sc13d
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101. Information to be Included in Statements Filed Pursuant to § 240.13d-1(a) and
Amendments Thereto Filed Pursuant to § 240.13d-2(a))
Under the Securities Exchange Act of 1934
(Amendment No. )*
TerreStar Corporation
(Name of Issuer)
COMMON STOCK, $0.01 PAR VALUE PER SHARE
(Title of Class of Securities)
881451108
(CUSIP Number)
R. Stanton Dodge
Executive Vice President, General Counsel and Secretary
EchoStar Corporation
90 Inverness Circle E.
Englewood, Colorado 80112
(303) 706-4000
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
June 9, 2008
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report the acquisition
that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e),
240.13d-1(f) or 240.13d-1(g), check the following box. o
Note: Schedules filed in paper format shall include a signed original and five copies of the
schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting persons initial
filing on this form with respect to the subject class of securities, and for any subsequent
amendment containing information which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed to be filed for
the purpose of Section 18 of the Securities Exchange Act of 1934 (Act) or otherwise subject to
the liabilities of that section of the Act but shall be subject to all other provisions of the Act
(however, see the Notes).
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1 |
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NAME OF REPORTING PERSON
EchoStar Corporation |
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CHECK THE APPROPRIATE BOX IF A MEMBER OF
A GROUP:
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(b) þ |
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SEC USE ONLY |
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SOURCE OF FUNDS |
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OO |
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CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |
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CITIZENSHIP OR PLACE OF ORGANIZATION |
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Nevada
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7 |
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SOLE VOTING POWER |
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NUMBER OF |
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39,180,172 (1) |
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SHARES |
8 |
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SHARED VOTING POWER |
BENEFICIALLY |
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OWNED BY |
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0 |
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EACH |
9 |
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SOLE DISPOSITIVE POWER |
REPORTING |
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PERSON |
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39,180,172 (1) |
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WITH |
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SHARED DISPOSITIVE POWER |
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0 |
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11 |
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY THE REPORTING PERSON |
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39,180,172 (1) |
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12 |
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CHECK IF THE AGGREGATE AMOUNT IN ROW
(11) EXCLUDES CERTAIN SHARES* |
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13 |
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) |
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30.1% (2) |
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14 |
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TYPE OF REPORTING PERSON |
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CO |
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(1) |
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Includes 9,180,172 shares of Common Stock issuable upon exchange of the 6.5% Senior Exchangeable PIK Notes due 2014 of TerreStar Networks Inc. held by EchoStar Corporation. |
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(2) |
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Based on 120,977,073 shares of Common Stock outstanding and 9,180,172 shares of Common Stock issuable upon exchange of the 6.5% Senior Exchangeable PIK Notes due 2014 of TerreStar Networks Inc. held by EchoStar Corporation. The number of outstanding shares of Common Stock is based on the 90,977,073 shares that TerreStar Corporation (TerreStar) reported as outstanding on May 2, 2008 and the 30,000,000 shares of Common Stock that
TerreStar issued on June 10, 2008 as reported on TerreStars Form 8-K dated June 11, 2008. |
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1 |
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NAME OF REPORTING PERSON
Charles W. Ergen |
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CHECK THE APPROPRIATE BOX IF A MEMBER OF
A GROUP:
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(a) o |
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(b) þ |
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3 |
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SEC USE ONLY |
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SOURCE OF FUNDS |
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OO |
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CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |
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CITIZENSHIP OR PLACE OF ORGANIZATION |
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U.S.A.
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SOLE VOTING POWER |
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NUMBER OF |
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39,180,172 (1) |
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SHARES |
8 |
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SHARED VOTING POWER |
BENEFICIALLY |
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OWNED BY |
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0 |
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EACH |
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SOLE DISPOSITIVE POWER |
REPORTING |
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PERSON |
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39,180,172 (1) |
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WITH |
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SHARED DISPOSITIVE POWER |
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0 |
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY
THE REPORTING PERSON |
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39,180,172 (1) |
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CHECK IF THE AGGREGATE AMOUNT IN ROW
(11) EXCLUDES CERTAIN SHARES* |
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) |
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30.1% (2) |
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14 |
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TYPE OF REPORTING PERSON |
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IN |
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(1) |
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Includes 9,180,172 shares of Common Stock issuable upon exchange of the 6.5% Senior Exchangeable PIK Notes due 2014 of TerreStar Networks Inc. held by EchoStar Corporation. |
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(2) |
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Based on 120,977,073 shares of Common Stock outstanding on June 10, 2008 and 9,180,172 shares of Common Stock issuable upon exchange of the 6.5% Senior Exchangeable PIK Notes due 2014 of TerreStar Networks Inc. held by EchoStar Corporation. The number of outstanding shares of Common Stock is based on the 90,977,073 shares that TerreStar reported as outstanding on May 2, 2008 and the 30,000,000 shares of Common Stock that TerreStar issued on June 10, 2008 as
reported on TerreStars Form 8-K dated June 11, 2008. |
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ITEM 1. Security and Issuer
This statement on Schedule 13D relates to shares of Common Stock (the Shares), par value
$0.01 per share of TerreStar Corporation (TerreStar). The principal executive offices of
TerreStar are located at 12010 Sunset Hills Road, 9th Floor, Reston, VA 20190.
ITEM 2. Identity and Background
(a) This statement is being filed by Charles W. Ergen and EchoStar Corporation (EchoStar).
The directors of EchoStar are Michael T. Dugan, Charles W. Ergen, Steven R. Goodbarn, David K.
Moskowitz, Tom A. Ortolf, C. Michael Schroeder and Carl E. Vogel. The executive officers of
EchoStar are Charles W. Ergen, Chairman and Chief Executive Officer; R. Stanton Dodge, Executive
Vice President, General Counsel and Secretary; Bernard L. Han, Executive Vice President and Chief
Financial Officer; Mark W. Jackson, President; Dean Olmstead,
President Fixed Satellite Services; and Steven B. Schaver, President EchoStar
International Corporation.
(b) The principal address of Mr. Ergen, EchoStar and each of EchoStars directors and
executive officers is 90 Inverness Circle E., Englewood, Colorado 80112.
(c) Mr. Ergens principal occupation is Chairman, President and Chief Executive Officer of
Dish Network Corporation and Chairman and Chief Executive Officer of EchoStar. EchoStars
principal business is to design, develop and distribute set-top boxes and related equipment and
provide fixed satellite transmission services. Mr. Dugans
principal occupation is Senior Technical Advisor of
EchoStar. Mr. Goodbarns principal occupation is Director, Chief Executive Officer and President
of Secure64 Software Corporation, a company he co-founded. Mr. Moskowitzs principal occupation is
Senior Advisor to DISH Network Corporation. Mr. Ortolfs principal occupation is President of
Colorado Meadowlark Corp., a privately held investment management firm. Mr. Schroeders principal
occupation is Director of EchoStar. Mr. Vogels principal occupation is advisor to EchoStar and
Vice Chairman of DISH Network Corporation. Mr. Dodges principal occupation is Executive Vice
President, General Counsel and Secretary of DISH Network Corporation and EchoStar. Mr. Hans
principal occupation is Executive Vice President and Chief Financial Officer of DISH Network
Corporation and EchoStar. Mr. Jacksons principal
occupation is President of EchoStar. Mr. Olmsteads principal
occupation is President Fixed Satellite Services of EchoStar. Mr.
Schavers principal occupation is President EchoStar International Corporation.
(d) Neither Mr. Ergen, EchoStar nor any of the directors or executive officers of EchoStar
have, during the last five years, been convicted in any criminal proceeding (excluding traffic
violations or similar misdemeanors).
(e) Neither Mr. Ergen, EchoStar nor any of the directors or executive officers of EchoStar
have, during the last five years, been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction as a result of which proceeding been subject to a
judgment, decree or final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any violation with respect to
such laws.
(f) Each of Mr. Ergen and the other executive officers and directors of EchoStar is a citizen
of the United States. EchoStar is a corporation organized under the laws of the State of Nevada.
ITEM 3. Source and Amount of Funds or Other Consideration
On February 7, 2008, EchoStar completed several transactions under a Master Investment
Agreement, dated as of February 5, 2008 (the Master Investment Agreement) between EchoStar on the
one hand, and TerreStar and TerreStar Networks Inc. (TerreStar Networks) on the other hand.
