EXHIBIT 10.41
INVESTMENT AGREEMENT
by and among
MOTIENT CORPORATION,
MOTIENT SATELLITE VENTURES LLC,
and
THE INVESTORS NAMED HEREIN
dated as of
June 22, 2000
Table of Contents
Page
Section 1. Newco Interests.....................................................1
1.1. The Purchase...............................................1
1.2. The Initial Closing........................................1
1.3. Conditions to Initial Closing..............................2
Section 2. Investors Option....................................................6
2.1. Grant of Option............................................6
2.2. Exercise of Option.........................................6
2.3. Conditions to Investors Option Closing.....................9
2.4. Payment and Issuance of Interests.........................12
2.5. Sub Offer.................................................12
Section 3. Parent Conversions.................................................13
3.1. Parent Conversions........................................13
Section 4. Representations and Warranties of Parent...........................14
4.1. Organization and Good Standing; Power and
Authority; Qualifications.................................15
4.2. Authorization of the Documents............................15
4.3. Capitalization............................................15
4.4. Authorization and Issuance of Parent Capital
Stock and Investor Interests..............................16
4.5. SEC and Other Documents; Financial Statements.............16
4.6. No Undisclosed Liabilities................................17
4.7. Absence of Certain Changes or Events......................17
4.8. No Conflict...............................................17
4.9. Litigation; Orders........................................18
4.10. Compliance with Laws; Permits.............................18
4.11. Offering Exemption........................................19
4.12. Consents..................................................19
4.13. Brokers...................................................19
4.14. Public Utility Holding Company, Etc.......................19
4.15. FCC.......................................................20
4.16. Sub Representations and Warranties........................21
4.17. Restrictions..............................................21
4.18. Newco Activities..........................................21
4.19. Disclosure................................................21
Section 5. Representations and Warranties of the Investors....................21
5.1. Investment Representations................................21
5.2. Organization and Good Standing; Power and Authority.......22
5.3. Authorization of Documents................................22
5.4. No Conflict...............................................23
5.5. Litigation; Orders........................................23
5.6. Compliance with Laws; Permits.............................23
5.7. Consents..................................................23
5.8. Brokers...................................................24
5.9. Appointment of Investor Group Designees...................24
Section 6. Representations and Warranties of Parent and Newco.................24
6.1. Organization and Good Standing; Power and
Authority; Qualifications.................................24
6.2. Authorization of the Documents............................25
6.3. Capitalization............................................25
6.4. Authorization and Issuance of Investor Interests..........25
6.5. Financial Statements......................................25
6.6. No Undisclosed Liabilities................................25
6.7. Absence of Certain Changes or Events......................26
6.8. No Conflict...............................................26
6.9. Litigation; Orders........................................26
6.10. Compliance with Laws; Permits.............................26
6.11. Title.....................................................27
6.12. ERISA Matters.............................................27
6.13. Insurance.................................................27
6.14. Labor Relations; Employees................................27
6.15. Agreements................................................27
6.16. Offering Exemption........................................28
6.17. Consents..................................................28
6.18. Brokers...................................................28
6.19. Public Utility Holding Company, Etc.......................28
6.20. FCC.......................................................29
6.21. Restrictions..............................................29
6.22. Sub Representations and Warranties........................30
6.23. Environmental Matters.....................................30
6.24. Proprietary Rights........................................30
6.25. Disclosure................................................31
Section 7. Certain Covenants..................................................31
7.1. Notification of Certain Matters...........................31
7.2. Xxxx Xxxxx-Xxxxxx Filing..................................31
7.3. Affirmative Covenants.....................................31
7.4. Certain Additional Covenants..............................32
7.5. Transactions with Affiliates..............................33
7.6. Reservation of Common Stock...............................33
7.7. Use of Proceeds...........................................33
7.8. Financial Information.....................................33
7.9. Survival of Representations, Warranties, Agreements
and Covenants; Indemnifications...........................34
Section 8. Termination........................................................37
8.1. Termination...............................................37
8.2. Parent Common Stock Purchase Option.......................37
Section 9. Further Assurances.................................................38
Section 10. Successors and Assigns............................................38
Section 11. Entire Agreement..................................................39
Section 12. Notices.......................................................... 39
Section 13. Amendments........................................................40
Section 14. Counterparts......................................................40
Section 15. Headings..........................................................40
Section 16. Nouns and Pronouns................................................40
Section 17. Governing Law.....................................................40
Section 18. Publicity.........................................................41
Section 19. Severability......................................................41
Section 20. Expenses..........................................................41
Schedules
Schedule I........ Investors
Disclosure Schedule:
Section 4.1 Subsidiaries
Section 4.3(a) Parent's Capitalization
Section 4.5(a) SEC and Other Documents
Section 4.6 No Undisclosed Liabilities
Section 4.7 Absence of Certain Changes or Events
Section 4.8 Conflicts
Section 4.9 Litigation; Disputes
Section 4.10 Compliance with Laws; Permits
Section 4.12 Consents
Section 4.15 FCC
Newco Disclosure Schedule:
Section 6.20 FCC
Section 6.24 Proprietary Rights
Exhibits
Exhibit A - Certificate
Exhibit B - LLC Operating Agreement
Exhibit C - Registration Rights Agreement
Exhibit D - Research and Development Agreement
Exhibit E - Cross-Licensing Agreement
Exhibit F - Asset Sale Agreement
Exhibit G - Opinion of Counsel to Parent (FCC)
Exhibit H - Merger Agreement
INVESTMENT AGREEMENT
INVESTMENT AGREEMENT, dated as of June 22, 2000 by and among
MOTIENT CORPORATION, a Delaware corporation ("Parent"), MOTIENT SATELLITE
VENTURES LLC, a Delaware limited liability company of which Parent is currently
the sole member ("Newco"), and each of the investors listed on Schedule I hereto
(each, an "Investor" and collectively, the "Investors").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, Motient Services Inc., a Delaware corporation and an
indirect wholly-owned subsidiary of Parent ("Sub"), has been issued licenses by
the Federal Communications Commission (the "FCC") to provide satellite
communications services (such licenses, together with the satellite and ground
assets, the "Existing Business") in the United States and surrounding waters and
airspace in the 1530-1559 Mhz and 1631.5-1660.5 Mhz band;
WHEREAS, the parties hereto wish for the Investors to invest
in Newco, for Newco to acquire the Existing Business, and for Newco, with the
assistance and cooperation of the Investors, to explore ways of maximizing the
use of the Existing Business, including modifications thereto.
NOW, THEREFORE, the parties hereto hereby agree as follows:
Section 1. Newco Interests.
---------------
1.1. The Purchase. At the Initial Closing, each Investor shall, severally and
not jointly, purchase from Newco, and Newco shall sell to such Investor, the
interest in Newco (collectively, the "Investor Interests") described opposite
such Investor's name on Schedule I for the purchase price indicated on Schedule
I, which shall result in an aggregate purchase price to be paid by the Investors
for all of the Investor Interests to be purchased at the Initial Closing of
Fifty Million Dollars ($50,000,000) (the "Initial Investment"). The Investor
Interests to be acquired for the Initial Investment will represent (as reflected
more fully in the LLC Operating Agreement, as defined below) in the aggregate an
interest in the profits and losses of Newco (a "Newco Percentage Interest") of
20%, with Parent then having a Newco Percentage Interest of 80%.
1.2. The Initial Closing.
-------------------
(a) The closing of the transactions contemplated by Section 1.1 (the "Initial
Closing") shall take place at the offices of Xxxxx Xxxxxxxxxx LLP, 0000
Xxxxxxxxxxxx Xxxxxx XX, Xxxxxxxxxx, XX 00000 at 10:00 a.m., on or prior to June
30, 2000, or on such other date as shall be mutually agreed by Parent, Newco and
the Investors (the "Initial Closing Date").
(b) At the Initial Closing, Newco shall deliver to each Investor an executed
copy of the LLC Operating Agreement (as defined below) evidencing the Investor
Interest purchased by such Investor, against receipt at the Initial Closing by
Newco from such Investor of 50% of its portion of the Initial Investment, which
shall be paid by wire transfer to an account designated in writing by Newco at
least three business days prior to the Initial Closing. If the Initial Closing
shall occur, then on or before July 14, 2000, each Investor shall pay to Newco
the remaining 50% of its portion of the Initial Investment by wire transfer as
contemplated by the preceding sentence, time being of the essence. If any
Investor shall fail to make the payment contemplated by the preceding sentence
(or shall fail to participate in the Initial Closing), the other Investors shall
have the pro rata right (but not the obligation) to make up for the resulting
shortfall, in which case the defaulting Investor shall be deemed to have
consented to the Investor Interests being re-allocated appropriately.
1.3. Conditions to Initial Closing.
-----------------------------
(a) Conditions to the Obligations of Parent, Newco and the Investors. The
obligations of Parent, Newco and the Investors to consummate the transactions
contemplated by Section 1.1 at the Initial Closing are subject to the
satisfaction of the following conditions: no ruling, order, injunction, decree,
statute, rule or regulation of any governmental authority shall prevent the
consummation of the transactions contemplated hereby; provided, however, that
the parties shall use their reasonable best efforts to cause any such decree,
ruling, injunction or other order to be vacated or lifted.
(b) Conditions to the Obligations of the Investors. The obligations of each
Investor to consummate the transactions contemplated by Section 1.1 at the
Initial Closing are subject to the satisfaction or waiver, on or before the
Initial Closing Date, of the following additional conditions:
(i) Representations, Warranties and Covenants of Parent. The
representations and warranties of Parent set forth in Section 4 of this
Agreement shall be true and correct in all material respects as of the date
when made and (unless made as of a specified date) as of the Initial
Closing Date; provided, however, that if any of the representations and
warranties are already qualified in any respect by materiality or as to
Material Adverse Effect, such representation or warranty shall be true and
correct as of such dates in all respects (i.e., as written); and Parent
shall have performed, and shall have caused Newco to perform, in all
material respects their respective covenants set forth in this Agreement to
be performed prior to or at the Initial Closing; provided, however, that if
any of the covenants are already qualified in any respect by materiality or
as to Material Adverse Effect, such covenant shall have been performed in
all respects (i.e., as written); and neither Parent nor Newco shall have
taken any action which would violate any provision of Newco's LLC Operating
Agreement (as defined below) or this Agreement, as the case may be, and at
the Initial Closing Parent shall deliver to each Investor an officer's
certificate, dated the Initial Closing Date and duly executed by an
executive officer, certifying as to Parent's compliance with the conditions
set forth in this clause (i) and in clauses (ii), (viii), (xiii), (xiv),
(xv) and (xviii);
(ii) Certificate. Newco shall have adopted and filed with the Secretary of
State of the State of Delaware the Certificate of Formation in the form
attached hereto as Exhibit A (the "Certificate");
(iii) LLC Operating Agreement. Parent, Newco and each other Investor shall
have executed and delivered to such Investor an LLC Operating Agreement in
substantially the form of Exhibit B hereto (the "LLC Operating Agreement");
(iv) Registration Rights Agreement. Parent shall have executed and
delivered to such Investor a Registration Rights Agreement in substantially
the form of Exhibit C hereto (the "Registration Rights Agreement");
(v) Research and Development Agreement. Newco and Sub shall have executed
and delivered the Research & Development, Marketing and Service Agreement
substantially in the form of Exhibit D hereto (the ---------- "Research and
Development Agreement");
(vi) Cross-Licensing Agreement. Newco, Sub and Motient Communications
Company ("Motient Communications") shall have executed and delivered the
Cross-Licensing and Bulk Resale Agreement substantially in the form of
Exhibit E hereto (the "Cross-Licensing Agreement");
(vii) Other Agreements. Parent and the persons or entities that control the
Investors shall have entered into (i) the letter agreement contemplated by
Section 2.1 hereof (the "Section 2.1 Letter") and (ii) a letter agreement
relating to certain transfers of interests in the Investors and of
interests in Newco (the "Parent Transfer Letter Agreement");
(viii) Asset Sale Agreement. Newco and Sub shall have executed and
delivered the Asset Sale Agreement substantially in the form of Exhibit F
hereto, (the "Asset Sale Agreement" and, together with the Certificate, LLC
Operating Agreement, Registration Rights Agreement, Research and
Development Agreement, the Cross-Licensing Agreement, the Section 2.1
Letter and the Parent Transfer Letter Agreement, the "Ancillary
Agreements");
(ix) Opinions of Counsel to Parent. Such Investor shall have received an
opinion of FCC counsel to Parent, dated the Initial Closing Date,
substantially in the form of Exhibit G and opinions of counsel to Parent
reasonably satisfactory to such Investor with respect to the matters set
forth in Sections 4.1, 4.2, 4.3, 4.4, 4.8, 4.9, 4.10, 4.11, 4.12, 4.14 and
4.17 hereto;
(x) Board of Directors of Newco. Newco shall have delivered to such
Investor evidence that the number of directors comprising Newco's board of
directors has been fixed at seven and that the three persons designated by
the Investors shall have been elected to such board;
(xi) Good Standing Certificates. Newco shall have delivered to such
Investor a copy of a certificate of good standing, dated as of a date not
earlier than five days prior to the Initial Closing, from the State of
Delaware and the Commonwealth of Virginia;
(xii) Secretary's Certificates. Parent, Newco and Sub shall have delivered
to such Investor certificates executed by their respective Secretaries,
dated the Initial Closing Date, each certifying (A) in the case of Newco, a
copy of its organizational documents, (B) resolutions of its respective
Board of Directors or Board of Managers authorizing the transactions
contemplated hereby and by the Ancillary Agreements, (C) incumbency
matters, and (D) such other proceedings relating to the authorization,
execution and delivery of this Agreement, the Ancillary Agreements and the
transactions contemplated hereby and thereby as may be reasonably requested
by Telcom Satellite Ventures Inc. (the "Lead Investor");
(xiii) No Pending Action. No action, suit, investigation, proceeding,
temporary restraining order, preliminary or permanent injunction or other
order or decree shall be pending or threatened in any court or other
tribunal or before any arbitrator or governmental authority which (i) could
have a Material Adverse Effect (as defined in Section 4.6) on Parent,
Newco, Sub or the Existing Business or (ii) seeks to prevent the
consummation of the transactions contemplated hereby or by the Ancillary
Agreements and is material in nature;
(xiv) Consents and Approvals. Parent, Sub, Newco and each Investor shall
have received all governmental, shareholder and third party consents and
approvals (including the consents of lenders) necessary or, in the
reasonable judgment of the Lead Investor, desirable in connection with the
transactions contemplated hereby and by the Ancillary Agreements including
the expiration or termination of any applicable waiting period under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 0000 (xxx "XXX Xxx");
(xv) No Material Adverse Effect. No Material Adverse Effect shall have
occurred, nor shall any event or events have occurred which would be
reasonably likely to have a Material Adverse Effect, with respect to
Parent, Newco, Sub or the Existing Business;
(xvi) Other Documents. Parent, Newco and Sub shall have delivered to such
Investor such other documents as counsel to the Lead Investor may
reasonably request;
(xvii) Other Investors. Each other Investor shall be prepared to close
simultaneously; and
(xviii) Loan Obligations. Sub shall have no obligation under the terms of
any loan agreements or financing documents to apply more than $6 million of
the $44 million in payments to be received by it (consisting of a $20
million Service Fee payable pursuant to the Research and Development
Agreement and a $24 million Deposit payable pursuant to the Asset Sale
Agreement) to the repayment of indebtedness, and upon consummation of the
transactions to be consummated at or simultaneously with the Initial
Closing (and giving effect to the funding contemplated by the second
sentence of Section 1.2(b)), Parent shall have at least $38 million
available to it for working capital, capital expenditures and payment of
expenses in connection with the transactions contemplated hereby and by the
Ancillary Agreements.
