Exhibit 10.57
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
MOTIENT CORPORATION
MVH HOLDINGS INC.
TELCOM SATELLITE VENTURES INC.
TELCOM SATELLITE VENTURES II INC.
AND
THE STOCKHOLDERS OF TELCOM
SATELLITE VENTURES INC. AND
TELCOM SATELLITE VENTURES II INC.
Dated as of February 9, 2005
TABLE OF CONTENTS
ARTICLE I The Merger..............................................................................................1
Section 1.1. The Merger.............................................................................1
Section 1.2. Closing................................................................................2
Section 1.3. Effective Time.........................................................................2
Section 1.4. Effect of the Merger...................................................................2
Section 1.5. Certificate of Incorporation and Bylaws................................................2
Section 1.6. Directors and Officers.................................................................2
ARTICLE II Effect of the Merger on the Stock of the Constituent Corporations; Exchange of Certificates............2
Section 2.1. Effect on Stock........................................................................2
Section 2.2. Exchange of Certificates...............................................................4
Section 2.3. Rights to Purchase Target Capital Stock................................................6
ARTICLE III Representations and Warranties of Target..............................................................6
Section 3.1. Organization, Qualification, Etc.......................................................6
Section 3.2. Capitalization.........................................................................6
Section 3.3. Corporate Authority Relative to this Agreement; No Violation...........................7
Section 3.4. No Liabilities; No Operations..........................................................7
Section 3.5. Target Assets..........................................................................8
Section 3.6. Target Agreements......................................................................8
Section 3.7. No Violation of Law....................................................................8
Section 3.8. Lack of Ownership of Acquiror Common Stock.............................................8
Section 3.9. Investigations; Litigation.............................................................8
Section 3.10. Tax Matters............................................................................9
Section 3.11. Approval of Target Stockholders........................................................9
ARTICLE IV Representations and Warranties of the Target Stockholders..............................................9
Section 4.1. Representations and Warranties of Target...............................................9
Section 4.2. Authority..............................................................................9
Section 4.3. No Conflict with other Instruments.....................................................9
Section 4.4. Ownership of Shares...................................................................10
Section 4.5. Approval of Agreement and Merger......................................................10
Section 4.6. Exchange Entirely for Own Account.....................................................10
Section 4.7. Reliance Upon the Target Stockholders' Representations................................10
Section 4.8. Receipt of Information................................................................10
Section 4.9. Investor Status; Etc..................................................................10
Section 4.10. Brokers or Finders....................................................................11
Section 4.11. Restricted Securities.................................................................11
Section 4.12. Legends...............................................................................11
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ARTICLE V Representations and Warranties of Acquiror and Merger Sub..............................................11
Section 5.1. Organization, Standing and Power......................................................11
Section 5.2. Capitalization........................................................................12
Section 5.3. Authority.............................................................................12
Section 5.4. SEC Documents.........................................................................12
Section 5.5. Litigation............................................................................13
Section 5.6. Broker's and Finders' Fees............................................................13
Section 5.7. Representations Complete..............................................................13
Section 5.8. Acquiror Subsidiaries.................................................................13
Section 5.9. Independent Investigation.............................................................14
ARTICLE VI Conduct of Target Prior to the Effective Time.........................................................14
Section 6.1. Conduct of Business by Target.........................................................14
Section 6.2. Restrictions on the Conduct of Business by Target.....................................14
Section 6.3. No Solicitation.......................................................................15
Section 6.4. Tax Treatment.........................................................................16
ARTICLE VII Additional Agreements................................................................................16
Section 7.1. Investigation.........................................................................16
Section 7.2. Cooperation...........................................................................16
Section 7.3. Filings; Other Action.................................................................17
Section 7.4. Further Assurances....................................................................17
Section 7.5. Public Announcements..................................................................17
Section 7.6. Update Disclosure: Breaches...........................................................17
Section 7.7. Contribution of MSV Interests and Shares..............................................18
Section 7.8. Blue Sky Laws.........................................................................18
Section 7.9. TerreStar.............................................................................18
Section 7.10. Acquiror Rights Offering..............................................................19
Section 7.11. Role of Xx. Xxxxx Subsequent to Closing...............................................19
Section 7.12. Target Stockholder Approval...........................................................19
Section 7.13. Rights Agreement......................................................................19
Section 7.14. Tax Treatment.........................................................................19
Section 7.15. Designation of Director...............................................................19
Section 7.16. No Additional Consideration...........................................................19
Section 7.17. Independent Evaluation of Investment..................................................19
ARTICLE VIII Conditions to the Merger............................................................................20
Section 8.1. Conditions to Each Party's Obligation to Effect the Merger............................20
Section 8.2. Conditions to Obligations of Target to Effect the Merger..............................20
Section 8.3. Conditions to Obligations of Acquiror to Effect the Merger............................21
ARTICLE IX Termination...........................................................................................22
Section 9.1. Termination or Abandonment............................................................22
Section 9.2. Effect of Termination.................................................................23
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ARTICLE X Indemnification........................................................................................23
Section 10.1. Survival of Representations and Warranties............................................23
Section 10.2. Obligation to Indemnify...............................................................23
Section 10.3. Indemnification Procedures............................................................24
Section 10.4. Notices and Payments..................................................................25
Section 10.5. Limited Remedy........................................................................25
Section 10.6. Payment Treatment.....................................................................26
ARTICLE XI Miscellaneous.........................................................................................26
Section 11.1. Expenses 26
Section 11.2. Counterparts: Effectiveness...........................................................26
Section 11.3. Governing Law.........................................................................26
Section 11.4. Notices...............................................................................26
Section 11.5. Assignment; Binding Effect............................................................27
Section 11.6. Severability..........................................................................27
Section 11.7. Entire Agreement; Non-Assignability; Parties in Interest..............................28
Section 11.8. Headings 28
Section 11.9. Certain Definitions...................................................................28
Section 11.10. Amendment.............................................................................28
Section 11.11. Waiver................................................................................28
Schedule A List of Target Stockholders
Schedule B Target Disclosure Schedule
Exhibit A Form of Acquiror Warrant
Exhibit B Form of Certificate of Merger
Exhibit C Form of Registration Rights Agreement
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and
entered into as of February 9, 2005 by and among Motient Corporation, a Delaware
corporation ("Acquiror"), MVH Holdings Inc., a Delaware corporation and direct
wholly-owned subsidiary of Acquiror ("Merger Sub"), Telcom Satellite Ventures
Inc., a Delaware corporation ("Telcom I") and Telcom Satellite Ventures II Inc.,
a Delaware corporation ("Telcom II" and together with Telcom I, "Target"), and
all of the stockholders of both Telcom I and Telcom II set forth on Schedule I
hereto (collectively, the "Target Stockholders").
RECITALS:
A. The respective Boards of Directors of Telcom I, Telcom II, Acquiror
and Merger Sub believe it is advisable and in the best interests of each company
and their respective stockholders that Acquiror acquire Target through the
statutory merger of both Telcom I and Telcom II with and into Merger Sub (the
"Merger"), have determined that the Merger is in furtherance of and consistent
with their respective business strategies and, in furtherance thereof, have
approved the Merger.
B. Pursuant to the Merger, among other things, each outstanding share
of Telcom I common stock, par value $0.01 per share ("Telcom I Common Stock")
and each outstanding share of Telcom II common stock, par value $0.01 per share
("Telcom II Common Stock" and, together with Telcom I Common Stock, "Target
Common Stock"), shall be converted into the right to receive (i) shares of
Motient Corporation common stock, par value $0.01 per share ("Acquiror Common
Stock"), and (ii) warrants (the "Acquiror Warrants") to purchase shares of
Acquiror Common Stock (the "Warrant Shares") a form of which is attached as
Exhibit A hereto, at the rates set forth therein.
C. Target, Acquiror, Merger Sub and the Target Stockholders desire to
make certain representations and warranties and other agreements in connection
with the Merger.
D. The parties intend, by executing this Agreement, to adopt a plan of
reorganization within the meaning of Section 368 of the Internal Revenue Code of
1986, as amended (the "Code"), and that the Merger shall qualify as a
"reorganization" within the meaning of Section 368(a) of the Code.
AGREEMENT:
NOW, THEREFORE, in consideration of the covenants and representations
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
ARTICLE I
The Merger
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Section 1.1. The Merger. Upon the terms and subject to the conditions
of this Agreement, at the Effective Time (as defined in Section 1.3) in
accordance with the Delaware General Corporation Law ("DGCL"), both Telcom I and
Telcom II shall be merged with and into Merger Sub and the separate existence of
Telcom I and Telcom II shall thereupon cease. Merger Sub shall be the surviving
corporation in the Merger and is hereinafter sometimes referred to as the
"Surviving Corporation."
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Section 1.2. Closing. The closing of the Merger (the "Closing") will
take place at such time and date to be specified by the parties (the "Closing
Date"), which shall be no later than the second business day after satisfaction
or waiver of the conditions set forth in Article VIII, unless another time or
date is agreed to by the parties hereto. The Closing will be held at the offices
of Xxxxxxx Xxxxx LLP, 000 Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx, or at such
time and place as is otherwise agreed to by the Acquiror and Target.
Section 1.3. Effective Time. Subject to the provisions of this
Agreement and in accordance with the DGCL, as soon as practicable on the Closing
Date, the parties shall file a Certificate of Merger (the "Certificate of
Merger") in the form attached as Exhibit B hereto, with the Secretary of State
of the State of Delaware, in such form as required by the DGCL. The Certificate
of Merger shall provide for its effectiveness immediately upon its filing (the
"Effective Time").
Section 1.4. Effect of the Merger. At the Effective Time, the effect of
the Merger shall be as provided in the applicable provisions of the DGCL.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time, except as otherwise provided herein, all the properties, rights,
privileges, powers and franchises of Merger Sub and Target shall vest in the
Surviving Corporation, and all debts, liabilities and duties of Merger Sub and
Target shall become the debts, liabilities and duties of the Surviving
Corporation.
Section 1.5. Certificate of Incorporation and Bylaws. At the Effective
Time:
(a) the Certificate of Incorporation of Merger Sub, as in effect
immediately prior to the Effective Time, shall be the Certificate of
Incorporation of the Surviving Corporation until thereafter amended as provided
by Delaware Law and such Certificate of Incorporation.
(b) the Bylaws of Merger Sub, as in effect immediately prior to the
Effective Time, shall be the Bylaws of the Surviving Corporation until
thereafter amended as provided by Delaware Law, the Certificate of Incorporation
and such Bylaws.