Under the Master Investment Agreement, EchoStar acquired, among other things, $50 million in
aggregate principal amount of TerreStar Networks 6.5% Senior Exchangeable Paid-in-Kind Notes due
June 15, 2014 (the Exchangeable Notes). The Exchangeable Notes were issued pursuant to an
Indenture dated as of February 7, 2008 among TerreStar, TerreStar Networks, certain guarantor
subsidiaries of TerreStar Networks and U.S. Bank National Association, as trustee (the
Exchangeable Note Indenture). The Exchangeable Notes are exchangeable for Shares, based on an
exchange ratio of 179.4 Shares (subject to adjustment upon the occurrence of certain events) per
$1,000 of Exchangeable Notes, following effectiveness of TerreStar stockholder approval. The
TerreStar stockholder approval became
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effective on June 9, 2008. The Exchangeable Notes will bear interest at 6.5% per annum, with
such interest being payable in additional Exchangeable Notes through March 2011.
On February 5, 2008, EchoStar entered into a Spectrum Agreement (the Spectrum Agreement)
with TerreStar and TerreStar Networks, which provided for the lease to TerreStar of EchoStars
holdings of 1.4 GHz spectrum along with an option for TerreStar to acquire the company through
which EchoStar holds these licenses in exchange for the issuance of 30 million Shares. On June 10,
2008, TerreStar completed the acquisition of the company under the Spectrum Agreement and issued 30
million Shares to EchoStar.
No borrowed funds were used to purchase the Shares.
All of the descriptions set forth in this Schedule 13D, are qualified in their entirety by
reference to copies of the Exchangeable Note Indenture, the Master Investment Agreement and the
Spectrum Agreement, which are included as exhibits hereto.
ITEM 4. Purpose of Transaction
The reporting persons have acquired the Shares for investment. Other than as expressly set
forth below, the reporting persons are not aware of any plans or proposals which they may have
which relate to or would result in:
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the acquisition by any person of additional securities of TerreStar, or the
disposition of securities of TerreStar; |
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an extraordinary corporate transaction, such as a merger, reorganization or
liquidation of securities of TerreStar or any of its subsidiaries; |
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a sale or transfer of a material amount of assets of TerreStar or any of its
subsidiaries; |
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any change in the present board of directors or management of TerreStar,
including any plans or proposals to change the number or term of directors or to fill
any existing vacancies on the board; |
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any material change in the present capitalization or dividend policy of
TerreStar; |
(f) |
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any material change in TerreStars business or corporate structure; |
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changes in TerreStars charter, bylaws or instruments corresponding thereto or
other actions which may impede the acquisition of control of TerreStar by any person; |
(h) |
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causing a class of securities of TerreStar to be delisted from a national
securities exchange or to cease to be authorized to be quoted in an inter-dealer
quotation system of a registered national securities association; |
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a class of equity securities of TerreStar becoming eligible for termination of
registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934; or |
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any action similar to any of the foregoing. |
As disclosed in response to Item 3 above, on February 5, 2008 and February 7, 2008, EchoStar
entered into certain definitive agreements with TerreStar (as more specifically described below) to
provide financing to and for the benefit of TerreStar, and to purchase securities of TerreStar.
Under the Master Investment Agreement, EchoStar purchased (i) $50,000,000 aggregate principal
amount of Exchangeable Notes issued pursuant to the Exchangeable Note Indenture, (ii) $50,000,000
aggregate principal amount of TerreStar Networks 15% Senior Secured Paid-in-Kind Notes due
February 15, 2014 (the Secured Notes) and (iii) one share of TerreStars Series C Preferred Stock
(the Series C Preferred). The Secured Notes acquired by EchoStar were issued under TerreStar
Networks existing Indenture, as amended (the Secured Note Indenture), dated as of February 14,
2007, with U.S. Bank National Association, as trustee. The Exchangeable Notes are guaranteed by
TerreStar License Inc. and TerreStar National Services, Inc. and are due on June 15, 2014.
TerreStar Networks has an obligation to repurchase the Exchangeable Notes and the Secured Notes
under certain circumstances, including upon the occurrence of a change of control of TerreStar
Networks or certain other subsidiaries thereof. Subject to TerreStar stockholder approval, the
principal and any accrued and unpaid interest on the Exchangeable Notes held by EchoStar will be
exchangeable for Shares based on an exchange ratio of 179.4 Shares (subject to adjustment upon the
occurrence of certain events) per $1,000 of Exchangeable Notes. As of June 9, 2008, 9,180,172
Shares would be issuable upon exchange of the Exchangeable Notes held by EchoStar.
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As long as EchoStar owns at least 10% of the outstanding Shares (on a fully-diluted basis),
the Series C Preferred provides EchoStar with the right to nominate two persons to the Board of
Directors of TerreStar, and consent rights with respect to the following: (i) any sale of 10% or
more of the assets of TerreStar or any subsidiary of TerreStar other than the equity interests of
SkyTerra Communications, Inc.; (ii) the consummation of any merger, consolidation,
recapitalization, liquidation, or dissolution of TerreStar or any subsidiary of TerreStar; (iii)
the amendment of the certificate of incorporation, by-laws, or other organizational documents of
TerreStar or any subsidiary of TerreStar; (iv) the redemption or repurchase of any equity
securities of TerreStar, except for the redemption of any shares of Series A Cumulative Convertible
Preferred Stock and the Series B Cumulative Convertible Preferred Stock or pursuant to any
compensatory plan or arrangement, in each case solely in accordance with the terms thereof; (v) any
material change in the line of business of TerreStar; (vi) the acquisition of any asset or assets
in one or more transactions with a value in excess of $5,000,000; (vii) any capital expenditure in
excess of $5,000,000 not contemplated by the annual budget of TerreStar which budget was approved
by the Board of Directors of TerreStar; (viii) the appointment of any new officers, executives or
other key employees of TerreStar; or (ix) any increase in the size of the TerreStar Board of
Directors above eight, except for any increase resulting from the election of additional directors
by Series A Cumulative Convertible Preferred Stock and the Series B Cumulative Convertible
Preferred Stock in accordance with the terms thereof. If EchoStar owns less than 10% but greater
than 5% of the outstanding Shares (on a fully diluted basis), then the Series C Preferred provides
EchoStar the right to nominate one person to the Board of Directors of TerreStar, and no consent
rights with respect to such transactions. Only EchoStar or any affiliate thereof may own the Series
C Preferred. A full description of the terms of the Series C Preferred is set forth in the
Certificate of Designations of the Series E Junior Participating Preferred Stock, Series C
Preferred Stock and Series D Preferred Stock of TerreStar (the Certificate of Designations).
On June 10, 2008, pursuant to the Spectrum Agreement, TerreStar exercised its option to
acquire from EchoStar the company through which EchoStar held certain licenses to use the 1.4 GHz
spectrum, in exchange for the issuance by TerreStar of 30 million Shares.
Under a Registration Rights Agreement, dated February 5, 2008 (the Registration Rights
Agreement), TerreStar is required to file shelf registration statements in respect of the Shares
issued pursuant to the Spectrum Agreement and issuable upon exchange of the Exchangeable Notes.
In connection with the foregoing transactions, each of TerreStar and TerreStar Networks
granted EchoStar a right of first offer under a Right of First Offer Agreement, dated February 5,
2008 (the Right of First Offer Agreement), among EchoStar, TerreStar and TerreStar Networks.
Pursuant thereto, TerreStar and/or TerreStar Networks (as applicable) must first offer to EchoStar
the right to purchase a proportionate amount (based on the Exchangeable Notes held by EchoStar as
compared to another group of holders of the Exchangeable Notes) of any securities of TerreStar or
TerreStar Networks, as applicable, to be issued, sold or otherwise transferred, subject to certain
exclusions (including, among other exclusions, securities issued as dividends paid in kind or upon
conversion or exchange of convertible or exchangeable securities) prior to offering, selling or
transferring such securities to other potential purchasers.
