NEITHER THIS WARRANT NOR ANY OF THE SECURITIES ISSUABLE UPON EXERCISE HEREOF
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
OR ANY STATE SECURITIES LAW. THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND
THE SECURITIES ISSUABLE UPON EXERCISE HEREOF MAY NOT BE TRANSFERRED, SOLD,
ASSIGNED, EXCHANGED, MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF
OR ENCUMBERED WITHOUT COMPLIANCE WITH THE PROVISIONS OF, AND ARE OTHERWISE
RESTRICTED BY THE PROVISIONS OF, THE ACT, THE RULES AND REGULATIONS THEREUNDER
AND THIS WARRANT.

Warrant No. 1

WARRANT

TO PURCHASE 626,002 SHARES OF COMMON STOCK

(SUBJECT TO ADJUSTMENT)

OF

SKYTERRA COMMUNICATIONS, INC.

THIS IS TO CERTIFY THAT BOEING SATELLITE SYSTEMS INC. (“Boeing”), or its
registered assigns, is entitled, at any time prior to the Expiration Date (such
term, and certain other capitalized terms used herein being hereinafter
defined), to purchase from SKYTERRA COMMUNICATIONS, INC., a Delaware corporation
(the “Company”), 626,002 shares of Voting Common Stock of the Company at a
purchase price of $10.00 per share (the initial “Exercise Price”). The amount
and kind of securities obtainable pursuant to the rights granted hereunder and
the Exercise Price are subject to adjustment pursuant to Section 4 hereof.

1.

DEFINITIONS

As used in this Warrant, the following terms have the respective meanings set
forth below:

“Additional Construction Deferral” shall have the meaning given to such term in
Contract #MSV-ATC-01, dated as of January 9, 2006, between Boeing and the
Company, as amended through the date hereof.

“Affiliate” of any Person shall mean any other Person which directly or
indirectly through one or more intermediaries controls, or is controlled by, or
is under common control with such Person. The term “control” (including the
terms “controlled by” and “under common control with”) as used with respect to
any Person shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise.

 

 

 

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“Appraised Value” per share of Common Stock as of a date specified herein shall
mean the value of such a share as of such date as determined by an investment
bank of nationally recognized standing selected by the Holder and reasonably
acceptable to the Company. If the investment bank selected by the Holder is not
reasonably acceptable to the Company, and the Company and the Holder cannot
agree on a mutually acceptable investment bank, then the Company and the Holder
shall each choose one such investment bank and the respective chosen firms shall
jointly select a third investment bank, which shall make the determination. The
Company shall pay the costs and fees of each such investment bank (including any
such investment bank selected by the Holder), and the decision of the investment
bank making such determination of Appraised Value shall be final and binding on
the Company and all affected holders of Warrants or Warrant Stock. Such
Appraised Value shall be determined as a pro rata portion of the value of the
Company taken as a whole, based on the higher of (A) the value derived from a
hypothetical sale of the entire Company as a going concern by a willing seller
to a willing buyer (neither acting under any compulsion) and (B) the liquidation
value of the entire Company. No discount shall be applied on account of (i) any
Warrants or Warrant Stock representing a minority interest, (ii) any lack of
liquidity of the Common Stock or the Warrant, (iii) the fact that the Warrants
or Warrant Stock may constitute “restricted securities” for securities law
purposes, (iv) the existence of any call option or (v) any other grounds.

“Boeing” shall have meaning set forth in the Preamble.

“Business Day” shall mean any day that is not a Saturday or Sunday or a day on
which banks are required or permitted to be closed in the State of New York.

“Commission” shall mean the Securities and Exchange Commission or any other
federal agency then administering the Securities Act and other federal
securities laws.

“Commission Reports” shall mean the Company’s reports filed with the Commission
pursuant to Section 13 of the Exchange Act since December 31, 2007, and the
Company’s registration statements filed with the Commission pursuant to the
Securities Act since December 31, 2007.

“Common Stock” shall mean the Voting Common Stock or the Non-Voting Common
Stock, as constituted on the Original Issue Date, and any capital stock into
which such Common Stock may thereafter be changed, and shall also include (i)
capital stock of the Company of any other class (regardless of how denominated)
issued to the holders of shares of any Common Stock upon any reclassification
thereof which is also not preferred as to dividends or liquidation over any
other class of stock of the Company and which is not subject to redemption, and
(ii) shares of common stock of any successor or acquiring corporation received
by or distributed to the holders of Common Stock of the Company in the
circumstances contemplated by Section 4.3 hereof.

“Company” shall have the meaning set forth in the Preamble.

“Current Market Price” shall mean as of any specified date the average of the
daily market price of one share of Voting Common Stock for the shorter of (x)
the twenty (20) consecutive Business Days immediately preceding such date or (y)
the period commencing on

 

 

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the Business Day next following the first public announcement by the Company of
any event giving rise to an adjustment of the Exercise Price pursuant to Section
5 below and ending on such date. The “daily market price” of one share of Voting
Common Stock for each such Business Day shall be: (i) if the Voting Common Stock
is then listed on a national securities exchange, the last sale price of one
share of Voting Common Stock, regular way, on such day on the principal stock
exchange or market system on which such Voting Common Stock is then listed or
admitted to trading, or, if no such sale takes place on such day, the average of
the closing bid and asked prices for one share of Voting Common Stock on such
day as reported on such stock exchange or market system, or (ii) if the Voting
Common Stock is not then listed or admitted to trading on any national
securities exchange but is traded over-the-counter, the average of the closing
bid and asked prices for one share of Voting Common Stock as reported on the
Electronic Bulletin Board or in the National Daily Quotation Sheets, as
applicable.

“Designated Office” shall have the meaning set forth in Section 10 hereof.

“Encumbrance” shall mean any mortgage, pledge, hypothecation, claim, charge,
security interest, encumbrance, adverse claim (within the meaning of Section
8-102 of the New York Uniform Commercial Code), option, lien, put or call right,
right of first offer or refusal, proxy, voting right or other restrictions or
limitations of any nature whatsoever in respect of any property or asset,
whether or not filed, recorded or otherwise perfected under applicable Law.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission thereunder, all as the same shall be
in effect from time to time.

“Excluded Stock” shall have the meaning set forth in Section 4.5(a) hereof.

“Exercise Date” shall have the meaning set forth in Section 2.1 hereof.

“Exercise Notice” shall have the meaning set forth in Section 2.1 hereof.

“Exercise Price” shall have the meaning set forth in the Preamble.

“Expiration Date” shall mean August 18, 2018.

“Fair Value” per share of Common Stock as of any specified date shall mean (A)
if the Common Stock is publicly traded on such date, the Current Market Price
per share, or (B) if the Common Stock is not publicly traded on such date, (1)
the fair market value per share of Common Stock as determined in good faith by
the Board of Directors of the Company and set forth in a written notice to the
Holder or (2) if the Holder objects in writing to such price as determined by
the Board of Directors within thirty (30) days after receiving notice of same,
the Appraised Value per share as of such date. For the avoidance of doubt and
notwithstanding the foregoing, the Fair Value per share of Voting Common Stock
and Non-Voting Common Stock shall, at all times, be deemed to be the same. Fair
Value with respect to property, services or other consideration shall be
calculated in a similar manner.

 

 

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“FINRA” shall mean the Financial Industry Regulatory Authority, Inc. or any
successor corporation thereto.

“GAAP” shall mean generally accepted accounting principles in the United States
of America, as from time to time in effect.

“Governmental Authority” shall mean any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.

“Harbinger” shall mean, collectively, Master Fund, Special Fund, Harbinger
Capital Partners Fund I, L.P. and Harbinger Co-Investment Fund, L.P.