Section 1.6. Directors and Officers. The directors of Merger Sub and
the officers of Merger Sub immediately prior to the Effective Time shall be the
directors and officers of the Surviving Corporation until their respective
successors are duly elected and qualified (or their earlier resignation or
removal), as the case may be.
ARTICLE II
Effect of the Merger on the Stock of the Constituent
----------------------------------------------------
Corporations; Exchange of Certificates
--------------------------------------
Section 2.1. Effect on Stock. As of the Effective Time, by virtue of
the Merger and without any action on the part of Merger Sub, Target, Acquiror or
the Target Stockholders:
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(a) Cancellation of Target-Owned Stock and Acquiror-Owned Stock. Each
share of Target Common Stock that is owned directly by Telcom I or Telcom II as
treasury stock or by Acquiror shall automatically be canceled and retired and
shall cease to exist, and no consideration shall be delivered in exchange
therefor.
(b) Conversion of Target Common Stock. Subject to Section 2.2(e), each
share of (i) Telcom I Common Stock issued and outstanding immediately prior to
the Effective Time (other than shares to be canceled in accordance with Section
2.1(a)) shall be converted into the right to receive (A) 65,202.425 shares of
Acquiror Common Stock; (B) an Acquiror Warrant to purchase 4,912.68 shares of
Acquiror Common Stock; and (C) Additional Merger Consideration, if any, pursuant
to Section 2.1(c) (collectively, the "Target I Merger Consideration") and (ii)
Telcom II Common Stock issued and outstanding prior to the Effective Time (other
than shares to be canceled in accordance with Section 2.1(a)) shall be converted
into the right to receive (A) 139,192.67 shares of Acquiror Common Stock; (B) an
Acquiror Warrant to purchase 10,439.45 shares of Acquiror Common Stock; and (C)
Additional Merger Consideration, if any (collectively, the "Target II Merger
Consideration" and, together with the Target I Merger Consideration, the "Merger
Consideration"). The Acquiror Warrants shall only become exercisable in the
event that the Acquiror is unable to file a Registration Statement on Form S-1
to register the resale of the Acquiror Common Stock and/or such registration
statement is not declared effective by the Securities and Exchange Commission
(the "SEC") prior to the dates and during the period set forth in the Acquiror
Warrants. As of the Effective Time, all such shares of Target Common Stock shall
no longer be outstanding and shall automatically be canceled and retired and
shall cease to exist, and each holder of a certificate or certificates which
immediately prior to the Effective Time represented outstanding Target Common
Stock (the "Certificates") shall cease to have any rights with respect thereto,
except the right to receive (i) shares of Acquiror Common Stock in an amount
equal to the product that is obtained by multiplying (A) the Exchange Ratio (as
defined below) by (B) the whole number of shares of Target Common Stock
surrendered and (ii) a warrant to purchase that number of shares of Acquiror
Common Stock equal to the product obtained by multiplying (A) 0.075 by (B) the
shares of Acquiror Common Stock determined in accordance with clause (i) of this
Section 2.1(b) (with the result rounded to the nearest whole share). The term
"Exchange Ratio" shall mean 8,187,804 divided by the sum of (i) the number of
shares of Telcom I Common Stock issued and outstanding immediately prior to the
Effective Time and (ii) the number of shares of Telcom II Common Stock issued
and outstanding immediately prior to the Effective Time.
(c) Purchase of MSV Interests. If at any time after the Closing Date
and prior to the one year anniversary of the Closing Date Acquiror acquires
additional interests in Mobile Satellite Ventures, L.P. ("MSV") (or its
successors) from a party who is a limited partner of MSV on the Closing Date (a
"Subsequent MSV Purchase"), Acquiror shall issue to the Target Stockholders in
proportion to their ownership of Target Common Stock immediately prior to the
Effective Time, as additional merger consideration (the "Additional Merger
Consideration"), a number of shares of Acquiror Common Stock equal to the
product of (i) the number of MSV limited partnership units held by Telcom I and
Telcom II immediately prior to the Effective Time, and (ii) the difference
between (x) the number of shares of Acquiror Common Stock issued in the
Subsequent MSV Purchase in exchange for each MSV limited partnership unit
acquired in such Subsequent MSV Purchase and (y) the number of shares of
Acquiror Common Stock issued to each Target Stockholder in exchange for each MSV
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limited partnership unit acquired by Acquiror in the Merger; provided, that if
the number in clause (y) above shall be equal to or greater than the number in
clause (x), no additional shares of Acquiror Common Stock shall be issuable to
the Target Stockholders pursuant to this Section 2.1(c). Any shares of Acquiror
Common Stock issuable pursuant to this Section 2.1(c) shall be entitled to
piggyback registration rights granted pursuant to the Registration Rights
Agreement by and among Acquiror and each Target Stockholder dated as of the date
hereof (the "Rights Agreement"), a form of which is attached as Exhibit C
hereto.
(d) Adjustments to Exchange Ratio. The number of shares of Acquiror
Common Stock issuable in the Merger and the number of shares of Acquiror Common
Stock issuable upon exercise of the Acquiror Warrants shall be appropriately
adjusted to reflect any stock split, reverse split, stock dividend,
reorganization, recapitalization or other like change with respect to Acquiror
Common Stock occurring after the date hereof and prior to the Effective Time.
(e) Fractional Shares. No fraction of a share of Acquiror Common Stock
will be issued, but in lieu thereof each holder of shares of Target Common Stock
who would otherwise be entitled to a fraction of a share of Acquiror Common
Stock (after aggregating all fractional shares of Acquiror Common Stock to be
received by such holder) shall receive from Acquiror an amount of cash (rounded
to the nearest whole cent, with 0.5 being rounded up) equal to the product of
(i) such fraction, multiplied by the closing price for a share of Acquiror
Common Stock as quoted on the pink sheets on last trading day prior to the
Effective Time. No warrants to acquire a fractional share of Acquiror Common
Stock will be issued, but in lieu thereof each Acquiror Warrants which would
otherwise be exercisable to purchase a fraction of a share of Acquiror Common
Stock shall be rounded down so that it will be exercisable to purchase the next
lower whole number of shares.
(f) Contribution of Merger Consideration. Immediately prior to each
issuance of Acquiror Common Stock or Acquiror Warrants as Merger Consideration,
including Acquiror Common Stock which is Additional Merger Consideration
pursuant to Section 2.1(c), Acquiror shall contribute such Acquiror Common Stock
or Acquiror Warrants to Merger Sub for issuance by Merger Sub to Target
Stockholders pursuant to this Article II .
Section 2.2. Exchange of Certificates.
(a) Exchange Agent. Acquiror shall act as exchange agent in the Merger.
(b) Notice of Exchange. As soon as reasonably practicable after the
Effective Time, Acquiror shall make available for exchange in accordance with
this Article II, through such reasonable procedures as the Acquiror may adopt,
the shares of Acquiror Common Stock and Acquiror Warrants issuable pursuant to
Section 2.1(b) in exchange for shares of Target Common Stock outstanding
immediately prior to the Effective Time.
(c) Exchange Procedures. Promptly after the Effective Time, Acquiror
shall cause to be mailed to each holder of record of a Certificate or
Certificates which immediately prior to the Effective Time represented
outstanding shares of Target Common Stock, whose shares were converted into the
right to receive shares of Acquiror Common Stock (and cash in lieu of fractional
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shares) and Acquiror Warrants pursuant to Section 2.1(b), (i) a letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon receipt of the
Certificates by Acquiror, and shall be in such form and have such other
provisions as Acquiror may reasonably specify) and (ii) instructions for use in
effecting the surrender of the Certificates in exchange for certificates (or
book entries in the case of shares that have not yet vested) representing shares
of Acquiror Common Stock (and cash in lieu of fractional shares) and Acquiror
Warrants. Upon surrender of a Certificate for cancellation to Acquiror, together
with such letter of transmittal, duly completed and validly executed in
accordance with the instructions thereto, the holder of such Certificate shall
be entitled to receive in exchange therefor a certificate representing the
number of whole shares of Acquiror Common Stock and payment in lieu of
fractional shares and Acquiror Warrants which such holder has the right to
receive pursuant to Section 2.1(b), and the Certificate so surrendered shall
forthwith be canceled. Until so surrendered, each outstanding Certificate that,
prior to the Effective Time, represented shares of Target Common Stock will be
deemed from and after the Effective Time, for all corporate purposes, other than
the payment of dividends, to evidence the ownership of the number of full shares
of Acquiror Common Stock into which such shares of Target Common Stock shall
have been so converted, the right to receive an amount in cash in lieu of the
issuance of any fractional shares and the Acquiror Warrants, all in accordance
with Section 2.1(b).
(d) No Further Ownership Rights in Target Common Stock. All Merger
Consideration paid upon the surrender for exchange of Certificates in accordance
with the terms of this Article II shall be deemed to have been paid in full
satisfaction of all rights pertaining to the shares of Target Common Stock
theretofore represented by such Certificates. There shall be no further
registration of transfers on the stock transfer books of the Surviving
Corporation of the shares of Target Common Stock which were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
Certificates are presented to the Acquiror or the Surviving Corporation for any
reason, they shall be canceled and exchanged as provided in this Article II,
except as otherwise provided by law.
(e) No Liability. None of Acquiror, Target or Merger Sub shall be
liable to any person in respect of any shares of Acquiror Common Stock delivered
to a public official pursuant to any applicable abandoned property, escheat or
similar law. If any Certificate shall not have been surrendered prior to five
years after the Effective Time (or immediately prior to such earlier date on
which any Merger Consideration, payable to the holder of such Certificate, would
otherwise escheat to or become the property of any governmental body or
authority) any such Merger Consideration shall, to the extent permitted by
applicable law, become the property of the Surviving Corporation, free and clear
of all claims or interest of any person previously entitled thereto.
(f) Lost Certificates. If any Certificate shall have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if required by
the Surviving Corporation, the posting by such person of a bond in such
reasonable amount as the Surviving Corporation may direct as indemnity against
any claim that may be made against Acquiror or the Surviving Corporation with
respect to such Certificate, the Acquiror shall issue in exchange for such lost,
stolen or destroyed Certificate the Merger Consideration pursuant to this
Agreement.
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Section 2.3. Rights to Purchase Target Capital Stock. At the Effective
Time, automatically and without any action on the part of the holder thereof,
each option, warrant or other right to purchase or acquire shares of Target
capital stock which remains as of such time unexercised in whole or in part
shall be cancelled.
