Exhibit 10.3
Execution Copy
SECOND AMENDED AND RESTATED PARENT TRANSFER/DRAG ALONG AGREEMENT
November 12, 2004
This SECOND AMENDED AND RESTATED PARENT TRANSFER/DRAG ALONG
AGREEMENT is entered into by and among Motient Corporation ("Motient"), Motient
Ventures Holding Inc. ("Motient Sub"), TMI Communications and Company, Limited
Partnership ("TMI"), TMI Communications Delaware, Limited Partnership ("TMI
Sub"), Mobile Satellite Ventures LP ("MSV LP"), Mobile Satellite Ventures GP
Inc. ("General Partner"), each investor set forth on SCHEDULE I hereto (each,
an "Investor") and each of the Investor's parents set forth on SCHEDULE I
hereto (each, an "Investor Parent").
1. Each of the Investor Parents (other than SkyTerra Communications,
Inc. ("SkyTerra")) hereby represents and warrants to Motient, TMI
and each other Investor Parent that it directly owns 100% of the
capital stock of its Investor as set forth on SCHEDULE I hereto.
2. Motient hereby represents and warrants to TMI and 3924505 Canada
Inc. ("TMI Sub GP" and together with TMI, the "TMI Entities") and
each Investor Parent that it directly owns 100% of the capital
stock of MVH Holdings Inc. ("MVH"), which, in turn, directly owns
100% of the capital stock of Motient Sub.
3. The TMI Entities hereby jointly and severally represent and
warrant to Motient and each Investor Parent that the TMI Entities
directly own 100% of the equity interests of TMI Sub.
4. SkyTerra hereby represents and warrants to Motient, TMI and each
other Investor Parent that it directly owns 100% of the capital
stock of MSV Investors Holdings, Inc. ("MSV Investors Holdings"),
which, in turn, directly owns 80% of the membership interests of
MSV Investors, L.L.C. ("MSV Investors"). The remaining membership
interests in MSV Investors are owned by other investors (the
"Other SkyTerra Investors"), all of whom have agreed to be bound
by the provisions hereof applicable to a Blocker Parent (as
hereinafter defined).
5. Each Blocker Parent (as defined below) other than SkyTerra hereby
agrees that the Other SkyTerra Investors may, without any
restriction or limitation imposed by this Agreement, exchange all
of their membership interests in MSV Investors solely for shares
of common stock of MSV Investors Holding or SkyTerra, in a
transaction or series of transactions the ultimate effect of
which is that 100% of the outstanding membership interests of MSV
Investors is owned solely by MSV Investors Holding.
6. Each Blocker Parent hereby agrees that certain of the Blocker
Parents may, without any restriction or limitation imposed by
this Agreement, effectuate the Columbia/Spectrum Transfers (as
hereinafter defined). For purposes hereof, the "Columbia/Spectrum
Transfers" means, collectively, the transfer of all limited
partnership interests of MSV LP and shares of GP Stock by (i)
Columbia Space (QP) II, Inc. ("Columbia QP II") to Columbia Space
(QP), Inc. ("Columbia QP"), pursuant to the merger of Columbia QP
II with and into Columbia QP; (ii) Columbia Space (AI) II, Inc.
("Columbia AI II") to Columbia Space (AI), Inc. ("Columbia AI"),
pursuant to the merger of Columbia AI II with and into Columbia
AI; (iii) Columbia Space Partners II, Inc. ("Columbia Space II")
to Columbia Space Partners, Inc. ("Columbia Partners"), pursuant
to the merger of Columbia Space II with and into Columbia
Partners; (iv) Spectrum Space Equity Investors IV-II, Inc.
("Spectrum IV-II") to Spectrum Space Equity Investors IV, Inc.
("Spectrum Equity"), pursuant to the merger of Spectrum IV-II
with and into Spectrum Equity; (v) Spectrum Space IV Parallel II,
Inc. ("Spectrum IV") to Spectrum Space IV Parallel, Inc.
("Spectrum Parallel"), pursuant to the merger of Spectrum IV with
and into Spectrum Parallel; and (vi) Spectrum Space IV Managers
II, Inc. ("Spectrum II") to Spectrum Space IV Managers, Inc.
("Spectrum Managers"), pursuant to the merger of Spectrum II with
and into Spectrum Managers.
7. Each of Motient, TMI, TMI Sub GP and each Investor Parent (each,
a "Blocker Parent" and collectively, the "Blocker Parents")
hereby represents and warrants that that certain First Amended
and Restated Investment Agreement, dated as of August 8, 2003, as
amended (the "Investment Agreement"), among MSV LP, Motient, TMI
Sub and the investors named therein, as amended, the Ancillary
Agreements (as defined in the Investment Agreement) and the
Transaction Documents (as defined in the Investment Agreement
(including this Agreement)) are the only agreements between or
among Motient, Motient Sub, TMI, TMI Sub GP, TMI Sub and any of
Investor Parents or the Investors relating to the Investment
Agreement or the transactions contemplated thereby.