“Holder” shall mean (a) with respect to this Warrant, the Person in whose name
the Warrant set forth herein is registered on the books of the Company
maintained for such purpose, and (b) with respect to any other Warrant or shares
of Warrant Stock, the Person in whose name such Warrant or Warrant Stock is
registered on the books of the Company maintained for such purpose.

“July 2008 SPA” shall mean the Securities Purchase Agreement, dated as of July
24, 2008, among the Company, MSVLP, Mobile Satellite Ventures Finance Co.,
Master Fund and Special Fund.

“Law” shall mean any constitution, treaty, statute, law, ordinance, regulation,
rule, standard, code, rule of common law, order or other requirement or rule
enacted or promulgated by any Governmental Authority.

“Majority Warrant Holders”, with respect to a given determination, shall mean
the Holders of Warrants representing more than fifty percent (50%) of all Voting
Common Stock issuable upon exercise of all outstanding Warrants.

“Master Contribution Agreement” shall mean the Master Contribution and Support
Agreement, dated as of July 24, 2008, among the Company, MSVLP and Mobile
Satellite Ventures Subsidiary LLC, and Harbinger.

“Master Fund” shall mean Harbinger Capital Partners Master Fund I, Ltd.

“Material Adverse Effect” shall mean any events, facts, changes or circumstances
which would reasonably be expected to have a material adverse effect on the
business, assets, liabilities, properties, operations, prospects or condition
(financial or otherwise) of the Company and its Subsidiaries, taken as a whole.

“Monthly Drawdown” shall have the meaning set forth in Section 2.1 hereof.

“MSVLP” shall mean Mobile Satellite Ventures LP.

“Non-Voting Common Stock” shall mean the non-voting common stock, par value
$0.01 per share, of the Company.

 

 

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“Opinion of Counsel” shall mean a written opinion of outside counsel experienced
in Securities Act matters reasonably acceptable to the Company.

“Original Issue Date” shall mean August 18, 2008.

“Original Warrant” shall mean the Warrant issued by the Company to Boeing
Satellite Systems Inc. on the Original Issue Date to purchase 626,002 shares of
Voting Common Stock.

“Outstanding” shall mean, when used with reference to Common Stock, at any date
as of which the number of shares thereof is to be determined, all issued shares
of Common Stock, whether Voting Common Stock or Non-Voting Common Stock, as the
case may be, except shares then owned or held by or for the account of the
Company or any Subsidiary, and shall include all shares issuable in respect of
outstanding scrip or any certificates representing fractional interests in
shares of Common Stock.

“Person” shall mean any individual, sole proprietorship, partnership, limited
liability company, joint venture, trust, incorporated organization, association,
corporation, institution, public benefit corporation, entity or government
(whether federal, state, county, city, municipal or otherwise, including,
without limitation, any instrumentality, division, agency, body or department
thereof).

“Registration Rights Agreement” shall mean the Registration Rights Agreement
between Boeing and the Company dated as of the date hereof.

“Restricted Common Stock” shall mean shares of Common Stock which are, or which
upon their issuance on the exercise of this Warrant would be, evidenced by a
certificate bearing the restrictive legend set forth in Section 8.2(a) hereof.

“Rule 144” shall mean Rule 144 under the Securities Act.

“Securities Act” shall mean the Securities Act of 1933, as amended, and the
rules and regulations of the Commission thereunder, all as the same shall be in
effect at the time.

“Special Fund” shall mean Harbinger Capital Partners Special Situations Fund,
L.P.

“Subsidiary” shall mean any corporation, association or other business entity
(i) at least 50% of the outstanding voting securities of which are at the time
owned or controlled directly or indirectly by the Company; or (ii) with respect
to which the Company possesses, directly or indirectly, the power to direct or
cause the direction of the affairs or management of such person.

“Transfer” shall mean any disposition of any Warrant or Warrant Stock or of any
interest therein, which would constitute a “sale” thereof or a transfer of a
beneficial interest therein within the meaning of the Securities Act.

“Vested Warrant Shares” shall have the meaning set forth in Section 2.1 hereof.

“Voting Common Stock” shall mean the voting common stock, par value $0.01 per
share, of the Company.

 

 

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“Warrant Price” shall mean an amount equal to (i) the number of shares of Voting
Common Stock being purchased upon exercise of this Warrant pursuant to Section
2.1 hereof, multiplied by (ii) the Exercise Price as of the date of such
exercise.

“Warrants” shall mean the Original Warrant and all warrants issued upon
transfer, division or combination of, or in substitution for, such Original
Warrant. All Warrants shall at all times be identical as to terms and
conditions, except as to the number of shares of Voting Common Stock for which
they may be exercised and their date of issuance.

“Warrant Stock” generally shall mean the shares of Voting Common Stock issued,
issuable or both (as the context may require) upon the exercise of Warrants.

2.

EXERCISE OF WARRANT

 

2.1

Manner of Exercise.

(a)       An aggregate of 626,002 shares of Voting Common Stock issuable
pursuant to this Warrant shall become exercisable in direct proportion to the
Company’s drawdowns of the Additional Construction Deferral upon delivery by the
Company of a Vesting Notification Form appearing at the end of this Warrant as
Annex A. The Company shall deliver a Vesting Notification Form to Boeing and any
other Holder of this Warrant reasonably promptly following the end of any
calendar month in which it draws down the Additional Construction Deferral (a
“Monthly Drawdown”). The number of shares of Voting Common Stock issuable
pursuant to this Warrant (the “Vested Warrant Shares”) that shall become
exercisable upon delivery of a Vesting Notification Form shall be equal to the
626,002 shares of Voting Common Stock issuable pursuant to this Warrant
multiplied by the amount of the Monthly Drawdown divided by the aggregate amount
of the Additional Construction Deferral, rounded to the nearest whole number;
provided, that in no event shall the number of Vested Warrant Shares exceed
626,002 shares of Voting Common Stock. Holders of this Warrant may, from time to
time, exercise this Warrant, on any Business Day, for all or any part of the
aggregate number of Vested Warrant Shares (less any shares of Voting Common
Stock as to which this Warrant has previously been exercised) until 5:00 P.M.,
New York time, on the Expiration Date.

As an example of the foregoing paragraph to demonstrate the calculation referred
to therein, if, in a given month, the Company makes two draw-downs of $10
million each, or $20 million in the aggregate, of the Additional Construction
Deferral, the amount of which is $40 million in the aggregate, the Company would
be obligated to deliver a Vesting Notification Form to Boeing and any other
Holder of this Warrant reasonably promptly following the end of such month
stating that an aggregate of 313,001 shares had become exercisable as Vested
Warrant Shares, which number is equal to 626,002 shares of Voting Common Stock
multiplied by $20 million divided by $40 million.

(b)       If this Warrant is held by more than one Holder, shares of Voting
Common Stock shall become exercisable pursuant to this Warrant in accordance
with Section 2.1(a) pro rata among such Holders based on the number of shares of
Voting Common Stock attributable to each such Holder which are then issuable
pursuant to this Warrant.

 

 

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(c)       In order to exercise this Warrant, in whole or in part, a Holder shall
(i) deliver to the Company at its Designated Office a written notice of the
Holder’s election to exercise this Warrant (an “Exercise Notice”), which
Exercise Notice shall be irrevocable, together with this Warrant, and (ii) pay
to the Company the Warrant Price (the date on which both such delivery and
payment shall have first taken place being hereinafter sometimes referred to as
the “Exercise Date”). Such Exercise Notice shall be in the form of the
subscription form appearing at the end of this Warrant as Annex B, duly executed
by the Holder or its duly authorized agent or attorney.