ARTICLE III
Representations and Warranties of Target
----------------------------------------
Except as otherwise specifically provided in Schedules 3.5 and/or 3.6
attached hereto and incorporated herein by reference (collectively, the "Target
Disclosure Schedule"), Telcom I and Telcom II represent and warrant jointly and
severally, to Acquiror and Merger Sub, that on the date hereof and as of the
Effective Time:
Section 3.1. Organization, Qualification, Etc. Telcom I and Telcom II
are corporations duly organized, validly existing and in good standing under the
laws of the State of Delaware and each has the corporate power and authority to
own its properties and assets and to carry on its business as it is now being
conducted and each is duly qualified to do business and is in good standing in
each jurisdiction in which the ownership of its properties or the conduct of its
business requires such qualification. The copies of Target's Certificates of
Incorporation and bylaws which have been delivered to Acquiror are complete and
correct and in full force and effect on the date hereof.
Section 3.2. Capitalization.
(a) The authorized stock of:
(i) Telcom I consists of 1,000 shares of Telcom I Common Stock. As
of the Effective Time, 40 shares of Telcom I Common Stock were issued and
outstanding. All the outstanding shares of Target Common Stock have been validly
issued and are fully paid and non-assessable.
(ii) Telcom II consists of 1,000 shares of Telcom II Common Stock.
As of the Effective Time, 40 shares of Telcom II Common Stock were issued and
outstanding. All the outstanding shares of Target Common Stock have been validly
issued and are fully paid and non-assessable.
(b) Neither Telcom I nor Telcom II is a party to, nor is Telcom I or
Telcom II aware of, any voting agreement, voting trust or similar agreement or
arrangement relating to any class or series of its capital stock, or any
agreement or arrangement providing for registration rights with respect to any
capital stock or other securities of Target.
(c) Other than (i) the rights of Telcom I and Telcom II to receive
shares of common stock of TerreStar Networks Inc. ("TerreStar") pursuant to
those certain rights certificates dated December 20, 2004 (the "Rights
Certificates"), (ii) the limited partnership units (the "MSV LP Units") of MSV
and (iii) the shares of common stock (the "MSV GP Common Stock") of Mobile
Satellite Ventures GP Inc. ("MSV GP"), neither Telcom I nor Telcom II, directly
or indirectly, owns of record or beneficially, or has the right or obligation to
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acquire, any outstanding securities or other interest in any corporation,
partnership, joint venture or other entity, except as otherwise may be set forth
in the Amended and Restated Stockholders' Agreement (the "MSV Stockholders'
Agreement") dated November 12, 2004 by and among MSV GP, the stockholders of MSV
GP and the Second Amended and Restated Parent Transfer/Drag Along Agreement
dated November 12, 2004 (the "Parent Transfer/Drag Along Agreement"), the
Amended and Restated Consent Agreement dated as of the date hereof (the "Consent
Agreement"), the Voting Agreement dated November 12, 2004 by and among Telcom I,
Telcom II and the other parties thereto (the "MSV Voting Agreement"), the Voting
Agreement dated December 20, 2004 by and among Telcom I, Telcom II and the other
parties thereto (the "TerreStar Voting Agreement"), the Parent Transfer/Drag
Along Agreement dated December 20, 2004 (the "TerreStar Parent Transfer/Drag
Along Agreement"), the Amended and Restated Limited Partnership Agreement of
MSV, dated November 12, 2004, as amended (the "Partnership Agreement"), the
Amended and Restated Stockholders' Agreement dated November 12, 2004 by and
among MSV GP and the stockholders of MSV GP (the "MSV Stockholders' Agreement"),
and the Rights Certificates, the Securityholders Agreement by and among MSV and
other securityholders of TerreStar (including the Irrevocable Proxies executed
in connection therewith) (the "TerreStar Securityholders Agreement") dated
December 20, 2004 (collectively, the "Other Documents").
Section 3.3. Corporate Authority Relative to this Agreement; No
Violation. Each of Telcom I and Telcom II has the corporate power and authority
to enter into this Agreement and to carry out its obligations hereunder. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by the
Board of Directors of Telcom I and Telcom II and, except for the approval and
adoption of this Agreement and the Merger by the stockholders of Telcom I and
Telcom II, no other corporate proceedings on the part of Telcom I and Telcom II
are necessary to authorize this Agreement and the transactions contemplated
hereby. The Board of Directors of Telcom I and Telcom II have determined that
the transactions contemplated by this Agreement are in the best interest of
Telcom I and Telcom II , respectively, and their respective stockholders. This
Agreement has been duly and validly executed and delivered by Telcom I and
Telcom II and, assuming this Agreement constitutes a valid and binding agreement
of the other parties hereto, this Agreement constitutes a valid and binding
agreement of Telcom I and Telcom II, enforceable against Telcom I and Telcom II
in accordance with its terms (except insofar as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally, or by principles governing the
availability of equitable remedies). Neither Telcom I nor Telcom II are subject
to or obligated under any charter, bylaw or contract provision or any license,
franchise or permit, or subject to any order or decree, other than the Other
Documents, which would be breached or violated by its executing or carrying out
this Agreement. Other than in connection with or in compliance with the
provisions of the DGCL and the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended (the "HSR Act") (collectively, the "Target Required
Approvals"), no authorization, consent or approval of, or filing with, any
governmental body or authority is necessary for the consummation by Telcom I or
Telcom II of the transactions contemplated by this Agreement.
Section 3.4. No Liabilities; No Operations. Except in connection with
their ownership and participation in the management of (i) MSV actively and/or
through the ownership of MSV LP Units and MSV GP Common Stock (including, but
not limited to, the exercise of those rights pursuant to the Other Documents),
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(ii) TerreStar, and the exercise of its rights as such owner (including, but not
limited to, the exercise of those rights pursuant to the Other Documents) and
(iii) as set forth on the Target Disclosure Schedule, including, without
limitation, Schedule 3.6, neither Telcom I nor Telcom II has any debt,
liabilities or obligations of any nature, whether accrued, contingent or
otherwise. Except for their active participation in the management of MSV,
neither Telcom I or Telcom II is currently conducting nor has either ever
conducted any operations.
Section 3.5. Target Assets. All assets of Telcom I and Telcom II are
set forth on Schedule 3.5 hereto (collectively, the "Target Assets"). Telcom I
and Telcom II have good and marketable title to their respective Target Assets,
including the MSV LP Units, MSV GP Common Stock and Rights Certificates listed
on Schedule 3.5 hereto, free and clear of all liens, security interests,
encumbrances or adverse claims, other than pursuant to applicable securities
laws and the Other Agreements. Neither Telcom I not Telcom II have any
subsidiaries.
Section 3.6. Target Agreements.
(a) Telcom I has delivered to Acquiror (i) a correct and complete copy
of each written contract, agreement, plan, understanding, commitment or other
arrangement that is binding on Telcom I and except, in each case, for those as
to which Acquiror or a subsidiary thereof is a party or has knowledge
(collectively, the "Telcom I Agreements") to which Telcom I is a party and (ii)
a written summary setting forth the terms and conditions of each oral contract,
agreement, plan, understanding, commitment or other arrangement that is binding
on Telcom I and except, in each case, for those as to which Acquiror or a
subsidiary thereof is a party (collectively, the "Telcom I Oral Agreements") to
which Telcom I is a party. A list of each Telcom I Agreement and Telcom I Oral
Agreement is set forth on Schedule 3.6(a) hereto.
(b) Telcom II has delivered to Acquiror (i) a correct and complete copy
of each written contract, agreement, plan, understanding, commitment or other
arrangement that is binding on Telcom II and except, in each case, for those as
to which Acquiror or a subsidiary thereof is a party or has knowledge
(collectively, the "Telcom II Agreements") to which Telcom II is a party and
(ii) a written summary setting forth the terms and conditions of each oral
contract, agreement, plan, understanding, commitment or other arrangement that
is binding on Telcom II and except, in each case, for those as to which Acquiror
or a subsidiary thereof is a party (collectively, the "Telcom II Oral
Agreements") to which Telcom II is a party. A list of each Telcom II Agreement
and Telcom II Oral Agreement is set forth on Schedule 3.6(b) hereto.
Section 3.7. No Violation of Law. The businesses of Telcom I and Telcom
II are not being conducted in violation of any law, ordinance or regulation of
any governmental entity.
Section 3.8. Lack of Ownership of Acquiror Common Stock. Neither Telcom
I nor Telcom II owns any Acquiror Common Stock or other securities convertible
into Acquiror Common Stock.
Section 3.9. Investigations; Litigation.
8
(a) No investigation or review by any governmental body or authority
with respect to either Telcom I or Telcom II is pending nor has any governmental
body or authority notified either Telcom I or Telcom II in writing of an
intention to conduct the same; and
(b) There are no actions, suits or proceedings pending or threatened in
writing against or affecting Telcom I or Telcom II or its properties at law or
in equity, or before any federal, state, local or foreign governmental body or
authority.
Section 3.10. Tax Matters. Each of Telcom I and Telcom II has timely
filed all tax returns and reports required by law to be filed by it, these
returns and reports are true, correct and complete in all material respects and
each of Telcom I and Telcom II has paid all taxes owed for period up to and
including the Closing Date which are required to have been paid prior to the
Closing Date.
Section 3.11. Approval of Target Stockholders. Each of the Telcom
Stockholders, in their capacity as stockholders of Telcom I and Telcom II,
respectively, has approved the Merger and this Agreement by its execution of
this Agreement and no further approvals are required. No further vote of the
stockholders or directors of Telcom I or Telcom II is required by law, the
Certificate of Incorporation or bylaws of Telcom I or Telcom II or otherwise in
order for Telcom I and Telcom II to consummate the Merger and the transactions
contemplated hereby.
ARTICLE IV
Representations and Warranties of the Target Stockholders.
----------------------------------------------------------
The Telcom Stockholders represent and warrant, jointly and severally,
to Acquiror and Merger Sub, that on the date hereof and as of the Effective
Time:
Section 4.1. Representations and Warranties of Target. The
representations and warranties made by Target in Article III of this Agreement
or the Target Disclosure Schedule, Rights Agreement, Certificate of Merger and
the Compliance Certificate (defined below) are true and correct as of the date
hereof and on and as of the Effective Time and do not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements herein or therein not misleading.
Section 4.2. Authority. Each Target Stockholder has all power to
execute and deliver this Agreement and to carry out and perform such Target
Stockholder's respective obligations under the terms of this Agreement; such
Target Stockholder has the sole power to dispose of his or its shares of Target
Common Stock, either as his, her or its sole and separate property or as
community property, as may be applicable to each Target Stockholder; and this
Agreement, when executed and delivered by such Target Stockholder and each other
party hereto, will constitute such Target Stockholder's valid and binding
obligation, enforceable against him or it in accordance with the terms of this
Agreement.
