Document:

Exhibit 10.5

 

AGREEMENT AND
PLAN OF MERGER

 

THIS AGREEMENT
AND PLAN OF MERGER (this “Agreement”)
is made and entered into as of May 6, 2006 (the “Effective Date”),
by and among Bay Harbour MSV, Inc., a Delaware corporation (“Bay Harbour”);
Trophy Hunter Investments, Ltd. and Bay Harbour 90-1, Ltd., each a Florida
limited partnership, and Bay Harbour Master Ltd., an exempt company with
limited liability incorporated in the Cayman Islands (collectively, “Bay
Harbour Parent”); MSV Rollup LLC, a Delaware limited liability company (“Holdings”);
and SkyTerra Communications, Inc., a Delaware corporation (“SkyTerra”).  Holdings and Bay Harbour are sometimes
referred to herein as the “Constituent Companies.”

 

WHEREAS,
Holdings is a wholly-owned subsidiary of SkyTerra, and Bay Harbour is
wholly-owned by Bay Harbour Parent;

 

WHEREAS, SkyTerra,
in its capacity as the sole member of Holdings, and Bay Harbour Parent, in its
capacity as the sole stockholder of Bay Harbour, have each approved this
Agreement and the transactions contemplated hereby;

 

WHEREAS, the
manager of Holdings and the board of directors of Bay Harbour have, by
resolutions duly adopted, each approved this Agreement and the transactions
contemplated hereby;

 

WHEREAS, the
parties intend that the merger of Bay Harbour with and into Holdings will
qualify as a “Reorganization” within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the “Code”) for federal
income tax purposes.

 

NOW, THEREFORE,
in consideration of the foregoing, of the mutual promises herein contained and
of other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto, intending to be legally bound,
hereby covenant and agree as follows:

 

1.             Merger.  Subject to the terms and conditions hereof, at
the Closing (as hereinafter defined), Bay Harbour shall be merged with and into
Holdings (the “Merger”), and the separate corporate existence of Bay
Harbour shall cease and, except as expressly provided herein, Holdings, as the
surviving entity (the “Surviving Entity”), shall succeed to and assume
all of the rights and obligations of Bay Harbour pursuant to Section 259 of the
General Corporation Law of the State of Delaware (the “DGCL”).

 

2.             Closing.  The Merger shall become effective upon the
date and time of the filing of a Certificate of Merger (the “Certificate of
Merger”)  with the Secretary of State
of the State of Delaware pursuant to Section 264 of the DGCL.  Holdings shall be responsible for the filing
of the Certificate of Merger.

 

3.             Certain
Effects of Merger.  If at any time
the Surviving Entity shall consider or be advised that any further assignment
or assurances in law or any things are necessary or desirable to vest in the Surviving
Entity, according to the terms hereof, the title to any property or rights of Bay
Harbour, the last acting officers and directors of Bay Harbour shall and will
execute and make all such proper assignments and assurances and do all things

 

 

necessary or
proper to vest title to such property or rights in the Surviving Entity, and
otherwise carry out the purposes of this Agreement.

 

4.             Surviving
Entity.  The Certificate of Formation
of Holdings (the “Certificate of Formation”) in effect on the Effective
Date shall continue to be the Certificate of Formation of the Surviving Entity
until thereafter amended in accordance with the provisions thereof and as
provided by the DGCL.

 

5.             Terms
of the Merger

 

(a)           Simultaneously
with the execution of this Agreement, (i) MSV Investors shall execute and
deliver to Bay Harbour Parent Amendment No. 2 to the TerreStar Networks Inc.
Stockholders’ Agreement and the Amended and Restated TerreStar Networks Inc.
Stockholders’ Agreement, each to be effective in accordance with its terms; and
(ii) Bay Harbour Parent shall execute and deliver to SkyTerra the Joinder
Agreement to the TerreStar Networks Inc. Stockholders’ Agreement and Amendment
No. 2 to the TerreStar Networks Inc. Stockholders’ Agreement and the Amended
and Restated TerreStar Networks Inc. Stockholders’ Agreement (the “Joinder
Agreement”), the form of which is attached hereto as Exhibit D.

 

(b)           At
the Closing, each of the outstanding shares of common stock, par value $0.01
per share, of Bay Harbour (“Outstanding Bay Harbour Common Shares”), which
shall have 1,000 total outstanding shares of common stock at the Closing, shall
be converted into the right to receive 3,054.575 validly issued, fully paid and
nonassessable shares of common stock, par value $0.01 per share, of SkyTerra (“SkyTerra
Common Stock”), as appropriately adjusted for any stock split, combination,
reorganization, recapitalization, reclassification, stock dividend, stock
distribution or similar event declared or effected prior to the Initial Closing
(as defined in the MSV Exchange Agreement (as defined below)); provided,
however, that no adjustment shall be made for the Rights Offering, as
such term is defined in the MSV Exchange Agreement; and the Outstanding Bay
Harbour Common Shares shall be canceled and cease to exist.

 

(c)           Each
membership interest of Holdings outstanding immediately prior to the Closing
shall represent a membership interest in the Surviving Entity following the
Merger.

 

(d)           After
the Closing, no transfer of Outstanding Bay Harbour Common Shares outstanding
immediately prior to the Closing shall be made on the stock transfer books of Bay
Harbour.

 

(e)           At
the Closing, by virtue of the Merger and without any action on the part of
either of the Constituent Companies, the holders of the respective shares, or
any other person, the shares of SkyTerra Common Stock into which the
Outstanding Bay Harbour Common Shares shall have been converted pursuant to
Section 5(a) hereof shall be represented and evidenced by stock certificates
that shall be delivered promptly to Bay Harbour Parent.

 

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(f)            At
the Closing, Bay Harbour Parent and Bay Harbour shall deliver to SkyTerra an
affidavit certifying as to their respective non-foreign status in accordance
with the requirements of Section 1.1445-2(b) of the Treasury Regulations.

 

(g)           At
the Closing, Bay Harbour Parent shall contribute $7.5 million in cash to Bay
Harbour with respect to Bay Harbour’s liability for tax with respect to any
gain recognized in (i) the distribution by MSV Investors of a portion of the
shares of TerreStar Networks Inc. (“TerreStar”) to Bay Harbour (the “TerreStar
Distribution”), and (ii) the distribution by Bay Harbour to Bay Harbour
Parent of the shares of TerreStar received by Bay Harbour pursuant to the
TerreStar Distribution (the “Bay Harbour Distribution”). SkyTerra shall
be responsible for preparing and filing all federal, state and local Tax
Returns of Bay Harbour that have not been filed on or prior to the Closing, and
Bay Harbour shall reimburse SkyTerra for any out of pocket costs incurred by
SkyTerra in connection with such preparation and filing. Ten days prior to the
earliest due date for the filing of Bay Harbour’s federal, state or local
income Tax Return for the period 1/1/06 through the Closing (without regard to
extensions), SkyTerra shall provide Bay Harbour Parent with a schedule
calculating Bay Harbour’s tax liability for such period. To the extent the
aggregate liability for Bay Harbour’s federal, state and local income Tax
Returns for such period exceeds $7.5 million, Bay Harbour Parent shall pay
SkyTerra the amount of such difference at least five days prior to the earliest
due date for the filing of Bay Harbour’s federal, state or local income Tax
Returns (without regard to extensions). If, after the filing of Bay Harbour’s
federal, state and local income Tax Returns, the aggregate liability for Bay
Harbour’s federal, state and local income Tax Returns for such period is less
than $7.5 million, SkyTerra shall pay Bay Harbour Parent such difference at
least five days following the final date on which Bay Harbour’s federal, state
or local income Tax Return is filed. Similar principles shall apply for any
other Tax Returns of Bay Harbour to be filed by SkyTerra after the Closing.

 

(h)           Bay
Harbour hereby agrees that between the Effective Date and the Closing, it shall
not, directly or indirectly, sell, transfer, distribute, pledge, dispose of,
grant an option with respect to, assign, transfer, or otherwise convey the Bay
Harbour Interest (as defined below) to any person other than Holdings or create
or permit to exist any Lien on or in respect of the Bay Harbour Interest,
excluding liens for taxes not due or payable as of the Effective Date.  As used herein, “Lien” means any claim,
mortgage, pledge, hypothecation, assignment, deposit arrangement, option, call
contract, commitment, demand, lien, tax, charge, security interest, encumbrance
or preference, priority or other security agreement of any kind or nature
whatsoever, including, without limitation, the filing of any financing
statement or similar instrument under the Uniform Commercial Code or comparable
law of any jurisdiction, domestic or foreign.

