RIGHT OF FIRST OFFER AGREEMENT February 5, 2008
EXHIBIT
(d)(15)
February
5, 2008
This
Right of First Offer Agreement is made and entered into by and between TerreStar
Corporation, a Delaware corporation (the “Parent”), TerreStar
Networks Inc., a Delaware corporation (the “Company”) and
EchoStar Corporation, a Nevada corporation (“EchoStar”) pursuant
to the Master Investment Agreement, dated as of February 5, 2008, by and among
Parent, the Company and EchoStar (the “Master Investment
Agreement”).
As an
inducement to EchoStar to enter into the Master Investment Agreement and in
satisfaction of a condition to the obligations of EchoStar thereunder, each of
Parent and the Company agrees with EchoStar as follows:
ARTICLE
I
DEFINITIONS
Section
1.01 Definitions. For
the purposes of this Agreement, the following terms shall have the following
meanings:
“Agreement” means this
Right of First Offer Agreement.
The
“Company” has
the meaning assigned to such term in the preamble to this
Agreement.
“Company Excluded
Securities” means (i) equity securities issued as dividends payable in
kind, (ii) securities issued as interest payable-in-kind, (ii) equity securities
issued in connection with a stock split or reclassification, (iii) securities
issued as direct consideration in connection with a bona fide acquisition of
another corporation or entity by the Company (or a wholly-owned subsidiary
thereof) by consolidation, merger, purchase of all or substantially all of the
assets of such other corporation or entity or 50% or more of the equity
ownership of such other entity, or other similar transaction, not resulting in
the holders of voting common stock of the Company owning less than 50% of the
voting securities of the Company or the entity resulting from such transaction;
provided that
such transaction or series of transactions has been approved by the Board of
Directors of the Company and such transaction is not being done in breach of any
approval rights of EchoStar, (iv) shares of Company Common Stock issuable upon
conversion or exercise of any options, warrants or other rights to purchase
Company Common Stock outstanding as of the date hereof or approved by the Board
of Directors of the Company after the date hereof, and (v) Company Common Stock
(or options, warrants or rights therefor) issuable to employees, officers,
directors, contractors, consultants or advisors of the Company (or any
subsidiary) pursuant to incentive agreements, stock purchase or stock option
plans, stock bonuses or awards, warrants, contracts or other similar
arrangements in each case for other than primarily equity financing purposes, as
approved by the Board of Directors of the Company.
“EchoStar” has the
meaning assigned to such term in the preamble to this
Agreement.
The
“EchoStar
Proportionate Number” is, at any given time and with respect to a
particular Offering, the product of (i) a number equal to (A) the aggregate
principal amount of Exchangeable Notes held by EchoStar and its affiliates at
such time, divided by (B) the aggregate principal amount of all Exchangeable
Notes held by EchoStar, Harbinger and their respective affiliates and (ii) the
total amount of securities proposed to be sold, issued or otherwise transferred
in such Offering; provided, however, that the
number referred to in clause (i)(B) above shall include those Exchangeable Notes
held by Harbinger only if Harbinger and its affiliates, at the time of the
relevant Right of First Offer Notice, hold at least 50% of the aggregate
principal amount of the Exchangeable Notes initially purchased by Harbinger
pursuant to the terms of the Master Investment Agreement between Parent, the
Company and Harbinger.
“Harbinger”: Harbinger
Capital Partners Master Fund I, Ltd. and Harbinger Capital Partners Special
Situations Fund, L.P.
“Master Investment
Agreement” has the meaning assigned to such term in the preamble to this
Agreement.
“Offering” has the
meaning assigned to such term in Section 2.01 of this
Agreement.
“Parent” has the
meaning assigned to such term in the preamble to this
Agreement.
“Parent Excluded
Securities” means (i) equity securities issued as dividends payable in
kind, (ii) securities issued as interest payable-in-kind, (iii) equity
securities issued in connection with a stock split or reclassification, (iii)
securities issued as direct consideration in connection with a bona fide
acquisition of another corporation or entity by Parent (or a wholly-owned
subsidiary thereof) by consolidation, merger, purchase of all or substantially
all of the assets of such other corporation or entity or 50% or more of the
equity ownership of such other entity, or other similar transaction, not
resulting in the holders of voting common stock of Parent owning less than 50%
of the voting securities of Parent or the entity resulting from such
transaction; provided that such
transaction or series of transactions has been approved by the Board of
Directors of Parent and such transaction is not being done in breach of any
approval rights of EchoStar, (iv) shares of Parent Common Stock issuable upon
conversion or exercise of any options, warrants or other rights to purchase
Parent Common Stock outstanding as of the date hereof or approved by the Board
of Directors of Parent after the date hereof, and (vi) Parent Common Stock (or
options, warrants or rights therefor) to employees, officers, directors,
contractors, consultants or advisors of the Company (or any subsidiary) pursuant
to incentive agreements, stock purchase or stock option plans, stock bonuses or
awards, warrants, contracts or other similar arrangements in each case for other
than primarily equity financing purposes, as approved by the Board of Directors
of Parent.