(d)       Upon receipt by the Company of such Exercise Notice, Warrant and
payment, the Company shall, as promptly as practicable, and in any event within
five (5) Business Days thereafter, execute (or cause to be executed) and deliver
(or cause to be delivered) to the Holders a certificate or certificates
representing the aggregate number of full shares of Voting Common Stock issuable
upon such exercise, together with cash in lieu of any fraction of a share, as
hereafter provided. The stock certificate or certificates so delivered shall be,
to the extent possible, in such denomination or denominations as the exercising
Holder shall reasonably request in the Exercise Notice and shall be registered
in the name of the Holders or, subject to Section 8 below, such other name as
shall be designated in the Exercise Notice. This Warrant shall be deemed to have
been exercised and such certificate or certificates shall be deemed to have been
issued, and the Holder or any other Person so designated to be named therein
shall be deemed to have become a holder of record of such shares for all
purposes, as of the Exercise Date.

(e)       Payment of the Warrant Price shall be made at the option of the
exercising Holder by one or more of the following methods: (i) by delivery to
the Company of a certified or official bank check in the amount of such Warrant
Price payable to the order of the Company, or (ii) by instructing the Company to
withhold a number of shares of Warrant Stock then issuable upon exercise of this
Warrant with an aggregate Fair Value equal to such Warrant Price. In the event
of any withholding of Warrant Stock pursuant to clause (ii) above where the
number of shares whose Fair Value (as measured on the Exercise Date) is equal to
the Warrant Price is not a whole number, the number of shares withheld by the
Company shall be rounded up to the nearest whole share and the Company shall
make a cash payment to the Holder based on the incremental fraction of a share
being so withheld by the Company in an amount determined in accordance with
Section 2.3 hereof. Notwithstanding any provision herein to the contrary, the
Company shall not be required to register shares of Voting Common Stock in the
name of any Person who acquired this Warrant (or part hereof) or any shares of
Warrant Stock otherwise than in accordance with this Warrant.

(f)        If this Warrant shall have been exercised in part, the Company shall,
at the time of delivery of the certificate or certificates representing the
shares of Voting Common Stock being issued, deliver to the exercising Holder a
new Warrant evidencing the rights of such Holder to purchase the unpurchased
shares of Voting Common Stock called for by this Warrant. Such new Warrant shall
in all other respects be identical to this Warrant.

 

(g)

All Warrants delivered for exercise shall be canceled by the Company.

 

 

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2.2       Payment of Taxes. All shares of Warrant Stock issuable upon the
exercise of this Warrant pursuant to the terms hereof shall be validly issued,
fully paid and nonassessable, issued without violation of any preemptive or
similar rights of any stockholder of the Company and free and clear of all
Encumbrances (other than any created by actions of the Holders). The Company
shall pay all expenses in connection with, and all taxes and other governmental
charges that may be imposed with respect to, the issue or delivery thereof,
unless such tax or charge is imposed by law upon the Holders. The Company shall
not, however, be required to pay any tax or governmental charge which may be
payable in respect of any Transfer involved in the issue and delivery of shares
of Warrant Stock issuable upon exercise of this Warrant in a name other than
that of the Holder of the Warrants to be exercised, and no such issue or
delivery shall be made unless and until the Person requesting such issue has
paid to the Company the amount of any such tax, or has established to the
satisfaction of the Company that such tax has been paid. The Company shall not
be required to reimburse any Holder or any other Person for any income,
withholding, franchise, or similar taxes or governmental charges (whether
collected by withholding or otherwise and whether imposed on the gross amount of
any payment or otherwise) paid by the Company or imposed on such Holder with
respect to the exercise or issuance of the Warrant or issuance of any Warrant
Stock or on or with respect to any payments made on or with respect to the
Warrant or Warrant Stock.

 

2.3       Fractional Shares. The Company shall not be required to issue a
fractional share of Voting Common Stock upon exercise of any Warrant. As to any
fraction of a share that the Holder of one or more Warrants, the rights under
which are exercised in the same transaction, would otherwise be entitled to
purchase upon such exercise, the Company shall pay to such Holder an amount in
cash equal to such fraction multiplied by the Fair Value of one share of Voting
Common Stock on the Exercise Date.

2.4       Delivery of Shares or Cash. The Company shall deliver any shares of
Common Stock in accordance with Section 2.1(d) or cash pursuant to Section 2.3
required to be delivered by it to the Holder based on the Fair Value per share
of Common Stock. If the Holder objects in writing to a price determined by the
Board of Directors of the Company as the Fair Value per share of Common Stock,
thereby requiring the Company to obtain an Appraised Value per share of Common
Stock, whether before or after the date of delivery of cash or shares provided
for in the preceding sentence, then (i) if the Appraised Value is greater than
the Fair Value per share of Common Stock, then the Company shall pay to the
Holder the aggregate difference between the Appraised Value and the Fair Value
to which the Holder is entitled promptly following the date on which the
Appraised Value is determined, or (ii) if the Appraised Value is less than the
Fair Value per share of Common Stock, then the Holder shall reimburse the
Company for the aggregate difference between the Fair Value actually paid to it
and the Appraised Value to which the Holder is entitled promptly following the
date on which the Appraised Value per share of Common Stock is determined.

3.

TRANSFER, DIVISION AND COMBINATION

3.1       Transfer. Subject to compliance with Section 8 hereof, each transfer
of this Warrant and all rights hereunder, in whole or in part, shall be
registered on the books of the Company to be maintained for such purpose, upon
surrender of this Warrant at the Designated Office, together

 

 

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with a written assignment of this Warrant in the form of Annex C hereto duly
executed by a Holder or its agent or attorney and funds sufficient to pay any
transfer taxes described in Section 2.2 in connection with the making of such
transfer. Upon such surrender and delivery and, if required, such payment, the
Company shall, subject to Section 8, execute and deliver a new Warrant or
Warrants in the name of the assignee or assignees and in the denominations
specified in such instrument of assignment, and shall issue to the assignor a
new Warrant evidencing the portion of this Warrant not so assigned and this
Warrant shall promptly be cancelled. A Warrant, if properly assigned in
compliance with Section 8, may be exercised by the new Holder for the purchase
of shares of Voting Common Stock without having a new Warrant issued.

3.2       Division and Combination. Subject to compliance with the applicable
provisions of this Warrant including, without limitation, Section 8, this
Warrant may be divided or combined with other Warrants upon presentation hereof
at the Designated Office, together with a written notice specifying the names
and denominations in which new Warrants are to be issued, signed by the Holder
or its agent or attorney. Subject to compliance with the applicable provisions
of this Warrant as to any transfer which may be involved in such division or
combination, the Company shall execute and deliver a new Warrant or Warrants in
exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice.

3.3       Expenses. The Company shall prepare, issue and deliver at its own
expense any new Warrant or Warrants required to be issued under this Section 3
(other than pursuant to Section 2.2 and 3.1 hereof).

3.4       Maintenance of Books. The Company agrees to maintain, at the
Designated Office, books for the registration and transfer of the Warrants.

4.

ANTIDILUTION PROVISIONS

4.1       Upon Stock Dividends, Subdivisions or Splits. If, at any time after
the Original Issue Date, the number of shares of Common Stock outstanding is
increased by a stock dividend payable in shares of Common Stock or by a
subdivision or split-up of shares of Common Stock, then, following the record
date for the determination of holders of Common Stock entitled to receive such
stock dividend, or to be affected by such subdivision or split-up, (a) the
Exercise Price shall be decreased by multiplying the Exercise Price by a
fraction, the numerator of which is the number of shares of Common Stock
Outstanding immediately prior to such increase in Outstanding shares and the
denominator of which is the number of shares of Common Stock Outstanding
immediately after such increase in Outstanding shares, and (b) the number of
shares issuable upon exercise of the Warrant shall be proportionately increased
by multiplying the same by the inverse of such fraction. In no event shall the
Exercise Price be less than the par value per share of Common Stock.