EchoStar also entered into a senior secured Purchase Money Credit Agreement in the principal
amount of up to $100,000,000, among TerreStar Networks, U.S. Bank National Association, as
collateral agent (the Collateral Agent), and Harbinger Capital Partners Master Fund I, Ltd. and
Harbinger Capital Partners Special Situations Fund LP (collectively, Harbinger), pursuant to
which EchoStar will provide TerreStar Networks a purchase money secured loan of up to $50,000,000
for purposes of paying certain satellite construction costs (the Loan). Pursuant to a Security
Agreement from TerreStar Networks in favor of the Collateral Agent dated February 5, 2008 (the
Security Agreement), TerreStar Networks granted a security interest to the Collateral Agent in
certain of TerreStar Networks assets financed by the proceeds of the Loan, including, among other
things, the satellite and related raw materials, work-in-progress, and finished goods.
All of the descriptions set forth in this Schedule 13D, are qualified in their entirety by
reference to copies of the Exchangeable Note Indenture, the Secured Note Indenture (including
supplemental indentures thereto), the Master Investment Agreement, the Spectrum Agreement, the
Registration Rights Agreement, the Right of First Offer Agreement, the Purchase Money Credit
Agreement and the Certificate of Designations, which are included
as exhibits hereto.
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ITEM 5. Interest in Securities of the Issuer.
(a) Including 9,180,172 Shares issuable upon exchange of the Exchangeable Notes, each of
EchoStar and Mr. Ergen beneficially own, or own securities convertible into or exercisable for,
39,180,172 Shares, representing 30.1% of the outstanding Shares after giving effect to conversion
and exercise of all derivative securities held by EchoStar and Mr. Ergen. The percentages reported
in this Schedule 13D are based upon 120,977,073 Shares outstanding and 9,180,172 Shares issuable
upon exchange of the Exchangeable Notes held by EchoStar as of June 9, 2008. The number of Shares
outstanding is based on the 90,977,073 shares that the Company reported as outstanding on May 2,
2008 and the 30,000,000 shares of Common Stock that the Company issued on June 10, 2008 as reported
on the Companys Form 8-K dated June 11, 2008. Mr. Ergen is not the registered holder of any
Shares or securities convertible into or exercisable for Shares; however, Mr. Ergen beneficially
owns approximately 50.0% of EchoStars total equity securities and possesses approximately 80.0% of
the total voting power of EchoStar, and as such, may be deemed to be a beneficial owner of Shares,
and securities convertible into or exercisable for Shares, held by EchoStar. None of the other
executive officers or directors of EchoStar beneficially own, or own securities convertible into or
exchangeable for, Shares.
(b) Sole power to vote or direct the vote: 39,180,172 Shares
Shared power to vote or direct the vote: 0 Shares
Sole power to dispose or to direct the disposition: 39,180,172 Shares
Shared power to dispose or direct the disposition: 0 Shares
(c) As discussed above, (i) on June 9, 2008, Exchangeable Notes held by EchoStar became
exchangeable for 9,180,172 Shares based on an exchange ratio of 179.4
Shares per $1,000 of Exchangeable Notes, and (ii) on June 10, 2008,
TerreStar issued to EchoStar 30,000,000 Shares pursuant to the Spectrum Agreement in exchange for
all of EchoStars equity interests in the company through which EchoStar held certain licenses to
use the 1.4 GHz spectrum.
(d) Not applicable.
(e) Not applicable.
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ITEM 6. |
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Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer |
Neither Mr. Ergen, EchoStar nor any of the other executive officers or directors of EchoStar
are parties to any contracts, arrangements, understandings or relationships, including, but not
limited to, transfer or voting of any of the securities, finders fees, joint ventures, loan or
option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the
giving or withholding of proxies nor are any of the securities pledged or otherwise subject to a
contingency the occurrence of which would give another person voting power or investment power over
such securities.
Item 7. Material to be Filed as Exhibits.
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Exhibit |
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Number |
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Description |
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99.1 |
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Master Investment Agreement, dated as of February 5, 2008,
by and among TerreStar, TerreStar Networks and EchoStar (incorporated
by reference to Exhibit 10.1 of the Form 8-K filed by TerreStar on
February 8, 2008) |
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99.2
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Indenture, dated as of February 14, 2007, by and among
TerreStar Networks, U.S. Bank National Association and the
guarantors party thereto, related to TerreStar Networks
15% Senior Secured PIK Notes due 2014 (incorporated
by reference to Exhibit 10.1 of the Form 8-K filed by TerreStar on
February 14, 2007) |
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Exhibit |
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Description |
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99.3
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First Supplemental Indenture, dated as of February 7, 2008,
by and among TerreStar Networks, U.S. Bank National
Association and the guarantors party thereto, related to
TerreStar Networks 15% Senior Secured PIK Notes due 2014 (incorporated by reference to Exhibit 4.2 of the Form 8-K filed by TerreStar on February 8, 2008) |
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99.4
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Second Supplemental Indenture, dated as of February 7,
2008, by and among TerreStar Networks, U.S. Bank National
Association and the guarantors party thereto, related to
TerreStar Networks 15% Senior Secured PIK Notes due 2014 (incorporated by reference to Exhibit 4.3 of the Form 8-K filed by TerreStar on February 8, 2008) |
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99.5
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Indenture, dated as of February 7, 2008, by and among
TerreStar, TerreStar Networks, U.S. Bank National
Association and the guarantors party thereto, related to
TerreStar Networks 6.5% Senior Exchangeable PIK Notes due
2014 (incorporated by reference to Exhibit 4.4 of the Form 8-K filed by TerreStar on February 8, 2008) |
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99.6
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Spectrum Agreement, dated as of February 5, 2008, by and
among TerreStar, TerreStar Networks and EchoStar (incorporated by reference to Exhibit 10.4 of the Form 8-K filed by TerreStar on February 8, 2008) |
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99.7
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Registration Rights Agreement, dated as of February 5,
2008, by and among TerreStar, EchoStar, Harbinger and the
investors listed therein (incorporated by reference to Exhibit 4.5 of the Form 8-K filed by TerreStar on February 8, 2008) |
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99.8
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Right of First Offer Agreement, dated as of February 5,
2008, by and among TerreStar, TerreStar Networks and
EchoStar |
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99.9
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Certificate of Designations of the Series E Junior
Participating Preferred Stock, Series C Preferred Stock and
Series D Preferred Stock of TerreStar, filed as of February
7, 2008 |
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99.10
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Purchase Money Credit Agreement, dated February 5, 2008,
among TerreStar Networks, the Collateral Agent, Harbinger
and EchoStar (incorporated by reference to Exhibit 4.1 of the Form 8-K filed by TerreStar on February 8, 2008) |
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99.11
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Joint Filing Agreement, dated June 19, 2008, by and between
Charles W. Ergen and EchoStar Corporation |
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SIGNATURES
After reasonable inquiry and to the best of his knowledge and belief, each of the undersigned
certifies that the information set forth in this statement is true, complete and correct.
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CHARLES W. ERGEN
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Dated: June 19, 2008 |
/s/ Charles W. Ergen
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Charles W. Ergen |
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ECHOSTAR CORPORATION
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Dated: June 19, 2008 |
By: |
/s/ Charles W. Ergen
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Name: |
Charles W. Ergen |
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Title: |
Chairman and Chief Executive Officer |
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Attention: Intentional misstatements or omissions of fact
constitute Federal criminal violations (See 18 U.S.C. 1001)
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exv99w8
Exhibit 99.8
Execution Version
RIGHT OF FIRST OFFER AGREEMENT
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.
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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
EchoStars 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, EchoStars 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 EchoStars
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.
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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
partys rights would interfere with or impair EchoStars 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
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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.
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]
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IN WITNESS WHEREOF, the undersigned have entered into this Agreement as of the date first
written above.
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TERRESTAR NETWORKS INC.