(c) Conditions to the Obligations of Parent and Newco. The obligations of Parent
and Newco to consummate the transactions contemplated by Section 1.1 at the
Initial Closing are subject to the satisfaction or waiver, on or before the
Initial Closing Date, of the following additional conditions:
(i) Representations, Warranties and Covenants of the Investors. The
representations and warranties of each Investor set forth in Section 5 of
this Agreement shall be true and correct in all material respects as of the
date when made and (unless made as of a specified date) as of the Initial
Closing Date; provided, however, that if any of the representations and
warranties are already qualified in any respect by materiality or as to
Material Adverse Effect, such representation or warranty shall be true and
correct as of such dates in all respects (i.e., as written); and each
Investor shall have performed, in all material respects its covenants set
forth in this Agreement to be performed prior to or at the Initial Closing;
provided, however, that if any of the covenants are already qualified in
any respect by materiality or as to Material Adverse Effect, such covenant
shall have been performed in all respects (i.e., as written); and at the
Initial Closing each Investor shall deliver to Parent officer's
certificates, dated the Initial Closing Date and duly executed by an
executive officer, certifying as to such Investor's compliance with the
conditions set forth in this clause (i) and in clauses (iv) and (v);
(ii) LLC Operating Agreement. Each Investor shall have executed and
delivered to Parent and Newco the LLC Operating Agreement;
(iii) Secretary's Certificates. Each Investor shall have delivered to
Parent a certificate executed by its Secretary, dated the Initial Closing
Date, certifying (A) resolutions of its Board of Directors authorizing the
transactions contemplated herein, (B) incumbency matters, and (C) such
other proceedings relating to the authorization, execution and delivery of
this Agreement, the Ancillary Agreements and the transactions contemplated
hereby and thereby as may be reasonably requested by Parent;
(iv) No Pending Action. No action, suit, investigation, proceeding,
temporary restraining order, preliminary or permanent injunction or other
order or decree shall be pending or threatened in any court or other
tribunal or before any arbitrator or governmental authority which (i) could
have a Material Adverse Effect on an Investor's ability to consummate the
transactions contemplated by this Agreement or (ii) seeks to prevent the
consummation of the transactions contemplated hereby and is material in
nature;
(v) Consents and Approvals. Parent, Sub, Newco and the Investors shall have
received all governmental, shareholder and third party consents and
approvals (including consents of lenders) necessary or, in the reasonable
judgment of Parent, desirable in connection with the transactions
contemplated hereby and by the Ancillary Agreements including the
expiration or termination of any applicable waiting period under the HSR
Act; and
(vi) Investors. Each of the Investors shall be prepared to close and fund
its share of the Initial Investment.
Section 2. Investors Option.
----------------
2.1. Grant of Option. Subject to the terms and conditions set forth herein,
Newco hereby grants to the Investors an irrevocable option (the "Investors
Option") to increase their Newco Percentage Interest by, in total for all
Investors, 40% (e.g., from 20% to 60%), as contemplated by Section 4.1 of the
LLC Operating Agreement, and to receive an aggregate of 40 Investor Units (as
defined in the LLC Operating Agreement) for a price (the "Option Price") of (i)
$120,000,000 if the Investors Option shall be exercised on or prior to the first
anniversary of the Initial Closing Date, or (ii) $120,000,000 plus $118,356 per
day for each day between the first anniversary of the Initial Closing Date and
the Investment Commitment Date (as defined below), if the Investors Option shall
be exercised after the first anniversary of the Initial Closing Date. If the
Investors Option is exercised by one or more Investors who, following such
exercise, would, collectively, hold a Newco Percentage Interest of less than
50.1% as a result of less than all Investors exercising or as a result of any
dilution to the Investor Interests resulting from any issuance by Newco to the
entities listed in the letter agreement dated the date hereof between Parent and
the Investors prior to the exercise of the Investors Option of an interest in
Newco (but, for avoidance of doubt, not including as a result of a decrease in
the Newco Percentage Interest held by Exercising Investor(s) (as defined below)
resulting from sales of Newco Percentage Interests by them to persons who are
not Exercising Investor(s)), such Exercising Investor(s) shall have the right to
increase the Newco Percentage Interest to be acquired upon exercise of the
Investors Option to such percentage as would be necessary to give such
Exercising Investor(s) a Newco Percentage Interest of 50.1%, for a proportional
increase in the Option Price. For illustrative purposes only, if the Exercising
Investor(s) owned a 9.1% aggregate Newco Percentage Interest, they would be
entitled to acquire an aggregate additional Newco Percentage Interest of 41% (41
Investor Units) for a purchase price of $123,000,000, assuming the Investment
Commitment Date occurred prior to the first anniversary of the Initial Closing
Date. Unless the parties hereto otherwise agree, nothing in this Section 2.1
shall grant the Investors the right to increase their Newco Percentage Interest
to more than 60%.
2.2. Exercise of Option.
------------------
(a) The Investors Option may be exercised once in whole but not in part by any
one or more of the Investors (the "Exercising Investor(s)") by delivering
written notice of exercise to Newco (the "Option Notice," the date of delivery
of which is referred to as the "Option Notice Date") at any time after the
Initial Closing Date and on or prior to the later of (x) second anniversary of
the Initial Closing Date and (y) if there shall be an extension of the Outside
Date pursuant to Section 8.8 of the Asset Sale Agreement, the date to which such
Outside Date is extended (the "Exercise Period"). Notwithstanding the foregoing,
no Investor may exercise the Investors Option (or participate in the exercise
thereof) unless such Investor either (i) is an Accredited Investor, or (ii)
delivers to Newco an opinion of counsel to the effect that such Investor may
acquire an additional interest in Newco without the necessity of a registration
under the Securities Act of 1933, as amended (the "Securities Act") or under
applicable state securities laws.
(b) The Investors agree among themselves that if any one or more of them shall
propose to exercise the Investors Option, it or they shall give at least twenty
(20) days' prior notice thereof to each other Investor who shall then be a
member of Newco. Any Investor that shall wish to participate in such exercise
shall be permitted to do so on a pro rata basis (allocating the Newco Percentage
Interest to be acquired upon such exercise, and the Option Price, on the basis
of the Newco Percentage Interest then held by each such participating Investor
relative to the Newco Percentage Interests then held by all participating
Investors). Notwithstanding the foregoing, except in the case of an Offer as
contemplated by Section 2.5, no Investor may exercise the Investor Option prior
to the 547th day after the Initial Closing unless such Investor, together with
other Investors that propose to participate in such exercise, or that consent to
such exercise, hold at least 50.1% of the Newco Percentage Interests then held
by all Investors. Upon the exercise of the Investors Option, all Investors who
are then members of Newco other than Investors participating in the Investors
Option shall be deemed to have requested a Parent Conversion (as defined below)
in accordance with Section 3.1, and to have delivered a Conversion Notice upon
the Option Notice Date, which Parent Conversion shall be consummated
simultaneously with the later of the Investors Option Closing or the earliest
date on which the rights granted by Section 3.1(a) may be exercised.
(c) Upon receipt of the Option Notice, Newco shall, and Parent shall cause Newco
to, provide the Exercising Investor(s) and their representatives full access to
all premises, properties, officers, directors, consultants, contractors, books,
records (including, without limitation, tax returns, tax records and
correspondence with accountants), contracts and documents pertaining to its
business as the Exercising Investor(s) deem necessary (the "Due Diligence"), and
the Exercising Investor(s) and their representatives shall have the right to
copy such books, records, contracts and documents at the Exercising Investor(s)'
expense. Newco shall, and Parent shall cause Newco to, cooperate fully with such
Investors and their representatives in permitting reasonable access to its
business to conduct the Due Diligence. Such access may be either during normal
business hours or after normal business hours after the giving of reasonably
advance notice to Newco. The Exercising Investor(s) shall reasonably restore any
property of Newco damaged as a result of the Due Diligence to its condition
prior to any such Due Diligence and shall indemnify and defend Newco from any
and all liability which may arise as a result of the performance of Due
Diligence by the Exercising Investor(s). Newco will furnish to each Exercising
Investor and its representatives such financial and operating data and other
information as to Newco (and, to the extent available to Newco, as to Sub) as
such Exercising Investor may reasonably request, including, without limitation,
financial statements, books and records and agreements with clients, customers,
vendors, lessors, licensors and suppliers of the Existing Business.
(d) Within ten (10) business days following the Option Notice Date, each of
Parent and Newco shall, and Parent shall cause Newco to, provide to each
Exercising Investor a certificate of a senior executive officer of Parent and
Newco, respectively, making on behalf of Parent and Newco the various
representations and warranties set forth in Section 6 of this Agreement and such
other representations and warranties as the Exercising Investor(s) may
reasonably request (except that Parent and Newco shall not be required to make
any such additional representations and warranties as to any matters as to which
the pertinent information is not reasonably available to them), together with
disclosure schedules updating the information in the Disclosure Schedules
delivered herewith and taking any necessary exceptions to the representations
and warranties not being made as of the date hereof, all as of the date
delivered to each Investor (the "Newco Update Date"). As to representations and
warranties made on the Newco Update Date which are parallel to representations
and warranties made on the date hereof pursuant to Section 4, the Disclosure
Schedules delivered on the Newco Update Date shall be updates of the Disclosure
Schedules delivered herewith, adding relevant information as to any pertinent
developments or changes since the date hereof. As to other representation and
warranties made on the Newco Update Date, the Disclosure Schedules shall be
prepared by Parent and Newco in good faith to reflect as fairly as possible the
nature and scope of exceptions that the parties hereto have agreed upon in
connection with the Disclosure Schedules delivered herewith.
(e) Within ten business (10) days following the Option Notice Date, each
Exercising Investor shall provide to each of Parent and Newco a certificate of a
senior executive officer of such Exercising Investor, remaking on behalf of such
Exercising Investor the various representations and warranties set forth in
Section 5 of this Agreement, together with disclosure schedules showing any
additional necessary exceptions to such representations and warranties, all as
of the Newco Update Date.
(f) Beginning on the Option Notice Date and ending ten (10) days after the Newco
Update Date, any Exercising Investor shall have the right to withdraw from
participation in the exercise of the Investor Option by providing written notice
to Newco and the other Exercising Investor(s) of such Exercising Investor's
decision to withdraw, in which case the withdrawing Exercising Investor shall be
deemed to have requested a Parent Conversion, and to have delivered a Conversion
Notice on the date of such withdrawal, which Parent Conversion shall be
consummated as contemplated by the last sentence of Section 2.2(b). Following
the expiration of the withdrawal period specified in the previous sentence, any
non-withdrawing Exercising Investor(s) shall have an additional five business
(5) day period in which they shall each decide whether to proceed with the
exercise or to revoke the Exercise Notice. If one or more of the Exercising
Investor(s) elects to proceed with the exercise of the Investors Option, such
Investor(s) shall proceed to consummate the Investors Option as set forth in
this Section 2 as though they were the only Investors originally exercising the
Investors Option, including, but not limited to, the right to increase their
Newco Percentage Interest in accordance with Section 2.1 and the allocation of
percentage interests to be acquired and Option Price in accordance with Section
2.2. If all Exercising Investor(s) withdraw, the Exercise Notice shall be deemed
revoked and the Investors Option shall be deemed not to have been exercised for
any purpose hereunder (including the first sentence of Section 2.2(a)).
(g) Following the expiration of the withdrawal periods specified in Section
2.2(f) or, in the event the Exercising Investor(s) provide written notice to
Newco that they waive the remainder of the withdrawal periods, on the date of
such notice (the date of such notice or waiver is referred to as the "Investment
Commitment Date"), Parent, Newco and the Exercising Investor(s) shall take all
commercially reasonable action to promptly consummate the closing of the
exercise of the Investors Option (the "Investors Option Closing"). Such date on
which the Investors Option Closing shall occur is referred to as the "Investors
Option Closing Date". Without limiting the generality of the foregoing, if prior
notification or approval of any regulatory authority is required in connection
with such purchase, the Exercising Investor(s) and, if applicable, Newco and
Parent shall promptly file the required notice or application for approval and
shall expeditiously process the same (and Newco and Parent, shall cooperate with
the Exercising Investor(s) in the filing of any such notice or application and
the obtaining of any such approval).
(h) During the period from the Option Notice Date to the date of the Investors
Option Closing, Parent shall cause Newco to conduct its business and engage in
transactions only in the ordinary course of business consistent with past
practice.
2.3. Conditions to Investors Option Closing.
--------------------------------------
(a) Conditions to the Obligations of Parent, Newco and the Exercising
Investor(s). The obligations of Parent, Newco and the Exercising Investor(s) to
consummate the transactions contemplated by Section 2.1 at the Investors Option
Closing are subject to the satisfaction of the following conditions: no ruling,
order, injunction, decree, statute, rule or regulation of any governmental
authority shall prevent the consummation of the transactions contemplated
hereby; provided, however, that the parties shall use their reasonable best
efforts to cause any such decree, ruling, injunction or other order to be
vacated or lifted.
(b) Conditions to the Obligations of the Exercising Investor(s). The obligations
of each Exercising Investor to consummate the transactions contemplated by
Section 2.1 at the Investors Option Closing are subject to the satisfaction or
waiver, on or before the Investors Option Closing Date, of the following
additional conditions:
(i) Representations, Warranties and Covenants of Parent and Newco. The
representations and warranties of Parent and Newco set forth in Section 6
of this Agreement and such other representations and warranties as were
made pursuant to Section 2.2(d) shall be true and correct in all material
respects as of the Newco Update Date and as of the Investors Option Closing
Date, subject to the updated disclosure schedules prepared in accordance
with Section 2.2(d); provided, however, that if any of the representations
and warranties are already qualified in any respect by materiality or as to
Material Adverse Effect, such representation or warranty shall be true and
correct as of such dates in all respects (i.e., as written); and Parent and
Newco shall have each performed, and Parent shall have caused Newco to
perform, in all material respects their respective covenants set forth in
this Agreement to be performed prior to or at the Investors Option Closing;
provided, however, that if any of the covenants are already qualified in
any respect by materiality or as to Material Adverse Effect, such covenant
shall have been performed in all respects (i.e., as written); and neither
Parent nor Newco shall have taken any action which have violated any
provision of Newco's Certificate or this Agreement, as the case may be, and
at the Investors Option Closing Parent and Newco shall each deliver to each
Investor officer's certificates, dated the Investors Option Closing Date
and duly executed by an executive officer, certifying as to Parent's and
Newco's compliance with the conditions set forth in this clause (i) and in
clauses (v), (vi), (vii) and (viii);
(ii) Opinions of Counsel to Parent. Each Exercising Investor shall
have received an opinion of counsel to Parent, dated the Investors Option
Closing Date, substantially in the form of Exhibit G and opinions of
counsel to Parent and Newco reasonably satisfactory to such Exercising
Investor with respect to the matters set forth in Sections 6.1, 6.2, 6.3,
6.4, 6.8, 6.9, 6.10, 6.16, 6.17, 6.19 and 6.21 hereto;
(iii) Good Standing Certificates. Newco shall have delivered to each
Exercising Investor a certificate of good standing, dated as of a date not
earlier than five days prior to the Investors Option Closing, from the
State of Delaware and each other state in which Newco transacts business;
(iv) Secretary's Certificates. Parent and Newco shall have delivered
to each Exercising Investor certificates executed by their respective
Secretaries, dated the Investors Option Closing Date, each certifying (A)
in the case of Newco, a copy of its organizational documents, (B)
resolutions of its respective Board of Directors authorizing the
transactions contemplated hereby and by the Ancillary Agreements, (C)
incumbency matters, and (D) such other proceedings relating to the
authorization, execution and delivery of this Agreement, the Ancillary
Agreements and the transactions contemplated hereby and thereby as may be
reasonably requested by such Exercising Investor(s);
(v) No Pending Action. No action, suit, investigation, proceeding,
temporary restraining order, preliminary or permanent injunction or other
order or decree shall be pending or threatened in any court or other
tribunal or before any arbitrator or governmental authority which (i) could
have a Material Adverse Effect on Parent, Newco, Sub or the Existing
Business or (ii) seeks to prevent the consummation of the transactions
contemplated hereby, and is material in nature;
(vi) Consents and Approvals. Parent, Sub and Newco shall have received
all governmental, shareholder and third party consents and approvals
(including the consents of lenders) and the Exercising Investor(s) shall
have received all governmental consents and approvals, in each case,
necessary or, in the reasonable judgment of such Exercising Investor,
desirable in connection with the transactions contemplated hereby and by
the Ancillary Agreements including the expiration or termination of any
applicable waiting period under the HSR Act;
(vii) No Material Adverse Effect. No Material Adverse Effect shall
have occurred during the period between the Newco Update Date and the
Investors Option Closing, nor shall any event or events have occurred which
would be reasonably likely to have a Material Adverse Effect during such
period, with respect to Parent, Newco, Sub or the Existing Business;
(viii) Simultaneous Closing. Simultaneously with the Investors Option
Closing, the closing of the acquisition by Newco of the Satellite
Communications Business (as defined in the Asset Sale Agreement) pursuant
to the Asset Sale Agreement shall take place;
(ix) Other Documents. Parent, Newco and Sub shall have delivered to
each Exercising Investor such other documents as counsel to such Exercising
Investor may reasonably request; and
(x) Other Exercising Investors. Each Other Exercising Investor shall
be prepared to close simultaneously.
