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EXHIBIT 4.4
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SHARE ISSUANCE AGREEMENT
BY AND BETWEEN
ORBCOMM CORPORATION
AND
ORBCOMM GLOBAL, L.P.
DATED AS OF
--, 1998
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SHARE ISSUANCE AGREEMENT
This SHARE ISSUANCE AGREEMENT (this "AGREEMENT") dated as of
- --, 1998, is made by and between ORBCOMM Corporation (the "COMPANY"), a
corporation organized under the laws of the State of Delaware and ORBCOMM
Global, L.P. ("ORBCOMM"), a limited partnership organized under the laws of the
State of Delaware.
WHEREAS, the Company was formed to act as a general partner of
ORBCOMM; and pursuant to the 1998 Subscription Agreement between the Company
and ORBCOMM, ORBCOMM has agreed to create, issue and sell, and the Company has
agreed to purchase, partnership units of ORBCOMM ("PARTNERSHIP UNITS") at an
aggregate purchase price equal to the proceeds to the Company from the initial
public offering (the "IPO") of its common stock, par value $.01 per share (the
"COMMON STOCK"); and on the purchase of such Partnership Units with the
proceeds from the IPO the Company will be admitted as a general partner of
ORBCOMM;
WHEREAS, ORBCOMM may desire that the Company authorize, issue,
offer and sell its securities (the "COMPANY SECURITIES") from time to time and
invest the proceeds from such sales of Company Securities in partnership
interests of ORBCOMM ("ORBCOMM UNITS"); and the Company desires to acquire from
time to time ORBCOMM Units, including Partnership Units, with the proceeds from
any such issuance of Company Securities;
WHEREAS, ORBCOMM has adopted the 1998 Equity Plan of ORBCOMM
Corporation and ORBCOMM Global, L.P. (the "EQUITY PLAN")and ORBCOMM may desire
to adopt other employee benefit plans from time to time (each such plan, an
"ORBCOMM BENEFIT PLAN"); and ORBCOMM desires to have the ability to: (i) issue
options to purchase Common Stock ("OPTIONS") from time to time pursuant to the
Equity Plan and; (ii) to issue Options and other rights to acquire Common Stock
("STOCK RIGHTS") pursuant to other ORBCOMM Benefit Plans;
WHEREAS, the Company desires to facilitate ORBCOMM's granting
of Options and Stock Rights pursuant to ORBCOMM Benefit Plans, and the Company
desires to acquire Partnership Units in exchange for shares of Common Stock
issued by the Company in connection with the exercise of such Options and the
exercise or conversion of Stock Rights.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICABILITY
SECTION 1.01. DEFINITIONS. As used in this Agreement, the
following terms have the following respective meanings:
"AGREEMENT" means this Share Issuance Agreement.
"BENEFIT PLAN SCHEDULE" has the meaning assigned thereto in
Section 4.02.
"BUSINESS DAY" means a day other than a Saturday, Sunday,
national or New York State holiday or other day on which commercial banks in
New York City are authorized or required by law to close.
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"CLOSING PRICE" means, for each Trading Day, the last reported
sale price regular way or, in case no such reported sale takes place on such
day, the average of the reported closing bid and asked prices regular way, in
either case on the principal national securities exchange on which the Common
Stock is listed or admitted to trading, or, if the Common Stock is not so
listed or admitted to trading on a national securities exchange, on the Nasdaq
National Market System or, if the Common Stock is not quoted on the Nasdaq
National Market System, the average of the closing bid and asked prices in the
over-the-counter market as furnished by any New York Stock Exchange member firm
selected from time to time by ORBCOMM for that purpose or, if the Common Stock
is not traded in the over-the-counter market, the fair market value per share
of the Common Stock as determined by ORBCOMM Committee (whose determination
shall be conclusive and binding).
"COMMISSION" means the U.S. Securities and Exchange
Commission.
"COMMON STOCK" means Common Stock, par value $.01 per share,
of the Company.
"COMPANY" shall have the meaning set forth in the preamble
and shall also include the Company's successors, if any.
"COMPANY BOARD" means the Board of Directors of the Company.
"COMPANY SECURITIES" means: (i) equity securities of the
Company, including Common Stock and any class of preferred stock and; (ii) any
security issued by the Company that is convertible into, or exchangeable or
exercisable for, equity securities of the Company.
"DIRECTED OFFERING" has the meaning assigned thereto in
Section 2.03.
"DIRECTED OFFERING PERIOD" means the period commencing on the
date ORBCOMM delivers a Sale Notice to the Company and ending on the 90th day
following such date; provided that the Directed Offering Period may be extended
by ORBCOMM, at its sole discretion, by delivering written notice of such
extension to the Company.
"EQUITY PLAN" means the 1998 Equity Plan of ORBCOMM
Corporation and ORBCOMM Global, L.P., as amended from time to time.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, or
any successor thereto, as the same shall be amended from time to time.
"EXCHANGE NOTICE" has the meaning assigned thereto in Section
4.02.
"EXCHANGE RATE" has the meaning assigned thereto in Section
4.01.
"HOLDER" has the meaning assigned thereto in Section 4.01.
"INDEMNIFIED PARTY" has the meaning assigned thereto in
Section 6.01.
"IPO" means the initial underwritten public offering of the
Common Stock as contemplated by the registration statement on Form S-1 under
the Securities Act filed by the Company (file No. 333-50599) on April 21, 1998,
as such registration statement is amended from time to time.
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"IPO DATE" means the date of the consummation of the IPO.
"MANAGING UNDERWRITER OR UNDERWRITERS" means the person or
persons selected by ORBCOMM and the Company in a Directed Offering to manage an
underwritten offering of Company Securities.
"NOTICED UNITS" has the meaning assigned thereto in Section
2.02.
