EXHIBIT 10.56
FORM OF STOCKHOLDERS' AGREEMENT
STOCKHOLDERS' AGREEMENT (this "Agreement"), dated as of _______, 2001, by
and among Mobile Satellite Ventures GP Inc., a Delaware corporation ("General
Partner") and General Partner of Mobile Satellite Ventures LP, a Delaware
limited partnership ("Newco LP") and the Stockholders of General Partner listed
on Schedule I hereto (each individually, a "Stockholder," and collectively, the
"Stockholders", and together with General Partner, the "Parties").
RECITALS
WHEREAS, each Stockholder is also either a limited partner of Newco LP or a
holder of notes convertible into limited partnership interests in Newco LP and
owns a portion of the common stock, par value $0.01 per share (the "Stock") of
General Partner in proportionate amounts based upon its respective ownership
interests in Newco LP (on an as-converted basis in the case of the holders of
the Convertible Notes); and
WHEREAS, the Stockholders have formed General Partner for the purpose of
having it serve exclusively as General Partner of Newco LP pursuant to the terms
of that certain Limited Partnership Agreement of Mobile Satellite Ventures LP,
dated as of [________ __, 2001], (the "Newco LP Agreement"); and
WHEREAS, the Stockholders wish to assure that General Partner performs its
duties under the Newco LP Agreement and the other agreements by and among the
Stockholders strictly in accordance with the terms of this Agreement; and
WHEREAS, General Partner and the Stockholders are entering into this
agreement pursuant to the terms of that certain Amended and Restated Investment
Agreement, dated as of October __, 2001, by and among the Stockholders (and
their affiliates), the LLC and certain other parties (as in effect on the date
hereof, and without giving effect to any modification, amendment, supplement or
restatement thereof or waiver thereunder, the "October Investment Agreement");
NOW, THEREFORE, in consideration of the agreements contained herein and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Parties hereby agree as follows:
Section 1. Definitions. Initially capitalized terms used, but not defined
herein, shall have the meanings ascribed thereto in the Newco LP Agreement or,
if not defined therein, in the October Investment Agreement, as applicable.
Additionally, terms defined in this Section 1 shall, for the purposes of this
Agreement, have the meanings herein specified.
"Business Day" means a day of the year on which banks are not required or
authorized to close in New York City.
"Columbia Investor Group" means the entities in Columbia Space (QP), Inc.'s
Investor Group as set forth in the October Investment Agreement.
"Control Party" means (i) an Affiliate that has direct or indirect majority
voting control of a Limited Partner, or (ii) an Affiliate that has a majority of
its voting interests held, directly or indirectly, by a Limited Partner or by
Persons that have direct or indirect voting control of a Limited Partner.
"Excluded Securities" means any interests in the Partnership (i) issued
pursuant to the October Investment Agreement or any of the transactions
contemplated thereby, (ii) issued in connection with the acquisition of the
business of another entity, whether by the purchase of equity securities, assets
or otherwise, (iii) issued as part of an Initial Public Offering or other
registered underwritten public offering of the Partnership's securities, (iv)
issued under an employee compensation plan approved by the General Partner, (v)
issued to financial institutions, financial syndicates or lessors in connection
with bona fide commercial credit arrangements, equipment financings, or similar
transactions for primarily other than equity financing purposes, and (vi) issued
pursuant to Section 8.1(h)(vi) of this Agreement.
"Family Member" means, with respect to any Person (i) the spouse, parents,
children, siblings, mother and father-in-law, sons and daughters-in-law and
brothers and sisters-in-law of such Person or of any of the beneficial owners of
such Person, (ii) any trust whose beneficiaries consist of only one or more of
such Person and such persons or (iii) any partnership or other entity whose
owners are one or more of such Person and such persons.
"Intervening Entity" shall mean, as applied to any Limited Partner at any
time, any Person the value of which at such time consists principally of its
direct or indirect ownership of interests in, or obligations of, the Partnership
or Canadian Holdco. Without limiting the foregoing, the parties stipulate that,
as of the date hereof, TMI and TMI's general partner are Intervening Entities.
"Pledge Agreement" means that certain Pledge Agreement, dated as of even
date herewith, by and among TMI, TMI Sub and the other parties thereto, as
amended, supplemented or revised from time to time.
"Spectrum Investor Group" means the entities in Spectrum Space Equity
Investors IV, Inc.'s Investor Group as set forth in the October Investment
Agreement.
"Telcom Investor Group" means the entities in Telcom Satellite Ventures
Inc.'s Investor Group as set forth in the October Investment Agreement.
Section 2. Board Composition.
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(a) Qualifications of Directors. No person shall be elected or appointed a
director if that person is less than 18 years of age, is of unsound mind and has
been found so by a court, is not an individual, or has the status of a bankrupt.
Directors may, but need not, be Stockholders.
(b) Each Stockholder agrees to use all commercially reasonable efforts
(including approving all necessary or advisable amendments to General Partner's
Certificate of Incorporation and/or Bylaws) to cause the board of directors of
General Partner (the "Board") to be composed as follows:
(i) Subject to clause (ii) below, assuming the First Closing has
occurred, the Board shall consist of twelve (12) directors as follows:
(1) Each of the Telcom Investor Group, the Spectrum Investor Group and
the Columbia Investor Group (or an Investor or group of Investors to
which Limited Partners of any such Investor Group transferred at least
a five percent (5%) Percentage Interest and expressly transferred such
Investor Group's right to designate a director under this Agreement
(each such Person, an "Investor Group Assignee")), acting through its
respective Investor Group Designee, shall be entitled to designate one
(1) director. For the avoidance of doubt, in no event shall the Telcom
Investor Group, the Spectrum Investor Group and the Columbia Investor
Group, or any transferees therefrom, be entitled to designate more
than three (3) directors in the aggregate.
(2) Motient Sub shall be entitled to designate three (3) directors.
(3) TMI Sub shall be entitled to designate three (3) directors.
(4) The Note Investors shall be entitled to designate three (3)
directors.
(ii) In the event that the Second Closing has not occurred on or prior
to June 30, 2003, then beginning on July 1, 2003, the Board shall consist
of ten (10) directors as follows:
(1) The Telcom Investor Group, the Spectrum Investor Group and the
Columbia Investor Group (or an Investor Group Assignee), as a group,
shall be entitled to designate a total of one (1) director.
(2) Motient Sub shall be entitled to designate three (3) directors.
(3) TMI Sub shall be entitled to designate three (3) directors.
(4) The Note Investors shall be entitled to designate three (3)
directors.
(iii) For so long as the Spectrum Investor Group continues to be
entitled to designate a director under this Agreement, Spectrum Space
Equity Investors IV, Inc., a wholly-owned subsidiary of Spectrum Equity IV,
L.P., shall be entitled to designate such director, and such director shall
be a representative of Spectrum Equity Investors IV, L.P. Spectrum Equity
Investors IV, L.P. shall be a third-party beneficiary of this Agreement to
the extent necessary in order to enforce its rights under this Section
2(b)(iii).
(iv) For so long as the Columbia Investor Group continues to be
entitled to designate a director under this Agreement, Columbia Space (QP),
Inc., a wholly-owned subsidiary of Columbia Capital Equity Partners (QP),
L.P., shall be entitled to designate such director, and such director shall
be a representative of Columbia Capital Equity Partners (QP), L.P. Columbia
Capital Equity Partners (QP), L.P. shall be a third-party beneficiary of
this Agreement to the extent necessary in order to enforce its rights under
this Section 2(b)(iv).
(v) For so long as the Note Investors continue to be entitled to
designate directors under this Agreement, MSV Investors LLC shall be
entitled to designate such directors, and such directors shall be
representatives of MSV Investors LLC.
(c) Resignation. Any director may resign at any time by giving written
notice to the President of General Partner (the "President"). Such resignation
shall take effect at the time specified in such notice or, if the time be not
specified, upon receipt thereof by the President. Unless otherwise specified
therein, acceptance of such resignation shall not be necessary to make it
effective. In the event of the death, disability, resignation or removal of any
director, the Stockholder(s) which designated such director shall designate his
or her replacement.
