Exhibit 10.66
Participation Rights Agreement
THIS PARTICIPATION RIGHTS AGREEMENT (this "Agreement") is made
as of December 31, 1997, by and among Motorola, Inc., a Delaware corporation
(the "Investor"), American Mobile Satellite Corporation, a Delaware corporation
(the "Company"), and the parties listed on Schedule A attached hereto (the
"Stockholders").
American Mobile Satellite Corporation, a Delaware corporation,
the Investor and certain others are parties to a Stock Purchase Agreement dated
as of December 31, 1997 (the "Purchase Agreement"). In order to induce the
Investor to enter into the Purchase Agreement, the Stockholders have agreed to
the provisions set forth in this Agreement. Unless otherwise provided in this
Agreement, capitalized terms used herein shall have the meanings set forth in
Section 5 hereof.
The parties hereto agree as follows:
1. Investor Participation Rights. At any time after the
Closing Date and prior to the date on which the Investor beneficially owns less
than 5% of the Common Stock on a fully-diluted basis:
(a) At least 30 days prior to any transfer, assignment or any
other disposition of Stockholder Shares (other than a transfer (i) to the public
pursuant to Rule 144 under the Securities Act (or any similar rule then in
force) or (ii) in other sales through a broker or dealer in the public stock
market over an exchange or the Nasdaq Stock Market (a "Transfer"), the
transferring Stockholder (the "Transferring Stockholder") shall deliver a
written notice (the "Sale Notice") to the Investor, specifying in reasonable
detail the identity of the prospective transferee(s), the number of Stockholder
Shares to be transferred and the terms and conditions of the Transfer (including
the proposed price at which the Stockholder Shares is to be transferred). The
Investor may elect to participate in the contemplated Transfer by delivering
written notice of such election to the Transferring Stockholder within 30 days
after delivery of the Sale Notice. If the Investor elects to participate in such
Transfer, each of the Transferring Stockholder and the Investor shall be
entitled to sell in the contemplated Transfer, at the same price and on the same
terms, a number of Stockholder Shares equal to the product of (A) the quotient
determined by dividing the number of Stockholder Shares owned by such Person by
the aggregate number of Stockholder Shares owned by the Transferring Stockholder
and the Investor and (B) the number of Stockholder Shares to be sold in the
contemplated Transfer.
For example (by way of illustration only), if the Sale Notice
contemplated a sale of 100 shares of Common Stock by the Transferring
Stockholder, and if the Transferring Stockholder at such time owns
shares which constitute 30% of all Common Stock which are Stockholder
Shares and if the Investor elects to participate in such Transfer and
the Investor owns shares of Common Stock which constitutes 10% of all
of the Common Stock which are Stockholder Shares, the Transferring
Stockholder would be entitled to sell 75 shares of Common Stock (30% /
40% x 100 shares) and the Investor would be entitled to sell 25 shares
of Common Stock (10% / 40% x 100 shares).
(b) The Transferring Stockholder will use its best efforts to
obtain the agreement of the prospective transferee(s) to the participation of
the Investor in any contemplated Transfer, and the Transferring Stockholder will
not Transfer any of its Stockholder Shares to the prospective transferee(s)
unless (i) simultaneously with such Transfer, the prospective transferee(s)
purchases from the Investor at the same price and on the same terms, the number
of Stockholder Shares which it is entitled to sell to such prospective
transferee pursuant to Section 1 above or (ii) simultaneously with such
Transfer, the Transferring Stockholder purchases the number of Stockholder
Shares from the Investor at the same price and on the same terms which the
Investor would have been entitled to sell pursuant to Section 1 above.
2. Shareholder Participation Rights. At any time after the
Closing Date and prior to the date on which the Investor beneficially owns less
than 5% of the Common Stock on a fully-diluted basis:
(a) At least 30 days prior to any transfer, assignment or any
other disposition of Stockholder Shares by the Investor (other than a transfer
(i) to the public pursuant to Rule 144 under the Securities Act (or any similar
rule then in force) or (ii) in other sales through a broker or dealer in the
public stock market over an exchange or the Nasdaq Stock Market) (a "Transfer"),
the Investor shall deliver a written notice (the "Sale Notice") to the
Stockholders, specifying in reasonable detail the identity of the prospective
transferee(s), the number of Stockholder Shares to be transferred and the terms
and conditions of the Transfer (including the proposed price at which the
Stockholder Shares is to be transferred). The Stockholders may elect, pro rata
based on the number of Stockholder Shares owned by them, to participate in the
contemplated Transfer by delivering written notice of such election to the
Investor within 30 days after delivery of the Sale Notice. If any Stockholder
elects to participate in such Transfer, the Investor and each such electing
Stockholder (an "Electing Stockholder") shall be entitled to sell in the
contemplated Transfer, at the same price and on the same terms, a number of
Stockholder Shares equal to the product of (A) the quotient determined by
dividing the number of Stockholder Shares owned by such Person by the aggregate
number of Stockholder Shares owned by the Electing Stockholders and the Investor
and (B) the number of Stockholder Shares to be sold in the contemplated
Transfer.