"OFFERING DOCUMENTS" has the meaning assigned thereto in
Section 3.02.
"OPTION" means an option to purchase one or more shares of
Common Stock that is issued pursuant to an ORBCOMM Benefit Plan.
"ORBCOMM" shall have the meaning set forth in the preamble and
shall also include ORBCOMM's successors.
"ORBCOMM BENEFIT PLAN" means any employee benefit plan of
ORBCOMM existing on the date hereof or hereafter created, each as adopted by
the ORBCOMM Committee and as amended from time to time, including the Equity
Plan.
"ORBCOMM COMMITTEE" means the Committee of ORBCOMM established
pursuant to the Partnership Agreement.
"ORBCOMM UNITS" means any partnership interest in ORBCOMM,
including the Partnership Units, and any security issued by ORBCOMM that is
convertible into, or exchangeable or exercisable for, partnership interests in
ORBCOMM.
"PARTNERSHIP AGREEMENT" means the Restated Agreement of
Limited Partnership of ORBCOMM Global, L.P. dated as of --, 1998, as amended
from time to time.
"PARTNERSHIP UNITS" have the meaning assigned thereto in the
Partnership Agreement.
"PERSON" means a natural person, partnership (whether general
or limited), limited liability company, trust, estate, association,
corporation, custodian, nominee or any other individual or entity in its own or
any representative capacity.
"PROCESS AGENT" has the meaning assigned thereto in Section
7.07.
"SALE NOTICE" has the meaning assigned thereto in Section
2.02.
"SALE RIGHT" has the meaning assigned thereto in Section 2.01.
"SECURITIES ACT" means the Securities Act of 1933, or any
successor thereto, as the same shall be amended from time to time.
"STOCK RIGHT" means a right (other than a Option) to acquire,
either directly or beneficially, one or more shares of Common Stock that is
issued pursuant to an ORBCOMM Benefit Plan.
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"TRADING DAY" means each Monday, Tuesday, Wednesday, Thursday
and Friday, other than any day on which securities are not traded on the
applicable exchange or in the applicable market.
"TRANSFER" has the meaning assigned thereto in Article V.
"UNDERLYING SHARES OF COMMON STOCK" has the meaning assigned
thereto in Section 4.01.
"UNDERWRITER" means any underwriter of an underwritten
offering of Company Securities pursuant to Article III.
SECTION 1.02. INTERPRETATION. The following provisions
shall govern the interpretation of this Agreement:
(a) The singular form of any word used herein,
including the terms defined in Section 1.01, includes the plural, and vice
versa, unless the context otherwise requires. The use herein of a pronoun of
any gender shall include correlative words of the other gender.
(b) Unless otherwise expressly indicated, all
references herein to "Articles," "Sections" and other subdivisions hereof are
to the corresponding Articles, Sections or subdivisions of this Agreement; and
the words "herein," "hereof," "hereunder" and other words of similar import
refer to this Agreement as a whole and not to any particular Article, Section
or subdivision hereof.
(c) The headings or titles of the several
Articles and Sections hereof, and any table of contents appended to copies
hereof, shall be solely for convenience of reference and shall not affect the
meaning, construction or effect of this Agreement.
(d) Each reference herein to any agreement,
instrument or other document shall mean such agreement, instrument or document
as from time to time amended, modified or supplemented in accordance with the
terms hereof and thereof. The term "including" shall be construed to mean
"including but not limited to."
ARTICLE II.
ORBCOMM'S RIGHT TO REQUIRE
FUTURE PURCHASES OF PARTNERSHIP UNITS
SECTION 2.01. GENERAL SALE RIGHTS OF ORBCOMM. Subject to
the terms and conditions set forth herein, at any time and from time to time
after the IPO Date, ORBCOMM shall have the right (the "SALE RIGHT") to create,
issue and sell to the Company, and the Company shall have the obligation to
purchase from ORBCOMM, ORBCOMM Units.
SECTION 2.02. NOTICE REQUIRED FOR EXERCISE OF SALE RIGHT.
In order to exercise its Sale Right, ORBCOMM shall deliver written notice (a
"SALE NOTICE") to the Company of: (i) its intent to exercise its rights under
this Article II; and (ii) the type and number of ORBCOMM Units intended to be
sold to the Company (the "NOTICED UNITS"); provided that if ORBCOMM elects to
change the number or type of Noticed Units during a Directed Offering Period an
additional Sale Notice shall not be required.
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SECTION 2.03. COMPANY'S OBLIGATION TO CONSUMMATE OFFERING
OF COMPANY SECURITIES IN RESPECT OF NOTICED INTERESTS. The Company hereby
agrees that on receipt of a Sale Notice the Company shall, within the Directed
Offering Period and in accordance with Article III, use its best reasonable
efforts to consummate an offering of Company Securities (a "DIRECTED
OFFERING"), and apply the proceeds received by the Company from such Directed
Offering to the purchase of the Noticed Units, on terms and conditions
determined by ORBCOMM; provided that the Company shall not be required to
purchase Noticed Units until the date it first receives proceeds from the
Directed Offering.
ARTICLE III.
PROCEDURES FOR DIRECTED OFFERINGS
SECTION 3.01. TERMS OF DIRECTED OFFERINGS; CORPORATE ACTION
BY THE COMPANY.
(a) The Company hereby agrees that, subject to
applicable law, the terms of any Directed Offering shall be structured at the
direction of ORBCOMM, including: (i) the quantity, class and terms of the
Company Securities to be offered; (ii) whether the Company Securities to be
offered will be registered under the Securities Act or whether such Company
Securities will be sold pursuant to an exemption from such registration; (iii)
whether the Directed Offering will be consummated on a date certain or will be
made on a delayed or continuous basis; and (iv) the terms under which the
proceeds from the sale of the Company Securities will be applied to the
purchase of the Noticed Units.