Section 3. Board Meeting.
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(a) Regular Meetings. The Board shall meet no less often than quarterly,
unless otherwise agreed by at least 4/5 of the Board. Such meetings shall be
held on such date as shall be determined by the President or a majority of the
Board.
(b) Other Meetings. Other meetings of the Board shall be held at such times
as the Chairman of General Partner (the "Chairman"), the President or a majority
of the Board shall from time to time determine.
(c) Notice of Meetings. The Secretary of General Partner (the "Secretary")
shall give written notice to the President and each director of each meeting of
the Board, which notice shall state the place, date, time and purpose of such
meeting. Notice of each such meeting shall be given to each director, if by
mail, addressed to him at his residence or usual place of business, at least
five (5) Business Days before the day on which such meeting is to be held, or
shall be sent to him at such place by telecopy, telegraph, cable, or other form
of recorded communication, or be delivered personally or by telephone not later
than forty-eight (48) hours before the time at which such meeting is to be held;
provided, however, that if any director objects to the holding of such Board
meeting at the requested time and date, such meeting shall be held five (5)
Business Days following the date of such notice. A written waiver of notice,
signed by the director entitled to notice, whether before or after the time of
the meeting referred to in such waiver, shall be deemed equivalent to notice.
Neither the business to be transacted at, nor the purpose of any meeting of the
Board, need be specified in any written waiver of notice thereof. Attendance of
a director at a meeting of the Board shall constitute a waiver of notice of such
meeting.
(d) Place of Meetings. The Board may hold its meetings at such place or
places within or without the State of Delaware as the President may from time to
time determine, or as shall be designated in the respective notices or waivers
of notice of such meetings.
(e) Quorum and Manner of Acting.
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(1) A majority of the directors then in office (or who are members of any
committee of the Board) shall be present in person or by proxy at any
meeting of the Board (or a committee thereof, as the case may be) in order
to constitute a quorum for the transaction of business at such meeting, and
the vote of a majority of those directors, or members of such committee,
present at any such meeting at which a quorum is present shall be necessary
for the passage of any resolution or act of the Board or such committee,
except as otherwise expressly required by this Agreement or the October
Investment Agreement. In the absence of a quorum for any such meeting, a
majority of the directors present thereat may adjourn such meeting from
time to time until a quorum shall be present.
(2) Organization. At each meeting of the Board, one of the following shall
act as chairman of the meeting and preside, in the following order of
precedence:
(1) the Chairman;
(2) the President; or
(3) any director chosen by a majority of the directors present.
The Secretary or, in the case of his absence, any person whom the chairman of
the meeting shall appoint shall act as secretary of such meeting and keep the
minutes thereof.
(f) Committees of the Board. The Board may, by resolution passed by a
majority of the whole Board, designate one or more committees consisting of four
or more directors; provided, that each committee shall consist of at least one
Investor Group designee, one Motient Sub designee, one TMI Sub designee, and one
Note Investor designee. Except as otherwise expressly required by this
Agreement, any committee of the Board, to the extent provided in the resolution
of the Board designating such committee, shall have and may exercise all the
powers and authority of the Board in the management of the business and affairs
of General Partner, and may authorize the seal of General Partner to be affixed
to all papers which may require it. Each committee of the Board shall keep
regular minutes of its proceedings and report the same to Board and upon request
of the Stockholders, to the Stockholders.
(g) Directors' Consent in Lieu of Meeting. Any action required or permitted
to be taken at any meeting of the Board or of any committee thereof may be taken
without a meeting, without prior notice and without a vote, if a consent in
writing, setting forth the action so taken, shall be signed by all the directors
of the Board, in the case of a Board meeting, or all the members of a committee,
in the case of a committee meeting, and such consent is filed with the minutes
of the proceedings of the Board or such committee.
(h) Action by Means of Telephone or Similar Communications Equipment. Any
one or more members of the Board, or of any committee thereof, may participate
in a meeting of the Board or such committee by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and participation in a meeting by such means
shall constitute presence in person at such meeting.
(i) Compensation. Directors shall not receive any salary or compensation
for their services as directors or as members of committees, except as
authorized by Stockholders holding a majority of the shares of Stock (the
"Shares"). The directors shall be entitled to be reimbursed for travelling
expenses properly incurred by them in attending meetings of the Board or any
committee thereof. Nothing herein shall preclude any director from serving
General Partner or Newco LP in any other capacity and receiving compensation
therefor.
(j) Selection of Officers. The initial officers of General Partner shall be
those set forth in General Partner's organizational resolutions and any changes
thereto shall be approved by a vote of the majority of the Board members.
(k) Agreements with Limited Partners or their Affiliates. Notwithstanding
the grant of authority to General Partner under Section 6.1 of the Newco LP
Agreement, without the prior written consent of the majority of the
disinterested directors (or, if the majority of the directors are designees of
interested parties, the entire Board) and any prior written consent of Limited
Partners of Newco LP required by the Newco LP Agreement, the Board shall not
permit or cause General Partner or Newco LP to enter into transactions with its
Limited Partners or Affiliates of its Limited Partners except as otherwise
permitted in the October Investment Agreement; provided that Newco LP shall be
permitted to enter into each of the other Ancillary Agreements.
Section 4. Agreement to Vote Shares to Elect Directors. Each Stockholder
hereby agrees to take all action necessary (including voting or causing to be
voted, or acting by written consent with respect to, any and all Shares held by
him or it on the record date for establishing the Stockholders entitled to vote
for the election of directors of General Partner) to cause the Investors'
designees, the Motient Sub designees, the TMI Sub designees, and the Note
Investor designees to be elected to the Board, in accordance with the provisions
hereof.
Section 5. Stockholder Meetings.
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(a) Regular Meetings. The Stockholders shall meet annually, unless
otherwise agreed by the Board. Such meetings shall be held on such date as shall
be determined by the a majority of the Board.
(b) Special Meetings. Special meetings of the Stockholders shall be held at
such times as the Board, the President or a majority in interest of the
Stockholders shall from time to time determine.
(c) Notice of Meetings. The Secretary shall give written notice to the
President and each Stockholder of each meeting of the Stockholders, which notice
shall state the place, date, time and purpose of such meeting. Notice of each
such meeting shall be given to each Stockholder, if by mail, to the address set
forth with respect to such Stockholder in Schedule I, at least five (5) Business
Days before the day on which such meeting is to be held, or shall be sent to
such Stockholder by telecopy, telegraph, cable, or other form of recorded
communication, or be delivered personally or by telephone not later than
forty-eight (48) hours before the time at which such meeting is to be held;
provided, however, that if any Stockholder objects to the holding of such
Stockholder meeting at the requested time and date, such meeting shall be held
five (5) Business Days following the date that such notice was given. A written
waiver of notice, signed by the Stockholder entitled to notice, whether before
or after the time of the meeting referred to in such waiver, shall be deemed
equivalent to notice. Neither the business to be transacted at, nor the purpose
of any meeting of the Stockholders need be specified in any written waiver of
notice thereof. Attendance of a Stockholder at a meeting of the Stockholders
shall constitute a waiver of notice of such meeting.
(d) Place of Meetings. The Stockholders may hold their meetings at such
place or places within or without the State of Delaware as the President may
from time to time determine, or as shall be designated in the respective notices
or waivers of notice of such meetings.
(e) Quorum and Manner of Acting. The Stockholders holding the majority of
the Shares shall be present in person or by proxy at any meeting of the
Stockholders in order to constitute a quorum for the transaction of business at
such meeting, and, except as otherwise provided herein or in the October
Investment Agreement, the vote of those Stockholders holding a majority of the
Shares, present at any such meeting at which a quorum is present, shall be
necessary for the passage of any resolution or act of the Stockholders, except
as otherwise expressly required by this Agreement. In the absence of a quorum
for any such meeting, holders of a majority of the Shares present thereat may
adjourn such meeting from time to time until a quorum shall be present.
