The following table and accompanying notes set forth certain information regarding the selling stockholders as of July 7, 2008 unless otherwise indicated.
Under this prospectus, the selling stockholders and any of their respective transferees, assignees, donees, distributees, pledgees or other successors in interest may offer and sell from time to time an aggregate of 132,591,433 shares of common stock.
In this prospectus, we refer to these holders collectively as the selling stockholders. The shares are being registered to permit public sales of the shares, and the selling stockholders may offer the shares for resale from time to time. See “Plan of Distribution.”
The shares of our common stock registered by this prospectus are comprised of (i) up to 8,970,000 shares of our common stock to be issued to EchoStar Corporation, or EchoStar, upon its exchange of up to $50 million in principal amount of TerreStar Networks Inc., or TerreStar, 6.5% Senior Exchangeable PIK Notes due 2014 (the “exchangeable notes”) originally issued on February 7, 2008,
(ii) up to 8,970,000 shares of our common stock to be issued to certain affiliates of Harbinger Capital Partners, or Harbinger, upon its exchange of up to $50 million in principal amount of exchangeable notes into 358,800 shares of our Series E Junior Participating Preferred Stock, par value $0.01 per share (the “Junior Preferred”), and the subsequent conversion of Junior Preferred stock into our common stock,
(iii) up to 8,970,000 shares of our common stock to be issued to certain of our existing shareholders upon their exchange of up to $50 million in principal amount of exchangeable notes, (iv) up to 3,884,951 shares of our common stock to be issued upon conversion of exchangeable notes payable as PIK interest on the exchangeable notes through March 15, 2010, in each case at a conversion price of $5.57 per share of common stock (and a conversion price of $139.35 per share of Junior Preferred stock),
(v) up to 30,000,000 shares of our common stock to be issued to Harbinger pursuant to our purchase of Harbinger's 1.4GHz spectrum rights for 1,200,000 shares of our Junior Preferred stock, and the subsequent conversion of Junior Preferred stock into our common stock,
(vi) 30,000,000 shares of our common stock issued to EchoStar in connection with our acquisition of EchoStar's 1.4GHz spectrum rights,
(vii) 37,389,426 shares of our common stock held by Harbinger who acquired these shares
(A) from former stockholders of TerreStar who exchanged each share of TerreStar common stock held by them for 1.78 shares of our common stock and subsequently sold those shares to Harbinger in a private transaction,
(B) in open market transactions and are freely-tradable shares, subject to limitations on resale due to the affiliate status of Harbinger, as such restrictions are applicable or
(C) from us in private placement transactions, (viii) 1,886 shares of our common stock that are issuable to Harbinger upon exercise of warrants and (ix) 4,405,170 shares issuable to Harbinger upon the conversion of shares of Series B Cumulative Convertible Preferred Stock held by Harbinger.
This registration statement of which this prospectus forms a part of has been filed pursuant to registration rights granted to the selling stockholders.
Under the terms of the registration rights agreement between us and the selling stockholders, we will pay all expenses of registration of the shares of common stock, excluding any underwriting discounts and fees, brokerage and sales commissions, and stock transfer taxes relating to the sale or disposition of the shares. Our expenses for the registration of shares of common stock are estimated to be $48,422.89.
Certain of the shares of common stock registered by this prospectus underlie exchangeable notes and Junior Preferred stock issued by TerreStar. The exchangeable notes bear interest at a rate of 6.5% per annum and will mature on June 15, 2014. Interest on the exchangeable notes is payable quarterly, payable in kind through March 15, 2011 and thereafter payable in cash. The exchangeable notes rank senior in right of payment to all existing and future subordinated indebtedness and pari passu with all other unsubordinated indebtedness.
The exchangeable notes are guaranteed by subsidiaries of TerreStar Networks. At any time and from time to time following shareholder approval until maturity,
(i) Harbinger has the right to exchange some or all of the principal of and the accrued and unpaid interest on its exchangeable notes into Junior Preferred stock and
(ii) each other holder of exchangeable notes has the right to exchange some or all of the principal of and the accrued and unpaid interest on its exchangeable notes into common shares, in each case, at an exchange rate based on a price per common share of $5.57, subject to
(a) customary adjustments and (b) limitations on exercise of exchange rights to the extent that such exchange would be a change of control.
