Document:

Exhibit
10.1

 

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF

HUGHES NETWORK SYSTEMS, LLC

THIS
LIMITED LIABILITY COMPANY AGREEMENT (the “Agreement”) is
entered into as of April 22, 2005, by and between HUGHES NETWORK SYSTEMS, INC.,
a Delaware corporation (“DTVG Sub”) and
a subsidiary of The DIRECTV Group, Inc. a Delaware corporation, and SkyTerra
Communications, Inc., a Delaware corporation (“SkyTerra”)
or any permitted successor, assignee or transferee of DTVG Sub, SkyTerra and
any other Persons who shall in the future execute and deliver this Agreement
pursuant to the provisions hereof shall hereinafter collectively be referred to
as the “Members.”

 

WHEREAS,
the DTVG Sub, as sole member, previously formed a limited liability company
under the name “Hughes Network Systems, LLC” (the “LLC”),
for the purposes hereinafter set forth, subject to the terms and conditions
hereof, and authorized Kathy P. Spicer as an authorized person to file a
Certificate of Formation (the “Certificate”)
to effect such formation pursuant to the provisions of the Delaware Limited
Liability Company Act (the “Delaware LLC Act”)
and entered into a Limited Liability Company agreement for the LLC dated
November 12, 2004 (the “Prior LLC Agreement”);  and

 

WHEREAS,
immediately prior to the effectiveness of this Agreement, the DTVG Sub conveyed
to SkyTerra a 50% LLC Interest in the LLC;

 

WHEREAS,
the Members desire to amend and restate the Prior LLC Agreement as more fully
set forth below; and

 

WHEREAS, following the closing of the
transactions contemplated by the Contribution Agreement, SkyTerra may create a
wholly owned subsidiary and assign its rights and obligations hereunder to such
subsidiary (the “Drop Down”);

 

NOW,
THEREFORE, in consideration of the foregoing, and of the covenants and
agreements hereinafter set forth, it is hereby agreed as follows:

 

1.                                      CERTAIN
DEFINITIONS

Unless
the context otherwise specifies or requires, capitalized terms used herein
shall have the respective meanings assigned thereto in Addendum I,
attached hereto, and incorporated herein by reference, for all purposes of this
Agreement (such definitions to be equally applicable to both the 

 

 

singular and the plural
forms of the terms defined).  Unless
otherwise specified, all references herein to Articles or Sections are to
Articles or Sections of this Agreement.

2.                                      FORMATION; NAME; PLACE OF BUSINESS

2.1.                            Formation of LLC;
Certificate of Formation

The Members of the LLC hereby:

2.1.1.       approve
and ratify the filing of the Certificate with the Recording Office on
November 12, 2004;

2.1.2.       confirm
and agree to their status as Members of the LLC;

2.1.3.       execute
this Agreement for the purpose of amending and restating the Prior LLC
Agreement, continuing the existence of the LLC and establishing the rights, duties,
and relationship of the Members;

2.1.4.       (i)
agree that if the laws of any jurisdiction in which the LLC transacts business
so require, the Managing Member or the appropriate officers or other authorized
representatives of the LLC shall file, or shall cause to be filed, with the
appropriate office in that jurisdiction, any documents necessary for the LLC to
qualify to transact business under such laws; and (ii) agree and obligate
themselves to execute, acknowledge, and cause to be filed for record, in the
place or places and manner prescribed by law, any amendments to the Certificate
as may be required, either by the Delaware LLC Act, by the laws of any
jurisdiction in which the LLC transacts business, or by this Agreement, to
reflect changes in the information contained therein or otherwise to comply
with the requirements of law for the continuation, preservation, and operation
of the LLC as a limited liability company under the Delaware LLC Act; and

2.1.5.       each
severally represent and warrant that such Member is duly authorized to execute,
deliver, and perform its obligations under this Agreement and that the Person,
if any, executing this Agreement on behalf of such Member is duly authorized to
do so and that this Agreement is binding on and enforceable against such Member
in accordance with its terms.

2.2.                            Name of LLC

The name under which the LLC shall conduct its
business is “Hughes Network Systems, LLC”. 
The business of the LLC may be conducted under any other name permitted
by the Delaware LLC Act that is deemed necessary or desirable by the Managing
Member, in its sole and absolute discretion. 
The Managing Member or the appropriate officers or other authorized
representatives of the LLC promptly shall execute, file, and record, or cause
to be executed, filed and recorded, any assumed or fictitious name certificates
required by the laws of the State of Delaware or any state in which the LLC
conducts business.

2.3.                            Place of Business

The location of the
principal place of business of the LLC shall be as determined by the Managing
Member.  The Managing Member may
hereafter change the principal place of business of the LLC to such other place
or places within the United States as the Managing Member may from time to time
determine, in its sole and absolute discretion, provided that, if necessary,
the Managing Member 

 

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shall
amend, or shall cause to be amended, the Certificate in accordance with the
applicable requirements of the Delaware LLC Act.  The Managing Member may, in its sole and
absolute discretion establish and maintain such other offices and additional
places of business of the LLC, either within or without the State of Delaware,
as they deem appropriate.

2.4.                            Registered Office and
Registered Agent

The street address of the initial registered
office of the LLC shall be 2711 Centre Road, Suite 400, Wilmington, Delaware
19808, and the LLC’s registered agent at such address shall be Corporation
Service Company.  The registered office
and the registered agent of the LLC may be changed by the Managing Member from
time to time in accordance with the then applicable provisions of the Delaware
LLC Act and any other applicable laws.

3.                                      PURPOSES
AND POWERS OF LLC

3.1.                            Purposes

The purposes of the LLC shall be to engage in
any lawful business permitted by the Delaware LLC Act or laws of any
jurisdiction in which the LLC may do business and to enter into any lawful
transaction and engage in any lawful activities in furtherance of the foregoing
purposes and as may be necessary, incidental or convenient to carry out the
business of the LLC as contemplated by this Agreement.

3.2.                            Powers

Subject to all of the provisions of this
Agreement, the LLC shall have the power to do any and all acts and things
necessary, appropriate, advisable, or convenient for the furtherance and
accomplishment of the purposes of the LLC, including, without limitation, to
engage in any kind of activity and to enter into and perform obligations of any
kind necessary to or in connection with, or incidental to, the accomplishment
of the purposes of the LLC, so long as said activities and obligations may be
lawfully engaged in or performed by a limited liability company under the
Delaware LLC Act.

4.                                      TERM OF LLC

The existence of the LLC commenced on the date
upon which the Certificate was duly filed with the Recording Office and shall
continue until the Termination Date, unless dissolved and liquidated before the
Termination Date in accordance with the provisions of Section 10.

5.                                      CAPITAL

5.1.                            Capital Contributions
and Percentage Interests of Members

5.1.1.                  Capital Contributions.

Prior to or
concurrently with the execution of this Agreement, DTVG Sub made the Capital
Contribution set forth on Exhibit A attached hereto and, upon the
acquisition by SkyTerra of a 50% LLC Interest from DTVG Sub, SkyTerra succeeded
to 50% of DTVG Sub’s initial Capital 

 

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Contribution
such that each of the Members is deemed to have made the Capital Contribution
set forth opposite such Member’s name in Exhibit A attached hereto
(individually, each a “Capital Contribution,”
and collectively, the “Capital Contributions”).  Exhibit A shall be amended from time
to time by the Managing Member to the extent necessary to reflect accurately
Capital Contributions or similar events under Section 5.3
making an amendment of Exhibit A necessary or appropriate in the
judgment of the Managing Member.  Except
as otherwise provided in the Delaware LLC Act, the Members shall not be required
to make any Capital Contributions to the LLC other than as set forth in this Section 5.1.

5.1.2.                  Class of Units

There shall be two classes of Units of LLC
Interests.  Class A Units shall be
granted to investors in the LLC in exchange for money or property other than
money, and Class B Units shall be granted by the LLC to certain persons as
determined by the Managing Member, in exchange for the performance of
services.  Exhibit A sets forth
(i) the name of each Member, (ii) the number of Class A Units held by each
Member, (iii) the number of Class B Units held by each Member, and (iv) the
amount of fair market value of each Member’s Capital Contributions to the LLC,
if any.

5.1.3.      Class B Units

Class B Units shall be available to issue to
employees, officers, directors and consultants of the LLC as determined by the
Managing Member, subject to Section 7.5.  Class B Units shall be granted solely in
exchange for the performance of services, and may be subject to forfeiture,
until fully vested, as determined by the Managing Member with respect to each
grant of Class B Units.  Class B Units
shall be non-voting Units in accordance with Section
7.1.5.

5.2.                            Support Obligations

In no event shall any Member
have any obligation to provide guarantees, collateral or any like support for
the debts, obligations or contracts of the LLC.

5.3.                            Issuance of Additional
LLC Interests

Subject to Section 7.5, the Managing Member is hereby authorized to
cause the LLC from time to time to issue to Members or other Persons (who, upon
such issuance and the execution by such Persons of such documents as the
Managing Member deems necessary or appropriate to evidence such Persons’
agreement to be admitted as a Member and to be bound by the terms and
conditions of this Agreement, shall automatically become Members) additional
LLC Interests for such consideration and in one or more classes, or one or more
series of any such classes, with such designations, preferences and relative,
participating, optional or other special rights, powers and duties, including
rights, powers and duties senior to the then-existing LLC Interests, all as
shall be determined by the Managing Member, in its reasonable discretion
subject to the requirements of the Delaware LLC Act, including without
limitation, (i) the allocations of items of LLC income, gain, loss, deduction
and credit to each such class or series of LLC Interests; (ii) the right of
each such class or series of LLC Interests to share in LLC distributions; and
(iii) the rights of each such class or series of LLC Interests upon dissolution
and liquidation of the LLC or upon termination of a series of LLC Interests.

 

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5.4.                            Capital Accounts

A separate Capital Account shall be established
and maintained for each Member in all events in accordance with the Tax
Allocations Addendum attached hereto as Addendum II and
by this reference incorporated herein.

5.5.                            Negative Capital
Accounts

No Member shall be required to pay to the LLC or
to any other Member any deficit or negative balance which may exist from time
to time in such Member’s Capital Account.

5.6.                            No Interest on Capital
Contributions or Capital Accounts

No Member shall be entitled to receive any
interest on its Capital Contributions or its outstanding Capital Account
balance.

5.7.                            Advances to LLC

Members may advance funds to the LLC in excess
of the amounts required hereunder to be contributed by them to the capital of
the LLC only with the consent of the Managing Member.  Any such approved advances by a Member shall
not result in any increase in the amount of such Member’s Capital Account or
entitle it to any increase in the Percentage Interest represented by such
Member’s LLC Interest.  The amounts of
such advances shall be a debt of the LLC to such Member and shall be payable or
collectible only out of the LLC Assets in accordance with terms and conditions
agreed upon by the Managing Member.

5.8.                            Liability of Members and
Board of Managers

Except as otherwise provided in the Delaware LLC
Act, the debts, obligations and liabilities of the LLC, whether arising in
contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and none of the Members or the Board Members shall be
obligated personally for any such debt, obligation or liability of the LLC
solely by reason of being a Member, the Managing Member or a Board Member.  The failure of the LLC to observe any
formalities or requirements relating to the exercise of its powers or management
of its business or affairs under the Delaware LLC Act or this Agreement shall
not be grounds for imposing personal liability on any Member, the Managing
Member or any Board Member for liabilities of the LLC.

5.9.                            Return of Capital

Except upon the dissolution of the LLC or as may
be specifically provided in this Agreement, no Member shall have the right to
demand or to receive the return of all or any part of its Capital Account or
its Capital Contributions to the LLC.

5.10.                     Rights to Subscribe to
Additional Issuances

Subject to Section 7.5, in the event the Managing Member decides to
cause the LLC to issue additional LLC Interests (other than (a) the issuance of
Class B Units, (b) the issuance of any LLC Interests in connection with
acquisitions, debt financings, joint ventures or strategic alliances, (c) the
declaration of dividends or other distributions in the form of additional LLC
Interests, (d) 

 

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recapitalizations,
splits or combinations of LLC Interests, or (e) the issuance of securities
(Units or otherwise) in a public offering, in the case of each of clauses (a)
through (e) to the extent approved in accordance with Section 7.5),
each Class A Member shall be offered the first opportunity to subscribe for
such additional issuance of  LLC
Interests, on the same terms and conditions as the Managing Member proposes to
issue such LLC Interests, in the proportion that such Class A Member’s
Percentage Interest bears to the aggregate Percentage Interests then held by
all Class A Members (such Member’s “Pro Rata Share”).  The Managing Member shall deliver a written
notice (the “Proposed Issuance Notice”) to each
such Class A Member at least ten (10) days in advance of the proposed issuance
of LLC Interests, stating the number and class of LLC Interests proposed to be
issued, the proposed subscription price, and the manner in which such Class A
Member may exercise its rights to subscribe to such LLC Interests.  Such Class A Member may exercise its rights
to subscribe to such LLC Interests by delivering a notice to that effect to the
LLC and each of the other Class A Members within ten (10) days after the
delivery of the Proposed Issuance Notice and complying with the procedures for
subscription specified in the Proposed Issuance Notice.  If any of the Class A Members does not elect
to purchase their full Pro Rata Share of the offered LLC Interests, the LLC
shall offer the Class A Members that have elected to purchase their full Pro
Rata Shares of such LLC Interests the opportunity to increase the number of
such LLC Interests they wish to subscribe for by an amount equal to their Pro
Rata Shares (excluding for such calculation the LLC Interests of any Member who
has not subscribed for its respective full Pro Rata Share) of the unsubscribed
portion of such LLC Interests.  This
process shall be repeated as often as necessary until either the Class A
Members have subscribed for all of the LLC Interests offered or no Class A
Member has exercised its right to subscribe for such additional LLC
Interests.  Any LLC Interests not
subscribed for by the Class A Members pursuant to the foregoing may be issued
by the Managing Member in accordance with the terms previously described by the
Managing Member.  From time to time and
at any time, the Class A Members may assign their rights to purchase LLC
Interests pursuant to this Section 5.10 to
their Affiliates.

6.                                      ALLOCATION
OF PROFITS AND LOSSES; DISTRIBUTIONS

6.1.                            Allocation of Net Income
or Net Loss

The Net Income or Net Loss, other items of
income, gains, losses, deductions and credits, and the taxable income, gains,
losses, deductions and credits of the LLC, if any, for each Fiscal Year (or
portion thereof) shall be allocated to the Members as provided in the Tax
Allocations Addendum.

6.2.                            Allocation of Income and
Loss With Respect to LLC Interests Transferred

If any LLC Interest is transferred during any
Fiscal Year, the Net Income or Net Loss (and other items referred to in Section 6.1) attributable to such LLC Interest for such
Fiscal Year shall be allocated between the transferor and the transferee based
on the number of days during such Fiscal Year for which each party was the
owner of the LLC Interest transferred.

6.3.                            Distributions

6.3.1.                  Determination of Availability.

Subject to Section 7.5, cash available or property available to be
distributed in-kind by the LLC to the Members (“Distributions”)
shall be determined for each Fiscal Year by the Managing Member and shall be
distributed to the Members as set forth in Section 6.3.3.

 

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6.3.2.                  Distribution to Members.

Distributions of available cash, as determined
by the Managing Member, shall be made at least annually within
seventy-five (75) days after the end of each Fiscal Year.  Distributions also may be made, in the sole
and absolute discretion of the Managing Member, after retention of appropriate
reserves, at other times during any Fiscal Year in anticipation of the year-end
determination thereof, and such Distributions shall be subject to year-end
adjustment.  The Members agree that,
within thirty (30) days after determination by the LLC that an overpayment
was made to any Member for any Fiscal Year pursuant to this Section 6.3, such Member shall repay the overpayment
unless the Board of Managers otherwise agrees to allow such overpayment to be a
credit against future Distributions, or make such other adjustments as the
Board of Managers determines to be appropriate to remedy such overpayment.

6.3.3.                  Priority of Distributions.

All Distributions shall be made in the following
order of priority:

 

                (a)           First, to the holders of Class
A Units pro rata in accordance with the number
of Units held until each such Member has received aggregate distributions under
this paragraph equal to such Member’s aggregate Capital Contributions to the
LLC, and

 

(b)           Second,
to the holders of all Units, pro rata in
accordance with the number of Vested Units held, provided that a holder of a
Class B Unit shall not be entitled to any distribution of cash or property that
resulted from the appreciation of the LLC Assets, or income earned by the LLC,
before such Member received such Class B Unit. 
In furtherance of the foregoing, prior to the issuance of a Class B
Unit, the Managing Member shall determine the amount, if any, of such
appreciation and such income, and such amount shall be reflected in a separate
column on Exhibit A.  Any such
amount that would, in the absence of the proviso in the preceding sentence, be
distributed to a Class B Member, shall instead be distributed to holders of all
other Units, pro rata in accordance with such
Units.  For the purposes of this Section
6.3.3, “Vested Units” means (i) all Class A Units and (ii) the Class B Units
that have “vested” in accordance with the applicable terms of such holder’s
employment agreement with the Company or any other agreement with the Company
which specifies the methodology for the “vesting” of such Class B Units.

6.3.4.                  Tax
Distribution.

Upon the request of
the Managing Member, within ten (10) days following the end of each quarter of
a Fiscal Year the LLC shall distribute to each Class A Member a cash amount
equal to (i) twenty-five percent (25%) of the Taxable Income Distribution
Amount of such Class A Member that the Managing Member estimates for the entire
Fiscal Year; and (ii) with respect to tax payments to be made with income tax
returns filed for a full Fiscal Year or with respect to adjustments to such
returns imposed by the Internal Revenue Service or other taxing authority, such
distribution to the Class A Members shall be equal to the Taxable Income
Distribution Amount for such Fiscal Year, less the aggregate amount distributed
for such Fiscal Year as provided in clause (i) above.  In the event that the amount determined under
clause (ii) above is a negative amount (a “Tax
Distribution Deficit”), the amount of any Distributions pursuant to
this Section 6.3.4 in the
succeeding Fiscal Year (or if necessary any subsequent Fiscal Year) shall be
reduced by such Tax Distribution Deficit; provided that if a Class A
Member stops being a Member while there is a Tax Distribution Deficit with
respect to such Class A Member, such Class A Member shall repay such Tax
Distribution Deficit to the LLC upon withdrawal from the LLC.

 

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6.3.5.                  Withholding Taxes.

(a)           Authority to Withhold; Treatment of Withheld Tax.  Notwithstanding any other provision of this
Agreement, each Member hereby authorizes the LLC to withhold and to pay over,
or otherwise pay, any withholding or other taxes payable by the LLC or any of
its Affiliates (pursuant to the Code or any provision of United States federal,
state or local or non-U.S. tax law) with respect to such Member or as a result
of such Member’s participation in the LLC. 
If and to the extent that the LLC shall be required to withhold or pay
any such withholding or other taxes, such Member shall be deemed for all
purposes of this Agreement to have received a payment from the LLC as of the
time such withholding or other tax is required to be paid, which payment shall
be deemed to be a Distribution pursuant to the relevant clause of Section 6.3.3 with respect to such Member’s Units to the
extent that such Member (or any successor to such Member’s Units) would have
received a Distribution but for such withholding.  To the extent that the aggregate of such
payments to a Member for any period exceeds the Distributions that such Member
would have received for such period but for such withholding, the Managing
Member shall notify such Member as to the amount of such excess and such Member
shall make a prompt payment to the LLC of such amount by wire transfer.  Any withholdings by the LLC referred to in
this Section 6.3.5 shall be made at the
maximum applicable statutory rate under the applicable tax law unless the Managing
Member shall have received an opinion of counsel or other evidence,
satisfactory to the Managing Member, to the effect that a lower rate is
applicable, or that no withholding is applicable.

 

(b)           Withholding from Distributions of
Property.  If the LLC makes a
Distribution in kind and such Distribution is subject to withholding or other
taxes payable by the LLC on behalf of any Member, such Member shall make a
prompt payment to the LLC of the amount required to be withheld.

7.                                      MEMBERS AND
MANAGEMENT

7.1.                            Members

7.1.1.                  Classes of LLC Interests.

For purposes of voting, the LLC Interests shall
be of two classes with such relative rights, powers and duties as are set forth
in or established in accordance with this Agreement.