Section 4.3. No Conflict with other Instruments. The execution,
delivery and performance of this Agreement will not result in any violation of,
be in conflict with, or constitute a default or give rise to a right of
9
termination, cancellation or acceleration under any provision of (a) any
judgment, decree or order or any material agreement, contract, understanding,
indenture or other instrument to which any Target Stockholder is a party or by
which such Target Stockholder is bound; or (b) to the knowledge of the Target
Stockholders, any statute, rule or governmental regulation applicable to such
Target Stockholder.
Section 4.4. Ownership of Shares. As of the Closing, each Target
Stockholder represents and warrants severally as to the shares of Target Common
Stock owned of record by him, her or it that he, she or it has good and
marketable title to the shares to be exchanged pursuant to this Agreement.
Section 4.5. Approval of Agreement and Merger. Such Target Stockholder
has approved this Agreement and the Merger in his, her or its capacity as a
stockholder of Telcom I and Telcom II, as applicable.
Section 4.6. Exchange Entirely for Own Account. The Acquiror Common
Stock, Acquiror Warrants and the Warrant Shares to be issued to such Target
Stockholder will be acquired for investment for such Target Stockholder's own
account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof, and that such Target Stockholder has no
present intention of selling, granting any participation in, or otherwise
distributing the same. By executing this Agreement, such Target Stockholder
further represents that such Target Stockholder does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
participation to such person or to any third person, with respect to any of such
Acquiror securities.
Section 4.7. Reliance Upon the Target Stockholders' Representations.
Such Target Stockholder understands that the Acquiror Common Stock, Acquiror
Warrants and Warrant Shares are not registered under the Securities Act and the
sale provided for in this Agreement and Acquiror's issuance of securities
hereunder will be made in reliance upon an exemption from registration under the
Securities Act pursuant to section 4(2) thereof, and that, in such case,
Acquiror's reliance on such exemption will be based on Target Stockholder's
representations set forth herein.
Section 4.8. Receipt of Information. Such Target Stockholder believes
he, she or it has received all the information he, she or it considers necessary
or appropriate for deciding whether to acquire the Acquiror Common Stock and
Acquiror Warrants. Such Target Stockholder further represents that he, she or it
has had an opportunity to ask questions and receive answers from Acquiror
regarding the terms and conditions of the offering of the Acquiror Common Stock
and Acquiror Warrants and the business and financial condition of Acquiror and
to obtain additional information (to the extent Acquiror possessed such
information or could acquire it without unreasonable effort or expense)
necessary to verify the accuracy of any information furnished to him, her or it
or which he, she or it had access.
Section 4.9. Investor Status; Etc. Such Target Stockholder certifies
and represents to Acquiror that it is an "accredited investor" as defined in
Rule 501 of Regulation D promulgated under the Securities Act and was not
organized for the purpose of acquiring any of the Acquiror Common Stock, the
10
Acquiror Warrants or the Warrant Shares. Such Target Stockholder's financial
condition is such that it is able to bear the risk of holding the Acquiror
Common Stock for an indefinite period of time and the risk of loss of its entire
investment. Such Target Stockholder has sufficient knowledge and experience in
investing in companies similar to Acquiror so as to be able to evaluate the
risks and merits of its investment in Acquiror.
Section 4.10. Brokers or Finders. Such Target Stockholder has not dealt
with any broker or finder in connection with the transactions contemplated by
this Agreement. Such Target Stockholder has not incurred, and shall not incur,
directly or indirectly, any liability for any brokerage or finders' fees or
agents' commissions or any similar charges in connection with this Agreement or
any transaction contemplated hereby.
Section 4.11. Restricted Securities. Such Target Stockholder
understands that the Acquiror Common Stock and Acquiror Warrants may not be
sold, transferred or otherwise disposed of without registration under the
Securities Act or an exemption therefrom, and that in the absence of an
effective registration statement covering the Acquiror Common Stock or an
available exemption from registration under the Securities Act, the Acquiror
Common Stock must be held indefinitely. In particular, such Target Stockholder
is aware that the Acquiror Common Stock may not be sold pursuant to Rule 144 or
Rule 145 promulgated under the Securities Act unless all of the conditions of
the applicable rule are met. Among the conditions for use of Rules 144 and 145
is the availability of current information to the public about Acquiror.
Section 4.12. Legends. It is understood that the certificates
evidencing the Acquiror Common Stock and Acquiror Warrants will bear one or all
of the following legends:
(a) "These securities have not been registered under the Securities Act
of 1933. They may not be sold, offered for sale, pledged or hypothecated in the
absence of a registration statement in effect with respect to the securities
under such Act or an opinion of counsel satisfactory to Motient Corporation that
such registration is not required or unless sold pursuant to Rule 144 or Rule
145 of such Act or another applicable exemption."
(b) Any legend required by the laws of the State of Delaware or other
jurisdiction.
ARTICLE V
Representations and Warranties of Acquiror and Merger Sub
---------------------------------------------------------
Acquiror and Merger Sub represent and warrant to Target that on the
date hereof and as of the Effective Time:
Section 5.1. Organization, Standing and Power. Each of Acquiror and
Merger Sub is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization. Each of Acquiror
and Merger Sub has the corporate power to own its properties and to carry on its
business as now being conducted and as proposed to be conducted and is duly
qualified to do business and is in good standing in each jurisdiction in which
the failure to be so qualified and in good standing would have a material
adverse effect on this Agreement, Merger Sub or Acquiror. Neither Acquiror nor
Merger Sub is in violation of, nor will either be, as a result of the
transactions contemplated by this Agreement, in violation of any of the
provisions of its Certificate of Incorporation or Bylaws.
11
Section 5.2. Capitalization. The authorized capital stock of Acquiror
consists of (i) 100,000,000 shares of Common Stock, of which 52,063,054 shares
were outstanding as of February 5, 2005, and (ii) 5,000,000 shares of preferred
stock, of which no shares are outstanding as of the date hereof; and no material
changes to such outstanding numbers has occurred as of the Effective Time,
without taking into account the transactions contemplated by this Agreement or
the Stock Purchase Agreements (defined below). The authorized capital stock of
Merger Sub consists of 1,000 shares of common stock, $0.01 par value, all of
which are issued and outstanding and held by Acquiror. The shares of Acquiror
Common Stock to be issued pursuant to the Merger will be duly authorized,
validly issued, fully paid and non-assessable.
Section 5.3. Authority. Acquiror and Merger Sub have all requisite
corporate power and authority to enter into this Agreement and to consummate the
transactions and carry out its obligations contemplated hereby. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of Acquiror and Merger Sub. This Agreement has been duly executed
and delivered by Acquiror and Merger Sub and constitutes the valid and binding
obligations of Acquiror and Merger Sub enforceable against Acquiror and Merger
Sub in accordance with its terms. The execution and delivery of this Agreement
does not, and the consummation of the transactions contemplated hereby will not,
conflict with, or result in any violation of, or default under (with or without
notice or lapse of time, or both), or give rise to a right of termination,
cancellation or acceleration of any obligation or loss of a benefit under (i)
any provision of the Certificate of Incorporation or Bylaws of Acquiror or
Merger Sub or any of their subsidiaries, as amended, or (ii) other than the
Other Documents, any material mortgage, indenture, lease, contract or other
agreement or instrument, permit, concession, franchise, license, judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to
Acquiror or Merger Sub or their properties or assets. No consent, approval,
order or authorization of, or registration, declaration or filing with, any
governmental entity, is required by or with respect to Acquiror or Merger Sub in
connection with the execution and delivery of this Agreement by Acquiror or
Merger Sub or the consummation by Acquiror or Merger Sub of the transactions
contemplated hereby or thereby, except for: (i) the filing of the Articles of
Merger as provided in Section 1.2; (ii) the filing of a Form 8-K with the SEC
within 4 business days after the Closing; (iii) the filing of a responsive HSR
Act filing to the HSR Act filing made by Telcom I and Telcom II; (iv) such
filings under applicable state securities laws and the securities laws of any
foreign country as may be required in connection with the transactions
contemplated by this Agreement which are permitted by such laws to be filed
after the Closing; and (v) such other consents, authorizations, filings,
approvals and registrations which, if not obtained or made, would not have a
material adverse effect on Acquiror or Merger Sub and would not prevent,
materially alter, delay or otherwise invalidate any of the transactions
contemplated, by or the due execution and delivery of, this Agreement.
Section 5.4. SEC Documents. Acquiror has made available to Target true
and complete copies of the following reports of Acquiror (collectively, the "SEC
Documents"): (i) the annual report on Form 10-K for the year ended December 31,
2003, (ii) quarterly reports on Form 10-Q for the periods ended March 31, 2004,
12
June 30, 2004 and September 30, 2004 and (iii) each current report on Form 8-K
filed with the SEC since December 31, 2003. As of their respective filing dates,
the SEC Documents complied in all material respects with the requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules
and regulations promulgated thereunder, and none of the SEC Documents contain
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of Acquiror included in the SEC Documents
comply in all material respects with applicable accounting requirements and the
rules and regulations of the SEC with respect thereto in effect at the time of
filing. All material agreements to which Acquiror is a party or to which the
property or assets of Acquiror are subject are included as part of or
specifically identified in the SEC Documents to the extent required by the rules
and regulations of the SEC as in effect at the time of filing. Acquiror has
prepared and filed with the SEC all filings and reports required by the
Securities Act of 1933, as amended (the "Securities Act") and the Exchange Act
to make Acquiror's filings and reports current in all respects.
Section 5.5. Litigation. There is no private or government proceeding
pending before any agency, court or tribunal, foreign or otherwise, against
Acquiror or any of its subsidiaries or, to the knowledge of Acquiror, threatened
against Acquiror or any of its subsidiaries that would prevent, enjoin, alter or
materially delay any of the transactions contemplated by this Agreement, or that
would have a material adverse effect on the ability of Acquiror to consummate
the transactions contemplated by this Agreement. There is no judgment, decree or
order against Acquiror or any of its subsidiaries, or, to the knowledge of
Acquiror, any of their respective directors or officers (in their capacities as
such), that would prevent, enjoin, alter or materially delay any of the
transactions contemplated by this Agreement, or that would have a material
adverse effect on the ability of Acquiror to consummate the transactions
contemplated by this Agreement.
Section 5.6. Broker's and Finders' Fees. Acquiror has not incurred, nor
will it incur, directly or indirectly, any liability for brokerage or finders'
fees or agents' commissions or investment bankers' fees or any similar charges
in connection with this Agreement or any transaction contemplated hereby.