The shares of Junior Preferred stock were issued (or, in the case of the shares of Junior Preferred stock underlying the exchangeable notes issued to Harbinger, are issuable) to Harbinger and its affiliates. Subject to certain restrictions related to change of control provisions, each share of Junior Preferred stock may be converted into 25 common shares (subject to adjustment). Except as otherwise required under Delaware law, the holders of shares of Junior Preferred stock are not entitled to vote on any matter required or permitted to be voted on by the stockholders.
The holders of shares of Junior Preferred stock are entitled to participate ratably in any dividends paid on the shares of common stock. In the event of a liquidation, the holders of shares of Junior Preferred stock will be entitled to be paid out of the assets of the company available for distribution to its stockholders an amount in cash equal to $0.0001 per share (subject to adjustment), before any distribution may be made or any assets distributed in respect of the common shares.
The table below sets forth the names of the selling stockholders and the number of shares owned, directly and beneficially, by such stockholders as of July 7, 2008 unless otherwise indicated.
The number of shares of common stock outstanding on June 13, 2008 unless otherwise indicated was 121,095,783. Ownership is based on information provided to us by each respective selling stockholder, Forms 4, Schedules 13D and other public documents filed with the Securities and Exchange Commission.
The selling stockholders will act independently of us in making decisions with respect to the timing, manner and size of the sale or sales of common stock covered by this prospectus.
We cannot estimate the number of shares the selling stockholders will hold after the completion of the offering by the selling stockholders because they may sell all or a portion of the shares offered by this prospectus.
We have assumed for the purposes of this table that none of the shares offered by this prospectus will be held by the selling stockholders after the completion of this offering.
Our registration of shares of common stock held by the selling stockholders does not necessarily mean that the selling stockholders will sell all or any of the shares. Except as otherwise indicated, each person listed in the table has informed TerreStar Corporation that such person has (1) voting and investment power with respect to such person’s shares of common stock and (2) record and beneficial ownership with respect to such person’s shares of common stock."
******
(1)
Pursuant to Rule 13d-3 of the Exchange Act, a person is deemed to be a beneficial owner of a security if that person has the right to acquire beneficial ownership of such security within 60 days, including the right to acquire through the sale of all shares offered by this prospectus and the exercise of an option or warrant or through the conversion of a security.
(2)
Shares issuable upon repayment of interest on the exchangeable notes are included in the number of Shares to be offered, but are not shown as beneficially owned by the Selling Stockholders. As a result the number of Shares that the Selling Stockholders may sell pursuant to this Prospectus may exceed the number of Shares the Selling Stockholders would otherwise beneficially own as determined pursuant to Rule 13d-3 of the Exchange Act.
(3)
Based on the number of shares of common stock outstanding as of June 13, 2008.
(4)
Assumes that the shares of common stock issuable upon the exercise of the warrants and shares of common stock underlying our Series A and Series B preferred stock are not outstanding.
(5)
Phillip Falcone, Raymond J. Harbert and Michael D. Luce of Harbinger Capital Partners exercise sole or shared voting and/or dispositive power with respect to the shares subject to sale owned by Harbinger Capital Partners.
(6)
Charles W. Ergen and Dean Olmstead of EchoStar Corporation exercise sole or shared voting and/or dispositive power with respect to the shares subject to sale owned by EchoStar Corporation.
(7)
Karen Singer of the Singer Children’s Management Trust exercises sole or shared voting and/or dispositive power with respect to the shares subject to sale owned by the Singer Children’s Management Trust.
(8)
Steven Singer of the Gary and Karen Singer Children’s Trust exercises sole or shared voting and/or dispositive power with respect to the shares subject to sale owned by the Gary and Karen Singer Children’s Trust.
(9)
Richard Conway and Steven Lampe of LC Capital Master Fund, Ltd. exercise sole or shared voting and/or dispositive power with respect to the shares subject to sale owned by LC Capital Master Fund, Ltd.
(10)
Daniel S. Och of OZ Global Special Investments Master Fund, LP exercises sole or shared voting and/or dispositive power with respect to the shares subject to sale owned by OZ Global Special Investments Master Fund, LP.
(11)
Daniel S. Och of OZ Master Fund, Ltd. exercises sole or shared voting and/or dispositive power with respect to the shares subject to sale owned by OZ Master Fund, Ltd.
(12)
Israel A. Englander of Millennium Partners, L.P. exercises sole or shared voting and/or dispositive power with respect to the shares subject to sale owned by Millennium Partners, L.P.