 

(i)            Upon
Closing, Bay Harbour Parent waives any and all rights it might have to
contribution or reimbursement, or other rights to recovery that it might
otherwise have, against Bay Harbour, and any and all representations and
warranties made by Bay Harbour shall terminate.

 

(j)            Upon
Closing, SkyTerra shall deliver to Bay Harbour Parent an effective registration
statement (the “Bay Harbour Registration Statement”) with respect to

 

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the shares of SkyTerra
Common Stock underlying the rights to be delivered to Bay Harbour Parent upon
Closing pursuant to Section 5(a).

 

6.             Representations
and Warranties of Bay Harbour.  Bay
Harbour represents and warrants to Holdings and SkyTerra, as of the Effective
Date and as of the date of Closing, that:

 

(a)           Bay
Harbour has all requisite corporate power and authority to enter into this Agreement.  The consummation of the Merger pursuant to
this Agreement will not violate or conflict with any agreement or instrument
binding on Bay Harbour or to which it or any of its properties is subject or
any applicable law.  This Agreement has been
duly executed and delivered by Bay Harbour and constitutes the legal, valid and
binding obligation of Bay Harbour, enforceable against Bay Harbour in
accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting enforcement of
creditors’ rights generally and by general equitable principles.

 

(b)           Except
in connection with the filing and recordation of the Certificate of Merger as
required by the DGCL, no consent, approval, authorization or order of, or
registration, qualification or filing with, any court, regulatory authority,
governmental body or any other third party, other than the consent of Bay
Harbour Parent as sole stockholder of Bay Harbour, as has been heretofore
obtained, is required for the execution, delivery and performance by Bay
Harbour of this Agreement or the consummation by Bay Harbour of the
transactions contemplated hereby.

 

(c)           Bay
Harbour is the record and beneficial owner of, directly or indirectly, and has
good, valid and legal title to 1,203,000 units of limited partnership interest
in MSV Investors (the “Bay Harbour Interest”), free and clear of all
Liens.

 

(d)           The
Bay Harbour Interest constitutes all the direct or indirect equity interests of
MSV Investors owned of record or beneficially by Bay Harbour.

 

(e)           Bay
Harbour is not under the jurisdiction of a court in a Title 11 or similar case
within the meaning of Section 368(a)(3)(A) of the Code.

 

(f)            Bay
Harbour was formed and incorporated in [month/year] solely to hold the Bay
Harbour Interest and not in contemplation of or in connection with the Merger.

 

(g)           The
fair market value of the assets of Bay Harbour exceed the sum of its
liabilities (including any liabilities to which the assets are subject).

 

(h)           Taxes.

 

(i)            Bay
Harbour has timely filed all material Tax Returns required to be filed by it
(taking into account all applicable extensions) and all such Tax Returns are
true, correct and complete in all respects.

 

(ii)           Bay
Harbour has paid all Taxes due and payable.

 

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(iii)          There
is no pending or, to the knowledge of Bay Harbour, threatened examination,
investigation, audit, suit, action, claim or proceeding relating to Taxes of
Bay Harbour.

 

(iv)          Bay
Harbour has not received notice of a determination by any taxing or other
Governmental Entity that Taxes are owed by Bay Harbour (such determination
being referred to as a “Tax Deficiency”) and, to the knowledge of Bay
Harbour, no Tax Deficiency is proposed or threatened.

 

(v)           All
Tax Deficiencies asserted against Bay Harbour have been paid or finally settled
and all amounts asserted in any Tax Deficiency to be owed have been paid.

 

(vi)          There
are no Liens arising from or related to Taxes on or pending against Bay Harbour
or any of its properties other than statutory Liens for Taxes that are not yet
due and payable.

 

(vii)         As
used in this Agreement:

 

(1)           “Tax”
means any and all federal, state, local, foreign or other tax of any kind
(together with any and all interest, penalties, additions to tax and additional
amounts imposed with respect thereto) imposed by any Tax Authority, including
taxes on or with respect to income, alternative minimum, accumulated earnings,
personal holding company, capital, transfer, stamp, franchises, windfall or
other profits, gross receipts, property, sales, use, capital stock, payroll,
employment, unemployment, social security, workers’ compensation or net worth,
and taxes in the nature of excise, withholding, ad valorem or value added; and

 

(2)           “Tax
Return” means any return, report or similar statement (including any
attached schedules) required to be filed with respect to Taxes and any
information return, claim for refund, amended return, or declaration of estimated
Taxes.

 

7.             Representations
and Warranties of Bay Harbour Parent. 
Bay Harbour Parent represents and warrants to Holdings and SkyTerra, as
of the Effective Date and as of the date of Closing, that:

 

(a)           Bay
Harbour Parent has all requisite corporate power and authority to enter into
this Agreement, the Joinder Agreement and the Registration Rights Agreement in
substantially the form attached as Exhibit A hereto (the “Registration
Rights Agreement”).  The consummation
of the Merger pursuant to this Agreement and the execution of the Joinder
Agreement and the Registration Rights Agreement will not violate or conflict
with any agreement or instrument binding on Bay Harbour Parent or to which it
or any of its properties is subject or any applicable law.  This Agreement, the Joinder Agreement and the
Registration

 

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Rights
Agreement have been duly executed and delivered by Bay Harbour Parent and
constitute the legal, valid and binding obligation of Bay Harbour Parent,
enforceable against Bay Harbour Parent in accordance with their terms, except
as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting enforcement of creditors’ rights generally
and by general equitable principles.

 

(b)           No
consent, approval, authorization or order of, or registration, qualification or
filing with, any court, regulatory authority, governmental body or any other
third party is required for the execution, delivery and performance by Bay
Harbour Parent of this Agreement, the Joinder Agreement or the Registration
Rights Agreement or the consummation by Bay Harbour Parent of the transactions
contemplated hereby, except filings pursuant to the Registration Rights
Agreement under the Securities Act of 1933, as amended (the “Securities Act”).

 

(c)           Bay
Harbour Parent is the record and beneficial owner of, and has good, valid and
legal title to all the Outstanding Bay Harbour Common Shares, free and clear of
all Liens.

 

(d)           The
Bay Harbour Interest constitutes all the direct or indirect equity interests of
MSV Investors owned of record or beneficially by Bay Harbour Parent.

 

(e)           Upon
the consummation of the Merger, Bay Harbour Parent shall not own, of record or
beneficially, or have, by conversion, warrant, option or otherwise, any right
to, interest in or agreement to acquire any equity interest in MSV Investors,
LLC, a Delaware limited liability company (“MSV Investors”), whether
issued or authorized but unissued, other than through the shares of SkyTerra
Common Stock to be received in the Merger.

 

(f)            Bay
Harbour Parent is not under the jurisdiction of a court in a Title 11 or
similar case within the meaning of Section 368(a)(3)(A) of the Code.

 

(g)           Bay
Harbour Parent has had an opportunity to ask questions and receive answers from
SkyTerra regarding the terms and conditions of the offering of shares of
SkyTerra Common Stock and the business and financial condition of SkyTerra and
to obtain additional information (to the extent SkyTerra possessed such
information or could acquire it without unreasonable effort or expense)
necessary to verify the accuracy of any information furnished to it or which it
had access.  The fair market value of the
assets of any entity holding the Bay Harbour Interest on behalf of Bay Harbour
Parent will exceed the sum of its liabilities (including any liabilities to
which its assets are subject).  The
foregoing, however, does not limit or modify the representations or warranties
of SkyTerra or Holdings in this Agreement or the right of Bay Harbour or Bay
Harbour Parent to rely upon such representations or warranties.

 

(h)           Bay
Harbour Parent is an “accredited investor” as that term is defined in
Regulation D promulgated under the Securities Act.

 

8.             Representations
and Warranties of Holdings.  Holdings
represents and warrants to Bay Harbour and Bay Harbour Parent that as of the
Effective Date and as of the date of Closing:

 

6

 

(a)           Holdings
has all requisite limited liability company power and authority to enter into
this Agreement. The consummation of the Merger pursuant to this Agreement will
not violate or conflict with any agreement or instrument binding on Holdings or
to which it or any of its properties is subject or any applicable law.  This Agreement has been duly executed and
delivered by Holdings and constitutes the legal, valid and binding obligation
of Holdings enforceable against Holdings in accordance with its terms, except
as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting enforcement of creditors’ rights generally
and by general equitable principles.