“Right of First Offer
Notice” has the meaning assigned to such term in Section 2.01 of this
Agreement.
Section
1.02 Other
Terms. Capitalized terms used herein but not defined shall
have the meanings assigned to such terms in the Master Investment
Agreement.
2
ARTICLE
II
LIMITED
PREEMPTIVE RIGHTS
Section
2.01 Right of First
Offer. In the event that either the Company or Parent proposes
to sell, issue or otherwise transfer any equity or debt securities (other than
Company Excluded Securities and Parent Excluded Securities) of the Company or
Parent (each such transaction, an “Offering”), it shall
provide EchoStar written notice (the “Right of First Offer
Notice”) of such Offering, specifying the proposed price (it being
understood that the form of consideration shall be cash or tangible assets only)
and the material terms upon which the Company or Parent proposes to sell, issue
or otherwise transfer the same. Any such Right of First Offer Notice shall
contain, as applicable, the term, maturity, amortization, interest rate and
payment terms (including cash and Paid-in-Kind components, as applicable), fees,
discount, equity component, security, terms of credit support (including, but
not limited to, collateral and guarantees), subordination (including contractual
and structural) and governance rights of such securities. EchoStar shall have
ten (10) Business Days from the delivery date of any Right of First Offer Notice
to agree to purchase (if the form of consideration is tangible assets, at
EchoStar’s option, for cash and/or the same type of tangible assets of equal
value), an amount of equity or debt securities of Parent or the Company up to
the EchoStar Proportionate Number (in each case calculated prior to the
issuance) for the price and upon the terms specified in the Right of First Offer
Notice by giving written notice to the Company or Parent, as applicable, and
stating therein the amount of such equity or debt securities to be purchased. If
a definitive agreement for the purchase of such equity or debt securities is not
provided along with the Right of First Offer Notice, EchoStar’s election to
purchase such equity or debt securities pursuant to such Right of First Offer
Notice shall not be binding until a definitive agreement is executed (but,
subject to Section 2.03, an election not to purchase shall be
binding).
Section
2.02 Extension
Right. To the extent that EchoStar has agreed to purchase all
of the EchoStar Proportionate Number of securities with respect to an Offering
and any other person with a similar right (i) does not elect to purchase all of
the securities with respect to such Offering which such other person has a right
to acquire or (ii) is otherwise unable to reach agreement with the Company or
Parent, as applicable, with regard to the terms of the definitive agreements
related thereto, EchoStar shall have the option to purchase any or all of such
securities not so purchased in addition to the EchoStar Proportionate Number of
securities with respect to such Offering.
Section
2.03 Right to
Sell. In the event that EchoStar does not elect to purchase
all of the equity or debt securities to be offered in an Offering, or to the
extent that EchoStar is not able to reach agreement with the Company or Parent,
as applicable, with regard to the terms of the definitive agreements related
thereto, the Company or Parent, as applicable, shall have 120 days after the
date of the Right of First Offer Notice to consummate the sale, issuance or
transfer of any or all of the amount of equity or debt securities with respect
to which EchoStar’s preemptive rights hereunder were not exercised, at or above
the price and upon terms not less favorable to the Company or Parent in any
material respect (it being understood and agreed that any increase in the number
of equity or debt securities or any decrease in the price thereof shall be
deemed material for this purpose) than the terms specified in the initial Right
of First Offer Notice given in connection with such sale, issuance or other
transfer.
3
ARTICLE
III
MISCELLANEOUS
Section
3.01 Term. This
Agreement shall terminate at such time when EchoStar and its affiliates
collectively own less than 50% of the aggregate principal amount of the
Exchangeable Notes initially purchased by EchoStar pursuant to the terms of the
Master Investment Agreement.
Section
3.02 Most Favored
Nation. Each of the Company and Parent agree not to grant to
any third party any preemptive rights or rights similar to the rights granted to
EchoStar hereunder (i) on any terms more favorable to such third party or (ii)
to the extent that such third party’s rights would interfere with or impair
EchoStar’s rights hereunder.
Section
3.03 Termination by Mutual
Consent. This Agreement may be terminated and the sale and
purchase of the Purchased Securities hereunder may be abandoned at any time
prior to the Closing, by mutual written consent of (a) the Company, (b) Parent
and (c) EchoStar.