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By: |
/s/ Robert H. Brumley
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Name: |
Robert H. Brumley |
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Title: |
President and Chief Executive Officer |
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TERRESTAR CORPORATION
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By: |
/s/ Robert H. Brumley
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Name: |
Robert H. Brumley |
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Title: |
President and Chief Executive Officer |
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ECHOSTAR CORPORATION
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By: |
/s/ Charles W. Ergen
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Name: |
Charles W. Ergen |
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Title: |
Chairman and Chief Executive Officer |
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[Signature Page to EchoStar Right of First Offer Agreement]
exv99w9
Exhibit 99.9
CERTIFICATE OF DESIGNATIONS
OF
SERIES E JUNIOR PARTICIPATING PREFERRED STOCK, SERIES C
PREFERRED STOCK AND SERIES D PREFERRED STOCK OF
TERRESTAR CORPORATION
(PURSUANT TO SECTION 151 OF THE
DELAWARE GENERAL CORPORATION LAW)
The undersigned does hereby certify that the following resolutions were duly adopted by the
Board of Directors (the Board of Directors) of TerreStar Corporation (the Corporation), a
corporation organized and existing under the General Corporation Law of the State of Delaware (the
DGCL), with the preferences and rights set forth therein relating to dividends, conversion,
dissolution and distribution of assets of the Corporation having been fixed by the Board of
Directors pursuant to authority granted to it under the Corporations Restated Certificate of
Incorporation (the Certificate of Incorporation) and in accordance with Section 151 of the DGCL:
A. SERIES E JUNIOR PARTICIPATING PREFERRED STOCK
RESOLVED that, pursuant to authority conferred on the Board of Directors by the Certificate of
Incorporation, the Board of Directors hereby authorizes the creation of 1,900,000 shares of Series
E Junior Participating Preferred Stock of the Corporation, par value $0.01 and hereby fixes the
designations, powers, preferences and relative participating, optional or other special rights, and
the qualifications, limitations or restrictions thereof, of such shares, in addition to those set
forth in the Certificate of Incorporation, as follows:
1. Designation and Amount. This series of preferred stock of the Corporation (the
Preferred Stock) shall be designated as Series E Junior Participating Preferred Stock (the
Junior Preferred Stock) and the number of shares constituting such series shall be 1,900,000.
Such number of shares may be increased or decreased by resolution of the Board of Directors;
provided that no decrease shall reduce the number of shares of Junior Preferred Stock then
outstanding, plus the number of shares reserved for issuance upon the exercise of outstanding
options, rights or warrants or upon conversion of any outstanding securities issued by the
Corporation and convertible into Junior Preferred Stock.
2. Dividends and Distributions. Subject to the rights of the holders of any shares of
any series of Preferred Stock (or any similar stock) ranking senior to the Junior Preferred Stock,
with respect to dividends, as and when dividends are declared or paid on the Common Stock of the
Corporation (the Common Stock), the holders of Junior Preferred Stock shall be entitled to
participate in such dividends ratably on a per share basis.
3. Voting Rights. Except as otherwise required under Delaware law, the holders of
shares of Junior Preferred Stock shall not be entitled or permitted to vote on any matter
required or permitted to be voted upon by the stockholders of the Corporation; provided, however,
that each holder of Junior Preferred Stock shall be entitled to notice of all stockholders meetings
at the same time and in the same manner as notice is given to the stockholders entitled to vote at
such meeting.
4. Liquidation Preference. In the event of any voluntary or involuntary liquidation,
dissolution or winding-up of the affairs of the Corporation, the holders of shares of Junior
Preferred Stock shall be entitled to be paid out of the assets of the Corporation available for
distribution to its stockholders an amount in cash equal to $.0001 per share, before any
distribution shall be made or any assets distributed in respect of the Common Stock. In the event
the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares
of Common Stock or effect a subdivision or combination or consolidation of the outstanding shares
of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each such case the
aggregate amount to which holders of shares of Junior Preferred Stock were entitled immediately
prior to such event in the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
5. Conversion; Restrictions.
(a) Defined Terms.
For purposes of this Section 5:
(i) Beneficial Ownership has the meaning given to such term in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended.
(ii) Original Indenture means that certain Indenture, dated February 14, 2007, by and among
TerreStar Networks Inc., the guarantors party thereto and U.S. Bank National Association.
(iii) Person means any natural person, corporation, limited liability company, trust, joint
venture, association, company, partnership, governmental authority or other entity.
(iv) Transfer means any sale, transfer, gift, assignment, devise or other disposition, as
well as any other event that causes any Person to acquire Beneficial Ownership, or any agreement to
take any such actions or cause any such events, of Junior Preferred Stock or Common Stock
(following the exercise of any conversion right in respect of the Junior Preferred Stock); in each
case, whether voluntary or involuntary, or whether by operation of law or otherwise. The terms
"Transferring and Transferred shall have the correlative meanings.
(v) Transferee means a person to whom a Transfer is made.
(b) Optional Conversion Rights. Subject to the restrictions set forth in Section
5(f), each share of Junior Preferred Stock may be converted, at any time and from
2
time to time, into twenty-five (25) shares of Common Stock, subject to adjustment as set forth
below.
(c) Mechanics of Conversion. Each conversion of shares of Junior Preferred Stock into
shares of Common Stock pursuant to this Section 5 shall be effected by the surrender of the
certificate or certificates representing the shares to be converted (the Converting Shares) at
the principal office of the Corporation or the transfer agent of the Junior Preferred Stock (if
any) at any time during normal business hours, together with written notice by the holder of such
Converting Shares, stating that such holder desires to convert the Converting Shares, and the
number of shares of Common Stock into which the Converting Shares are to be converted (the
Converted Shares). Such notice shall also state the name or names (with addresses) and
denominations in which the certificate or certificates for Converted Shares are to be issued and
shall include instructions for the delivery thereof. If the issuance of any Converted Shares or
the acquisition thereof by the holder of Converting Shares requires filing or registration with or
approval of any governmental authority before such shares may be issued upon conversion, the
Corporation will use its commercially reasonable efforts to cause such filing, registration or
approval or to cooperate with such holder to satisfy such requirements, as the case may be.
Promptly after such filing, registration or approval and such surrender and the receipt of such by
written notice, the Corporation will issue and deliver in accordance with the surrendering holders
instructions the certificate or certificates evidencing the Converted Shares issuable upon such
conversion, and the Corporation will deliver to the converting holder a certificate (which shall
contain such legends as were set forth on the surrendered certificate or certificates, if any)
representing any shares which were represented by the certificate or certificates that were
delivered to the Corporation in connection with such conversion, but which were not converted. Such
conversion, to the extent permitted by law, shall be deemed to have been effected as of the close
of business on the date on which such certificate or certificates shall have been surrendered and
such notice shall have been received by the Corporation, and at such time the rights of the holder
of the Converting Shares as such holder shall cease and the person or persons in whose name or
names the certificate or certificates for the Converted Shares are to be issued upon such
conversion shall be deemed to have become the holder or holders of record of the Converted Shares.
Upon issuance of the shares in accordance with this Section 5, such Converted Shares shall
be deemed to be fully authorized, validly issued, fully paid and non-assessable. The Corporation
shall take all such actions as may be necessary to assure that all such shares of Common Stock may
be so issued without violation of any applicable law or governmental regulation or any requirements
of any domestic securities exchange upon which shares of Common Stock may be listed (except for
official notice of issuance which will be immediately transmitted by the Corporation upon
issuance). The issuance of certificates for shares of any class of Common Stock upon the conversion
of Junior Preferred Stock as permitted by and pursuant to this Section 5 shall be made
without charge to the holders for any issuance tax in respect thereof or other cost incurred by the
Corporation in connection with such conversion and the related issuance of shares of Common Stock.
The Corporation shall not close its books against the transfer of shares of Junior Preferred Stock
in any manner which would interfere with the timely conversion of any shares of Junior Preferred
Stock. In the event of the conversion of less than all of the shares of Junior Preferred Stock
evidenced by a single certificate, the Corporation shall execute and deliver to the holder thereof,
without charge to such holder, a new certificate or new certificates evidencing the shares of
Junior Preferred Stock not so converted.
3
(d) Adjustment. In the event that the Corporation shall at any time declare or pay
any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the number of shares of Common Stock into which
the shares of Junior Preferred Stock are convertible shall be adjusted by multiplying the number of
shares of Common Stock into which the Junior Preferred Stock would have been converted by a
fraction, the numerator of which is the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(e) Reservation of Shares. The Corporation shall at all times when the Junior
Preferred Stock shall be outstanding, reserve and keep available out of its authorized but unissued
shares of Common Stock, such number of its duly authorized shares of Common Stock as shall from
time to time be sufficient to effect the conversion of all outstanding Junior Preferred Stock; and
if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient
to effect the conversion of all then outstanding shares of the Junior Preferred Stock, the
Corporation shall take such corporate action as may be necessary to increase its authorized but
unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes,
including, without limitation, engaging in best efforts to obtain the requisite stockholder
approval of any necessary amendment to the Certificate of Incorporation.