Section 5.7. Representations Complete. None of the representations or
warranties made by Acquiror or Merger Sub herein or in any Schedule hereto, or
certificate furnished by Acquiror or Merger Sub pursuant to this Agreement, when
all such documents are read together in their entirety, contains or will contain
at the Effective Time any untrue statement of a material fact, or omits or will
omit at the Effective Time to state any material fact necessary in order to make
the statements contained herein or therein, in the light of the circumstances
under which made, not misleading.
Section 5.8. Acquiror Subsidiaries. Motient Ventures Holdings Inc.
("MVHI") is a direct wholly-owned subsidiary of Merger Sub and MVHI holds the
interests in MSV and MSV GP that are currently reported as beneficially owned by
Acquiror and its direct and indirect subsidiaries. Neither Merger Sub nor MVHI
is an "investment company" within the meaning of the Investment Company Act of
1940, as amended, and neither Merger Sub nor MVHI is subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act.
13
Section 5.9. Independent Investigation. Acquiror and Merger Sub are
acting for their own account and have made their own independent decisions to
enter into this Agreement and to acquire the MSV LP Units, shares of MSV GP
Common Stock and the Right Certificates pursuant to the transaction contemplated
by this Agreement, based solely on their own judgment and investigation and upon
advice from such legal, financial, tax and other advisors as they have deemed
appropriate. Acquiror and Merger Sub are not relying on any investment advice,
assurance or recommendations by any other party to this Agreement with respect
to their investment in MSV, MSV GP and TerreStar.
ARTICLE VI
Conduct of Target Prior to the Effective Time
---------------------------------------------
Section 6.1. Conduct of Business by Target. During the period from the
date of this Agreement and continuing until the earlier of the termination of
this Agreement or the Effective Time, Telcom I and Telcom II agree (except to
the extent expressly contemplated by this Agreement or as consented to in
writing by Acquiror), to carry on their business in the usual, regular and
ordinary course in substantially the same manner as heretofore conducted.
Without limiting the generality of the foregoing sentence, Telcom I and Telcom
II further agree (i) to pay their debts and taxes when due subject (A) to good
faith disputes over such debts or taxes and (B) to Acquiror's consent to the
filing of material tax returns (which consent shall not be unreasonably withheld
or delayed); (ii) to pay or perform other obligations when due; and (iii) to use
all reasonable efforts consistent with past practice and policies to preserve
intact present business organizations. Both Telcom I and Telcom II agree to
promptly notify Acquiror of any event or occurrence not in the ordinary course
of their business, and of any event which could have a material adverse effect
on the assets of either Telcom I or Telcom II.
Section 6.2. Restrictions on the Conduct of Business by Target. During
the period from the date of this Agreement and continuing until the earlier of
the termination of this Agreement or the Effective Time, except as set forth in
the Target Disclosure Schedule and as expressly contemplated by this Agreement,
neither Telcom I nor Telcom II shall do, cause or permit any of the following,
without the prior written consent of Acquiror:
(a) Charter Documents. Cause or permit any amendments to its
Certificate of Incorporation or Bylaws;
(b) Dividends; Changes in Capital Stock. Declare or pay any dividends
on or make any other distributions (whether in cash, stock or property) in
respect of any of its capital stock, or split, combine or reclassify any of its
capital stock or issue or authorize the issuance of any other securities in
respect of, in lieu of or in substitution for shares of its capital stock, or
repurchase or otherwise acquire, directly or indirectly, any shares of its
capital stock;
(c) No Operations. Other than their active participation in the
management of MSV, conduct any operations;
(d) Contracts. Enter into any contract or commitment, or violate, amend
or otherwise modify or waive any of the terms of any of its contracts;
14
(e) Issuance of Securities. Issue, deliver or sell or authorize or
propose the issuance, delivery or sale of, or purchase or propose the purchase
of, any shares of its capital stock or securities convertible into, or
subscriptions, rights, warrants or options to acquire, or other agreements or
commitments of any character obligating it to issue any such shares or other
convertible securities;
(f) Dispositions. Sell, lease, license or otherwise dispose of or
encumber any of its properties or assets;
(g) Indebtedness. Incur any indebtedness;
(h) Capital Expenditures. Make any capital expenditures, capital
additions or capital improvements;
(i) Insurance. Materially reduce the amount of any insurance coverage
provided by existing insurance policies;
(j) Termination or Waiver. Terminate or waive any right of substantial
value;
(k) Lawsuits. Commence a lawsuit other than for a breach of this
Agreement;
(l) Acquisitions. Acquire or agree to acquire by merging or
consolidating with, or by purchasing a substantial portion of the assets of, or
by any other manner, any business or any corporation, partnership, association
or other business organization or division thereof, or otherwise acquire or
agree to acquire any assets which are material, individually or in the
aggregate, to its and its subsidiaries' business, taken as a whole;
(m) Taxes. Other than in the ordinary course of business, make or
change any material election in respect of taxes, adopt or change any accounting
method in respect of taxes, file any material tax return or any material
amendment to a tax return, enter into any closing agreement, settle any claim or
assessment in respect of taxes, or consent to any extension or waiver of the
limitation period applicable to any claim or assessment in respect of taxes;
(n) Other. Take or agree in writing or otherwise to take, any of the
actions described in this Sections 6.2(a) through (m) above, or any action which
would make any of its representations or warranties contained in this Agreement
untrue or incorrect or prevent it from performing or cause it not to perform its
covenants hereunder.
Section 6.3. No Solicitation. Telcom I and Telcom II agree that neither
they nor any of their officers, directors or trustees shall, and that they shall
direct and use their best efforts to cause their employees, agents and
representatives (including any investment banker, attorney or accountant
retained by either of them) not to, directly or indirectly, initiate, solicit,
encourage or otherwise facilitate (including by way of furnishing information)
any inquiries or the making or any proposal or offer by any person other than
Acquiror or Merger Sub with respect to a merger, reorganization, share exchange,
consolidation, business combination, liquidation, dissolution or similar
transaction involving, or any purchase or sale of all or any significant portion
of the assets or equity securities of, Telcom I or Telcom II (any such proposal
or offer being hereinafter referred to as an "Acquisition Proposal"). Both
15
Telcom I and Telcom II further agree that neither they nor any of their
officers, directors and trustees shall, and that they shall direct and use their
best efforts to cause their employees, agents and representatives (including any
investment banker, attorney or accountant retained by either of them) not to,
directly or indirectly, have any discussion with or provide any confidential
information or data to any person relating to an Acquisition Proposal, or engage
in any negotiations concerning an Acquisition Proposal, or otherwise facilitate
any effort or attempt to make or implement an Acquisition Proposal or accept an
Acquisition Proposal. Both Telcom I and Telcom II agree that they and their
officers, directors or trustees shall, and shall direct and use their best
efforts to cause their employees, agents and representatives (including any
investment banker, attorney or accountant retained by either of them) to, cease
immediately any discussions or negotiations with any third parties relating to
any Acquisition Proposal. Target agrees that it will take the necessary steps to
promptly inform the individuals or entities referred to in the first sentence of
this Section 6.3 of the obligations undertaken in this Section 6.3.
Notwithstanding the above, the foregoing provisions this Section 6.3 will not
apply to any such actions taken solely in relation to the TerreStar Warrants,
the MSV Stockholders' Agreement or the Parent Transfer/Drag Along Agreement.
Section 6.4. Tax Treatment. ..Each of the parties intends the Merger to
qualify as a reorganization under Section 368(a) of the Code, and, from the date
of this Agreement until the Effective Time each party to this Agreement, and
each of their respective subsidiaries, shall not take any action, fail to take
any action, cause any action to be taken or not be taken, or suffer to exist any
condition, if such party knows, or has been advised in writing by another party,
that such action, failure or condition would prevent, or would be reasonably
likely to prevent, the Merger from qualifying as a reorganization within the
meaning of Section 368(a) of the Code.
ARTICLE VII
Additional Agreements
---------------------
Section 7.1. Investigation. Telcom I and Telcom II shall afford to
Acquiror and to Acquiror's officers, employees, accountants, counsel and other
authorized representatives full and complete access during normal business
hours, throughout the period prior to the earlier of the Effective Time or the
date of termination of this Agreement, to their plants, properties, contracts,
commitments, books and records (including but not limited to tax returns) and
any report, schedule or other document filed or received by them pursuant to the
requirements of federal or state securities laws, and shall use their reasonable
best efforts to cause their respective representatives to furnish promptly to
one another such additional financial and operating data and other information
as to their respective businesses and properties as the other or its duly
authorized representatives may from time to time reasonably request.
Section 7.2. Cooperation. Telcom I, Telcom II and Acquiror shall
cooperate with one another in order to lift any injunctions or remove any other
impediment to the consummation of the transactions contemplated herein.
16
Section 7.3. Filings; Other Action. Subject to the terms and conditions
herein provided, the ultimate parent entity of the Target Stockholders and
Acquiror shall (i) promptly make their respective filings and thereafter make
any other required submissions under the HSR Act (to the extent such filings
have not already been made prior to the date hereof), (ii) use reasonable
efforts to cooperate with one another in (A) determining whether any filings are
required to be made with, or consents, permits, authorizations or approvals are
required to be obtained from, any third party, the United States government or
any agencies, departments or instrumentalities thereof or other governmental or
regulatory bodies or authorities of federal, state, local and foreign
jurisdictions in connection with the execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby and thereby and (B)
timely making all such filings and timely seeking all such consents, permits,
authorizations or approvals and (iii) use reasonable efforts to take, or cause
to be taken, all other actions and do, or cause to be done, all other things
necessary, proper or advisable to consummate and make effective the transactions
contemplated hereby, including, without limitation, taking all such further
action as reasonably may be necessary to resolve such objections, if any, as the
Federal Trade Commission, the Antitrust Division of the Department of Justice,
state antitrust enforcement authorities or competition authorities of any other
nation or other jurisdiction or any other person may assert under relevant
antitrust or competition laws with respect to the transactions contemplated
hereby.
Section 7.4. Further Assurances. Each of the parties to this Agreement
shall use its reasonable best efforts to effectuate the transactions
contemplated hereby and to fulfill and cause to be fulfilled the conditions to
closing under this Agreement. Each party hereto, at the reasonable request of
another party hereto, shall execute and deliver such other instruments and do
and perform such other acts and things as may be necessary or desirable for
effecting completely the consummation of this Agreement and the transactions
contemplated hereby.