7.1.2.                  Meetings.

The Class A Members
shall meet at least once each Fiscal Year at such place, on such date and at
such time as may be fixed by the Managing Member for the purpose of electing
Board Members and for the transaction of such other lawful business as may come
before the meeting.  Special Meetings of
the Class A Members may be called by a Class A Member holding more than ten
percent (10%) of the issued and outstanding Class A Units and shall be called
by the Secretary upon the request of the Managing Member or any Class A Member
holding more than ten percent (10%) of the issued and outstanding Class A Units
upon ten (10) days’ notice to all Class A Members in writing or by telephone or
facsimile.  No business shall be acted
upon at a special meeting that is not stated in the notice of the meeting.  Class A Members may vote in person or by
proxy, and such proxy may be granted in writing, by means of electronic
transmission (as defined in the Delaware LLC Act), or as otherwise permitted by
applicable law.    Meetings of Class A
Members may be held by telephone or any other communications equipment by means
of which all participating Class A Members can simultaneously hear each other
during the meeting.

 

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7.1.3.                  Quorum.

No action may be taken at a meeting of Class A
Members unless a quorum consisting of at least a Majority of the Members are
present.

7.1.4.                  Action by Written Consent.

Any action which may be taken by the Class A
Members under this Agreement may be taken without a meeting if consents in
writing setting forth the action so taken are signed by Class A Members who own
LLC Interests having voting power to cast not less than the minimum number of
votes necessary for such action to be taken by the Class A Members.  All Class A Members who do not participate in
taking the action by written consent shall be given written notice thereof by
the Secretary of the LLC promptly after such action has been taken.  A consent transmitted by electronic transmission
(as defined in the Delaware LLC Act) by a Class A Member or by a Person or
Persons authorized to act for a Class A Member shall be deemed to be written
and signed for purposes of this Section 7.1.4.

7.1.5.                  Voting Rights; Required Vote.

The Class A Members shall be entitled to vote the
Percentage Interest represented by such Class A Member’s LLC Interest with
respect to any action required or permitted to be taken by the Class A Members
under this Agreement, except that holders of the SkyTerra Interests shall not
be entitled to vote for the Board Member(s), if any, to be elected by the
holders of the DTVG Interests hereunder and the holders of the DTVG Interests
shall not be entitled to vote for the Board Member(s), if any, to be elected by
holders of the SkyTerra Interests hereunder.  Except as otherwise expressly provided in this
Agreement, any action required or permitted to be taken by the Class A Members
must be approved by the affirmative vote of a Majority of the Members entitled
to vote thereon.  The Members holding
Class B Units shall not be entitled to vote with respect to any action required
or permitted to be taken by the Members under this Agreement.

7.1.6.                  Waivers of Notice.

Whenever the giving of any notice to Members is
required by statute or this Agreement, a waiver thereof, in writing and
delivered to the LLC signed by the Person or Persons entitled to said notice,
whether before or after the event as to which such notice is required, shall be
deemed equivalent to notice.  Attendance
of a Class A Member at a meeting or execution of a written consent to any
action shall constitute a waiver of notice of such meeting or action.

7.2.                            Management of LLC by the
Managing Member

7.2.1.                  Management by the Managing
Member.

Subject to Section 7.5 and Section 7.10,
the Members hereby unanimously agree that full responsibility for management of
the business and affairs of the LLC shall be delegated to the Managing Member
pursuant to Section 18-402 of the Delaware LLC Act.  In the event that, at any time, the Person
designated as the then-current “Managing Member” hereunder ceases to hold at
least 50% of the Class A Units that such Person (together with its Permitted
Transferees) holds on the date of this Agreement, the Managing Member shall
promptly offer to resign as the Managing Member, and the Majority of the
Members may either accept such offer of resignation and appoint a new Managing
Member in accordance with Section 7.5 and
the other provisions of this Agreement or decline such offer of resignation in
which case the Managing Member shall continue to act in such capacity.  In the event of any temporary vacancy in the
position of Managing Member, the Board of Managers shall assume and perform the
duties of the 

 

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Managing
Member hereunder.  Notwithstanding
anything to the contrary contained herein, the Managing Member may resign at
any time without the approval of the Members.

7.2.2.                  Power and Authority of the
Managing Member.

Subject to Section 7.5 and
Section 7.10, the Managing Member (acting
on behalf of the LLC) shall have the right, power, and authority, to manage,
operate and control the business and affairs of the LLC and to do or cause to
be done any and all acts, at the expense of the LLC, deemed by the Managing
Member to be necessary or appropriate to effectuate the purposes of the
LLC.  Except as otherwise expressly
provided in this Agreement or as may be approved by the Managing Member, no
Member shall have any authority, right or power, by virtue of being a Member,
to bind the LLC, or to manage or control, or to participate in the management
or control of, the business and affairs of the LLC in any manner whatsoever.
Without limiting the generality of the foregoing but subject to Section 7.5, the Managing Member shall have the right, power
and authority on behalf of the LLC:

                (i)            to develop, review and approve
annual budgets, policies, operating guidelines, and other operational items for
the LLC; and

(ii)           to
elect officers of the LLC in accordance with Section 7.4;
and

(iii)          to
arrange for such personnel as may be necessary or convenient to carry out the
business and affairs of the LLC; and

(iv)          to
establish such reasonable cash reserves to provide for anticipated expenses of
the LLC as the Managing Member determines to be necessary for timely payment of
such expenses; and

(v)           to
direct the officers of the LLC to make, execute, assign, acknowledge, and file
on behalf of the LLC any and all documents or instruments of any kind which the
Managing Member may deem necessary or appropriate in carrying out the business
and affairs of the LLC, including, without limitation, powers of attorney,
agreements of indemnification, documents, or instruments of any kind or
character, and amendments thereto (and no Person dealing with the Managing
Member shall be required to determine or inquire into the authority or power of
the Managing Member to bind the LLC or to execute, acknowledge, or deliver any
and all documents in connection therewith).

Except as may be approved by the Managing
Member, no Board Member, acting individually, shall have any authority, right
or power, by virtue of being a Board Member, to bind the LLC.

7.3.                            Board
of Managers

7.3.1.                  Composition; Election; Removal.

                                (i)            Number; Qualifications.  The board of managers of the LLC (the “Board of Managers”) shall at all times be composed of seven
managers (each, a “Board Member”).   The qualifications for Board Members shall
be as fixed from time to time by the Class A Members entitled to vote on the
election of such Board Members, at any regular or special meeting, subject to
the provisions of this Agreement , including without limitation the
requirements of Section 7.3.1(ii) regarding
designation of Board Members by (A) Members holding a majority of the SkyTerra
Interests (each such Board Member, a “SkyTerra Board Member,”
and together, the “SkyTerra Board Members”),
(B) Members holding a majority of the DTVG Interests (each such Board Member, a
“DTVG Board 

 

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Member” and together, the “DTVG Board
Members”) and (C) subject to Section 7.3.1(iii),
jointly by (1) Members holding a majority of the SkyTerra Interests and
(2) Members holding a majority of the DTVG Interests (the “Independent Board Member”). 
Board Members need not be Members.

                                (ii)           Election.  Board Members shall be elected at the annual
meeting of Class A Members held for the purpose of electing Board Members.  The DTVG Board Members and the SkyTerra Board
Members shall hold office until the next annual meeting of Class A Members and
until their respective successors are duly elected and qualified.  The Independent Board Member shall hold
office until the first anniversary of his or her most recent election as
Independent Board Member and shall be deemed automatically removed as Board
Member unless and until re-elected as Independent Board Member.  Subject to clause (iii) below, three of the
Board Members shall be DTVG Board Members who shall be elected by the
affirmative vote of the then-holders of a majority of the DTVG Interests, three
of the Board Members shall be SkyTerra Board Members who shall be elected by
the affirmative vote of the then-holders of a majority of the SkyTerra
Interests and one Board Member shall be the Independent Board Member who shall
be elected jointly by (1)  the then-holders of a majority of the SkyTerra
Interests and (2) the then-holders of a majority of the DTVG Interests.

                                (iii)          Certain Rights of SkyTerra and DTVG
Sub.  In the event that, at any time,
DTVG Sub and its Permitted Transferees have transferred in one or more
transactions DTVG Interests representing more than 50% of the Percentage
Interests held by DTVG Sub as of the date of this Agreement to transferees who
are not Permitted Transferees, the number of DTVG Board Members shall be reduced
to two and the number of SkyTerra Board Members shall be increased to
four.  In the event that at any time,
SkyTerra and its Permitted Transferees have transferred in one or more
transactions SkyTerra Interests representing more than 50% of the Percentage
Interests held by SkyTerra as of the date of this Agreement to transferees who
are not Permitted Transferees, the number of SkyTerra Board Members shall be
reduced to two and the number of DTVG Board Members shall be increased to four.  Notwithstanding the immediately preceding two
sentences, in the event that at any time, each of SkyTerra and DTVG Sub, and
their respective Permitted Transferees, have transferred more than 50% of the
Percentage Interests held by SkyTerra or DTVG Sub, as the case may be, as of
the date of this Agreement to transferees who are not Permitted Transferees but
each retain at least 10% of the Percentage Interests, there shall be two
SkyTerra Board Members and two DTVG Board Members and the remaining Board
Members shall be elected by a Majority of Members.  In the event that at any time, SkyTerra and
DTVG Sub, and their respective Permitted Transferees, each retain less than 10%
of the Percentage Interests, all Board Members shall be elected by a Majority
of the Members.

                                (iv)          Vacancies.  In the event of any vacancy in the office of
a Board Member as a result of the death, incapacity, resignation or removal of
a Board Member, such vacancy shall be filled by the affirmative vote of the
Class A Member(s) which elected the Board Member whose office is vacant at a
meeting of the Class A Members called for such purpose.  The Board Member elected to fill any vacancy
shall hold office until the next annual meeting of the Class A Members for the
election of Board Members and until such Board Member’s successor is duly
elected and qualified.

                                (v)           Removal of Board Members.  Any Board Member may be removed, with or
without cause, by the affirmative vote of the Class A Member(s) which elected
such Board Member provided that any Independent Board Member who resigns or is
removed as chief executive officer of the LLC shall be deemed automatically
removed as Independent Board Member at the time of such resignation or removal
unless such person is re-elected as Independent Board Member in accordance with
this Section 7.3.1.  Any vacancy caused by any such removal shall
be filled as provided in Section 7.3.1(iv)
above.

 

11

 

7.3.2.                  Meetings.

Regular meetings of the Board of Managers shall
be held at least once each calendar quarter on such date and at such place and
time as may be fixed from time to time by the Managing Member (unless such
meeting shall be waived by all of the Board Members).  Regular meetings of the Board of Managers
shall be held on not less than two (2) days notice to all Board Members in
writing or by telephone or facsimile transmission.  Special meetings of the Board of Managers may
be called by any Board Member and shall be called by the Secretary upon the
request of any Class A Member holding more than ten percent (10%) of the issued
and outstanding Class A Units, upon two (2) days’ notice to all Board Members
in writing or by telephone or facsimile transmission.  Board Members may vote in person or by proxy,
and such proxy may be granted in writing, by electronic transmission (as
defined in the Delaware LLC Act), or as otherwise permitted by applicable
law.    Meetings of the Board of Managers
may be held by conference telephone or other communications equipment by means
of which all participating Board Members can simultaneously hear each other
during the meeting.

7.3.3.                  Quorum of the Board of
Managers.

No action may be taken at a meeting of the Board
of Managers unless a quorum consisting of at least a Majority of the Board
Members then in office are present in person or by proxy; provided that at
least one such Board Member is a SkyTerra Board Member (so long as such Member
is entitled to at least three (3) Board Members pursuant to Section 7.3.1(ii)) and one such Board Member is a DTVG Board
Member (so long as such Member is entitled to at least three (3) Board Members
pursuant to Section 7.3.1(ii)).

7.3.4.                  Action by Written Consent.

Any action which may be taken by the Board of
Managers under this Agreement may be taken without a meeting if consents in
writing setting forth the action so taken are signed by a Majority of the Board
Members then in office, provided that at least one such signature is that of a
SkyTerra Board Member (so long as such Member is entitled to at least three (3)
Board Members pursuant to Section 7.3.1(ii)),
and one such signature is that of a DTVG Board Member (so long as such Member
is entitled to at least three (3) Board Members pursuant to Section 7.3.1(ii)). 
A consent transmitted by electronic transmission (as defined in the
Delaware LLC Act) by a Board Member or by a person or persons authorized to act
for a Board Member shall be deemed to be written and signed for purposes of
this Section 7.3.4.

7.3.5.                  Voting Rights of the Board of
Managers; Required Votes of the Board of Managers.

Each Board Member
shall be entitled to cast one vote with respect to any matter coming before the
Board of Managers, except with respect to a determination to seek
indemnification pursuant to Section 7.11
hereof, in which event a Board Member seeking indemnification hereunder shall
have no vote with respect to his indemnification.  Any action required or permitted to be taken
by the Board of Managers must be approved by the affirmative vote of a Majority
of the Board Members then in office; provided, however, that any
determination to grant indemnification to a Board Member pursuant to Section 7.11 hereof shall require the affirmative vote
of only one (1) Board Member other than the Board Member in question.

 

12

 

7.3.6.                  Compensation of Board Members.

Subject to Section 7.5,
Board Members, as such, shall not receive any stated salary for their services,
but the Board of Managers may authorize the payment to Board Members of a fixed
sum and expenses of attendance, if any, for each regular or special meeting of
the Board of Managers attended; provided that nothing herein contained shall be
construed to preclude any Board Member from serving the LLC in any other
capacity and receiving compensation therefor.

7.3.7.                  Resignations of Board Members.

Any Board Member may resign at any time by
giving written notice to the Managing Member or the Secretary of the LLC.  Any such resignation shall take effect at the
time specified therein, or, if no time is specified, upon receipt thereof; and
unless otherwise specified therein, acceptance of such resignation shall not be
necessary to make it effective.

7.3.8.                   Committees of the Board of
Managers.

The Board of Managers from time to time may
appoint one or more committees, each such committee to be comprised of one or
more Board Members, to perform any functions or conduct any activities that the
Board of Managers has the right, power, and authority to perform or conduct,
provided that such committees shall be composed of a number of SkyTerra Board
Members and DTVG Board Members in direct proportion to the numbers of SkyTerra
Board Members and DTVG Board Members appointed to the Board of Managers from
time to time.

7.4.                            Officers.

7.4.1.                  Number, Election and Term of
Office.

Subject to Section 7.5,
(i) the officers of the LLC shall be a President and Chief Executive Officer, a
Treasurer and a Secretary, and may at the discretion of the Managing Member
include one or more Vice Presidents, Assistant Secretaries and other officers;
(ii) the initial officers shall be appointed by a resolution of the Board of
Managers and shall hold their respective offices until the first meeting of the
Class A Members for the election of Board Members and until their successors
are duly elected and qualified or until their earlier death, resignation or
removal; and (iii) the officers of the LLC subsequently shall be appointed
annually by the Managing Member and shall hold their respective offices until
their successors are duly elected and have qualified or until their earlier
death, resignation or removal.  Except as
otherwise provided by law, any number of offices may be held by the same
person.

7.4.2.                  President and Chief Executive
Officer.

Subject to the direction of the Managing Member,
the President (i) shall be the chief executive officer of the LLC,
(ii) shall have full responsibility and authority for management of the
day-to-day operations of the LLC, and (iii) may execute agreements and
contracts and take other actions on behalf of the LLC as authorized by the
Managing Member.  The President shall
report directly to the Managing Member.

7.4.3.                  Treasurer.

The Treasurer shall
have charge of the funds of the LLC.  He
shall keep full and accurate accounts of all receipts and disbursements of the
LLC in books belonging to the LLC and shall deposit all monies and other
valuable effects in the name and to the credit of the LLC in such depositories
as may be 

 

13

 

designated
by the Managing Member.  He shall
disburse the funds of the LLC as may be ordered by the Managing Member, and
shall render to the Managing Member, whenever the Managing Member may require
it, an account of all his transactions as Treasurer and an account of the business
and financial position of the LLC.

7.4.4.                  Secretary.

The Secretary, at the direction of the Managing
Member, shall prepare and distribute to the Board Members an agenda in advance
of each meeting and shall prepare and distribute promptly to each Board Member
written minutes of all meetings of the Board of Managers.  The Secretary shall also be responsible for
preparing and distributing to the Board Members any notices received by the LLC
or otherwise called for by this Agreement to be given by the LLC.

7.4.5.                  Vice President.

The Managing Member may appoint one or more Vice
Presidents of the LLC.  Each Vice
President shall perform such duties as the Managing Member shall require of
such Vice President.  The Vice Presidents
(in the order of their election) shall, during the absence or incapacity of the
President, assume and perform the duties of the President.

7.4.6.                  Assistant Secretary.

The Managing Member may appoint one or more
Assistant Secretaries of the LLC.  Each
Assistant Secretary shall perform such duties as the Managing Member shall
require of such Assistant Secretary.  The
Assistant Secretaries (in the order of their election) shall, during the
absence or incapacity of the Secretary, assume and perform all functions and
duties which the Secretary might lawfully do if present and not under any
incapacity.

7.4.7.                  Other Officers.

The Managing Member may appoint such other
officers and agents of the LLC as the Managing Member shall deem necessary or
appropriate to carry out the business of the LLC upon such terms and
conditions, and with such duties, as the Managing Member may determine.  Any such officer shall hold his or her
respective office for the term specified by the Managing Member unless earlier
removed by the Managing Member.

7.4.8.                  Resignation.

Any officer or agent of the LLC may resign at
any time by giving written notice to the Managing Member or to the Secretary of
the LLC.  Any such resignation shall take
effect at the time specified therein or, if no time is specified, upon receipt thereof;
and unless otherwise specified therein, acceptance of such resignation shall
not be necessary to make it effective.

7.4.9.                  Removal; Vacancies; Transfer of
Duties.

Subject to Section 7.5, (i) any officer or agent of the LLC may be
removed from office, with or without cause, by the Managing Member; (ii) any
vacancy in the office of President, Treasurer, or Secretary for any reason
shall be filled by a person designated by the Managing Member for the unexpired
term of the vacant office; and (iii) the Managing Member may transfer the power
and duties, in whole or in part, of any officer to any other officer, or
persons, notwithstanding the provisions of this Agreement, except as otherwise
provided by the laws of the State of Delaware.

 

14

 

7.4.10.           Compensation.

Subject to Section 7.5,
the officers of the LLC shall be entitled to such salary or other compensation
as the Managing Member shall determine.

7.4.11.           Third Party Reliance.

Third parties dealing with the LLC shall be
entitled to rely conclusively upon the power and authority of the officers of
the LLC as set forth herein.

7.5.                            Major Decisions

None of the LLC, Managing Member (in its
capacity as Managing Member only), the Board of Managers or any officer or
agent of the LLC shall take any action relating to a Major Decision (as
hereinafter defined) unless, in addition to any other consents or approvals
that may be required, at least four Board Members, other than the Independent
Board Member, have approved such Major Decision.  For the purposes of this Agreement, a “Major Decision” shall mean any of the following events, in
each case in one transaction or a series of related transactions consummated
after the date hereof:

7.5.1.       incurrence
of indebtedness in excess of Ten Million Dollars ($10,000,000) in the
aggregate;

7.5.2.       granting
of guarantees of third party indebtedness for borrowed money, granting of
guarantees of obligations of Persons who are not Affiliates outside of the
Ordinary Course of Business or in excess of Ten Million Dollars ($10,000,000)
in the aggregate in the Ordinary Course of Business, and refinancing and
material modification of the terms of such indebtedness or guarantees;

7.5.3.       except
with respect to any Drag Along Transaction (as defined in the Investor Rights
Agreement), (a) mergers, consolidations, sale of all or substantially all of
the assets, conversions, liquidation (partial or complete) or dissolution of
the LLC, or (b) acquisition by the LLC of another business (either by asset or
stock or partnership interest purchase) or (c) any equity of another Person for
a purchase price in excess of Two Million, Five Hundred Thousand Dollars
($2,500,000) in the aggregate;

7.5.4.       except
with respect to any Drag Along Transaction (as defined in the Investor Rights
Agreement), (a) declaration of Distributions of cash or property on LLC
Interests, (b) redemption of LLC Interests (other than redemptions of
Class B Units from employees, officers, directors and consultants in connection
with employment or service termination), (c) recapitalizations, and
(d) issuance of additional LLC Interests and/or rights to acquire
additional LLC Interests (other than issuances of Class B Units to employees,
officers, directors and consultants pursuant to a plan or other arrangement approved pursuant to Section
7.5.14);

7.5.5.       the
conversion pursuant to Section 9.5 or
the consummation of a public offering of any LLC Interests or reclassified
equity interests pursuant to Section 9.5;

7.5.6.       except as provided in Section 5 of the Tax Allocations Addendum where the Tax
Matters Member causes the LLC to file an election under section 754 of the Code
to provide for an adjustment to the Adjusted Basis of LLC assets if requested
to by a Class A Member in connection with the disposition of an LLC interest by
that Class A Member, the making of any tax election;

 

15

 

7.5.7.       the
hiring or termination of the senior executive officers of the LLC and the
financial terms and conditions of their employment;

7.5.8        payment
of any compensation to the Board Members;

7.5.9.       entering
into any joint venture, partnership arrangement or strategic alliance with any
Person;

7.5.10.     disposition
of a subsidiary, material product line or material business unit of the LLC;

7.5.11.     approval
of the annual operating budget of the LLC
including capital expenditures and other project spending or material
deviations therefrom; provided, that if such budget has not been approved in
accordance with this Section 7.5,
the annual operating budget in place for the prior year shall continue in place
until a new annual operating budget is approved;

7.5.12      changing
or replacing the Managing Member, and any modification to the Annual Management
Fee Payment (as defined in Section 7.8) or
the payment of any cash or other consideration to the Managing Member not
specifically provided for in this Agreement;

7.5.13      changes
in accounting policies;

7.5.14      the
approval of plans or other arrangements for the issuance of Class B Units to
employees, officers and Board members of the LLC;

7.5.15      the
making of any form of loan or advance to, or any direct or indirect guaranty of
or granting any direct or indirect security for the obligations of, any Member
or Board Member or any Affiliate of any Member or Board Member; and

7.5.16      actions
of any kind by a direct or indirect subsidiary or subsidiaries of the LLC, if
such actions, individually or collectively, would constitute a “Major Decision”
as defined in Sections 7.5.1 through 7.5.15 (excluding Section 7.5.4(a))
if taken by the LLC directly.