8. Each of the Blocker Parents hereby agree, that, subject to the
exception contained in Paragraph 9 below, if any of them shall
propose to transfer any of its respective interests in Parent
Sub, MVH, TMI Sub or an Investor that holds Percentage Interests
(as defined in that certain Amended and Restated Limited
Partnership Agreement, dated as of November 12, 2004, by and
among General Partner and the limited partners named therein (as
amended, restated or otherwise modified from time to time, the
"LP Agreement")) in MSV LP, as the case may be (each, a
"Subsidiary" and collectively, the "Subsidiaries"), owned by such
Blocker Parent, such transfer shall be subject to the rights and
obligations contained in Section 8.2 of that certain Amended and
Restated Stockholders' Agreement, dated as of November 12, 2004
(as amended, restated or otherwise modified from time to time,
the "GP Agreement"), by and among the General Partner and the
stockholders named therein (the provisions of which are hereby
incorporated herein by reference, mutatis mutandis) as if such
Blocker Parent were a Limited Partner (as defined in the LP
Agreement) of MSV LP and the interests being transferred were
Percentage Interests in MSV LP.
9. Notwithstanding the previous paragraph, any Investor Parent may,
without any restriction or limitation by virtue of this
Agreement, transfer up to 10% to any single transferee, or up to
20% in the aggregate, of its interest in an Investor, provided
such transferee executes a joinder to this Agreement agreeing to
be bound by the provisions hereof applicable to the transferor.
10. Each of the Blocker Parents hereby agrees with each other Blocker
Parent that if one or more of the Blocker Parents which own
Subsidiaries holding, in the aggregate, a majority of the
Percentage Interests propose to transfer or exchange (in a
merger, stock transfer or otherwise) all of their interests in
such Subsidiaries to an unrelated and unaffiliated third party
("Buyer"), such Blocker Parents shall have, with respect to each
other Blocker Parent and their respective ownership interests in
the Subsidiaries, the rights and obligations contained in Section
8.5(b) of the GP Agreement (the provisions of which are hereby
incorporated herein by reference, mutatis mutandis), as if the
Blocker Parents were Limited Partners in MSV LP and the
Subsidiaries being transferred were Percentage Interests in MSV
LP (the "Blocker Parent Drag Along"). The Blocker Parent Drag
Along shall be on the same terms as would be obtained by applying
such Section 8.5(b) of the GP Agreement, except that the Blocker
Parents and their respective Subsidiaries may be required to
provide different representations, warranties and covenants to
Buyer to the extent reasonably required to reflect the
differences in the nature of the interests being transferred
(i.e., a transfer of TMI Sub equity interests versus a transfer
of Investor capital stock). Without limiting the generality of
the foregoing, the Blocker Parent Drag Along shall provide each
of the Blocker Parents with the same percentage of the
consideration to be received from Buyer as would be obtained by
applying Section 8.5(b) of the GP Agreement (i.e., as if Buyer
had acquired MSV LP partnership interests directly, and the
proceeds of such acquisition were distributed by each Subsidiary
to its respective Blocker Parent); provided, however, that if any
of the Subsidiaries has any liabilities, then such liabilities
shall be taken into account and reduce the consideration to be
received by the owners of such entity. Without limiting the
foregoing, each of the parties expressly acknowledges and agrees
that the most likely method of structuring a sale or disposition
of MSV LP's business is not by means of a sale of MSV LP's assets
or partnership interests but rather by means of the transfer of
the ownership interests in the various entities that hold
interests in MSV LP by sale, merger or otherwise and that a
merger or series of mergers or similar transaction involving
securities of the acquirer or its affiliates may be fully taxable
to TMI and/or TMI Sub GP (and to any other Investor Parent or
Other SkyTerra Investor who owns an Investor organized as a
limited partnership or limited liability company (a "LLC
Investor")) if TMI Sub (or such LLC Investor) were treated as a
partnership for U.S. tax purposes while being treated as a
tax-free reorganization by others or may otherwise involve tax
consequences that are different for, and potentially adverse to,
TMI, TMI Sub GP and/or TMI Sub (and to any other Investor Parent
or Other SkyTerra Investor who owns a LLC Investor) compared to
the other parties to this Agreement if TMI Sub (or a LLC
Investor) were treated as a partnership for U.S. tax purposes.