(c) Conditions to the Obligations of Parent and Newco. The obligations of Parent
and Newco to consummate the transactions contemplated by Section 2.1 at the
Investors Option Closing are subject to the satisfaction or waiver, on or before
the Investors Option Closing Date, of the following additional conditions:
(i) Representations, Warranties and Covenants of the Exercising
Investors. The representations and warranties of each Exercising Investor
set forth in Section 5 of this Agreement shall be true and correct in all
material respects as of the date when made and (unless made as of a
specified date) as of the Investors Option Closing Date, subject to the
updated disclosure schedules prepared in accordance with Section 2.2(e) ;
provided, however, that if any of the representations and warranties are
already qualified in any respect by materiality or as to Material Adverse
Effect, such representation or warranty shall be true and correct as of
such dates in all respects (i.e., as written); and the Exercising Investors
shall have performed, in all material respects, their covenants set forth
in this Agreement to be performed prior to or at the Investors Option
Closing; provided, however, that if any of the covenants are already
qualified in any respect by materiality or as to Material Adverse Effect,
such covenant shall have been performed in all respects (i.e., as written);
and at the Investors Option Closing each Investor shall deliver to Parent
officer's certificates, dated the Investors Option Closing Date and duly
executed by an executive officer, certifying as to such Exercising
Investor's compliance with the conditions set forth in this clause (i) and
in clause (iii);
(ii) Secretary's Certificates. Each Exercising Investor shall have
delivered to Parent a certificate executed by its Secretary, dated the
Investors Option Closing Date, certifying (A) resolutions of its Board of
Directors authorizing the transactions contemplated herein, (B) incumbency
matters, and (C) such other corporate proceedings relating to this
Agreement, the Ancillary Agreements and the transactions contemplated
hereby and thereby as may be reasonably requested by Parent;
(iii) Consents and Approvals. The Exercising Investor(s) and Parent,
Sub and Newco shall have received all governmental consents and approvals,
in each case, necessary in connection with the transactions contemplated by
this Section 2 including the expiration or termination of any applicable
waiting period under the HSR Act.
(iv) Payment of Initial Investment. The entire Initial Investment
shall have been paid to Newco.
(d) If the Investors Option Closing shall not occur due to a failure of any of
the conditions listed in Section 2.3(b), then the Exercise Notice shall be
deemed revoked and the Investors Option shall be deemed not to have been
exercised for any purpose hereunder (including the first sentence of Section
2.2(a)).
2.4. Payment and Issuance of Interests.
---------------------------------
(a) At the Investors Option Closing, each Exercising Investor will pay to Newco
in immediately available funds by wire transfer to a bank account designated in
writing by Newco at least three days prior to the Investors Option Closing an
amount equal to such Investor's proportional amount of the Option Price;
provided, that failure or refusal of Newco to designate such a bank account
shall not preclude the Investors from exercising the Investors Option.
(b) At the Investors Option Closing, simultaneously with the delivery of
immediately available funds as provided in Section 2.4(a), Newco will deliver,
or cause to be delivered to each Exercising Investor, evidence that the Investor
Interests to be purchased by such Investor at the Investors Option Closing have
been duly issued, which Investor Interests will be validly issued and free and
clear of all mortgages, liens, pledges, encumbrances, security interests, deeds
of trust, options, encroachments, reservations, orders, decrees, judgments,
conditions, restrictions, charges, agreements, claims or equities of any kind
("Encumbrances") (except for any such Encumbrance due to applicable federal and
state securities laws and Encumbrances arising from acts of the Exercising
Investors).
2.5. Sub Offer.
---------
(a) In the event that following the first anniversary of the Initial Closing
Date and prior to the earlier of (i) expiration of the Investors Option in
accordance with its terms and (ii) exercise of the Investors Option, Parent or
Sub shall receive a bona fide offer that Parent reasonably believes is capable
of being consummated on the terms proposed, and that Parent or Sub proposes to
accept (an "Offer") from any unaffiliated third party (the "Offeror") to acquire
all or substantially all of the assets of, or otherwise a substantial interest
(by means of a stock purchase, merger, business combination or otherwise) in,
Sub or the Existing Business, other than a transaction of the type contemplated
by Section 7.4(b), Parent shall give written notice (the "Offer Notice," the
date of receipt of which is referred to as the "Offer Notice Date") to each
Investor Group Designee (as defined below) of such Offer, which notice shall
contain a reasonably detailed description of the proposed transaction, including
the identity of the Offeror (including any known affiliates), a description of
the consideration to be received in respect thereof and a description of all the
material terms of the Offer. Until the 60th day after the Offer Notice Date, no
action shall be taken by Parent, Sub, Newco or any of their affiliates to accept
the Offer or to create any obligation to the Offeror in respect of the Offer.
If, on or prior to such 60th day, one or more of the Investors deliver an Option
Notice, Parent, Sub and Newco shall continue to refrain from pursuing the Offer
and shall proceed in accordance with Section 2.2 hereof.
(b) In the event that no Investor shall have delivered an Option Notice prior to
the 60th day after the Offer Notice Date, Parent and Sub may accept the Offer
and consummate the transactions contemplated thereby on terms not materially
less favorable to Parent and Sub than the terms contained in the Offer Notice;
provided that Parent shall give the Investors not more than ten nor less than
five business days notice of the closing of the transactions contemplated by the
Offer (the "Offer Closing Notice Date"), and within three business days of the
Offer Closing Notice Date, the Investors shall elect in writing to either (i)
effect the Parent Conversions in accordance with Section 3.1, simultaneously
with or promptly following such closing or (ii) liquidate Newco in accordance
with Section 13.1 of the LLC Operating Agreement, in which case Parent and Sub
may not consummate the transactions contemplated by the Offer unless prior
thereto or simultaneously therewith Sub shall refund to Newco the $44 million
paid to Sub pursuant to the Asset Sale Agreement and the Research and
Development Agreement.
Section 3. Parent Conversions.
------------------
3.1. Parent Conversions.
------------------
(a) Each of the three Investor Groups as described on Schedule I hereto (each,
an "Investor Group") shall have a right at any time during the Exercise Period,
upon written notice (the "Conversion Notice") to Parent by the Investor Group
Designee designated on Schedule I hereto relating to such Investor Group an
"Investor Group Designee"), to require, and upon receipt of such notice Parent
shall cause and do all things necessary (including preparing and filing within
15 days after receipt of such notice all required documents and filings) to
obtain all third-party or government consents, approvals and authorizations as
may be necessary or advisable, to, as promptly as practicable (but in no event
later than the latest of (i) the expiration or termination of any applicable
waiting period under the HSR Act, (ii) the receipt of all necessary third party
or governmental consents, authorizations or approvals and (iii) 15 days after
receipt of such notice) either, at the option of each Investor in such Investor
Group, (i) cause a Delaware direct wholly-owned corporate subsidiary of Parent
to merge, in a reorganization intended to be tax-free, into such Investor
pursuant to a merger agreement substantially in the form attached hereto as
Exhibit H (each, a "Parent Merger"); provided that such Investor shall be a
corporation permitted under applicable law and its governing instruments to
effectuate a Parent Merger and shall have represented and warranted that such
Investor has no assets or liabilities other than the Investor Interests held by
it and its rights and obligations under this Agreement and the Ancillary
Agreements or (ii) exchange shares of common stock, par value $0.01 per share,
of Parent ("Parent Common Stock) for the Investor Interests held by such
Investor (each, a "Parent Exchange" and together with the Parent Mergers, the
"Parent Conversions"). In each Parent Merger, the capital stock of the Investor
shall be converted into shares of Parent Common Stock, and in each Parent
Exchange, the Newco Interest held by the Investor shall be exchanged for Parent
Common Stock, in each case with the number of shares of Parent Common Stock to
be issued to be determined by dividing the original purchase price for the
interest in Newco held by such Investor (A) by $12, if the Closing Price as of
the date of delivery of the Conversion Notice (the "Notice Closing Price") is
less than or equal to $24, (B) by $20, if the Notice Closing Price is greater
than or equal to $40, or (C) if the Notice Closing Price is greater than $24 and
less than $40, then by such number equal to one-half of the Notice Closing
Price, as the case may be; provided, however, that no Investor Group shall
exercise such rights pursuant to this Section 3.1 until the earlier of (i) 6
months after the Initial Closing or (ii) a Parent Extraordinary Event (as
defined below). In the event Parent is excused from registering shares of Parent
Common Stock on Forms S-4 as contemplated by Section 3 of the Registration
Rights Agreement, an Investor which has not been deemed to make an election
hereunder pursuant to Section 2.2(b) or Section 2.2(f) may delay the closing of
the Parent Conversion until such registration is available or revoke its
election with respect to the Parent Conversion, in which case such election
shall be deemed not to have been exercised for any purpose hereunder.
(b) For purposes of this Agreement, "Closing Price" means as of any date and
subject to adjustment in the event of a stock split, stock dividend or other
recapitalization of Parent (i) if shares of Parent Common Stock are listed on a
national securities exchange, the average of the closing sale prices per share
therefor on the largest securities exchange on which such shares are traded on
the last twenty (20) trading days before such date, (ii) if such shares are
listed on The Nasdaq National Market but not on any national securities
exchange, the average of the closing bid and asked prices per share therefor on
The Nasdaq National Market on the last twenty (20) trading days before such
date, or (iii) if such shares are not listed on either a national securities
exchange or The Nasdaq National Market, the average of the closing bid and asked
prices per share therefor in the over the counter market on the last thirty (30)
trading days before such date. For purposes of this Agreement, a "Parent
Extraordinary Event" shall mean (i) Parent shall have effected any merger (other
than a merger done solely to effect a change in domicile or other
non-substantive transaction), amalgamation, corporate reorganization or business
combination or sale or conveyance of its assets, property or business as an
entirety or substantially as an entirety or shall have entered into any
agreement to, or announced an intention to, effect any of the foregoing, or (ii)
any party shall have commenced or announced an intention to commence a tender
offer, proxy contest or similar transaction with the purpose or effect of
effecting a change of control of Parent.
(c) If there shall be any consolidation or merger to which Parent is a party, or
any sale or conveyance of the property of Parent as an entirety or substantially
as an entirety (any such event being called a "Parent Capital Reorganization"),
then, effective upon the effective date of such Parent Capital Reorganization,
the Investors shall have the right to receive in the Parent Conversion the kind
and amount of shares of stock and other securities and property (including cash)
which the Investors would have been entitled to receive in connection with such
Parent Capital Reorganization if the Parent Conversion had been effected
immediately prior to such Parent Capital Reorganization. As a condition to
effecting any Parent Capital Reorganization, Parent or the successor or
surviving corporation, as the case may be, shall execute and deliver to each
Investor an agreement as to such Investor's rights in accordance with this
Section 3.1(c). The provisions of this Section 3.1(c) shall similarly apply to
successive Parent Capital Reorganizations.
(d) To the extent not theretofore exercised, the Investors shall be deemed to
have waived their rights under this Section 3.1 when and in the event that Sub
shall have irreversibly refunded to Newco the Refund (as defined in the Asset
Sale Agreement) following an election made by Newco to receive such Refund under
Section 8.8, 8.9 or 8.10 of the Asset Sale Agreement. If Newco shall have made
an election to receive the Refund Amount under Section 8.8 or 8.10 of the Asset
Sale Agreement, the Investors' right to effect a Parent Conversion shall be
suspended for 60 days from the date of such election.
Section 4. Representations and Warranties of Parent. Except as disclosed in the
disclosure schedule delivered by Parent to the Investors and incorporated herein
(the "Disclosure Schedule"), Parent hereby represents and warrants to Newco and
the Investors as follows:
4.1. Organization and Good Standing; Power and Authority; Qualifications. Each
of Parent and Newco (a) is duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization and (b) has all requisite
corporate or limited liability company power and authority to own, lease and
operate its properties and to carry on its business as presently conducted. Each
of Parent and Newco has all requisite power and authority to enter into and
carry out the transactions contemplated by this Agreement and the Ancillary
Agreements to which it is a party. Newco has filed to become qualified to
transact business as a foreign limited liability company in, and Parent knows of
no reason that Newco will not be in good standing under the laws of, the
Commonwealth of Virginia. Section 4.1 of the Disclosure Schedule sets forth a
complete list of each Subsidiary of Parent. As used in this Agreement,
"Subsidiary" means an entity that is directly or indirectly controlled by, or
more than 50% owned by, another entity.
4.2. Authorization of the Documents. The execution, delivery and performance by
Parent and Newco of this Agreement and each of the Ancillary Agreements to which
it is a party, and the consummation of the transactions contemplated hereby and
thereby have been duly authorized by all requisite corporate or limited
liability company action on the part of Parent and Newco, respectively (and do
not or will not require the approval or consent of the shareholders of Parent),
and this Agreement and each of the Ancillary Agreements when executed will
constitute a legal, valid and binding obligation of each of Parent and Newco,
enforceable against Parent and Newco in accordance with its terms except to the
extent that enforceability may be limited by bankruptcy, insolvency or other
similar laws affecting creditors' rights generally and except to the extent that
the remedy of specific performance and injunction and other forms of equitable
relief may be subject to equitable defenses. As of the Initial Closing, the
Cross Licensing Agreement will have been duly authorized, executed and delivered
by Motient Communications and will be the legal, valid and binding obligation of
Motient Communications, enforceable against it in accordance with its terms
except to the extent that enforceability may be limited by bankruptcy,
insolvency or other similar laws affecting creditors' rights generally and
except to the extent that the remedy of specific performance and injunction and
other forms of equitable relief may be subject to equitable defenses.
4.3. Capitalization.
--------------
(a) Parent. The authorized capitalization of Parent as of the date hereof
consists of: (i) 200,000 shares of preferred stock, par value $0.01 per share,
none of which are issued and outstanding, and (ii) 150,000,000 shares of Parent
Common Stock, of which 49,506,308 shares were issued and outstanding as of June
19, 2000. Since June 19, 2000, no shares of capital stock of Parent have been
issued except pursuant to the exercise of options outstanding on June 19, 2000.
All such outstanding shares of Parent Common Stock are validly issued, fully
paid and nonassessable. The information set forth on the capitalization table
set forth in Section 4.3(a) of the Disclosure Schedule, including, without
limitation, the information regarding the outstanding options to purchase Parent
Common Stock and fully diluted share information is true, correct and complete
as of June 19, 2000. Except as listed in Section 4.3(a) of the Disclosure
Schedule, there are no outstanding options, warrants, subscription rights, calls
or commitments of any character whatsoever relating to, or securities or rights
convertible into, shares of any class of capital stock of Parent (collectively,
"Parent Options"), or by which Parent or any of its subsidiaries is or may
become bound to issue additional shares of its capital stock or options,
warrants or other rights to purchase or acquire any shares of its capital stock
or other rights, agreements or commitments which obligate the Parent to register
any shares of its capital stock.