7.6.                            Managing Member;
Day-to-Day Operations

                Notwithstanding
anything in this Agreement to the contrary, and with the exception of those
actions relating to a Major Decision, the day-to-day operations, business and
affairs of the LLC shall be managed by the Managing Member and, as delegated by
the Managing Member, by the officers of the LLC.  Subject to Section 7.5,
the Managing Member shall have the power and authority, on behalf of the LLC,
to take or authorize any actions of any kind not inconsistent with this
Agreement and that the Managing Member deems necessary or appropriate to carry
on the business and purposes of the LLC. 
The actions of the Managing Member shall bind the LLC.  Except as expressly provided in this
Agreement, the Managing Member shall owe no duties (fiduciary or otherwise) to
the LLC or the Members; provided that, the Managing Member
shall, in all events, owe to the LLC and the other Members the duty to act as
Managing Member in a manner which it believes in good faith is commercially
reasonable and in the best interests of the LLC.

 

16

 

7.7                               Fiduciary Relationship

                To the full extent permitted by
the Delaware LLC Act and other applicable law, the Members hereby acknowledge
and agree that each SkyTerra Board Member and DTVG Board Member shall serve in
a representative capacity as a representative of the Members who elected such
SkyTerra Board Member or DTVG Board Member and shall be able to act solely in
the interests of the electing Member and shall have no duties (fiduciary or
otherwise) to the LLC or other Members of the LLC other than as set forth in
this Agreement.  In addition, each Class
A Member shall be able to act solely in the interests of such Class A Member
and shall have no duties (fiduciary or otherwise) to the LLC or any other
Member of the LLC other than as set forth in this Agreement.  To the full extent permitted by law, each
Member releases each other Member and the SkyTerra Board Member and DTVG Board
Members elected by other Members from liability for votes cast or withheld,
consents granted or failures to consent as a Member, SkyTerra Board Member or
DTVG Board Member.

7.8                               Managing Member’s
Quarterly Fee

So long as the
Managing Member is not in material default of its obligations under this
Agreement, on each January 1, April 1, July 1, and October 1 during the period
commencing on the date hereof and ending three years thereafter, the Managing
Member shall be entitled to receive from the LLC a quarterly management fee
equal to Two Hundred Fifty Thousand Dollars ($250,000) payable in advance in
cash (the “Quarterly Management Fee Payment”),
which Quarterly Management Fee Payments shall not exceed Three Million Dollars
($3,000,000) in the aggregate, for and in consideration for the services to be
provided by the Managing Member under this Agreement during the quarter beginning
on the date the Quarterly Management Fee Payment is made.  This first and last Quarterly Management Fee
Payments shall be pro rata payments for the period during the then applicable
quarter for which services will be provided by the Managing Member.  In the event that the Managing Member is
terminated or removed prior to the end of the applicable quarter for which a
Quarterly Management Fee Payment has been made, the Managing Member shall
promptly reimburse the LLC a prorated portion of the Quarterly Management Fee
Payment based on the number of days the Managing Member did not act in such
capacity during the applicable quarter for which the Quarterly Management Fee
Payment was made.

7.9                               Other Activities of
Members or Affiliates

Subject to any intellectual property or other
property rights of the LLC and to protection of the confidentiality of any
information treated as confidential by the LLC (including without limitation
with respect to the obligations set forth in Section 7.14),
any Member or any Affiliate thereof may have other business interests and may
engage in other business ventures of any nature or description whatsoever,
whether currently existing or hereafter created, and may compete, directly or
indirectly, with the business of the LLC. 
No Member or Affiliate thereof shall incur any liability to the LLC as a
result of such Member’s or Affiliate’s pursuit of such other business
interests, ventures and competitive activity, and neither the LLC nor the other
Members shall have any right to participate in such other business ventures or
to receive or share in any income or profits derived therefrom.  For the avoidance of doubt, the corporate
opportunity doctrine shall not apply to the Members with respect to the
LLC.  The provisions of this Section 7.9
shall not apply to any Class B Member.

7.10                        Certain Transactions

Subject to Section 5.7 Reference source not found., the LLC
is expressly permitted in the normal course of its business to enter into
transactions with any or all Members or with any Affiliate of any or all
Members 

 

17

 

provided
that the price and other terms of such transactions are fair to the LLC and
that the price and other terms of such transactions are not less favorable to
the LLC than those generally prevailing with respect to comparable transactions
between unrelated parties.  To the extent
such transactions are not in the Ordinary Course of Business or may require the
payment by the LLC of more than Two Million Five Hundred Thousand Dollars
($2,500,000) over their term, the LLC shall not enter into the same unless they
have been approved by the Board Members not elected by the interested
Member.  If the LLC becomes a party to
any agreement with any Member or any Affiliate of any Member, including without
limitation the Contribution Agreement, the Intellectual Property Agreement, the
Transition Services Agreement, the DirecWay Agreement, the Spaceway Services
Agreement and the Non-Competition Agreement (each of the foregoing as defined
in the Contribution Agreement), then notwithstanding the other provisions of Section 7 hereof, (i) the Board Members, and, if applicable,
the Managing Member, who are not Affiliates of the Persons that are parties to
such agreement shall be entitled to exercise any and all rights, waivers,
consents and remedies of the LLC and same shall be exercised in the sole
discretion of and by the Board Members, and, if applicable, the Managing
Member, who are not Affiliates of the Persons that are parties to such
agreement and (ii) the Board Members, and, if applicable, the Managing Member,
who are Affiliates of the Persons which are parties to such agreement shall not
have any right, power or authority to make any decisions for the LLC or
exercise any other authority as Board Member, and, if applicable, the Managing
Member, with respect to such agreement, including the enforcement thereof.  The contracts identified on Schedule
2.2(a)(vii) of the Contribution Agreement and the Management Services Agreement
dated as of date hereof between the Company and SkyTerra have been assumed by
the LLC with the unanimous consent of all Board Members, and each of the same
shall be subject to the provisions of the preceding sentence.  Notwithstanding the
other provisions of Section 7, if
the LLC exercises the Newco Purchase Option under Section 3.11(f) of the
Contribution Agreement, the Managing Member on behalf of the LLC shall be
permitted to take all actions reasonably necessary to effect such transaction,
including without limitation, obtaining debt financing from a third-party on
commercially reasonable terms or equity financing (subject in each case to Section 5.10) to the extent necessary to consummate the
acquisition of the Parent Offered Assets in accordance with Section 3.11(f) of
the Contribution Agreement without the approval of the Board Members that may
otherwise be required with respect to Major Decisions pursuant to Section 7.5.

7.11                        Indemnification of the Members,
Board Members, Officers and any Affiliate

7.11.1.                     In
accordance with Section 18-108 of the Delaware LLC Act, the LLC shall
indemnify and hold harmless any Member, Board Member, officer, or Affiliate
thereof (individually, in each case, an “Indemnitee”) to
the fullest extent permitted by law from and against any and all losses,
claims, demands, costs, damages, liabilities (joint or several), expenses of
any nature (including attorneys’ fees and disbursements), judgments, fines,
settlements, and other amounts arising from any and all claims, demands,
actions, suits, or proceedings, whether civil, criminal, administrative or
investigative, in which the Indemnitee may be involved, or threatened to be
involved, as a party or otherwise, arising out of or incidental to the business
or activities of or relating to the LLC, regardless of whether the Indemnitee
continues to be a Member, a Board Member, an officer, or Affiliate thereof at
the time any such liability or expense is paid or incurred; provided, however, that this provision shall not eliminate
or limit the liability of an Indemnitee (i) for acts or omissions which involve
intentional misconduct or a knowing violation of law, or (ii) for any
transaction from which the Indemnitee received any improper personal benefit.

7.11.2.                     Expenses incurred by an
Indemnitee in defending any claim, demand, action, suit, or proceeding subject
to this Section 7.11 shall, from time to
time, upon request by the Indemnitee be advanced by the LLC prior to the final
disposition of such claim, demand, action, suit, or proceeding upon receipt by
the LLC of an undertaking by or on behalf of the Indemnitee to repay such 

 

18

 

amount,
if it shall be determined in a judicial proceeding or a binding arbitration
that such Indemnitee is not entitled to be indemnified as authorized in this Section 7.11.

7.11.3.                     The
indemnification provided by this Section 7.11
shall be in addition to any other rights to which an Indemnitee may be entitled
under any agreement, vote of the Members, as a matter of law or equity, or
otherwise, both as to an action in the Indemnitee’s capacity as a Member, a
Board Member, an officer, or any Affiliate thereof, and as to an action in
another capacity, and shall continue as to an Indemnitee who has ceased to
serve in such capacity and shall inure to the benefit of the heirs, successors,
assigns, and administrators of the Indemnitee.

7.11.4.                     The
LLC may purchase and maintain insurance on behalf of the Board Members and the
Managing Member and such other Persons as the Managing Member shall determine
against any liability that may be asserted against or expense that may be
incurred by such Persons in connection with the offering of interests in the
LLC or the business or activities of the LLC, regardless of whether the LLC would
have the power to indemnify such Persons against such liability under the
provisions of this Agreement.

7.11.5.                     An
Indemnitee shall not be denied indemnification in whole or in part under this Section 7.11 or otherwise by reason of the fact that
the Indemnitee had an interest in the transaction with respect to which the
indemnification applies if the transaction was otherwise permitted or not
expressly prohibited by the terms of this Agreement.

7.11.6.                     The
provisions of this Section 7.11
are for the benefit of the Indemnitees, their heirs, successors, assigns and
administrators and shall not be deemed to create any rights for the benefit of
any other Persons.

7.12                        Delegation of Rights and
Authority

Except as otherwise expressly provided in this
Agreement, neither the Board of Managers nor any Member or Board Member may
delegate to any Person or Persons the rights and powers of the Board of
Managers or of such Member or Board Member to manage and control the business
and affairs of the LLC.

7.13                        Subsidiaries

In
all events, the LLC shall cause the governing body of each subsidiary of the
LLC to be constituted, as nearly as may be, in the same way, and with the same
rights and powers, as the Board of Managers and the Managing Member have been
granted hereunder.

 

7.14                        Confidentiality

                                7.14.1      Each Member shall not, and each Member
shall cause its respective Affiliates not to, disclose or use any Confidential
Information of the LLC except as permitted by this Agreement.  Each of the Members and their Affiliates
shall, and shall cause its Affiliates to, use no less than reasonable care in
protecting the Confidential Information of the LLC which it has received.  Information shall not be deemed Confidential
Information under this Section 7.14 if
it: (x) is or becomes publicly known through no wrongful act or omission of the
receiving party; or (y) is independently developed following the date of this
Agreement by the receiving party without the use of or reference to the
Confidential Information of the disclosing party.  Notwithstanding the provisions of this Section 7.14, in the event a Member or its Affiliate is
required to disclose the Confidential Information of the LLC (in such event,
the party required 

 

19

 

to disclose is the “Disclosing Party”)
pursuant to an order or pursuant to a law (and such party has obtained advice
of counsel to the effect that such information is required to be disclosed),
and would otherwise be prohibited from doing so under this Section 7.14,
the Disclosing Party shall: (i) promptly notify the LLC of the existence, terms
and circumstances surrounding such requirement; (ii) consult with the LLC on
the advisability of taking legally available steps to resist or narrow such
request; and (iii) if disclosure of such Confidential Information is required,
furnish only that portion of the Confidential Information which the Disclosing
Party is legally compelled to disclose and advise the LLC reasonably in advance
of such disclosure so that the LLC may seek an appropriate protective order or
other reliable assurance that confidential treatment will be accorded such
Confidential Information.  The Disclosing
Party shall not oppose actions by the LLC to obtain an appropriate protective
order or other reliable assurance that confidential treatment will be accorded
such Confidential Information.

 

                                7.14.2      Notwithstanding anything to the contrary
herein, the LLC shall be entitled to seek equitable relief (including
injunctive relief) to protect their interest in any of its Confidential
Information.

 

                                7.14.3      Notwithstanding anything to the contrary
contained herein, nothing contained herein shall limit the ability of the
Managing Member to use Confidential Information of the LLC in connection with
fulfilling its duties to the LLC under this Agreement.

 

                                7.14.4      With respect to each former Member, the
obligations of such former Member set forth in this Section 7.14
shall continue in full force and effect, notwithstanding that such former
Member ceases to hold, directly or indirectly, any LLC Interests.

8.                                      BANK ACCOUNTS; BOOKS
AND RECORDS; STATEMENTS; TAXES; FISCAL YEAR

8.1.                Bank
Accounts

All funds of the LLC shall be deposited in its
name in such checking and savings accounts, time deposits or certificates of
deposit, or other accounts at such banks as shall be designated by the Managing
Member from time to time, and the Managing Member shall arrange for the
appropriate conduct of such account or accounts.

8.2.                Books
and Records

The Managing Member shall keep, or cause to be
kept, accurate, full and complete books and accounts showing assets,
liabilities, income, operations, transactions and the financial condition of
the LLC.  Such books and accounts shall
be prepared on the cash or accrual basis of accounting, as determined by the
Managing Member.  Any Class A Member, or
its respective designee, shall have access thereto, and access to the LLC’s
properties, at any reasonable time during regular business hours and shall have
the right to copy said records at its expense. 
The LLC shall concurrently deliver to SkyTerra and the DTVG Sub the same
information which is required to be delivered by the LLC to its senior lenders.

8.3.                Financial
Statements and Information

8.3.1.                       All financial statements
prepared pursuant to this Section 8.3
shall present fairly the financial position and operating results of the LLC
and shall be prepared in accordance with generally accepted accounting
principles as provided in Section 8.2
and shall contain information 

 

20

 

sufficient
for inclusion in the publicly-filed financial statements of The DIRECTV Group,
Inc. and SkyTerra Communications, Inc.

8.3.2.                       Within
fifteen (15) days after the end of each monthly accounting period (the “Fiscal Month”) of each Fiscal Year, commencing with the
first full Fiscal Month after the date of this Agreement, the President shall
prepare and submit or cause to be prepared and submitted to the Class A Members
an unaudited statement of profit and loss for the LLC for such Fiscal Month and
an unaudited balance sheet of the LLC dated as of the end of such Fiscal Month,
in each case prepared in accordance with generally accepted accounting
principles consistently applied (subject to normal year-end adjustments).

8.3.3.                       Within
twenty five (25) days after the end of each quarterly period (the “Fiscal Quarter”) of each Fiscal Year, commencing with the
first full Fiscal Quarter after the date of this Agreement, the President shall
prepare and submit or cause to be prepared and submitted to the Class A Members
an unaudited statement of profit and loss and an unaudited statement of cash
flows for the LLC for such Fiscal Quarter and an unaudited balance sheet of the
LLC dated as of the end of such Fiscal Quarter, in each case prepared in
accordance with generally accepted accounting principles consistently applied
(subject to normal year-end adjustments).

8.3.4.                       Within
sixty (60) days after the end of each Fiscal Year during the term of this
Agreement, the President shall prepare and submit or cause to be prepared and
submitted to the Class A Members (i) an audited balance sheet, together
with audited statements of profit and loss, Members’ equity and changes in
financial position for the LLC during such Fiscal Year; (ii) a report of
the activities of the LLC during the Fiscal Year; (iii) a report
summarizing the fees and other remuneration paid by the LLC for such Fiscal
Year to the Members and any Affiliates thereof; and (iv) an unaudited
statement showing any amounts distributed to the Members in respect of such
Fiscal Year.

8.3.5.                       The
President shall provide to the Class A Members such other reports and
information concerning the business and affairs of the LLC as may be required
by the Delaware LLC Act or by any other law or regulation of any regulatory
body applicable to the LLC.

8.4.                Accounting
Decisions

All decisions as to accounting matters, except
as specifically provided to the contrary herein, shall be made by the Managing
Member.

8.5.                Where
Maintained

The books, accounts and records of the LLC at
all times shall be maintained at the LLC’s principal office or such other
office or offices as the Managing Member shall determine.

8.6.                Tax
Returns

8.6.1.                       The President shall, at
the expense of the LLC, cause to be prepared and delivered to the Class A
Members, in a timely fashion after the end of each Fiscal Year, copies of all
federal and state income tax returns for the LLC for such Fiscal Year, one copy
of which shall be timely filed with the appropriate tax authorities.  Such returns shall accurately reflect the
results of operations of the LLC for such Fiscal Year.  The Managing Member is hereby appointed as
the “tax matters partner” (as defined in the Code) of the LLC (the “Tax Matters Member”) and is authorized and required to
represent the LLC (at the expense of the LLC) in connection with all
examinations of the affairs of the 

 

21

 

LLC
by any federal, state, or local tax authorities, including any resulting administrative
and judicial proceedings, and to expend funds of the LLC for professional
services and costs associated therewith; provided, however, that the Tax
Matters Member shall not make any tax election or settle or compromise any tax
audit, controversy, litigation or issue without the advice and consent of the
Board of Managers.  Each Class A Member
shall be designated a “notice partner” as defined in the Code..

8.6.2.                       The
Tax Matters Member shall keep all Class A Members fully informed of the progress
of any such examination, audit or other proceeding, and any Class A Member with
a Percentage Interest of at least 10% of all Percentage Interests held by Class
A Members (and any Person that was a Class A Member with a Percentage Interest
of at least 10% of all Percentage Interests held by Class A Members in the year
to which such examination, audit or other proceeding relates) shall have the
right to participate in such examination, audit or other proceeding.  Each Member and former Member agrees to cooperate
with the Board of Managers and the Tax Matters Member and to do or refrain from
doing any or all things reasonably required by the Board of Managers in
connection with the conduct of such proceedings.

8.7.                Fiscal
Year

The fiscal year of the LLC for financial,
accounting, Federal, state and local income tax purposes shall initially be the
calendar year (the “Fiscal Year”).  The Managing Member shall have authority to
change the beginning and ending dates of the Fiscal Year if the Managing
Member, in its sole and absolute discretion, deems such change to be necessary
or appropriate to the business of the LLC.

9.                                      TRANSFER
AND CONVERSION OF LLC INTERESTS AND THE ADDITION, SUBSTITUTION AND WITHDRAWAL
OF MEMBERS

9.1.                Transfer
of LLC Interests

9.1.1.                       The
term “transfer”, when used in this Section  9
with respect to an LLC Interest, shall include any sale, assignment, gift,
pledge, hypothecation, mortgage, exchange, or other disposition, except that
such term shall not include any pledge, mortgage, or hypothecation of or
granting of a security interest in an LLC Interest in connection with any
financing obtained on behalf of the LLC.

9.1.2.                       No
LLC Interest shall be transferred, in whole or in part, except in accordance
with the terms and conditions set forth in this Section
 9.  Any transfer or
purported transfer of any LLC Interest not made in accordance with this Section  9 shall be void ab  initio.

9.2.                Restrictions on Transfers

9.2.1.                       No Member may transfer
all or any portion of its LLC Interest without the express written consent of
Class A Members holding a majority in interest of the non-transferred LLC
Interests held by Class A Members in their sole and absolute discretion; provided,
however, that (a) any Class A Member may transfer all or a portion of
its LLC Interest (i) to a Permitted Transferee, (ii) pursuant to and in
accordance with any of the transactions contemplated by Sections 2, 3 and 6 of
the Investor Rights Agreement, (b) DTVG Sub may transfer all or any portion of
its LLC Interest to The DIRECTV Group, Inc., and (c) SkyTerra may transfer all
or any portion of its LLC Interests to a wholly owned subsidiary pursuant to
the Drop Down, in each case without the consent of any other Member.