(b) The Company hereby agrees, subject to
applicable law, to take all action necessary to consummate any Directed
Offering in accordance with the terms of this Agreement, including: (i)
authorizing the issuance and sale of the Company Securities (and authorizing
and reserving for issuance all Company Securities issuable on the exercise of
the Company Securities to be issued in the Directed Offering); and (ii)
amending or supplementing the Company's governing documents as required by the
terms of the Directed Offering and seeking stockholder or other approval, if
necessary, for such action.
(c) In addition to any other obligation of the
Company hereunder, the Company hereby agrees that at any time and from time to
time after the IPO Date, it will increase its authorized share capital as
directed by ORBCOMM, including authorizing additional shares of Common Stock
and creating and authorizing one or more series of preferred stock, within
thirty days of receipt of written instructions from ORBCOMM to effect such an
increase.
SECTION 3.02. COOPERATION IN PREPARATION OF OFFERING
DOCUMENTS. ORBCOMM and the Company hereby agree to cooperate in the
preparation of any offering documents relating to a Directed Offering (the
"OFFERING DOCUMENTS"), including: (a) any registration statements or amendments
thereto required to be filed with the Commission pursuant to Section 3.04 in
connection with the registration of Company Securities to be issued in a
Directed Offering; and (b) any disclosure memoranda or amendments thereto to be
used in connection with a Directed Offering of Company Securities exempt from
registration under the Securities Act.
SECTION 3.03. CUSTOMARY AGREEMENTS. ORBCOMM and the
Company hereby agree to enter into and deliver all customary agreements
(including underwriting or purchase agreements) as are reasonably requested of
the Company or ORBCOMM to expedite or facilitate any Directed Offering.
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SECTION 3.04. REGISTRATION STATEMENTS.
(a) In connection with the obligations of the
Company under Articles II and III in respect of any Directed Offering of
Company Securities registered under the Securities Act the Company hereby
agrees to:
(i) prepare and file with the Commission
a registration statement with respect to the Company
Securities on any form which may be utilized by the Company
and which shall permit the disposition of such Company
Securities in accordance with the terms of the Directed
Offering and use its reasonable best efforts to cause such
registration statement to become effective as directed by
ORBCOMM;
(ii) prepare and file with the Commission
such amendments and supplements to such registration statement
and the prospectus used in connection therewith as may be
necessary to maintain the effectiveness of such registration
statement for the period required for the disposition of the
Company Securities in accordance with the terms of the
Directed Offering and to comply with the provisions of the
Securities Act with respect to the sale or other disposition
of the Company Securities covered by such registration
statement;
(iii) for a reasonable period prior to the
filing of such registration statement, and throughout the
period required for the disposition of the Company Securities
in accordance with the terms of the Directed Offering, and on
reasonable notice, make available for inspection by ORBCOMM,
any underwriter participating in any distribution pursuant to
the registration statement, and any attorney or accountant
designated by ORBCOMM, at a reasonable time and in a
reasonable manner, financial and other information and the
books and records of the Company, and cause the officers,
directors and employees of the Company to respond to such
inquiries and supply information reasonably requested by
ORBCOMM and any such underwriter, attorney or accountant in
the course of conducting a reasonable investigation within the
meaning of Section 11 of the Securities Act;
(iv) promptly notify ORBCOMM, and the
managing underwriter or underwriters, if any, and confirm such
advice in writing: (A) when such registration statement or
supplement or post-effective amendment has been declared or
becomes effective; (B) of the issuance by the Commission of
any stop order suspending the effectiveness of such
registration statement or the initiation or threatening of any
proceedings for such purpose; (C) of the receipt by the
Company of any notification with respect to the suspension of
the qualification of the Company Securities offered in any
jurisdiction or the initiation or threatening of any
proceeding for such purpose; or (D) of the happening of any
event during the period such registration statement is
effective which makes any statement made in such registration
statement or the related prospectus untrue in any material
respect or which requires the making of any changes in such
registration statement or prospectus in order to make the
statements therein not misleading;
(v) on the occurrence of any event
contemplated by Section 3.04(a)(iv)(D) hereof, use its
reasonable best efforts to prepare a supplement or
post-effective amendment to such registration statement or the
related prospectus or any
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document incorporated therein by reference or file any other
required document so that, as thereafter delivered to the
purchasers of the Company Securities, such prospectus will not
contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements
therein, in the light of the circumstances under which they
were made, not misleading;
(vi) use its reasonable best efforts to
obtain promptly the withdrawal of any order suspending the
effectiveness of such registration statement or any
post-effective amendment thereto;
(vii) provide copies of any prospectus,
any amendment to the registration statement or amendment or
supplement to any prospectus or any document which is to be
incorporated by reference into such registration statement or
any prospectus after initial filing of such registration
statement, a reasonable time prior to the filing of any such
prospectus, amendment, supplement or document, to ORBCOMM and
the underwriters, if any, and make the representatives of the
Company available to ORBCOMM and the underwriters, if any, for
discussion of any such document;
(viii) use its reasonable best efforts to:
(A) register or qualify the Company Securities to be included
in such registration statement under such securities laws or
blue sky laws of such jurisdictions as ORBCOMM and each
placement or sales agent, if any, therefor and each
underwriter, if any, thereof shall reasonably request in
writing on a timely basis; and (B) take any and all other
actions as may be reasonably necessary or advisable to enable
each such holder, agent, if any, and each underwriter, if any,
to consummate the disposition in such jurisdictions of the
Company Securities; and
(ix) use its reasonable best efforts to
obtain the consent or approval of each governmental agency or
authority, whether federal, state or local which may be
required to effect the registration or the offering or sale in
connection therewith of the Company Securities;
(b) ORBCOMM hereby agrees to provide the Company
with all assistance reasonably necessary for the Company to comply with its
obligations under Section 3.04(a).