Section 7.5. Public Announcements. Except as may be required by
applicable law, no party hereto shall make any public announcements or otherwise
communicate with any news media or any other party, with respect to this
Agreement or any of the transactions contemplated hereby, without prior
consultation with the other parties as to the timing and contents of any such
announcement or communications; provided, however, that nothing contained herein
shall prevent any party from (i) promptly making all filings with governmental
authorities or disclosures with the stock exchange, if any, on which such
party's capital stock is listed, as may, in its judgment, be required in
connection with the execution and delivery of this Agreement or the consummation
of the transactions contemplated hereby or (ii) disclosing the terms of this
Agreement to such party's legal counsel, financial advisors or accountants in
furtherance of the transactions contemplated by this Agreement.
Section 7.6. Update Disclosure: Breaches.
(a) From and after the date of this Agreement until the Effective Time,
each party hereto shall promptly notify the other party hereto in writing of (i)
the occurrence, or non-occurrence, of any event that would be likely to cause
any condition to the obligations of any party to effect the Merger and the other
transactions contemplated by this Agreement not to be satisfied or (ii) the
failure of Telcom I, Telcom II or Acquiror, as the case may be, to comply with
or satisfy any covenant, condition or agreement to be complied with or satisfied
by it pursuant to this Agreement which would be likely to result in any
17
condition to the obligations of any party to effect the Merger and the other
transactions contemplated by this Agreement not to be satisfied; provided,
however, that the delivery of any notice pursuant to this Section 7.6 shall not
otherwise limit or affect the remedies available hereunder to the party
receiving such notice.
(b) Until the Closing, each party hereto shall have the continuing
obligation to promptly supplement the information contained in its disclosure
schedule attached hereto with respect to any matter hereafter discovered which
was in existence on the date hereof and, if known at the date of this Agreement,
would have been required to be set forth or described in such disclosure
schedules.
(c) Neither the supplementation of the disclosure schedules pursuant to
the obligation in Section 7.6(b) nor any disclosure after the date hereof of the
untruth of any representation and warranty made in this Agreement shall operate
as a cure of any breach of (i) the failure to disclose the information or (ii)
any untrue representation or warranty made herein. Notwithstanding the
foregoing, if such supplementation by Target or Acquiror (x) is consented to in
writing by Acquiror or Target, as applicable or (y) discloses any fact or set of
facts which, either singly or in the aggregate with other facts disclosed
pursuant to such obligation, is not, or is not reasonably likely to result in, a
material adverse effect, such supplementation shall be deemed to cure any such
untrue representation or warranty, and such representation or warranty, as so
supplemented, shall be deemed to have been amended accordingly.
Section 7.7. Contribution of MSV Interests and Shares. Within thirty
(30) days after the Effective Time, Acquiror and Merger Sub agree to cause all
of the MSV LP Units and shares of MSV GP Common Stock acquired by Acquiror
and/or Merger Sub as a result of the transactions contemplated by this Agreement
to be contributed by Merger Sub to MVHI (which shall have continued to be a
direct wholly-owned subsidiary of Merger Sub at such time), and thereby to cause
MVHI to hold both (i) the MSV limited partnership interests and MSV GP shares
that are currently beneficially owned by Acquiror and/or its direct and indirect
subsidiaries and (ii) the MSV limited partnership interests and MSV GP shares
acquired by Acquiror and/or Merger Sub as a result of the transactions
contemplated by this Agreement.
Section 7.8. Blue Sky Laws. Acquiror shall take such steps as may be
necessary to comply with the securities and blue sky laws of all jurisdictions
which are applicable to the issuance of the Acquiror Common Stock in connection
with the Merger. Each of Telcom I and Telcom II shall use its best efforts to
assist Acquiror as may be necessary to comply with the securities and blue sky
laws of all jurisdictions in which such compliance is necessary or desirable in
connection with the issuance of Acquiror Common Stock in connection with the
Merger.
Section 7.9. Acquiror Rights Offering. After the Closing, Acquiror may
issue up to 2,500,000 shares of Acquiror Common Stock at a purchase price per
share of $8.57 to its stockholders of record on December 17, 2004 pursuant to a
rights offering (the "Rights Offering"). The shares of Acquiror Common Stock
issuable to the Target Stockholders in the Merger will be issued to the Target
Stockholders after the record date for such Rights Offering. Each Target
Stockholder hereby acknowledges that such Target Stockholder has no right to
participate in the Rights Offering.
18
Section 7.10. Role of Xx. Xxxxx Subsequent to Closing. In the event
that, subsequent to the Closing, Acquiror requests that Xx. Xxxxxxxx Xxxxx
provide advisory or consulting services to Acquiror in a non-employee capacity,
on mutually acceptable terms, Xx. Xxxxx would be willing to do so.
Section 7.11. Target Stockholder Approval. Each Target Stockholder
hereby approves this Agreement and the Merger in his/its capacity as a
stockholder of Telcom I or Telcom II, as applicable.
Section 7.12. Rights Agreement. At the Closing, Acquiror and each
Target Stockholder shall enter into the Rights Agreement in substantially the
form attached as Exhibit C hereto.
Section 7.13. Tax Treatment. At and after the Effective Time, each
party to this Agreement, and each of their respective subsidiaries, shall not to
take any action, fail to take any action, cause any action to be taken or not be
taken, or suffer to exist any condition, if such party knows, or has been
advised in writing by another party, that such action, failure or condition
would prevent, or would be reasonably likely to prevent, the Merger from
qualifying as a reorganization within the meaning of Section 368(a) of the Code.
Section 7.14. Designation of Director. Pursuant to this Agreement and
each of the Stock Purchase Agreements dated as of the date hereof by and among
Motient, Merger Sub and each of Columbia Capital Equity Partners III (QP), L.P.,
Columbia Capital Equity Partners III (AI), L.P., Columbia Capital Equity
Partners III (CAYMAN), L.P., Columbia Capital Investors III, LLC, Columbia
Capital Employee Investors III, L.L.C., Spectrum Equity Investors IV, L.P.,
Spectrum IV Investment Managers' Fund, L.P. and Spectrum Equity Investors
Parallel IV, L.P. (collectively, the "Stock Purchase Agreements"), the members
of the Telcom Investor Group, the Spectrum Investor Group and the Columbia
Investor Group (as such terms are defined in the MSV Stockholders' Agreement are
transferring to Motient or affiliates of Motient more than five percent (5%)
Percentage Interests (as such term is defined in the MSV Stockholders'
Agreement), and in connection herewith and therewith, hereby expressly transfer
to Motient such Investor Group's right to designate one director of MSV GP
pursuant to Section 2(b)(i) of the MSV Stockholders' Agreement, which director
shall be designated by Motient as transferee of such Investor Groups.
Section 7.15. No Additional Consideration. Each of Telcom I, Telcom II
and each Target Stockholder hereby agrees that other than the Merger
Consideration, no additional consideration is owed hereunder by Motient or
Merger Sub or any subsidiary of affiliate of Motient or Merger Sub to Telcom I,
Telcom II or the Target Stockholders due to consideration to be paid by Motient
and Merger Sub in connection with the transactions contemplated by the Stock
Purchase Agreements.
Section 7.16. Independent Evaluation of Investment..
(a) The parties intend that this Agreement and the transactions
contemplated thereby be consistent with the conditions and restrictions
applicable to the parties and/or their affiliates either pursuant to MSV GP's,
MSV's and/or TerreStar's organizational documents and/or pursuant to the
agreements between or among MSV GP's, MSV's and/or TerreStar's stockholders
and/or partners, as applicable, including without limitation the Other Documents
(collectively, the "Investor Agreements").
19
(b) Each of the parties hereto has made an independent evaluation of
each of the Investor Agreements' conditions and restrictions that are or may be
applicable or relevant to the transactions contemplated by this Agreement and
each acknowledges and agrees (i) that it is not relying on any representation,
warranty or evaluation by any other party to this Agreement with respect thereto
and (ii) that it believes in good faith that the Investor Agreements' conditions
and restrictions have been satisfied and/or are consistent with the transactions
contemplated by this Agreement. Notwithstanding any other provision of this
Agreement, it is the intention and agreement of the parties hereto that each
will bear its own risk and responsibility with respect to any such conditions
and restrictions applicable to it, without recourse to any other party pursuant
to the terms of this Agreement, including, without limitation, pursuant to
Article X hereof, provided that nothing herein shall limit in any way the
ability of a party hereto to seek equitable remedies in the event the transfers
hereunder (including but not limited to the indirect transfers of interests in
MSV, MSV GP or TerreStar) are held not to be valid, binding and enforceable.
ARTICLE VIII
Conditions to the Merger
------------------------
Section 8.1. Conditions to Each Party's Obligation to Effect the
Merger. The respective obligations of each party to effect the Merger shall be
subject to the fulfillment at or prior to the Effective Time of the following
conditions:
(a) No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or enforced by any
court or other tribunal or governmental body or authority which prohibits the
consummation of the Merger substantially on the terms contemplated hereby. In
the event any order, decree or injunction shall have been issued, each party
shall use its reasonable efforts to remove any such order, decree or injunction.
(b) Any applicable waiting period under the HSR Act with respect to the
transactions contemplated by this Agreement shall have expired or been
terminated and any other Target Required Approvals and Acquiror Required
Approvals shall have been obtained, except where the failure to obtain such
other Target Required Approvals and Acquiror Required Approvals would not have a
material adverse effect on Target or Acquiror, as the case may be.
Section 8.2. Conditions to Obligations of Target to Effect the Merger.
The obligations of Telcom I and Telcom II to effect the Merger are subject to
the fulfillment on or before the Closing of each of the following conditions:
(a) Acquiror shall have entered into the Rights Agreement;
(b) all representations and warranties made by Acquiror shall be true
and correct on and as of the Closing with the same effect as though such
representations and warranties had been made on and as of the date of Closing;
20
(c) since the date hereof, there shall have been no material adverse
change in the business, assets or financial condition of Acquiror;
(d) Acquiror shall have performed and complied in all material respects
with all agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by it on or before the Closing;
(e) Telcom I and Telcom II shall have concluded, in their reasonable
discretion, that the consummation of the Merger will not be taxable events for
their stockholders and shall have received from Telcom I and Telcom II's tax
advisor a legal opinion, letter ruling or other assurance reasonably
satisfactory to them with respect thereto;
(f) Merger Sub and MVHI shall have executed a written acknowledgement
agreeing to be bound by the terms of the Voting Agreement dated November 12,
2004 by and among the stockholders of MSV GP in accordance with the provisions
of Section 2.03 thereof;
(g) Merger Sub and MVHI shall have entered into the Consent Agreement
with respect to the MSV LP Units and shares of MSV GP Common Stock acquired by
Merger Sub and contributed to MVHI at the Effective Time.