 

(b)           Except
in connection with the filing and recordation of the Certificate of Merger as
required by the DGCL, no consent, approval, authorization or order of, or
registration, qualification or filing with, any court, regulatory authority,
governmental body or any other third party, other than the consent of SkyTerra
as sole member of Holdings, as has been heretofore obtained is required for the
execution, delivery and performance by Holdings of this Agreement or the
consummation by Holdings of the transactions contemplated hereby, except
filings pursuant to the Registration Rights Agreement under the Securities Act.

 

(c)           Holdings
is not under the jurisdiction of a court in a Title 11 or similar case within
the meaning of Section 368(a)(3)(A) of the Code.

 

(d)           Holdings
believes it has received all the information it considers necessary or
appropriate for deciding whether to engage in the Merger.  Holdings further represents that it has had
an opportunity to ask questions and receive answers from Bay Harbour regarding
the terms and conditions of the Bay Harbour Interest and the business and
financial condition of MSV Investors and to obtain additional information (to
the extent Bay Harbour possessed such information or could acquire it without
unreasonable effort or expense) necessary to verify the accuracy of any
information furnished to it or which it had access.  The foregoing, however, does not limit or
modify the representations or warranties of Bay Harbour or Bay Harbour Parent in
this Agreement or the right of Holdings or SkyTerra to rely upon such
representations or warranties.

 

9.             Representations
and Warranties of SkyTerra.  SkyTerra
represents and warrants to Bay Harbour and Bay Harbour Parent that as of the
Effective Date and as of the date of Closing:

 

(a)           SkyTerra
has all requisite corporate power and authority to enter into this Agreement
and the Registration Rights Agreement. The consummation of the Merger pursuant
to this Agreement and the execution of the Registration Rights Agreement will
not violate or conflict with any agreement or instrument binding on SkyTerra or
to which it or any of its properties is subject or any applicable law.   This
Agreement and the Registration Rights Agreement have been duly executed and
delivered by SkyTerra and constitute the legal, valid and binding obligation of
SkyTerra enforceable against SkyTerra in accordance with their terms, except as
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting enforcement of creditors’ rights generally
and by general equitable principles.

 

7

 

(b)           No
consent, approval, authorization or order of, or registration, qualification or
filing with, any court, regulatory authority, governmental body or any other
third party is required for the execution, delivery and performance by SkyTerra
of this Agreement or the Registration Rights Agreement or the consummation by
SkyTerra of the transactions contemplated hereby, except filings pursuant to the
Registration Rights Agreement under the Securities Act.

 

(c)           The
shares of SkyTerra Common Stock to be issued to the Bay Harbour Parent
hereunder have been duly and validly authorized, and, when issued and delivered
pursuant to Section 5, will be fully paid and nonassessable.

 

(d)           Assuming
the truth and accuracy of the representations and warranties of Bay Harbour Parent
contained in Sections 7 and 10 hereof, the offer, sale, and issuance of the
shares of SkyTerra Common Stock will be exempt from the registration
requirements of the Securities Act, and will have been registered or qualified
(or are exempt from registration and qualification) under the registration,
permit or qualification requirements of all applicable state securities laws.

 

(e)           Neither
SkyTerra, nor any of its affiliates or any other person acting on SkyTerra’s
behalf, has directly or indirectly engaged in any form of general solicitation
or general advertising with respect to the shares of SkyTerra Common Stock nor
have any of such persons made any offers or sales of any security or solicited
any offers to buy any security under circumstances that would require
registration of the shares of SkyTerra Common Stock under the Securities Act or
cause this offering of shares of SkyTerra Common Stock to be integrated with
any prior offering of securities of SkyTerra for purposes of the Securities Act.

 

(f)            Attached
as Exhibit B hereto is a true and correct copy of the MSV Exchange Agreement
(as defined herein).

 

10.           Acknowledgments.
Bay Harbour and Bay Harbour Parent each represent, warrant to, and agree with, Holdings
and SkyTerra that:

 

(a)           Bay
Harbour and Bay Harbour Parent each acknowledge that on May •, 2006, SkyTerra executed an exchange
agreement (the “MSV Exchange Agreement”) with Motient that will result
in the consolidation (the “Consolidation”) of the ownership of Mobile
Satellite Ventures LP, a Delaware limited partnership (“MSV”), including,
among other things, the exchange of certain of the equity interests of MSV
currently owned, directly or indirectly, by Motient for SkyTerra non-voting
common stock (the “MSV Exchange”), exchangeable in certain circumstances
for shares of SkyTerra Common Stock.  Bay
Harbour and Bay Harbour Parent each acknowledge that SkyTerra may possess
material, non-public information that might be relevant in connection with the
Merger (the “Information”).  At the
request of Bay Harbour and Bay Harbour Parent, Bay Harbour and Bay Harbour
Parent have not been provided with any of the Information and Bay Harbour and Bay
Harbour Parent each acknowledge that the Information may be material to its decision
to enter into this Agreement, or otherwise materially adverse to each such
party’s interests.  Bay Harbour and Bay
Harbour Parent each acknowledge that such party does not wish to receive any of
the Information,

 

8

 

notwithstanding
SkyTerra’s offer to disclose and discuss the same with Bay Harbour and Bay
Harbour Parent.

 

(b)           Notwithstanding
not receiving the Information, Bay Harbour and Bay Harbour Parent each believe that
each such party has adequate information concerning the business and financial
condition of MSV Investors and SkyTerra and the terms of the Consolidation to
make an informed decision regarding entering into the transactions contemplated
by this Agreement.  Bay Harbour and Bay
Harbour Parent have each independently and without reliance upon the
Information or otherwise upon SkyTerra or Holdings (except for the
representations and warranties expressly set forth in Sections 8 and 9 of this
Agreement) or any agent of SkyTerra, made its own analysis and decision to
enter into the transactions contemplated by this Agreement.  Without limiting the foregoing, neither
SkyTerra nor Holdings nor any agent or affiliate of SkyTerra or Holdings,
respectively, shall be deemed to have made any representation or warranty regarding
the Information or any other representation or warranty with respect to any
other matter except to the extent set forth in Sections 8 and 9 of this
Agreement.  Bay Harbour and Bay Harbour Parent
each understand the disadvantage to which such party may be subject on account
of such party’s express desire not to receive the Information.

 

(c)           Notwithstanding
anything contained in this Agreement to the contrary, Bay Harbour and Bay
Harbour Parent each hereby irrevocably and forever release and discharge SkyTerra,
Holdings and their respective affiliates, directors, officers, employees,
representatives, agents, advisors and controlling persons and their respective
successors and assigns from any and all claims, losses, liabilities, damages,
deficiencies, judgments, assessments, fines, settlements, costs or expenses
(including interest, penalties and reasonable fees, disbursements and other
expenses of counsel), including, but not limited to, any and all liabilities,
claims or demands (legal, equitable or otherwise), whether arising before or
after the Closing, alleging violations of federal or state securities laws,
common law fraud or deceit, breach or fiduciary duty, negligence, tort or any
other theory, based upon, arising from, relating to, or in connection with,
directly or indirectly, the non-disclosure of, in whole or in part, the
Information.

 

(d)           Bay
Harbour Parent acknowledges that the consideration it will receive in the
Merger represents a fair value negotiated in an arm’s length transaction between
Bay Harbour Parent and SkyTerra even though the consideration may be less than
the value negotiated in the MSV Exchange of the indirect membership interest in
MSV represented by the Bay Harbour Interest.

 

(e)           Bay
Harbour and Bay Harbour Parent have each consulted legal, tax and business
advisors with respect to this Agreement and the transactions contemplated
hereby.

 

(f)            Bay
Harbour and Bay Harbour Parent are relying solely upon the advice of each such
party’s respective legal, tax and business advisors and its entering into this
Agreement is the result of independent arm’s length negotiations between the
parties hereto.  Bay Harbour and Bay
Harbour Parent also each acknowledge that SkyTerra and Holdings are relying on
the representations and warranties contained in Sections 6 and 7 and

 

9

 

this Section 10
and would not consummate the transactions contemplated by this Agreement in the
absence of the representations and warranties contained in Sections 6 and 7 and
this Section 10.