4.2       Upon Combinations or Reverse Stock Splits. If, at any time after the
Original Issue Date, the number of shares of Common Stock Outstanding is
decreased by a combination or reverse stock split of the Outstanding shares of
Common Stock into a smaller number of shares of Common Stock, then, upon the
record date to determine shares affected by such combination or reverse stock
split, (a) the Exercise Price shall be increased by multiplying the Exercise
Price by a fraction, the numerator of which is the number of shares of Common
Stock Outstanding

 

 

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immediately prior to such decrease and the denominator of which is the number of
shares of Common Stock Outstanding immediately after such decrease in
Outstanding shares, and (b) the number of shares issuable upon exercise of the
Warrant shall be proportionately decreased by multiplying the same by the
inverse of such fraction.

4.3       Upon Reclassifications, Reorganizations, Consolidations or Mergers. In
the event of any capital reorganization of the Company, any reclassification of
the stock of the Company (other than a change in par value or from par value to
no par value or from no par value to par value or as a result of a stock
dividend or subdivision, split up or combination of shares), or any
consolidation or merger of the Company with or into another Person (where the
Company is not the surviving Person or where there is a change in or
distribution with respect to the Common Stock), each Warrant shall after such
reorganization, reclassification, consolidation, or merger be exercisable for
the kind and number of shares of stock or other securities or property of the
Company or of the successor Person resulting from such consolidation or
surviving such merger, if any, to which the holder of the number of shares of
Common Stock deliverable (immediately prior to the time of such reorganization,
reclassification, consolidation or merger) upon exercise of such Warrant would
have been entitled upon such reorganization, reclassification, consolidation or
merger. The provisions of this Section 4.3 shall similarly apply to successive
reorganizations, reclassifications, consolidations, or mergers. The Company
shall not effect any such reorganization, reclassification, consolidation or
merger unless, prior to the consummation thereof, the successor Person (if other
than the Company) resulting from such reorganization, reclassification,
consolidation or merger, shall assume, by written instrument, the obligation to
deliver to the Holders of the Warrant such shares of stock, securities or
assets, which, in accordance with the foregoing provisions, such Holders shall
be entitled to receive upon such conversion.

4.4       Upon Issuance of Common Stock. If the Company shall, at any time or
from time to time after the Original Issue Date, issue any shares of Common
Stock, options to purchase or rights to subscribe for shares of Common Stock,
securities by their terms convertible into or exchangeable for shares of Common
Stock, or options to purchase or rights to subscribe for such convertible or
exchangeable securities (other than Excluded Stock) for consideration per share
less than the Exercise Price in effect immediately prior to the issuance of such
Common Stock or securities, then the Exercise Price shall be lowered to a price
equal to the price obtained by multiplying:

(a)       the Exercise Price in effect immediately prior to the issuance of such
Common Stock, options, rights or securities by

(b)       a fraction of which (x) the numerator shall be the sum of (i) the
number of shares of Common Stock Outstanding on a fully-diluted basis
immediately prior to such issuance, and (ii) the number of additional shares of
Common Stock which the aggregate consideration for the number of shares of
Common Stock so offered would purchase at the Exercise Price in effect
immediately prior to such issuance, and (y) the denominator shall be the number
of shares of Common Stock Outstanding on a fully-diluted basis immediately after
such issuance.

For purposes of this Section 4, (x) “fully diluted basis” shall be determined in
accordance with the treasury stock method of computing fully diluted earnings
per share in

 

 

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accordance with GAAP. Additionally, for the purposes of any adjustment of the
Exercise Price pursuant to this Section 4.4, the following provisions shall be
applicable:

(i)     In the case of the issuance of Common Stock for cash in a public
offering or private placement, the consideration shall be deemed to be the
amount of cash paid therefor before deducting therefrom any discounts,
commissions or placement fees payable by the Company to any underwriter or
placement agent in connection with the issuance and sale thereof.

(ii)    In the case of the issuance of Common Stock for a consideration in whole
or in part other than cash, the consideration other than cash shall be deemed to
be the Fair Value thereof.

(iii)   In the case of the issuance of options to purchase or rights to
subscribe for Common Stock, securities by their terms convertible into or
exchangeable for Common Stock (including convertible preferred stock), or
options to purchase or rights to subscribe for such convertible or exchangeable
securities (except for options to acquire Excluded Stock):

 

(A)

the aggregate maximum number of shares of Common Stock deliverable upon exercise
of such options to purchase or rights to subscribe for Common Stock shall be
deemed to have been issued at the time such options or rights were issued and
for a consideration equal to the consideration (determined in the manner
provided in subparagraphs (i) and (ii) above), if any, received by the Company
upon the issuance of such options or rights plus the additional consideration,
if any, to be received by the Company upon the exercise of such options or
rights (the consideration in each case to be determined in the manner provided
in paragraphs (i) and (ii) above);

 

(B)

the aggregate maximum number of shares of Common Stock deliverable upon
conversion of or in exchange for any such convertible or exchangeable securities
(including convertible preferred stock) or upon the exercise of options to
purchase or rights to subscribe for such convertible or exchangeable securities
and subsequent conversion or exchange thereof shall be deemed to have been
issued at the time such securities, options, or rights were issued and for

 

 

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a consideration equal to the consideration received by the Company for any such
securities and related options or rights (excluding any cash received on account
of accrued interest or accrued dividends), plus the additional consideration, if
any, to be received by the Company upon the conversion or exchange of such
securities or the exercise of any related options or rights (the consideration
in each case to be determined in the manner provided in paragraphs (i) and (ii)
above);

 

(C)

on any change in the number of shares or exercise price of Common Stock
deliverable upon exercise of any such options or rights or conversions of or
exchanges for such securities, other than a change resulting from the
anti-dilution provisions thereof, the Exercise Price shall forthwith be
readjusted to such Exercise Price as would have been obtained had the adjustment
made upon the issuance of such options, rights or securities not converted prior
to such change or options or rights related to such securities not converted
prior to such change been made upon the basis of such change;

 

(D)

upon the expiration of any options to purchase or rights to subscribe for Common
Stock which shall not have been exercised, the Exercise Price computed upon the
original issue thereof (or upon the occurrence of a record date with respect
thereto), and any subsequent adjustments based thereon, shall, upon such
expiration, be recomputed as if the only additional shares of Common Stock
issued were the shares of Common Stock, if any, actually issued upon the
exercise of such options to purchase or rights to subscribe for Common Stock,
and the consideration received therefor was the consideration actually received
by the Company for the issue of the options to purchase or rights to subscribe
for Common Stock that were exercised, plus the consideration actually received
by the Company upon such exercise; and

 

 

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(E)

no further adjustment of the Exercise Price adjusted upon the issuance of any
such options, rights, convertible securities or exchangeable securities shall be
made as a result of the actual issuance of Common Stock on the exercise of any
such rights or options or any conversion or exchange of any such securities.

4.5

Exceptions.