 

22

 

9.2.2.                       Any
transferee of an LLC Interest shall become a substituted Member only upon
(i) the express written consent of Class A Members holding a Majority in
Interest of the non-transferred LLC Interests held by Class A Members (provided
that if such transferee was a Permitted Transferee, is The DIRECTV Group, Inc.,
is a wholly owned subsidiary of SkyTerra, or acquires such LLC Interests
pursuant to and in accordance with transactions contemplated by Sections 2, 3
and 6 of the Investor Rights Agreement, such consent shall not be required);
(ii) the transferee agreeing to be bound by all the terms and conditions
of the Certificate and this Agreement as then in effect; and (iii) receipt
of any necessary regulatory approvals. 
Unless and until a transferee is admitted as a substituted Member, the
transferee shall have no right to exercise any of the powers, rights, and
privileges of a Member hereunder.  A
Member who has transferred its LLC Interest shall cease to be a Member upon
transfer of the Member’s entire LLC Interest and thereafter shall have no
further powers, rights, and privileges as a Member hereunder except as provided
in Section 7.11 and Section 8.6.2.

9.2.3.                       For
the purposes of Section 9.2.1 and Section 9.2.2, in calculating a majority in interest of the
non-transferred LLC Interests held by Class A Members, the LLC Interests of a
transferring Class A Member shall be excluded.

9.2.4.                       The
LLC, each Member, the Board of Managers, the officers and any other Person or
Persons having business with the LLC need deal only with Members who are
admitted as Members or as substituted Members of the LLC, and they shall not be
required to deal with any other Person by reason of transfer by a Member or by
reason of the death of a Member, except as otherwise provided in this
Agreement.  In the absence of the
substitution (as provided herein) of a Member for a transferring or a deceased
Member, any payment to a Member or to a Member’s executors or administrators
shall acquit the LLC and the Board of Managers of all liability to any other
Persons who may be interested in such payment by reason of an assignment by, or
the death of, such Member.

9.3.                Publicly
Traded Partnership

No transfer shall be allowed
if in the sole determination of the Managing Member such transfer could
reasonably be expected to cause the LLC to be a “publicly traded partnership”
within the meaning of Section 7704 of the Code.

9.4.                No Right to Withdraw

No Member shall have any right to resign, retire
or otherwise withdraw from the LLC without the express prior approval of all of
the Class A Members.

9.5.                Conversion

Subject to Section 7.5, in the event that the LLC determines to
consummate a Qualified Initial Public Offering, the Managing Member shall have
the power and authority, to incorporate the LLC or take such other action as it
may deem advisable, including, without limitation, (A) dissolving the LLC,
creating one or more subsidiaries of the newly formed corporation and
transferring to such subsidiaries any or all of the assets of the LLC (including
by merger) or (B) causing the Members to exchange their Units for common stock
of the newly formed corporation.  In
connection with any such transaction, the Members shall receive, in exchange
for their respective Units, shares of common stock of such corporation or its
subsidiaries having the same relative economic interest in such corporation or
its subsidiaries as is set forth in this Agreement, subject to any
modifications required solely as a result of the conversion to corporate form.  At the time of such transaction, the Members
shall, and hereby agree to, take any and all actions deemed reasonably
necessary and appropriate by the Managing Member to effect such transaction,
including entering into a stockholders’ agreement providing for (i) the restrictions
on 

 

23

 

Transfer
set forth in this Agreement; provided that such restrictions shall not apply to
sales in broadly disseminated public offerings, to sales in accordance with
Rule 144 under the Securities Act or, subject to Section 6.8
of the Investor Rights Agreement, to sales following the consummation of such
Qualified Initial Public Offering and (ii) an agreement to vote all shares of
capital stock held by them to elect the Board of Managers as the directors of
the new corporation in accordance with this Agreement.  Prior to consummating any such transaction,
the Members shall approve the proposed forms of a certificate of incorporation,
by-laws, stockholders’ agreement and any other governing documents proposed to
be established for such corporation and its subsidiaries, if any, all of which
shall, as nearly as practicable, reflect the rights and obligations of the
Members under this Agreement and comparable agreements applicable to any
subsidiary as of the date of such transaction. 
Prior to effecting any conversion under this Section 9.5,
the Class A Members shall be given sufficient time to effect reasonable tax
planning and other internal restructuring as such Class A Member shall deem to
be reasonably necessary.

10.                               DISSOLUTION
AND LIQUIDATION

10.1.         Events
Causing Dissolution

Subject to the provisions of Section 10.2 below, the LLC shall be dissolved and its
affairs wound up upon the occurrence of any of the following events:

10.1.1.     The
consent in writing to dissolve and wind up the affairs of the LLC by all of the
Class A Members;

10.1.2.     The
sale or other disposition by the LLC of all or substantially all of the LLC
Assets and the collection of all amounts derived from any such sale or other
disposition, including all amounts payable to the LLC under any promissory
notes or other evidences of indebtedness taken by the LLC (unless the Class A
Members shall elect to distribute such indebtedness to the Members in
liquidation), and the satisfaction of contingent liabilities of the LLC in
connection with such sale or other disposition;

10.1.3.     the
“Bankruptcy” (as hereinafter defined), termination of membership, or
dissolution of a Class A Member;

10.1.4.     the
Termination Date; or

10.1.5.     The
occurrence of any other event that, under the Delaware LLC Act, would cause the
dissolution of the LLC or that would make it unlawful for the business of the
LLC to be continued.

For the purposes of
this Agreement, the term “Bankruptcy”
shall mean, and the Class A Member shall be deemed “Bankrupt”
upon, (i) the entry of a decree or order for relief of the Class A Member
by a court of competent jurisdiction in any involuntary case involving the
Class A Member under any bankruptcy, insolvency, or other similar law now or
hereafter in effect; (ii) the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator, or other similar agent for the
Class A Member or for any substantial part of the Class A Member’s assets or
property; (iii) the ordering of the winding up or liquidation of the Class
A Member’s affairs; (iv) the filing with respect to the Class A Member of
a petition in any such involuntary bankruptcy case, which petition remains
undismissed for a period of 90 days or which is dismissed or suspended
pursuant to Section 305 of the Federal Bankruptcy Code (or any
corresponding provision of any future United States bankruptcy law);
(v) the commencement by the Class A Member of a voluntary case under any
bankruptcy, insolvency, or other 

 

24

 

similar
law now or hereafter in effect; (vi) the consent by the Class A Member to
the entry of an order for relief in an involuntary case under any such law or
to the appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator, or other similar agent for the Class A Member
or for any substantial part of the Class A Member’s assets or property;
(vii) the making by the Class A Member of any general assignment for the benefit
of creditors; or (viii) the failure by the Class A Member generally to pay
its debts as such debts become due.

10.2.         Right
to Continue Business of LLC

Upon an event described in Section 10.1.3.
or 10.1.5., the LLC thereafter shall
be dissolved and liquidated unless, within 90 days after the event described in
any of such Sections, an election to continue the business of the LLC shall be
made in writing by the remaining Class A Members holding a majority of the
Percentage Interests held by the remaining Class A Members; provided, however, that no such election may be made in the
case of an event described in Section 10.1.5.
that makes it unlawful for the business of the LLC to be continued.  If such an election to continue the LLC is
made, then the LLC shall continue until another event causing dissolution in
accordance with this Section 10
shall occur.

10.3.         Cancellation
of Certificate

Upon the dissolution and completion of winding
up of the LLC, the Certificate shall be canceled in accordance with the
provisions of Section 18-203 of the Delaware LLC Act, and the Managing
Member (or any other Person responsible for winding up the affairs of the LLC)
shall promptly notify the Members of such dissolution.

10.4.         Distributions
Upon Dissolution

10.4.1.     Upon
the dissolution of the LLC, the Managing Member (or any other Person
responsible for winding up the affairs of the LLC) shall proceed without any
unnecessary delay to sell or otherwise liquidate the LLC Assets and pay or make
due provision for the payment of all debts, liabilities and obligations of the
LLC.

10.4.2.     The
Managing Member (or any other Person responsible for winding up the affairs of
the LLC) shall distribute the net liquidation proceeds and any other liquid
assets of the LLC after the payment of all debts, liabilities and obligations
of the LLC (including, without limitation, all amounts owing to a Member under
this Agreement or under any agreement between the LLC and a Member entered into
by the Member other than in its capacity as a Member in the LLC), the payment
of expenses of liquidation of the LLC, and the establishment of a reasonable
reserve in an amount estimated by the Managing Member to be sufficient to pay
any amounts reasonably anticipated to be required to be paid by the LLC, which
shall be distributed to the Members in accordance with Section 6.3.

10.5.         Reasonable
Time for Winding Up

A reasonable time
shall be allowed for the orderly winding up of the business and affairs of the
LLC and the liquidation of its assets pursuant to Section 10.4
in order to minimize any losses otherwise attendant upon such a winding up.

 

25

 

11.                               MISCELLANEOUS
PROVISIONS

11.1.         Compliance
with Delaware LLC Act

Each Member agrees not to take any action or fail
to take any action which, considered alone or in the aggregate with other
actions or events, would result in the termination of the LLC under the
Delaware LLC Act.

11.2.         Additional
Actions and Documents

Each of the Members hereby agrees to take or
cause to be taken such further actions, to execute, acknowledge, deliver and
file or cause to be executed, acknowledged, delivered and filed such further
documents and instruments, and to use commercially reasonable efforts to obtain
such consents, as may be necessary or as may be reasonably requested by the
Managing Member in order to fully effectuate the purposes, terms and conditions
of this Agreement, whether before, at or after the closing of the transactions
contemplated by this Agreement.

11.3.         Notices

All notices, demands, requests or other
communications which may be or are required to be given, served, or sent by a
Member pursuant to this Agreement shall be in writing and shall be hand
delivered (including delivery by courier), mailed by first-class, registered or
certified mail, return receipt requested, postage prepaid, or transmitted by
facsimile transmission, addressed as set forth on Exhibit A attached
hereto.

Each Member may designate by notice in writing a
new address to which any notice, demand, request or communication may
thereafter be so given, served or sent. 
Each notice, demand, request or communication which shall be delivered,
mailed or transmitted in the manner described above shall be deemed sufficiently
given, served, sent or received for all purposes at such time as it is
delivered to the addressee (with an affidavit of personal delivery, the return
receipt, the delivery receipt, or (with respect to a telex) the answer back
being deemed conclusive evidence of such delivery) or at such time as delivery
is refused by the addressee upon presentation.

11.4.         Severability

The invalidity of any one or more provisions
hereof or of any other agreement or instrument given pursuant to or in
connection with this Agreement shall not affect the remaining portions of this
Agreement or any such other agreement or instrument or any part thereof, all of
which are inserted conditionally on their being held valid in law; and in the
event that one or more of the provisions contained herein or therein should be
invalid, or should operate to render this Agreement or any such other agreement
or instrument invalid, this Agreement and such other agreements and instruments
shall be construed as if such invalid provisions had not been inserted.

11.5.         Survival

It is the express
intention and agreement of the Members that all covenants, agreements,
statements, representations, warranties and indemnities made in this Agreement
shall survive the execution and delivery of this Agreement.

 

26

 

11.6.         Waivers

Neither the waiver by the LLC or a Member of a
breach of or a default under any of the provisions of this Agreement, nor the
failure of the LLC or a Member, on one or more occasions, to enforce any of the
provisions of this Agreement or to exercise any right, remedy or privilege
hereunder, shall thereafter be construed as a waiver of any subsequent breach
or default of a similar nature, or as a waiver of any such provisions, rights,
remedies or privileges hereunder.

11.7.         Exercise
of Rights

No failure or delay on the part of a Member or
the LLC in exercising any right, power or privilege hereunder and no course of
dealing between the Members or between a Member and the LLC shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.  The rights and remedies herein expressly
provided are cumulative and not exclusive of any other rights or remedies which
a Member or the LLC would otherwise have at law or in equity or otherwise.

11.8.         Binding
Effect

Subject to any provisions hereof restricting
assignment, this Agreement shall be binding upon and shall inure to the benefit
of the Members and their respective heirs, devises, executors, administrators,
legal representatives, successors and assigns.

11.9.         Limitation
on Benefits of this Agreement

Subject to Section 7.11
and Section 8.6.2, it is the explicit
intention of the Members that no Person other than the Members and the LLC is
or shall be entitled to bring any action to enforce any provision of this
Agreement against any Member or the LLC, and that the covenants, undertakings
and agreements set forth in this Agreement shall be solely for the benefit of,
and shall be enforceable only by, the Members (or their respective successors
and assigns as permitted hereunder), and the LLC.

11.10.  Amendment
Procedure

Amendments to Exhibit A
to reflect actions taken pursuant to Section 5.3 may
be made by the Managing Member.  Any
other amendment or modification to this Agreement may be made only upon the
written consent of all Members holding Class A Units.

11.11.  Entire
Agreement

This Agreement (including the Schedules hereto)
and the Investor Rights Agreement contain the entire agreement between the
Members with respect to the matters contemplated herein, and supersedes all
prior oral or written agreements, commitments or understandings with respect to
the matters provided for herein and therein.

11.12.  Pronouns

All pronouns and any
variations thereof shall be deemed to refer to the masculine, feminine, neuter,
singular or plural, as the identity of the Person may require.

 

27

 

11.13.  Headings

Section and subsection headings contained in
this Agreement are inserted for convenience of reference only, shall not be
deemed to be a part of this Agreement for any purpose, and shall not in any way
define or affect the meaning, construction or scope of any of the provisions
hereof.

11.14.  Governing
Law

This Agreement, the rights and obligations of
the parties hereto, and any claims or disputes relating thereto, shall be
governed by and construed in accordance with the laws of the State of Delaware
(but not including the choice of law rules thereof).

11.15.  Execution
in Counterparts

To facilitate execution, this Agreement may be
executed in as many counterparts as may be required; and it shall not be
necessary that the signatures of, or on behalf of, each party, or that the
signatures of all persons required to bind any party, appear on each
counterpart; but it shall be sufficient that the signature of, or on behalf of,
each party, or that the signatures of the persons required to bind any party,
appear on one or more of the counterparts. 
All counterparts shall collectively constitute a single agreement.  It shall not be necessary in making proof of
this Agreement to produce or account for more than a number of counterparts
containing the respective signatures of, or on behalf of, all of the parties
hereto.

11.16.  Required
FCC Consents

In the event that
any Transfer of all or any portion of a Member’s LLC Interest in accordance
with this Agreement would (i) result in a voluntary or involuntary assignment or
transfer of control, within the meaning of the applicable Communications Laws,
of any telecommunications license, authorization, certificate, approval, or
permit, and (ii) such voluntary or involuntary assignment or transfer of
control requires consent of the Federal Communications Commission (the “FCC”) or another governmental authority under the
Communications Laws, each of the Members and the LLC shall cooperate and use
commercially reasonable efforts to make any required filings and to obtain the
consent of appropriate governmental authorities, and the Members and the LLC
shall obtain the consent of the FCC.

 

28

 

IN WITNESS WHEREOF, the undersigned have duly executed this
Amended and Restated Limited Liability Company Agreement, or have caused this
Amended and Restated Limited Liability Company Agreement to be duly executed on
their behalf, as of the day and year first hereinabove set forth.

	
   

  
	
  HUGHES NETWORK SYSTEMS,
  INC.

  
	
  By: 

  	
   

  
	
  Name: 

  	
   

  
	
  Title: 

  	
   

  
	
   

  
	
  SKYTERRA COMMUNICATIONS,
  INC.

  
	
   

  
	
  By: 

  	
   

  
	
  Name: 

  	
   

  
	
  Title: 

  	
   

  
				

 

 

EXHIBIT A

Members

	
  Member

  	
   

  	
  Class A
  Units

  	
   

  	
  Capital
  Contributions

  	
   

  	
  Class B
  Units

  	
   

  	
  LLC
  Gain/Income at

  Issuance
  of

  Class B
  Units

  	
   

  	
  Notice
  Address

  
	
  Hughes Network Systems, Inc.

  	
   

  	
  47,500

  	
   

  	
  $61,712,000

  	
   

  	
  -0-

  	
   

  	
  -0-

  	
   

  	
  Hughes Network Systems, Inc. 

  c/o The DIRECTV Group, Inc. 

  2250 East Imperial Highway 

  El Segundo, CA 90245 

  Attn.: Larry D. Hunter, Esq. 

  Telecopy No.: 310-964-0838

   

  with a copy (which shall not constitute notice) to:

   

  Hogan & Hartson L.L.P. 

  8300 Greensboro Drive 

  McLean, VA 22102 

  Attn.: Richard K.A. Becker, Esq. 

  Telecopy No.: 703-610-6200

   

  
	
  SkyTerra Communications, Inc.

  	
   

  	
  47,500

  	
   

  	
  $61,712,000

  	
   

  	
  -0-

  	
   

  	
  -0-

  	
   

  	
  SkyTerra Communications, Inc. 

  19 West 44th Street, Suite 507 

  New York, NY 10036 

  Attn.: Jeffrey Leddy 

  Telecopy No.: 212-730-7541 

   

  with copies (which shall not constitute notice) to:

   

  Apollo Management, L.P.

   

  

 

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  9 West 57th Street 

  New York, NY 10019 

  Attn.: Andy Africk 

  Telecopy No.: 212-515-3283

   

  and

   

  O’Melveny & Myers LLP 

  Times Square Tower 

  7 Times Square 

  New York, NY 10036 

  Attn.: John J. Suydam, Esq. 

  Telecopy No.: 212-408-2420

   

  
	
  Pradman Kaul

  	
   

  	
  -0-

  	
   

  	
  -0-

  	
   

  	
  1,500

  	
   

  	
  -0-

  	
   

  	
  Hughes Network Systems, LLC 

  11717 Exploration Lane 

  Germantown, MD 20876 

   

  with copies (which shall not constitute notice) to:

   

  and

   

  Doreen E. Lilienfeld, Esq. 

  Shearman & Sterling LLP 

  599 Lexington Avenue 

  13th Floor 

  New York, NY 10022 

  212-848-7179 (facsimile)

   

  
	
  Pradeep Kaul

  	
   

  	
  -0-

  	
   

  	
  -0-

  	
   

  	
  500

  	
   

  	
  -0-

  	
   

  	
  Hughes Network Systems, LLC 

  11717 Exploration Lane 

  Germantown, MD 20876 

   

  

 

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  with copies (which shall not constitute notice) to:

   

  and

   

  Doreen E. Lilienfeld, Esq. 

  Shearman & Sterling LLP 

  599 Lexington Avenue 

  13th Floor 

  New York, NY 10022 

  212-848-7179 (facsimile)

   

  
	
  Jim Lucchese

  	
   

  	
  -0-

  	
   

  	
  -0-

  	
   

  	
  500

  	
   

  	
  -0-

  	
   

  	
  Hughes Network Systems, LLC 

  11717 Exploration Lane 

  Germantown, MD 20876 

   

  with copies (which shall not constitute notice) to:

   

  and

   

  Doreen E. Lilienfeld, Esq. Shearman & Sterling
  LLP 599 Lexington Avenue 

  13th Floor 

  New York, NY 10022 

  212-848-7179 (facsimile)

   

  
	
  Bahram Pourmand

  	
   

  	
  -0-

  	
   

  	
  -0-

  	
   

  	
  500

  	
   

  	
  -0-

  	
   

  	
  Hughes Network Systems, LLC 

  11717 Exploration Lane 

  Germantown, MD 20876 

   

  

 

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  with copies (which shall not constitute notice) to:

   

  and

   

  Doreen E. Lilienfeld, Esq. 

  Shearman & Sterling LLP 

  599 Lexington Avenue 

  13th Floor 

  New York, NY 10022 

  212-848-7179 (facsimile)

   

  
	
  Adrian Morris

  	
   

  	
  -0-

  	
   

  	
  -0-

  	
   

  	
  500

  	
   

  	
  -0-

  	
   

  	
  Hughes Network Systems, LLC 

  11717 Exploration Lane 

  Germantown, MD 20876 

   

  with copies (which shall not constitute notice) to:

   

  and

   

  Doreen E. Lilienfeld, Esq. 

  Shearman & Sterling LLP 

  599 Lexington Avenue 

  13th Floor 

  New York, NY 10022 

  212-848-7179 (facsimile)

   

  
	
  Paul Gaske

  	
   

  	
  -0-

  	
   

  	
  -0-

  	
   

  	
  650

  	
   

  	
  -0-

  	
   

  	
  Hughes Network Systems, LLC 

  11717 Exploration Lane 

  Germantown, MD 20876 

   

  with copies (which shall not constitute 

  

 

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  notice) to:

   

  and

   

  Doreen E. Lilienfeld, Esq. 

