use of Option Transactions Clause in Contracts

Option Transactions. On or prior to July 23, 2008, TerreStar Parent may elect to effect one of the following transactions (the “Option Transactions”): (a) TerreStar Parent may elect to contribute the Harbinger Spectrum to the JV and increase TerreStar Parent’s ownership interest in the JV such that each of TerreStar Parent and EchoStar hold 50% ownership interests in the JV, provided that in connection with the contribution, (i) TerreStar Networks or TerreStar Parent shall enter into a lease agreement with the JV or amend the Initial Lease under which TerreStar Networks or TerreStar Parent would lease the Harbinger Spectrum as well as the EchoStar Spectrum on terms substantially the same as those under the Initial Lease; and (ii) on the date of such contribution, EchoStar and TerreStar Parent shall enter into an amended and restated limited liability company agreement to set forth commercially reasonable governance terms to be agreed between them in good faith, reflecting the revised ownership structure; or (b) TerreStar Parent may, subject to the terms and conditions set forth herein, elect to acquire EchoStar’s convertible preferred interest in the JV and indirectly acquire 100% ownership of the EchoStar Spectrum; in connection with such acquisition: (i) TerreStar Parent would acquire the special purpose corporate entity owned by EchoStar which will hold EchoStar’s JV interest and (ii) TerreStar Parent would issue to EchoStar or its designee 30,000,000 shares of common stock, par value $.01 per share, of TerreStar Parent (the “TerreStar Parent Shares”).