(a)       Sections 4.2 – 4.4 shall not apply to: (i) any issuance of Common
Stock upon exercise of any warrants or options outstanding on the Original Issue
Date; (ii) securities issued pursuant to a strategic acquisition by the Company
approved by the Board of Directors of the Company of any product, technology,
know-how or business by merger, asset purchase, stock purchase or any other
reorganization; provided, the Company is the surviving corporation after such
transaction and where the aggregate Fair Value of the issuances pursuant to this
clause does not exceed $100,000,000 from the Original Issue Date; (iii)
securities issued in connection with any stock split, subdivision or stock
dividend in respect of which the adjustment provided for in Section 4.1 applies;
(iv) securities issued to employees or directors of the Company pursuant to an
employee stock option plan or stock incentive plan approved by the Board of
Directors (whether or not existing on the date hereof); (v) securities issued to
a strategic partner as an equity incentive, if approved by the Board of
Directors, where the primary purpose is not a financing and where the aggregate
Fair Value of the issuances pursuant to this clause does not exceed $50,000,000
from the Original Issue Date; (vi) any issuance of Common Stock in exchange for,
or in connection with the termination of, outstanding options to purchase
limited partnership interests of MSVLP, as described in the Registration
Statement on Form S-4 (File No. 333-144093), originally filed with the
Securities and Exchange Commission on June 27, 2007 (the “S-4 Registration
Statement”), or any issuance of Common Stock in exchange for, or in connection
with the termination of, limited partnership interests of MSVLP or equity
interests in the general partner of MSVLP (or any option or right to acquire
such interests) outstanding on the date hereof, so long as such exchange or
termination is based on the same exchange ratio referred to in the S-4
Registration Statement; or (vii) any issuance of warrants, Common Stock issued
upon exercise of such warrants, rights to subscribe for shares of Common Stock,
or securities by their terms convertible into or exchangeable for shares of
Common Stock pursuant to the July 2008 SPA and the Master Contribution
Agreement. Clauses (i) through (vii) above are referred to collectively as
“Excluded Stock.”

(b)       Notwithstanding the foregoing, Boeing hereby waives any antidilution
rights provided for in Section 4.4 (i) to the same extent that Harbinger has
waived such antidilution rights pursuant to Section 16.18 of the Master
Contribution Agreement, and (ii) to the extent of any future waiver by Master
Fund or Special Fund or their permitted assigns of antidilution rights contained
in warrants issued to Master Fund or Special Fund on January 4, 2008 to purchase
an aggregate of 9,144,038 shares of Common Stock.

 

 

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5.

NO IMPAIRMENT; REGULATORY COMPLIANCE AND COOPERATION; NOTICE OF EXPIRATION

(a)       The Company shall not by any action, including, without limitation,
amending its charter documents or through any reorganization, reclassification,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other similar voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms and in the
taking of all such actions as may be necessary or appropriate to protect the
rights of the Holders against impairment. Without limiting the generality of the
foregoing, the Company shall take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable shares of Voting Common Stock upon the exercise of this
Warrant, free and clear of all Encumbrances (other than any created by actions
of the Holders), and shall use its best efforts to obtain all such
authorizations, exemptions or consents from any public regulatory body having
jurisdiction thereof as may be necessary to enable the Company to perform its
obligations under this Warrant.

(b)       The Company shall deliver to the Holder no more than 60 and no less
than 30 days prior to the Expiration Date a written notice of such Expiration
Date. If the Company fails to fulfill in a timely manner the notice obligation
set forth in the prior sentence, it shall provide such notice as soon as
possible thereafter.

6.

RESERVATION AND AUTHORIZATION OF COMMON STOCK; REGISTRATION WITH OR APPROVAL OF
ANY GOVERNMENTAL AUTHORITY

From and after the Original Issue Date, the Company shall at all times reserve
and keep available for issuance upon the exercise of the Warrants such number of
its authorized but unissued shares of Voting Common Stock as will be sufficient
to permit the exercise in full of all outstanding Warrants. All shares of Voting
Common Stock issuable pursuant to the terms hereof, when issued upon exercise of
this Warrant with payment therefor in accordance with the terms hereof, shall be
duly and validly issued and fully paid and nonassessable, not subject to
preemptive rights and shall be free and clear of all Encumbrances (other than
any Encumbrances created by actions of any Holder). Before taking any action
that would result in an adjustment in the number of shares of Voting Common
Stock for which this Warrant is exercisable or in the Exercise Price, the
Company shall obtain all such authorizations or exemptions thereof, or consents
thereto, as may be necessary from any public regulatory body or bodies having
jurisdiction over such action. Subject to the proviso in Section 2.1 (e) herein,
if any shares of Voting Common Stock required to be reserved for issuance upon
exercise of Warrants require registration or qualification with any governmental
authority under any federal or state law (other than under the Securities Act or
any state securities law) before such shares may be so issued, the Company will
in good faith and as expeditiously as possible and at its expense endeavor to
cause such shares to be duly registered.

 

 

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7.

NOTICE OF CORPORATE ACTIONS; TAKING OF RECORD; TRANSFER BOOKS

 

7.1

Notices of Corporate Actions.

In case:

(a)       the Company shall take an action or an event shall occur, that would
require an Exercise Price adjustment pursuant to Section 4; or

(b)       the Company shall grant to the holders of its Common Stock rights or
warrants to subscribe for or purchase any shares of capital stock of any class;
or

(c)       of any reclassification of the Common Stock (other than a subdivision
or combination of the Outstanding shares of Common Stock), or of any
consolidation, merger or share exchange to which the Company is a party and for
which approval of any stockholders of the Company is required, or of the sale or
transfer of all or substantially all of the assets of the Company; or

(d)       of the voluntary or involuntary dissolution, liquidation or winding up
of the Company; or

(e)       the Company or any Subsidiary shall commence a tender offer for all or
a portion of the Outstanding shares of Common Stock (or shall amend any such
tender offer to change the maximum number of shares being sought or the amount
or type of consideration being offered therefor);

then the Company shall cause to be filed at each office or agency maintained for
such purpose, and shall cause to be mailed to all Holders at their last
addresses as they shall appear in the stock register, at least 10 days prior to
the applicable record, effective or expiration date hereinafter specified, a
notice stating (x) the date on which a record is to be taken for the purpose of
such dividend, distribution or granting of rights or warrants, or, if a record
is not to be taken, the date as of which the holders of Common Stock of record
who will be entitled to such dividend, distribution, rights or warrants are to
be determined, (y) the date on which such reclassification, consolidation,
merger, share exchange, 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 upon such
reclassification, consolidation, merger, share exchange, sale, transfer,
dissolution, liquidation or winding up, or (z) the date on which such tender
offer commenced, the date on which such tender offer is scheduled to expire
unless extended, the consideration offered and the other material terms thereof
(or the material terms of the amendment thereto). Such notice shall also set
forth such facts with respect thereto as shall be reasonably necessary to
indicate the effect of such action on the Exercise Price and the number and kind
or class of shares or other securities or property which shall be deliverable or
purchasable upon the occurrence of such action or deliverable upon exercise of
the Warrants. Neither the failure to give any such notice nor any defect therein
shall affect the legality or validity of any action described in clauses (a)
through (e) of this Section 7.1.

 

 

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7.2       Taking of Record. In the case of all dividends or other distributions
by the Company to the holders of its Common Stock with respect to which any
provision of any Section hereof refers to the taking of a record of such
holders, the Company will in each such case take such a record as of the close
of business on a Business Day.

7.3       Closing of Transfer Books. The Company shall not at any time, except
upon dissolution, liquidation or winding up of the Company, close its stock
transfer books or Warrant transfer books so as to result in preventing or
delaying the exercise or transfer of any Warrant.

8.

TRANSFER RESTRICTIONS

A Holder, by acceptance of this Warrant, agrees to be bound by the provisions of
this Section 8.