(b) Newco. Immediately prior to the Initial Closing, the sole member of Newco
will be, and the only interest in Newco will be held by, Parent. Immediately
after the Initial Closing, the ownership of Newco shall be as set forth in the
LLC Operating Agreement. All such outstanding interests will be validly issued.
Except pursuant to the LLC Operating Agreement, no member of Newco is entitled
to pre-emptive rights. Except for the Investors Option granted to the Investors
pursuant to Section 2.1 of this Agreement, there are not now and will not as of
the Initial Closing be, any outstanding options, warrants, subscription rights,
calls or commitments of any character whatsoever relating to, or interests or
rights convertible into, or exchangeable for, interests of any character of
Newco, or by which Newco is or may become bound to issue additional interests
(collectively, "Newco Options"). Newco has not, since its inception, declared or
paid any dividend or made any other distribution of cash or other property to
its members.
4.4. Authorization and Issuance of Parent Capital Stock and Investor Interests.
The authorization, issuance, sale and delivery of the Investor Interests
pursuant to this Agreement and the authorization, reservation, issuance, sale
and delivery of Parent Common Stock pursuant to the Parent Conversions and the
Parent Common Stock Purchase Option have been duly authorized by all requisite
limited liability company or corporate action on the part of Newco and Parent,
as the case may be, and when issued, sold and delivered in accordance with this
Agreement, the (i) Investor Interests will be validly issued and outstanding
with no personal liability attaching to the ownership thereof (other than as
provided in the Delaware Limited Liability Company Act) and (ii) the Parent
Common Stock will be validly issued and outstanding, fully paid and
nonassessable with no personal liability attaching to ownership thereof, in each
case, free and clear of any Encumbrances, other than Encumbrances, if any,
arising as a result of actions taken by the Investors or arising pursuant to
applicable federal and state securities laws, and not subject to preemptive or
similar rights of members or stockholders of Newco, Parent or others. The terms,
designations, powers, preferences and relative, optional and other special
rights, and the qualifications, limitations and restrictions, of the Investor
Interests are as stated in the LLC Operating Agreement. As of the Closing,
Parent has reserved a sufficient number of shares of Parent Common Stock for
issuance upon the exercise of the Parent Common Stock Purchase Option and in the
event of the Parent Conversions.
4.5. SEC and Other Documents; Financial Statements.
---------------------------------------------
(a) Parent has delivered or made available to the Investors each registration
statement, report, proxy statement or information statement and all exhibits,
amendments and supplements thereto filed with the Securities and Exchange
Commission ("SEC") since January 1, 2000, which are listed in Section 4.5(a) of
the Disclosure Schedule, each in the form (including exhibits and any amendments
and supplements thereto) filed with the SEC (collectively, including any such
reports filed subsequent to the date hereof, the "Parent Reports"). Except as
set forth in Section 4.5(a) of the Disclosure Schedule, the Parent Reports were
filed with the SEC in a timely manner and constitute all forms, reports and
documents required to be filed by the Company under the Securities Act, the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and the rules
and regulations promulgated thereunder (the "Securities Laws"). As of their
respective dates, the Parent Reports (i) complied, and any Parent Reports filed
with the SEC subsequent to the date hereof will comply, as to form in all
material respects with the applicable requirements of the Securities Laws and
(ii) did not, and any Parent Reports filed with the SEC subsequent to the date
hereof will not, contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading. There is no unresolved violation asserted by any
government authority with respect to any of the Parent Reports.
(b) Each of the balance sheets included in or incorporated by reference into the
Parent Reports (including the related notes and schedules) fairly presented the
financial position of the entity or entities to which it relates as of its date
and each of the statements of operations, stockholders' equity (deficit) and
cash flows included in or incorporated by reference into the Parent Reports
(including any related notes and schedules) fairly presented the results of
operations, retained earnings or cash flows, as the case may be, of the entity
or entities to which it relates for the periods set forth therein, in each case
in accordance with United States generally accepted accounting principles
("GAAP") consistently applied during the periods involved, except as may be
noted therein and except, in the case of the unaudited statements, for the
absence of notes thereto, and subject to normal recurring year-end adjustments
which have not been and will not be material in nature or amount.
4.6. No Undisclosed Liabilities. Except as disclosed in the Parent Reports filed
prior to the date hereof, and except for normal or recurring liabilities
incurred since March 31, 2000 in the ordinary course of business consistent with
past practices, Parent and its subsidiaries do not have any liabilities, either
accrued, contingent or otherwise, of the type required to be reflected in
financial statements in accordance with GAAP, and whether due or to become due,
which individually or in the aggregate, have had or are reasonably likely to
have a material adverse effect on the properties, business, prospects,
operations, earnings, assets, liabilities or the condition (financial or
otherwise) (a "Material Adverse Effect") of Parent.
4.7. Absence of Certain Changes or Events. Except as disclosed in the Parent
Reports filed with the SEC prior to the date hereof or in Section 4.7 of the
Disclosure Schedule, since December 31, 1999, Parent and its subsidiaries have
conducted their respective businesses only in the ordinary course, and there has
not been (a) any change, circumstance or event that could reasonably be expected
to result in a Material Adverse Effect on Parent, Newco, Sub or the transactions
contemplated by this Agreement, (b) any declaration, setting aside or payment of
any dividend or other distribution with respect to the Parent Common Stock or
Investor Interests, (c) any material commitment, contractual obligation,
borrowing, capital expenditure or transaction (each, a "Commitment") entered
into by Parent or any of its subsidiaries outside the ordinary course of
business, or (d) any material change in the Parent's accounting principles,
practices or methods.
4.8. No Conflict. The execution and delivery by each of Parent and Newco of this
Agreement, and by Parent, Newco, Sub and Motient Communications of the Ancillary
Agreements to which it is a party, and the consummation by each of Parent,
Newco, Sub and Motient Communications of the transactions contemplated hereby
and thereby and compliance with the provisions hereof and thereof (including,
without limitation, the issuance, sale and delivery of the Investor Interests)
will not (a) violate or conflict with, or require any consent, approval, notice
or filing under, any provision of any domestic (federal, state or local) or
foreign law, statute, rule or regulation, or any ruling, writ, injunction,
order, judgment or decree of any court, administrative agency or other
governmental body applicable to it, or any of its properties or assets other
than violations or conflicts which would not reasonably be expected to have a
Material Adverse Effect on Parent, Newco, Sub or the transactions contemplated
by this Agreement or the Ancillary Agreements, (b) conflict with, or result in
any violation or breach of, or constitute (with due notice or lapse of time, or
both) a default or loss of a benefit under, or cause or permit the acceleration
under, the terms, conditions or provisions of (i) the Series A and Series B 12
1/4% Senior Notes due 2008 Indenture, dated March 31, 1998, of Motient Holdings
Inc. ("Holdings") (the "Indenture") or (ii) any other indenture, mortgage,
guaranty, lease, license or other contract, agreement or understanding, written
or oral (each, a "Contract") to which Parent, Newco or Sub is a party or to
which any of their properties or assets are subject (all of which are listed in
Section 4.8 of the Disclosure Schedule) which could reasonably be expected to
have a Material Adverse Effect on Parent, Newco, Sub or the transactions
contemplated by this Agreement, or any of the Ancillary Agreements, (c) result
in the creation or imposition of any Encumbrance upon any of Parent's, Newco's
or Sub's properties or assets which could reasonably be expected to have a
Material Adverse Effect on Parent, Newco, Sub or the transactions contemplated
by this Agreement or any of the Ancillary Agreements, or (d) violate Parent's,
Newco's or Sub's organizational documents. Parent and Sub have received all
necessary consents or waivers from their lenders and guarantors with respect to
the transactions contemplated hereby and by the Ancillary Agreements (other than
any consents that may be needed in connection with the transactions contemplated
by the Section 2.1 Letter), and the fairness opinion(s) required by Section 4.11
of the Indenture has/have been obtained and copies of such documents have been
delivered to the Investors. No other consent, waiver, approval, document or
action is required for Parent and its subsidiaries (including Sub) to be in full
compliance with the provisions of the agreements relating to their financing
arrangements upon consummation of the transactions contemplated hereby and by
the Ancillary Agreements.
4.9. Litigation; Orders. Except as set forth in the Parent Reports, there is no
civil, criminal or administrative action, suit, claim, notice, hearing, inquiry,
proceeding or investigation at law or in equity by or before any court,
arbitrator or similar panel, governmental instrumentality or other agency now
pending or, to the best knowledge of Parent, threatened against Parent, Sub or
Newco or the assets (including the Intellectual Property) of Parent, Sub or
Newco (a "Litigation") which if determined adversely to Parent, Sub or Newco
could reasonably be expected to have a Material Adverse Effect on Parent, Newco,
Sub or the transactions contemplated by this Agreement. None of Parent, Sub or
Newco is subject to any order, writ, injunction or decree of any court of any
federal, state, municipal or other domestic or foreign governmental department,
commission, board, bureau, agency or instrumentality.
4.10. Compliance with Laws; Permits. Except as provided in Section 4.10 of the
Disclosure Schedule and except for matters governed by Section 4.15, Parent,
Newco and Sub are and have been, since their respective dates of incorporation,
in compliance with, and have conducted their business in compliance with, all
federal, state, local and foreign laws, rules, ordinances, codes, consents,
authorizations, registrations, regulations, decrees, directives, judgments and
orders, including environmental, applicable to them other than instances of
non-compliance which have not had and are not reasonably expected to have a
Material Adverse Effect on Parent, Newco, Sub or the transactions contemplated
hereby. Each of Parent, Newco and Sub has all federal, state, local and foreign
governmental licenses, permits, qualifications and authorizations ("Permits")
materially necessary in the conduct of its business as currently conducted. All
such Permits are in full force and effect, and no material violations have been
recorded in respect of any such Permits; no material proceeding is pending or,
to the best knowledge of Parent, threatened to revoke or limit any such Permit;
and no such Permit will be suspended, cancelled or adversely modified in any
material respect as a result of the execution and delivery of this Agreement or
the Ancillary Agreements and the consummation of the transactions contemplated
hereby or thereby.
4.11. Offering Exemption. Assuming the accuracy of the representations and
warranties contained in Section 5 hereof, the offer and sale of the Investor
Interests as contemplated hereby, and issuance and delivery of Parent Common
Stock in connection with the Parent Conversions or upon the exercise of the
Parent Common Stock Purchase Option (as defined below) are each exempt from
registration under the Securities Act as in effect on the date of this Agreement
and under applicable state securities and "blue sky" laws, as currently in
effect.
4.12. Consents. No permit, authorization, consent or approval of or by, or any
notification of or filing with, any person (governmental or private) is required
by Parent or Newco in connection with the execution, delivery and performance of
this Agreement, or by Parent, Newco or Sub in connection with the execution,
delivery and performance of the Ancillary Agreements to which it is a party, the
consummation by Parent, Newco or Sub of the transactions contemplated hereby or
thereby, or the issuance, sale or delivery of the Investor Interests or Parent
Common Stock (other than (i) such notifications or filings required under the
HSR Act, the Communications Act of 1934, as amended (the "FCC Act") and
applicable federal or state securities laws, if any, which shall be made on a
timely basis and (ii) permits, authorizations, consents and approvals which, if
not obtained, could not reasonably be expected to have a Material Adverse Effect
on Parent, Newco, Sub or the transactions contemplated by this Agreement and the
Ancillary Agreements).
4.13. Brokers. No agent, broker, investment banker or other firm or person, is
or will be entitled to any broker's or finder's fee or any other commission or
similar fee from Parent, Sub or Newco in connection with this Agreement or the
Ancillary Agreements or any of the transactions contemplated hereby or thereby.
4.14. Public Utility Holding Company, Etc. Neither Parent or Newco nor any
Subsidiary is: (i) a "public utility company" or a "holding company," or an
"affiliate" or a "subsidiary company" of a "holding company," or an "affiliate"
of a "public utility company," a "holding company" or a "subsidiary company" of
a holding company as such terms are defined in the Public Utility Holding
Company Act of 1935, as amended, or (ii) a "public utility," as defined in the
Federal Power Act, as amended, or (iii) an "investment company" or an
"affiliated person" thereof or an "affiliated person" of any such "affiliated
person," as such terms are defined in the Investment Company Act of 1940, as
amended.
4.15. FCC(a) . (a) Section 4.15 of the Disclosure Schedule contains a true and
complete list of all material licenses, permits, and authorizations
("Licenses"), including the frequencies authorized for and the issuance and
expiration dates of each such License, issued to Parent or Sub by the FCC in
connection with the operation of the Existing Business. No such License is
subject to any restriction or condition which would limit in any material
respect the full operation of the Existing Business as now operated, and no
proceeding, inquiry, investigation or other administrative action is pending or,
to Parent's knowledge, threatened by or before the FCC that would reasonably be
expected to result in the revocation of any material FCC authorization or
otherwise impair in any material respect the full operation of the Existing
Business. The representations contained in this Section 4.15 are limited by the
statements set forth in the section of Parent's most recent SEC Form 10-K
entitled "Business -- Regulation" filed with the Securities and Exchange
Commission on March 30, 2000 ("Regulatory Disclosure"). The statements contained
in the Regulatory Disclosure fully and accurately describe, with respect to the
Existing Business, the material legal matters and proceedings arising under the
Communications Act of 1934, as amended, and the published rules, regulations,
and policies promulgated thereunder by the FCC.
(b) Section 4.15 of the Disclosure Schedule contains a true and complete list of
all material pending applications, including requests for extension of
construction or other performance milestones ("Applications"), and including the
frequencies applied for and the filing date of each such Application, that have
been filed by Parent or Sub with the FCC relating to the Existing Business.
Neither Parent nor Sub is aware of any reason why any Application would not
granted by the FCC. Parent and Sub have delivered to Investor true and complete
copies of the Licenses and Applications, including any all additions, amendments
and other modifications thereto.
(c) Sub is the authorized legal holder of all the Licenses. The Licenses are in
good standing, are in full force and effect, and are unimpaired by any act or
omission of Parent, Sub, or any of their officers, directors, or employees; and
the operation of the Existing Business is in full compliance with the Licenses.
These Licenses are sufficient for the lawful conduct of the business and
operation of the Existing Business in the manner and to the full extent they are
currently conducted. All material reports, forms, and statements required to be
filed with the FCC with respect to the Existing Business have been filed and are
complete and accurate in all material respects.
(d) In 1999, Sub had access to the spectrum assigned to Sub in the 1999
coordination agreement among the North American L-band operators. Parent
believes that Sub should continue to have access in 2000 to as much of this
spectrum as Sub is able to use.
(e) No consent, authorization, approval, order, exemption, waiver, or other
action of the FCC is required for the consummation of the Initial Investment.
4.16. Sub Representations and Warranties. All representation and warranties made
by Sub in or pursuant to the Research and Development Agreement and the Asset
Sale Agreement (as qualified by the disclosure schedule thereto), are
incorporated herein as though made in their entirety by Parent in this
Agreement.
4.17. Restrictions. Newco is not and will not be a party to any loan agreement
or other financing document giving rise to any obligations, restrictions,
limitations or Encumbrances with respect to Newco or its assets. So long as
Parent shall own an interest in Newco of 50% or greater, the only contractual
obligations of Parent relating to Newco (other than those contained in this
Agreement and the Ancillary Agreements) shall be the provisions of Parent's term
loan agreement and the revolving credit facility of Holdings relating to
Parent's subsidiaries. Following consummation of the Investors Option Closing
and assuming that Parent shall then own less than a 50% Percentage Interest in
Newco, such requirements shall cease to be applicable, other than Parent's
pledge of all of its Membership Interests in Newco to its banks and guarantors.
4.18. Newco Activities. Newco has not conducted any business or engaged in any
activity or taken any actions, other than those solely in connection with,
relating to, and necessary for this Agreement and the Ancillary Agreements and
the consummation of the transactions contemplated hereby or thereby. Newco has
no assets, other than a nominal amount of cash obtained in connection with
Parent's subscription for its Newco Interests, and no liabilities or obligations
of any type whatsoever other than its obligations under the Ancillary Agreements
to which it is a party.