 

(g)           Bay
Harbour Parent is acquiring the SkyTerra Common Stock for its own account for
investment purposes and not with a view to any distribution thereof in
violation of the Securities Act of 1933 or any state securities laws.  Until the SkyTerra Common Stock received by Bay
Harbour Parent pursuant to this Agreement is transferred pursuant to an
effective registration statement or Rule 144 under the Securities Act, each
certificate evidencing such SkyTerra Common Stock issued to Bay Harbour Parent
or to a subsequent transferee shall include a legend in substantially the
following form (in addition to any other statements or legends required by
law):

 

THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR UNDER
STATE SECURITIES LAWS.  THESE SECURITIES
MAY NOT BE RESOLD OR TRANSFERRED UNLESS REGISTERED OR EXEMPT FROM REGISTRATION
UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE STATE SECURITIES LAWS.

 

(h)           Bay
Harbour Parent understands that no federal or state agency has passed upon or
made any recommendation or endorsement of an investment in, or disposition of,
SkyTerra Common Stock.

 

(i)            Bay
Harbour Parent, Bay Harbour and their respective officers, directors and employees,
and their agents and representatives providing services in respect of the
transactions contemplated by this Agreement, will not trade in the securities
of SkyTerra prior to (i) the Closing or (ii) the termination of this Agreement.

 

11.           Conditions
to the Obligations of Bay Harbour and Bay Harbour Parent.  The obligations of Bay Harbour and Bay
Harbour Parent hereunder to consummate the Merger are subject to the
fulfillment, prior to or at the Closing, of each of the following conditions,
unless any such condition is waived in writing by Bay Harbour or Bay Harbour
Parent, as applicable:

 

(a)           The
representations and warranties made by Holdings and SkyTerra herein shall be
true and correct as of the Closing with the same effect as though made on such
date.  SkyTerra and Holdings shall have
performed and complied with all agreements, covenants, and conditions required
by this Agreement to be performed and complied with by it prior to the Closing.

 

(b)           There
shall be no effective injunction, writ or preliminary restraining order of a
court of competent jurisdiction directing that the transactions provided for
herein not be consummated.

 

(c)           The
Initial Closing under, and as defined in, the MSV Exchange Agreement shall have
been consummated.

 

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(d)           SkyTerra
shall have delivered at the Closing the shares of SkyTerra Common Stock in
accordance with Section 5 hereto.

 

(e)           SkyTerra
shall have entered into the Registration Rights Agreement, and shall have
provided to Bay Harbour Parent such executed Registration Rights Agreement and
certified resolutions of the Board of Directors of SkyTerra approving its entry
into such Registration Rights Agreement.

 

(f)            The
Bay Harbour Registration Statement shall have become effective and no stop
order with respect thereto shall be in effect and no proceedings for that
purpose shall have been commenced or threatened by the Securities and Exchange
Commission.

 

12.           Conditions
to the Obligations of Holdings and SkyTerra.  All obligations of Holdings and SkyTerra
hereunder are subject to the fulfillment, prior to or at the Closing, of each
of the following conditions, unless any such condition is waived in writing by Holdings
or SkyTerra, as applicable:

 

(a)           The
representations and warranties made by each of Bay Harbour and Bay Harbour Parent
herein shall be true and correct as of the Closing with the same effect as
though made on such date.  Bay Harbour and
Bay Harbour Parent each shall have performed and complied with all agreements,
covenants, and conditions required by this Agreement to be performed and
complied with by such party at or prior to the Closing.

 

(b)           There
shall be no effective injunction, writ or preliminary restraining order of a
court of competent jurisdiction directing that the transactions provided for
herein not be consummated.

 

(c)           The
Initial Closing under, and as defined in, the MSV Exchange Agreement shall have
been consummated.

 

(d)           Prior
to the Closing, MSV Investors shall have distributed all of the shares of
common stock of TerreStar Networks, Inc. and TererStar Networks Bermuda Ltd.
that it owns (collectively, the “TerreStar Shares”), on a pro rata
basis, to the members of MSV Investors in the TerreStar Distribution, and Bay
Harbour shall have distributed such TerreStar Shares to Bay Harbour Parent in
the Bay Harbour Distribution.

 

(e)           Bay
Harbour Parent and Bay Harbour shall have furnished SkyTerra an affidavit
certifying as to their respective non-foreign status in accordance with the
requirements of Section 1.1445-2(b) of the Internal Revenue Service
Regulations.

 

(f)            Bay
Harbour Parent shall have entered into the Registration Rights Agreement, and
shall have provided to SkyTerra such executed Registration Rights Agreement and
certified resolutions of the Board of Directors of Bay Harbour Parent approving
its entry into such Registration Rights Agreement.

 

13.           Expenses.  Each party shall bear its own expenses in
connection with the transactions contemplated by this Agreement.

 

11

 

14.           Indemnification.  Each of the parties hereto hereby shall defend,
indemnify and hold harmless the other against and in respect of:

 

(a)           Any
and all losses and damages resulting from, relating or incident to, or arising
out of any misrepresentation or breach of warranty, covenant or agreement by
such party made or contained in this Agreement; and

 

(b)           Any
and all actions, suits, proceedings, claims, demands, judgments, costs and
expenses (including reasonable legal fees) incident to the foregoing, whether
between the parties or between a party and any third party or otherwise.

 

Further, Bay Harbour Parent shall defend,
indemnify and hold harmless SkyTerra and its affiliates (including Holdings)
against and in respect of any and all losses and damages, actions, suits,
proceedings, claims, demands, judgments, costs and expenses (including
reasonable legal fees) resulting from or relating or incident to Taxes
attributable to or imposed on Bay Harbour, Holdings or any successor for any
taxable period or portion thereof ending on or prior to the Closing (including,
without limitation, all liabilities for Taxes relating to the TerreStar
Distribution, the Bay Harbour Distribution and the Merger).

 

If an indemnitee has a claim for
indemnification under this Section 14, the indemnitee shall promptly provide to
the indemnitor a notice of such claim, including a description of such claim
and the amount of the indemnification payment that is claimed, and the
indemnitor shall make the claimed payment to the indemnitee within 10 days
after receiving such notice unless the indemnitor elects to defend such claim.

 

15.           Consent
and Waiver.

 

(a)           Bay
Harbour and Bay Harbour Parent hereby waive any and all “Tag-Along Rights,” as
described in Section 13(c) of the Limited Liability Company Agreement of MSV
Investors, dated as of November 23, 2001 (the “Investors LLC Agreement”),
to which Bay Harbour or Bay Harbour Parent may be entitled in connection with
the Consolidation.

 

(b)           Holdings,
in its capacity as Manager (as defined in the Investors LLC Agreement), hereby
consents to the Merger, pursuant to the terms contained herein.

 

16.           Closing.  Unless this Agreement is terminated in
accordance herewith, the closing of the Merger (the “Closing”) shall take place immediately after the Initial
Closing under, and as defined in, the MSV Exchange Agreement at the offices of
Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New York, New
York 10036 or at such other time and/or location as may be mutually agreed upon
by the parties hereto.

 

17.           Events
of Termination.  This Agreement may
be terminated and the transactions contemplated hereby abandoned at any time by
mutual written consent of Holdings and Bay Harbour. This Agreement shall
automatically terminate and shall be of no further force or effect upon the
earlier to occur of (a) termination of the MSV Exchange Agreement and (b) December
31, 2006.

 

12

 

18.           Effect
of Termination.  In the event of
termination of this Agreement pursuant to Section 17 hereof:

 

(a)           Each
party will upon request return all documents and other materials of the other
party relating to the transactions contemplated hereby, whether so obtained
before or after the execution hereof, to the party furnishing the same; and

 

(b)           Neither
party shall have any liability or further obligation to the other party to this
Agreement.

 

19.           Governing
Law.  This Agreement shall be
construed in accordance with the laws of the State of New York without giving
effect to applicable principles of conflicts of laws to the extent that the
application of the laws of another jurisdiction would be required thereby.

 

20.           Invalidity
or Unenforceability.  In case any one
or more of the provisions contained in this Agreement shall, for any reason, be
held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect the other provisions of this
Agreement, and this Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.

 

21.           Benefits
and Burdens.  This Agreement is
binding upon, and inures to the benefit of, the parties hereto and their
respective estates, executors, administra­tors, legatees, heirs, and personal
and legal representatives, successors and permitted assigns.  Neither Bay Harbour nor Bay Harbour Parent shall
assign any of their respective rights or obligations hereunder without the
prior written consent of SkyTerra and Holdings.

 

22.           Change;
Waiver.  No change or modification of
or supplement to this Agreement shall be valid unless the same is in writing
and signed by the parties hereto.  No
waiver of any provision of this Agreement shall be valid unless in writing and
signed by the party waiving its rights. 
The failure of any party to this Agreement at any time to insist upon,
or any delay by any party to this Agreement at any time to insist upon, strict
performance of any condition, promise, agreement or understanding set forth
herein shall not be construed as a waiver or relinquishment of the right to
insist upon strict performance of the same condition, promise, agreement or
understanding at a future time.