ARTICLE IV.
ORBCOMM'S EXCHANGE RIGHTS WITH RESPECT
TO OPTIONS AND STOCK RIGHTS
SECTION 4.01. GENERAL EXCHANGE RIGHTS OF ORBCOMM. Upon
exercise of any Options or exercise or conversion of Stock Rights by the holder
thereof (the "HOLDER") and notice by ORBCOMM of such exercise or conversion
pursuant to Section 4.02(c), the Company shall have the obligation to sell to
ORBCOMM, in accordance with Section 4.03 hereof, the number of registered,
fully paid and non-assessable shares of Common Stock such Holder is entitled to
have delivered on exercise of such Options or Stock Rights (the "UNDERLYING
SHARES OF COMMON STOCK"). In exchange for each Underlying Share of Common
Stock delivered by the Company pursuant to this Article IV, ORBCOMM shall
create, issue and deliver to the Company, in accordance with Section 4.03
hereof, fully paid and non-assessable Partnership Units, subject to adjustment
as provided in Article V. The number of shares of Common Stock to be delivered
by the Company pursuant to this Article IV in exchange for one such
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Partnership Unit is hereinafter referred to as the "EXCHANGE RATE." At any time
and from time to time after the IPO Date, ORBCOMM shall have the right to issue
additional Options and Stock Rights pursuant to any ORBCOMM Benefit Plan.
SECTION 4.02. INFORMATION AND NOTICE OBLIGATIONS OF
ORBCOMM; SHARE RESERVATION OBLIGATIONS OF THE COMPANY.
(a) ORBCOMM has heretofore delivered to the
Company a copy of the Equity Plan and agrees to provide the Company with copies
of any other ORBCOMM Benefit Plan that permits ORBCOMM to offer Options or
Stock Rights. ORBCOMM hereby agrees to provide the Company with a schedule no
later than the 20th Business Day following the last day of each calendar
quarter listing: (i) all authorized and outstanding Options and Stock Rights
under ORBCOMM Benefit Plans; and (ii) the total number of Underlying Shares of
Common Stock issuable in respect of all authorized and outstanding Options and
Class Rights (the "AUTHORIZED SHARES") as of the last Business Day of such
calendar quarter (the "BENEFIT PLAN SCHEDULE"); provided that: (i) ORBCOMM may
provide a Benefit Plan Schedule at any time and; (ii) ORBCOMM shall not be
required to provide a Benefit Plan Schedule if there has been no change from
the most recently provided Benefit Plan Schedule.
(b) The Company hereby agrees to authorize and
reserve for issuance pursuant to this Agreement a number of shares of Common
Stock that is not less than the number of Authorized Shares; and the Company
agrees that, if a Benefit Plan Schedule lists a greater number of Authorized
Shares than the number of shares of Common Stock the Company has authorized and
reserved for issuance pursuant to this Agreement, the Company shall immediately
act to increase the number of shares of Common Stock authorized and reserved
for issuance pursuant to this Agreement to a number of shares of Common Stock
that is not less than the number of Authorized Shares listed in such Benefit
Plan Schedule.
(c) In order for the Company to have the
obligation to sell Underlying Shares of Common Stock to ORBCOMM on a Holder's
exercise or conversion of a Option or a Stock Right, ORBCOMM must provide the
Company with written notice (an "EXCHANGE NOTICE") of: (i) such Holder's
exercise of, or intention to exercise, Options or Stock Rights; (ii) the number
of Underlying Shares of Common Stock to be delivered by the Company as a result
of such exercise; and (iii) the person in whose name such Underlying Shares of
Common Stock are to be registered.
SECTION 4.03. PROCEDURES FOR DELIVERY BY THE COMPANY AND
ORBCOMM. Each of the Company and ORBCOMM shall have the obligation to deliver
the Underlying Shares of Common Stock and the Partnership Units and the
respective purchase prices therefor in accordance with Article V of the Equity
Plan.
SECTION 4.04. COMPANY'S OBLIGATION TO MAINTAIN EFFECTIVE
REGISTRATION STATEMENT. The Company hereby agrees to prepare and file with
the Commission, a registration statement with respect to the Underlying Shares
of Common Stock to be delivered pursuant to this Article IV on any form which
may be used by the Company and will permit the delivery of registered
Underlying Shares of Common Stock in accordance with this Article IV and to use
its best efforts to cause such registration statement or statements to become
effective as of the IPO Date or as soon as practicable thereafter; and the
Company hereby agrees to use its best efforts to prepare and file with the
Commission such amendments and supplements to such registration statement, or
to file and seek the effectiveness of additional registration statements, if
any, as may be necessary to maintain an effective
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registration statement that will permit the delivery of registered Underlying
Shares of Common Stock in accordance with this Article IV at any time after the
IPO Date.
SECTION 4.05. COOPERATION IN PREPARATION OF REGISTRATION
STATEMENTS; CUSTOMARY AGREEMENTS. ORBCOMM and the Company hereby agree to
cooperate in the preparation of any registration statement required to be filed
with the Commission pursuant to Section 4.04. ORBCOMM and the Company hereby
agree to enter into and deliver all customary Agreements as are reasonably
requested of the Company or ORBCOMM to expedite or facilitate the issuance of
registered Underlying Shares of Common Stock in accordance with this Article
IV.
SECTION 4.06. EXPENSES. ORBCOMM shall promptly pay, or
reimburse the Company for the payment of, all expenses incurred by the Company
in connection with the transactions contemplated by this Article IV.
ARTICLE V.