(13)
Christopher Pucillo, Christopher Bondy, Steven Renehan and Nicholas Signorile of Sola, Ltd. exercise sole or shared voting and/or dispositive power with respect to the shares subject to sale owned by Sola, Ltd.
(14)
Consists of (a) 8,970,000 shares of common stock issuable upon the exchange of up to $50 million in principal amount of exchangeable notes for shares of Series E Junior Participating Preferred Stock convertible into shares of common stock and (b) 1,294,984 shares of common stock issuable upon the exchange of exchangeable notes issuable in the form of PIK interest for shares of Series E Junior Participating Preferred Stock convertible into shares of common stock through March 15, 2010.
(15)
Consists of (a) 8,970,000 shares of common stock issuable upon the exchange of up to $50 million in principal amount of exchangeable notes and (b) 1,294,984 shares of common stock issuable upon the exchange of exchangeable notes issuable in the form of PIK interest through March 15, 2010.
(16)
Consists of (a) 448,500 shares of common stock issuable upon the exchange of up to $2,500,000 in principal amount of exchangeable notes and (b) 64,749 shares of common stock issuable upon the exchange of exchangeable notes issuable in the form of PIK interest through March 15, 2010.
(17)
Consists of (a) 448,500 shares of common stock issuable upon the exchange of up to $2,500,000 in principal amount of exchangeable notes and (b) 64,749 shares of common stock issuable upon the exchange of exchangeable notes issuable in the form of PIK interest through March 15, 2010.
(18)
Consists of (a) 1,121,250 shares of common stock issuable upon the exchange of up to $6,250,000 in principal amount of exchangeable notes and (b) 161,873 shares of common stock issuable upon the exchange of exchangeable notes issuable in the form of PIK interest through March 15, 2010.
(19)
Consists of (a) 97,773 shares of common stock issuable upon the exchange of up to $545,000 in principal amount of exchangeable notes and (b) 14,115 shares of common stock issuable upon the exchange of exchangeable notes issuable in the form of PIK interest through March 15, 2010.
(20)
Consists of (a) 1,696,227 shares of common stock issuable upon the exchange of up to $9,455,000 in principal amount of exchangeable notes and (b) 244,881 shares of common stock issuable upon the exchange of exchangeable notes issuable in the form of PIK interest through March 15, 2010.
(21)
Consists of (a) 1,121,250 shares of common stock issuable upon the exchange of up to $6,250,000 in principal amount of exchangeable notes and (b) 161,873 shares of common stock issuable upon the exchange of exchangeable notes issuable in the form of PIK interest through March 15, 2010.
(22)
Consists of (a) 4,036,500 shares of common stock issuable upon the exchange of up to $22,500,000 in principal amount of exchangeable notes and (b) 582,743 shares of common stock issuable upon the exchange of exchangeable notes issuable in the form of PIK interest through March 15, 2010.
(23)
Harbinger Capital Partners Master Fund I, Ltd. owns 30,641,731 shares and Harbinger Capital Partners Special Situations Fund, L.P. owns 11,154,751 shares.
(1)
Pursuant to Rule 13d-3 of the Exchange Act, a person is deemed to be a beneficial owner of a security if that person has the right to acquire beneficial ownership of such security within 60 days, including the right to acquire through the sale of all shares offered by this prospectus and the exercise of an option or warrant or through the conversion of a security.
(2)
Shares issuable upon repayment of interest on the exchangeable notes are included in the number of Shares to be offered, but are not shown as beneficially owned by the Selling Stockholders. As a result the number of Shares that the Selling Stockholders may sell pursuant to this Prospectus may exceed the number of Shares the Selling Stockholders would otherwise beneficially own as determined pursuant to Rule 13d-3 of the Exchange Act.
(3)
Based on the number of shares of common stock outstanding as of June 13, 2008.
(4)
Assumes that the shares of common stock issuable upon the exercise of the warrants and shares of common stock underlying our Series A and Series B preferred stock are not outstanding.
(5)
Phillip Falcone, Raymond J. Harbert and Michael D. Luce of Harbinger Capital Partners exercise sole or shared voting and/or dispositive power with respect to the shares subject to sale owned by Harbinger Capital Partners.
(6)
Charles W. Ergen and Dean Olmstead of EchoStar Corporation exercise sole or shared voting and/or dispositive power with respect to the shares subject to sale owned by EchoStar Corporation.