(f) Stockholders' Consent in Lieu of Meeting. Any action required or
permitted to be taken at any meeting of the Stockholders may be taken without a
meeting, without prior notice and without a vote, if a consent in writing,
setting forth the action so taken, shall be signed by the Stockholders holding
the requisite number of Shares for the taking the relevant action and such
consent is filed with the minutes of the proceedings of the Stockholders.
(g) Action by Means of Telephone or Similar Communications Equipment. Any
one or more Stockholders may participate in a meeting of the Stockholders by
means of conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other, and
participation in a meeting by such means shall constitute presence in person at
such meeting.
Section 6. Assignment; Restriction on Transfer. The rights of the
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Stockholders to designate directors hereunder may not be transferred, except by
Investors to an Investor Group Assignee in accordance with Section 2(b)(i)(1).
Section 7. Transfer of Shares; Redemption.
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(a) Transfer of Shares. The Stockholders each undertake to take such
actions and execute such documents as may be necessary to insure that the
proportionate ownership of General Partner at all times reflects the
then-current proportional ownership of Limited Partnership Interests in Newco LP
(on an as-converted basis in the case of the holders of the Convertible Notes).
In furtherance of the foregoing, except for Transfers made simultaneously with
permitted transfers of Limited Partnership Interests made in accordance with the
terms of Section 8 of this Agreement or Articles 3 and 7 of the October
Investment Agreement, each Stockholder agrees not to, directly or indirectly,
sell, assign, transfer, pledge, encumber, hypothecate, mortgage or otherwise
dispose of, either voluntarily or involuntarily (or to enter into any contract,
option or other arrangement or understanding to do any of the foregoing) (a
"Transfer"), any Shares; provided, however, that TMI Sub shall be permitted to
pledge its Shares pursuant to the Pledge Agreement. In addition, each
Stockholder hereby undertakes to, at the same time that it transfers any of its
Limited Partnership Interests or Convertible Notes, Transfer its Shares (or the
same portion thereof as the Limited Partnership Interests or Convertible Notes
being transferred bear to its total Limited Partnership Interests (on an
as-converted basis in the case of the holders of the Convertible Notes)) to the
purchaser or assignee of any of its Limited Partnership Interests or Convertible
Notes in accordance with Section 8 of this Agreement or the applicable
provisions of the Convertible Notes. Following a Transfer of such Shares, such
Shares shall remain subject to the provisions of this Agreement, and the
transferee shall execute and deliver to General Partner a written agreement to
be bound by this Agreement in form and substance reasonably satisfactory to
General Partner. Notwithstanding the foregoing, except as set forth in Section
2(b)(i)(1) with respect to Transfers to an Investor Group Assignee, in
connection with transfers of Limited Partnership Interests pursuant to Sections
8.2(c) or (d) of this Agreement, no transferee shall have the right to designate
directors pursuant hereto.
(b) Redemption; Effect of Redemption and Transfer. In the event that Newco
LP repays any of the principal amount of Convertible Notes, in whole or in part,
General Partner shall purchase from each Note Investor whose Convertible Notes
are being repaid (in whole or in part), and each Note Investor whose Convertible
Notes are being repaid (in whole or in part) shall sell to General Partner, a
number of Shares equal to the product of (I) the sum of the total number of
Shares issued to such Note Investor by General Partner (appropriately adjusted
for stock splits, combinations, stock dividends, reorganizations and the like)
multiplied by (II) a fraction, the numerator of which shall equal the amount of
principal of such Note Investor's Convertible Note so paid and the denominator
of which shall equal the original principal amount of such Convertible Note. The
consideration for any such purchase shall be $0.01 per Share, and the Note
Investor holding such Shares shall deliver such Shares to General Partner for
cancellation promptly following any such repayment. Additionally, in the event
that:
(i) Newco LP repays in cash a total of more than one-third of the
original aggregate principal amount of the Convertible Notes, the size of
the Board shall be reduced by one (1) director, the Note Investors shall
only be entitled to designate two (2) directors, and the Note Investors
shall cause one (1) of the directors designated by them to resign from the
Board;
(ii) Newco LP repays in cash a total of more than two-thirds of the
original aggregate principal amount of the Convertible Notes, the size of
the Board shall be reduced by a total of two (2) directors, the Note
Investors shall only be entitled to designate one (1) director and the Note
Investors shall cause all directors designated by them, other than such one
(1) remaining director, to resign from the Board; and
(iii) Newco LP repays in cash a total of more than ninety percent
(90%) of the original aggregate principal amount of the Convertible Notes,
the size of the Board shall be reduced by a total of three (3) directors,
the Note Investors shall not be entitled to designate any directors, the
Note Investors shall not be entitled to designate any directors to serve on
committees of the Board and the Note Investor shall cause all directors
designated by them to resign from the Board.
Section 8 Transfers, Admission of Limited Partners and Conversion.
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Section 8.1 Additional Issuances of Interests.
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(a) In order to raise capital for Newco LP operations or to acquire assets,
to redeem or retire Newco LP debt, or for any other valid Newco LP purposes,
General Partner may, subject to the provisions of this Section 8.1, from time to
time determine that it is in the best interests of Newco LP to cause Newco LP to
issue additional interests in Newco LP to the Limited Partners or other Persons
and to admit such other Persons to Newco LP as Additional Limited Partners
pursuant to Section 8.4. General Partner shall determine the consideration for
and the terms and conditions with respect to any future issuance of interests in
Newco LP.
(b) Subject to clause (h) below, General Partner shall not issue any
interests in Newco LP unless it first delivers to each Limited Partner and Note
Investor (each such Person being referred to in this Section 8.1 as a "Buyer") a
written notice (the "Notice of Proposed Issuance") specifying the type and
amount of such interests that Newco LP then intends to issue (the "Offered
Interests"), all of the material terms, including the price (cash or non-cash)
upon which Newco LP proposes to issue the Offered Interests and stating that the
Buyers shall have the right to purchase the Offered Interests in the manner
specified in this Section 8.1 for the same price per share and in accordance
with the same terms and conditions specified in such Notice of Proposed
Issuance, provided, that if such price consists of non-cash consideration, a
Buyer may purchase the Offered Interest with the same type and amount of
non-cash consideration described in such Notice of Proposed Issuance or, may
instead, pay for such Offered Interests with the cash equivalent of such price.
(c) During the ten (10) consecutive day period commencing on the date Newco
LP delivers to all of the Buyers the Notice of Proposed Issuance (the "Ten Day
Period"), the Buyers shall have the option to purchase up to all of the Offered
Interests at the same price and upon the same terms and conditions specified in
the Notice of Proposed Issuance. Each Buyer electing to purchase Offered
Interests must give written notice of its election to General Partner prior to
the expiration of the Ten Day Period.
(d) Each Buyer shall have the right to purchase up to that percentage of
the Offered Interests equal to the Percentage Interest then held by such Buyer.
The amount of such Offered Interests that each Buyer is entitled to purchase
under this Section 8.1 shall be referred to as its "Proportionate Share."
(e) Each Buyer shall have a right of oversubscription such that if any
other Buyer fails to elect to purchase his or its full Proportionate Share of
the Offered Interests, the other Buyer(s) shall, among them, have the right to
purchase up to the balance of such Offered Interests not so purchased. The
Buyers may exercise such right of oversubscription by electing to purchase more
than their Proportionate Share of the Offered Interests by so indicating in
their written notice given during the Ten Day Period. If, as a result thereof,
such oversubscription elections exceed the total number of the Offered Interests
available in respect to such oversubscription privilege, the oversubscribing
Buyers shall be cut back with respect to oversubscriptions on a pro rata basis
in accordance with their respective Proportionate Share or as they may otherwise
agree among themselves.