 

23.           Further
Cooperation.  Each party shall
cooperate with the other, at any other party’s request, to execute any and all
documents or instruments, or to obtain any consent, in order to assign,
transfer, perfect, record, maintain, enforce or otherwise carry out the intent
of the terms of this Agreement.

 

24.           Entire
Agreement.  This Agreement sets forth
all of the promises, agreement, conditions, understandings representations,
warranties and covenants by and between the parties hereto with respect to the
subject matter referred to herein, and there are no promises, representations
or warranties other than as set forth herein. 
Any and all prior agreements with respect to such subject matter are
hereby revoked.  This Agreement is, and
is intended by the parties to be, an integration of any and all prior
agreements or understandings, oral or written,

 

13

 

with respect
to such subject matter.  Without limiting
the foregoing, no party shall be deemed to have made any representation or
warranty other than as expressly made herein.

 

25.           Headings.  The headings and other captions in this
Agreement are for convenience and reference only and shall not be used in
interpreting, construing or enforcing any of the provisions of this Agreement.

 

26.           Counterparts.  This Agreement may be executed in any number
of counterparts, which may be by facsimile, all of which counterparts taken
together shall constitute one and the same instrument.

 

27.           Specific
Performance. The parties to this Agreement agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise
breached.  Accordingly, the parties to
this Agreement hereby agree that each party hereto shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement in any court of the
United States or any state having jurisdiction, in addition to any other remedy
to which such party may be entitled at law or in equity.

 

[Signature Page Follows]

 

14

 

IN WITNESS
WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.

 

	
   

  	
  SKYTERRA COMMUNICATIONS,

  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey
  A. Leddy

  
	
   

  	
   

  	
  Name: Jeffrey
  A. Leddy

  
	
   

  	
   

  	
  Title: Chief
  Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MSV ROLLUP LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert
  Lewis

  
	
   

  	
   

  	
  Name: Robert
  Lewis

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BAY HARBOUR MSV,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven
  Van Dyke

  
	
   

  	
   

  	
  Name: Steven
  Van Dyke

  
	
   

  	
   

  	
  Title:
  Managing Principal

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TROPHY HUNTER
  INVESTMENTS,

  LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven
  Van Dyke

  
	
   

  	
   

  	
  Name: Steven
  Van Dyke

  
	
   

  	
   

  	
  Title:
  Managing Principal

  

 

15

 

	
   

  	
  BAY HARBOUR
  90-1, LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven
  Van Dyke

  
	
   

  	
   

  	
  Name: Steven
  Van Dyke

  
	
   

  	
   

  	
  Title:
  Managing Principal

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BAY HARBOUR
  MASTER LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven
  Van Dyke

  
	
   

  	
   

  	
  Name: Steven
  Van Dyke

  
	
   

  	
   

  	
  Title:
  Managing Principal

  

 

16

 

EXHIBIT A

 

Form of Registration Rights Agreement

 

EXHIBIT B

 

MSV Exchange Agreement

 

 

EXHIBIT C

 

Amended and Restated TerreStar Networks Inc. Stockholders’ Agreement

 

 

EXHIBIT D

 

Form of Joinder AgreementExhibit 10.6

 

FORM
OF ASSET PURCHASE AGREEMENT

 

THIS ASSET
PURCHASE AGREEMENT (this “Agreement”) is made
and entered into as of May 6, 2006 (the “Effective Date”), by and
among [Seller] (“[Seller]”), MSV Investors Holdings, Inc., a
Delaware corporation (“Buyer”), and SkyTerra Communications, Inc.,
a Delaware corporation (“SkyTerra”).

 

WHEREAS,
Buyer is a wholly-owned subsidiary of SkyTerra;

 

WHEREAS,
[Seller] desires to sell to Buyer, and Buyer desires to purchase from [Seller],
the [Seller] Interest (as defined herein) on the terms and subject to the
conditions, promises, representations and warranties set forth herein; and

 

NOW,
THEREFORE, in consideration of the foregoing, of the
mutual promises herein contained and of other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto, intending to be legally bound, hereby covenant and agree as follows:

 

1.             Sale
and Transfer of the [Seller] Interest. At the Closing (as defined
below) [Seller] shall sell, assign, transfer and convey all of the outstanding
equity interests of MSV Investors, LLC, a Delaware limited liability company (“MSV
Investors”), owned directly or indirectly, of record or beneficially, by [Seller]
and which constitute                   %
of the total outstanding equity interests of MSV Investors (the “[Seller]
Interest”), to Buyer, and Buyer shall purchase the [Seller] Interest from [Seller];
provided, that [Seller] shall not sell, assign, transfer or convey to
Buyer, and Buyer shall not assume, any liability (whether fixed or contingent),
including without limitation any liability for taxes, interest and penalties encumbering
or otherwise attributable to the [Seller] Interest or [Seller] (the “Excluded
Liabilities”).

 

2.             Instruments of Conveyance
and Transfer.

 

(a)           Simultaneously with the execution of this Agreement, (i) MSV
Investors shall execute and deliver to [Seller] Amendment No. 2 to the
TerreStar Networks Inc. Stockholders’ Agreement and the Amended and Restated
TerreStar Networks Inc. Stockholders’ Agreement, each to be effective in
accordance with its terms; and (ii) [Seller] shall execute and deliver to
SkyTerra the Joinder Agreement to the TerreStar Networks Inc. Stockholders’
Agreement and Amendment No. 2 to the TerreStar Networks Inc. Stockholders’
Agreement and the Amended and Restated TerreStar Networks Inc. Stockholders’
Agreement (the “Joinder Agreement”), the form of which is attached
hereto as Exhibit C.

 

(b)           At the Closing, [Seller] shall deliver to Buyer an
instrument of assignment, substantially in the form of Exhibit A
hereto (the “Instrument of Assignment”) evidencing the transfer of the [Seller] Interest, dated the date of the
Closing, or in such other form satisfactory to SkyTerra as shall be
effective to vest in Buyer good and valid title to the [Seller] Interest, free and clear of all
Liens (as defined herein), except for Liens created by Buyer. [Seller] shall at any time, and from time to
time, after the 

 

1

 

Closing, execute, acknowledge and deliver all
further assignments, transfers, and any other such instruments of conveyance,
upon the request of Buyer or SkyTerra, to confirm the sale of the [Seller] Interest hereunder.

 

(c)           At the Closing, [Seller] shall deliver to Buyer an affidavit
certifying as to [Seller]’s non-foreign status in accordance with the
requirements of Section 1.1445-2(b) of the Internal Revenue Service
Treasury Regulations.

 

(d)           [Seller] hereby agrees that between the
Effective Date and the Closing, it shall not, directly or indirectly, sell,
transfer, distribute, pledge, dispose of, grant an option with respect to or
create or permit to exist any Lien on or in respect of the [Seller] Interest. As used herein, “Lien”
means any claim, mortgage, pledge, hypothecation, assignment, deposit
arrangement, option, call contract, commitment, demand, lien, tax, charge,
security interest, encumbrance or preference, priority or other security
agreement of any kind or nature whatsoever, including, without limitation, the
filing of any financing statement or similar instrument under the Uniform Commercial
Code or comparable law of any jurisdiction, domestic or foreign.

 

(e)           [Seller] hereby constitutes and appoints
Robert C. Lewis as the true and lawful representative and attorney-in-fact of [Seller], in the name, place and stead of [Seller], with full power of substitution,
to make, execute, sign and deliver the Instrument of Assignment effecting the
transfer of the [Seller] Interest to Buyer at the Closing and such other instruments,
documents and certificates necessary to effect the transactions contemplated
hereby and to accept and receive on its behalf the stock certificate
representing the Consideration (as defined herein).

 

(f)            Upon Closing, SkyTerra shall deliver to [Seller] an effective registration statement
(the “[Seller] Registration Statement”) with respect to the shares of SkyTerra Common Stock
to be delivered by Buyer to [Seller] upon Closing pursuant to Section 3(a).