ADJUSTMENT OF EXCHANGE RATE
The Exchange Rate shall be adjusted from time to time as
follows:
(a) In case the Company shall pay or make a
dividend or other distribution on any class of capital stock of the Company in
Common Stock, the Exchange Rate in effect at the opening of business on the day
following the date fixed for the determination of holders of the Company's
Common Stock entitled to receive such dividend or other distribution shall be
adjusted by multiplying such Exchange Rate by a fraction the numerator of which
shall be the sum of the number of shares of Common Stock outstanding at the
close of business on the date fixed for such determination plus the total
number of shares constituting such dividend or other distribution and the
denominator of which shall be such number of shares of Common Stock outstanding
at the close of business on the date fixed for such determination. The
adjusted Exchange Rate shall be effective immediately after the opening of
business on the day following the date fixed for such determination. For the
purposes of this subsection (a), the number of shares of Common Stock at any
time outstanding shall not include shares held in the treasury of the Company.
(b) In case ORBCOMM shall pay or make a dividend
or other distribution on any class of ORBCOMM Units in Partnership Units, the
Exchange Rate in effect at the opening of business on the day following the
date fixed for the termination of ORBCOMM partners entitled to receive such
dividend or other distribution shall be adjusted by multiplying such Exchange
Rate by a fraction the denominator of which shall be the sum of the number of
Partnership Units outstanding at the close of business on the date fixed for
such determination plus the total number of Partnership Units constituting such
dividend or other distribution and the numerator of which shall be such number
o Partnership Units outstanding at the close of business on the date fixed for
such determination. The adjusted Exchange Rate shall be effective immediately
after the opening of business on the day following the date fixed for such
determination. For the purposes of this subsection (b), the number of
Partnership Units at any time outstanding shall not include shares held in the
treasury of ORBCOMM.
(c) In case the Company shall issue rights or
warrants to all holders of any class of Common Stock entitling them to
subscribe for, purchase or acquire shares of Common Stock at a price per share
less than the current market price per share (determined as provided in
subsection (k) below) of the Common Stock on the date fixed for the
determination of holders of the Company's
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Common Stock entitled to receive such rights or warrants, the Exchange Rate in
effect at the opening of business on the day following the date fixed for such
determination shall be adjusted by multiplying such Exchange Rate by a fraction
the numerator of which shall be the sum of the number of shares of Common Stock
outstanding at the close of business on the date fixed for such determination
plus the number of shares of Common Stock so offered for subscription, purchase
or acquisition, and the denominator of which shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock that could be purchased
at the current market price with the aggregate offering price of the total
number of shares of Common Stock so offered for subscription, purchase or
acquisition would purchase at such current market price. The adjusted Exchange
Rate shall be effective immediately after the opening of business on the day
following the date fixed for such determination. For the purposes of this
subsection (c), the number of shares of Common Stock at any time outstanding
shall not include shares held in the treasury of the Company. The Company
agrees not to pay any dividend or make any distribution on shares of Common
Stock held in its treasury.
(d) In case ORBCOMM shall issue rights or
warrants to all holders of Partnership Units entitling them to subscribe for,
purchase or acquire Partnership Units at a price per Partnership Unit less than
the current market price per share (determined as provided in subsection (k)
below) of the Common Stock multiplied by the Exchange Rate on the date fixed
for the determination of Partnership Unit holders entitled to receive such
rights or warrants, the Exchange Rate in effect at the opening of business on
the day following the date fixed for such determination shall be adjusted by
multiplying such Exchange Rate by a fraction the denominator of which shall be
the sum of the number of Partnership Units outstanding at the close of business
on the date fixed for such determination plus the number of Partnership Units
so offered for subscription, purchase or acquisition, and the numerator of
which shall be the number of Partnership Units outstanding at the close of
business on the date fixed for such determination plus the number of
Partnership Units that could be purchased at the current market price with the
aggregate offering price of the total number of Partnership Units so offered
for subscription, purchase of acquisition would purchase at a price per
Partnership Unit equal to the market price per Share of Common Stock multiplied
by the Exchange Rate. The adjusted Exchange Rate shall be effective
immediately after the opening of business on the day following the date fixed
for such determination. For the purposes of this subsection (d), the number of
Partnership Units at any time outstanding shall not include shares held in the
treasury of ORBCOMM. ORBCOMM agrees not to pay any dividend or make any
distribution on Partnership Units held in its treasury.
(e) In case the outstanding shares of Common
Stock shall be subdivided into a greater or smaller number of shares of Common
Stock, the Exchange Rate in effect at the opening of business on the day
following the day on which such subdivision becomes effective shall be
proportionately adjusted. The adjusted Exchange Rate shall be effective
immediately after the opening of business on the day following the day on which
such subdivision or combination becomes effective.
(f) In case the outstanding Partnership Units
shall be subdivided into a greater or smaller number of Partnership Units, the
Exchange Rate in effect at the opening of business on the day following the day
on which such subdivision becomes effective shall be proportionately adjusted.
The adjusted Exchange Rate shall be effective immediately after the opening
of business on the day following the day on which such subdivision or
combination becomes effective.
(g) In case the Company shall, by dividend or
otherwise, distribute to all holders of its Common Stock evidences of its
indebtedness or assets (including securities but excluding: (i) any rights or
warrants referred to in subsection (c) above; (ii) any dividend or distribution
referred to
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in subsection (a) above; and (iii) any dividend or distribution paid in cash
out of current or accumulated earnings), then in each case, the Exchange Rate
in effect at the opening of business on the day following the date fixed for
the determination of holders of Common Stock entitled to receive such
distribution shall be adjusted by multiplying such Exchange Rate by a fraction
of which the numerator shall be the current market price per share (determined
as provided in subsection (k) below) of the Common Stock on such date of
determination (or, if earlier, on the date on which the Common Stock goes
"ex-dividend" in respect of such distribution) less the then Fair Market Value
as determined by the Company Board (whose determination shall be conclusive) of
the portion of the assets or evidences of indebtedness so distributed (and for
which an adjustment to the Exchange Rate has not previously been made pursuant
to the terms of this Article V) applicable to one share of Common Stock, and
the denominator shall be such current market price per share of the Common
Stock. The adjusted Exchange Rate shall be effective immediately after the
opening of business on the day following such date of determination.