(f) If all of the Offered Interests have not been purchased by the Buyers
pursuant to the foregoing provisions, then General Partner shall have the right,
until the expiration of one hundred eighty (180) consecutive days commencing on
the first day immediately following the expiration of the Ten Day Period, to
issue the Offered Interests not purchased by the Buyers at not less than, and on
terms no more favorable in any material respect to the purchaser(s) thereof
than, the price and terms specified in the Notice of Proposed Issuance. If such
remaining Offered Interests are not issued within such period and at such price
and on such terms, the right to issue in accordance with the Notice of Proposed
Issuance shall expire and the provisions of this Agreement shall continue to be
applicable to the Offered Interests.
(g) Notwithstanding the foregoing, the rights described in this Section 8.1
shall not apply with respect to the issuance of Excluded Securities.
(h) Notwithstanding the foregoing, General Partner may proceed with the
issuance of interests in Newco LP without first following the procedures in
clauses (b)-(f) above, provided that the purchaser of such interests (the "New
Purchaser") agrees in writing to take such interests subject to the provisions
of this Section 8.1(h). In such event the following provisions shall apply:
(i) Within ten (10) days following the issuance of such interests,
General Partner or the New Purchaser shall issue to each Buyer a written
notice (the "Notice of Issuance") specifying the type and amount of such
interests that Newco LP has issued (the "Issued Interests"), all of the
material terms, including the price (the "Issued Interest Price") at which
Newco LP issued the Issued Interests and stating that the Buyers shall have
the right to purchase Issued Interests in the manner specified below for
the same price per Unit and in accordance with the same terms and
conditions specified in such Notice of Issuance.
(ii) During the ten (10) consecutive day period commencing on the date
Newco LP or the New Purchaser delivers to all of the Buyers the Notice of
Issuance (the "Issuance Ten Day Period"), the Buyers shall have the option
to purchase up to all of the Issued Interests for the same type and amount
per Issued Interest of cash or non-cash consideration paid by the New
Purchaser or cash in an amount equivalent in value to the Issued Interest
Price and upon the same terms and conditions specified in the Notice of
Issuance. Each Buyer electing to purchase Issued Interests must give
written notice of its election to the deliverer of the Notice of Issuance
prior to the expiration of the Issuance Ten Day Period.
(iii) Each Buyer shall have the right to purchase from the New
Purchaser up to that percentage of the Issued Interests equal to the
Proportionate Share held by such Buyer immediately prior to the issuance of
the Issued Interests.
(iv) Each Buyer shall have a right of oversubscription such that if
any other Buyer fails to elect to purchase his or its full Proportionate
Share of the Issued Interests, the other Buyer(s) shall, among them, have
the right to purchase up to the balance of such Issued Interests not so
purchased. The Buyers may exercise such right of oversubscription by
electing to purchase more than their Proportionate Share of the Issued
Interests by so indicating in their written notice given during the
Issuance Ten Day Period. If, as a result thereof, such oversubscription
elections exceed the total number of the Issued Interests available in
respect to such oversubscription privilege, the oversubscribing Buyers
shall be cut back with respect to oversubscriptions on a pro rata basis in
accordance with their respective Proportionate Share or as they may
otherwise agree among themselves.
(v) Any Issued Interests that have not been purchased by the Buyers
pursuant to the foregoing provisions shall remain owned by the New
Purchaser.
(vi) Notwithstanding anything in this clause (h) to the contrary, in
the event the Buyers elect, within the Issuance Ten Day Period, to purchase
less than all of the Issued Interests then, in lieu of the Buyers
purchasing Issued Interests from the New Purchaser, General Partner may
elect to issue directly to such Buyers, for the same type and amount per
Issued Interest of cash or non-cash consideration paid by the New Purchaser
or cash in an amount equivalent in value to the Issued Interest Price, an
equivalent amount of additional securities that are identical to the Issued
Interests in all material respects.
Section 8.2 Transfers. Except as set forth in Sections 8.2(c) and (d) or in
the October Investment Agreement, until September 30, 2002, no Limited Partner
or Note Investor shall be permitted to transfer any of its Limited Partnership
Interests or Convertible Notes to any Person without the consent of a majority
in interest (determined on an as-converted basis) of the Limited Partners and
Note Investors who are neither transferors nor transferees, nor members of an
Investor Group which includes a transferee or transferor. After September 30,
2002, no Limited Partner or Note Investor may assign or transfer all or any part
of its Limited Partnership Interest or Convertible Notes to any Person, except
in compliance with the following:
(a) Right of First Refusal. In the event that after September 30, 2002, a
Limited Partner or Note Investor (a "Selling Party") proposes to transfer all or
a portion of its Limited Partnership Interest or Convertible Notes to any third
party, other than in accordance with Section 8.2(c) or (d), pursuant to a bona
fide offer, such Selling Party will provide notice of such proposed transfer
(including the identity of the proposed purchaser of such interest, the amount
of interests or Convertible Notes proposed to be transferred and the proposed
terms thereof) (the "Transfer Notice"), at least fifteen (15) Business Days
prior to the proposed transfer, to each other Limited Partner and Note Investor,
whereupon each other Limited Partner and Note Investor shall have the right to
purchase, at the same price and upon the same terms and conditions set forth in
the Transfer Notice, a pro rata portion of such interest or Convertible Note
based upon such Limited Partner's or Note Investor's portion of the Percentage
Interests (determined on an as-converted basis with respect to holders of the
Convertible Notes) held by all Limited Partners and Note Investors other than
the Selling Party. Except as set forth in the next sentence, the purchase price
shall be payable in cash. In the event that the Transfer Notice specifies the
payment of consideration other than cash, the purchase price for purposes of
this Section 8.2(a) shall either be (x) the cash equivalent of such
consideration, determined by General Partner in good faith or (y) to the extent
the participating Limited Partner or Note Investor elects, the same type and
amount of non-cash consideration that is proposed to be paid as described in the
Transfer Notice. The Transfer Notice shall constitute an irrevocable offer by
the Selling Party to sell to the other Limited Partners and Note Investors such
interests or Convertible Notes at the price and on the terms as contained in
such Transfer Notice. Each Limited Partner or Note Investor desiring to
participate in such purchase shall provide the Selling Party and each other
Limited Partner and Note Investor notice of its agreement to participate (the
"Participation Notice") within ten (10) Business Days of receipt of the Transfer
Notice specifying such participation and whether and the extent to which such
Limited Partner or Note Investor wishes to acquire any remaining, unallocated
portion of the proposed transfer (the "Unallocated Portion"). In the event that
one or more of the other Limited Partners or Note Investors do not provide a
timely Participation Notice, the Unallocated Portion shall be allocated in pro
rata proportion to the Percentage Interest (after giving effect to the
conversion of the Convertible Notes) held by each of the Limited Partners and
Note Investors who submits a Participation Notice to the extent of such Limited
Partner's or Note Investor's indicated willingness to acquire any Unallocated
Portion as provided in such Limited Partners' or Note Investor's Participation
Notice. The Participation Notice shall be deemed to be an irrevocable commitment
to purchase from the Selling Party, at the price (or the cash equivalent
thereof) and on the terms as contained in the Transfer Notice, the amount of the
interests or Convertible Notes that such Limited Partner or Note Investor
specifies in the Participation Notice. In the event that the Limited Partners or
Note Investors are not willing to purchase all of the interests or Convertible
Notes offered pursuant to the Transfer Notice, and the amount of interests which
the Selling Party has offered to sell pursuant to the Transfer Notice less the
amount of interests or Convertible Notes the Limited Partners and Note Investors
are willing to accept is less than the minimum amount of interests or
Convertible Notes which the offeror is willing to purchase pursuant to the bona
fide offer described in the Transfer Notice, then the Limited Partners and Note
Investors shall be deemed to have rejected the offer contained in the Transfer
Notice in its entirety and the Selling Party shall be permitted to proceed with
the sale described in the Transfer Notice. In the event that the Limited
Partners and Note Investors shall have accepted all or part of the interests or
Convertible Notes offered pursuant to the Transfer Notice (and shall not have
been deemed to have rejected the offer in its entirety as described in the
immediately preceding sentence), then the Selling Party shall sell to such
Limited Partners and Note Investors such interests or Convertible Notes as have
been accepted by such Limited Partners and Note Investors as specified in such
Limited Partner's or Note Investor's Participation Notice on the terms contained
in the Transfer Notice. Any interests or Convertible Notes not sold to the
Limited Partners or Note Investors pursuant to the preceding sentence may be
sold to a third party, including the original offeror, at a price not lower
than, and on such other terms and conditions not more favorable to such third
party than, those contained in the original Transfer Notice, at any time within
one hundred eighty (180) days after the expiration of the offer required by this
Section 8.2(a). In the event the interests or Convertible Notes are not
transferred by the Selling Party on such terms during such one hundred eighty
(180) day period, the restrictions of this Section 8.2(a) shall again become
applicable to any transfer of interests or Convertible Notes by the Selling
Party.