 

3.             Payment by Buyer.

 

(a)           The aggregate purchase price for the [Seller] Interest (the “Consideration”)
shall be equal to ______ shares of common stock, par value $0.01 per share (“SkyTerra
Common Stock”), of SkyTerra (as appropriately adjusted for any stock split,
combination, reorganization, recapitalization, reclassification, stock
dividends, stock distribution or similar event declared or effected prior to
the Initial Closing, as such term is defined in the MSV Exchange Agreement, as
defined below); provided, however, that no adjustment shall be
made for the Rights Offering (as such term is defined in the MSV Exchange
Agreement). At the Closing, Buyer shall deliver to [Seller], simultaneously with the receipt by
Buyer of the items required by Section 2, a stock certificate registered
in the name of [Seller]
in the amount of the Consideration.

 

(b)          SkyTerra hereby guarantees the full performance by
Buyer of Buyer’s obligations described in Section 3(a) above.

 

2

 

4.             Representations
and Warranties of [Seller]. [Seller] represents and warrants to Buyer
and SkyTerra, as of the Effective Date and as of the date of Closing, that:

 

(a)           [Seller] has all requisite corporate power
and authority to enter into this Agreement, the Joinder Agreement and the
Registration Rights Agreement in substantially the form attached as Exhibit B
hereto (the “Registration Rights Agreement”) and to sell the [Seller] Interest hereunder. The sale of the
[Seller]
Interest hereunder by [Seller] and the execution of this Agreement, the Joinder
Agreement and the Registration Rights Agreement will not violate or conflict
with any agreement or instrument binding on [Seller] or to which it or any of its
properties is subject or any applicable law. This Agreement, the Joinder Agreement
and the Registration Rights Agreement have been duly executed and delivered by [Seller] and constitute the legal, valid and
binding obligation of [Seller], enforceable against [Seller] in accordance with their terms,
except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting enforcement of creditors’
rights generally and by general equitable principles.

 

(b)           No consent, approval, authorization or order of, or
registration, qualification or filing with, any court, regulatory authority,
governmental body or any other third party is required for the execution,
delivery and performance by [Seller] of this Agreement, the Joinder Agreement or the
Registration Rights Agreement or the consummation by [Seller] of the transactions contemplated
hereby, except the filings pursuant to the Registration Rights Agreement under
the Securities Act of 1933, as amended (the “Securities Act”).

 

(c)           [Seller] is the record and beneficial owner
of, and has, and will convey to Buyer at the Closing, good, valid and legal
title to the [Seller]
Interest, free and clear of all Liens, except for Liens created by Buyer.

 

(d)           The [Seller] Interest constitutes all the direct or indirect
equity interests of both MSV Investors and MSV (as defined below) owned of
record or beneficially by [Seller].

 

(e)           Upon the consummation of the sale, assignment,
transfer and conveyance of the [Seller] Interest, [Seller] shall not own, of record or beneficially, or have, by
conversion, warrant, option or otherwise, any right to, interest in or
agreement to acquire any equity interest in either MSV Investors or MSV,
whether issued or authorized but unissued.

 

(f)            [Seller] is an “accredited investor” as that
term is defined in Regulation D promulgated under the Securities Act of 1933.

 

(g)           [Seller] has had an opportunity to ask
questions and receive answers from SkyTerra regarding the terms and conditions
of the offering of shares of SkyTerra Common Stock and the business and
financial condition of SkyTerra and to obtain additional information (to the
extent SkyTerra possessed such information or could acquire it without 

 

3

 

unreasonable effort or expense) necessary to
verify the accuracy of any information furnished to it or to which it had
access. The fair market value of the assets of any entity holding the [Seller] Interest on behalf of the [Seller] will exceed the sum of its liabilities (including any
liabilities to which its assets are subject). The foregoing, however, does not
limit or modify the representations or warranties of SkyTerra in this Agreement
or the right of [Seller] to rely upon such representations or warranties.

 

5.             Representations
and Warranties of Buyer. Buyer represents and warrants that:

 

(a)           Buyer has all requisite corporate power and authority
to enter into this Agreement and to purchase the [Seller] Interest hereunder. The
purchase by Buyer of the [Seller] Interest hereunder will not violate any
agreement or instrument binding on Buyer or to which it or any of its
properties is subject or any applicable law. This Agreement has been duly
executed and delivered by Buyer and constitutes the legal, valid and binding
obligation of Buyer enforceable against Buyer in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting enforcement of creditors’
rights generally and by general equitable principles.

 

(b)           No consent, approval, authorization or order of, or
registration, qualification or filing with, any court, regulatory authority,
governmental body or any other third party is required for the execution,
delivery and performance by Buyer of this Agreement or the consummation by
Buyer of the transactions contemplated hereby, except the filings pursuant to the
Registration Rights Agreement under the Securities Act.

 

(c)           The [Seller] Interest to be transferred to Buyer will
be acquired for investment for Buyer’s own account, not as a nominee or agent,
and not with a view to the resale or distribution of any part thereof, in
each case, in violation of applicable securities laws, and Buyer has no present
intention of selling, granting any participation in, or otherwise distributing
the same except in compliance with applicable securities laws.

 

(d)           Buyer understands that the [Seller] Interest will not
be registered under the Securities Act and the sale provided for in this
Agreement and [Seller]’s transfer of securities hereunder will be made in
reliance upon an exemption from registration under the Securities Act, and
that, in such case, [Seller]’s reliance on such exemption will be based on
Buyer’s representations set forth herein.

 

(e)           Buyer believes it has received all the information it
considers necessary or appropriate for deciding whether to acquire the [Seller]
Interest. Buyer further represents that it has had an opportunity to ask
questions and receive answers from [Seller] regarding the terms and conditions
of the [Seller] Interest and the business and financial condition of MSV
Investors and to obtain additional information (to the extent [Seller]
possessed such information or could acquire it without unreasonable effort or
expense) necessary to verify the accuracy of any information furnished to it or
which it had access. The foregoing, however, does not limit or modify the
representations or warranties of [Seller] in this Agreement or the right of
Buyer to rely upon such representations or warranties.

 

4

 

(f)            Buyer certifies and represents to [Seller] that 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 [Seller] Interest. Buyer’s financial condition is such that it is
able to bear the risk of holding the [Seller] Interest for an indefinite period
of time and the risk of loss of its entire investment. Buyer has sufficient
knowledge and experience in investing in companies similar to MSV Investors so
as to be able to evaluate the risks and merits of its investment in MSV
Investors.

 

(g)           Buyer understands that the [Seller] Interest may not
be sold, transferred or otherwise disposed of without registration under the
Securities Act or an exemption therefrom, and that in the absence of an
effective registration statement covering the [Seller] Interest or an available
exemption from registration under the Securities Act, such [Seller] Interest,
must be held indefinitely.

 

6.             Representations
and Warranties of SkyTerra. SkyTerra represents and warrants that:

 

(a)           SkyTerra has all requisite corporate power and
authority to enter into this Agreement and the Registration Rights Agreement and
to guarantee the purchase by Buyer of the [Seller] Interest hereunder. The
guarantee by SkyTerra of Buyer’s purchase of the [Seller] Interest hereunder
will not violate any agreement or instrument binding on SkyTerra or to which it
or any of its properties is subject or any applicable law. This Agreement and
the Registration Rights Agreement have been duly executed and delivered by
SkyTerra and constitute the legal, valid and binding obligation of SkyTerra
enforceable against SkyTerra in accordance with their terms, except as
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting enforcement of creditors’ rights generally
and by general equitable principles.

 

(b)           No consent, approval, authorization or order of, or
registration, qualification or filing with, any court, regulatory authority,
governmental body or any other third party is required for the execution,
delivery and performance by SkyTerra of this Agreement or the Registration
Rights Agreement or the consummation by SkyTerra of the transactions
contemplated hereby, except the filings pursuant to the Registration Rights
Agreement under the Securities Act.

 

(c)           The shares of SkyTerra Common Stock to be issued to [Seller]
hereunder have been duly and validly authorized, and, when issued and delivered
pursuant to Section 3, will be fully paid and nonassessable.

 

(d)           Assuming the truth and accuracy of the representations
and warranties of [Seller] contained in Sections 4 and 7 hereof, the offer,
sale, and issuance of the shares of SkyTerra Common Stock will be exempt from
the registration requirements of the Securities Act, and will have been
registered or qualified (or are exempt from registration and qualification)
under the registration, permit or qualification requirements of all applicable
state securities laws.