11. The Blocker Parents and the Subsidiaries hereby severally agree
that, notwithstanding anything to the contrary in the GP
Agreement, without the consent ("Consent") of a majority in
interest of each of the Columbia Investor Group and the Spectrum
Investor Group (each, as defined in the GP Agreement), they shall
not (i) allow MSV LP or the General Partner to sell or transfer
all or substantially all of its assets or (ii) allow any
Subsidiary to sell or transfer its interests in MSV LP or the
General Partner, if in either event, any stockholder of any
blocker C corporation that is a member of the Columbia Investor
Group or the Spectrum Investor Group ("Stockholder") would incur
greater tax liability than if such Stockholder had held its
ownership interests in MSV LP or the General Partner directly
instead of through blocker C corporations ("Adverse Tax
Consequences"). Without limiting the foregoing, the parties
acknowledge and agree that under present law, (A) a sale or
transfer of the type described in clause (i) above would result
in Adverse Tax Consequences, and (B) a sale or transfer of the
type described in clause (ii) above would result in Adverse Tax
Consequences if either the Columbia Investor Group or the
Spectrum Investor Group joined in such sale or transfer on the
same basis as the proposed transferor. The parties further
acknowledge and agree that a sale or transfer of the type
described in clause (ii) above would not result in Adverse Tax
Consequences if such sale or transfer is effected pursuant to the
terms of Section 8.2(c) or Section 8.2(d) of the GP Agreement and
neither the Columbia Investor Group nor the Spectrum Investor
Group joins in such sale or transfer. The parties intend that the
after tax consequences to the Stockholders in their indirect
investments in MSV LP and the General Partner be no different
than if the investment by such Stockholders had been made
directly in MSV LP and the General Partner by such Stockholders
and, accordingly, agree that Consent will not be required if a
disproportionate amount of sale proceeds from a sale or transfer
of the type described in clauses (i) and (ii) is allocated to the
Stockholders or blocker corporations of the Columbia Investor
Group and the Spectrum Investor Group, as the case may be, so as
to mitigate any Adverse Tax Consequences to the Stockholders and
to put the Stockholders in the same after tax economic position
(as collectively determined by the Columbia Investor Group and
the Spectrum Investor Group) as if such investments had been made
directly in MSV LP and the General Partner by the Stockholders
instead of through blocker C corporations.
12. Motient and Motient Sub hereby represent and warrant to TMI and
the Investor Parents that from and after the date hereof, Motient
Sub (i) shall have no assets or liabilities other than the
Percentage Interests, the shares of common stock, $0.001 par
value per share (the "TerreStar Stock"), of TerreStar Networks
Inc. owned by it, the shares of common stock, $0.01 per share
(the "GP Stock"), of the General Partner owned by it, and the
rights and obligations under the Investment Agreement, the
Ancillary Agreements, the Transaction Documents and that certain
Purchase Agreement, dated as of November 12, 2004, by and among
MSV LP and Motient Sub and (ii) shall not engage in any business
activities other than holding the Percentage Interests, the GP
Stock and the TerreStar Stock.
13. TMI, TMI Sub GP and TMI Sub hereby represent and warrant to
Motient and the Investor Parents that from and after the date
hereof, TMI Sub (i) shall have no assets or liabilities other
than the Percentage Interests, the GP Stock owned by it, the
TerreStar Stock owned by it, and the rights and obligations under
the Investment Agreement, the Ancillary Agreements, the
Transaction Documents, that certain Purchase Agreement, dated as
of November 12, 2004, by and among MSV LP and TMI Sub, that
certain Voting Agreement, dated as of November 12, 2004 (the "MSV
Voting Agreement"), by and among TMI Sub and the other investors
named therein and a similar voting agreement amongst the same
parties to the MSV Voting Agreement (or affiliates of such
parties) relating to the TerreStar Stock (the "TerreStar Voting
Agreement" and together with the MSV Voting Agreement, the
"Voting Agreements"), by and among TMI Sub and the other
investors named therein and (ii) shall not engage in any business
activities other than holding the Percentage Interests, the GP
Stock and the TerreStar Stock and performing its obligations
under the Pledge Agreement (as defined in the GP Agreement) and
the Voting Agreements.
14. Each Investor Parent and Other SkyTerra Investor hereby
represents and warrants to Motient and TMI that from and after
the date hereof, each of their respective Investors shall (i)
have no assets or liabilities other than the Percentage
Interests, the GP Stock owned by it, the TerreStar Stock owned by
it, and the rights and obligations under the Investment
Agreement, the Ancillary Agreements, the Transaction Documents
and the Voting Agreements and (ii) not engage in any business
activities other than holding the Percentage Interests, the GP
Stock and the TerreStar Stock and performing its obligations
under the Voting Agreements.