(f) Limitations on Conversion. The original holder or Transferee of the shares of
Junior Preferred Stock shall not have the right to convert such shares of Junior Preferred Stock
into shares of Common Stock, if:
(i) there are outstanding any shares of the Series A Cumulative Convertible Preferred Stock of
the Corporation and such conversion would result in such original holder or Transferee
thereof becoming the beneficial owners (as defined in Rule 13d-3 under the Exchange Act) of shares
representing more than 50% of the aggregate ordinary voting power represented by issued and
outstanding voting stock of the Corporation; or
(ii) there are outstanding any shares of the Series B Cumulative Convertible Preferred Stock
of the Corporation and such conversion would result in such original holder or Transferee
thereof becoming the beneficial owners (as defined in Rule 13d-3 under the Exchange Act) of shares
representing more than 50% of the aggregate ordinary voting power represented by issued and
outstanding voting stock of the Corporation; or
(iii) there are outstanding any notes issued pursuant to the Original Indenture and
such conversion would result in such original holder or Transferee thereof becoming the beneficial
owner (as defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating
the beneficial ownership of any particular holder or Transferee for purposes of this Section
1(f)(iii), such holder or Transferee will be deemed to have beneficial ownership of all securities
that such holder or Transferee has the right to acquire by conversion or exercise of other
securities, whether such right is currently exercisable, or is exercisable only upon the occurrence
of a subsequent condition), directly or indirectly, of more than 50% of the voting corporate stock
of the Corporation (which, at such time, is
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entitled to vote in the election of the Board of Directors) measured by voting power rather than
number of shares.
Notwithstanding anything to the contrary contained herein, the Junior Preferred shall not be
subject to any of the foregoing conversion restrictions during any Excepted Period. For purposes of
this Section 5, an Excepted Period means a period commencing upon, and lasting until 60 days
following, the occurrence or consummation (as applicable) of any Change of Control under the
terms of the Series A Cumulative Convertible Preferred Stock of the Corporation, the Series B
Cumulative Convertible Preferred Stock of the Corporation or the Original Indenture. Within five
(5) days following the commencement of any Excepted Period, the Corporation shall provide written
notice thereof to any holder of shares of Junior Preferred Stock that are then outstanding. Such
notice shall include a reference to the conversion rights set forth in this paragraph.
7. Rank. The Junior Preferred Stock, with respect to payment of dividends, redemption
payments, rights upon liquidation, dissolution or winding up of the affairs of the Corporation, or
otherwise (i) rank senior and prior to each other class or series of equity securities of the
Corporation, whether currently issued or issued in the future, that by its express terms ranks
junior to the Junior Preferred Stock (whether with respect to payment of dividends, redemption
payments, rights upon liquidation, dissolution or winding up of the affairs of the Corporation, or
otherwise) (all of such equity securities, are collectively referred to herein as the JPS Junior
Securities), (ii) rank on a parity with the Common Stock (except to the extent set forth herein),
and each other class or series of equity securities of the Corporation, whether currently issued or
issued in the future, that does not by its terms expressly provide that it ranks senior to or
junior to the Junior Preferred Stock (whether with respect to payment of dividends, redemption
payments, rights upon liquidation, dissolution or winding up of the affairs of the Corporation, or
otherwise) (all of such equity securities are collectively referred to herein as the JPS Parity
Securities), and (iii) rank junior to each other class or series of equity securities of the
Corporation, whether currently issued or issued in the future, that by its express terms ranks
senior to the Junior Preferred Stock (whether with respect to payment of dividends, redemption
payments, rights upon liquidation, dissolution or winding up of the affairs of the Corporation, or
otherwise) (all of such equity securities are collectively referred to herein as the JPS Senior
Securities). The respective definitions of JPS Junior Securities, JPS Parity Securities and JPS
Senior Securities shall also include any rights or options exercisable or exchangeable for or
convertible into any of the JPS Junior Securities, JPS Parity Securities or JPS Senior Securities,
as the case may be. At the date of the initial issuance of the Junior Preferred Stock (i) shares of
the Series A Cumulative Convertible Preferred Stock of the Corporation, the Series B Cumulative
Convertible Preferred Stock of the Corporation, the Series C Preferred Stock of the Corporation and
the Series D Preferred Stock shall be the only JPS Senior Securities issued and outstanding and
(ii) shares of the Common Stock shall be the only JPS Parity Securities issued and outstanding.
8. Notices. All notices referred to herein shall be dated and in writing, to the
Corporation at its principal executive offices and to any holder of Junior Preferred at such
holders address as it appears in the stock records of the Corporation (unless otherwise specified
in a written notice to the Corporation by such holder), and shall be deemed to have been given (a)
when delivered, if delivered personally, sent by confirmed facsimile or certified mail, return
receipt requested, postage prepaid, (b) on the next business day if sent by overnight courier and
(c) when received if delivered otherwise.
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9. Amendment and Waiver. No amendment or waiver of any provision of the Certificate
of Incorporation (including this Certificate of Designations) which would materially alter or
change the powers, preferences or special rights of the Junior Preferred Stock so as to affect them
adversely shall be effective without the affirmative vote or consent of the holders of at least
two-thirds of the Junior Preferred Stock, either in writing or by resolution adopted at an annual
or special meeting.
B. SERIES C PREFERRED STOCK
RESOLVED that, pursuant to authority conferred on the Board of Directors by the Certificate of
Incorporation, the Board of Directors hereby authorizes the creation of one (1) share of Series C
Preferred Stock of the Corporation, par value $0.01, and hereby fixes the designations, powers,
preferences and relative participating, optional or other special rights, and the qualifications,
limitations or restrictions thereof, of such share, in addition to those set forth in the
Certificate of Incorporation, as follows:
1. Designation and Amount; Ownership. This series of Preferred Stock shall be
designated as Series C Preferred Stock (the Series C Preferred Stock) and the number of shares
constituting such series shall be one (1). Such number of shares may be increased or decreased by
resolution of the Board of Directors; provided that no decrease shall reduce the number of shares
of Series C Preferred Stock then outstanding. Series C Preferred Stock may only be issued to and
beneficially owned by EchoStar Corporation or an affiliate thereof (the Series C Holder). For
purposes of this Section B, the term affiliate shall have the meaning given such term as in Rule
12b-2 promulgated under the Securities Exchange Act of 1934, as amended, and the term beneficial
ownership shall have the meaning given such term as in Rule13d-3 of the Securities Exchange Act of
1934, as amended.
2. Voting Rights.
(a) Defined Terms.
For purposes of this Section 2:
(i) Fundamental Corporate Transaction Approval Right means, that without first obtaining the
affirmative vote or consent of the Series C Holder, either in writing or by resolution adopted at
an annual or special meeting, and otherwise in accordance with the provisions hereof, the
Corporation shall not:
(A) sell or permit to be sold 10% or more of the assets of the Corporation or any subsidiary
of the Corporation other than the equity interests of SkyTerra Communications, Inc.;
(B) consummate or permit to be consummated any merger, consolidation, recapitalization,
liquidation, or dissolution of the Corporation or any subsidiary of the Corporation;
6
(C) amend or permit the amendment of the certificate of incorporation, by-laws, or other
organizational documents of the Corporation or any subsidiary of the Corporation;
(D) redeem or repurchase any equity securities of the Corporation, except for the redemption
of any shares of Series A Cumulative Convertible Preferred Stock and the Series B Cumulative
Convertible Preferred Stock or pursuant to any compensatory plan or arrangement, in each case
solely in accordance with the terms thereof;
(E) make any material change in the line of business of the Corporation;
(F) acquire any asset or assets in one or more transactions with a value in excess of
$5,000,000;
(G) make any capital expenditure in excess of $5,000,000 not contemplated by the annual budget
of the Corporation which budget was approved by the Board of Directors;
(H) appoint or permit to be appointed any new officers, executives or other key employees of
the Corporation; or
(I) increase the size of the Board of Directors above eight (8), except for any increase
resulting from the election of additional directors by Series A Cumulative Convertible Preferred
Stock and the Series B Cumulative Convertible Preferred Stock in accordance with the terms thereof
(the foregoing subsections (A)-(I) shall be referred to in this Section 2 as Fundamental Corporate
Transactions).