(h) In case ORBCOMM shall, by dividend or
otherwise, distribute to all holders of its Partnership Units evidence of its
indebtedness or assets (including securities but excluding: (i) any rights or
warrants referred to in subsection (d) above; (ii) any dividend of distribution
referred to in subsection (b) above; and (iii) any dividend or distribution
paid in cash out of current or accumulated earnings), then in each case, the
Exchange Rate in effect at the opening of business on the day following the
date fixed for the determination of holders of Partnership Units entitled to
receive such distribution shall be adjusted by multiplying such Exchange Rate
by a fraction of which the denominator shall be the current market price per
share (determined as provided in subsection (k) below) of the Common Stock on
such date of determination multiplied by the Exchange Rate (or, if earlier, on
the date on which the Partnership Units go "ex-dividend" in respect of such
distribution) less the then Fair Market Value as determined by the ORBCOMM
Committee (whose determination shall be conclusive) of the portion of the
assets or evidences of indebtedness so distributed (and for which an adjustment
to the Exchange Rate has not previously been made pursuant to the terms of this
Article V) applicable to one Partnership Unit, and the numerator shall be such
current market price per share of the Common Stock multiplied by the Exchange
Rate. The adjusted Exchange Rate shall be effective immediately after the
opening of business on the day following such date of determination.
(i) The reclassification or change of Common
Stock into securities including securities other than Common Stock (other than
any reclassification on a consolidation or merger to which subsection (n) below
applies) shall be deemed to involve: (A) a distribution of such securities
other than Common Stock to all holders of Common Stock (and the effective date
of such reclassification shall be deemed to be "the date fixed for the
determination of holders of Common Stock entitled to receive such distribution"
within the meaning of subsection (g) above); and (B) a subdivision or
combination, as the case may be, of the number of shares of Common Stock
outstanding immediately prior to such reclassification into the number of
shares of Common Stock outstanding immediately thereafter (and the effective
date of such reclassification shall be deemed to be "the day on which such
subdivision becomes effective" or "the day on which such combination becomes
effective," as the case may be, and "the day on which such subdivision or
combination becomes effective" within the meaning of subsection (e) above).
(j) The reclassification or change of Partnership
Units into interests or securities including ORBCOMM Units other than
Partnership Units shall be deemed to involve: (A) a distribution of such
interests or securities other than Partnership Units to all holders of
Partnership Units (and the effective date of such reclassification shall be
deemed to be "the date fixed for the determination of holders of Partnership
Units entitled to receive such distribution" within the meaning of subsection
(h) above); and (B) a subdivision or combination, as the case may be, of the
number of shares of Partnership
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Units outstanding immediately prior to such reclassification into the number of
Partnership Units outstanding immediately thereafter (and the effective date of
such reclassification shall be deemed to be "the day on which such subdivision
becomes effective" or "the day on which such subdivision becomes effective," as
the case may be, and "the day on which such subdivision or combination become
effective" within the meaning of subsection (f) above).
(k) For the purpose of any computation under
subsection (c), (d), (g) or (h) above, the current market price per share of
Common Stock on any day shall be deemed to be the average of the Closing Prices
of the Common Stock for the 20 consecutive Trading Days selected by the Company
Board commencing no more than 30 Trading Days before and ending no later than
the second Trading Day before the day in question; provided, that, in the case
of subsection (3), if the period between the date of the public announcement of
the dividend or distribution and the date for the determination of holders of
Common Stock entitled to receive such dividend or distribution (or, if earlier,
the date on which the Common Stock goes "ex-dividend" in respect of such
dividend or distribution) shall be less than 20 Trading Days, the period shall
be such lesser number of Trading Days but, in any event, not less than five
Trading Days.
(l) No adjustment in the Exchange Rate shall be
required unless such adjustment would require an increase or decrease of at
least 1% in such rate; provided, however, that any adjustments which by reason
of this clause (l) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment and provided, further, that
adjustments shall be required and made in accordance with the provisions of
this Article V (other than this clause (l)) not later than such time as may be
required in order to preserve the tax free nature of a distribution to the
holders of shares of Common Stock. Anything in this clause (l) to the contrary
notwithstanding, the Company shall be entitled, at its option, to make such
increases in the Exchange Rate, in addition to those required by this Article
V, as it in its discretion shall determine to be advisable in order that any
stock dividend, subdivision or combination of shares, distribution of capital
stock or rights or warrants to purchase stock or securities, or distribution of
evidences of indebtedness or assets (other than cash dividends or distributions
paid from current or accumulated earnings) or other event shall be a tax free
distribution to holders for United States federal income tax purposes. All
calculations under this clause (l) shall be made to the nearest cent.
(m) ORBCOMM shall notify the Company of any event
requiring an adjustment in the Exchange Rate pursuant to subsection (b), (d),
(f), (h) or (j), and whenever the Exchange Rate is adjusted as herein provided,
the Company shall notify ORBCOMM which notice shall include the Exchange Rate
after such adjustment and shall set forth a brief statement of the facts
requiring such adjustment and the manner of computing the same.