15. This Agreement shall be governed by and construed according to
the law of the State of New York. This Agreement may be executed
in any number of counterparts, each of which shall be deemed an
original and enforceable against the parties actually executing
such counterpart, and all of which, when taken together, shall
constitute one instrument.
16. Upon the consolidation (by a series of mergers or otherwise) of
MSV LP, the Investors, Motient Sub and TMI Sub into one corporate
entity, this Agreement shall automatically terminate, whereupon
the restrictions set forth herein shall be replaced by provisions
pertaining to the ownership interests in such corporate entity
that are substantially identical to those set forth in Sections
8.1 and 8.2 of the GP Agreement. The parties hereto agree to
execute such documents or agreements necessary or appropriate to
accomplish the foregoing.
[Remainder of Page Intentionally Left Blank]
[Signature Page - A&R Parent Transfer/Drag Along Agreement]
IN WITNESS WHEREOF, the undersigned indicate their agreement
to the foregoing as of the day and year first above written.
MOBILE SATELLITE VENTURES LP
By: Mobile Satellite Ventures GP Inc.,
Its General Partner
By: /s/ Xxxxx Xxxxx
---------------------------------
Name: Xxxxx Xxxxx
Title: Secretary
MOBILE SATELLITE VENTURES GP INC.
By: /s/ Xxxxx Xxxxx
---------------------------------
Name: Xxxxx Xxxxx
Title: Secretary
MOTIENT CORPORATION
By: /s/ Xxxxx Xxxxxx
---------------------------------
Name: Xxxxx Xxxxxx
Title: EVP & COO
MOTIENT VENTURES HOLDING INC.
By: /s/ Xxxxx Xxxxxx
---------------------------------
Name: Xxxxx Xxxxxx
Title: EVP & COO
TMI COMMUNICATIONS AND COMPANY,
LIMITED PARTNERSHIP
By: /s/ Xxxx XxXxxxxxx
---------------------------------
Name: Xxxx XxXxxxxxx
Title: President
TMI COMMUNICATIONS DELAWARE,
LIMITED PARTNERSHIP
By: 3924505 CANADA INC.,
Its General Partner
By: /s/ Xxxx XxXxxxxxx
---------------------------------
Name: Xxxx XxXxxxxxx
Title: President
INVESTOR PARENTS:
/s/ Xxxxxxxx Xxxxx
------------------------------------
Xxxxxxxx Xxxxx
Xxxxx Xxxxx
------------------------------------
Xxxxx Xxxxx
THE XXXXX XXX XXXXX EDUCATION TRUST
By: /s/ Xxxxxxxx Xxxxx
---------------------------------
Name: Xxxxxxxx Xxxxx
Title:
THE SAMIR XXX XXXXX EDUCATION TRUST
By: /s/ Xxxxxxxx Xxxxx
---------------------------------
Name: Xxxxxxxx Xxxxx
Title:
COLUMBIA CAPITAL EQUITY PARTNERS III (QP), L.P.
By: Columbia Capital Equity Partners III, L.P.,
as General Partner
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Authorized Signatory
COLUMBIA CAPITAL EQUITY PARTNERS III (AI), L.P.
By: Columbia Capital Equity Partners III, L.P.,
as General Partner
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Authorized Signatory
COLUMBIA CAPITAL EQUITY PARTNERS III (CAYMAN), L.P.
By: Columbia Capital Equity Partners
(Cayman) III, Ltd., as General Partner
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Authorized Signatory
COLUMBIA CAPITAL INVESTORS III, LLC
By: Columbia Capital Equity Partners III, L.P.,
as General Partner
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Authorized Signatory
COLUMBIA CAPITAL EMPLOYEE INVESTORS III, L.L.C.
By: Columbia Capital III, L.L.C., its Manager
By: /s/ Authorized Signatory
---------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Authorized Signatory
SPECTRUM EQUITY INVESTORS IV, L.P.
By: Spectrum Equity Associates IV, L.P.
Its General Partner
By: /s/ Xxxxx Xxxxxx
--------------------------------
Name: Xxxxx Xxxxxx
Title: Authorized Signatory
SPECTRUM IV INVESTMENT MANAGERS' FUND, L.P.
By: /s/ Xxxxx Xxxxxx
--------------------------------
Name: Xxxxx Xxxxxx
Title: Authorized Signatory
SPECTRUM EQUITY INVESTORS PARALLEL IV, L.P.
By: Spectrum Equity Associates IV, L.P.,
its General Partner
By: /s/ Xxxxx Xxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxx
Title: Authorized Signatory
SKYTERRA COMMUNICATIONS, INC.
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxx
Title: CEO and President