(b) Tag Along Rights.
----------------
(i) General. No Selling Party may transfer (other than pursuant to
Section 8.2(c) or 8.2(d)) Limited Partnership Interests or any portion of
the Convertible Notes held by such Selling Party to any Person, unless the
terms and conditions of such transfer shall include an offer by the third
party transferee to the other Limited Partners and Note Investors (each, a
"Tag Along Participant"), at a price calculated using the same methodology
used to calculate the price of the Selling Party's Limited Partnership
Interest taking into account the relative capital accounts and distribution
rights of the Tag Along Participants, or, with respect to the Convertible
Notes, at a purchase price per Unit calculated by dividing the purchase
price of such offer divided by the number of Common Units into which the
portion of such Convertible Note proposed to be transferred is then
convertible (such price, the "Tag Along Price") and on the same terms and
conditions as the Selling Party has agreed to sell its Limited Partnership
Interest or portion of such Convertible Note, to include in the transfer to
the third party transferee a portion of Limited Partnership Interests, or,
with respect to transfers of Convertible Notes, a number of Units
determined in accordance with this Section 8.2(b).
(ii) Obligation of Transferee to Purchase. The third-party transferee
of the Selling Party shall purchase from each Tag Along Participant the
portion of such Tag Along Participant's Limited Partnership Interest or
Convertible Note that such Tag Along Participant desires to sell, provided
that such portion does not exceed the Maximum Tag Along Portion (as defined
below) and, if such portion exceeds the Maximum Tag Along Portion, the
transferee shall purchase only the Maximum Tag Along Portion. For purposes
hereof, the term "Maximum Tag Along Portion" means a portion of a Tag Along
Participant's Limited Partnership Interest or Convertible Note the price of
which (based on the Tag Along Price of such Limited Partnership Interest or
Convertible Note) equals the total original price proposed to be paid by
the transferee for the Selling Party's Limited Partnership Interest or
portion of a Convertible Note multiplied by a fraction, the numerator of
which is the Tag Along Price of such portion which such Tag Along
Participant desires to include in such sale and the denominator of which is
the aggregate Tag Along Price of the Limited Partnership Interests or
portion of a Convertible Note that the Selling Party and each Tag Along
Participant desires to include in such sale.
(iii) Exercise. The tag-along right may be exercised by each Tag-Along
Participant by delivery of a written notice to the Selling Party (the "Tag
Along Notice") within 15 calendar days following receipt of the Transfer
Notice. The Tag Along Notice shall state the portion of a Limited
Partnership Interest or Convertible Note that such Tag Along Participant
wishes to include in such transfer to the transferee. Upon the giving of a
Tag Along Notice, such Tag Along Participant shall be entitled and
obligated to sell the portion of its Limited Partnership Interest or
Convertible Note set forth in the Tag Along Notice, to the transferee on
the terms and conditions set forth in the Transfer Notice (the "Transferee
Terms"); provided, however, the Selling Party shall not consummate the sale
of any Limited Partnership Interest or Convertible Note offered by it if
the transferee does not purchase all Limited Partnership Interests and
portions of Convertible Notes which each Tag Along Participant is entitled
and desires to sell pursuant hereto. After expiration of the 15
calendar-day period referred to above, if the provisions of this Section
have been complied with in all respects, the Selling Party and each Tag
Along Participant that delivered a Tag Along Notice shall transfer the
Limited Partnership Interests and portions of Convertible Notes determined
in accordance with Section 8.2(b)(ii) to the transferee on the Transferee
Terms on the sale date proposed in the Transfer Notice (or such other date
within sixty (60) days of such proposed sale date as may be agreed among
the participants in such transfer).
(iv) Several Liability. Anything to the contrary contained herein
notwithstanding, the Selling Party agrees to use its reasonable good faith
efforts to seek to ensure that the applicable Transferee Terms provide for
several, and not joint, liability, with respect to the indemnification and
comparable obligations contained within such Transferee Terms.
(c) Subject to Sections 8.2(e), (f) and (g), a Limited Partner or Note
Investor may at any time and from time to time (i) transfer all or part of such
Limited Partner's Limited Partnership Interest or Note Investor's Convertible
Notes to any of such Limited Partner's or Note Investor's Family Members
provided that such Limited Partner or Note Investor shall provide the other
Partners and Note Investors notice of the identity of such Family Member
transferee, (ii) transfer all or part of its Limited Partnership Interest or
Convertible Notes to its members, partners, shareholders or other equity
holders, as the case may be ("Distributee"), pro-rata in accordance with the
governing documents of the Limited Partner or Note Investor, as the case may be,
and without consideration, or (iii) transfer all or part of such Limited
Partner's Limited Partnership Interest to a Control Party of such Limited
Partner or of such Note Investor's Convertible Notes to a Control Party of such
Note Investor; provided, that such Limited Partner or Note Investor and Control
Party agree with Newco LP in writing that such Control Party shall transfer such
Limited Partnership Interest or Convertible Notes back to such Limited Partner
or Note Investor immediately upon such Person ceasing to be a Control Party of
such Limited Partner or Note Investor. A Limited Partner or Note Investor may at
any time and from time to time pledge or hypothecate, in connection with its
bona fide financing arrangements (including, in the case of Motient, under its
current guaranteed bank facilities), its Limited Partnership Interest or
Convertible Notes, provided, that upon foreclosure or other execution of the
pledge or hypothecation, any assignment or transfer shall be subject to Sections
8.2(e), (f) and (g). Subject to Sections 8.2(e), (f) and (g), a Class A Limited
Partner may at any time and from time to time transfer all or part of its
Limited Partnership Interest to another Class A Limited Partner.
(d) Each of TMI Sub, Motient Sub and the Lead Note Investor shall have the
right, subject to Sections 8.2(a), (e), (f), and (g), to assign or transfer its
interest in Newco LP to any Person owning 10% or more of the outstanding common
stock of BCE Inc., Motient or Rare Medium Group, Inc. respectively, and each
other Limited Partner shall have the right, subject to Sections 8.2(a), (e),
(f), and (g), to assign or transfer its interest in Newco LP to any Person
owning ten percent (10%) or more of the ownership interests in such Limited
Partner; provided that in the case of a transfer by TMI Sub, such transferee
agrees to be bound by the terms and conditions of (i) the Non-Interference
Agreement, of the date even herewith between BCE Inc. and Newco LP (the
"Non-Interference Agreement") applicable to BCE Inc., (ii) the Stockholders
Agreement, of the date even herewith, by and among TMI, Newco LP, Canadian
Holdco and Canadian License Co. and (iii) the Pledge Agreement.