 

5

 

(e)           Neither SkyTerra, nor any of its affiliates or any
other person acting on SkyTerra’s behalf, has directly or indirectly engaged in
any form of general solicitation or general advertising with respect to
the shares of SkyTerra Common Stock nor have any of such persons made any
offers or sales of any security or solicited any offers to buy any security
under circumstances that would require registration of the shares of SkyTerra
Common Stock under the Securities Act or cause this offering of shares of
SkyTerra Common Stock to be integrated with any prior offering of securities of
SkyTerra for purposes of the Securities Act.

 

7.             Acknowledgments.
[Seller] represents, warrants to, and agrees with, Buyer and SkyTerra that:

 

(a)           [Seller] acknowledges that (i) on May 6, 2006, SkyTerra executed an
exchange agreement (the “MSV Exchange Agreement”) with Motient that will
result in the consolidation (the “Consolidation”) of the ownership of
Mobile Satellite Ventures LP, a Delaware limited partnership (“MSV”), including,
among other things, the exchange of certain of the equity interests of MSV
currently owned, directly or indirectly, by Motient for SkyTerra non-voting
common stock (the “MSV Exchange”), exchangeable in certain circumstances
for shares of SkyTerra voting common stock. [Seller] acknowledges that SkyTerra
or Buyer may possess material, non-public information that might be
relevant in connection with a sale of the [Seller] Interest by [Seller]
hereunder (the “Information”). At [Seller]’s request, [Seller] has not
been provided with any of the Information and [Seller] acknowledges that the
Information may be material to [Seller]’s decision to enter into this
Agreement or otherwise materially adverse to [Seller]’s interests. [Seller]
acknowledges that it does not wish to receive any of the Information,
notwithstanding SkyTerra’s and Buyer’s offer to disclose and discuss the same
with [Seller].

 

(b)           Notwithstanding not receiving the Information, [Seller]
believes it has adequate information concerning the business and financial
condition of MSV Investors and MSV and the terms of the Consolidation to make
an informed decision regarding entering into the transactions contemplated by
this Agreement. [Seller] has independently and without reliance upon the
Information or otherwise upon SkyTerra or Buyer (except for the representations
and warranties expressly set forth in Sections 5 and 6 of this Agreement) or
any agent of SkyTerra, made its own analysis and decision to enter into the
transactions contemplated by this Agreement. Without limiting the foregoing,
neither SkyTerra nor Buyer nor any agent or affiliate of SkyTerra or Buyer,
respectively, shall be deemed to have made any representation or warranty
regarding the Information or any other representation or warranty with respect
to any other matter except to the extent set forth in Sections 5 and 6 of this
Agreement. [Seller] understands the disadvantage to which it may be
subject on account of its express desire not to receive the Information.

 

(c)           Notwithstanding anything contained in this Agreement
to the contrary, [Seller] hereby irrevocably and forever releases and
discharges SkyTerra, Buyer and their respective affiliates, directors,
officers, employees, representatives, agents, advisors and controlling persons
and their respective successors and assigns from any and all claims, losses,
liabilities, damages, deficiencies, judgments, assessments, fines, settlements,
costs or expenses (including interest, penalties and reasonable fees,
disbursements and other expenses of counsel), 

 

6

 

including, but not limited to, any and all
liabilities, claims or demands (legal, equitable or otherwise), whether arising
before or after the date of the Closing, alleging violations of federal or
state securities laws, common law fraud or deceit, breach or fiduciary duty,
negligence, tort or any other theory, based upon, arising from, relating to, or
in connection with, directly or indirectly, the non-disclosure of, in whole or
in part, the Information.

 

(d)           [Seller] acknowledges that the Consideration
represents a fair value negotiated in an arm’s length transaction between [Seller]
and the Buyer even though the Consideration may be less than the value
negotiated in the MSV Exchange of the indirect percentage interest in MSV
represented by the [Seller] Interest.

 

(e)           [Seller] has consulted legal, tax and business
advisors with respect to this Agreement and the transactions contemplated
hereby.

 

(f)            [Seller] is relying solely upon the advice of its own
legal, tax and business advisors and its entering into this Agreement is the
result of independent arm’s length negotiations between [Seller], Buyer and
SkyTerra. [Seller] also acknowledges that SkyTerra and Buyer are relying on the
representations and warranties contained in Section 4 and this Section 7
and would not consummate the transactions contemplated by this Agreement in the
absence of the representations and warranties contained in Section 4 and
this Section 7.

 

(g)           [Seller] represents that the offering of the SkyTerra
Common Stock received by [Seller] pursuant to this Agreement was made only
through direct, personal communication by Buyer and SkyTerra and not through
public solicitation or advertising. [Seller] has not retained or consulted any “Purchaser
Representative” as such term is defined in Rule 501 of Regulation D
promulgated under the Securities Act of 1933, as amended (the “Securities
Act”). [Seller] has such knowledge, experience and skill in evaluating and
investing in issues of equity securities, including securities of new and
speculative companies, based on actual participation in financial, investment
and business matters such that [Seller] is capable of evaluating the merits and
risks of an investment in SkyTerra Common Stock, and has such knowledge,
experience and skill in financial and business matters that [Seller] is capable
of evaluating the suitability of SkyTerra Common Stock as an investment of [Seller].
[Seller] has not received, nor is relying on, any representations or warranties
from Buyer or SkyTerra, other than as provided herein. [Seller] is able to bear
the economic risk of an investment in SkyTerra Common Stock and has adequate
income independent of any income produced from an investment in SkyTerra Common
Stock and has sufficient net worth to sustain a loss of all of [Seller]’s
investment in SkyTerra Common Stock without economic hardship if such a loss
should occur.

 

(h)           [Seller] is acquiring the SkyTerra Common Stock for
its own account for investment purposes and not with a view to any distribution
thereof in violation of the Securities Act of 1933 or any state securities laws.
Until the SkyTerra Common Stock received by [Seller] pursuant to this Agreement
is transferred pursuant to an effective registration statement or Rule 144
under the Securities Act, each certificate evidencing such SkyTerra Common
Stock issued to [Seller] or to a subsequent transferee shall 

 

7

 

include a legend in substantially the
following form (in addition to any other statements or legends required by
law):

 

THE SECURITIES REPRESENTED BY
THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
UNDER STATE SECURITIES LAWS. THESE SECURITIES MAY NOT BE RESOLD OR
TRANSFERRED UNLESS REGISTERED OR EXEMPT FROM REGISTRATION UNDER THE SECURITIES
ACT OF 1933 AND APPLICABLE STATE SECURITIES LAWS.

 

(i)            [Seller] understands that no federal or state agency
has passed upon or made any recommendation or endorsement of an investment in,
or disposition of, SkyTerra Common Stock.

 

(j)            [Seller] and its officers, directors, employees,
agents and representatives will not trade in the securities of SkyTerra prior
to (i) the Closing or (ii) the termination of this Agreement.

 

8.             Conditions
to the Obligations of [Seller]. The obligation of [Seller] hereunder to
consummate the sale and transfer of the [Seller] Interest contemplated by Section 1
hereof is subject to the fulfillment, prior to or at the Closing, of each of
the following conditions, unless any such condition is waived in writing by [Seller]:

 

(a)           The representations and warranties made by Buyer and
SkyTerra herein shall be true and correct as of the Closing Date with the same
effect as though made on such date. Buyer and SkyTerra shall have performed and
complied with all agreements, covenants, and conditions required by this
Agreement to be performed and complied with by either of them prior to the
Closing.

 

(b)           There shall be no effective injunction, writ or
preliminary restraining order of a court of competent jurisdiction directing
that the transactions provided for herein not be consummated.

 

(c)           The Initial Closing under, and as defined in, the MSV
Exchange Agreement shall have been consummated.

 

(d)           Buyer shall have delivered at the Closing the
Consideration in accordance with Section 3 hereof.

 

(e)           Prior to the Closing, MSV Investors shall have
distributed all of the shares of common stock of TerreStar Networks, Inc. and
TererStar Networks Bermuda Ltd. that it owns (collectively, the “TerreStar
Shares”), on a pro rata basis, to the members of MSV Investors (the “TerreStar
Distribution”).

 

(f)            SkyTerra shall have entered into the Registration
Rights Agreement, and shall have provided to [Seller] such executed
Registration Rights Agreement and 

 

8

 

certified resolutions of the Board of
Directors of SkyTerra approving its entry into the Registration Rights
Agreement.

 

(g)           The [Seller] Registration
Statement shall have become effective and no stop order with respect thereto
shall be in effect and no proceedings for that purpose shall have been
commenced or threatened by the Securities and Exchange Commission.