  Shearman & Sterling LLP 

  599 Lexington Avenue 

  13th Floor 

  New York, NY 10022 

  212-848-7179 (facsimile)

  

Amended as of
April 23, 2005 to reflect the issuance of 4,150 Class B Units.

 

 

THE LIMITED LIABILITY COMPANY INTERESTS EVIDENCED BY THIS
AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”), OR UNDER APPLICABLE STATE SECURITIES LAWS (THE “STATE ACTS”), AND
MAY BE OFFERED OR SOLD BY A PURCHASER OF THE LIMITED LIABILITY COMPANY
INTERESTS ONLY (1) UPON REGISTRATION OF THE LIMITED LIABILITY COMPANY
INTERESTS UNDER THE ACT AND THE STATE ACTS OR PURSUANT TO AN EXEMPTION
THEREFROM, AND (2) AFTER COMPLIANCE WITH ALL RESTRICTIONS ON TRANSFER OF LIMITED
LIABILITY COMPANY INTERESTS IMPOSED BY THIS AGREEMENT, INCLUDING (WITHOUT
LIMITATION) THE PROVISIONS OF SECTION 9.

 

*    *    *    *    *

 

 

LIMITED
LIABILITY COMPANY AGREEMENT

OF

HUGHES
NETWORK SYSTEMS, LLC

 

 

ADDENDUM I

 

DEFINITIONS

 

 

“Affiliate”—When used with reference to a specified
Person, means (i) any Person that directly or indirectly through one or more
intermediaries controls or is controlled by or is under common control with the
specified Person, (ii) any Person that is an officer or director of, general
partner in or trustee of, or serves in a similar capacity with respect to, the
specified Person or of which the specified Person is an officer, director,
general partner or trustee, or with respect to which the specified Person
serves in a similar capacity, (iii) any Person for which an officer or director
of, general partner in or trustee of, or individual serving in a similar
capacity with respect to, the specified Person serves in any such capacity, and
(iv) any relative or spouse of the specified Person who makes his or her home
with that of the specified Person.  As
used in this definition of “Affiliate”, the term “control” (including as used
in the correlative terms “controlling” and “controlled by”) means the
possession, directly or indirectly, of (i) more than fifty percent (50%) of the
securities or other ownership interests in a Person or the voting power of a
Person or (ii) the power to direct or cause the direction of the management or
policies (whether through the ownership of voting securities, by contract, or
otherwise) of a Person.  Other than with
respect to Section 7.10, notwithstanding the
foregoing, the LLC shall not be deemed an Affiliate of any of its Class A
Members, and no Class A Member shall be deemed an Affiliate of the LLC, for
purposes of this Agreement.

“Agreement”—This Limited Liability Company
Agreement, as it may be amended or supplemented from time to time.

“Bankrupt”—As defined in Section 10.1.

“Bankruptcy”—As defined in Section
10.1.

“Board
of Managers”—The
group of individuals elected by the Class A Members pursuant to Section 7.3 who are vested with the responsibility and
authority for management of the business and affairs of the LLC.

“Board
Member”—A
Person elected by the Class A Members to serve on the Board of Managers in
accordance with the terms of this Agreement.

“Capital Account”—The capital account established and
maintained for each Member pursuant to the Tax Allocations Addendum in Addendum II attached hereto.

“Capital Contribution”—Any property (including cash)
contributed to the LLC by or on behalf of a Member.

“Certificate”—The Certificate of Formation of the LLC,
dated as of November 12, 2004, and any and all amendments thereto, filed on
behalf of the LLC with the Recording Office as required under the Delaware LLC
Act.

“Class
A Units”
— Interests in the LLC designated as Class A Units.

“Class B Units” — Interests in the LLC designated as
Class B Units.

 

 

“Code”—The Internal Revenue Code of 1986, as in
effect and hereafter amended, and, unless the context otherwise requires,
applicable regulations thereunder.  Any
reference herein to a specific section or sections of the Code shall be deemed
to include a reference to any corresponding provision of future law.

“Communications Laws” —All United States
federal and state, and any foreign (including those of the European Union),
statutes, rules, regulations, orders, administrative and judicial doctrines,
and other laws that are designed or intended to regulate the communications or
telecommunications industry, including the Communications Act of 1934, as
amended, the Telecommunications Act of 1996, as amended, any rule, regulation
or policy of the FCC, and/or any statute, rule, regulation or policy of any
other governmental authority with respect to the operation of channels of radio
communication and/or the provision of communications or telecommunications
services.

“Confidential
Information”—All Trade Secrets and other confidential or proprietary
information of a Person, including information derived from reports,
investigations, research, work in progress, codes, marketing and sales
programs, financial projections, cost summaries, pricing formulas, contract
analyses, financial information, projections, confidential filings with any
governmental authority, and all other confidential concepts, methods of doing
business, ideas, materials or information prepared or performed for, by or on
behalf of such Person by its employees, officers, directors, agents, representatives
or consultants.

“Contribution Agreement”—The
Contribution and Membership Interest Purchase Agreement dated as of December 3,
2004 among The DIRECTV Group, Inc., Hughes Network Systems, Inc., SkyTerra
Communications, Inc. and the LLC.

“Delaware LLC
Act”—The
Delaware Limited Liability Company Act, as amended.

“Distributions”—As defined in Section 6.3.

“DTVG
Interests” —LLC
Interests held by DTVG Sub from time to time, as the same may be transferred
from time to time in accordance with the terms of this Agreement.

“Fiscal Year”—As defined in Section 8.7.

“Indemnitee”—As defined in Section 7.11.

“Investor
Rights Agreement” —
The Investor Rights Agreement dated as of the date hereof, among the SkyTerra,
the DTVG Sub and the LLC.

“LLC”—Hughes Network Systems, LLC, a Delaware
limited liability company.

“LLC Assets”—All assets and property, whether tangible
or intangible and whether real, personal, or mixed, at any time owned by or
held for the benefit of the LLC.

“LLC Interest”—As to any Member, all of the interest of
that Member in the LLC, including, without limitation, such Member’s
(i) right to a distributive share of the income, gain, losses and
deductions of the LLC in accordance with this Agreement, and (ii) right to
a distributive share of LLC Assets.

“Major Decision”—As defined in Section 7.5.

 

 

“Majority
of the Board Members”—
Four or more Board Members and, so long as each is entitled to designate three
(3) Board Members pursuant to Section 7.3.1(ii),
at least one SkyTerra Board Member and at least one DTVG Board Member.

“Majority of
the Members” — Members owning Class A Units which represent a
majority of Percentage Interests held by holders of Class A Units.

“Managing
Member”
— (a) Until the consummation of the Drop Down, Skyterra and (b) after consummation
of the Drop Down, SkyTerra Sub, or any successor Class A Member appointed by
the Class A Members in accordance Section 7.5 and
the other provisions of this Agreement.

“Member”—The signatories to this Agreement
(including the Managing Member), or any other Person who in the future shall
execute and deliver this Agreement, or other documents as the Class A Members
deems necessary or appropriate to evidence such Person’s agreement to be
admitted as a Member and be bound by the terms and conditions of the
Certificate and this Agreement, and be admitted to the LLC as a new Member
pursuant to the provisions hereof.

“Net
Income or Net Loss”—As
defined in the Tax Allocations Addendum.

“Ordinary
Course of Business”—The
historical and customary practices of the LLC, and the historical and customary
practices Hughes Network Systems, Inc. prior to the date of this Agreement.

“Percentage
Interest”—A
Member’s ownership interest in the LLC by virtue of its ownership of Units
expressed as a percentage of the Units held by all Members.

“Permitted
Transferee” —With respect to any Class A Member, any Person
controlled (as defined in the definition of “Affiliate”) by such Member,
provided such Person is not a competitor of the LLC.

“Person”—Any individual, corporation, association,
partnership, limited liability company, joint venture, trust, estate, or other
entity or organization.

“Quarterly
Management Fee Payment” — As defined in Section 7.8.

“Recording Office”—The office of the Secretary of State of
the State of Delaware.

“SkyTerra
Interests” —LLC Interests held by SkyTerra prior to the Drop Down
and SkyTerra Sub after the Drop Down, from time to time, as the same may be
transferred from time to time in accordance with the terms of this Agreement.

“SkyTerra
Sub” —
A wholly owned subsidiary of SkyTerra formed for the purposes of effecting the
Drop Down.

“Tax
Allocations Addendum”—The
Addendum attached to the Agreement as Addendum II
and incorporated herein by reference.

“Tax
Matters Member”—As
defined in Section 8.6.

“Taxable Income Distribution Amount” — The product of (i) Net Income (as defined in Addendum II) for the
relevant Fiscal Year multiplied by, (ii) a Class A Member’s Percentage Interest
and 

 

 

(iii) the greater of
(A) the highest effective tax rate applicable to any Class A Member residing in
the State of New York and (B) forty five percent (45%).

“Termination Date”—The date which is the 99th anniversary of
the date upon which the Certificate was duly filed with the Recording Office.

“Trade Secrets”— all trade secrets under
applicable law and other rights in know-how and confidential or proprietary
information, processing, manufacturing or marketing information, including new
developments, inventions, processes, ideas, data processing or other computer
software (source code and object code), or other proprietary information that
provides advantages over competitors who do not know or use it and
documentation thereof (including related papers, blueprints, drawings, chemical
compositions, formulae, diaries, notebooks, specifications, designs, methods of
manufacture, flow charts, and data processing software and compilations of
information) and all claims and rights related thereto.

“Transfer”—As defined in Section 9.1.

“Units”—The Class A Units and Class B Units, collectively.

“Vested Units” as defined in 6.3.3.

 

 

ADDENDUM II

 

TAX ALLOCATIONS ADDENDUM

1.             PURPOSE

This
Tax Allocations Addendum (the “Addendum”) is
attached to, and constitutes a part of, the Limited Liability Company Agreement
of Hughes Network Systems, LLC (the “LLC”), as it
may be amended from time to time (the “Agreement”),
for the purpose of setting forth the rules governing the maintenance of the
Capital Accounts required to be maintained for each Member under the Agreement
and the rules governing the allocation of the LLC’s items of Net Income and Net
Loss, other items of income, gain, loss, deduction and credit, and taxable
income, gain, loss, deduction, and credit. 
This Addendum is to be construed and applied to the extent practicable
in a manner consistent with the Members’ agreement with respect to LLC
distributions as set forth in Section 6 of
the Agreement.

2.             CERTAIN DEFINITIONS

Unless
otherwise provided in this Addendum, all capitalized terms used in this
Addendum shall have the meanings assigned to them in other provisions of the
Agreement.  In addition, the following
terms shall have the meanings indicated:

“Accounting Period” — A period beginning on the first
day following any Allocation Date (or in the case of the initial Accounting Period,
which shall begin immediately upon organization of the LLC) and ending on the
next succeeding Allocation Date.

“Addendum”—This
Tax Allocations Addendum, as it may be amended from time to time.

“Adjusted Basis”—The
basis for determining gain or loss for federal income tax purposes from the
sale or other disposition of property, as defined in section 1011 and other
applicable provisions of the Code and the Regulations.

“Adjusted Capital Account Deficit”—The deficit balance (if any) in a Member’s
Capital Account after (a) crediting to such Capital Account any amount which
such Member is obligated to restore pursuant to the Agreement or is deemed
obligated to restore pursuant to the minimum gain chargeback provisions in
Regulations sections 1.704-2(g)(1) and 1.704-2(i)(5) and (b) charging to such
Capital Account any adjustments, allocations or distributions described in the
qualified income offset provisions in Regulations section
1.704-1(b)(2)(ii)(d)(4), (5) or (6) which are required to be charged to such Capital
Account pursuant to this Addendum.

“Allocation Date”
— As defined in Section 3.1 of this Addendum.

“Fiscal Year”—The fiscal year of the LLC under the
Agreement.

“Gross Asset Value”—With
respect to any asset, the asset’s Adjusted Basis, except:

 

 

(a) the initial Gross
Asset Value of any asset contributed (or deemed contributed) to the LLC shall
be such asset’s fair market value at the time of such contribution; and

(b) the Gross Asset
Values of all LLC Assets shall be adjusted to equal their respective fair
market values and to reflect the relative economic interests of the Members in
the LLC as a result of (i) the acquisition of an additional interest in the LLC
by a new or existing Member in exchange for more than a de minimis capital
contribution or in exchange for the performance of services, (ii) the
distribution by the LLC to a Member of a more than de minimis amount of LLC
property as consideration for an interest in the LLC, or (iii) the liquidation
of the LLC within the meaning of Regulations section 1.704-1(b)(2)(ii)(g).

“Net Income” and “Net Loss”—For
a period as determined for federal income tax purposes, the taxable income or
loss, respectively, computed with the following adjustments:

(a)           items of gain, loss and deduction
relating to LLC Assets shall be computed based on the Gross Asset Values of
such LLC Assets rather than upon their Adjusted Bases, and in the case of
depreciation, amortization or other cost recovery deductions, computed using
the same method and useful life used by the LLC in computing such deductions
for federal income tax purposes;

(b)           tax-exempt income of the LLC shall be
treated, for purposes of this definition only, as gross income;

(c)           expenditures of the LLC described in
section 705(a)(2)(B) of the Code or treated as such expenditures pursuant to
Regulations section 1.704-1(b)(2)(iv)(i) shall be treated, for purposes of this
definition only, as deductible expenses; and

(d)           notwithstanding any other provision
of this definition, any items which are specially allocated pursuant to Section 4.3 of this Addendum shall not be taken into account
in computing Net Income or Net Loss.

“Nonrecourse Deduction”—A deduction of the LLC
described in Regulations sections 1.704-2(c) and (j)(1)(ii).

“Partially Adjusted Capital Account” — With respect to any Member
and any Accounting Period, the aggregate capital account of such Member in the
LLC as of the beginning of such Accounting Period, adjusted as set forth in Section 3.1 of this Addendum with respect to such Accounting
Period but before giving effect to any allocations of Net Income or Net Loss or
items of income, gain, loss and deduction of such Accounting Period pursuant to
Section 3.1 of this Addendum.

“Partnership Minimum Gain” — As defined in Regulations
section 1.704-2(d).

“Partner Nonrecourse Debt” — As defined in Regulations
section 1.704-2(b)(4).

“Partner Nonrecourse Debt Minimum Gain” — As defined in
Regulations section 1.704-2(i)(2).

“Regulations”—The regulations issued by the United States
Department of the Treasury under the Code as now in effect and as they may be
amended from time to time, and any successor regulations.

“Regulatory
Allocations” — As defined in Section 4.2(g) of
this Addendum.

 

 

“Target Capital Account” — With respect to any
Member for any Accounting Period in which an allocation of Net Income or Net
Loss is to be made, an amount (which may be either a positive or a deficit
balance) equal to the amount such Member would receive as a distribution if all
assets of the LLC as of such date were sold for cash equal to the Gross Asset
Value of such assets on the books of the LLC, all liabilities of the LLC were
satisfied to the extent required by their terms, and the net proceeds were
distributed pursuant to Section 6.3.3,
all of the foregoing computed after giving effect to any capital contributions
and distributions that have been made for such Accounting Period.

3.             MAINTENANCE OF CAPITAL ACCOUNTS

3.1          In General

A
separate capital account shall be maintained on the books of the LLC for each
Member, which shall be adjusted in accordance with Treasury Regulation Section
1.704-1(b)(2)(iv), effective as of: (1) December 31 of each year, (2)
immediately prior to the acquisition of any Unit or the occurrence of any
capital contribution to the LLC by any Person, (3) the date of a liquidation,
dissolution or sale of the LLC, (4) the date of any Distribution by the LLC,
and (5) any other date selected by the Managing Member (each of the foregoing,
an “Allocation Date”).  Each Capital Account shall be:

(i) credited with (A)
the amount of cash and the fair market value of any property (net of
liabilities secured by such property, which liabilities are assumed or taken
subject to by the LLC) contributed to the LLC by such Member and (B) all Net
Income and other specially allocated items of income and gain of the LLC
allocated to such Member pursuant to Section 4 of
this Addendum; and

(ii) debited with (A)
all Net Losses and other specially allocated items of loss or deduction of the
LLC allocated to such Member pursuant to Section 4 of
this Addendum and (B) all cash and the fair market value of any property (net
of liabilities secured by such property, which liabilities are assumed or taken
subject to by such Member) distributed by the LLC to such Member pursuant to Section 6.3 or Section 10.4 of
the Agreement.  Any references in this
Addendum or in the Agreement to the Capital Account of a Member shall be deemed
to refer to such Capital Account as the same may be credited or debited from
time to time as set forth herein.

3.2          Adjustment of Gross
Asset Value

If the Gross Asset Value of
an LLC Asset is adjusted pursuant to paragraph (b) of the definition of “Gross
Asset Value,” all Members’ Capital Accounts shall be adjusted to reflect the
manner in which the unrealized income, gain, loss and deduction inherent in
such LLC Asset (that has not been reflected in the Capital Accounts previously)
would be allocated among the Members if there were a taxable disposition of
such LLC Asset for its fair market value (but not for less than the amount of
any nonrecourse indebtedness secured by such LLC Asset).

3.3          Succession to Capital
Account

Any permitted transferee of an interest in the LLC shall succeed to the
Capital Account relating to the interest transferred.

 

 

4.             ALLOCATIONS

4.1          Net Income and Net
Loss

The Net Income and Net
Losses for the LLC for any Accounting Period shall be allocated for federal
income tax purposes, as of the end of such Accounting Period, as follows:

(a)           Net Income and Net Losses of the LLC shall be allocated
among the Members so as to reduce, proportionately, the difference between
their respective Target Capital Accounts and Partially Adjusted Capital
Accounts as of the end of such Accounting Period.  No portion of Net Income and Net Losses for
any Accounting Period shall be allocated to a Member, in the case of Net
Income, whose Partially Adjusted Capital Account is greater than or equal to
its Target Capital Account or, in the case of Net Losses, whose Target Capital
Account is greater than or equal to its Partially Adjusted Capital Account for
such Accounting Period.  If all Target
Capital Accounts equal all Partially Adjusted Capital Accounts for any
Accounting Period, the remaining Net Income and Net Losses shall be allocated
to the Members pro rata in accordance with their Partially Adjusted Capital
Accounts.

(b)           At the direction of the Majority of
the Board Members, (i) if, notwithstanding the application of Section 4.1(a), any Member’s Partially Adjusted Capital
Account is greater than or less than its Target Capital Account, then such
Member may be specially allocated items of LLC income, gain, deduction or loss
(to the extent available) equal to the difference between its Partially
Adjusted Capital Account and its Target Capital Account; and (ii) if all
Members have a zero capital account and the LLC has additional Net Loss to
allocate, then the allocation of such Net Loss shall be made in accordance with
Treasury Regulations promulgated under Section 704 of the Code; and the first
subsequent allocation of Net Profit shall be made to reverse any allocation of
Net Loss under this clause (ii).

4.2          Special Allocation
Rules

The following allocation rules shall apply
notwithstanding the provisions of Sections 4.1
and 4.2 of this Addendum, and the
provisions of Sections 4.1 and 4.2 of this Addendum shall be applied only after giving
effect to the following rules.

(a)           Nonrecourse Deductions for a Fiscal
Year shall be allocated to the Members in the same manner as Net Loss is
allocated pursuant to Section 4.1 of
this Addendum.  In accordance with
Regulations sections 1.704-2(f), (g) and (j), upon the recapture (or other
reversal) of Nonrecourse Deductions, items of income or gain of the LLC shall
be allocated to the Members in proportion to the amount of such Nonrecourse
Deductions previously allocated to them pursuant to the preceding sentence (and
not previously recaptured pursuant to this sentence).

(b)           In the event a Member receives with respect to an
Accounting Period an adjustment, allocation, or distribution described in
subparagraphs (4), (5), or (6) of Regulations section 1.704-1(b)(2)(ii)(d) that
causes or increases an Adjusted Capital Account Deficit in such Member’s
Capital Account, such Member shall be specially allocated for such Accounting
Period (and, if necessary, in subsequent Accounting Period) items of income and
gain in an amount and manner sufficient to eliminate such Adjusted Capital
Account Deficit as promptly as possible. 
Items to be so allocated shall be determined and the allocations made as
provided in Regulations section 1.704-1(b)(2)(ii)(d).

 

 

(c)           No Net Loss or LLC deductions for any
Fiscal Year shall be allocated to any Member to the extent such allocation
would cause or increase an Adjusted Capital Account Deficit in such Member’s Capital
Account, while any other Member has a positive Capital Account.