(h) Telcom I and Telcom II shall have been provided with a draft copy
of Acquiror's Registration Statement on Form S-1 (the "Mandatory S-1")
registering the resale of the Acquiror Common Stock to be issued in the Merger
in form and substance substantially as required by the rules and regulations of
the SEC, together with such information and assurances as Telcom I and Telcom II
shall require in their reasonable discretion with respect to Acquiror's ability
to meet its registration obligations as described in the Rights Agreement; and
(i) such other closing conditions as may be reasonably requested by
Telcom I and Telcom II, including, without limitation, no suspension of trading
relating to Acquiror or Acquiror Common Stock, the delivery of original stock
certificates and Acquiror Warrants, certified board resolutions approving the
Merger, good standing certificates, and the delivery of transfer agent
instructions to and their acceptance and processing by the transfer agent.
Section 8.3. Conditions to Obligations of Acquiror to Effect the
Merger. The obligation of Acquiror and Merger Sub to effect the Merger are
subject to the fulfillment on or before the Closing of each of the following
conditions:
(a) each Target Stockholder shall have entered into the Rights
Agreement;
(b) the representations and warranties of Target contained in Article
III and the Target Stockholders contained in Article IV shall be true and
correct on and as of the Closing with the same effect as though such
representations and warranties had been made on and as of the date of Closing ;
(c) Target and the Target Stockholders shall have performed and
complied in all material respects with all agreements, obligations and
conditions contained in this Agreement that are required to be performed or
complied with by it on or before the Closing;
21
(d) the President of Telcom I and Telcom II shall have delivered to
Acquiror at the Closing a certificate (the "Compliance Certificate") stating
that the conditions specified in Sections 8.3(b) and (c) have been fulfilled;
(e) Acquiror shall have concluded, in its reasonable discretion, that
the consummation of the Merger will not be a taxable event for Acquiror or
Merger Sub;
(f) Acquiror shall have concluded that it will be able to file the
Mandatory S-1 covering the resale of Acquiror Common Stock to be issued in the
Merger within three business days after the Closing Date;
(g) Telcom I and Telcom II shall have taken all actions necessary to
comply with the requirements of the MSV Stockholders' Agreement, including
Sections 8.2(a) and 8.2(b) thereof, and the Parent Transfer/Drag Along
Agreement;
(h) there shall have been no material adverse change in the business,
assets or financial condition of Telcom I, Telcom II, MSV, MSV GP or TerreStar;
and
(i) such other closing conditions as may be reasonably requested by
Motient, including, without limitation, the delivery of original stock
certificates for the outstanding shares of Telcom I and Telcom II, certified
board and stockholder resolutions approving the transaction and good standing
certificates.
ARTICLE IX
Termination
-----------
Section 9.1. Termination or Abandonment. Notwithstanding anything
contained in this Agreement to the contrary, this Agreement may be terminated
and abandoned at any time prior to the Effective Time, whether before or after
any approval of the matters presented in connection with the Merger by the
stockholders of Target:
(a) by the mutual written consent of Target and Acquiror;
(b) by either Target or Acquiror if the Effective Time shall not have
occurred on or before February 9, 2005; provided, that the party seeking to
terminate this Agreement pursuant to this clause 9.1(b) shall not have breached
in any material respect its obligations under this Agreement in any manner that
shall have proximately contributed to the failure to consummate the Merger on or
before such date;
(c) by either Target or Acquiror if (i) a statute, rule, regulation or
executive order shall have been enacted, entered or promulgated prohibiting the
consummation of the Merger substantially on the terms contemplated hereby or
(ii) an order, decree, ruling or injunction shall have been entered permanently
restraining, enjoining or otherwise prohibiting the consummation of the Merger
substantially on the terms contemplated hereby and such order, decree, ruling or
injunction shall have become final and non-appealable; provided, that the party
seeking to terminate this Agreement pursuant to this clause 9.1(c)(ii) shall
have used its reasonable best efforts to remove such injunction, order or
decree;
22
(d) by Target, if Acquiror shall have breached or failed to perform in
any material respect any of its representations, warranties, covenants or other
agreements contained in this Agreement, which breach or failure to perform (i)
would give rise to the failure of a condition set forth in Section 8.2(b) or
(d), and (ii) is incapable of being cured by Acquiror or is not cured within 30
days of notice of such breach or failure; or
(e) by Acquiror, if Target shall have breached or failed to perform in
any material respect any of its representations, warranties, covenants or other
agreements contained in this Agreement, which breach or failure to perform (i)
would give rise to the failure of a condition set forth in Section 8.3(b) or
(c), and (ii) is incapable of being cured by Target or is not cured within 30
days of notice of such breach or failure.
Section 9.2. Effect of Termination. Except as provided elsewhere in
this Agreement, in the event of the termination of this Agreement pursuant to
Section 9.1, this Agreement shall forthwith become void, there shall be no
liability on the part of Acquiror, Merger Sub or Target or any of their
respective officers or directors to the other and all rights and obligations of
any party hereto shall cease, except that nothing herein shall relieve any party
from liability for any misrepresentation or breach of any covenant or agreement
under this Agreement.
ARTICLE X
Indemnification
---------------
Section 10.1. Survival of Representations and Warranties. The
warranties, representations and covenants of Acquiror, Merger Sub and the Target
Stockholders contained in or made pursuant to this Agreement shall survive the
execution and delivery of this Agreement and the Closing, for a period of twelve
(12) months, except for the representations and warranties of the Target
Stockholders to the extent that they relate to the representations and
warranties of Telcom I and Telcom II set forth in Section 3.9 relating to
certain tax matters, which shall survive for the duration of the statute of
limitations applicable to such tax matters (such twelve month period or the
duration of the statute of limitations, as applicable, shall be defined as the
"Survival Period"), and shall in no way be affected by any investigation of the
subject matter thereof made by any party hereto. The warranties, representations
and covenants of Telcom I and Telcom II shall expire at the Effective Time;
provided, however, that such expiration shall in no way shorten the Survival
Period with respect to the representations of the Target Stockholders in Section
4.1.
Section 10.2. Obligation to Indemnify.
(a) Target and Target Stockholders Obligation to Indemnify. From and
after the Effective Time, the Target Stockholders (each, an "Acquiror
Indemnitor"), jointly and severally, shall indemnify, defend and hold harmless
Acquiror, Merger Sub and their respective officers, directors, stockholders,
partners, employees, agents and affiliates (each, an "Acquiror Indemnitee"),
from and against all losses, claims, damages, liabilities, obligations, fines,
penalties, judgments, settlements, costs, expenses and disbursements (including
23
attorneys', accountants' and investigatory fees and expenses) (collectively,
"Losses") to the extent resulting from any (i) breach or inaccuracy of any
representation or warranty of an Acquiror Indemnitor contained in the Agreement
for which a claim is initiated prior to the expiration of the Survival Period;
(ii) breach or inaccuracy of any representation or warranty of Telcom I or
Telcom II contained in this Agreement for which a claim is initiated prior to
the expiration of the Survival Period; or (iii) non-fulfillment or breach of any
covenant or agreement of an Acquiror Indemnitor or of Telcom I or Telcom II
contained in this Agreement.
(b) Acquiror's Obligation to Indemnify. From and after the Effective
Time, Acquiror shall defend, indemnify and hold harmless the Target Stockholders
and their respective officers, directors, stockholders, partners, employees,
agents and affiliates (each, a "Target Indemnitee") from and against any and all
Losses to the extent resulting from any (i) breach or inaccuracy of any
representation or warranty of the Acquiror or Merger Sub contained in this
Agreement for which a claim is initiated prior to the expiration of the Survival
Period; or (ii) non-fulfillment or breach of any covenant or agreement of the
Acquiror or Merger Sub contained in this Agreement.
(c) Indemnification Basket Amount. Notwithstanding the foregoing, an
Indemnifying Party (defined below) shall not be required to indemnify an
Indemnified Party pursuant to Section 10.2(a) or (b) unless and until the amount
of all Losses incurred by such Indemnified Party exceeds $500,000 in the
aggregate (the "Basket Amount"), in which case the Indemnifying Party shall be
required to indemnify the Indemnified Party for any and all such Losses
(including the Basket Amount).
Section 10.3. Indemnification Procedures.
(a) The person seeking indemnification hereunder (each, an "Indemnified
Party") shall give the party or parties from whom indemnification is sought or
to be sought (each, an "Indemnifying Party") prompt written notice of any Loss
as to which they have received written notification. If an indemnification claim
involves a claim by a third party (a "Third Party Claim"), the Indemnified Party
shall promptly notify the Indemnifying Party thereof in writing; provided,
however, that no delay on the part of the Indemnified Party in notifying the
Indemnifying Party shall relieve the Indemnifying Party from any obligation
hereunder unless (and then solely to the extent) the Indemnifying Party is
actually and materially prejudiced thereby. An Indemnifying Party shall have ten
business days from the delivery of such notice (the "Notice Response Period") to
notify the Indemnified Party whether or not it disputes its liability to the
Indemnified Party hereunder with respect to such claim or demand. If an
Indemnifying Party disputes its liability to an Indemnified Party hereunder with
respect to such claim or demand or the amount thereof, such dispute shall be
resolved by a civil action in a court of appropriate jurisdiction (including as
part of any proceeding with respect to the claim that gave rise to the
indemnification claim to which such dispute relates) which may be commenced by
either party. During the Notice Response Period, no such claim or demand may be
settled by the Indemnified Party.
(b) With respect to each Indemnification Matter (as defined below), the
Indemnified Parties will have the sole right and authority to control the
defense against any Third Party Claim with one counsel of their collective
choice. This right shall include the right to settle or resolve the Third Party
24
Claim by entering into an agreement memorializing the terms of settlement or
resolution (a "Settlement Agreement"), provided however, that the Indemnified
Party provides the Indemnifying Party with notice (in accordance with Section
10.4 hereof) of its intent to enter into a Settlement Agreement, which notice
shall include the proposed terms of the Settlement Agreement. The Indemnifying
Party shall, within ten business days of receipt of such notice, have the right
to reject the proposed Settlement Agreement, but shall do so only if it
reasonably determines that the Settlement Agreement does not represent a bona
fide and reasonable resolution of the underlying Third Party Claim. The
Indemnifying Party (and any Indemnified Party who is not otherwise satisfied
with the one counsel chosen by the Indemnified Parties collectively) may retain
separate co-counsel at their sole cost and expense and participate in the
defense of the Third Party Claim; provided, however, that in no event may any
Indemnifying Party consent to the entry of any judgment, enter into any
settlement with respect to the Third Party Claim or agree with any Person other
than the Indemnified Party, to take any other action with respect to the Third
Party Claim without the prior written consent of the Indemnified Party . If it
is determined pursuant to an order or settlement agreement that an Indemnifying
Party is responsible for all or a portion of any amounts for which the
Indemnified Party is liable as a result of such Third Party Claim hereunder, the
Indemnifying Party shall, pursuant to Section 10.4(b), render payment to the
Indemnified Party for all Losses resulting from such claim, subject to the
provisions of Section 10.5.