 

9.             Conditions
to the Obligations of Buyer and SkyTerra. All obligations of Buyer and
SkyTerra hereunder are subject to the fulfillment, prior to or at the Closing,
of each of the following conditions, unless any such condition is waived in
writing by Buyer or SkyTerra, as applicable:

 

(a)           The representations and warranties made by [Seller]
herein shall be true and correct as of the Closing Date with the same effect as
though made on such date. [Seller] shall have performed and complied with all
agreements, covenants, and conditions required by this Agreement to be
performed and complied with by it at or prior to the Closing.

 

(b)           There shall be no effective injunction, writ or
preliminary restraining order of a court of competent jurisdiction directing
that the transactions provided for herein not be consummated.

 

(c)           The Initial Closing under, and as defined in, the MSV
Exchange Agreement shall have been consummated.

 

(d)           [Seller] shall have delivered or caused to be
delivered to Buyer an Instrument of Assignment effecting the transfer of the [Seller]
Interest in accordance with Section 2 hereof and all documents,
instruments, assignments, and writings reasonably requested by Buyer or
SkyTerra in connection therewith.

 

(e)           [Seller] shall have furnished SkyTerra an affidavit certifying
as to [Seller]’s non-foreign status in accordance with the requirements of Section 1.445-2(b) of
the Internal Revenue Service Regulations.

 

(f)            Immediately prior to the Closing, MSV Investors shall
have distributed all of its TerreStar Shares, on a pro rata basis, to the
members of MSV Investors.

 

(g)           [Seller] shall have entered into the Registration
Rights Agreement, and shall have provided to SkyTerra such executed
Registration Rights Agreement and certified resolutions of the Board of
Directors of [Seller] approving its
entry into the Registration Rights Agreement.

 

10.          Expenses.
Each party shall bear its own expenses in connection with the transactions
contemplated by this Agreement.

 

11.          Indemnification.
Each of the parties hereto shall defend, indemnify and hold harmless the other
against and in respect of:

 

9

 

(a)           Any and all losses and damages resulting from,
relating or incident to, or arising out of any misrepresentation or breach of
warranty, covenant or agreement by such party made or contained in this
Agreement; and

 

(b)           Any and all actions, suits, proceedings, claims,
demands, judgments, costs and expenses (including reasonable legal fees)
incident to the foregoing, whether between the parties or between a party and
any third party or otherwise.

 

Further, [Seller]
agrees to defend, indemnify and hold harmless SkyTerra and its affiliates against
and in respect of any and all Excluded Liabilities and any and all actions,
suits, proceedings, claims, demands, judgments, costs and expenses (including
reasonable legal fees) incident to the Excluded Liabilities.

 

12.          Consent and Waiver.

 

(a)            [Seller] hereby waives
any and all “Tag-Along Rights,” as described in Section 13(c) of the
Limited Liability Company Agreement of MSV Investors, dated as of November 23,
2001 (the “Investors LLC Agreement”), to which [Seller] may be
entitled in connection with the Consolidation.

 

(b)           Buyer, in its capacity as Manager (as defined in the
Investors LLC Agreement), hereby consents to the transfer by [Seller] of the [Seller]
Interest, pursuant to the terms contained herein.

 

13.          Closing.
Unless this Agreement is terminated in accordance herewith, the closing of the
purchase and sale contemplated by Section 1 of this Agreement (the “Closing”)
shall take place immediately after the Initial Closing under, and as defined
in, the MSV Exchange Agreement at the offices of Skadden, Arps, Slate, Meagher &
Flom LLP, Four Times Square, New York, New York 10036, or at such other time
and/or location as may be mutually agreed upon by the parties hereto.

 

14.          Events of Termination.
This Agreement may be terminated and the transactions contemplated hereby
abandoned at any time by mutual written consent of Buyer and [Seller]. This Agreement
shall automatically terminate and shall be of no further force or effect upon
the earlier to occur of (a) termination of the MSV Exchange Agreement and (b) December 31,
2006.

 

15.          Effect of Termination. In the event
of termination of this Agreement pursuant to Section 14 hereof:

 

(a)           Each party will upon request return all documents and
other materials of the other party relating to the transactions contemplated
hereby, whether so obtained before or after the execution hereof, to the party
furnishing the same; and

 

(b)           Neither party shall have any liability or further
obligation to the other party to this Agreement.

 

10

 

16.          Governing Law. This Agreement shall
be construed in accordance with the laws of the State of New York without
giving effect to applicable principles of conflicts of laws to the extent that
the application of the laws of another jurisdiction would be required thereby.

 

17.         Invalidity or Unenforceability. In
case any one or more of the provisions contained in this Agreement shall, for
any reason, be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect the other
provisions of this Agreement, and this Agreement shall be construed as if such
invalid, illegal or unenforceable provision had never been contained herein.

 

18.          Benefits
and Burdens. This Agreement is binding upon, and inures to the benefit
of, the parties hereto and their respective estates, executors, administrators,
legatees, heirs, and personal and legal representatives, successors and
permitted assigns. [Seller] shall not assign any of its rights or obligations
hereunder without the prior written consent of SkyTerra and Buyer.

 

19.          Change;
Waiver. No change or modification of or supplement to this Agreement shall
be valid unless the same is in writing and signed by the parties hereto. No
waiver of any provision of this Agreement shall be valid unless in writing and
signed by the party waiving its rights. The failure of any party to this
Agreement at any time to insist upon, or any delay by any party to this
Agreement at any time to insist upon, strict performance of any condition,
promise, agreement or understanding set forth herein shall not be construed as
a waiver or relinquishment of the right to insist upon strict performance of
the same condition, promise, agreement or understanding at a future time.

 

20.          Further
Cooperation. Each party shall cooperate with the other, at any other
party’s request, to execute any and all documents or instruments, or to obtain
any consent, in order to assign, transfer, perfect, record, maintain, enforce
or otherwise carry out the intent of the terms of this Agreement.

 

21.          Entire
Agreement. This Agreement sets forth all of the promises, agreement,
conditions, understandings representations, warranties and covenants by and
between the parties hereto with respect to the subject matter referred to
herein, and there are no promises, representations or warranties other than as
set forth herein. Any and all prior agreements with respect to such subject
matter are hereby revoked. This Agreement is, and is intended by the parties to
be, an integration of any and all prior agreements or understandings, oral or
written, with respect to such subject matter. Without limiting the foregoing,
no party shall be deemed to have made any representation or warranty other than
as expressly made herein.

 

22.          Headings.
The headings and other captions in this Agreement are for convenience and
reference only and shall not be used in interpreting, construing or enforcing
any of the provisions of this Agreement.

 

23.          Counterparts.
This Agreement may be executed in any number of counterparts, which may be
by facsimile, all of which counterparts taken together shall constitute one and
the same instrument.

 

11

 

24.          Specific
Performance. The parties to this Agreement agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. Accordingly, the parties to this Agreement hereby agree that each
party hereto shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
of this Agreement in any court of the United States or any state having
jurisdiction, in addition to any other remedy to which such party may be
entitled at law or in equity.

 

[Signature Page Follows]

 

12

 

IN WITNESS
WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.

 

 

	
   

  	
  SKYTERRA
  COMMUNICATIONS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MSV
  INVESTORS HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [SELLER]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

13

 

EXHIBIT A

 

Form of
Instrument of Assignment

 

[Seller] Company
(“[Seller]”), for good and valuable consideration, the receipt of which
is hereby acknowledged, in accordance with and as additional documentation
pursuant to the Asset Purchase Agreement (the “Purchase Agreement”),
dated as of May 6, 2006, by and between [Seller], Buyer and SkyTerra, does
hereby acknowledge and affirm the transfer, conveyance and assignment to Buyer
and the purchase and acceptance by Buyer of good and valid title in and to the [Seller]
Interest, pursuant to the terms of the Purchase Agreement.

 

Capitalized
terms used herein and not otherwise defined shall have the meanings ascribed to
them in the Purchase Agreement.

 

This
Instrument of Assignment, being further documentation of the transfers,
conveyances and assignments provided for in and by the Purchase Agreement, does
not extend upon or limit the rights, obligations, representations and
warranties or acknowledgements therein provided. No representations and
warranties are made in this Instrument of Assignment, but instead are expressly
disclaimed, other than those representations, warranties and acknowledgements
expressly set forth in the Purchase Agreement, which such representations,
warranties and acknowledgements are hereby affirmed.

 

[Signature Page Follows]

 

14

 

EXHIBIT B

 

Form of
Registration Rights Agreement

 

15

 

EXHIBIT C

 

Form of
Joinder Agreement

 

16

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