Section
3.04 Interpretation;
Severability. Article, Section, Schedule, and Exhibit
references are to this Agreement, unless otherwise specified. All references to
instruments, documents, contracts, and agreements are references to such
instruments, documents, contracts, and agreements as the same may be amended,
supplemented, and otherwise modified from time to time, unless otherwise
specified. The word “including” shall mean “including but not limited to.”
Whenever any party has an obligation under this Agreement, the expense of
complying with that obligation shall be an expense of such party unless
otherwise specified. If any provision of this Agreement is held to be illegal,
invalid, not binding, or unenforceable, such provision shall be fully severable
and this Agreement shall be construed and enforced as if such illegal, invalid,
not binding, or unenforceable provision had never comprised a part of this
Agreement, and the remaining provisions shall remain in full force and
effect.
Section
3.05 Waivers; Remedies;
Amendments.
(a) No
Waiver; Remedies Cumulative. No failure or delay on the part of any party in
exercising any right, power, or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power, or
remedy preclude any other or further exercise thereof or the exercise of any
right, power, or remedy. The remedies provided for herein are cumulative and are
not exclusive of any remedies that may be available to a party at law or in
equity or otherwise.
(b) Amendments
and Modifications. Except as otherwise provided herein, no amendment, waiver,
consent or modification of any provision of this Agreement shall be effective
unless signed by each of the parties hereto affected by such amendment, waiver,
consent or modification. Any amendment, supplement or modification of or to any
provision of this Agreement, any waiver of any provision of this Agreement, and
any consent to any departure by any party hereto from the terms of any provision
of this Agreement shall be effective only in the specific instance and for the
specific purpose for which made or given. Except where notice is specifically
required by this Agreement, no notice to or demand on any party hereto in any
case shall entitle any party hereto to any other or further notice or demand in
similar or other circumstances .
4
Section
3.06 Binding Effect;
Assignment. This Agreement shall be binding upon the Company,
Parent, EchoStar, and their respective successors and permitted assigns. Except
as expressly provided in this Agreement, this Agreement shall not be construed
so as to confer any right or benefit upon any Person other than the parties to
this Agreement and their respective successors and permitted
assigns.
Section
3.07 Non-Disclosure. Notwithstanding
anything herein to the contrary, the Confidentiality Agreement shall remain in
full force and effect according to its terms regardless of any termination of
this Agreement.
Section
3.08 Communications. All
notices and demands to be delivered to any party hereto shall be in writing and
shall be given by registered or certified mail, return receipt requested,
telecopy, air courier guaranteeing overnight delivery or personal delivery to
the address of such party specified in the Master Investment Agreement or to
such other address as such party may designate in writing. All notices and
communications shall be deemed to have been duly given at the time delivered by
hand, if personally delivered; upon actual receipt if sent by certified mail,
return receipt requested, or regular mail, if mailed; when receipt acknowledged,
if sent via facsimile; and upon actual receipt when delivered to an air courier
guaranteeing overnight delivery.
Section
3.09 Entire
Agreement. This Agreement and the other agreements and
documents referred to herein are intended by the parties as a final expression
of their agreement and intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein and therein. There are no restrictions, promises,
representations, warranties, covenants or undertakings, other than those set
forth or referred to herein or therein with respect to the rights granted by the
Company, Parent or any of their Affiliates or each of the Purchasers or any of
their Affiliates set forth herein or therein. This Agreement and the other
agreements and documents referred to herein supersede all prior agreements and
understandings between the parties with respect to such subject
matter.
Section
3.10 Governing
Law. This Agreement will be construed in accordance with and
governed by the laws of the State of New York without regard to principles of
conflicts of laws.
Section
3.11 Execution in
Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which counterparts, when so executed and delivered, shall be deemed to be an
original and all of which counterparts, taken together, shall constitute but one
and the same Agreement.
[SIGNATURE
PAGE FOLLOWS]
5
IN
WITNESS WHEREOF, the undersigned have entered into this Agreement as of the date
first written above.
|
TERRESTAR
NETWORKS INC.
|
||
|
By:
|
||
|
Title:
|
||
|
TERRESTAR
CORPORATION
|
||
|
By:
|
||
|
Title:
|
||
|
ECHOSTAR
CORPORATION
|
||
|
By:
|
||
|
Title:
|
||
|
[Signature
Page to EchoStar Right of First Offer
Agreement]
|
||
IN
WITNESS WHEREOF, the undersigned have entered into this Agreement as of the date
first written above.
|
TERRESTAR
NETWORKS INC.
|
|||
|
|
|||
|
By:
|
|||
|
Title:
|
|||
|
TERRESTAR
CORPORATION
|
|||
|
|
|||
|
By:
|
|||
|
Title:
|
|||
|
ECHOSTAR
CORPORATION
|
|||
| By: | |||
| Title: | |||
|
[Signature
Page to EchoStar Right of First Offer
Agreement]
|
|||