(7)
Karen Singer of the Singer Children’s Management Trust exercises sole or shared voting and/or dispositive power with respect to the shares subject to sale owned by the Singer Children’s Management Trust.
(8)
Steven Singer of the Gary and Karen Singer Children’s Trust exercises sole or shared voting and/or dispositive power with respect to the shares subject to sale owned by the Gary and Karen Singer Children’s Trust.
(9)
Richard Conway and Steven Lampe of LC Capital Master Fund, Ltd. exercise sole or shared voting and/or dispositive power with respect to the shares subject to sale owned by LC Capital Master Fund, Ltd.
(10)
Daniel S. Och of OZ Global Special Investments Master Fund, LP exercises sole or shared voting and/or dispositive power with respect to the shares subject to sale owned by OZ Global Special Investments Master Fund, LP.
(11)
Daniel S. Och of OZ Master Fund, Ltd. exercises sole or shared voting and/or dispositive power with respect to the shares subject to sale owned by OZ Master Fund, Ltd.
(12)
Israel A. Englander of Millennium Partners, L.P. exercises sole or shared voting and/or dispositive power with respect to the shares subject to sale owned by Millennium Partners, L.P.
(13)
Christopher Pucillo, Christopher Bondy, Steven Renehan and Nicholas Signorile of Sola, Ltd. exercise sole or shared voting and/or dispositive power with respect to the shares subject to sale owned by Sola, Ltd.
(14)
Consists of (a) 8,970,000 shares of common stock issuable upon the exchange of up to $50 million in principal amount of exchangeable notes for shares of Series E Junior Participating Preferred Stock convertible into shares of common stock and (b) 1,294,984 shares of common stock issuable upon the exchange of exchangeable notes issuable in the form of PIK interest for shares of Series E Junior Participating Preferred Stock convertible into shares of common stock through March 15, 2010.
(15)
Consists of (a) 8,970,000 shares of common stock issuable upon the exchange of up to $50 million in principal amount of exchangeable notes and (b) 1,294,984 shares of common stock issuable upon the exchange of exchangeable notes issuable in the form of PIK interest through March 15, 2010.
(16)
Consists of (a) 448,500 shares of common stock issuable upon the exchange of up to $2,500,000 in principal amount of exchangeable notes and (b) 64,749 shares of common stock issuable upon the exchange of exchangeable notes issuable in the form of PIK interest through March 15, 2010.
(17)
Consists of (a) 448,500 shares of common stock issuable upon the exchange of up to $2,500,000 in principal amount of exchangeable notes and (b) 64,749 shares of common stock issuable upon the exchange of exchangeable notes issuable in the form of PIK interest through March 15, 2010.
(18)
Consists of (a) 1,121,250 shares of common stock issuable upon the exchange of up to $6,250,000 in principal amount of exchangeable notes and (b) 161,873 shares of common stock issuable upon the exchange of exchangeable notes issuable in the form of PIK interest through March 15, 2010.
(19)
Consists of (a) 97,773 shares of common stock issuable upon the exchange of up to $545,000 in principal amount of exchangeable notes and (b) 14,115 shares of common stock issuable upon the exchange of exchangeable notes issuable in the form of PIK interest through March 15, 2010.
(20)
Consists of (a) 1,696,227 shares of common stock issuable upon the exchange of up to $9,455,000 in principal amount of exchangeable notes and (b) 244,881 shares of common stock issuable upon the exchange of exchangeable notes issuable in the form of PIK interest through March 15, 2010.
(21)
Consists of (a) 1,121,250 shares of common stock issuable upon the exchange of up to $6,250,000 in principal amount of exchangeable notes and (b) 161,873 shares of common stock issuable upon the exchange of exchangeable notes issuable in the form of PIK interest through March 15, 2010.
(22)
Consists of (a) 4,036,500 shares of common stock issuable upon the exchange of up to $22,500,000 in principal amount of exchangeable notes and (b) 582,743 shares of common stock issuable upon the exchange of exchangeable notes issuable in the form of PIK interest through March 15, 2010.
(23)
Harbinger Capital Partners Master Fund I, Ltd. owns 30,641,731 shares and Harbinger Capital Partners Special Situations Fund, L.P. owns 11,154,751 shares.
Source of Terrestar Corp TSTRQ.PK Shareholder Post
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Crystal L. Cox
Crystal L. Cox
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Crystal@CrystalCox.com
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