(d)           In the event that any fees, interest,
or other amounts paid to a Member or affiliate of a Member pursuant to the
Agreement, or any agreement between the LLC and the Member or affiliate
providing for the payment of such amounts, and deducted by the LLC, whether in
reliance on sections 162, 163, 707(a), and/or 707(c) of the Code or otherwise,
on its federal income tax return for the Fiscal Year in or with respect to
which such amounts are claimed, are disallowed as deductions to the LLC and are
treated as LLC distributions, then:

(i)            the
Net Income or Net Loss, as the case may be, for the Fiscal Year in or with
respect to which such deduction was claimed shall be increased or decreased, as
the case may be, by the amount of such deduction that is so disallowed and
treated as an LLC distribution; and

(ii)           there
shall be allocated to the Member who received (or whose affiliate received)
such payments, prior to the allocations pursuant to Section 4.1
of this Addendum, an amount of gross income of the LLC for the Fiscal Year in
or with respect to which such claimed deduction was disallowed equal to the
amount of such deduction that is so disallowed and treated as an LLC
distribution.

(e)           If there is a net decrease in
Partnership Minimum Gain for a Fiscal Year, there shall be allocated to each
Member items of income and gain for such Fiscal Year equal to that Member’s
share of the net decrease in Partnership Minimum Gain (determined pursuant to
Regulations section 1.704-2(g)(2)) in accordance with Regulations section
1.704-2(f).

(f)            If there is a net decrease in
Partner Nonrecourse Debt Minimum Gain for a Fiscal Year, then there shall be
allocated to each Member with a share of such Partner Nonrecourse Debt Minimum
Gain (determined in accordance with Regulations section 1.704-2(i)(5)) as of
the beginning of the Fiscal Year items of income and gain for such Fiscal Year
(and, if necessary, for subsequent Fiscal Years) equal to that Member’s share of
the net decrease in partner nonrecourse debt minimum gain, subject to the
exceptions set forth in Regulations section 1.704-2(i)(4).

(g)           To the extent possible, all
allocations pursuant to Sections 4.2(a)
through (f) of this Addendum (“Regulatory Allocations”) shall be offset either with other
Regulatory Allocations or with special allocations of other items of LLC
income, gain, loss or deduction.  Such
offsetting allocations shall be made such that, after such offsetting
allocations have been made, each Member’s Capital Account balance is as close
as possible to the Capital Account balance such Member would have had if the
Regulatory Allocations had not been made and the LLC had allocated all items
pursuant to Section 4.1 hereof.  Where feasible, the determination of such
offsetting allocations shall take into account future Regulatory Allocations
that, although not yet made, are likely to offset other Regulatory Allocations
previously made.

4.3          Tax Allocations

(a)           For United States federal income and applicable state tax
purposes, all items of taxable income, gain, loss and deduction of the LLC
shall be allocated to the Members in the same manner as are Net Income, Net
Loss and items of income, gain, loss and deduction pursuant to Sections  4.1 and 4.2 of this Addendum, and items of credit shall be allocated
to the Members, generally in the same manner as items of Net Income, Net Loss
and items of income, gain, loss and deduction, as provided in Regulations
sections 1.704-1(b)(4)(ii) and 1.704-1T(b)(4)(xi), or any successor Regulations

 

 

in
effect.  If the Gross Asset Value of any
LLC Asset differs from its Adjusted Basis, then items of taxable income, gain,
loss and deduction with respect to such LLC Asset shall be allocated, solely
for tax purposes, among the Members to take into account the variation between
such Gross Asset Value and Adjusted Basis in accordance with the principles of
Regulation section 1.704-3.

(b)           In making the tax allocations
provided for in Section 4.3(a) of this Addendum,
appropriate adjustments shall be made as necessary to take into account the
effects of any election pursuant to Section 754 of the Code.

5.             SECTION 754 ELECTION

The Tax Matters Member shall cause the LLC to file an election under
Section 754 of the Code to provide for an adjustment to the Adjusted Basis of
LLC Assets if requested to by a Member in connection with the disposition of an
LLC interest by that Member.

 

 

TABLE
OF CONTENTS

 

 

	
  1.

  	
  CERTAIN DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  2.

  	
  FORMATION; NAME; PLACE OF BUSINESS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.1.

  	
  Formation
  of LLC; Certificate of Formation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.2.

  	
  Name of LLC

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.3.

  	
  Place of Business

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.4.

  	
  Registered
  Office and Registered Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  3.

  	
  PURPOSES AND POWERS OF
  LLC

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.1.

  	
  Purposes

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.2.

  	
  Powers

  	
   

  
	
   

  	
   

  	
   

  
	
  4.

  	
  TERM OF LLC

  	
   

  
	
   

  	
   

  	
   

  
	
  5.

  	
  CAPITAL

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.1.

  	
  Capital
  Contributions and Percentage Interests of Members

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  5.1.1.

  	
  Capital Contributions.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  5.1.2.

  	
  Class of Units

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.2.

  	
  Support Obligations

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.3.

  	
  Issuance of
  Additional LLC Interests

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.4.

  	
  Capital Accounts

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.5.

  	
  Negative Capital
  Accounts

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.6.

  	
  No
  Interest on Capital Contributions or Capital Accounts

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.7.

  	
  Advances to LLC

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.8.

  	
  Liability
  of Members and Board of Managers

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.9.

  	
  Return of Capital

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.10.

  	
  Rights
  to Subscribe to Additional Issuances

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  ALLOCATION
  OF PROFITS AND LOSSES; DISTRIBUTIONS

  	
   

  
						

 

i

 

	
   

  	
  6.1.

  	
  Allocation of
  Net Income or Net Loss

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.2.

  	
  Allocation
  of Income and Loss With Respect to LLC Interests Transferred

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.3.

  	
  Distributions

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  6.3.1.

  	
  Determination of
  Availability.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  6.3.2.

  	
  Distribution to
  Members.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  6.3.3.

  	
  Priority of
  Distributions.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  6.3.4.

  	
  Tax Distribution.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  6.3.5.

  	
  Withholding Taxes.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  MEMBERS AND MANAGEMENT

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  7.1.

  	
  Members

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.1.1.

  	
  Classes of LLC
  Interests.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.1.2.

  	
  Meetings.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.1.3.

  	
  Quorum.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.1.4.

  	
  Action by Written Consent.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.1.5.

  	
  Voting Rights;
  Required Vote.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.1.6.

  	
  Waivers of Notice.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.2.

  	
  Management
  of LLC by the Managing Member

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.2.1.

  	
  Management by
  the Managing Member.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.2.2.

  	
  Power
  and Authority of the Managing Member.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.3.

  	
  Board of Managers

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.3.1.

  	
  Composition;
  Election; Removal.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.3.2.

  	
  Meetings.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.3.3.

  	
  Quorum of the
  Board of Managers.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.3.4.

  	
  Action by Written Consent.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.3.5.

  	
  Voting
  Rights of the Board of Managers; Required Votes of the Board of Managers.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.3.6.

  	
  Compensation of
  Board Members.

  	
   

  
							

 

ii

 

	
   

  	
  7.3.7.

  	
  Resignations of
  Board Members.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.3.8.

  	
  Committees
  of the Board of Managers.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.4.

  	
  Officers.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.4.1.

  	
  Number,
  Election and Term of Office.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.4.2.

  	
  President
  and Chief Executive Officer.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.4.3.

  	
  Treasurer.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.4.4.

  	
  Secretary.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.4.5.

  	
  Vice President.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.4.6.

  	
  Assistant Secretary.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.4.7.

  	
  Other Officers.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.4.8.

  	
  Resignation.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.4.9.

  	
  Removal;
  Vacancies; Transfer of Duties.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.4.10.

  	
  Compensation.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.4.11.

  	
  Third Party Reliance.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.5.

  	
  Major Decisions

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.6.

  	
  Managing
  Member; Day-to-Day Operations

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.7.

  	
  Fiduciary Relationship

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.8.

  	
  Managing Member’s
  Quarterly Fee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.9.

  	
  Other
  Activities of Members or Affiliates

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.10.

  	
  Certain Transactions

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.11.

  	
  Indemnification
  of the Members, Board Members, Officers and any Affiliate

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.12.

  	
  Delegation of
  Rights and Authority

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.13.

  	
  Subsidiaries

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.14.

  	
  Confidentiality

  	
   

  
	
   

  	
   

  	
   

  
	
  8.

  	
  BANK
  ACCOUNTS; BOOKS AND RECORDS; STATEMENTS; TAXES; FISCAL YEAR

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  8.1.

  	
  Bank Accounts

  	
   

  
						

 

iii

 

	
   

  	
  8.2.

  	
  Books and Records

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.3.

  	
  Financial
  Statements and Information

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.4.

  	
  Accounting Decisions

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.5.

  	
  Where Maintained

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.6.

  	
  Tax Returns

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.7.

  	
  Fiscal Year

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  TRANSFER
  AND CONVERSION OF LLC INTERESTS AND THE ADDITION, SUBSTITUTION AND WITHDRAWAL
  OF MEMBERS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.1.

  	
  Transfer of LLC Interests

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.2.

  	
  Restrictions on Transfers

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.3.

  	
  Publicly Traded
  Partnership

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.4.

  	
  No Right to Withdraw

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.5.

  	
  Conversion

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  DISSOLUTION AND
  LIQUIDATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.1.

  	
  Events Causing
  Dissolution

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.2.

  	
  Right to
  Continue Business of LLC

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.3.

  	
  Cancellation of
  Certificate

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.4.

  	
  Distributions Upon
  Dissolution

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.5.

  	
  Reasonable Time
  for Winding Up

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
  MISCELLANEOUS PROVISIONS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.1.

  	
  Compliance with
  Delaware LLC Act

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.2.

  	
  Additional Actions
  and Documents

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.3.

  	
  Notices

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.4.

  	
  Severability

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.5.

  	
  Survival

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.6.

  	
  Waivers

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.7.

  	
  Exercise of Rights

  	
   

  

 

iv

 

	
   

  	
  11.8.

  	
  Binding Effect

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.9.

  	
  Limitation
  on Benefits of this Agreement

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.10.

  	
  Amendment Procedure

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.11.

  	
  Entire Agreement

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.12.

  	
  Pronouns

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.13.

  	
  Headings

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.14.

  	
  Governing Law

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.15.

  	
  Execution in
  Counterparts

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.16.

  	
  Required FCC Consents

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ADDENDUM I — Definitions

  	
   

  
	
   

  	
   

  
	
  ADDENDUM II — TAX
  ALLOCATIONS

  	
   

  

 

 

vExhibit 10.3

 

INVESTOR RIGHTS
AGREEMENT

This
INVESTOR RIGHTS AGREEMENT (this “Agreement”), dated as of April 22, 2005, is entered into by
and among HUGHES NETWORK SYSTEMS, LLC, a Delaware limited liability company
(the “Company”), the DTVG Investor (as defined
herein) and the SkyTerra Investor (as defined herein).

WHEREAS,
The DIRECTV Group, Inc. (“DTVG”), Hughes
Network Systems, Inc. (“HNS”), SkyTerra
Communications, Inc. (“SkyTerra”) and
the Company have entered into a Contribution and Membership Interest Purchase
Agreement, dated as of December 3, 2004 (as amended, the “Contribution
Agreement”), pursuant to which, among other things, (i) HNS,
contributed to the Company, and the Company acquired and accepted from HNS
certain assets, and assumed certain liabilities associated therewith, all on
the terms and conditions set forth therein and (ii) HNS sold to SkyTerra and SkyTerra purchased from HNS, 50% of the membership
interests in the Company;

WHEREAS,
HNS and SkyTerra have entered into an Amended and Restated Limited Liability
Company Agreement of the Company, of even date herewith (the “LLC Agreement”), pursuant to which each Investor owns a 50%
LLC Interest (as defined below) in the Company;

WHEREAS,
the Company and the Investors desire to provide for certain arrangements with
respect to (i) tag along rights, (ii) drag-along rights, (iii)
registration rights and (iv) other related matters; and

WHEREAS,
following the closing of the transactions contemplated by the Contribution
Agreement, SkyTerra may create a wholly owned subsidiary and assign its rights
and obligations hereunder to such subsidiary (the “Drop Down”);

NOW,
THEREFORE, in consideration of the mutual promises and covenants contained in
this Agreement, the parties hereto agree as follows:

1.             Definitions.  As used in this
Agreement, the following terms shall have the following respective meanings:

                                1.1           “Commission” means the
Securities and Exchange Commission, or any other Federal agency at the time
administering the Securities Act.

                                1.2          “DTVG
Investor(s)” means HNS, and any Persons to whom the rights granted
under this Agreement are transferred by HNS, its successors or assigns pursuant
to Section 5 hereof.  If more than one DTVG Investor exists, any
action requiring the consent, approval or exercise of the DTVG Investors shall
be consented to or approved or exercised by the DTVG Investors who own a
majority of the Class A Units held by all DTVG Investors.

                                1.3          “Exchange Act” means the
Securities Exchange Act of 1934, as amended, or any similar Federal statute,
and the rules and regulations of the Commission issued under such Act, as they
each may, from time to time, be in effect.

                                1.4          “Fairness Opinion” means a written opinion from a
nationally-recognized investment bank reasonably acceptable to the SkyTerra
Investors and the DTVG Investors opining that the Basic Sales Terms of the Drag
Along Transaction are fair to the Investors.

 

 

1.5          “Investors” means the SkyTerra Investor(s) and the DTVG
Investor(s).

1.6          “LLC Interest” means as to any Investor, all of the interest
of that Investor in the Company, including without limitation, such Investor’s
(i) right to a distributive share of the income, gain, losses and deductions of
the Company in accordance with the LLC Agreement, and (ii) right to a distributive
share of LLC Assets.  In the event that
the Managing Member effects the transactions contemplated by Section 9.5
of the LLC Agreement, the equity interests issued in connection therewith shall
be deemed to be an “LLC Interest” hereunder.

1.7          “Qualified Initial Public
Offering” means the
first underwritten public offering of the equity of the Company on a firm
commitment basis covering the offer and sale of equity of the Company for the
account of the Company in which the aggregate public offering price (before
deduction of underwriters’ discounts and commissions) equals or exceeds $50 million underwritten by a reputable nationally
recognized underwriting firm pursuant to which the equity interests will be
quoted on the NASDAQ National Market or listed or quoted on the New York Stock
Exchange or another securities exchange acceptable to the Investors.

                                1.8          “Registrable
Securities” means (i) the
LLC Interests and (ii) any other equity securities of the Company issued in
respect of the interests described in clause (i), including without limitation
because of a conversion of the Company from a limited liability company to, or
merger of the Company with, a corporation in accordance with Section 9.5
of the LLC Agreement or other reclassifications, recapitalizations or similar
events; provided, however, that such interests
that are Registrable Securities shall cease to be Registrable Securities (x)
upon any sale pursuant to a Registration Statement, or (y) with respect to an
Investor, when such Investor is eligible to sell, transfer or otherwise convey
all of such Investor’s Registrable Securities pursuant to Rule 144 under the
Securities Act without regard to volume and holding period limitations.

                                1.9          “Registration Statement” means a
registration statement filed by the Company with the Commission for a public
offering and sale of equity securities of the Company (other than a
registration statement on Form S-8 or Form S-4, or their successors, any
registration statement covering only securities proposed to be issued in
exchange for securities or assets of another corporation or a registration
statement on Form S-3 solely for the purpose of registering shares issued in a
non-underwritten offering in connection with a merger, combination or
acquisition).

                                1.10        “Securities Act” means the
Securities Act of 1933, as amended, or any similar Federal statute, and the
rules and regulations of the Commission issued under such Act, as they each
may, from time to time, be in effect.

1.11        “SkyTerra Investor(s)” means SkyTerra, and
any Persons to whom the rights granted under this Agreement are transferred by SkyTerra,
its successors or assigns pursuant to Section 5
hereof.  If more than one SkyTerra
Investor exists, any action requiring the consent, approval or exercise of the
SkyTerra Investors shall be consented to or approved or exercised by the
SkyTerra Investors who own a majority of the Class A Units held by all SkyTerra
Investors.  After delivery of notice to
the DTVG Investor(s) of the Drop Down, the SkyTerra Sub shall become the
SkyTerra Investor hereunder.

1.12        “SkyTerra
Sub” — A wholly
owned subsidiary of SkyTerra formed for the purpose of effecting the Drop Down.

1.13        “Unaffiliated Buyer” means an unrelated and
unaffiliated third party in which the SkyTerra Investors, their respective
Affiliates, Apollo Management, L.P., any investment fund managed by Apollo
Management, L.P., and any direct or indirect portfolio company of any
investment 

 

 

fund managed by Apollo Management, L.P. do not own in the aggregate (or
will not own in the aggregate, following a Drag-Along Transaction, except as a
result of equity interests issued in consideration of, or retained in
connection with, a Drag-Along Transaction) a direct or indirect equity interest
of (i) greater than ten percent (10%) or (ii) if the Sky Terra Investors
deliver a Fairness Opinion to the DTVG Investors in connection with the
Drag-Along Transaction, greater than twenty-five percent (25%).

                                Capitalized
terms used in this Agreement and not otherwise defined herein shall have the
meanings given them in the LLC Agreement.

2.     Tag Along Rights.

                                2.1          General.  An Investor
desiring to transfer any LLC Interest (a “Selling Investor”)
shall not be permitted to transfer (other than to a Permitted Transferee) such
LLC Interest to any Person, unless the terms and conditions of such transfer
shall include an offer by the third-party transferee to the other Investors
(each other Investor who wishes to sell LLC Interests, a “Tag Along
Participant”), at a price calculated using the same methodology used
to calculate the price of such Selling Investor’s LLC Interest proposed to be
transferred (such price, a “Tag Along Price”)
and otherwise on the same terms and conditions as such Selling Investor has
agreed to sell such LLC Interest, to include in the transfer to the third party
transferee a portion of LLC Interests held by each Tag Along Participant
determined in accordance with this Section 2.

 

                                2.2          Obligation of Transferee to Purchase.  The third-party transferee of the Selling
Investor shall purchase from each Tag Along Participant who accepts such offer
the portion of such Tag Along Participant’s aggregate LLC Interest that such
Tag Along Participant desires to sell, provided that such portion does not
exceed the Maximum Tag Along Portion (as defined below) attributable to such
Tag Along Participant and, if such portion exceeds such Maximum Tag Along
Portion, the third-party transferee shall purchase from such Tag Along
Participant only the Maximum Tag Along Portion. 
For purposes hereof, the term “Maximum Tag Along Portion”
attributable to a Tag Along Participant means an amount equal to (a) the total
number of Units proposed to be transferred to the third-party transferee by the
Selling Investor and all Tag Along Participants multiplied by (b) a fraction,
the numerator of which is the number of Units held by such Tag Along
Participant and the denominator of which is the number of Units held by the
Selling Investor and all Tag Along Participants.

 

                                2.3          Notice.  In the event
the Selling Investor proposes to transfer any LLC Interest in a transaction
subject to this Section 2, it shall notify,
or cause to be notified, in writing, each Investor of each such proposed
transfer.  Such notice (the “Transfer Notice”) shall be given not more than 60 nor less
than 20 calendar days prior to the proposed sale date and set forth:  (i) the name of the transferee and the LLC
Interest proposed to be transferred, (ii) the proposed amount and form of consideration
and terms and conditions of payment offered by the transferee (the “Transferee Terms”), (iii) that the transferee has been
informed of the “tag along right” provided for in this Section 2,
and has agreed to purchase LLC Interests from each Tag Along Participant in
accordance with the terms hereof, and (iv) the proposed sale date.

 

                                2.4          Exercise.  The
tag-along right may be exercised by each Tag-Along Participant by delivery of a
written notice to the Selling Investor (the “Tag Along
Notice”) within 15 calendar days following receipt of the Transfer
Notice.  The Tag Along Notice shall state
the portion of its aggregate LLC Interest 
that such Tag Along Participant wishes to include in such transfer to
the third-party transferee.  Upon the
giving of a Tag Along Notice, such Tag Along Participant shall be entitled and
obligated to sell the portion of its LLC Interest set forth in the Tag Along
Notice (but not in excess of the 

 

 

Maximum Tag Along Portion), to the
third-party transferee on the Transferee Terms; provided,
however, the Selling Investor shall not
consummate the sale of any LLC Interest offered by it if the third-party
transferee does not purchase all LLC Interests which each Tag Along Participant
is entitled to and desires to sell pursuant hereto.  After expiration of the 15 calendar-day
period referred to above, if the provisions of this Section 2
have been complied with in all material respects, the Selling Investor and each
Tag Along Participant that delivered a Tag Along Notice shall transfer the LLC
Interests to the transferee on the Transferee Terms on the sale date proposed
in the Transfer Notice (or such other date within thirty (30) days of such
proposed sale date as may be agreed among the participants in such transfer).