(e) In addition to any other requirements of this Agreement relating to a
transfer of Limited Partnership Interests or Convertible Notes, no Limited
Partnership Interest or Convertible Note shall be transferred or assigned unless
the transferee (i) executes an instrument satisfactory to General Partner
accepting all of the terms and conditions relating to a Limited Partner or Note
Investor set forth in this Agreement and the Newco LP Agreement, (ii) pays any
reasonable expenses of Newco LP incurred in connection with such transfer or
assignment (including, without limitation, attorney's fees) and (iii) is either
an "accredited investor" (as defined in Rule 501 promulgated under the
Securities Act of 1933, as amended (the "Securities Act")) or provides an
opinion of counsel reasonably acceptable to General Partner that the transfer
will not require registration under the Securities Act.
(f) Notwithstanding any other provisions of this Agreement to the contrary,
General Partner may prohibit any proposed transfer if, in the reasonable
determination of the General Partner, such transfer would (i) result in the
close of Newco LP's taxable year with respect to all Limited Partners, in the
termination of Newco LP within the meaning of ss. 708(b) of the Code or in the
termination of its status as a partnership under the Code, (ii) cause Newco LP
to be in violation of any applicable state or federal securities laws or (iii)
result in an interest in Newco LP being held by a Person whose participation in
the ownership of Newco LP would be detrimental to Newco LP; provided, however,
that no transfer made pursuant to Section 8.2(c) hereof shall be deemed
detrimental to Newco LP.
(g) To the extent that any regulatory approval, notification or other
submission or procedure is required or customarily provided in connection with
the exercise of any right or obligations as set forth in this Agreement or the
Newco LP Agreement with respect to the transfer or assignment of interests in
Newco LP (including, but not limited to, FCC approvals (if required), filings
under the HSR Act and applicable securities laws), such transfer or assignment
pursuant to this Agreement will be delayed and will only take place after such
approval, notification or other submission or procedure has been obtained,
submitted or completed, as determined by General Partner.
(h) In addition to any other restrictions regarding TMI Sub's right to
transfer the Limited Partnership Interests held by it contained herein or in any
Ancillary Agreement, TMI Sub shall not be permitted to transfer its Limited
Partnership Interests except to a Person (or an Affiliate of such Person) that
is also simultaneously acquiring TMI's direct or indirect ownership interests in
Canadian Holdco and Canadian License Co. Any purported transfer of TMI Sub's
Limited Partnership Interests in contravention of this subsection (h) shall be
void and of no effect.
(i) Any transfer of Limited Partnership Interests hereunder shall be deemed
to include a proportional transfer of the transferor's Units and Capital
Account, adjusted for all prior allocations and distributions with respect to
the transferred Capital Account for purposes of Articles VII and VIII of the
Newco LP Agreement.
(j) Except as set forth in the last sentence of this paragraph, (1) upon
any transfer of Class A Preferred Units and Limited Partnership Interests by a
Class A Limited Partner to Motient Sub, TMI Sub or any Affiliate of either of
them, or (2) if any Class A Preferred Units otherwise become held by Motient
Sub, TMI Sub or any Affiliate of either of them, except with the prior written
consent of the Class A Limited Partners other than the transferring Class A
Limited Partner, none of Motient Sub, TMI Sub or any Affiliate of either of
them, shall be deemed to be a Class A Limited Partner or shall be entitled to
vote as a Class A Limited Partner and the Class A Preferred Units so acquired or
held shall automatically convert into the number of Common Units which at the
time of such conversion equals the Percentage Interest represented by the Class
A Preferred Units so acquired. Notwithstanding the foregoing, in the event that
any of Motient Sub, TMI Sub, or any Affiliates of either of them pay a portion
of the Investor Purchase Price at the Second Closing pursuant to Section 2.3 of
the October Investment Agreement, such Units purchased by such Persons at the
Closing shall be Class A Preferred Units and shall not be converted, or be
deemed to have been converted, into Common Units by operation of this Section
8.2(j).
(k) For purposes of this Agreement, the sale or transfer of any equity or
other ownership interests in any Intervening Entity (an "Intervening Entity
Ownership Change") shall be deemed to constitute a transfer of the aggregate
Limited Partnership Interests held by that Limited Partner or the aggregate
amount of Convertible Notes owned directly or indirectly by such Intervening
Entity multiplied by a fraction, the numerator of which is the percentage
ownership of the Intervening Entity so sold or transferred and the denominator
of which is 100%. If such a deemed transfer of Limited Partnership Interests or
Convertible Notes occurs without compliance with the provisions of this
Agreement then, without limiting the rights of Newco LP or the other Partners or
Note Investors at law or in equity, all of the Limited Partners and Note
Investors (other than the Limited Partner which is so deemed to have transferred
Limited Partnership Interests or Note Investor deemed to have transferred
Convertible Notes) shall have the right to purchase the Limited Partnership
Interests or Convertible Notes so deemed transferred as if such Limited
Partnership Interests or Convertible Notes were being offered for sale pursuant
to the provisions of Section 8.2(a) (the provisions of which are hereby
incorporated by reference, mutatis mutandis) for the same amount of
consideration to be given to the Intervening Entity or its owners, in respect of
the Intervening Entity Ownership Change.
(l) Any attempted transfer of Units, Limited Partnership Interests or
Convertible Notes in violation of this Agreement shall be void and of no effect.
Section 8.3 Admission of Substituted Limited Partners.
(a) An assignee or transferee of an interest in Newco LP shall not be
admitted to Newco LP as a substituted Limited Partner until (i) such assignee or
transferee and transferring Limited Partner has complied with all of the
conditions and procedures set forth in Section 8.2 , (ii) such assignee or
transferee has confirmed in writing to General Partner that it has reviewed the
terms and conditions of this Agreement, the Newco LP Agreement, the October
Investment Agreement and each of the Ancillary Agreements including, without
limitation, the events of default, remedy and forfeiture provisions of the
Pledge Agreement, and (iii) payment of any reasonable expenses of Newco LP
incurred in connection with such admission (including, without limitation,
attorney's fees). Such assignee or transferee shall automatically be admitted to
Newco LP as a Limited Partner following satisfaction of the provisions of this
Section 8.3(a).
(b) A Person who acquires any Limited Partnership Interests of a Limited
Partner pursuant to Section 8.2 but who is not admitted as a substituted Limited
Partner pursuant to Section 8.3(a) shall be entitled only to allocations and
distributions with respect to such acquired Limited Partnership interests in
accordance with this Agreement, but shall have no right to vote or give consent
hereunder, to obtain any information or accounting of the affairs of Newco LP,
shall not solely as a result of its acquisition of such Limited Partnership
Interests obtain or have the right to obtain any shares in General Partner,
shall not be entitled to inspect the books or records of Newco LP and shall not
have any rights of a Limited Partner under the Delaware Act, this Agreement or
the Newco LP Agreement.
(c) A transferor of interests shall remain a Limited Partner of Newco LP
with respect to such transferred interests until such time, if ever, as the
transferee of such interests is admitted as a substituted Limited Partner in
accordance with this Agreement.
Section 8.4 Admission of Additional Limited Partners. A Person (other than
a current Limited Partner) who purchases from Newco LP interests issued pursuant
to Section 8.1 shall be admitted to Newco LP as an Additional Limited Partner
upon furnishing to Newco LP (a) a subscription agreement, in form satisfactory
to the General Partner, which agreement shall include an acceptance by such
Person of all the terms and conditions of this Agreement, and (b) such other
documents as the General Partner deems necessary or advisable. Such admission
shall become effective on the date that the General Partner determines that such
conditions have been satisfied. Additionally, any Note Investor who converts its
Convertible Notes into Limited Partnership Interests shall be admitted to Newco
LP as an Additional Limited Partner (to the extent that such holder is not
already a Limited Partner) on the terms and conditions set forth in such
Convertible Notes and this Agreement. Additionally, any Second Closing Investors
who purchase Limited Partnership Interests at the Second Closing shall be
admitted to Newco LP as an Additional Limited Partner on the terms and
conditions set forth in the October Investment Agreement.
Section 8.5 Corporate Conversion; Drag Along Rights.