For example (by way of illustration only), if the Sale Notice
contemplated a sale of 100 shares of Common Stock by the Investor, and
if the Investor at such time owns shares which constitute 30% of all
Common Stock which are Stockholder Shares and if Electing Stockholders
elect to participate in such Transfer and the Electing Stockholders own
shares of Common Stock which constitutes 10% of all of the Common Stock
which are Stockholder Shares, the Investor would be entitled to sell 75
shares of Common Stock (30% / 40% x 100 shares) and the Electing
Stockholders would be entitled to sell 25 shares of Common Stock (10% /
40% x 100 shares).
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(b) The Investor will use its best efforts to obtain the
agreement of the prospective transferee(s) to the participation of the Electing
Stockholders in any contemplated Transfer, and the Investor will not Transfer
any of its Stockholder Shares to the prospective transferee(s) unless (i)
simultaneously with such Transfer, the prospective transferee(s) purchases from
the Electing Stockholders at the same price and on the same terms, the number of
Stockholder Shares which they are entitled to sell to such prospective
transferee pursuant to Section 2 above or (ii) simultaneously with such
Transfer, the Investor will purchase the number of Stockholder Shares from the
Electing Stockholders at the same price and on the same terms which the Electing
Stockholders would have been entitled to sell pursuant to Section 2 above.
3. Agreement to Vote for Transaction. Each Stockholder agrees
that it shall vote all of its Stockholder Shares in favor of and take such other
action as may be necessary to approve, and hereby consents to the Company
entering into, all of the transactions contemplated by the Purchase Agreement,
including the issuance of shares of Common Stock to the Investor.
4. Registration Rights Agreement. Pursuant to the Purchase
Agreement, the Company shall provide the Investor with certain registration
rights under a registration rights agreement substantially in the form of
Schedule B attached hereto (the "Registration Rights Agreement"). Each
Stockholder agrees and acknowledges that pursuant to the Registration Rights
Agreement, the Company shall provide the Investor with Demand Registrations and
Piggyback Registrations (each as defined in the Registration Rights Agreement),
for which the Investor shall have a priority of sale of its Registrable
Securities (as defined in the Registration Rights Agreement) over all other
unregistered securities held by any other stockholder of the Company. Each
Stockholder agrees to subordinate any registration rights granted with respect
to the unregistered securities of the Company owned by it (including any
unregistered securities it may acquire in the future), to the Investor under the
Registration Rights Agreement, and agrees that it shall be bound by Sections
1(b) and 2(c) therein until the end of the 42nd month after the month in which
the Closing under the Purchase Agreement occurs (the "Subordination Termination
Date"). After the Subordination Termination Date, the Investor and the
Stockholders will be pari passu with respect to the priority of sale in any
piggyback registration rights granted to such parties as set forth in the
Registration Rights Agreement.
5. Definitions.
(a) "Common Stock" means the Common Stock, par value $.01
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per share, of the Company.
(b) "Stockholder Shares" means (i) any shares of Common Stock
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issued to the Stockholders and the Investor (including shares issuable upon the
exercise of any AMSC Warrants) and (ii) any equity securities issued or issuable
directly or indirectly with respect to the Common Stock referred to in clause
(i) above (including by way of stock dividend or stock split or in connection
with a combination of shares, recapitalization, merger, consolidation or other
reorganization). As to any particular shares constituting Stockholder Shares,
such shares will cease to be Stockholder Shares when they have been (x)
effectively registered under the Securities Act and disposed of in accordance
with the registration statement covering them, or (y) sold to the public through
a broker, dealer or market maker pursuant to Rule 144 (or by similar provision
then in force) under the Securities Act.
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(c) Unless otherwise stated, other capitalized terms contained
herein have the meanings set forth in the Purchase Agreement.
6. Miscellaneous.
(a) Entire Agreement; No Inconsistent Agreements. This
Agreement contains the entire agreement between the parties hereto with respect
to the transactions contemplated herein and supersede all previous negotiations,
commitments and writings. The Company shall not hereafter enter into any
agreement with respect to its securities which is inconsistent with or violates
the rights granted to the Investor in this Agreement.
(b) Remedies. Any Person having rights under any provision of
this Agreement shall be entitled to enforce such rights specifically to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that any party may in its sole discretion
apply to any court of law or equity of competent jurisdiction (without posting
any bond or other security) for specific performance and for other injunctive
relief in order to enforce or prevent violation of the provisions of this
Agreement.
(c) Amendments and Waivers. Except as otherwise provided
herein, the provisions of this Agreement may be amended or waived only upon the
prior written consent of the Investor and the Stockholders.
(d) Successors and Assigns. All covenants and agreements in
this Agreement by or on behalf of any of the parties hereto shall bind and inure
to the benefit of the respective successors and assigns of the parties hereto
whether so expressed or not. In addition, whether or not any express assignment
has been made, the provisions of this Agreement which are for the benefit of
purchasers or holders of the Investor's Stockholder Shares are also for the
benefit of, and enforceable by, any subsequent holder of such shares.