(n) In case of any consolidation of the Company
with, or merger of the Company into, any other entity, any merger of another
entity into the Company (other than a merger which does not result in any
reclassification, conversion, exchange or cancellation of outstanding shares of
Common Stock) or any sale or transfer of all or substantially all of the assets
of the Company, ORBCOMM shall have the right thereafter to exchange Partnership
Units only into the kind and amount of securities, cash and other property
receivable on such consolidation, merger, sale or transfer by a holder of the
number of shares of Common Stock into which such Partnership Units might have
been exchanged immediately prior to such consolidation, merger, sale or
transfer, assuming such holder of Common Stock is not the entity with which the
Company consolidated or into which the Company merged or which merged into the
Company or to which such sale or transfer was made, as the case may be (a
"constituent person"), or an affiliate of a constituent person and such holder
shall have failed to
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exercise its rights of election, if any, as to the kind or amount of
securities, cash or other property receivable on such consolidation, merger,
sale or transfer provided that if the kind or amount of securities, cash and
other property receivable on such consolidation, merger, sale or transfer is
not the same for each share of Common Stock held immediately prior to such
consolidation, merger, sale or transfer by other than a constituent entity or
an affiliate thereof and in respect of which such rights of election shall not
have been exercised ("non-electing share"), then for the purpose of this
subsection (n) the kind and amount of securities, cash and other property
receivable on such consolidation, merger, sale or transfer by each non-electing
share shall be deemed to be the kind and amount so receivable per share by a
plurality of the non-electing shares. If necessary, appropriate adjustment
shall be made in the application of the provisions set forth herein with
respect to the rights and interests thereafter of ORBCOMM, so that the
provisions set forth herein shall thereafter be applicable, as nearly as may
reasonably be practicable, to any shares of stock or other securities or
property thereafter deliverable on the exchange of the Partnership Units. Any
adjustment under this subsection (n) shall be evidenced by a certificate of the
Company and a notice of such adjustment filed and mailed in the manner set
forth in subsection (m). The above provisions shall similarly apply to
successive consolidations, mergers, sales or transfers.
In case: (x) the Company shall take any action that would
result in an adjustment to the Exchange Rate; or (y) of any consolidation or
merger to which the Company is a party and for which approval of any holders of
the Company' Common Stock is required, or of the sale or transfer of all or
substantially all of the assets of the Company; or (z) of the voluntary or
involuntary dissolution, liquidation or winding-up of the Company; then the
Company shall provide to ORBCOMM, at least 15 days prior to the applicable
record or effective date hereinafter specified, a notice stating: (A) the date
on which a record is to be taken for the purpose of such actions, or, if the
record is not to be taken, the date as of which the holders of Common Stock, as
the case may be, of record are to be determined; or (B) the date on which such
adjustment, consolidation, merger, sale, transfer, dissolution, liquidation or
winding-up is expected to become effective, and the date as of which it is
expected that holders of Common Stock of record shall be entitled to exchange
their shares of Common Stock for securities, cash or other property deliverable
on such consolidation, merger, sale, transfer, dissolution, liquidation or
winding-up. Neither the failure to give such notice nor any defect therein
shall affect the legality or validity of the proceedings described in clauses
(x) through (z) above.
ARTICLE VI.
RESTRICTIONS ON TRANSFER
The ORBCOMM Units sold or exchanged hereunder are subject to
the restrictions on Transfer (as hereinafter defined) contained in the
Partnership Agreement. In addition, such ORBCOMM Units will not be registered
under any United States federal or state securities laws and may not be
Transferred unless such laws do not apply or unless such registration is
otherwise not required. As used herein, "Transfer" means to sell, transfer,
assign, pledge or otherwise encumber or dispose of (whether with or without
consideration and whether voluntarily or involuntarily or by operation of law),
directly or indirectly.
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ARTICLE VII.
INDEMNIFICATION
SECTION 7.01. INDEMNIFICATION BY ORBCOMM. ORBCOMM will
indemnify and hold harmless the Company and each of its officers, directors and
employees (each an "indemnified party") against any losses, claims, damages or
liabilities to which such indemnified party may become subject, under the
Securities Act or otherwise, that directly or indirectly, arise out of or are
related to, the transactions contemplated by this Agreement, and will reimburse
such indemnified party for any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim, as such losses, damages, liabilities or expenses are incurred;
provided, however, that ORBCOMM shall not be liable in any such case to any
indemnified party to the extent that any such loss, claim, damage or liability
arises out of or is based on an intentional act or omission of the indemnified
party which was contrary to any written instruction or request of ORBCOMM or
which amounted to willful misconduct on the part of the indemnified party.
SECTION 7.02. PROCEEDINGS. Promptly after receipt by an
indemnified party of notice of the commencement of any action, suit or
proceeding as to which a claim in respect thereof is to be made against ORBCOMM
under Section 7.01, the indemnified party shall notify ORBCOMM in writing of
the commencement thereof, but the omission so to notify ORBCOMM shall not
relieve ORBCOMM from any liability that it may have to any indemnified party
otherwise than under such section unless ORBCOMM is materially prejudiced
thereby. In case any such action shall be brought against any indemnified party
and it shall notify ORBCOMM of the commencement thereof, ORBCOMM shall be
entitled to participate therein and, to the extent that it shall wish, to
assume the defense thereof, with counsel satisfactory to such indemnified party
(which shall not, except with the consent of the indemnified party, be counsel
to ORBCOMM), and, after notice from ORBCOMM to such indemnified party of its
election so to assume the defense thereof, ORBCOMM shall not be liable to such
indemnified party under such subsection for any legal expenses of other counsel
or any other expenses, in each case subsequently incurred by such indemnified
party, in connection with the defense thereof other than reasonable costs of
investigation. ORBCOMM shall not, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment: (a)
includes an unconditional release of the indemnified party from all liability
arising out of such action or claim; and (b) does not include a statement as to
or an admission of fault, culpability or a failure to act, by or on behalf of
any indemnified party. No indemnified party shall effect the settlement or
compromise of, or consent to the entry of any judgment with respect to, any
pending or threatened action or claim in respect of which indemnification or
contribution has been or may be sought hereunder without the prior written
consent of ORBCOMM.