---------------------------------------
(a) At any time prior to the Second Closing, upon the consent of Motient
Sub, TMI Sub and Class A Limited Partners holding a majority of the Percentage
Interests held by all Class A Limited Partners, and at any time after the Second
Closing, at the General Partner's discretion, Newco LP shall be converted into
corporate form ("Newco") by merger, statutory conversion or any other method set
forth in such consent (the "Corporate Conversion"). If the Corporate Conversion
is in connection with an initial public offering of Newco LP's (or its
successor's) securities, the outstanding interests in Newco LP shall be
converted into common stock of Newco in accordance with the Percentage Interests
represented by such Limited Partnership Interests, and each holder of such
interests shall take such steps as may be reasonably requested by the General
Partner in connection therewith, whereupon the rights and obligations of the
Limited Partners hereunder, including, without limitation, those arising under
Article 6, shall cease and have no further force and effect. If a Corporate
Conversion is approved for any purpose other than in connection with an initial
public offering of Newco LP's (or its successor's) securities, (i) the
respective outstanding interests of Newco LP shall be converted into securities
of Newco which track, as closely as practicable, the economic, voting and other
rights represented by such outstanding interests immediately prior to the
Corporate Conversion and (ii) the holders of such interests shall enter into a
shareholders agreement and such other agreements and the organizational
documents of Newco will contain such provisions as may be necessary, to allow
Newco to mimic, as closely as practicable, the governance and other operating
provisions of the Newco LP Agreement, including, without limitation, an
agreement by all shareholders holding stock with special voting, economic or
other rights to convert such stock into common stock immediately prior to the
initial public offering of Newco securities on a basis similar to that
contemplated by the second sentence of this Section 8.5(a). To the extent
permitted by applicable law (including without limitation, Section 17-219 of the
Delaware Act), the consents of Limited Partners, required by the first sentence
of this Section 8.5(a) shall be the only consents of Limited Partners necessary
for Newco LP to effect a Corporate Conversion and no other class votes or
consents of Limited Partners or the General Partner shall be required in
connection therewith.
(b) At any time after the Second Closing, if the Required Majority
determines to transfer or exchange (in a merger, business combination or
otherwise) in one or a series of related bona fide arm's-length transactions
(collectively, the "Drag-Along Transaction") to an unrelated and unaffiliated
third party all of the Limited Partnership Interests held by such Limited
Partners, then, upon thirty (30) days' written notice to the other Limited
Partners and Newco LP (the "Drag-Along Notice"), which notice shall include
reasonable details of the proposed transaction, including the consideration to
be received by the Limited Partners, each other Limited Partner and holder of
Limited Partnership Interests shall be obligated to, and shall sell, transfer
and deliver, or cause to be sold, transferred and delivered, to such third
party, all of its Limited Partnership Interests in the same transaction at the
closing thereof (and will deliver such Limited Partnership Interests free and
clear of all liens, claims, or encumbrances except this Agreement or the Newco
LP Agreement) (or shall vote in favor of or consent to any transaction requiring
the vote or consent of Limited Partners), and shall otherwise cooperate in the
consummation of such transaction, and the consideration to be paid to the
Limited Partners shall be deemed to be Capital Proceeds and shall be distributed
to the Limited Partners pursuant to Section 8.6 of the Newco LP Agreement as if
such transaction were a Capital Event. In the event a Drag Along Transaction is
initiated by the Investors, unless the consideration to be received by the
Limited Partners is based solely on the respective Percentage Interests held by
such Limited Partners, (i) until the second anniversary of the date of the
Second Closing, the consent of the Limited Partners holding a majority of the
Common Units shall be required with respect to any Drag Along Transaction in
which the value of the aggregate consideration to be paid to the Investors for
their Limited Partnership Interests is less than an amount equal to twice the
sum of such Investors' aggregate Capital Contributions and (ii) after the second
anniversary date of the Second Closing, each of Motient and TMI shall have
thirty (30) days from receipt of the Drag Along Notice to make, or cause a third
party to make, a bona fide offer that is no less favorable to the Investors and
the other Limited Partners than the terms, conditions and consideration of the
Drag Along Transaction described in such Drag Along Notice and which will be
consummated within thirty (30) days after such offer is made.
Section 9. Legends. Each Stockholder consents to General Partner inserting
appropriate legends referencing the restrictions and obligations contained in
this Agreement on the certificates representing the Shares held by the
Stockholders on or after the date of this Agreement.
Section 10. Stockholders' Representation. Each Stockholder hereby
-------------------------------
represents that, notwithstanding anything herein to the contrary, it has no plan
or intention to consummate any Transfer of Shares.
Section 11. Miscellaneous.
--------------------------
(a) Representation. No Stockholder is a party to any other agreement, other
than the Newco LP Agreement and the October Investment Agreement, with respect
to the transfer or disposition of voting rights with respect to any Shares.
(b) Severability. Should any one or more of the provisions of this
Agreement be determined to be illegal or unenforceable, each other provision of
this Agreement shall be given effect separately from the provision or provisions
determined to be illegal or unenforceable and shall not be affected thereby.
(c) No Waiver. No failure or delay on the part of any party in exercising
any right, power or remedy hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any such right, power or remedy preclude
any other or further exercise thereof or the exercise of any other right, power
or remedy hereunder.
(d) Entire Agreement. This Agreement, the October Investment Agreement and
the Newco LP Agreement, together with the exhibits thereto constitute the entire
agreement among the parties pertaining to the subject matter hereof and
supersede all prior agreements and understandings of the parties in connection
herewith.
(e) Amendment and Modification. This Agreement may be amended, modified and
supplemented only by written agreement of the holders of a majority of the
Shares (or, in the event the provision to be amended contains language requiring
the consent of a greater percentage of the Shares, such greater percentage);
provided, however, that any amendment, modification or supplement to this
Agreement that would adversely affect any individual Stockholder, or group of
Stockholders, in a manner different than its effect on other Stockholders, shall
require the prior written consent of such Stockholder(s). Notwithstanding the
foregoing, if Newco LP shall admit any new limited partner (other than upon the
conversion of any Convertible Notes) and the Board shall determine that the
Board should be expanded to allow for representation on the Board by such new
limited partner, this Agreement may be amended by the written agreement of the
holders of a majority of the Shares to provide for one or more additional
directors (the number of such additional directors to be reasonably
proportionate to the Percentage Interest in Newco LP held by such new limited
partner (after giving effect to the conversion of the Convertible Notes then
outstanding)), which director(s) shall be designated by such new limited
partner. Additionally, any Second Closing Investors who purchase Shares at the
Second Closing shall be added by General Partner as a Party hereto on the terms
and conditions set forth in the October Investment Agreement.
(f) Remedies. The Parties acknowledge and agree that the breach of any of
the terms of this Agreement will cause irreparable injury for which an adequate
remedy at law is not available. Accordingly, it is agreed that each party hereto
shall be entitled to an injunction, restraining order or other equitable relief
to prevent breaches of this Agreement and to enforce specifically the terms and
provisions hereof in any court of competent jurisdiction in the United States or
any state thereof, without the requirement of the posting of any bond. Such
remedies shall be cumulative and non-exclusive and shall be in addition to any
other rights and remedies the Parties may have under this Agreement.
(g) Notices. All notices provided for in this Agreement shall be in
writing, duly signed by the party giving such notice, and shall be delivered
personally, sent by a nationally recognized overnight courier, telecopied or
mailed by registered or certified mail, as follows:
(i) If given to General Partner, at General Partner's mailing address
set forth below:
Mobile Satellite Ventures GP Inc.
00000 Xxxxxxxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxx 00000-0000
Fax: (000) 000-0000
Attention: President
with a copy to each Stockholder as set forth in clause (ii)
below.
(ii) If given to any Stockholder, at the address set forth on Schedule
I hereof (or as modified from time to time by a Stockholder upon
written notice to General Partner).