 

                                2.5          Several Liability. 
Anything to the contrary contained herein notwithstanding, the Selling
Investor agrees to use its reasonable good faith efforts to seek to ensure that
the applicable Transferee Terms provide for several, and not joint, liability,
with respect to the indemnification and comparable obligations contained within
such Transferee Terms.

 

                3.             Drag-Along Rights.

                                3.1          Drag-Along Transaction.  At any time after the second anniversary of
the date of this Agreement, if the SkyTerra Investors determine to (i) transfer
or exchange (in a merger, business combination or otherwise) in one or a series
of related bona fide arm’s-length transactions all or substantially all of the
Class A Units of the Company (including all or substantially all of the LLC
Interests held by the SkyTerra Investors) or (ii) sell all or substantially all
of the assets of the Company (collectively, the “Drag-Along
Transaction”) to an Unaffiliated Buyer, and provided that (x) prior
to the proposed Drag-Along Transaction, all of the SkyTerra Investors own at
least twenty five (25%) of the aggregate Percentage Interests of the Company,
(y) the SkyTerra Investors are not then in default of any of their obligations
under this Agreement or the LLC Agreement in a manner that has had a material
adverse impact on the value of the Company, and (z) the transaction will not
result in any material default under any indebtedness of the Company guaranteed
by any DTVG Investor or the triggering of any obligation of any DTVG Investor
to make payments or incur any indebtedness or other significant liability in
connection with any Financial Support Arrangements (as defined in the
Contribution Agreement) retained for the benefit of the Company or other
guaranties or credit support maintained by such DTVG Investor on behalf of the
Company (other than arising out of reasonable and customary indemnification
provisions, typically found in transactions of similar type (a “Standard Indemnity”)), then the SkyTerra Investors shall
have the right to implement the drag along procedures set forth in this Section 3 by delivering a written notice to all
Investors (the “Drag-Along Notice”).  Such Drag-Along Notice shall include
reasonable details of the proposed transaction with the Unaffiliated Buyer,
including a description of all consideration, payments, commitments,
compensation, rights or other property of any type to be received and all
material liabilities and obligations to be incurred (other than a Standard
Indemnity) by the Investors or their Affiliates in connection with such
transaction (including any issuance of notes or other securities, assumption of
material liabilities and any other commercial arrangements) and any other
material economic terms of the proposed sale (the “Basic Sale
Terms”).  The Basic Sale Terms
shall provide for distribution of the economic benefits and detriments of the
transactions among the Investors in accordance with their respective Percentage
Interests.

                                3.2          Participation in
Drag-Along Transaction.  In
the event that all of the DTVG Investors then own a Percentage Interest in the
LLC at least equal to the Percentage Interest then owned by all of the SkyTerra
Investors, a representative of the DTVG Investors shall be included in all
material negotiations regarding the proposed Drag-Along Transaction, and shall
be permitted to participate in all material facets of the transaction, but in
such negotiations the DTVG Investors shall cooperate with the SkyTerra
Investors in connection with the proposed Drag-Along Transaction.  If the DTVG Investors do not participate in
the material negotiations or other material facets of the transaction, the DTVG
Investors shall be entitled to receive copies of the proposed definitive
transaction documents at 

 

 

least five (5) business days
prior to the proposed approval and execution of the Drag-Along
Transaction.  After such five (5)
business day period, all of the Investors shall, (i) vote all of their equity
interests of the Company represented by the Investor’s LLC Interest in favor of
the Drag-Along Transaction, and (ii) to the extent applicable, instruct the
DTVG Board Members to vote in favor of any reasonable action deemed necessary
to consummate the Drag-Along Transaction and enter into a definitive agreement
to sell, transfer and deliver, or cause to be sold transferred and delivered,
to the Unaffiliated Buyer, all of its LLC Interests in the Drag-Along
Transaction.

                                3.3          Drag-Along Transaction Not
Consummated.  In the event that a binding and
definitive agreement for the sale or transfer in a Drag-Along Transaction pursuant to this Section 3
is not entered into within ninety (90) days after the Investors receive the
Drag-Along Notice or
the Drag-Along Transaction is not consummated following satisfaction or waiver
of all applicable conditions precedent within eight (8) months thereafter, upon
expiration of any definitive agreement for the Drag-Along Transaction then in
effect the Investors shall cease to be bound by the obligations set forth in Section 3.2 with regard to such transaction.

                                3.4          Third Party Matters.  No DTVG Investor shall be required to satisfy
the obligations set forth in Section
3.2 unless the
definitive agreement to consummate the Drag-Along Transaction contains a
provision reasonably acceptable to the DTVG Investors which provides for the
Unaffiliated Buyer in the Drag-Along Transaction to assume and release the DTVG
Investors and their Affiliates from all indebtedness of the Company guaranteed
by the DTVG Investors or their Affiliates or any obligation of any DTVG
Investor or its respective Affiliates to make payments or incur any
indebtedness or other significant liability in connection with any Financial
Support Arrangements (as defined in the Contribution Agreement) retained for
the benefit of the Company or other guaranties or credit support maintained by the
DTVG Investors or their Affiliates on behalf of the Company (other than arising
out of a Standard Indemnity).  The
parties further agree that the closing of the Drag-Along Transaction shall not
be consummated unless the DTVG Investors and their Affiliates are so released
as provided for in the agreement entered into in accordance with the foregoing
sentence.  Unless otherwise agreed by the
SkyTerra Investors, the DTVG Investors and the Unaffiliated Buyer, if the Drag-Along
Transaction pursuant to this Section 3 would
violate any loan document or other material contract to which the Company is a
party, then the Company and the Unaffiliated Buyer shall obtain the consent of
the lender or other third party to such sale prior to closing.  The provisions of this Section 3.4
shall not apply to any Standard Indemnity entered into in connection with the
Drag-Along Transaction.

                                3.5          Default.  In the event
that a party fails to fulfill its obligation to sell or purchase under this Section 3, then the other parties shall be entitled to
exercise all rights and remedies provided by law for such a default, including
specific performance and the right to sue for damages.

                4.             Notice of Sale;
Auction Participation.

 

                                If
at any time or from time to time following the date of this Agreement, the
SkyTerra Investors desire to (i) transfer or exchange (in a merger, business
combination or otherwise) in one or a series of related bona fide arm’s-length
transactions all of the Class A Units of the Company (including all of the LLC
Interests held by the SkyTerra Investors) or (ii) sell all or substantially all
of the assets of the Company (collectively, a “Sale
Transaction”), in each case, to an Unaffiliated Buyer, prior to
initiating any material discussions regarding a Sale Transaction with any
Unaffiliated Buyer (excluding brokers and investment advisors), the SkyTerra
Investors shall provide a written notice to the DTVG Investors indicating the
intention of the SkyTerra Investors to pursue a Sale Transaction.  If the SkyTerra Investors pursue a Sale
Transaction through an auction process, the SkyTerra Investors shall provide
the DTVG Investors an opportunity to participate in such auction in a manner
that is no less favorable than that offered to other potential bidders or participants
in such auction.

 

 

                5.             Transfers of Rights.  This Agreement, and the rights and
obligations of any Investor hereunder, may be assigned by such Investor to any
transferee of such Investor’s LLC Interests to the extent such Investor
transfers the LLC Interests in accordance with the LLC Agreement, and, subject
to the following sentence, such transferee shall be deemed a “SkyTerra Investor” or “DTVG Investor”,
as the case may be, for purposes of this Agreement; provided
that the transferor shall give the Company prior written notice of any transfer
under this Section 5.  Notwithstanding the
foregoing, the rights of the SkyTerra Investors under Section 3
may only be assigned to (i) a Person who will, following such transfer, own at least fifty
percent (50%) of the aggregate Percentage Interests owned by the SkyTerra
Investors as of the date of this Agreement or (ii) any Person, if SkyTerra and
its Affiliates or Persons to whom these rights have been assigned pursuant to
this Section 5 own Percentage Interests
greater than the Percentage Interests owned by DTVG and its Affiliates, and for
purposes of Section 3, only SkyTerra and such
Persons described in clause (i) and (ii) will be considered “SkyTerra Investors”.

 

                6.             Registration Rights.

 

                                6.1          Required Registrations.

                                                6.1.1       At any time following the
fifth anniversary of the date of this Agreement, the SkyTerra Investors, on the
one hand, or the DTVG Investors, on the other, may request, in writing, that
the Company effect a registration on Form S-1 (or any successor form) of
Registrable Securities owned by such Investor or Investors provided that the
aggregate public offering price (before deduction of underwriters’ discounts
and commissions) of the LLC Interests or other equity of the Company offered in
such registration equals or exceeds $50 million.  In addition, at any time following the date
that the Company has consummated a public offering of its equity securities
pursuant to a Registration Statement, the SkyTerra Investors, on the one hand,
or the DTVG Investors, on the other, may request, in writing, that the Company
effect a registration on Form S-1 (or any successor form) of Registrable
Securities owned by such Investor.  If
the Investors initiating the registration intend to distribute the Registrable
Securities by means of an underwriting, they shall so advise the Company in
their request.  In the event such
registration is underwritten, the right of other Investors to participate in
such registration shall be conditioned on such Investors’ participation in such
underwriting.  Upon receipt of any such
request, the Company shall promptly give written notice of such proposed
registration to all Investors.  Such
other Investors shall have the right, by giving written notice to the Company
within 30 days after the Company provides its notice, to elect to have included
in such registration all or a part of their Registrable Securities as such
Investors may request in such notice of election.  All Investors proposing to distribute their
securities through such underwriting shall enter into an underwriting agreement
in customary form with an underwriter or underwriters that are mutually
agreeable to the Company and the Investors including Registrable Securities in
such offering.  Thereupon, the Company shall,
at its own expense and as expeditiously as possible, use its best efforts to
effect the registration, on Form S-1 (or any successor form), of all
Registrable Securities that the Company has been requested so to register.

                                                6.1.2       At any time
after the Company becomes eligible to file a Registration Statement on Form S-3
(or any successor form relating to secondary offerings, hereinafter, “Form S-3”), each of (i) the SkyTerra Investors and (ii)
the DTVG Investors holding Registrable Securities will have the right to
require the Company to effect a registration on Form S-3 of Registrable
Securities provided that the aggregate public offering price (before deduction
of underwriters’ discounts and commissions) of the LLC Interests or other
equity of the Company offered in such registration equals or exceeds $10
million (or such lesser amount to the extent that such Investor(s) do not own
LLC Interests or other equity securities that equal or exceed $10
million).  Upon receipt of any such
request, the Company shall promptly give written notice of such proposed
registration to all Investors.  Such
other Investors shall have the right, by giving written notice to the Company
within 30 days after the Company provides its 

 

 

notice,
to elect to have included in such registration such of their Registrable
Securities as such Investors may request in such notice of election.  Thereupon, the Company shall, as
expeditiously as possible, use its best efforts to effect the registration on
Form S-3 of all Registrable Securities that the Company has been requested
to register.

                                                6.1.3       The Company
shall be required to effect not more than (a) five (5) registrations initiated
by the SkyTerra Investors pursuant to Section 6.1.1
above, or (b) five (5) registrations initiated by the DTVG Investors pursuant
to Section 6.1.1 above.  The Company shall not be required to effect
more than one (1) registration under this Section 6.1
in any six (6) month period.  Each
request for registration pursuant to Section 6.1.1
shall be deemed satisfied only when a registration statement covering all
Registrable Securities specified in notices received as aforesaid, for sale in
accordance with the method of disposition specified in such notices, has become
effective and, if the method of disposition is a firm commitment underwritten
public offering all of the Registrable Securities covered thereby shall have
been sold pursuant thereto.  A requested
registration under this Section 6.1
may be rescinded by written notice to the Company by the holders requesting
such registration and such rescinded registration shall not count as a
registration statement initiated pursuant to this Section 6.1,
if such holders shall have reimbursed the Company for all out-of-pocket
expenses incurred by the Company in connection with such rescinded
registration.  Except for Registration
Statements on Form S-4, S-8 or another form not available for registering
securities for sale to the public, or any successor thereto, and subject to Section 6.1.4 herein, the Company will not, without
the consent of all of the Investors, file with the Commission any other
Registration Statement with respect to its LLC Interests or other equity
interests of the Company whether for its own account or that of other
Investors, from the date of receipt of a notice from requesting Investors
pursuant to Section 6.1.1 until the
completion of the period of distribution of the securities contemplated
thereby.

                                                6.1.4       If at the
time of any request to register Registrable Securities pursuant to Section 6.1.2, the Company (a) is engaged or has fixed
plans to engage within 30 days of the time of the request in a registered
public offering as to which the Investors may include Registrable Securities
pursuant to Section 6.2, (b) is engaged
in any other activity that the Company certifies, in the good faith
determination of the Company’s Board of Managers, would be adversely affected
by the requested registration to the material detriment of the Company or (c)
the request to register pursuant to Section 6.1.2
is in a jurisdiction in which the Company would be required to qualify to do
business or execute a general consent to service of process to effect such
registration, then the Company may at its option direct that such request be
delayed for a period of at least ninety (90) days and not to exceed one hundred
fifty (150) days from the effective date of such offering or the date of
commencement of such other material activity, as the case may be, such right to
delay a request to be exercised by the Company not more than once in any twelve
(12) month period.

                                                6.1.5       In
connection with any offering under this Section 6.1
involving an underwriting, if the representative of the underwriters advises
the Investors in writing that marketing factors require a limitation on the
securities to be so underwritten, the securities which the Company and/or other
Persons have requested to be so included, if any, shall be entirely excluded
from such registration and underwriting, and the number of Registrable
Securities to be included in the registration and underwriting shall thereafter
be allocated pro rata among the Investors based upon their total ownership of
LLC Interests or other equity interests; provided, however,
that such allocation shall not operate to reduce the aggregate number of
securities to be included in such registration, if any Investor does not
request inclusion of the maximum number of Registrable Securities allocated to
such Investor pursuant to the above-described procedure, in which case the
remaining portion of such Investor’s allocation shall be reallocated among
those Investors whose allocations did not satisfy their requests, pro rata on
the basis of the LLC Interests or other equity interests which would be held by
such Investors.  This procedure shall be
repeated until all of the securities which may be included in the registration
on 

 

 

behalf
of the requesting Investors have been so allocated.

                                6.2.         Incidental Registration.

                                                6.2.1       Subject to Section 6.2.2, below, whenever the Company proposes to
file a Registration Statement for the issuance of LLC Interests or other equity
of the Company (except for registrations relating to the Class B Units,
employee benefit plans and corporate reorganizations) at any time and from time
to time, it will, prior to such filing, give written notice to all Investors of
its intention to do so and, upon the written request of an Investor or
Investors given within 20 days after the Company provides such notice (which
request shall state the intended method of disposition of such Registrable
Securities), the Company shall use its best efforts to cause all Registrable
Securities that the Company has been requested by such Investor or Investors to
register to be registered under the Securities Act to the extent necessary to
permit their sale or other disposition in accordance with the intended methods
of distribution specified in the request of such Investor or Investors; provided that the Company shall have the right to postpone
or withdraw any registration effected pursuant to this Section 6.2
without obligation to any Investor.

                                                6.2.2       In
connection with any offering under this Section 6.2
involving an underwriting, the Company shall not be required to include any
Registrable Securities in such underwriting unless the holders thereof accept
the terms of the underwriting as agreed upon between the Company and the
underwriters selected by it, and then only in such quantity as will not, in the
good faith opinion of the underwriters, jeopardize the success of the offering
by the Company.

                                                6.2.3       In connection with any
offering under this Section 6.2
involving an underwriting, if the representative of the underwriters advises
the Company in writing that marketing factors require a limitation on the
securities to be so underwritten, the securities which the Company has
requested to be so included shall be entirely included in such registration and
underwriting and the number of Registrable Securities to be included in the
registration and underwriting by the Investors shall thereafter be allocated
pro rata among the Investors based upon their total ownership of LLC Interests
or other equity interests; provided, however,
that such allocation shall not operate to reduce the aggregate number of
securities to be included in such registration, if any Investor does not
request inclusion of the maximum number of Registrable Securities allocated to
such Investor pursuant to the above-described procedure, in which case the
remaining portion of such Investor’s allocation shall be reallocated among
those Investors whose allocations did not satisfy their requests, pro rata on
the basis of the LLC Interests or other equity interests which would be held by
such Investors.  This procedure shall be
repeated until all of the securities which may be included in the registration
on behalf of the requesting Investors have been so allocated.

                                6.3          Registration
Procedures.  If and whenever
the Company is required by the provisions of this Agreement to effect the
registration of any of the Registrable Securities under the Securities Act, the
Company shall:

                                                6.3.1       as
expeditiously as possible use its best efforts to prepare and file with the
Commission a Registration Statement with respect to such Registrable Securities
and use its best efforts to cause that Registration Statement to become and
remain effective for the earlier of 120 days or until the completion of the
distribution;

                                                6.3.2       as
expeditiously as possible use its best efforts to prepare and file with the
Commission any amendments and supplements to the Registration Statement and the
prospectus included in the Registration Statement as may be necessary to keep
the Registration Statement effective, and comply with the provisions of the
Securities Act with respect to the disposition of all securities 

 

 

covered
by such Registration Statement;

                                                6.3.3       as
expeditiously as possible use its best efforts to furnish to each selling
Investor such reasonable numbers of copies of the Registration Statement, each
amendment and supplement thereto, prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and such
other documents as the selling Investor may reasonably request in order to
facilitate the public sale or other disposition of the Registrable Securities
owned by the selling Investor;

                                                6.3.4       as
expeditiously as possible use its best efforts to register or qualify the
Registrable Securities covered by the Registration Statement under the
securities or Blue Sky laws of such states as the selling Investors shall
reasonably request, and do any and all other acts and things that may be
necessary or desirable to enable the selling Investors to consummate the public
sale or other disposition in such states of the Registrable Securities owned by
the selling Investor; provided, however,
that the Company shall not be required in connection with this Section 6.3.4 to qualify as a foreign corporation or
execute a general consent to service of process in any jurisdiction unless the
Company is already subject to service in such jurisdiction and except as may be
required under the Securities Act;

                                                6.3.5       in the
event of any underwritten public offering, enter into and perform its
obligations under an underwriting agreement, in usual and customary form, with
the managing underwriter(s) of such offering and reasonably cooperate in the
marketing efforts of the underwriters and the Investors by, among other things,
making available, as reasonably requested by the underwriters and the
Investors, senior executive officers of the Company for attendance at, and
active participation with the underwriters in, informational meetings with
prospective purchasers of the Registrable Securities being offered, including
meeting with groups of such purchasers or with individual purchasers, providing
information and answering questions about the Company at such meetings, and
traveling to locations at reasonable times and as reasonably selected by the
underwriters.  Investors participating in
such underwriting shall also enter into and perform their obligations under
such an agreement;

                                                6.3.6       notify each
holder of Registrable Securities covered by such registration statement at any
time when a prospectus relating thereto is required to be delivered under the
Securities Act of the happening of any event as a result of which the
prospectus included in such registration statement, as then in effect, includes
an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing;

                                                6.3.7       use its
best efforts to furnish, on the date that such Registrable Securities are
delivered to the underwriters for sale, if such securities are being sold
through underwriters, (i) an opinion, dated as of such date, of the
counsel representing the Company for the purposes of such registration, in form
and substance as is customarily given to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and (ii) a letter dated as of
such date, from the independent certified public accountants of the Company, in
form and substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering addressed to the
underwriters;

                                                6.3.8       if the
Company has delivered preliminary or final prospectuses to the selling
Investors and after having done so the prospectus is amended to comply with the
requirements of the Securities Act, the Company shall promptly notify the
selling Investors and, if requested, the selling Investors shall immediately
cease making offers of Registrable Securities and return all prospectuses to
the Company.  The Company shall promptly
provide the selling Investors with revised prospectuses and, following receipt
of the revised prospectuses, the selling Investors shall be free to resume
making offers of the Registrable Securities;

 

 

                                                6.3.9       cause all
Registrable Securities to be listed on securities exchanges, if any, on which
similar securities issued by the Company are then listed or, if they are not so
listed, on such exchanges the selling Investors may reasonably request;

                                                6.3.10     make
available for inspection by any Investor or any underwriter participating in
any disposition pursuant to such Registration Statement and any attorney,
accountant or other professional retained by any such Investor or underwriter
(collectively, the “Inspectors”),
all financial and other records, pertinent corporate documents and properties
of the Company as shall be reasonably necessary to enable them to exercise
their due diligence responsibility, and cause the Company’s officers, managers
and employees to supply all information reasonably requested by any Inspectors
in connection with such Registration Statement;

                                                6.3.11     if requested
by the Investors, provide a CUSIP number for all Registrable Securities not
later than the effective date of the Registration Statement covering such
Registrable Securities and provide the Company’s transfer agent(s) and
registrar(s) for the Registrable Securities with printed certificates for the
Registrable Securities;

                                                6.3.12     cooperate
and assist in any filings required to be made with the NASD and in the
performance of any due diligence investigation by any underwriter (including
any “qualified independent underwriter”) that is required to be retained in
accordance with the rules and regulations of the NASD; and

                                                6.3.13     use its best
efforts to comply with all applicable rules and regulations of the Commission,
and make available to its securityholders, as soon as reasonably practicable,
an earnings statement covering a period of 12 months, beginning within three
months after the commencement of any public offering of securities pursuant to
the Registration Statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act.