SECTION 7.03. CONTRIBUTION. In order to provide for just
and equitable contribution in circumstances in which the indemnity agreement
provided for in Section 7.01 is for any reason held to be unenforceable
although applicable in accordance with its terms, ORBCOMM shall contribute to
the losses, liabilities, claims, damages and expenses of the type contemplated
by such indemnity agreement incurred by any indemnified party in such
proportion as shall be appropriate to reflect: (a) the relative benefits
received, directly or indirectly, by ORBCOMM on the one hand and the
indemnified party on the other hand, from the sale or exchange of the Company
Securities and the issuance and sale of the Partnership Units; and (b) the
relative fault of ORBCOMM on the one hand and the indemnified party on the
other, with respect to the acts or omissions that resulted in such loss,
liability, claim, damage or
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expense, or action in respect thereof, as well as any other relevant equitable
considerations. ORBCOMM and the Company agree that it would not be just and
equitable if contribution pursuant to this Section 7.03 were to be determined
by pro rata allocation or by any other method of allocation that does not take
into account the relevant equitable considerations. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from ORBCOMM if ORBCOMM was
not guilty of such fraudulent misrepresentation. The indemnity and
contribution obligations in this Article VI are solely obligations of ORBCOMM
and no recourse may be had thereunder against any member, director, officer,
employee or agent of ORBCOMM.
ARTICLE VIII.
MISCELLANEOUS PROVISIONS
SECTION 8.01. EFFECTIVENESS OF AGREEMENT. This Agreement
shall become effective only on the first date on which the Company purchases
Partnership Units from ORBCOMM.
SECTION 8.02. ACKNOWLEDGMENT. The Company hereby
acknowledges pursuant to the Equity Plan that shares of Common Stock are
available for purposes of the Equity Plan.
SECTION 8.03. SUCCESSORS AND ASSIGNS. This Agreement shall
inure to the benefit of and be binding on the successors and permitted assigns
of each of the parties; provided that this Agreement may not be assigned by the
Company without the written consent of ORBCOMM.
SECTION 8.04. NOTICES. All notices and other
communications provided for in this Agreement shall be in writing, shall be in
the English language and shall be sufficiently given if made: (a) by hand
delivery; (b) by telecopier; or (c) by reputable express courier service
(charges prepaid), if to the Company, at the following address:
ORBCOMM Corporation
c/o ORBCOMM Global, L.P.
2455 Horse Pen Road, Suite 100
Herndon, Virginia, 20171
Attention: Mary Ellen Seravalli, Esq.
Phone: (703) 406-5521
Telecopier: (703) 406-5933
or if to ORBCOMM, at the following address:
ORBCOMM Global, L.P.
2455 Horse Pen Road, Suite 100
Herndon, VA 20171
Attention: Mary Ellen Seravalli, Esq.
Phone: (703) 406-5521
Telecopier: (703) 406-5933
or at such other address as the Company or ORBCOMM shall have furnished in
writing one to the other. Such notice shall be deemed to have been given when
actually received.
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SECTION 8.05. ENTIRE AGREEMENT. This Agreement constitutes
the entire understanding of the parties hereto with respect to the subject
matter hereof and supersedes all prior understandings among such parties with
respect to such subject matter.
SECTION 8.06. GOVERNING LAW; SEVERABILITY. THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE DOMESTIC
LAWS OF THE STATE OF DELAWARE WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR
CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF DELAWARE OR ANY
OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY
JURISDICTION OTHER THAN THE STATE OF DELAWARE. If it shall be determined by a
court of competent jurisdiction that any provision or wording of this Agreement
shall be invalid or unenforceable under applicable law, such invalidity or
unenforceability shall not invalidate this entire Agreement. In that case,
this Agreement shall be construed so as to limit any term or provision so as to
make it enforceable or valid within the requirements of any applicable law,
and, in the event such term or provision cannot be so limited, this Agreement
shall be construed to omit such invalid or unenforceable provisions.
SECTION 8.07. JURISDICTION AND SERVICE OF PROCESS. Any
suit, action or proceeding against any party with respect to this Agreement may
be brought in a court of the United States sitting in the State of Delaware or,
if jurisdiction is lacking in such a court, in a court of record in the State
of Delaware, and each party hereby irrevocably waives, to the fullest extent
permitted by law, any objection that it may have, whether now or in the future,
to the laying of venue in, or to the jurisdiction of, any and each of such
courts for the purpose of any such suit, action, proceeding or judgment and
further waives any claim that any such suit, action, proceeding or judgment has
been brought in an inconvenient forum, and the party hereby submits to such
jurisdiction. Each party hereto hereby agrees that service of all writs,
process and summonses in any such suit, action or proceeding brought in the
State of Delaware may be made on the process agent appointed by the Company or
such alternate process agent in the United States designated with respect to
the party in a writing delivered to the other party (the "PROCESS AGENT") and
each of the parties hereto hereby irrevocably appoints the Process Agent in its
name, place and stead to receive and forward such service of any and all such
writs, process and summonses and agrees that the failure of the Process Agent
to give any notice of any such service of process to such party shall not
impair or affect the validity of such service or of any judgment based thereon.
If the Process Agent is no longer able to so act for any reason whatsoever, the
party agrees to appoint a substitute process agent, which substitute process
agent shall thereafter be deemed to be the Process Agent hereunder, and to give
notice of such appointment to the other party.
SECTION 8.08. AMENDMENTS TO THE AGREEMENT. This Agreement
may not be changed or amended or the observance of any provisions waived
without the written consent of each of the Company and ORBCOMM.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
ORBCOMM CORPORATION
By:
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Name: Scott L. Webster
Title: President and Chief Executive Officer
ORBCOMM GLOBAL, L.P.
By:
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Name: Scott L. Webster
Title: Chief Executive Officer
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