Notices delivered personally to an addressee or sent by overnight
courier shall be deemed to have been given upon such delivery. Notices sent
by telecopier shall be deemed to have been given upon confirmation by
telecopy answerback (provided that the sending of any such notice is
followed promptly by the mailing of the original of such notice). Notices
mailed by registered or certified mail shall be deemed to have been given
upon the expiration of five (5) Business Days after such notice has been
deposited in the mail.
(h) Governing Law; Consent to Jurisdiction. This Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware
without regard to any applicable principles of conflicts of law. Each party
agrees that, in connection with any legal suit or proceeding arising with
respect to this Agreement, it shall submit to the non-exclusive jurisdiction of
the United States District Court for the Southern District of New York or the
applicable New York state court located in New York County and agrees to venue
in such courts.
(i) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first written above.
GENERAL PARTNER:
MOBILE SATELLITE VENTURES GP INC.
By:__________________________
Name:
Title:
STOCKHOLDERS:
[MOTIENT SUB]
By:__________________________
Name:
Title:
[TMI SUB]
By:__________________________
Name:
Title:
INVESTORS:
---------
EXISTING INVESTORS:
------------------
TELCOM SATELLITE VENTURES INC.
By:__________________________
Name:
Title:
NOTE INVESTORS:
--------------
TELCOM SATELLITE VENTURES II INC.
By:__________________________
Name:
Title:
EXISTING INVESTORS:
------------------
COLUMBIA SPACE (QP), INC.
By:__________________________
Name:
Title:
COLUMBIA SPACE (AI), INC.
By:__________________________
Name:
Title:
COLUMBIA SPACE PARTNERS, INC.
By:__________________________
Name:
Title:
NOTE INVESTORS:
--------------
COLUMBIA SPACE (QP) II, INC.
By:__________________________
Name:
Title:
COLUMBIA SPACE (AI) II, INC.
By:__________________________
Name:
Title:
COLUMBIA SPACE PARTNERS II, INC.
By:__________________________
Name:
Title:
EXISTING INVESTORS:
------------------
SPECTRUM SPACE EQUITY
INVESTORS IV, INC.
By:__________________________
Name:
Title:
SPECTRUM SPACE IV PARALLEL, INC.
By:__________________________
Name:
Title:
SPECTRUM SPACE IV MANAGERS, INC.
By:__________________________
Name:
Title:
NOTE INVESTORS:
--------------
SPECTRUM SPACE EQUITY INVESTORS IV-II, INC.
By:__________________________
Name:
Title:
SPECTRUM SPACE IV PARALLEL II, INC.
By:__________________________
Name:
Title:
SPECTRUM SPACE IV MANAGERS II, INC.
By:__________________________
Name:
Title:
MSV INVESTORS LLC
By:__________________________
Name:
Title:
SCHEDULE I
STOCKHOLDERS
------------------------------ --------------------------------------------------- ------------------------------
Name Address Number of Shares
------------------------------ --------------------------------------------------- ------------------------------
------------------------------ --------------------------------------------------- ------------------------------
Motient Sub 00000 Xxxxxxxxx Xxxxxxxxx 8,387,804.87
Xxxxxx, Xxxxxxxx 00000-0000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxx Xxxxxxx, Vice President and
General Counsel,
with a copy to:
Xxxxx & Xxxxxxx L.L.P.
0000 Xxxxxxxxxx Xxxxx
Xxxxx 0000
XxXxxx, Xxxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxxxx X.X. Xxxxxx, Esq.
------------------------------ --------------------------------------------------- ------------------------------
------------------------------ --------------------------------------------------- ------------------------------
Telcom Satellite Ventures 000 Xxxxx Xxxxx Xxxxxx 720,000
Inc. Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxx X. Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
------------------------------ --------------------------------------------------- ------------------------------
------------------------------ --------------------------------------------------- ------------------------------
Telcom Satellite Ventures II 000 Xxxxx Xxxxx Xxxxxx 139,609.75
Inc. Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxx X. Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
------------------------------ --------------------------------------------------- ------------------------------
------------------------------ --------------------------------------------------- ------------------------------
Columbia Space (QP), Inc. 000 Xxxxx Xxxxx Xxxxxx 345,042.42
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxxxx & Xxxxxx, LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
------------------------------ --------------------------------------------------- ------------------------------
------------------------------ --------------------------------------------------- ------------------------------
Columbia Space (AI), Inc. 000 Xxxxx Xxxxx Xxxxxx 19,061.12
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxxxx & Xxxxxx, LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
------------------------------ --------------------------------------------------- ------------------------------
------------------------------ --------------------------------------------------- ------------------------------
Columbia Space Partners, Inc. 000 Xxxxx Xxxxx Xxxxxx 275,896.46
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxxxx & Xxxxxx, LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
------------------------------ --------------------------------------------------- ------------------------------
------------------------------ --------------------------------------------------- ------------------------------
Columbia Space (QP) II, Inc. 000 Xxxxx Xxxxx Xxxxxx 66,904.57
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxxxx & Xxxxxx, LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
------------------------------ --------------------------------------------------- ------------------------------
------------------------------ --------------------------------------------------- ------------------------------
Columbia Space (AI) II, Inc. 000 Xxxxx Xxxxx Xxxxxx 3,696.00
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxxxx & Xxxxxx, LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
------------------------------ --------------------------------------------------- ------------------------------
------------------------------ --------------------------------------------------- ------------------------------
Columbia Space Partners II, 000 Xxxxx Xxxxx Xxxxxx 53,496.99
Inc. Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxxxx & Xxxxxx, LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
------------------------------ --------------------------------------------------- ------------------------------
------------------------------ --------------------------------------------------- ------------------------------
One International Place
Spectrum Space Equity 29th Floor 618,048.00
Investors IV, Inc. Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxxxx & Xxxxxx, LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxx, Esq.
Tel: (000) 000-0000 Fax: (888)
325-9120
------------------------------ --------------------------------------------------- ------------------------------
------------------------------ --------------------------------------------------- ------------------------------
Spectrum Space IV Parallel, One International Place 14,464.00
Inc. 00xx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxxxx & Xxxxxx, LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
------------------------------ --------------------------------------------------- ------------------------------
------------------------------ --------------------------------------------------- ------------------------------
Spectrum Space IV Managers, One International Place 7,488.00
Inc. 00xx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxxxx & Xxxxxx, LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx
Xxxxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
------------------------------ --------------------------------------------------- ------------------------------
------------------------------ --------------------------------------------------- ------------------------------
One International Place
Spectrum Space Equity 29th Floor 119,841.01
Investors IV-II, Inc. Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxxxx & Xxxxxx, LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxx, Esq.
Tel: (000) 000-0000 Fax: (888)
325-9120
------------------------------ --------------------------------------------------- ------------------------------
------------------------------ --------------------------------------------------- ------------------------------
Spectrum Space IV Parallel One International Place 2,804.60
II, Inc. 00xx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxxxx & Xxxxxx, LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
------------------------------ --------------------------------------------------- ------------------------------
------------------------------ --------------------------------------------------- ------------------------------
Spectrum Space IV Managers One International Place 1,451.94
II, Inc. 00xx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxxxx & Xxxxxx, LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx
Xxxxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
------------------------------ --------------------------------------------------- ------------------------------
------------------------------ --------------------------------------------------- ------------------------------
6,636,481.51
TMI Sub 0000 Xxxxxxx Xxxxx
Xxxxxxxxxx Xxxxx
Xxxxxx X0X 0X0
Attn: Xxxx XxXxxxxxx
with a copy to:
Salans Xxxxxxxxx Xxxxxxxxx Xxxxxxx & Xxxxxx
Xxxxxxxxxxx Center
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attn: Xxxx X. Xxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
------------------------------ --------------------------------------------------- ------------------------------
------------------------------ --------------------------------------------------- ------------------------------
c/o Rare Medium Group, Inc.
MSV Investors LLC 00 Xxxx 00xx Xxxxxx 7,756,097.42
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
------------------------------ --------------------------------------------------- ------------------------------