(ii) Minimum Ownership Threshold means (A) for purposes of Multiple Director Nomination
Right, the beneficial ownership of at least ten percent (10%) of the then outstanding Common Stock,
(B) for purposes of a Fundamental Corporate Transaction Approval Right, the beneficial ownership of
at least ten percent (10%) of the then outstanding Common Stock, and (C) for purposes of a Single
Director Nomination Right, the beneficial ownership of at least five percent (5%) of the then
outstanding Common Stock, in each case on a fully diluted basis.
(iii) Multiple Director Nomination Right means the exclusive right of the Series C Holder to
nominate two (2) directors to the Board of Directors in accordance with the provisions hereof.
(iv) Nomination Submission Deadline means the deadline for receipt by the Corporation of any
names of candidates nominated to the Board of Directors.
(v) Single Director Nomination Right means the exclusive right of the Series C Holder to
nominate one (1) director to the Board of Directors in accordance with the provisions hereof.
(b) Voting Rights. The Series C Holder, except as otherwise required under Delaware
law or as set forth in paragraphs (i), (ii) and (iii) below, shall not be entitled
7
to or permitted to vote on any matter required or permitted to be voted upon by the stockholders of
the Corporation.
(i) Nomination Rights. Upon the issuance of the Series C Preferred Stock, and
thereafter, in connection with any annual or special meeting of the stockholders at which members
of the Board of Directors are to be elected, so long as the Series C Holder meets the Minimum
Ownership Threshold, the Series C Holder shall be entitled to exercise the Single Director
Nomination Right or the Multiple Director Nomination Right, as applicable, as follows:
(A) The Board of Directors shall set a date for the Nomination Submission Deadline in
connection with any annual or special meeting of the stockholders at which members of the Board of
Directors are to be elected and shall provide written notice of such date at least thirty (30) days
prior thereto to the Series C Holder (the Nomination Deadline Notice). In such Nomination
Deadline Notice, the Board of Directors shall inform the Series C Preferred Holder whether such
Holder is entitled to exercise the Single Director Nomination Right, the Multiple Director
Nomination Right, or no rights at all, dependent upon whether the Series C Holder meets the Minimum
Ownership Threshold at such time. Prior to the Nomination Submission Deadline, the Series C
Holder shall submit in writing the names of the individual or individuals, as applicable, to the
Board of Directors for inclusion in any ballot or other materials to be provided to the
stockholders of the Corporation in connection with such annual or special meeting of the
stockholders.
(B) In connection with any election at which the Series C Holder is entitled to exercise the
Single Director Nomination Right or the Multiple Director Nomination Right, the Board of Directors
agrees that it shall nominate no greater than that number of directors for election to the Board of
Directors which is equal to the aggregate number of positions on the Board of Directors up for
election at such time less the sum of the number of directors the Series C Holder is entitled to
nominate pursuant to the provisions of this Section 2 at such time and the number of directors that
any holder of Series C Parity Securities (defined below) is entitled to nominate at such time, if
any. To the extent that if at such time any Series C Senior Securities (defined below) are
entitled to nominate and elect any members of the Board of Directors, such elected members shall be
in addition to the directors so nominated by the Series C Holder, any Series C Parity Securities
and/or the Board of Directors, and shall result in an increase of the size of the Board of
Directors.
(ii) Fundamental Corporate Transaction. Upon the issuance of the Series C Stock, and
thereafter, so long as the Series C Holder meets the Minimum Ownership Threshold, the Series C
Holder shall be entitled to exercise the Fundamental Corporate Transaction Approval Right, as
follows:
(A) The Corporation must provide to the Series C Holder written notice of any proposed
Fundamental Corporate Transaction at least five (5) days prior to the consummation of the
Fundamental Corporate Transaction. In such notice, the Corporation shall state whether the Series
C Holder meets the Minimum Ownership Threshold to exercise the Fundamental Corporate Transaction
Approval Right, and provide the material terms of the Fundamental Corporate Transaction, including,
without limitation, the consideration to be paid to the Corporation and/or any monetary obligation
the Corporation will incur in connection with such Fundamental Corporate Transaction. The Series C
Holder may reasonably request that additional information be provided by the
8
Corporation, if the Series C Holder determines that such information is necessary to make a prudent
decision in exercising its Fundamental Corporate Transaction Approval Right. The Series C Holder
may withhold its consent to or affirmative vote in favor of any Fundamental Corporate Transaction,
in its sole discretion.
(iii) Approval of New Classes of Securities.
(A) Hereafter, so long as any shares of Series C Preferred Stock are outstanding, the
Corporation shall not authorize or issue any class of Series C Parity Securities (as defined below)
without the prior consent or affirmative vote of the Series C Holder, either in writing or by
resolution adopted at an annual or special meeting.
(B) Hereafter, so long as any shares of Series C Preferred Stock are outstanding, the
Corporation shall not authorize or issue any class of Series C Senior Securities (as defined below)
without the prior consent or affirmative vote of the Series C Holder, either in writing or by
resolution adopted at an annual or special meeting.
3. Liquidation Preference. In the event of any voluntary or involuntary liquidation,
dissolution or winding-up of the affairs of the Corporation, no distribution shall be made (a) to
the holders of any shares of capital stock of the Corporation ranking junior (with respect to
rights upon liquidation, dissolution or winding up) to the Series C Preferred Stock, unless the
Series C Holder shall have received $1000 per share, or (b) to the holders of shares of capital
stock of the Corporation ranking on a parity (with respect to rights upon liquidation, dissolution
or winding up) with the Series C Preferred Stock, except for distributions made ratably on the
Series C Preferred Stock and all such parity stock in proportion to the total amounts to which the
holders of all such shares are entitled upon such liquidation, dissolution or winding up.
4. Rank. Series C Preferred Stock shall, with respect to payment of dividends,
redemption payments, rights upon liquidation, dissolution or winding up of the affairs of the
Corporation, or otherwise, rank (i) senior and prior (to the extent set forth herein) to the Common
Stock, the Junior Preferred Stock, and each other class or series of equity securities of the
Corporation, whether currently issued or issued in the future, that by its express terms ranks
junior to the Series C Preferred Stock (whether with respect to payment of dividends, redemption
payments, rights upon liquidation, dissolution or winding up of the affairs of the Corporation, or
otherwise) (all of such equity securities, including the Common Stock, are collectively referred to
herein as the Series C Junior Securities), (ii) rank on a parity with the Series D Preferred
Stock, and each other class or series of equity securities of the Corporation, whether currently
issued or issued in the future, that does not by its terms expressly provide that it ranks senior
to or junior to the Series C Preferred Stock (whether with respect to payment of dividends,
redemption payments, rights upon liquidation, dissolution or winding up of the affairs of the
Corporation, or otherwise) (all of such equity securities are collectively referred to herein as
the Series C Parity Securities), provided that any such Series C Parity Securities that were not
approved by the Series C Holder in accordance with Section B(2)(b)(iii)(A) hereof shall be deemed
to be Series C Junior Securities and not Series C Parity Securities, and (iii) rank junior to the
Series A Cumulative Convertible Preferred Stock, the Series B Cumulative Convertible Preferred
Stock, and each other class or series of equity securities of the Corporation, whether currently
issued or issued in the future, that by its express terms ranks senior to the Series C Preferred
Stock (whether with respect to payment of dividends, redemption payments, rights upon liquidation,
9
dissolution or winding up of the affairs of the Corporation, or otherwise) (all of such equity
securities are collectively referred to herein as the Series C Senior Securities), provided that
any such Series C Senior Securities that were not approved by the Series C Holder in accordance
with Section B(2)(b)(iii)(B) hereof shall be deemed to be Series C Junior Securities and not Series
C Senior Securities. The respective definitions of Series C Junior Securities, the Series C Parity
Securities and the Series C Senior Securities shall also include any rights or options exercisable
or exchangeable for or convertible into any of the Series C Junior Securities, the Series C Parity
Securities or the Series C Senior Securities, as the case may be. At the date of the initial
issuance of the Series C Preferred Stock (i) shares of Series A Cumulative Convertible Preferred
Stock and the Series B Cumulative Convertible Preferred Stock shall be the only Series C Senior
Securities issued and outstanding, (ii) shares of Series D Preferred Stock shall be the only Series
D Parity Securities issued and outstanding, and (iii) shares of Common Stock and Junior Preferred
Stock shall be the only Series C Junior Securities issued and outstanding.