                                6.4.         Allocation of
Expenses.  The Company will
pay all Registration Expenses (as defined below) of all registrations under
this Agreement; provided, however, that if a
registration under Section 6.1.1
is withdrawn at the request of the Investors requesting such registration
(other than as a result of information concerning the business or financial
condition of the Company that is made known to the Investors after the date on
which such registration was requested) and if the requesting Investors elect
not to have such registration counted as a registration requested under Section 6.1.1, the requesting Investors shall pay the
Registration Expenses of such registration pro rata in accordance with the
number of their Registrable Securities included in such registration.  For purposes of this Section, the term “Registration Expenses” shall mean all expenses incurred by
the Company in complying with this Agreement, including, without limitation,
all registration and filing fees, exchange listing fees, printing expenses,
fees and disbursements of counsel for the Company and the reasonable fees and
expenses of one (1) counsel selected by the selling Investors to represent the
selling Investors, state Blue Sky fees and expenses, and the expense of any
special audits incident to or required by any such registration, but excluding
underwriting discounts, selling commissions and the fees and expenses of selling
Investors’ own counsel (other than the counsel selected to represent all
selling Investors).

                                6.5          Indemnification and Contribution.  In the event of any registration of any of
the Registrable Securities under the Securities Act pursuant to this Agreement,
the Company will indemnify and hold harmless the seller of such Registrable
Securities (including any member, partner, officer or director of such seller),
each underwriter of such seller of such Registrable Securities, and each other
Person, if any, who controls such seller or underwriter within the meaning of
the Securities Act or the Exchange Act against any losses, claims, damages or
liabilities, joint or several, to which such seller (including any member,
partner, officer or director of such seller), underwriter or controlling Person
may 

 

 

become
subject under the Securities Act, the Exchange Act, state securities or Blue
Sky laws or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in any
Registration Statement under which such Registrable Securities were registered
under the Securities Act, any preliminary prospectus or final prospectus contained
in the Registration Statement, or any amendment or supplement to such
Registration Statement, or arise out of or are based upon the omission or
alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or any violation or
alleged violation by the Company of the Securities Act, the Exchange Act, any
state securities law or any rule or regulation promulgated under the Securities
Act, the Exchange Act or any state securities laws in connection with the
offering covered by such registration statement; and the Company will reimburse
such seller (including any member, partner, officer or director of such
seller), underwriter and each such controlling Person of the seller or
underwriter for any legal or any other expenses reasonably incurred by such
seller (including any member, partner, officer or director of such seller),
underwriter or controlling Person in connection with investigating or defending
any such loss, claim, damage, liability or action; provided,
however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any untrue statement or omission made in such Registration Statement,
preliminary prospectus or prospectus, or any such amendment or supplement, in
reliance upon and in conformity with information furnished to the Company, in
writing, by or on behalf of such seller, underwriter or controlling Person
specifically for use in the preparation thereof.

                                In the event of
any registration of any of the Registrable Securities under the Securities Act
pursuant to this Agreement, each seller of Registrable Securities, severally
and not jointly, will indemnify and hold harmless the Company, each of its
directors and officers and each underwriter (if any) and each Person, if any,
who controls the Company or any such underwriter within the meaning of the
Securities Act or the Exchange Act, and any other seller of Registrable
Securities or any such seller’s partners, directors or officers and each
Person, if any, who controls such seller within the meaning of the Securities
Act and the Exchange Act, against any losses, claims, damages or liabilities,
joint or several, to which the Company, such directors and officers,
underwriter, other selling Investor or controlling Person may become subject
under the Securities Act, Exchange Act, state securities or Blue Sky laws or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in any Registration Statement
under which such Registrable Securities were registered under the Securities
Act, any preliminary prospectus or final prospectus contained in the
Registration Statement, or any amendment or supplement to the Registration
Statement, or arise out of or are based upon any omission or alleged omission
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading, and each such Seller of Registrable
Securities will reimburse the Company for any legal or any other expenses
reasonably incurred by the Company in connection with investigating or
defending any such loss, claim, damage, liability or action, if the statement
or omission was made in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of such seller,
specifically for use in connection with the preparation of such Registration
Statement, prospectus, amendment or supplement; provided,
however, that the obligations of such Investors hereunder shall be
limited to an amount equal to the net proceeds received by each selling
Investor of Registrable Securities sold as contemplated herein.

                                Each
party entitled to indemnification under this Section 6.5
(the “Indemnified Party”) shall
give notice to the party required to provide indemnification (the “Indemnifying Party”) promptly after
such Indemnified Party has actual knowledge of any claim as to which indemnity
may be sought, and shall permit the Indemnifying Party to assume the defense of
any such claim or any litigation resulting therefrom; provided,
that counsel for the Indemnifying Party, who shall conduct the defense of such
claim or litigation, shall be approved by the Indemnified Party (whose approval
shall not be 

 

 

unreasonably
withheld); and, provided, further, that the
failure of any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this Agreement, except
to the extent that the Indemnifying Party’s ability to defend against such
claim or litigation is impaired as a result of such failure to give
notice.  The Indemnified Party may participate
in such defense at such party’s expense; provided, however,
that the Indemnifying Party shall pay such expense if representation of such
Indemnified Party by the counsel retained by the Indemnifying Party would be
inappropriate due to actual or potential differing interests between the
Indemnified Party and any other party represented by such counsel in such
proceeding.  No Indemnifying Party in the
defense of any such claim or litigation shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect of such claim or litigation, and no Indemnified Party
shall consent to entry of any judgment or settle such claim or litigation
without the prior written consent of the Indemnifying Party.  Each Indemnified Party shall furnish such
information regarding itself or the claim in question as an Indemnifying Party
may reasonably request in writing and as shall be reasonably required in
connection with the defense of such claim and litigation resulting therefrom.

                                In order to
provide for just and equitable contribution in circumstances in which the
indemnification provided for in this Section 6.5
is due in accordance with its terms but for any reason is held to be
unavailable to an Indemnified Party in respect to any losses, claims, damages
and liabilities referred to herein, then the Indemnifying Party shall, in lieu
of indemnifying such Indemnified Party, contribute to the amount paid or
payable by such Indemnified Party as a result of such losses, claims, damages
or liabilities to which such party may be subject in proportion as is
appropriate to reflect the relative fault of the Indemnifying Party on the one
hand and the Indemnified Party on the other in connection with the statements
or omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations.  The relative fault of the Indemnifying Party
and the Indemnified Party shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of material fact related
to information supplied by the Indemnifying Party or the Indemnified Party and
the parties’ relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.  The Company and the Investors agree that it
would not be just and equitable if contribution pursuant to this Section 6.5 were determined by pro rata allocation or
by any other method of allocation that does not take account of the equitable
considerations referred to above. 
Notwithstanding the provisions of this paragraph of Section 6.5,
(a) in no case shall any one Investor be liable or responsible for any amount
in excess of the net proceeds received by such Investor from the offering of
Registrable Securities and (b) the Company shall be liable and responsible for
any amount in excess of such proceeds; provided, however,
that no Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution
from any Person who was not guilty of such fraudulent misrepresentation.  Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party or parties under this Section 6.5,
notify such party or parties from whom such contribution may be sought, but the
omission so to notify such party or parties from contribution may be sought
shall not relieve such party from any other obligation it or they may have
thereunder or otherwise under this Section 6.5.  No party shall be liable for contribution
with respect to any action, suit, proceeding or claim settled without its prior
written consent, which consent shall not be unreasonably withheld.

                                6.6.         Indemnification with Respect to
Underwritten Offering.  In
the event that Registrable Securities are sold pursuant to a Registration
Statement in an underwritten offering pursuant to Section 6.1,
the Company agrees to enter into an underwriting agreement containing customary
representations and warranties with respect to the business and operations of
an issuer of the securities being registered and customary covenants and
agreements to be performed by such issuer, including 

 

 

without
limitation customary provisions with respect to indemnification by the Company
of the underwriters of such offering.

                                6.7.         Information by Holder.  Each holder of Registrable Securities
included in any registration shall furnish to the Company such information
regarding such holder and the distribution proposed by such holder as the
Company may reasonably request in writing and as shall be required in
connection with any registration, qualification or compliance referred to in
this Agreement.

                                6.8.         “Market Stand-Off” Agreement.  Each Investor, if requested by the Company
and an underwriter of LLC Interests or other securities of the Company, shall
agree not to sell or otherwise transfer or dispose of any Registrable
Securities or other securities of the Company held by such Investor for a
specified period of time determined by the Company and the underwriters (not to
exceed 90 days (or 180 days in connection with the initial public offering of
equity securities of the Company)) following the effective date of a
Registration Statement; provided, that:

                                                (a)           such agreement shall only apply to
the first Registration Statement covering LLC Interests or other securities of
the Company to be sold on the Company’s behalf to the public in an underwritten
offering; and

                                                (b)           all Investors holding more than 1% of
the LLC Interests or other equity of the Company (including convertible
securities, or upon the exercise of options, warrants or rights) and all
executive officers and directors of the Company enter into similar agreements.

                                Such agreement
shall be in writing in a form reasonably satisfactory to the Company and such
underwriter.  The Company may impose
stop-transfer instructions with respect to the Registrable Securities or other
securities subject to the foregoing restriction until the end of the stand-off
period.

                                The Company
agrees, on behalf of itself and its Affiliates, (i) not to effect any public
sale or distribution of any securities similar to those being registered in
accordance with Section 6.1 hereof, or any
securities convertible into or exchangeable or exercisable for such securities
(in each case other than in connection with the Company’s employee stock option
or incentive plan) during the 30 days prior to, and during the 120-day period
beginning on, the commencement of a public distribution of Registrable
Securities (or such shorter period of time as may be required by the
underwriter effecting such public distribution); and (ii) that any agreement
pursuant to which the Company issues or agrees to issue, or has issued or
agreed to issue, any privately placed equity securities shall contain, or
contains, a provision under which holders of such securities agree not to
effect any public sale or distribution of any such securities during the
periods described in (i) above, in each case including a sale pursuant to Rule
144 under the Securities Act; provided, however, that the provisions of this paragraph (b) shall not
prevent the conversion or exchange of any securities pursuant to their terms
into or for other securities.

                                6.9.         Limitations on Subsequent Registration
Rights.  The Company shall not,
without the prior written consent of all of the Investors, be party to any
agreement (other than this Agreement) with any holder or prospective holder of
any securities of the Company that would allow such holder or prospective
holder either (a) to include securities of the Company in any registration
filed under Sections 6.1 or 6.2, or (b) to make a demand registration that could result
in such registration statement being declared effective prior to an initial
public offering, or (c) to have registration rights equal to or senior to those
granted to the holders of Registrable Securities under this Agreement.

                                6.10.       Rule 144
Requirements.  After the
earliest of (i) the closing of the sale of securities of the Company pursuant
to a Registration Statement, (ii) the registration by the Company of a class of
securities under Section 12 of the Exchange Act, or (iii) the provision by
the Company of an 

 

 

offering
circular pursuant to Regulation A under the Securities Act, the Company agrees
to:

                                (a)           comply with the requirements of Rule 144(c)
under the Securities Act with respect to current public information about the
Company;

                                (b)           use its best efforts to file with the
Commission in a timely manner all reports and other documents required of the
Company under the Securities Act and the Exchange Act (at any time after it has
become subject to such reporting requirements); and

                                (c)           furnish to any holder of Registrable
Securities upon written request (i) a written statement by the Company as to
its compliance with the requirements of said Rule 144(c), and the reporting
requirements of the Securities Act and the Exchange Act (at any time after it
has become subject to such reporting requirements), (ii) a copy of the most
recent annual or quarterly report of the Company, and (iii) such other reports
and documents of the Company as such holder may reasonably request to avail
itself of any similar rule or regulation of the Commission allowing it to sell
any such securities without registration.

                                6.11.       Selection of Underwriter.  Except for any registration effected pursuant
to Section 6.1, the Company shall
have the right to designate the managing underwriter in any underwritten
offering, subject to the approval of the Board of Managers of the Company and
the holders of a majority of the Registrable Securities requested to be
included in such offering, which approval shall not be unreasonably withheld
provided that the managing underwriter shall be a leading national investment
banking firm.

                7.             Termination of Certain Rights.  (a) The registration rights provided pursuant
to Section 6 will terminate five (5)
years after the consummation of the Company’s Qualified Initial Public Offering
and (b) the rights and obligations provided pursuant to Section 2,
Section 3 and Section 4
will terminate upon the consummation of a Qualified Initial Public Offering.

8.                                      General.

8.1          Severability. 
The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement.

8.2          Specific
Performance.  In addition to any and all other remedies
that may be available at law, in the event of any breach of this Agreement, the
Investors shall be entitled to specific performance of the agreements and
obligations of the Company hereunder and to such other injunctive or other
equitable relief as may be granted by a court of competent jurisdiction

8.3          Jurisdiction. This Agreement and the duties and
obligations of the parties hereto shall be enforceable against the parties
hereto in the courts of the United States of America, and of the State of New
York in each case, located in the County of New York in the State of New
York.  For such purpose, the parties
hereto hereby irrevocably submit to the non-exclusive jurisdiction of such
courts, and agree that all claims in respect of this Agreement any of the other
documents referred to herein or therein may be heard and determined in any of
such courts.  The parties hereto hereby
irrevocably agree that a final judgment of any of the courts specified above in
any action or proceeding relating to this Agreement or to any of the other
documents referred to herein or therein shall be conclusive and may be enforced
in other jurisdictions by suit on the judgment or in any other manner provided
by law.

 

 

8.4          Governing Law.  This Agreement, the rights
and obligations of the parties hereto, and any claims or disputes relating
thereto, shall be governed by and construed in accordance with the laws of the
State of New York (excluding the choice of law rules thereof, other than
Section 5-1401 of the New York General Obligations Law).

8.5          Notices. 
All notices required or permitted by this Agreement shall be in writing
and shall be deemed given upon delivery, when delivered personally or by
overnight courier or sent by telegram or fax, or three (3) business days after
being deposited in the U.S. mail, as certified or registered mail, with postage
prepaid, addressed to the party to be notified at such party’s address as set
forth below, or as subsequently modified by written notice to the other
parties:

	
  If to the Company:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Hughes Network Systems, LLC

  
	
   

  	
   

  	
  c/o SkyTerra Communications, Inc.

  
	
   

  	
   

  	
  19 West 44th Street, Suite 507

  
	
   

  	
   

  	
  New York, NY 10036

  
	
   

  	
   

  	
  Attention: Jeff Leddy

  
	
   

  	
   

  	
  Telecopy No.: 212-730-7541

  
	
   

  	
   

  	
   

  
	
  With copies to:

  
	
   

  	
   

  	
  Apollo
  Management, L.P.

  
	
   

  	
   

  	
  9
  West 57th Street

  
	
   

  	
   

  	
  New
  York, NY 10019

  
	
   

  	
   

  	
  Attention:
  Andy Africk

  
	
   

  	
   

  	
  Telecopy
  No.: 212-515-3283

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  and

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  O’Melveny
  & Myers LLP

  
	
   

  	
   

  	
  Times
  Square Tower

  
	
   

  	
   

  	
  7
  Times Square

  
	
   

  	
   

  	
  New
  York, NY 10036

  
	
   

  	
   

  	
  Attention:
  John J. Suydam

  
	
   

  	
   

  	
  Telecopy No.: 212-408-2420

  
	
   

  
	
  If to the DTVG Investor(s):

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Hughes Network Systems, Inc.

  
	
   

  	
   

  	
  c/o The DIRECTV Group, Inc.

  
	
   

  	
   

  	
  2250 East Imperial Highway

  
	
   

  	
   

  	
  El Segundo, CA 90245

  
	
   

  	
   

  	
  Attention: Larry D. Hunter, Esq.

  
	
   

  	
   

  	
  Telecopy No.: 310-964-0838

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Hogan & Hartson L.L.P.

  
	
   

  	
   

  	
  8300 Greensboro Drive

  
	
   

  	
   

  	
  Suite 1100

  

 

 

	
   

  	
   

  	
  McLean, VA 22102

  
	
   

  	
   

  	
  Attention: Richard K.A. Becker, Esq.

  
	
   

  	
   

  	
  Telecopy No.: (703) 610-6200

  
	
   

  	
   

  	
   

  
	
  If to the SkyTerra Investor(s):

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SkyTerra Communications, Inc.

  
	
   

  	
   

  	
  19 West 44th Street, Suite 507

  
	
   

  	
   

  	
  New York, NY 10036

  
	
   

  	
   

  	
  Attention: Jeff Leddy

  
	
   

  	
   

  	
  Telecopy No.: 212-730-7541

  
	
  With copies to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Apollo Management, L.P.

  
	
   

  	
   

  	
  9 West 57th Street

  
	
   

  	
   

  	
  New
  York, NY 10019

  
	
   

  	
   

  	
  Attention: Andy Africk

  
	
   

  	
   

  	
  Telecopy
  No.: 212-515-3283

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  and

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  O’Melveny & Myers LLP

  
	
   

  	
   

  	
  Times Square Tower

  
	
   

  	
   

  	
  7 Times Square

  
	
   

  	
   

  	
  New York, NY 10036

  
	
   

  	
   

  	
  Attention: John J. Suydam

  
	
   

  	
   

  	
  Telecopy No.: 212-408-2420

  

 

8.5          Complete
Agreement.  This Agreement constitutes the entire
agreement and understanding of the parties hereto with respect to the subject
matter hereof and supersedes all prior agreements and understandings relating
to such subject matter.

8.6          Amendments
and Waivers.  Any term of this Agreement may be amended or
terminated and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively), with the written consent of the Company and all of the
Investors.  Any such amendment,
termination or waiver effected in accordance with this Section 8.6
shall be binding on all parties hereto, even if they do not execute such
consent.  No waivers of or exceptions to
any term, condition or provision of this Agreement, in any one or more
instances, shall be deemed to be, or construed as, a further or continuing
waiver of any such term, condition or provision.

8.7          Pronouns. 
Whenever the context may require, any pronouns used in this Agreement
shall include the corresponding masculine, feminine or neuter forms, and the
singular form of nouns and pronouns shall include the plural and vice versa.

8.8          Counterparts;
Facsimile Signatures.  This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, and all of
which together shall constitute one and the same document.  This Agreement may be executed by facsimile
signatures.

8.9          Section Headings. 
The section headings are for the convenience of the parties and in no
way alter, modify, amend, limit or restrict the contractual obligations of the
parties.

 

 

8.10        Required FCC Consents.  In the event that any transfer of all or any
portion of an Investor’s LLC Interest made in accordance with the LLC Agreement
would (i) result in a voluntary or involuntary assignment or transfer of
control, within the meaning of the applicable Communications Laws, of any
telecommunications license, authorization, certificate, approval, or permit,
and (ii) such voluntary or involuntary assignment or transfer of control
requires consent of the Federal Communications Commission (the “FCC”) or another governmental authority under the
Communications Laws, then each of the Investors and the Company shall cooperate
and use commercially reasonable efforts to make any required filings and to
obtain the consent of appropriate governmental authorities, and the Investors
and the Company shall obtain the consent of the FCC.

 

[Signatures on following page]

 

 

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

 

 

	
  COMPANY:

  
	
   

  
	
  HUGHES NETWORK
  SYSTEMS, LLC

  
	
   

  
	
  By: 

  	
   

  
	
  Name: 

  	
   

  
	
  Title: 

  	
   

  
	
   

  
	
  DTVG INVESTOR:

  
	
   

  
	
  HUGHES NETWORK SYSTEMS,
  INC.

  
	
   

  
	
  By: 

  	
   

  
	
  Name: 

  	
   

  
	
  Title: 

  	
   

  
	
   

  
	
  SKYTERRA INVESTOR:

  
	
   

  
	
  SKYTERRA
  COMMUNICATIONS, INC.

  
	
   

  
	
  By: 

  	
   

  
	
  Name: 

  	
   

  
	
  Title:

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