4.19. Disclosure. Neither this Agreement nor any Ancillary Agreement (nor any
certificate or instrument executed in connection with this Agreement or any
Ancillary Agreement) furnished or made to the Investors by or on behalf of
Parent, Sub or Newco omits to state a material fact required to be stated
therein or necessary in order to make the statements contained herein and
therein, in light of the circumstances under which they were made, not
misleading.
Section 5. Representations and Warranties of the Investors. Each Investor
represents and warrants to Parent as of the date hereof as follows:
5.1. Investment Representations(a) . (a) Such Investor understands that the
Investor Interests, and the Parent Common Stock Purchase Option and the Parent
Common Stock to be issued pursuant thereto (collectively, the "Parent
Securities") (i) have not been, and will not be, registered under the Securities
Act or any state securities laws, (ii) are being offered and sold pursuant to an
exemption from registration contained in the Securities Act based in part on the
representations of such Investor contained in this Agreement, and (iii) the
Parent Securities may not be sold unless such disposition is registered under
the Securities Act and applicable state securities laws or is exempt from
registration thereunder.
(b) Acquisition for Own Account. Such Investor is acquiring the Parent
Securities for its own account, for investment only and not with a view to the
distribution thereof within the meaning of the Securities Act.
(c) Accredited Investor; Domicile. Such Investor is an "Accredited Investor" (as
defined in Rule 501(a) under the Securities Act). Such Investor is a resident of
the State or Commonwealth set forth on Schedule I hereto and the Parent
Securities were offered and sold to such Investor solely in the State or
Commonwealth set forth on Schedule I hereto.
(d) Investors Able to Bear Economic Risk. Such Investor has substantial
experience in evaluating and investing in private transactions of securities in
companies similar to Newco and Parent so that it is capable of evaluating the
merits and risks of its investment in Newco and Parent and has the capacity to
protect its own interests. Such Investor understands that an investment in the
Parent Securities acquired pursuant to this Agreement is highly speculative and
involves substantial economic risk. Such Investor understands that it must bear
the economic risk of this investment indefinitely unless Parent Securities are
registered pursuant to the Securities Act, or an exemption from registration is
available, and that such Investor may sustain, and is financially able to
sustain, a complete loss of its investment pursuant to this Agreement. Such
Investor understands that the Company has no present intention of registering
the Parent Securities. Such Investor also understands that there is no assurance
that any exemption from registration under the Securities Act will be available
and that, even if available, such exemption may not allow such Investor to
transfer all or any portion of Parent Securities under the circumstances, in the
amounts or at the times such Investor might propose.
(e) Investor Can Protect Its Interest. By reason of its or of its management's
business or financial experience, such Investor has the capacity to protect its
own interests in connection with the transactions contemplated by this
Agreement. Further, such Investor is aware of no publication of any
advertisement in connection with the transactions contemplated by this
Agreement.
(f) Company Information. Such Investor has had an opportunity to discuss the
business, management and financial affairs of Parent and Newco with directors,
officers and management of Parent and Newco. Such Investor has also had the
opportunity to ask questions of, and receive answers from, Parent and Newco and
its management regarding the terms and conditions of this Investment.
5.2. Organization and Good Standing; Power and Authority. Such Investor (i) is
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization and (ii) has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as presently conducted. Such Investor has all requisite power and authority to
enter into and carry out the transactions contemplated by this Agreement and the
Ancillary Agreements to which it is a party.
5.3. Authorization of Documents. The execution, delivery and performance by the
Investor of this Agreement and each of the Ancillary Agreements to which it is a
party and the consummation of the transactions contemplated hereby and thereby
have been duly authorized by all requisite corporate action on the part of such
Investor, and this Agreement and each of such Ancillary Agreements when executed
will constitute a legal, valid and binding obligation of such Investor,
enforceable against such Investor in accordance with its terms, except to the
extent that enforceability may be limited by bankruptcy, insolvency or other
similar laws affecting creditors' rights generally and except to the extent that
the remedy of specific performance and injunction and other forms of equitable
relief may be subject to equitable defenses.
5.4. No Conflict. The execution and delivery by such Investor of this Agreement
and the Ancillary Agreements to which it is a party, and the consummation by
such Investor of the transactions contemplated hereby and thereby and compliance
with the provisions hereof and thereof will not (a) violate or conflict with, or
require any consent, approval, notice or filing under, any provision of any
domestic (federal, state or local) or foreign law, statute, rule or regulation,
or any ruling, writ, injunction, order, judgment or decree of any court,
administrative agency or other governmental body applicable to it, or any of its
properties or assets, (b) conflict with, or result in any violation or breach
of, or constitute (with due notice or lapse of time, or both) a default or loss
of a benefit under, or cause or permit the acceleration under, the terms,
conditions or provisions of any indenture, mortgage, guaranty, lease, license or
other contract, agreement or understanding, written or oral to which it is a
party or to which its properties or assets is subject, which could reasonably be
expected to have a Material Adverse Effect on such Investor's ability to
consummate the transactions contemplated by the Agreement, (c) result in the
creation or imposition of any Encumbrance upon any of its properties or assets,
which could reasonably be expected to have a Material Adverse Effect on such
Investor's ability to consummate the transactions contemplated by this Agreement
or (d) violate its organizational documents.
5.5. Litigation; Orders. There is no civil, criminal or administrative action,
suit, claim, notice, hearing, inquiry, proceeding or investigation at law or in
equity by or before any court, arbitrator or similar panel, governmental
instrumentality or other agency now pending or, to the best knowledge of such
Investor, threatened against such Investor which if determined adversely to such
Investor could reasonably be expected to have a Material Adverse Effect on such
Investor's ability to consummate the transactions contemplated by this
Agreement. Such Investor is not subject to any order, writ, injunction or decree
of any court of any federal, state, municipal or other domestic or foreign
governmental department, commission, board, bureau, agency or instrumentality.
5.6. Compliance with Laws; Permits. Such Investor is and has been, since the
date of its incorporation, in compliance with, and has conducted its business in
compliance with, all federal, state, local and foreign laws, rules, ordinances,
codes, consents, authorizations, registrations, regulations, decrees,
directives, judgments and orders applicable to it, which if Investor failed to
comply would be reasonably likely to have a Material Adverse Effect on such
Investor's ability to consummate the transactions contemplated by this
Agreement. Such Investor has all Permits materially necessary in the conduct of
its business as currently conducted. All such Permits are in full force and
effect, and no material violations have been recorded in respect of any such
Permits; no material proceeding is pending or, to the best knowledge of the
Investor, threatened to revoke or limit any such Permit; and no such Permit will
be suspended, cancelled or adversely modified as a result of the execution and
delivery of this Agreement or the Ancillary Agreements and the consummation of
the transactions contemplated hereby or thereby.
5.7. Consents. No permit, authorization, consent or approval of or by, or any
notification of or filing with, any person (governmental or private) is required
by such Investor in connection with the execution, delivery and performance of
this Agreement, or in connection with the execution, delivery and performance of
the Ancillary Agreements to which it is a party, or the consummation by such
Investor of the transactions contemplated hereby or thereby (other than (i)
notifications or filings required under the HSR Act, the FCC Act and applicable
federal or state securities law, if any, which shall be made on a timely basis
and (ii) permits, authorizations, consents and approvals which, if not obtained,
could not reasonably be expected to have a Material Adverse Effect on such
Investor's ability to consummate the transactions contemplated by this
Agreement).
5.8. Brokers. No agent, broker, investment banker or other firm or person, is or
will be entitled to any broker's or finder's fee or any other commission or
similar fee from such Investor in connection with this Agreement or any of the
transactions contemplated hereby.
5.9. Appointment of Investor Group Designees. Without in any way limiting any
Investor's right to vote or transfer its Investor Interest in its sole
discretion or to otherwise exercise its rights or receive the benefits of
ownership of such Investor Interest (subject, in each case to the limitations,
restrictions and other provisions contained in the LLC Operating Agreement),
each Investor hereby irrevocably delegates the power and authority relating to
the exercise of the Parent Conversions, and the matters set forth in clauses (i)
through (iv) below, to such Investor's Investor Group Designee as set forth on
Schedule I hereto (each, an "Investor Group Designee") and appoints such
Investor Group Designee as its true and lawful agent and attorney, for and in
the name, place and stead of such Investor (i) to exercise at any time the right
to deliver a Conversion Notice, (ii) to request a Parent Conversion, (iii) to
exercise such Investor's rights under Section 3.1 of this Agreement and (iv) to
send or receive notices, and make elections and decisions of any type, under
this Agreement. Each Investor hereby affirms that this grant of power and
authority may under no circumstances be revoked except with the prior written
consent of such Investor's Investor Group Designee and Parent, which shall not
be unreasonably withheld. The authority given to any Investor Group Designee
hereunder may be transferred by such Investor Group Designee to any single
person or entity upon notice to Parent, but in no event shall these be more than
three Investor Group Designees.
Section 6. Representations and Warranties of Parent and Newco. Except as
disclosed in the disclosure schedule to be delivered by Parent and Newco to the
Investors on the Newco Update Date (the "Newco Disclosure Schedule"), as
required by Sections 2.2(d) and 2.3(a), Parent and Newco shall represent and
warrant to the Investors on the Newco Update Date and the Investors Option
Closing Date as follows:
6.1. Organization and Good Standing; Power and Authority; Qualifications. Newco
(a) is duly organized, validly existing and in good standing under the laws of
its jurisdiction of organization and (b) has all requisite limited liability
company power and authority to own, lease and operate its properties and to
carry on its business as presently conducted. Newco has all requisite power and
authority to enter into and carry out the transactions contemplated by this
Agreement and the Ancillary Agreements to which it is a party. Newco is
qualified to transact business as a foreign limited liability company in, and is
in good standing under the laws of the Commonwealth of Virginia.
6.2. Authorization of the Documents. The execution, delivery and performance by
Newco of this Agreement and each of the Ancillary Agreements to which it is a
party, and the consummation of the transactions contemplated hereby and thereby
have been duly authorized by all requisite limited liability company action on
the part of Newco (and do not or will not require the approval or consent of the
shareholders of Newco), and this Agreement and each of the Ancillary Agreements
when executed will constitute a legal, valid and binding obligation of Newco,
enforceable against Newco in accordance with its terms except to the extent that
enforceability may be limited by bankruptcy, insolvency or other similar laws
affecting creditors' rights generally and except to the extent that the remedy
of specific performance and injunction and other forms of equitable relief may
be subject to equitable defenses.
6.3. Capitalization. Immediately prior to the Investors Option Closing, the
ownership of Newco shall be as then set forth in the LLC Operating Agreement.
All such outstanding interests will be validly issued. Except pursuant to the
LLC Operating Agreement, no member of Newco is entitled to pre-emptive rights.
Except for the Investors Option granted to the Investors pursuant to Section 2.1
of this Agreement, there will not as of the Investors Option Closing be any
outstanding Newco Options. Newco has not, since its inception, declared or paid
any dividend or made any other distribution of cash, stock or other property to
its members.
6.4. Authorization and Issuance of Investor Interests. The authorization,
reservation, issuance, sale and delivery of the Investor Interests pursuant to
the Investors Option have been duly authorized by all requisite limited
liability company action on the part of Newco and when issued, sold and
delivered in accordance with this Agreement, the Investor Interests will be
validly issued and outstanding, with no personal liability attaching to the
ownership thereof (other than as provided in the Delaware Limited Liability
Act), free and clear of any Encumbrances, other than Encumbrances, if any,
arising as a result of actions taken by the Investors or arising pursuant to
applicable federal and state securities laws, and not subject to preemptive or
similar rights of members of Newco or others. The terms, designations, powers,
preferences and relative, optional and other special rights, and the
qualifications, limitations and restrictions, of the Investor Interests are as
stated in the LLC Operating Agreement.
6.5. Financial Statements. Each of the balance sheets included in the most
recent monthly and quarterly Newco Financial Statements (as defined in Section
7.8(b)) fairly presented the financial position of the entity or entities to
which it relates as of its date and each of the statements of operations,
stockholders' equity (deficit) and cash flows included in the most recent
monthly and quarterly Newco Financial Statements fairly presented the results of
operations, retained earnings or cash flows, as the case may be, of the entity
or entities to which it relates for the periods set forth therein, in each case
in accordance with GAAP consistently applied during the periods involved, except
as may be noted therein and except for the absence of notes thereto, and subject
to normal recurring year-end adjustments which have not been and will not be
material in nature or amount.
6.6. No Undisclosed Liabilities. Except as disclosed in the Newco Financial
Statements, and except for normal or recurring liabilities incurred since the
date of the Newco Financial Statements in the ordinary course of business
consistent with past practices, Newco does not have any liabilities, either
accrued, contingent or otherwise, of the type required to be reflected in
financial statements in accordance with GAAP, and whether due or to become due,
which individually or in the aggregate, have had or are reasonably likely to
have a Material Adverse Effect on Newco.
6.7. Absence of Certain Changes or Events. Except as disclosed in the Newco
Financial Statements, since the date of the Newco Financial Statements, Newco
has conducted its business only in the ordinary course, and there has not been
(a) any change, circumstance or event that could reasonably be expected to
result in a Material Adverse Effect on Newco, (b) any declaration, setting aside
or payment of any dividend or other distribution with respect to the Investor
Interests, (c) any material Commitment entered into by Newco outside the
ordinary course of business, or (d) any material change in Newco's accounting
principles, practices or methods.
6.8. No Conflict. The execution and delivery by Newco of this Agreement, and by
Newco of the Ancillary Agreements to which it is a party, and the consummation
by Newco of the transactions contemplated hereby and thereby and compliance with
the provisions hereof and thereof will not (a) violate or conflict with, or
require any consent, approval, notice or filing under, any provision of any
domestic (federal, state or local) or foreign law, statute, rule or regulation,
or any ruling, writ, injunction, order, judgment or decree of any court,
administrative agency or other governmental body applicable to it, or any of its
properties or assets other than violations or conflicts which would not
reasonably be expected to have a Material Adverse Effect on Newco, (b) conflict
with, or result in any violation or breach of, or constitute (with due notice or
lapse of time, or both) a default or loss of a benefit under, or cause or permit
the acceleration under, the terms, conditions or provisions of (i) the Indenture
or (ii) any Contract to which Newco is a party or to which its properties or
assets is subject (all of which are listed in Section 6.8(b)(ii) of the Newco
Disclosure Schedule) which could reasonably be expected to have a Material
Adverse Effect on Newco, (c) result in the creation or imposition of any
Encumbrance upon any of Newco's properties or assets which could reasonably be
expected to have a Material Adverse Effect on Newco, or (d) violate Newco's
organizational documents.
6.9. Litigation; Orders. There is no Litigation against Newco which if
determined adversely to Newco could reasonably be expected to have a Material
Adverse Effect on Newco. Newco is not subject to any order, writ, injunction or
decree of any court of any federal, state, municipal or other domestic or
foreign governmental department, commission, board, bureau, agency or
instrumentality.
6.10. Compliance with Laws; Permits. Newco is and has been, since its date of
incorporation, in compliance with, and has conducted its business in compliance
with, all federal, state, local and foreign laws, rules, ordinances, codes,
consents, authorizations, registrations, regulations, decrees, directives,
judgments and orders, including environmental, applicable to it which if Newco
failed to comply could reasonably be expected to have a Material Adverse Effect
on Newco. Newco has all Permits materially necessary in the conduct of its
business as currently conducted. All such Permits are in full force and effect,
and no material violations have been recorded in respect of any such Permits; no
material proceeding is pending or, to the best knowledge of Newco, threatened to
revoke or limit any such Permit; and no such Permit will be suspended, cancelled
or adversely modified in any material respect as a result of the execution and
delivery of this Agreement or the Ancillary Agreements and the consummation of
the transactions contemplated hereby or thereby.