5. Notices. All notices referred to herein shall be dated and in writing, to the
Corporation at its principal executive offices and to the Series C Holder at such holders address
as it appears in the stock records of the Corporation (unless otherwise specified in a written
notice to the Corporation by such holder), and shall be deemed to have been given (a) when
delivered, if delivered personally, sent by confirmed facsimile or certified mail, return receipt
requested, postage prepaid, (b) on the next business day if sent by overnight courier and (c) when
received if delivered otherwise.
6. Conversion. The Series C Preferred Stock is not convertible into any other class
of capital stock of the Corporation.
7. Transfers. The Series C Holder may not effect any offer, sale, pledge, transfer,
or other disposition or distribution (collectively a Transfer), or enter into any agreement with
respect to any Transfer, or grant any proxy with respect to, and the Series C Preferred Stock or
any beneficial or other interest therein to any person or entity other than an Affiliate of the
Series C Holder. Any purported Transfer to any person or entity other than the Series C Holder
shall be void ab initio, and the voting rights set forth in Section 2 hereof may only be exercised
by the Series C Holder only so long as the Series C Preferred Stock is beneficially owned by
EchoStar Corporation or an affiliate thereof. The certificate representing the share of Series C
Preferred Stock shall bear the following legend:
THE SHARE OF SERIES C PREFERRED STOCK OF TERRESTAR CORPORATION REPRESENTED BY THIS CERTIFICATE
MAY ONLY BE ISSUED TO AND BENEFICIALLY OWNED BY ECHOSTAR CORPORATION OR AN AFFILIATE THEREOF, AND
ANY PURPORTED TRANSFER TO ANY OTHER PERSON OR ENTITY IS NULL AND VOID.
8. Amendment and Waiver. No amendment or waiver of any provision of the Certificate
of Incorporation (including this Certificate of Designations) which would materially alter or
change the powers, preferences or special rights of the Series C Preferred Stock so as to affect
them adversely shall be effective without the prior consent or affirmative vote of the Series C
Holder, either in writing or by resolution adopted at an annual or special meeting.
10
C. SERIES D PREFERRED STOCK
RESOLVED that, pursuant to authority conferred on the Board of Directors by the Certificate of
Incorporation, the Board of Directors hereby authorizes the creation of one (1) shares of Series D
Preferred Stock of the Corporation, par value $0.01 and hereby fixes the designations, powers,
preferences and relative participating, optional or other special rights, and the qualifications,
limitations or restrictions thereof, of such share, in addition to those set forth in the
Certificate of Incorporation, as follows:
1. Designation and Amount. This series of Preferred Stock shall be designated as
Series D Preferred Stock (the Series D Preferred Stock) and the number of shares constituting
such series shall be one (1). Such number of shares may be increased or decreased by resolution
of the Board of Directors; provided that no decrease shall reduce the number of shares of Series D
Preferred Stock then outstanding. Series D Preferred Stock may only be issued to and beneficially
owned by Harbinger Capital Partners Master Fund I, Ltd. or an affiliate thereof (the Series D
Holder). For purposes of this Section C, the term affiliate shall have the meaning given such
term as in Rule 12b-2 promulgated under the Securities Exchange Act of 1934, as amended, and the
term beneficial ownership shall have the meaning given such term as in Rule13d-3 of the
Securities Exchange Act of 1934, as amended.
2. Voting Rights.
(a) Defined Terms.
For purposes of this Section 2:
(i) Fundamental Corporate Transaction Approval Right means, that without first obtaining the
affirmative vote or consent of the Series D Holder, either in writing or by resolution adopted at
an annual or special meeting, and otherwise in accordance with the provisions hereof, the
Corporation shall not:
(A) sell or permit to be sold 10% or more of the assets of the Corporation or any subsidiary
of the Corporation other than the equity interests of SkyTerra Communications, Inc.;
(B) consummate or permit to be consummated any merger, consolidation, recapitalization,
liquidation, or dissolution of the Corporation or any subsidiary of the Corporation;
(C) amend or permit the amendment of the certificate of incorporation, by-laws, or other
organizational documents of the Corporation or any subsidiary of the Corporation;
(D) redeem or repurchase any equity securities of the Corporation, except for the redemption
of any shares of Series A Cumulative Convertible Preferred Stock and the Series B Cumulative
Convertible Preferred Stock or pursuant to any compensatory plan or arrangement, in each case
solely in accordance with the terms thereof;
11
(E) make any material change in the line of business of the Corporation;
(F) acquire any asset or assets in one or more transactions with a value in excess of
$5,000,000;
(G) make any capital expenditure in excess of $5,000,000 not contemplated by the annual budget
of the Corporation which budget was approved by the Board of Directors;
(H) appoint or permit to be appointed any new officers, executives or other key employees of
the Corporation; or
(I) increase the size of the Board of Directors above eight (8), except for any increase
resulting from the election of additional directors by Series A Cumulative Convertible Preferred
Stock and the Series B Cumulative Convertible Preferred Stock in accordance with the terms thereof
(the foregoing subsections (A)-(I) shall be referred to in this Section 2 as Fundamental Corporate
Transactions).
(ii) Minimum Ownership Threshold means (A) for purposes of a Multiple Director Nomination
Right, the beneficial ownership of at least ten percent (10%) of the then outstanding Common Stock,
(B) for purposes of Fundamental Corporate Transaction Approval Right, the beneficial ownership of
at least ten percent (10%) of the then outstanding Common Stock, and (C) for purposes of a Single
Director Nomination Right, the beneficial ownership of at least five percent (5%) of the then
outstanding Common Stock, in each case on a fully diluted basis.
(iii) Multiple Director Nomination Right means the exclusive right of the Series D Holder to
nominate two (2) directors to the Board of Directors in accordance with the provisions hereof.
(iv) Nomination Submission Deadline means the deadline for receipt by the Corporation of any
names of candidates nominated to the Board of Directors.
(v) Single Director Nomination Right means the exclusive right of the Series D Holder to
nominate one (1) director to the Board of Directors in accordance with the provisions hereof.
(b) Voting Rights. The Series D Holder, except as otherwise required under Delaware
law or as set forth in paragraphs (i), (ii) and (iii) below, shall not be entitled to or permitted
to vote on any matter required or permitted to be voted upon by the stockholders of the
Corporation.
(i) Nomination Rights. Upon the issuance of the Series D Preferred Stock, and
thereafter, in connection with any annual or special meeting of the stockholders at which members
of the Board of Directors are to be elected, so long as the Series D Holder meets the Minimum
Ownership Threshold, the Series D Holder shall be entitled to exercise the Single Director
Nomination Right or the Multiple Director Nomination Right, as applicable, as follows:
12
(A) The Board of Directors shall set a date for the Nomination Submission Deadline in
connection with any annual or special meeting of the stockholders at which members of the Board of
Directors are to be elected and shall provide written notice of such date at least thirty (30) days
prior thereto to the Series D Holder (the Nomination Deadline Notice). In such Nomination
Deadline Notice, the Board of Directors shall inform the Series D Preferred Holder whether such
Holder is entitled to exercise the Single Director Nomination Right, the Multiple Director
Nomination Right, or no rights at all, dependent upon whether the Series D Holder meets the Minimum
Ownership Threshold at such time. Prior to the Nomination Submission Deadline, the Series D
Holder shall submit in writing the names of the individual or individuals, as applicable, to the
Board of Directors for inclusion in any ballot or other materials to be provided to the
stockholders of the Corporation in connection with such annual or special meeting of the
stockholders.
(B) In connection with any election at which the Series D Holder is entitled to exercise the
Single Director Nomination Right or the Multiple Director Nomination Right, the Board of Directors
agrees that it shall nominate no greater than that number of directors for election to the Board of
Directors which is equal to the aggregate number of positions on the Board of Directors up for
election at such time less the sum of the number of directors the Series D Holder is entitled to
nominate pursuant to the provisions of this Section 2 at such time and the number of directors that
any holder of Series D Parity Securities (defined below) is entitled to nominate at such time, if
any. To the extent that if at such time any Series D Senior Securities (defined below) are
entitled to nominate and elect any members of the Board of Directors, such elected members shall be
in addition to the directors so nominated by the Series D Holder, any Series D Parity Securities
and/or the Board of Directors, and shall result in an increase of the size of the Board of
Directors.