8.1       Restrictions on Transfers. Subject to this Section 8.1, a Holder may
transfer this Warrant or any shares of Restricted Common Stock or cause a
portion of this Warrant to be transferred. Neither this Warrant, any portion
hereof nor any shares of Restricted Common Stock issued upon the exercise hereof
shall be transferred, sold, assigned, exchanged, mortgaged, pledged,
hypothecated, or otherwise disposed of or encumbered without compliance with,
and they are otherwise restricted by, the provisions of the Securities Act, the
rules and regulations thereunder and this Warrant. Each certificate, if any,
evidencing such shares of Restricted Common Stock issued upon any such Transfer,
other than in a public offering pursuant to an effective registration statement,
shall bear the restrictive legend set forth in Section 8.2(a), and each Warrant
issued upon such Transfer shall bear the restrictive legend set forth in Section
8.2(b), unless the Holder delivers to the Company an Opinion of Counsel to the
effect that such legend is not required for the purposes of compliance with the
Securities Act. Holders of the Warrants or the Restricted Common Stock, as the
case may be, shall not be entitled to Transfer such Warrants or such Restricted
Common Stock except in accordance with this Section 8.1.

 

8.2

Restrictive Legends.

(a)       Except as otherwise provided in this Section 8, each certificate for
Warrant Stock initially issued upon the exercise of this Warrant, each
certificate for Warrant Stock issued to any subsequent transferee of any such
certificate, shall be stamped or otherwise imprinted with two legends in
substantially the following forms: “THE SHARES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT”), OR ANY STATE SECURITIES LAW. THE SHARES REPRESENTED BY THIS CERTIFICATE
MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, EXCHANGED, MORTGAGED, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF OR ENCUMBERED WITHOUT COMPLIANCE WITH THE
PROVISIONS OF, AND ARE OTHERWISE RESTRICTED BY THE PROVISIONS OF, THE ACT AND
THE RULES AND REGULATIONS THEREUNDER.” “THE SHARES REPRESENTED BY THIS
CERTIFICATE ARE ENTITLED TO THE BENEFIT OF AND ARE SUBJECT TO CERTAIN
OBLIGATIONS SET FORTH IN A CERTAIN WARRANT DATED AUGUST 18, 2008, ORIGINALLY
ISSUED BY SKYTERRA COMMUNICATIONS, INC. (THE “WARRANT”) PURSUANT TO THE

 

 

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EXERCISE OF WHICH SUCH SHARES WERE ISSUED. A COPY OF THE WARRANT IS AVAILABLE AT
THE EXECUTIVE OFFICES OF SKYTERRA COMMUNICATIONS, INC.”

(b)       Except as otherwise provided in this Section 8, each Warrant shall be
stamped or otherwise imprinted with a legend in substantially the following
form: “NEITHER THIS WARRANT NOR ANY OF THE SECURITIES ISSUABLE UPON EXERCISE
HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT”), OR ANY STATE SECURITIES LAW. THE WARRANTS REPRESENTED BY THIS
CERTIFICATE AND THE STOCK ISSUABLE UPON EXERCISE HEREOF MAY NOT BE TRANSFERRED,
SOLD, ASSIGNED, EXCHANGED, MORTGAGED, PLEDGED, HYPOTHECATED OF OTHERWISE
DISPOSED OF OR ENCUMBERED WITHOUT COMPLIANCE WITH THE PROVISIONS OF, AND ARE
OTHERWISE RESTRICTED BY THE PROVISIONS OF, THE ACT, THE RULES AND REGULATIONS
THEREUNDER AND THIS WARRANT.”

8.3       Termination of Securities Law Restrictions. Notwithstanding the
foregoing provisions of this Section 8, the restrictions imposed by Section 8.1
upon the transferability of the Warrants and the Restricted Common Stock and the
legend requirements of Section 8.2 shall terminate as to any particular Warrant
or shares of Restricted Common Stock when (a) such Warrant or shares of
Restricted Common Stock shall have been sold pursuant to an effective
registration statement filed with the Commission, or (b) the Company’s transfer
agent shall have received from the Holder thereof or the Company an Opinion of
Counsel to the effect that such Warrant or shares of Restricted Common Stock may
be transferred pursuant to Rule 144 or another exemption from the registration
requirements of the Securities Act. Whenever the restrictions imposed by
Sections 8.1 and 8.2 shall terminate as to this Warrant, as hereinabove
provided, the Holder hereof shall be entitled to receive from the Company, at
the expense of the Company, a new Warrant bearing the following legend in place
of the restrictive legend set forth in Section 8.2(b).

All Warrants issued upon registration of transfer, division or combination of,
or in substitution for, any Warrant or Warrants entitled to bear such legend
shall have a similar legend endorsed thereon. Whenever the restrictions imposed
by this Section shall terminate as to any share of Restricted Common Stock, as
hereinabove provided, the Holder thereof shall be entitled to receive from the
Company, at the Company’s expense, a new certificate representing such Common
Stock not bearing the restrictive legend set forth in Section 8.2(a).

8.4       Registration Rights. The Holder shall have all of the rights set forth
in the Registration Rights Agreement.

9.

LOSS OR MUTILATION

Upon receipt by the Company from any Holder of evidence reasonably satisfactory
to it of the ownership of and the loss, theft, destruction or mutilation of this
Warrant and an indemnity reasonably satisfactory to it (it being understood that
the written indemnification agreement of or affidavit of loss of the Holder,
shall be a sufficient indemnity) and, in case of mutilation, upon surrender and
cancellation hereof, the Company will execute and

 

 

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deliver in lieu hereof a new Warrant of like tenor to such Holder; provided,
however, that, in the case of mutilation, no indemnity shall be required if this
Warrant in identifiable form is surrendered to the Company for cancellation.

10.

OFFICE OF THE COMPANY

As long as any of the Warrants remain outstanding, the Company shall maintain an
office or agency, which may be the principal executive offices of the Company
(the “Designated Office”), where the Warrants may be presented for exercise,
registration of transfer, division or combination as provided in this Warrant.
Such Designated Office shall initially be the office of the Company at 10802
Parkridge Boulevard, Reston, Virginia 20191. The Company may from time to time
change the Designated Office to another office of the Company or its agent
within the United States by notice given to all registered Holders at least ten
(10) Business Days prior to the effective date of such change.

11.

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company hereby makes the following representations and warranties to Boeing
(but not to any subsequent Holder) as of the Original Issue Date (but not as of
any date thereafter):

11.1     Corporate Status. The Company (a) has been duly organized, and is
validly existing and in good standing under the Laws of the jurisdiction of its
organization and has all requisite corporate power and authority to own its
property and assets and to transact the business in which it is engaged, and (b)
has duly qualified to do business and is in good standing in each jurisdiction
where it is required to be so qualified or in good standing, except in the case
of (b) where the failure to be so qualified or be in good standing would not
reasonably be expected to have a Material Adverse Effect. The Company is not
currently in violation of any of the provisions of its Certificate of
Incorporation or By-laws, each as amended to date.

11.2     Corporate Power and Authority. All corporate action on the part of the
Company necessary for the authorization, execution, delivery and performance of
this Warrant and the Registration Rights Agreement and the consummation of the
transactions contemplated herein and therein has been taken (other than the
approval by the Company’s Board of Directors of the filing of a registration
statement pursuant to the Registration Rights Agreement). When executed and
delivered by the Company, each of this Warrant and the Registration Rights
Agreement shall constitute the legal, valid and binding obligation of the
Company and shall be enforceable against the Company in accordance with its
terms, except as such may be limited by bankruptcy, insolvency, reorganization
or other laws affecting creditors’ rights generally and by general equitable
principles. The Company has all requisite corporate power and authority to enter
into this Warrant and the Registration Rights Agreement and to carry out and
perform its obligations under the terms hereof and thereof.