6.11. Title. Newco has good and marketable title to all of its material
properties and assets, real and personal, and has good title to all its
leasehold interests, in each case subject only to Encumbrances created in the
ordinary course of business.
6.12. ERISA Matters. Each plan maintained by or contributed to by Newco is in
compliance in all respects with all presently applicable provisions of law,
including, without limitation, the Employee Retirement Income Security Act of
1974, as amended, including the regulations and published interpretations
thereunder ("ERISA"); neither Newco nor any entity that is or was at any time
treated as a single employer with Newco under Section 414(b), (c), (m) or (o) of
the Internal Revenue Code of 1986, as amended, including the regulations and
published interpretations thereunder (the "Code") has incurred or expects to
incur liability with respect to a plan subject to Title IV of ERISA or Section
412 of the Code; and each "pension plan" (as defined in ERISA) for which Newco
would have any liability that is intended to be qualified under Section 401(a)
of the Code is so qualified in all material respects and nothing has occurred,
whether by action or by failure to act, which would cause the loss of such
qualification.
6.13. Insurance. Newco maintains property and casualty, general liability,
personal injury, director and officer and other similar types of insurance with
financially sound and reputable insurers that is adequate and consistent with
industry standards. Newco has not received notice from, and has no knowledge of
any threat by, any insurer (that has issued any insurance policy to Newco) that
such insurer intends to deny coverage under or cancel, discontinue or not renew
any insurance policy covering Newco presently in force.
6.14. Labor Relations; Employees. Newco is not delinquent in payments to any of
its employees, for any wages, salaries, commissions, bonuses or other direct
compensation for any services performed by the date hereof or amounts required
to be reimbursed by them to the date hereof, (ii) Newco is in compliance with
all applicable federal, state and local laws, rules and regulations respecting
employment, employment practices, labor, terms and conditions of employment and
wages and hours except where failure to comply would not, individually or in the
aggregate, have a Material Adverse Effect on Newco, (iii) Newco is not bound by
or subject to (and none of its assets or properties is bound by or subject to)
any written or oral, express or implied, commitment or arrangement with any
labor union, and no labor union has requested or, to the best knowledge of
Newco, has sought to represent any of the employees, representatives or agents
of Newco, (iv) there is no labor strike, dispute, slowdown or stoppage actually
pending, or, to the best knowledge of Newco, threatened against or involving
Newco, and (v) to the best knowledge of Newco, no salaried key employee has any
plans to terminate his or her employment with Newco. Each of the executive
officers of Newco who has or had access to confidential information of Newco has
executed a confidentiality agreement, and such agreements are in full force and
effect.
6.15. Agreements(a) . (a) Newco is not a party to, or bound or subject to, any
Contract, other than (x) any Contract which (i) pursuant to its terms, has
expired, been terminated or fully performed by the parties, and in each case,
under which Newco has no liability, contingent or otherwise, or (ii) involves
monthly payments to or from Newco (as opposed to an indemnity agreement or
similar contract under which a party is not required to make fixed monthly
payments) which monthly payments do not aggregate on an annual basis to $250,000
or more, and in each case, is not material to the business, condition (financial
or otherwise), operations or prospects of Newco and (y) as set forth in Section
4.17.
(b) Assuming the due execution and delivery by the other parties thereto, each
of such Contracts is, as of the date hereof, legal, valid, binding and in full
force and effect and enforceable in accordance with its terms. There is no
breach, violation or default by Newco (or, to the best knowledge of Newco, any
other party) under any such Contract except where such breach, violation or
default would not, individually or in the aggregate, have a Material Adverse
Effect on Newco, and no event (including, without limitation, the consummation
of the transactions contemplated by this Agreement) which, with notice or lapse
of time or both, would (A) constitute a breach, violation or default by Newco
(or, to the best knowledge of Newco, any other party) under any such Contract
except where such breach, violation or default would not, individually or in the
aggregate, have a Material Adverse Effect on Newco, or (B) give rise to any lien
or right of termination, modification, cancellation, prepayment, suspension,
limitation, revocation or acceleration against Newco under any such Contract.
Newco is not or, to the knowledge of Newco, no other party to any of such
Contracts (i) is in arrears in respect of the performance or satisfaction of the
terms and conditions on its part to be performed or satisfied under any of such
Contracts or (ii) has granted or has been granted any waiver or indulgence under
any of such Contracts or has repudiated any provision thereof.
6.16. Offering Exemption. Assuming the accuracy of the representations and
warranties contained in Section 5 hereof, the issuance and delivery of Investor
Interests to the Investors upon exercise of the Investors Option are exempt from
registration under the Securities Act as in effect on the date of this Agreement
and under applicable state securities and "blue sky" laws, as currently in
effect.
6.17. Consents. No permit, authorization, consent or approval of or by, or any
notification of or filing with, any person (governmental or private) is required
by Newco in connection with the execution, delivery and performance of this
Agreement, or by Newco in connection with the execution, delivery and
performance of the Ancillary Agreements to which it is a party, the consummation
by Newco of the transactions contemplated hereby or thereby, or the issuance,
sale or delivery of the Investor Interests (other than (i) such notifications or
filings required under the HSR Act, the FCC Act and applicable federal or state
securities laws, if any, which shall be made on a timely basis and (ii) permits,
authorizations, consents and approvals which, if not obtained, could not
reasonably be expected to have a Material Adverse Effect on Newco).
6.18. Brokers. No agent, broker, investment banker or other firm or person, is
or will be entitled to any broker's or finder's fee or any other commission or
similar fee from Newco in connection with this Agreement or the Ancillary
Agreements or any of the transactions contemplated hereby or thereby.
6.19. Public Utility Holding Company, Etc. Neither Newco nor any Subsidiary is:
(i) a "public utility company" or a "holding company," or an "affiliate" or a
"subsidiary company" of a "holding company," or an "affiliate" of a " public
utility company," a "holding company" or a "subsidiary company" of a holding
company as such terms are defined in the Public Utility Holding Company Act of
1935, as amended, or (ii) a "public utility," as defined in the Federal Power
Act, as amended, or (iii) an "investment company" or an "affiliated person"
thereof or an "affiliated person" of any such "affiliated person," as such terms
are defined in the Investment Company Act of 1940, as amended.
6.20. FCC(a) . (a) Section 6.20 of the Newco Disclosure Schedule contains a true
and complete list of all material Licenses, including the frequencies authorized
for and the issuance and expiration dates of each such License, issued to Parent
or Sub or Newco by the FCC in connection with the operation of the Existing
Business. No such License is subject to any restriction or condition which would
limit in any material respect the full operation of the Existing Business as now
operated, and no proceeding, inquiry, investigation or other administrative
action is pending or, to Parent's knowledge, threatened by or before the FCC
that would reasonably be expected to result in the revocation of any material
FCC authorization or otherwise impair in any material respect the full operation
of the Existing Business. The representations contained in this Section 6.20 are
limited by the statements set forth in the section of Parent's most recent
Regulatory Disclosure. The statements contained in the Regulatory Disclosure
fully and accurately describe, with respect to the Existing Business, the
material legal matters and proceedings arising under the Communications Act of
1934, as amended, and the published rules, regulations, and policies promulgated
thereunder by the FCC.
(b) Section 6.20 of the Newco Disclosure Schedule contains a true and complete
list of all material Applications, and including the frequencies applied for and
the filing date of each such Application, that have been filed by Parent or Sub
with the FCC relating to the Existing Business. Neither Parent nor Sub nor Newco
is aware of any reason why any Application would not granted by the FCC. Parent,
Sub and Newco have delivered to Investor true and complete copies of the
Licenses and Applications, including any additions, amendments and other
modifications thereto.
(c) Sub is the authorized legal holder of all the Licenses, other than Licenses
held by Newco. The Licenses are in good standing, are full force and effect, and
are unimpaired by any act or omission of Parent, Sub or Newco, or any of their
officers, directors, or employees; and the operation of the Existing Business is
in full compliance with the Licenses. These Licenses are sufficient for the
lawful conduct of the business and operation of the Existing Business in the
manner and to the full extent they are currently conducted. All material
reports, forms, and statements required to be filed with the FCC with respect to
the Existing Business have been filed and are complete and accurate in all
material respects.
(d) In 1999, Sub had access to the spectrum assigned to Sub in the 1999
coordination agreement among the North American L-band operators. Parent
believes that Sub should continue to have access for the year in which the
Investors Option Closing occurs to as much of this spectrum as Sub is able to
use.
(e) No consent, authorization, approval, order, exemption, waiver, or other
action of the FCC is required for the consummation of the Initial Investment.
6.21. Restrictions. Newco is not and will not be a party to any loan agreement
or other financing document giving rise to any obligations, restrictions,
limitations or Encumbrances with respect to Newco or its assets. So long as
Parent shall own an interest in Newco of 50% or greater, the only contractual
obligations of Parent relating to Newco (other than those contained in this
Agreement and the Ancillary Agreements) shall be the provisions of Parent's term
loan agreement and the revolving credit facility of Holdings relating to
Parent's subsidiaries. Following consummation of the Investors Option Closing
and assuming that Parent shall then own less than a 50% Percentage Interest in
Newco, such requirements shall cease to be applicable, other than Parent's
pledge of all of its Membership Interests in Newco to its banks and guarantors.
6.22. Sub Representations and Warranties. All representations and warranties
made by Sub in the Asset Sale Agreement (as qualified by the disclosure schedule
thereto), are incorporated herein as though made in their entirety by Newco in
this Agreement.
6.23. Environmental Matters. There are, with respect to Newco, no past or
present violations of Environmental Law (as defined below), nor any actions,
activities, circumstances, conditions, events, incidents, or contractual
obligations which are reasonably likely to give rise to any liability which
would have a Material Adverse Effect on Newco pursuant to any Environmental Law,
and neither Parent nor Newco has received any written notice with respect to any
of the foregoing nor is any Litigation pending or, to the knowledge of Parent
and Newco, threatened in connection with any of the foregoing.
For purposes of this Section 6.23, capitalized terms used herein shall
have the following meanings:
"Environmental Laws" shall mean, all applicable provisions of federal,
state, local or foreign law (including applicable principles of common and civil
law), statutes, ordinances, rules, regulations, published standards and
directives that have the force and effect of law, permits, licenses, judgments,
writs, injunctions, decrees and orders enacted, promulgated or issued by any
Public Authority, and all indemnity agreements and other contractual
obligations, as in effect at such date, relating to (i) the protection of the
environment, including the air, surface and subsurface soils, surface waters,
groundwaters and natural resources, and (ii) occupational health and safety and
exposure of persons to Hazardous Materials. Environmental Laws shall include the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
Sections 9601 et seq., and any other laws imposing or creating liability with
respect to Hazardous Materials.
"Hazardous Material" shall mean any substance regulated by any
Environmental Law.
"Public Authority" shall mean any supranational, national, regional,
state or local government court, governmental agency, authority, board, bureau,
instrumentality or regulatory body.
6.24. Proprietary Rights. Except for matters which would not, in the aggregate,
have a Material Adverse Effect on Newco, (i) Newco is the sole owner, free and
clear of any Encumbrance, of, or has a valid license, without the payment of any
royalty except with respect to off-the-shelf software and otherwise on
commercially reasonable terms, to, all U.S. and foreign trademarks, service
marks, logos, designs, trade names, internet domain names and corporate names,
and the goodwill of the business connected therewith and symbolized thereby,
patents, registered designs, copyrights, computer software and databases,
whether or not registered, web sites and web pages and related items (and all
intellectual property and proprietary rights incorporated therein) and all other
trade secrets, research and development, formulae, know-how, proprietary and
intellectual property rights and information, including all grants,
registrations and applications relating thereto (collectively, the "Proprietary
Rights") described in Schedule 6.24 of the Newco Disclosure Schedule, (such
Proprietary Rights owned by or licensed to Newco, collectively, the "Newco
Rights"); (ii) Newco has taken, and will take, all actions which are necessary
or advisable in order to protect the Newco Rights, and to acquire Proprietary
Rights, consistent with prudent commercial practices in the telecommunications
industry; (iii) Newco's rights in the Newco Rights are valid and enforceable;
(iv) neither Parent nor Newco has received any demand, claim, notice or inquiry
from any person or entity in respect of the Newco Rights which challenges,
threatens to challenge or inquires as to whether there is any basis to
challenge, the validity of, or the rights of Newco in, any such Newco Rights,
and neither Parent nor Newco knows of any basis for any such challenge; (v)
Newco is not in violation or infringement of, and has not violated or infringed,
any Proprietary Rights of any other person or entity; (vi) to the knowledge of
Parent and Newco, no person or entity is infringing any Newco Rights; and (vii)
except on an arm's-length basis for value and other commercially reasonable
terms, Newco has not granted any license with respect to any Newco Rights to any
person or entity.
6.25. Disclosure. Neither this Agreement nor any Ancillary Agreement (nor any
certificate or instrument executed in connection with this Agreement or any
Ancillary Agreement) furnished or made to the Investor by or on behalf of Newco
omits to state a material fact required to be stated therein or necessary in
order to make the statements contained herein and therein, in light of the
circumstances under which they were made, not misleading.
Section 7. Certain Covenants.
-----------------
7.1. Notification of Certain Matters. The Investors, Parent and Newco shall each
notify the other party in writing of its discovery of any matter that would
render any of such party's representations and warranties contained herein
untrue or incorrect in any material respect.
7.2. Xxxx Xxxxx-Xxxxxx Filing. The parties shall make any appropriate filings of
Notification and Report Forms pursuant to the HSR Act with respect to the
transactions contemplated hereby as promptly as practicable and supply as
promptly as practicable any additional information and documentary material that
may be requested pursuant to the HSR Act and take all other actions reasonably
necessary to cause the expiration or termination of the applicable waiting
periods under the HSR Act as soon as practicable.
7.3. Affirmative Covenants.
---------------------
(a) System of Accounting. The books of account and other financial and corporate
records of Newco shall be maintained in accordance with good business and
accounting practices to allow the preparation of financial statements in
accordance with generally accepted accounting principles.
(b) Maintenance of Existence, etc. Newco shall, and (until the Investors Option
Closing) Parent shall cause Newco and Sub to, maintain in full force and effect
its respective corporate or limited liability company existence, rights,
governmental approvals and franchises and all licenses and other rights to use
patents, processes, trademarks, trade names or copyrights owned or possessed by
it and material to the conduct of its business.
(c) Compliance with Laws. Newco shall, and (until the Investors Option Closing)
Parent shall cause Newco and Sub to, comply with all applicable laws, rules,
regulations and orders.
(d) Maintenance of Properties and Leases. Newco shall, and (until the Investors
Option Closing) Parent shall cause Newco and Sub to, keep their properties in
good repair, working order and condition, reasonable wear and tear excepted, and
from time to time make all reasonably needful and proper, or legally required,
repairs, renewals, replacements, additions and improvements thereto.
(e) Insurance. Newco shall, and (until the Investors Option Closing) Parent
shall cause Newco and Sub to, keep its respective assets which are of an
insurable character, if any, insured by financially sound and reputable insurers
against loss or damage by fire, extended coverage and other hazards and risks
and liability to persons and property to the extent and in the manner customary
for companies in similar businesses similarly situated. Newco shall, and (until
the Investors Option Closing) Parent shall cause Newco to, also obtain and
maintain directors and officers insurance to the extent and in the manner
customary for companies similarly situated.
7.4. Certain Additional Covenants(a) . (a) Parent shall cause Sub and (until the
Investors Option Closing) Newco to promptly perform, and Parent hereby
unconditionally guarantees the prompt performance by Newco and Sub of, their
respective obligations under this Agreement and the Ancillary Agreements,
including, without limitation, the obligations of Sub to consummate the
transactions contemplated by the Ancillary Agreements.