(ii) Fundamental Corporate Transaction. Upon the issuance of the Series D Stock, and
thereafter, so long as the Series D Holder meets the Minimum Ownership Threshold, the Series D
Holder shall be entitled to exercise the Fundamental Corporate Transaction Approval Right, as
follows:
(A) The Corporation must provide to the Series D Holder written notice of any proposed
Fundamental Corporate Transaction at least five (5) days prior to the consummation of the
Fundamental Corporate Transaction. In such notice, the Corporation shall state whether the Series
D Holder meets the Minimum Ownership Threshold to exercise the Fundamental Corporate Transaction
Approval Right, and provide the material terms of the Fundamental Corporate Transaction, including,
without limitation, the consideration to be paid to the Corporation and/or any monetary obligation
the Corporation will incur in connection with such Fundamental Corporate Transaction. The Series D
Holder may reasonably request that additional information be provided by the Corporation, if the
Series D Holder determines that such information is necessary to make a prudent decision in
exercising its Fundamental Corporate Transaction Approval Right. The Series D Holder may withhold
its consent to or affirmative vote in favor of any Fundamental Corporate Transaction, in its sole
discretion.
(iii) Approval of New Classes of Securities.
(A) Hereafter, so long as any shares of Series D Preferred Stock are outstanding, the
Corporation shall not authorize or issue any class of Series D
13
Parity Securities (as defined below) without the prior consent or affirmative vote of the Series D
Holder, either in writing or by resolution adopted at an annual or special meeting.
(B) Hereafter, so long as any shares of Series D Preferred Stock are outstanding, the
Corporation shall not authorize or issue any class of Series D Senior Securities (as defined below)
without the prior consent or affirmative vote of the Series D Holder, either in writing or by
resolution adopted at an annual or special meeting.
3. Liquidation Preference. In the event of any voluntary or involuntary liquidation,
dissolution or winding-up of the affairs of the Corporation, no distribution shall be made (a) to
the holders of any shares of capital stock of the Corporation ranking junior (with respect to
rights upon liquidation, dissolution or winding up) to the Series D Preferred Stock, unless the
Series D Holder shall have received $1000 per share, or (b) to the holders of shares of capital
stock of the Corporation ranking on a parity (with respect to rights upon liquidation, dissolution
or winding up) with the Series D Preferred Stock, except for distributions made ratably on the
Series D Preferred Stock and all such parity stock in proportion to the total amounts to which the
holders of all such shares are entitled upon such liquidation, dissolution or winding up.
4. Rank. Series D Preferred Stock shall, with respect to payment of dividends,
redemption payments, rights upon liquidation, dissolution or winding up of the affairs of the
Corporation, or otherwise, rank (i) senior and prior (to the extent set forth herein) to the Common
Stock, the Junior Preferred Stock, and each other class or series of equity securities of the
Corporation, whether currently issued or issued in the future, that by its express terms ranks
junior to the Series D Preferred Stock (whether with respect to payment of dividends, redemption
payments, rights upon liquidation, dissolution or winding up of the affairs of the Corporation, or
otherwise) (all of such equity securities, including the Common Stock, are collectively referred to
herein as the Series D Junior Securities), (ii) rank on a parity with the Series C Preferred
Stock, and each other class or series of equity securities of the Corporation, whether currently
issued or issued in the future, that does not by its terms expressly provide that it ranks senior
to or junior to the Series D Preferred Stock (whether with respect to payment of dividends,
redemption payments, rights upon liquidation, dissolution or winding up of the affairs of the
Corporation, or otherwise) (all of such equity securities are collectively referred to herein as
the Series D Parity Securities), provided that any such Series D Parity Securities that were not
approved by the Series D Holder in accordance with Section C(2)(b)(iii)(A) hereof shall be deemed
to be Series D Junior Securities and not Series D Parity Securities, and (iii) rank junior to the
Series A Cumulative Convertible Preferred Stock, the Series B Cumulative Convertible Preferred
Stock, and each other class or series of equity securities of the Corporation, whether currently
issued or issued in the future, that by its express terms ranks senior to the Series D Preferred
Stock (whether with respect to payment of dividends, redemption payments, rights upon liquidation,
dissolution or winding up of the affairs of the Corporation, or otherwise) (all of such equity
securities are collectively referred to herein as the Series D Senior Securities), provided that
any such Series D Senior Securities that were not approved by the Series D Holder in accordance
with Section C(2)(b)(iii)(B) hereof shall be deemed to be Series D Junior Securities and not Series
D Senior Securities. The respective definitions of Series D Junior Securities, the Series D Parity
Securities and the Series D Senior Securities shall also include any rights or options exercisable
or exchangeable for or convertible into any of the Series D Junior Securities, the Series D Parity
Securities or the Series D Senior Securities, as the case may be. At the date of the initial
issuance of the Series D Preferred Stock (i) shares of Series
14
A Cumulative Convertible Preferred Stock and the Series B Cumulative Convertible Preferred Stock
shall be the only Series D Senior Securities issued and outstanding, (ii) shares of Series C
Preferred Stock shall be the only Series D Parity Securities issued and outstanding, and (iii)
shares of Common Stock and Junior Preferred Stock shall be the only Series D Junior Securities
issued and outstanding.
5. Notices. All notices referred to herein shall be dated and in writing, to the
Corporation at its principal executive offices and to the Series D Holder at such holders address
as it appears in the stock records of the Corporation (unless otherwise specified in a written
notice to the Corporation by such holder), and shall be deemed to have been given (a) when
delivered, if delivered personally, sent by confirmed facsimile or certified mail, return receipt
requested, postage prepaid, (b) on the next business day if sent by overnight courier and (c) when
received if delivered otherwise.
6. Conversion. The Series D Preferred Stock is not convertible into any other class
of capital stock of the Corporation.
7. Transfers. The Series D Holder may not effect any offer, sale, pledge, transfer,
or other disposition or distribution (collectively a Transfer), or enter into any agreement with
respect to any Transfer, or grant any proxy with respect to, and the Series D Preferred Stock or
any beneficial or other interest therein to any person or entity other than an Affiliate of the
Series D Holder. Any purported Transfer to any person or entity other than the Series D Holder
shall be void ab initio, and the voting rights set forth in Section 2 hereof may only be exercised
by the Series D Holder only so long as the Series D Preferred Stock is beneficially owned by
Harbinger Capital Partners Master Fund I, Ltd. or an affiliate thereof. The certificate
representing the share of Series D Preferred Stock shall bear the following legend:
THE SHARE OF SERIES D PREFERRED STOCK OF TERRESTAR CORPORATION REPRESENTED BY THIS CERTIFICATE
MAY ONLY BE ISSUED TO AND BENEFICIALLY OWNED BY HARBINGER CAPITAL PARTNERS MASTER FUND I, LTD. OR
AN AFFILIATE THEREOF, AND ANY PURPORTED TRANSFER TO ANY OTHER PERSON OR ENTITY IS NULL AND VOID.
8. Amendment and Waiver. No amendment or waiver of any provision of the Certificate
of Incorporation (including this Certificate of Designations) which would materially alter or
change the powers, preferences or special rights of the Series D Preferred Stock so as to affect
them adversely shall be effective without the prior consent or affirmative vote of the Series D
Holder, either in writing or by resolution adopted at an annual or special meeting.
IN WITNESS WHEREOF, the undersigned officer of the Corporation has executed this Certificate
of Designations as of 7th day of February, 2008.
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By: |
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/s/ Robert H. Brumley |
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Name:
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Robert H. Brumley
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Title:
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President and Chief Executive Officer |
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15
exv99w11
Exhibit 99.11
Joint Filing Agreement
In accordance with Rule 13d-1(k)(1) promulgated under the Securities Exchange Act of 1934, as
amended, the undersigned hereby agree to the joint filing by the undersigned on behalf of each of
them of a statement on Schedule 13D (including amendments thereto) with respect to the Common
Stock, par value $0.01 per share, of TerreStar Corporation., a Delaware corporation, and that this
agreement may be included as an exhibit to such joint filing.
IN WITNESS WHEREOF, the undersigned hereby execute this Agreement as of June 19, 2008.
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CHARLES W. ERGEN
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By: |
/s/ Charles W. Ergen
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Name: |
Charles W. Ergen |
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ECHOSTAR CORPORATION
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By: |
/s/ Charles W. Ergen
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Name: |
Charles W. Ergen |
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Title: |
Chairman and Chief Executive Officer |
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