11.3     No Violation. None of the execution, delivery and performance by the
Company of this Warrant or the Registration Rights Agreement, or compliance with
the terms and provisions hereof and thereof, (a) will contravene any applicable
provision of any applicable Law, (b) will conflict with or result in any breach
of, any of the terms, covenants, conditions or

 

 

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provisions of, or constitute a default under, or result in the creation or
imposition of (or the obligation to create or impose) any Encumbrance (other
than those created by the Holder) upon any of the property or assets of the
Company or any of its Subsidiaries pursuant to the terms of, any indenture,
mortgage, deed of trust, agreement or other material instrument to which the
Company or any of its Subsidiaries is a party or by which it or any of its
property or assets are bound or to which it may be subject or result in the
acceleration of any obligation of the Company, or (c) will violate any provision
of the Certificate of Incorporation or By-laws of the Company or any of its
Subsidiaries, each as amended to date, except, in the case of (a) and (b), where
such breach or conflict would not reasonably be expected to have a Material
Adverse Effect.

11.4     Approvals. Assuming the accuracy of Boeing’s representations and
warranties set forth in Section 12 below, except (a) for any required filings
and recordings which have been made and are in full force and effect, and (b)
for applicable blue sky notice filings, no order, consent, approval, license,
authorization or validation of, or filing, recording or registration with, or
exemption by, any Person or Governmental Authority, is required to authorize or
is required for or as a condition to (i) the execution and delivery of this
Warrant and the Registration Rights Agreement or (ii) the legality, validity,
binding effect or enforceability of this Warrant and the Registration Rights
Agreement. The execution and delivery by the Company of this Warrant and the
issuance of the Voting Common Stock issuable upon exercise of the Warrant do not
require the consent or approval of the security holders of the Company or of any
other Person.

11.5     Valid Issuance of the Common Stock. The shares of Voting Common Stock
issuable upon exercise of the Warrant have been duly authorized by the Company
and, when delivered in accordance with the terms of this Warrant, (a) will be
validly issued, fully paid and nonasessable, (b) will not be subject to any
preemptive rights or any other similar contractual rights of the stockholders of
the Company or any other Person, and (c) will be delivered to Boeing free and
clear of any Encumbrances which are imposed by the Company, or arise as a result
of the Company’s action or omission. The Company has reserved from its duly
authorized capital stock the number of shares of Voting Common Stock issuable
upon the exercise in full of the Warrant.

11.6     Securities Laws. Assuming the accuracy of Boeing’s representations and
warranties set forth in Section 12, the offer and issuance of this Warrant and
the shares of Voting Common Stock issuable upon exercise of this Warrant are and
are intended to be exempt from the registration requirements of the Securities
Act pursuant to Section 4(2) thereof.

11.7     Conformity to Securities Act and Exchange Act; No Misstatement or
Omission. As of its filing date or, if amended prior to the date of this
Warrant, as of the date of the last such amendment prior to the Original Issue
Date, each of the Commission Reports complied in all material respects with the
applicable requirements of the Securities Act or the Exchange Act (as
applicable) and the respective rules and regulations of the Commission
thereunder, as in effect on the date so filed, and does not contain an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein not misleading. Since December 31, 2007, the
Company has filed all reports, schedules, forms, statements and other documents
required to be filed by it with the Commission pursuant to the

 

 

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reporting requirements of the Exchange Act. The financial statements and
supporting schedules included in the Company’s Annual Report on Form 10-K for
the year ended December 31, 2007, as amended by the amendment to such Annual
Report filed with the Commission on Form 10-K/A on April 29, 2008, and in the
Company’s Quarterly Reports on Form 10-Q for the quarters ended March 30, 2008
and June 30, 2008 and in any other Commission Reports, in each case filed with
the Commission, present fairly, in all material respects, the consolidated
financial position of the Company as of the dates specified and the consolidated
results of their operations and cash flows for the periods specified, in each
case, in conformity with GAAP applied on a consistent basis during the periods
involved, except as indicated therein or in the notes thereto.

12.

REPRESENTATIONS AND WARRANTIES OF BOEING

Boeing hereby makes the following representations and warranties to the Company
as of the Original Issue Date (but not as of any date thereafter):

12.1     Authorization. All corporate, partnership or limited liability company
action on the part of Boeing necessary for the authorization, execution,
delivery and performance of this Warrant and the Registration Rights Agreement
and the consummation of the transactions contemplated herein and therein, has
been taken. When executed and delivered by Boeing, each of this Warrant and the
Registration Rights Agreement shall constitute the legal, valid and binding
obligation of Boeing, and shall be enforceable against Boeing in accordance with
its terms, except as such may be limited by bankruptcy, insolvency,
reorganization or other laws affecting creditors’ rights generally and by
general equitable principles. Boeing has all the requisite corporate power and
authority to enter into each of this Warrant and the Registration Rights
Agreement and to carry out and perform its obligations under the terms hereof
and thereof.

12.2     Purchase Entirely for Own Account. Boeing is acquiring the Warrant for
its own account for investment and not for the account of any other Person or
with a view to any resale, fractionalization, division, or distribution thereof
in a manner that would require registration thereof or the transactions
contemplated hereby under the Securities Act, and Boeing does not presently have
any reason to anticipate any change in its circumstances or other particular
occasion or event which would cause it to sell the Warrant or the shares of
Voting Common Stock underlying the Warrant other than in compliance with the
requirements of the Securities Act. Boeing has no contract, undertaking,
agreement, understanding or arrangement with any Person to sell, transfer, or
pledge to any Person any part or all of the Warrant which Boeing is acquiring,
or any interest therein, and has no present plans to enter into the same. The
Warrant was not offered or sold to Boeing by means of any general solicitation
or general advertisement.

12.3     Investor Status; Etc. Boeing certifies and represents to the Company
that (i) it is an “accredited investor” as defined in Rule 501 of Regulation D
promulgated under the Securities Act and was not organized for the purpose of
acquiring the Warrant. Boeing has adequate means of providing for its current
needs and personal contingencies, has no need now, and anticipates no need in
the foreseeable future, to sell the Warrant, and currently has sufficient net
worth and financial liquidity to afford a complete loss of its investment in the
Company. Boeing has such knowledge and experience in financial and business
matters so that Boeing is capable of evaluating the merits and risks of an
investment in the Company and has made such

 

 

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evaluation. Boeing fully understands that the Warrant is a speculative
investment which involve a high degree of risk of loss of Boeing’s entire
investment. No Person or entity, other than the Company or its authorized
representatives, has offered the Warrant to Boeing. Boeing is able to bear the
economic risk of an investment in the Warrant.

12.4     Warrant Not Registered. Boeing understands that neither this Warrant
nor the Warrant Stock issuable upon exercise of this Warrant has been registered
under the Securities Act by reason of its issuance by the Company in a
transaction exempt from the registration requirements of the Securities Act, and
that this Warrant and the Warrant Stock must continue to be held by Boeing
unless a subsequent disposition thereof is registered under the Securities Act
or is exempt from such registration. Boeing understands that the exemptions from
registration afforded by Rule 144 (the provisions of which are known to it)
depend on the satisfaction of various conditions, and that, if applicable, Rule
144 may afford the basis for sales only in limited amounts. Boeing has had an
opportunity to ask questions of and receive answers from the management and
authorized representatives of the Company, and to review any other relevant
documents and records concerning the business of the Company and the terms and
conditions of this investment, and that any such questions have been answered to
Boeing’s satisfaction. Boeing understands that no federal or state agency has
passed upon or made any recommendation or endorsement of an investment in this
Warrant.

12.5     Reliance. Boeing acknowledges that the Company is relying on the
representation and warranties of Boeing contained in this Section 12 and would
not issue this Warrant in the absence of the representations and warranties made
by Boeing contained in this Section 12.

13.