(b) Until the later of (x) the lapse of the Investors Option, or (y) the
Investors Option Closing, Parent shall not, and shall not permit any of its
direct or indirect subsidiaries to, engage in any transaction which would have
the effect of transferring ultimate control of Sub to any person or entity not
controlled by Parent, or of divesting Parent of ultimate control of Sub, without
the consent of a majority in interest of the Investors, which consent shall not
be unreasonably withheld if (i) in connection with a bona fide disposition of
assets in which the stock or assets of Sub constitute less than 50% in terms of
value, ultimate control of Sub is transferred to a person or entity which shall
have agreed in writing to be bound by the provisions hereof applicable to
Parent, (ii) such transaction shall not materially interfere with or impede the
consummation of the transactions contemplated by this Agreement and/or the
Ancillary Agreements, and (iii) Parent shall expressly acknowledge in writing
that it shall remain fully liable in respect of all liabilities and obligations
(including indemnity obligations) undertaken by it under this Agreement and the
Ancillary Agreements even if such liabilities or obligations arise from actions
taken (or not taken) by such transferee.
(c) Parent shall, and shall cause Newco and Sub to, use all commercially
reasonable efforts to satisfy at the appropriate times all closing conditions to
the consummation of the Initial Closing, the Investors Option Closing, the
Parent Conversions, the Parent Common Stock Purchase Option and the transactions
contemplated by the Ancillary Agreements (as defined in the Asset Sale
Agreement).
(d) Parent shall not, and shall not permit Newco or Sub to, become bound by any
contract, undertaking or obligation that would prohibit, restrict, require any
consent for, or give rise to any obligation as a result of, the transactions
contemplated hereby or the Ancillary Agreements, other than standard
anti-assignability clauses in ordinary course agreements, provided that the
inability to transfer such agreements to Newco would not have a Material Adverse
Effect on Newco.
(e) Investment Company Act. Parent will not become an "investment company" or an
"affiliated person" thereof or an "affiliated person" of any such "affiliated
person," as such terms are defined in the Investment Company Act of 1940, as
amended.
7.5. Transactions with Affiliates. Except as set forth herein or in the
Ancillary Agreements, Newco will not engage in any transaction or group of
related transactions (including, without limitation, the purchase, lease, sale
or exchange of properties of any kind or the rendering of any service) with any
affiliate, except in the ordinary course of business and pursuant to the
reasonable requirements of Newco's business and upon fair and reasonable terms
no less favorable to Newco than would be obtainable in a comparable arm's-length
transaction with a person not an affiliate. As used herein, the term "affiliate"
shall mean any officer, director, 10% or greater stockholder, or any family
member of any such person, or any business entity controlled by any such person;
without limiting the generality of the foregoing, Parent and each of its
subsidiaries and affiliates shall be deemed to be affiliates of Newco.
7.6. Reservation of Common Stock. From and after the Initial Closing Date,
Parent shall at all times reserve and keep available out of its authorized
shares of common stock, solely for the purpose of issue or delivery upon the
consummation of the Parent Merger and/or the exercise of the Parent Common Stock
Purchase Option, the maximum number of shares of Parent Common Stock that may be
issuable or deliverable in connection therewith. Such shares of Parent Common
Stock are or will be duly authorized and, when issued or delivered in accordance
with its charter and against payment therefor, shall be validly issued, fully
paid and non-assessable.
7.7. Use of Proceeds. The amount received by Newco hereunder shall be used as
follows: (a) $20 million shall be paid to Sub as contemplated by the Research
and Development Agreement, (b) $24 million shall be paid to Sub as a deposit
under the Asset Sale Agreement, and (c) the remainder of the proceeds shall be
used to provide working capital for Newco and for the payment of the expenses of
the parties in connection herewith (as contemplated by Section 20). Parent shall
cause Sub to use the proceeds paid to Sub in compliance with its obligation
under its various financing arrangements.
7.8. Financial Information. Beginning three months following the Initial
----------------------
Closing, Newco shall, and Parent shall cause Newco to, furnish to the Investors
the following financial statements:
(a) within 115 days after the end of each fiscal year of Newco, an audited
balance sheet of Newco as of the end of such fiscal year and the related audited
statements of income, stockholders' equity and cash flows for the fiscal year
then ended, prepared in accordance with GAAP and certified by a firm of
independent public accountants selected by the Board of Directors of Newco; and
(b) within 45 days after the end of each fiscal month of Newco, an unaudited
balance sheet of Newco as of the end of such fiscal month and the related
unaudited statements if income, stockholders' equity and cash flows for the
fiscal month then ended, prepared in accordance with GAAP, except for the
absence of notes thereto and subject to normal recurring year end adjustments
which will not be material in nature or amount, and certified by the chief
financial officer of Newco (the most recent of which shall be referred to herein
as the "Newco Financial Statements").
7.9. Survival of Representations, Warranties, Agreements and Covenants;
Indemnifications.
(a) All representations and warranties made in or pursuant to this Agreement and
in or pursuant to the Ancillary Agreements shall survive until two years after
the date made (except that the representations and warranties made in Sections
4.8(b)(i) and 6.8(b)(i) shall survive until the expiration of the statute of
limitations applicable to any claims that may be made by the holders of the
Series A and Series B 12 1/4% Senior Notes due 2008 issued by Holdings) and
shall in no way be affected by any investigation or knowledge of the subject
matter thereof made by or on behalf of the Investor.
(b) Indemnification by Parent. Parent shall indemnify and hold harmless each
Investor and (without duplication of remedies) Newco from and against all
damages, losses, claims, liabilities and obligations, costs and expenses
(including attorneys' fees) ("Losses") arising in any way out of or related to
(i) the breach by Parent, Newco, Motient Communications or Sub of any
representation or warranty made by Parent, Newco, Motient Communications or Sub
herein or in any Ancillary Agreement or in any document delivered pursuant
hereto or thereto, or (ii) the breach by Parent, Newco, Motient Communications
or Sub of any covenant or agreement contained herein or in any Ancillary
Agreement or in any document delivered pursuant hereto or thereto. For purposes
of this Section 7.9(b), the terms "material" and "Material Adverse Effect", and
other materiality qualifiers in the representations and warranties contained
herein or in the Ancillary Agreements and in any documents delivered pursuant
hereto or thereto, shall be deemed to refer to matters, and groups of related
matters, that have a financial or economic impact, or are capable of having a
financial or economic impact, of $100,000 or more. For purposes of the foregoing
sentence, matters shall be considered to be within "groups of related matters"
if they relate to any given Section of the representations and warranties. (For
purposes of illustration only, Section 4.6 would be deemed to be breached if
Parent had failed to disclose a liability of $25,000 and a liability of $90,000,
but not if Parent had failed to disclose seven liabilities of $10,000 each.)
(c) Indemnification by Newco. Newco shall indemnify and hold harmless each
Investor from and against all Losses arising in any way out of or related to (i)
the breach by Newco of any representation or warranty made by Newco herein or in
any document delivered pursuant hereto, or (ii) the breach by Newco of any
covenant or agreement contained herein or in any document delivered pursuant
hereto.
(d) No Duplication of Remedies. To the extent any party may have more than one
remedy for any Losses incurred by it, it may pursue all available remedies but
in no event shall be entitled to collect and retain any amount hereunder in
excess of its Losses.
(e) Indemnification by Investor. Each Investor shall indemnify and hold harmless
Parent from and against all Losses arising in any way out of or related to (i)
the breach by such Investor of any representation or warranty made by such
Investor herein or in any document delivered pursuant hereto, or (ii) the breach
by such Investor of any covenant or agreement contained herein or in any
document delivered pursuant hereto. (f) Notice of claims. All claims for
indemnification hereunder shall be resolved in accordance with the following
procedures:
(i) If the party seeking indemnification (the "Indemnified Party") has
incurred or reasonably believes that it may incur any Losses, it shall
deliver promptly written notice to the indemnifying party (the
"Indemnifying Party"), setting forth the nature and amount of the Losses or
potential Losses, if possible, and further referencing the sections of this
Agreement or in any other document delivered pursuant hereto upon which the
claim for indemnification for such Losses is based (a "Claim Notice"). If
an Indemnified Party receives notice of a third-party claim for which it
intends to seek indemnification hereunder, it shall give the Indemnifying
Party written notice of such claim, so that the Indemnifying Party's
defense of such claim under this Agreement may be timely instituted. The
failure by an Indemnified Party to provide such written notice shall not
constitute a waiver of the Indemnified Party's right to indemnity unless
such failure has prejudiced the Indemnifying Party's ability to defend such
claim, and then only to the extent of such prejudice.
(ii) If, after receiving a Claim Notice, the Indemnifying Party
desires to dispute such claim or the amount claimed in the Claim Notice, it
shall deliver to the Indemnified Party a written objection to such claim or
payment setting forth the basis for disputing such claim or payment. Such
notice shall be delivered within thirty (30) days after the date the Claim
Notice to which it relates is received by the Indemnifying Party. If no
such notice is received within the aforementioned 30-day period, the
Indemnified Party shall be entitled to payment for such Losses from the
Indemnifying Party within ten (10) days of the end of such 30-day objection
period.
(iii) if the Indemnifying Party shall agree that it is responsible for
all amounts that may be recovered in connection with a third-party claim,
action or suit (including waiving any deductible or limit that might
otherwise apply under this Section 7.9) the Indemnifying Party shall have
the right to conduct and control through counsel of its own choosing, which
counsel shall be reasonably acceptable to the Indemnified Party, any
third-party claim, action or suit; provided, that the Indemnifying Party
diligently contests and defends such claim. The Indemnified Party shall be
entitled at any time, at its own cost and expense (except that such cost
and expense shall be paid by the Indemnifying Party if the Indemnified
Party reasonably determines that the Indemnifying Party is not adequately
representing or, because of a conflict of interest, may not adequately
represent the interests of the Indemnified Party) to participate in such
defense and to be represented by attorneys of its choosing. Except with the
prior written consent of the Indemnified Party no Indemnifying Party, in
the defense of such claim or litigation, shall consent to entry of any
judgment or order, interim or otherwise, or enter into any settlement that
provides for injunctive or other nonmonetary relief affecting the
Indemnified Party or that does not include as an unconditional term thereof
the giving by each claimant or plaintiff to such Indemnified Party of a
release from all liability with respect to such claim or litigation.
(iv) In the event that the Indemnifying Party does not elect to defend
against any third-party claim, the Indemnified Party may defend against
such claim in such manner as it may deem appropriate and the Indemnifying
Party shall be liable for any legal expenses reasonably incurred in
connection with such defense; provided, however, that the Indemnified Party
shall not, without the consent of the Indemnifying Party, which consent
shall not be unreasonably withheld, settle or consent to the entry of
judgment with respect to such third-party claim.
(v) In the event of any claim by a third party, the parties hereto
agree that they will cooperate fully with each other in connection with the
defense or settlement of such matter.
(g) Limitation on Amounts. The Indemnifying Party shall not be obligated to pay
any amounts for indemnification under this Section 7.9 until the aggregate
indemnification obligation of such Indemnifying Party hereunder exceeds
$500,000, whereupon the Indemnifying Party shall be liable for all amounts for
which indemnification may be sought which exceed $500,000. Notwithstanding the
foregoing, in no event shall the aggregate liability of Parent and Newco to the
Investors exceed (i) $50,000,000 if the Investors Option shall not have been
exercised and consummated, or (ii) an amount equivalent to $50,000,000 plus the
Option Price, if the Investors Option has been exercised and consummated, except
in the case of fraud or willful breach or any breach by Parent, Newco or Sub of
the representations and warranties made in Sections 4.8(b)(i) or 6.8(b)(i).
(h) Force Majeure. Notwithstanding any other provision of this Section 7.9,
neither Parent nor Newco shall be liable for any failure of performance of the
terms of this Agreement due solely to acts of God, fires, floods or other
natural catastrophes; national emergencies, insurrections, riots or wars;
strikes, lockouts, work stoppages or other labor difficulties beyond Parent's
reasonable control.
(i) Exclusive remedy. Indemnification pursuant to this Section 7.9 shall be the
exclusive remedy for any breach of representations and warranties or of any
covenant or agreement in this Agreement by any party or any other matter
pertaining to this Agreement or the transactions contemplated hereby, other than
Losses relating to other written agreements between the parties and Losses
relating to fraud or violation of securities laws; provided that nothing in
Section 7.9 shall prevent any party from obtaining equitable relief in order to
require another party to perform its obligations hereunder.
Section 8. Termination.
-----------
8.1. Termination. If (i) the Initial Closing pursuant to the conditions set
forth in Section 1.3 hereof shall not have occurred on or before June 30, 2000
or (ii) the parties agree prior to such date that it is impossible or reasonably
unlikely to consummate the transactions contemplated by this Agreement, on such
earlier date as the parties determine, this Agreement and all rights and
obligations of the parties hereunder, except rights and obligations pursuant to
Sections 7.9, 8.1, 8.2, and Sections 9 through 20, shall terminate at 11:59 p.m.
New York time on such date.
8.2. Parent Common Stock Purchase Option(a) . (a) Subject to the terms and
conditions set forth herein, Parent hereby grants to each Investor an
irrevocable option ("Parent Common Stock Purchase Option") to purchase up to
such number of shares of Parent Common Stock that equals the result obtained by
dividing the Purchase Price to be paid by such Investor by the Parent Option
Price (as defined below) at a price per share equal to the Parent Option Price.
For the purposes hereof, the "Parent Option Price" shall be (A) $12 if the
Closing Price on the Parent Notice Date (as defined below) is less than or equal
to $24, (B) $20, if the Closing Price on the Parent Notice Date is greater than
or equal to $40, or (C) if the Closing Price on the Parent Notice Date is
greater than $24 and less than $40, then such number equal to one-half of the
Closing Price on the Parent Notice Date; provided, that such numbers shall be
equitably adjusted in the event of a stock split, stock dividend or other
recapitalization of Parent. The Parent Common Stock Purchase Option may be
exercised at any time prior to and until May 4, 2001 ("Parent Exercise Period"),
in the event the Initial Closing has not occurred as a result of either (a) a
willful breach of this Agreement by Parent or (b) Parent or Sub shall have
executed an agreement with a third-party which provides for or relates to the
disposition of all or a substantial interest in Sub or the Existing Business or
a sale, transfer or other distribution of a substantial portion of the assets or
business of the Existing Business or stock of Sub, or a successor to Sub.
Nothing contained in this Section 8.2 shall act to or be interpreted as
relieving Parent of any liability for breach of any provisions contained in this
Agreement. In the event the Parent Common Stock Purchase Option is exercised,
Parent and each Investor shall each provide representations, warranties and
legal opinions which, in the case of Parent, shall relate to Parent and the
Parent Common Stock subject to the Parent Common Stock Purchase Option,
customary for financing transactions, and Parent shall grant to the Investors
exercising such option the registration rights contemplated by the Registration
Rights Agreement.
(b) If an Investor wishes to exercise the Parent Common Stock Purchase Option,
it shall deliver to Parent a written notice (the date of receipt of which is
referred to as the "Parent Notice Date") specifying (i) that it intends to
exercise the Parent Common Stock Purchase Option and (ii) a place and date not
earlier than three business days nor later than 15 business days from the Parent
Notice Date for the closing of such purchase; provided, that if the closing of
the purchase and sale pursuant to the Parent Common Stock Purchase Option (the
"Parent Common Stock Purchase Closing") cannot be consummated by reason of any
applicable judgment, decree, order, law or regulation, the period of time that
otherwise would run pursuant to this subsection (b) shall run instead from the
date on which such restriction on consummation has expired or been terminated;
and provided, further, that, without limiting the foregoing, if prior
notification to or approval of any regulatory authority is required in
connection with such purchase, such Investor and, if applicable, Parent shall
promptly file the required notice or application for approval and shall
expeditiously process the same (and Parent shall cooperate with such Investor in
the filing of any such notice or application and the obtaining of any such
approval), and the period of time that otherwise would run pursuant to this
subsection (b) shall run instead from the date on which, as the case may be, (i)
any required notification period has expired or been terminated or (ii) such
approval has been obtained, and in either event, any requisite waiting period
has elapsed. At the time of the Parent Common Stock Purchase Option Closing,
such Investor shall either be an "Accredited Investor" (as defined in Rule 501
under the Securities Act) or deliver to Parent an opinion of counsel to the
effect that such securities are freely transferable without registration under
the Securities Act. Furthermore, Parent and such Investor shall take any action
reasonably requested by the other to cause the Parent Common Stock Purchase
Closing to occur as promptly as practicable. Any exercise of the Parent Common
Stock Purchase Option shall be deemed to occur on the Parent Notice Date
relating thereto. Any extensions of the periods specified in this Section 8.2(b)
shall extend the Parent Exercise Period on a day for day basis.