Section 10.4. Notices and Payments.
With respect to each separate matter which is subject to
indemnification under this Section 10 (each, an "Indemnification Matter"):
(a) Notice. Upon the Indemnified Party's receipt of written documents
pertaining to an Indemnification Matter, or, if the Indemnification Matter does
not involve a third party demand or claim, within a reasonable time after the
Indemnified Party first has actual knowledge of such Indemnification Matter, the
Indemnified Party shall give written notice to the Indemnifying Party of the
nature of such Indemnification Matter, and, if susceptible to estimation at such
time, the Indemnified Party's best estimate of the amount demanded or claimed in
connection therewith as provided in Section 10.3; provided, however, that no
delay on the part of the Indemnified Party in notifying the Indemnifying Party
shall relieve the Indemnifying Party from any obligation hereunder unless (and
then solely to the extent) the Indemnifying Party is actually and materially
prejudiced thereby.
(b) Payment. Upon determination of the amount of the Loss (whether due
to the Indemnifying Party's failure to dispute the indemnification matter, by
agreement among the parties, or after a settlement agreement is executed or a
final order is rendered with respect to the indemnification matter), the
Indemnifying Party shall promptly (and in any event, not later than ten days
after such determination) pay to the Indemnified Party all amounts owing by the
Indemnifying Party under this Section 10 with respect to such indemnification
matter, subject to the limitations set forth in Section 10.5.
Section 10.5. Limited Remedy.
25
(a) Acquiror Indemnitee Indemnification Limit. The maximum amount all
Acquiror Indemnitees may recover pursuant to the indemnity set forth in Section
10.2(a) hereof shall be limited to the value of the shares of Acquiror Common
Stock issued in the Merger as determined using the closing sales price of such
Acquiror Common Stock on the pink sheets on the Closing Date plus the value of
any shares of Acquiror Common Stock issued as Additional Merger Consideration as
determined using the closing sales price of Acquiror Common Stock on the pink
sheets on the date such Additional Merger Consideration is issued to the Target
Stockholders.
(b) Target Indemnitee Indemnification Limit. The maximum amount each
Target Indemnitee may recover pursuant to the indemnity set forth in Section
10.2(b) shall be limited to the value of the shares of Acquiror Common Stock
issued to such Target Indemnitee in the Merger as determined using the closing
sales price of Acquiror Common Stock on the pink sheets on the Closing Date plus
the value of any shares of Acquiror Common Stock issued as Additional Merger
Consideration to such Target Indemnitee as determined using the closing sales
price of Acquiror Common Stock on the pink sheets on the date such Additional
Merger Consideration is issued to such Target Indemnitee.
Section 10.6. Payment Treatment. Acquiror, Merger Sub and the Target
Stockholders agree to treat any payment under this Section 10 as an adjustment
to the Merger Consideration.
ARTICLE XI
Miscellaneous
-------------
Section 11.1. Expenses. Whether or not the Merger is consummated, all
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby and thereby shall be paid by the party
incurring such expenses.
Section 11.2. Counterparts: Effectiveness. This Agreement may be
executed in two or more consecutive counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon
the same instrument, and shall become effective when one or more counterparts
have been signed by each of the parties and delivered (by telecopy or otherwise)
to the other parties.
Section 11.3. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without regard to
the principles of conflicts of laws thereof.
Section 11.4. Notices. Any notices, reports or other correspondence
(hereinafter collectively referred to as "correspondence") required or permitted
to be given hereunder shall be given in writing and shall be deemed given three
business days after the date sent by certified or registered mail (return
receipt requested), one business day after the date sent by overnight courier or
on the date given by telecopy (with confirmation of receipt) or delivered by
hand, to the party to whom such correspondence is required or permitted to be
given hereunder. An electronic communication ("Electronic Notice") shall be
deemed written notice for purposes of this Section 11.4 if sent with return
receipt requested to the facsimile number or electronic mail address specified
by the receiving party either in this Section 11.4 or on Schedule 1 hereto.
Electronic Notice shall be deemed received at the time the party sending
Electronic Notice receives verification of receipt by the receiving party.
26
To Acquiror:
Motient Corporation
000 Xxxxxxxxxxxxx Xxxxxxx
Xxxxxxxxxxxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: General Counsel
with a copy (which shall not constitute notice) to:
Xxxxxxx Xxxxx LLP
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxx Xxxxx
To Target:
Telcom Satellite Ventures Inc.
Telcom Satellite Ventures II Inc.
x/x Xxxxxx Xxxxxxxx, X.X.X.
000 X. Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Telecopy: 703-519-2181
Attention: Xxx X. Xxxxxxx, Vice President & General Counsel
with a copy (which shall not constitute notice) to:
Steel Xxxxxx & Xxxxx LLP
000 Xxxxx Xxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxx, XX 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
To Target Stockholders:
At the address for such Target Stockholder set forth on
Schedule A hereto.
Section 11.5. Assignment; Binding Effect. Neither this Agreement nor
any of the rights, interests or obligations hereunder shall be assigned by any
of the parties hereto (whether by operation of law or otherwise) without the
prior written consent of the other parties. Subject to the preceding sentence,
this Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns.
Section 11.6. Severability. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable.
27
Section 11.7. Entire Agreement; Non-Assignability; Parties in Interest.
This Agreement and the documents and instruments and other agreements
specifically referred to herein or delivered pursuant hereto, including the
Exhibits, the Schedules and the Target Disclosure Schedule: (a) constitute the
entire agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof; (b) are not intended to
confer upon any other person any rights or remedies hereunder; and (c) shall not
be assigned by operation of law or otherwise except as otherwise specifically
provided.
Section 11.8. Headings. Headings of the Articles and Sections of this
Agreement are for convenience of the parties only, and shall be given no
substantive or interpretive effect whatsoever.
Section 11.9. Certain Definitions. References in this Agreement to
"Subsidiaries" of Telcom I, Telcom II or Acquiror shall mean any corporation or
other form of legal entity of which more than 50% of the outstanding voting
securities are on the date hereof directly or indirectly owned by Telcom I,
Telcom II or Acquiror, as the case may be. References in this Agreement (except
as specifically otherwise defined) to "affiliates" shall mean, as to any person,
any other person which, directly or indirectly, controls, or is controlled by,
or is under common control with, such person. As used in this definition,
"control" (including, with its correlative meanings, "controlled by" and "under
common control with") shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of management or policies of a person,
whether through the ownership of securities or partnership of other ownership
interests, by contract or otherwise. References in the Agreement to "person"
shall mean an individual, a corporation, a partnership, an association, a trust
or any other entity or organization, including, without limitation, a
governmental body or authority.
Section 11.10. Amendment. This Agreement may be amended by the
agreement of all parties at any time prior to the Effective Time. This Agreement
may not be amended except by an instrument in writing signed by the parties
hereto.
Section 11.11. Waiver. At any time prior to the Effective Time, the
parties hereto may (a) extend the time for the performance of any of the
obligations or other acts of any other party hereto, (b) waive any inaccuracies
in the representations and warranties of any other party contained herein or in
any document delivered pursuant hereto and (c) waive compliance by any other
party with any of the agreements or conditions contained herein. Any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed by the party or parties to be bound thereby, but such extension or waiver
or failure to insist on strict compliance with an obligation, covenant,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure.
[Signature Pages Follow]
28
IN WITNESS WHEREOF, the parties hereto have caused this Agreement and
Plan of Merger to be duly executed and delivered as of the date first above
written.
MOTIENT CORPORATION
By:/s/ Xxxxxxxxxxx Xxxxxx
---------------------------------------
Name: Xxxxxxxxxxx Xxxxxx
Title: Executive Vice President and Chief
Operating Officer
MVH HOLDINGS INC.
By:/s/ Xxxxxxxxxxx Xxxxxx
---------------------------------------
Name: Xxxxxxxxxxx Xxxxxx
Title: Executive Vice President and Chief
Operating Officer
TELCOM SATELLITE VENTURES INC.
By:_______________________________________
Name:_____________________________________
Title:____________________________________
TELCOM SATELLITE VENTURES II INC.
By:_______________________________________
Name:_____________________________________
Title:____________________________________
[SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER]
TARGET STOCKHOLDERS:
/s/ Xx. Xxxxxxxx Xxxxx
------------------------------------------
Xx. Xxxxxxxx Xxxxx
/s/ Xxxxx Xxxxx
------------------------------------------
Xxxxx Xxxxx
The Xxxxx Xxx Xxxxx Education Trust
By:/s/ Xxxxx Xxxxx
---------------------------------------
As Trustee
The Samir Xxx Xxxxx Education Trust
By:/s/ Xxxxx Xxxxx
---------------------------------------
_______________________________________
_______________________________________
_______________________________________
_______________________________________
_______________________________________
As Trustee
[SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER]
Schedule A
----------
Target Stockholders
Xx. Xxxxxxxx Xxxxx
x/x Xxxxxx Xxxxxxxx, X.X.X.
000 X. Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Telecopy: 703-519-2181
Attention: Xxx X. Xxxxxxx, Vice
President and General Counsel
Xxx. Xxxxx Xxxxx
x/x Xxxxxx Xxxxxxxx, X.X.X.
000 X. Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Telecopy: 703-519-2181
Attention: Xxx X. Xxxxxxx,
Vice President and General Counsel
The Xxxxx Xxx Xxxxx Education Trust
x/x Xxxxxx Xxxxxxxx, X.X.X.
000 X. Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Telecopy: 703-519-2181
Attention: Xxx X. Xxxxxxx,
Vice President and General Counsel
The Samir Xxx Xxxxx Education Trust
x/x Xxxxxx Xxxxxxxx, X.X.X.
000 X. Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Telecopy: 703-519-2181
Attention: Xxx X. Xxxxxxx,
Vice President and General Counsel
Schedule B
----------
Target Disclosure Schedule
Schedule 3.5
Target Assets
2,296,835 MSV LP limited partnership units
249.60 shares of common stock of MSV GP
1,536,123 rights to receive shares of common stock of TerreStar Networks, GP
Rights under the agreements and instruments listed in Schedule 3.6
Schedule 3.6
Target Agreements
(see attached)
Exhibit A
---------
Form of Acquiror Warrant
Exhibit B
---------
Form of Certificate of Merger
Exhibit C
---------
Form of Registration Rights Agreement