MISCELLANEOUS

13.1     Nonwaiver. No course of dealing or any delay or failure to exercise any
right hereunder on the part of the Company or the Holders shall operate as a
waiver of such right or otherwise prejudice the rights, powers or remedies of
such Person.

13.2     Notice Generally. Any notice, demand, request, consent, approval,
declaration, delivery or communication hereunder to be made pursuant to the
provisions of this Warrant shall be sufficiently given or made if in writing and
either delivered in person with receipt acknowledged or sent by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:

(a)       if to any Holder of this Warrant or of Warrant Stock issued upon the
exercise hereof, at its last known address appearing on the books of the Company
maintained for such purpose;

 

(b)

if to the Company, at the Designated Office;

or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration, delivery or other communication hereunder shall
be deemed to have been duly given or served on the date on

 

 

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which personally delivered, with receipt acknowledged, or three (3) Business
Days after the same shall have been deposited in the United States mail, or one
(1) Business Day after the same shall have been sent by Federal Express or
another recognized overnight courier service.

13.3     Limitation of Liability. No provision hereof, in the absence of
affirmative action by the Holders to purchase shares of Common Stock, and no
enumeration herein of the rights or privileges of the Holders hereof, shall give
rise to any liability of such Holders to pay the Exercise Price for any Warrant
Stock other than pursuant to an exercise of this Warrant or any liability as a
stockholder of the Company, whether such liability is asserted by the Company or
by creditors of the Company.

13.4     Remedies. Each Holder of Warrants and/or Warrant Stock, in addition to
being entitled to exercise its rights granted by law, including recovery of
damages, shall be entitled to specific performance of its rights provided under
this Warrant. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions
of this Warrant and hereby agrees, in an action for specific performance, to
waive the defense that a remedy at law would be adequate.

13.5     Successors and Assigns. Subject to the provisions of Sections 3.1 and
8.1, this Warrant and the rights evidenced hereby shall inure to the benefit of
and be binding upon the successors of the Company and the permitted successors
and assigns of the Holders hereof. The provisions of this Warrant are intended
to be for the benefit of all Holders from time to time of this Warrant and to
the extent applicable, all Holders of shares of Warrant Stock issued upon the
exercise hereof (including transferees), and shall be enforceable by any such
Holder.

13.6     Amendment. This Warrant and all other Warrants may be modified or
amended or the provisions hereof waived with the written consent of the Company
and the Holders, provided that no such Warrant may be modified or amended to
reduce the number of shares of Voting Common Stock for which such Warrant is
exercisable or to increase the price at which such shares may be purchased upon
exercise of such Warrant (before giving effect to any adjustment as provided
therein) without the written consent of the Holders thereof.

13.7     Severability. Wherever possible, each provision of this Warrant shall
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Warrant shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Warrant.

13.8     Headings. The headings used in this Warrant are for the convenience of
reference only and shall not, for any purpose, be deemed a part of this Warrant.

13.9     GOVERNING LAW; JURISDICTION. IN ALL RESPECTS, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS WARRANT AND THE OBLIGATIONS ARISING
HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN
SUCH STATE. THE COMPANY HEREBY CONSENTS AND AGREES THAT THE STATE OR

 

 

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FEDERAL COURTS LOCATED IN NEW YORK, SHALL HAVE, EXCEPT AS SET FORTH BELOW,
EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE
COMPANY AND THE HOLDER OF THIS WARRANT PERTAINING TO THIS WARRANT OR TO ANY
MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT, PROVIDED, THAT IT IS
ACKNOWLEDGED THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT
LOCATED OUTSIDE OF NEW YORK.

 

 

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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed and
its corporate seal to be impressed hereon and attested by its Secretary or an
Assistant Secretary.

 

SKYTERRA COMMUNICATIONS, INC.

 

 

By:

/s/ Scott Macleod

 

Name: Scott Macleod

 

Title: Executive Vice President

 

and Chief Financial Officer

 

 

 

 

[SEAL]

Attest:

 

 

By:

 

 

Name: Randy Segal

 

Title:  Senior Vice President,

 

General Counsel and Secretary

 

 

 

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ANNEX A

 

VESTING NOTIFICATION FORM

[To be delivered by the Company upon Drawdown of Additional Construction
Deferral]

 

_________________, 20_____

 

SkyTerra Communications, Inc. (the “Company”) hereby provides notice to Boeing
Satellite Systems Inc. (“Boeing”) and any other registered owner of this Warrant
of the Company’s drawdown or drawdowns under the “Additional Construction
Deferral” pursuant to and as defined in Contract #MSV-ATC-01, dated as of
January 9, 2006, between the Company and Boeing, as amended through the date
hereof, in the aggregate amount of $_________________ (the “Drawdown”) during
the month of _________________, 20_____.

 

Pursuant to Section 2.1(a) of this Warrant, _________________ shares (the
“Vested Warrant Shares”) of voting common stock, par value $0.01 per share, of
the Company (“Voting Common Stock”) issuable pursuant to this Warrant have
become exercisable under the terms of this Warrant due to the Drawdown. The
number of Vested Warrant Shares relative to the 626,002 shares of Voting Common
Stock originally issuable pursuant to this Warrant is approximately equal to the
amount of the Drawdown relative to the aggregate amount of the Additional
Construction Deferral.

 

As of the date hereof, the registered owner of this Warrant is entitled to
exercise this Warrant for an aggregate of _________________ shares of Voting
Common Stock, including (i) the Vested Warrant Shares, and (ii) all shares of
Voting Common Stock as to which this Warrant has previously become exercisable
pursuant to Section 2.1(a) of this Warrant but which remain unexercised at the
date hereof.

 

SKYTERRA COMMUNICATIONS, INC.

 

 

By:

 

Name:

 

Title:

 

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ANNEX B

 

SUBSCRIPTION FORM

[To be executed only upon exercise of Warrant]

The undersigned registered owner of this Warrant irrevocably exercises this
Warrant for the purchase of ______ shares of Voting Common Stock of SkyTerra
Communications, Inc. and herewith makes payment therefor in _________________,
all at the price and on the terms and conditions specified in this Warrant and
requests that certificates for the shares of such Voting Common Stock hereby
purchased (and any securities or other property issuable upon such exercise) be
issued in the name of and delivered to _________________ whose address is
_______________________________ and, if such shares of Voting Common Stock shall
not include all of the shares of Voting Common Stock issuable as provided in
this Warrant, that a new Warrant of like tenor and date for the balance of the
shares of Voting Common Stock issuable hereunder be delivered to the
undersigned.

 

Method of Payment of Exercise Price:

______________________________

_______________________________

(Name of Registered Owner)

_______________________________

(Signature of Registered Owner)

_______________________________

(Street Address)

_______________________________

(City) (State) (Zip Code)

NOTICE:

The signature on this subscription must correspond with the name as written upon
the face of the within Warrant in every particular, without alteration or
enlargement or any change whatsoever.

 

 

 

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ANNEX C

 

ASSIGNMENT FORM

FOR VALUE RECEIVED the undersigned registered owner of this Warrant hereby
sells, assigns and transfers unto the assignee named below all of the rights of
the under signed under this Warrant, with respect to the number of shares of
Voting Common Stock set forth below:

Name and Address of Assignee

No. of Shares of

Voting Common Stock

 

 

 

 

 

 

 

 

and does hereby irrevocably constitute and appoint ________ _____________
attorney-in-fact to register such transfer onto the books of SkyTerra
Communications, Inc. maintained for the purpose, with full power of substitution
in the premises.

 

Dated:

Print Name:

 

 

Signature:

 

 

Witness:

 

 

NOTICE:

The signature on this assignment must correspond with the name as written upon
the face of the within Warrant in every particular, without alteration or
enlargement or any change whatsoever.