(e) Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or the effectiveness or validity of any provision in any
other jurisdiction, and this Agreement shall be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.
(f) Counterparts. This Agreement may be executed
simultaneously in two or more counterparts (including by means of telecopied
signature pages), any one of which need not contain the signatures of more than
one party, but all such counterparts taken together shall constitute one and the
same Agreement.
(g) Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
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(h) Governing Law. THIS AGREEMENT AND THE EXHIBITS AND
SCHEDULES HERETO SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR
CONFLICT OF LAW RULES OR PROVISIONS (WHETHER OF THE STATE OF NEW YORK OR ANY
OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY
JURISDICTION OTHER THAN THE STATE OF NEW YORK.
(i) Notices. All notices, demands or other communications to
be given or delivered under or by reason of the provisions of this Agreement
shall be in writing and shall be deemed to have been given when (i) delivered
personally to the recipient, (ii) sent to the recipient by reputable overnight
courier service (charges prepaid), (iii) sent by facsimile transmission, when
transmitted and receipt is confirmed or (iv) mailed to the recipient by
certified or registered mail, return receipt requested and postage prepaid. Such
notices, demands and other communications shall be sent to the Stockholders at
their respective addresses listed on Schedule A attached hereto and to the
Investor at the address indicated below:
To the Investor:
Motorola, Inc.
1303 East Algonquin Road
Schaumburg, Illinois 60196
Attn: General Counsel
Facsimile: (847) 576-3628
With a copy (which will not constitute notice) to:
Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
Attn: Mark B. Tresnowski, Esq.
Facsimile: (312) 861-2200
To the Company:
American Mobile Satellite Corporation
10802 Parkridge Boulevard
Reston, Virginia 20191-5416
Attn: General Counsel
Facsimile: (703) 758-6134
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With a copy (which will not constitute notice) to:
Arnold & Porter
555 12th Street, N.W.
Washington, D.C. 20004
Attn: Samuel A. Flax, Esq.
Facsimile: (202) 942-5999
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
* * * * *
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IN WITNESS WHEREOF, the parties have duly executed this
Participation Rights Agreement as of the date first written above.
MOTOROLA, INC., SATELLITE MOBILE TELEPHONE
a Delaware corporation COMPANY, L.P.
By:/s/Julie A. Welch By:/s/Douglas I. Brandon
Name: Julie A. Welch Name: Douglas I. Brandon
Its: Senior Operations Controller Its: VP - External Affairs & Law
HUGHES COMMUNICATIONS TRANSIT COMMUNICATIONS, INC.
SATELLITE SERVICES, INC.
By:/s/Amnon Carr By:/s/Douglas I. Brandon
Name: Amnon Carr Name: Douglas I. Brandon
Its: Assistant Treasurer, Its: VP - External Affairs & Law
Hughes Electronics
SATELLITE COMMUNICATIONS SINGAPORE
INVESTMENTS CORPORATION TELECOMMUNICATIONS LTD.
By:/s/Douglas I. Brandon By:/s/Yap Chee Keong
Name: Douglas I. Brandon Name: Yap Chee Keong
Its: VP - External Affairs & Law Its: Group Financial Controller
SPACE TECHNOLOGIES AMERICAN MOBILE SATELLITE
INVESTMENTS, INC. CORPORATION
By:/s/Douglas I. Brandon By:/s/Gary M. Parsons
Name: Douglas I. Brandon Name: Gary M. Parsons
Its: VP - External Affairs & Law Its: Chief Executive Officer and
President
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[Continuation of Signature Page
to Participation Rights Agreement]
Solely with respect to its Warrants:
BARON CAPITAL PARTNERS, L.P.
By: Baron Capital Management, Inc.,
a General Partnership
By:/s/Morty Schaja
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Name: Morty Schaja
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Its: S.V.P.
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For purposes of Sections 3 of the Participation Rights Agreement only:
BARON CAPITAL MANAGEMENT,
INC.
By:/s/Morty Schaja
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Name: Morty Schaja
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Its: S.V.P.
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BAMCO, INC.
By:/s/Morty Schaja
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Name: Morty Schaja
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Its: S.V.P.
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Schedule A
Hughes Communications Satellite Services, Inc.
1500 Hughes Way
Long Beach, California 90810
Space Technologies Investments, Inc.
1150 Connecticut Avenue, N.W.
4th Floor
Washington, D.C. 20036
Satellite Communications Investments Corporation
1150 Connecticut Avenue, N.W.
4th Floor
Washington, D.C. 20036
Satellite Mobile Telephone Company, L.P.
1150 Connecticut Avenue, N.W.
4th Floor
Washington, D.C. 20036
Transit Communications, Inc.
1150 Connecticut Avenue, N.W.
4th Floor
Washington, D.C. 20036
Singapore Telecommunications Ltd.
31C Exeter Road
#03-00 Comcentre III
Singapore 239734
Republic of Singapore
Baron Capital Management, Inc.
767 Fifth Avenue
24th Floor
New York, New York 10153
BAMCO, Inc.
767 Fifth Avenue
24th Floor
New York, New York 10153