(c) Notwithstanding anything herein to the contrary, it shall be a condition to
the exercise of this Parent Common Stock Purchase Option and the purchase of the
shares of Parent Common Stock that (i) no preliminary or permanent injunction or
other order, decree or ruling against the sale or delivery of the shares of
Parent Common Stock issued by any federal or state court of competent
jurisdiction in the United States is in effect at such time, (ii) any applicable
waiting period under the HSR Act shall have expired or been terminated at or
prior to such time, (iii) any approval required to be obtained prior to the
delivery of the shares of Parent Common Stock under the laws of any jurisdiction
shall have been obtained and shall be in full force and effect, and (iv) all
consents and approvals of any governmental, shareholder and third parties
necessary for the Parent Common Stock Purchase Closing have been obtained.
(d) At the Parent Common Stock Purchase Closing, such Investor will pay to
Parent in immediately available funds by wire transfer to a bank account
designated in writing by Parent the aggregate purchase price for the number of
shares to be purchased pursuant to Section 8.2(a).
(e) Immediately following the Initial Closing, the Parent Common Stock Purchase
Option shall be null, void and of no further effect.
Section 9. Further Assurances. At any time or from time to time after the
Initial Closing, Parent, Newco, and each Investor, agree to cooperate with each
other, and at the request of another party, to execute and deliver any further
instruments or documents and to take all such further action as the other party
may reasonably request in order to evidence or effectuate the consummation of
the transactions contemplated hereby and to otherwise carry out the intent of
the parties hereunder.
Section 10. Successors and Assigns. This Agreement shall bind and inure to the
benefit of Parent and the Investors and the respective successors, permitted
assigns, heirs and personal representatives of Parent and the Investors, except
that neither Parent nor Newco may assign its rights and obligations under this
Agreement to any person without the prior written consent of the Investors. In
addition, and whether or not any express assignment has been made, the
provisions of this Agreement that are for each Investor's benefit as a purchaser
or holder of Investor Interests or Parent Common Stock are also for the benefit
of, and enforceable by, any subsequent holder of such Investor Interests or
Parent Common Stock. An Investor may assign its rights and obligations hereunder
to any affiliate or to any of its members or partners. Subject to the
restrictions contained in the LLC Operating Agreement, an Investor may also
assign its rights and obligations hereunder, including its rights pursuant to
Sections 2 and 3 hereof, to any permitted transferee of its Investor Interest;
provided that such transferee agrees in writing to be bound by the terms of this
Agreement, including that the appropriate Investors Group Designee holds the
right to request a Parent Conversion as to the Investor Interest held by such
transferee.
Section 11. Entire Agreement. This Agreement and the Ancillary Agreements and
the other writings referred to herein or delivered pursuant hereto which form a
part hereof contain the entire agreement among the parties with respect to the
subject matter hereof and supersede all prior arrangements or understandings
with respect thereto.
Section 12. Notices. All notices, requests, consents and other communications
hereunder to any party shall be deemed to be sufficient if contained in a
written instrument delivered in person or sent by telecopy, nationally
recognized overnight courier or first class registered or certified mail, return
receipt requested, postage prepaid, addressed to such party at the address set
forth below or such other address as may hereafter be designated in writing by
such party to the other parties:
(i) if to Parent or Newco, to:
Motient Corporation
00000 Xxxxxxxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxx 00000-0000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxx, Esq.
Senior Vice President and
General Counsel
with a copy to:
Xxxxx & Xxxxxxx L.L.P.
0000 Xxxxxxxxxx Xxxxx, Xxxxx 0000
XxXxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxxx X.X. Xxxxxx, Esq.
(ii) if to the Investors, to each of the Investor Group Designees at
their addresses set forth on Schedule I.
with a copy to:
Xxxxx Xxxxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
All such notices, requests, consents and other communications
shall be deemed to have been given when received.
Section 13. Amendments. The terms and provisions of this Agreement may be
modified or amended, or any of the provisions hereof waived, temporarily or
permanently, pursuant to the written consent of Parent and each Investor Group
Designee. No waiver of any of the provisions of this Agreement shall be deemed
to or shall constitute a waiver of any other provision hereof (whether or not
similar). No delay on the part of any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof.
Section 14. Counterparts. This Agreement may be executed in any number of
counterparts, and each such counterpart hereof shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
Section 15. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed to be a part
of this Agreement.
Section 16. Nouns and Pronouns. Whenever the context may require, any pronouns
used herein shall include the corresponding masculine, feminine or neuter forms,
and the singular form of names and pronouns shall include the plural and vice
versa.
Section 17. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Virginia, without regard to its
principles of conflicts of law that would give effect to the application of the
law of another jurisdiction. Each of the parties hereto hereby irrevocably and
unconditionally consents to submit to the exclusive jurisdiction of the courts
of the Commonwealth of Virginia and of the United States of America, in each
case having jurisdiction over the County of Fairfax, for any Litigation arising
out of or relating to this Agreement and the Ancillary Agreements and the
transactions contemplated hereby and thereby (and agrees not to commence any
Litigation relating thereto except in such courts), and further agrees that
service of any process, summons, notice or document by U.S. registered mail to
its respective address set forth in this Agreement shall be effective service of
process for any Litigation brought against it in any such court. Each of the
parties hereto hereby irrevocably and unconditionally waives any objection to
the laying of venue of any Litigation arising out of this Agreement or the
transactions contemplated hereby in the courts of the Commonwealth of Virginia
or the United States of America, in each case having jurisdiction over the
County of Fairfax, and hereby further irrevocably and unconditionally waives and
agrees not to plead or claim in any such court that any such Litigation brought
in any such court has been brought in an inconvenient forum.
Section 18. Publicity. Except as may be required by applicable law, stock
exchange rules or listing agreements, each of the parties hereto agrees that it
will make no public statement regarding the transactions contemplated hereby
unless the language and timing of such statement has been approved by Parent and
the Investor.
Section 19. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid, but if any
provision of this Agreement is held to be invalid or unenforceable in any
respect, such invalidity or unenforceability shall not render invalid or
unenforceable any other provision of this Agreement.
Section 20. Expenses. Except as otherwise set forth in this Agreement, if the
Initial Closing shall occur, (i) Newco shall pay all costs and expenses incurred
by the Investors (including up to one corporate counsel and one regulatory
counsel) in connection with the preparation, negotiation and execution of this
Agreement and the Ancillary Agreements and in connection with the Initial
Closing, the Investor Option Closing, and the transactions contemplated thereby
except for expenses relating to any Parent Conversion, which shall be paid by
the Investors electing to cause a Parent Conversion, and (ii) Parent shall pay
all costs and expenses incurred by Parent, Newco (not including those payable by
Newco under the preceding clause (i)) and Sub. In addition, if the Closing shall
occur, Newco shall pay its costs and expenses incurred in connection with
complying with its obligations hereunder and under the LLC Operating Agreement,
including preparing financial statements. If the Initial Closing shall not
occur, each party shall pay its own expenses, without prejudice to any party's
rights hereunder to damages in the event of a breach hereof.
SEPARATE SIGNATURE PAGE
INVESTMENT AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
MOTIENT CORPORATION
By: /s/Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx, Chairman
MOTIENT SATELLITE VENTURES LLC
By Motient Corporation, Sole Member
By: /s/Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx, Chairman
SEPARATE SIGNATURE PAGE
INVESTMENT AGREEMENT
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the date first above written.
TELCOM SATELLITE VENTURES INC.
By: /s/Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx
Title: President
SEPARATE SIGNATURE PAGE
INVESTMENT AGREEMENT
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the date first above written.
COLUMBIA SPACE (QP), INC.
By: /s/Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: President
COLUMBIA SPACE (AI), INC.
By: /s/Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: President
COLUMBIA SPACE PARTNERS, INC.
By: /s/Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: President
SEPARATE SIGNATURE PAGE
INVESTMENT AGREEMENT
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the date first above written.
SPECTRUM SPACE EQUITY
INVESTORS IV, INC.
By: /s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Chairman and CEO
SPECTRUM SPACE IV PARALLELL, INC.
By: /s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Chairman and CEO
SPECTRUM SPACE IV MANAGERS', INC.
By: /s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Chairman and CEO
SCHEDULE I
INVESTORS
PURCHASE PRICE FOR
INVESTOR INTERESTS INVESTOR INTERESTS TO BE NAME AND ADDRESS OF INVESTOR
NAME OF INVESTOR PURCHASED PURCHASED GROUP DESIGNEE
============================== ==================== ========================== ==============================
INVESTOR GROUP 1: 7.2% (7.2 $18,000,000 Telcom Satellite Ventures Inc.
----------------------------- Investor Units) 000 Xxxxx Xxxxx Xxxxxx
Telcom Satellite Ventures Suite 300
Inc. Xxxxxxxxxx, Xxxxxxxx 00000
Jurisdiction of Attention: Xxx X. Xxxxxxx
Incorporation: Delaware Tel: (000) 000-0000
Fax: (000) 000-0000
============================== ==================== ============ ==============================
INVESTOR GROUP 2:
Columbia Space (QP), Inc.
Jurisdiction of 3.01282560% $ 7,532,064 Columbia Space Partners, Inc.
Incorporation: Delaware (3.01282560 000 Xxxxx Xxxxx Xxxxxx
Investor Units) Suite 300
Columbia Space (AI), Inc. Xxxxxxxxxx, Xxxxxxxx 00000
Jurisdiction of Attention: Xxxxx Xxxxxxx and
Incorporation: Delaware Xxx Xxxxxxx
0.00097280% $ 2,432 Tel: (000) 000-0000
Columbia Space Partners, Inc. (0.00097280 Fax: (000) 000-0000
Jurisdiction of Investor Units)
Incorporation: Delaware with a copy to:
Xxxxxxx & Xxxxxx, LLP
000 Xxxxxxx Xxxxxx
3.3862016% $ 8,465,504 Xxxxxx, XX 00000
(3.3862016 Investor Units) Attention: Xxxxxxx
Xxxxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
============================== ==================== =========== ==============================
INVESTOR GROUP 3:
Spectrum Space Equity 6.18048% $15,451,200 Spectrum Space Equity Investors
Investors IV, Inc. (6.18048 IV, Inc.
Jurisdiction of Investor Units) One International Place
Incorporation: Delaware 00xx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Spectrum Space IV Parallel,
Inc.
Jurisdiction of
Incorporation: Delaware 0.14464% $ 361,600 with a copy to:
(0.14464 Xxxxxxx & Xxxxxx, LLP
Spectrum Space IV Managers, Investor Units) 000 Xxxxxxx Xxxxxx
Inc. Xxxxxx, XX 00000
Jurisdiction of Attention: Xxxxxxx
Incorporation: Delaware 0.07488% Xxxxxxxx, Esq.
(0.07488 $ 187,200 Tel: (000) 000-0000
Investor Units) Fax: (000) 000-0000
============================== ==================== =========== ==============================
Totals 20% $50,000,000
============================== ==================== =========== ==============================
EXHIBIT A
CERTIFICATE
EXHIBIT B
LLC OPERATING AGREEMENT
EXHIBIT C
REGISTRATION RIGHTS AGREEMENT
EXHIBIT D
RESEARCH AND DEVELOPMENT AGREEMENT
EXHIBIT E
CROSS-LICENSING AGREEMENT
EXHIBIT F
ASSET SALE AGREEMENT
EXHIBIT G
FCC OPINION OF COUNSEL TO PARENT
EXHIBIT H
MERGER AGREEMENT
Index of Defined Terms
Term Section
Accredited Investor Section 5.1 (c)
Ancillary Agreements Section 1.3 (b)(vii)
Applications Section 4.15 (b)
Asset Sale Agreement Section 1.3 (b)(vii)
Certificate Section 1.3 (b)(ii)
Claim Notice Section 7.9 (f)(I)
Closing Price Section 3.1 (b)
Code Section 6.12
Commitment Section 4.7
Contract Section 4.8
Conversion Notice Section 3.1 (a)
Cross-Licensing Agreement Section 1.3(b)(vi)
Disclosure Schedule Section 4
Due Diligence Section 2.2 (c)
Encumbrances Section 4.11 (b)
Environmental Laws Section 6.23
ERISA Section 6.12
Exchange Act Section 4.5 (a)
Exercise Period Section 2.2 (a)
Exercising Investor(s) Section 2.2(a)
Existing Business Page 1, First Whereas Clause
FCC Page 1, First Whereas Clause
FCC Act Section 4.12
GAAP Section 4.5 (b)
Hazardous Material Section 6.23
Holdings Section 4.8
HSR Act Section 1.3 (b)(xiv)
Indemnified Party Section 7.9 (f)(i)
Indemnifying Party Section 7.9 (f)(i)
Indenture Section 4.8
Initial Closing Section 1.2 (a)
Initial Closing Date Section 1.2 (a)
Initial Investment Section 1.1
Investment Commitment Date Section 2.2 (g)
Investor Page 1, Introductory Paragraph
Investor Group Section 3.1(a)
Investor Group Designee Section 3.1 (a)
Investor Interests Section 1.1
Investors Option Section 2.1
Investors Option Closing Section 2.2 (g)
Investors Option Closing Date Section 2.2 (g)
Lead Investor Section 1.3 (b)(xii)
Licenses Section 4.15 (a)
Litigation Section 4.9
LLC Operating Agreement Section 1.3 (b)(iii)
Losses Section 7.9 (b)
Material Adverse Effect Section 4.6
Motient Communications Section 1.3(b)(vi)
Newco Page 1, Introductory Paragraph
Newco Disclosure Schedule Section 6
Newco Financial Statements Section 7.8
Newco Options Section 4.3 (b)
Newco Percentage Interest Section 1.1
Newco Rights Section 6.24
Newco Update Date Section 2.2 (d)
Notice Closing Price Section 3.1(a)
Offer Section 2.5 (a)
Offer Closing Notice Date Section 2.5 (b)
Offer Notice Section 2.5 (a)
Offer Notice Date Section 2.5 (a)
Offeror Section 2.5 (a)
Option Notice Section 2.2 (a)
Option Notice Date Section 2.2 (a)
Option Price Section 2.1
Parent Page 1, Introductory Paragraph
Parent Capital Reorganization Section 3.1 (c)
Parent Common Stock Section 3.1 (a)
Parent Common Stock Purchase Closing Section 8.2 (b)
Parent Common Stock Purchase Option Section 8.2 (a)
Parent Conversions Section 3.1 (a)
Parent Exchange Section 3.1 (a)
Parent Exercise Period Section 8.2 (a)
Parent Extraordinary Event Section 3.1 (b)
Parent Merger Section 3.1 (a)
Parent Notice Date Section 8.2 (b)
Parent Option Price Section 8.2 (a)
Parent Options Section 4.3 (a)
Parent Reports Section 4.5 (a)
Parent Securities Section 5.1 (a)
Parent Transfer Letter Agreement Section 1.3 (b)(vii)
Permits Section 4.10
Proprietary Rights Section 6.24
Public Authority Section 6.23
Registration Rights Agreement Section 1.3 (b)(iv)
Regulatory Disclosure Section 4.15(a)
Research and Development Agreement Section 1.3 (b)(v)
SEC Section 4.5 (a)
Section 2.1 Letter Section 1.3(b)(vii)
Securities Act Section 2.2 (a)
Securities Laws Section 4.5 (a)
Sub Page 1, First Whereas Clause
Subsidiary Section 4.1
