EXHIBIT 10.2
STOCK REPURCHASE AGREEMENT
BY AND BETWEEN
MOTIENT CORPORATION
AND
[------------------]
DATED AS OF MAY 17, 2005
TABLE OF CONTENTS
ARTICLE I Purchase and Sale.......................................................................................1
Section 1.1. Sale of Repurchase Shares..............................................................1
Section 1.2. Purchase Price.........................................................................2
Section 1.3. Closing................................................................................2
Section 1.4. Deliveries.............................................................................2
ARTICLE II Representations and Warranties of Seller...............................................................2
Section 2.1. Organization, Qualification, Etc.......................................................2
Section 2.2. Agreements Affecting Repurchase Shares.................................................2
Section 2.3. Title to Repurchase Shares.............................................................3
Section 2.4. Authority..............................................................................3
Section 2.5. Litigation.............................................................................3
Section 2.6. [Intentionally Omitted]................................................................4
Section 2.7. Unsolicited Purchase...................................................................4
Section 2.8. [Intentionally Omitted]................................................................4
Section 2.9. Representation and Investigation.......................................................4
Section 2.10. Brokers or Finders.....................................................................4
Section 2.11. Representations Complete...............................................................4
ARTICLE III Representations and Warranties of Motient and Sub.....................................................4
Section 3.1. Organization, Standing and Power.......................................................5
Section 3.2. Authority..............................................................................5
Section 3.3. SEC Documents..........................................................................5
Section 3.4. Litigation.............................................................................6
Section 3.5. [Intentionally Omitted]................................................................6
Section 3.6. Broker's and Finders' Fees.............................................................6
Section 3.7. Representation and Investigation.......................................................6
Section 3.8. Representations Complete...............................................................6
ARTICLE IV Additional Agreements..................................................................................6
Section 4.1. Filings; Other Action..................................................................6
Section 4.2. Public Announcements...................................................................7
Section 4.3. Lock-Up................................................................................7
Section 4.4. Delay Not Unreasonable.................................................................8
ARTICLE V Indemnification.........................................................................................8
Section 5.1. Survival of Representations and Warranties.............................................8
Section 5.2. Obligation to Indemnify................................................................8
Section 5.3. Indemnification Procedures.............................................................9
Section 5.4. Notices and Payments..................................................................10
Section 5.5. Limited and Exclusive Remedy..........................................................11
ARTICLE VI Miscellaneous.........................................................................................11
Section 6.1. Expenses..............................................................................11
Section 6.2. Counterparts; Effectiveness...........................................................11
Section 6.3. Governing Law.........................................................................11
Section 6.4. Notices...............................................................................11
Section 6.5. Assignment; Binding Effect............................................................12
Section 6.6. Severability..........................................................................12
Section 6.7. Entire Agreement; Non-Assignability; Parties in Interest..............................13
Section 6.8. Headings..............................................................................13
Section 6.9. Certain Definitions...................................................................13
Section 6.10. Amendments and Waivers................................................................13
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STOCK REPURCHASE AGREEMENT
THIS STOCK REPURCHASE AGREEMENT (this "AGREEMENT") is made and entered
into as of May 17, 2005 by and between Motient Corporation, a Delaware
corporation ("MOTIENT") and [------------------] (the "SELLER"), a Delaware
limited partnership.
RECITALS:
WHEREAS, Seller owns [------------------]shares (the "MOTIENT SHARES")
of Motient's common stock, par value $0.01 per share ("MOTIENT COMMON STOCK"),
which Seller acquired from Motient pursuant to that certain Stock Purchase
Agreement (the "PURCHASE AGREEMENT"), dated as of February 9, 2005, by and among
Motient, MVH Holdings Inc. and Seller; and
WHEREAS, in connection with the purchase of the Motient Shares pursuant
to the Purchase Agreement, Motient and Seller entered into that certain
Registration Rights Agreement (the "REGISTRATION RIGHTS AGREEMENT"), dated as of
February 9, 2005, by and among Seller and Motient (among others), pursuant to
which Motient agreed to file a registration statement on Form S-1 with the
Securities and Exchange Commission (the "SEC") to register the resale of the
Motient Shares and other securities (the "REGISTRATION STATEMENT"); and
WHEREAS, Motient has filed the Registration Statement with the SEC, but
the Registration Statement had not yet been declared effective by the SEC; and
WHEREAS, prior to the effectiveness of the Registration Statement,
Motient acquired a controlling equity interest in TerreStar Networks Inc. (the
"TERRESTAR TRANSACTION"); and
WHEREAS, the consummation of the TerreStar Transaction may delay the
effectiveness of the Registration Statement until such time as Motient can file
audited financial statements for TerreStar Networks Inc. ("TerreStar") as part
of the Registration Statement; and
WHEREAS, in order to provide Seller with liquidity for a portion of the
Motient Shares prior to the effectiveness of the Registration Statement, Seller
has requested that Motient purchase from Seller, and Motient has agreed to
purchase from Seller [------------------] of the Motient Shares (the "REPURCHASE
SHARES"), on and subject to the terms and conditions set forth in this
Agreement.
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
PURCHASE AND SALE
Section 1.1. SALE OF REPURCHASE SHARES. Subject to the terms and
conditions hereof and in reliance upon the representations, warranties and
agreements contained herein, at the Closing (defined below), Motient will
purchase from Seller, and Seller shall sell to Motient, the Repurchase Shares
for the aggregate consideration set forth in SECTION 1.2 below. The purchase of
the Repurchase Shares contemplated by this SECTION 1.1 is sometimes referred to
herein as the "STOCK REPURCHASE."
Section 1.2. PURCHASE PRICE. In consideration for the Repurchase
Shares, Motient shall pay to Seller $19.50 per share, for an aggregate cash
purchase price of $[------------------] (the "PURCHASE PRICE"). Motient shall
pay the Purchase Price at the Closing by wire transfer of immediately available
funds to an account or accounts designated by Seller prior to the execution and
delivery of this Agreement.
Section 1.3. CLOSING. The closing (the "CLOSING") of the purchase and
sale of the Repurchase Shares in exchange for the Purchase Price is taking place
contemporaneously with the execution and delivery of this Agreement on the date
hereof and is being held at the offices of Xxxxxxx Xxxxx LLP, 000 Xxxxxxxx
Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx.
Section 1.4. DELIVERIES. At the Closing:
(a) Seller shall deliver to Motient the following:
(i) one certificate registered in Seller's name representing the
Repurchase Shares (the "Certificate"); and
(ii) stock powers with respect to the Repurchase Shares duly
endorsed in blank.
(b) Motient shall deliver to Seller the following:
(i) the Purchase Price; and
(ii) a new stock certificate registered in Seller's name
representing the [------------------] shares under the Certificate not sold to
Motient pursuant to this Agreement, within seven (7) business days after the
Closing.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Motient as follows:
Section 2.1. ORGANIZATION, QUALIFICATION, ETC. Seller is a limited
partnership duly formed, validly existing and in good standing under the laws of
the State of Delaware and has the power and authority to own its properties and
assets and to carry on its business as it is now being conducted and 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.
Section 2.2. AGREEMENTS AFFECTING REPURCHASE SHARES. Seller is not a
party to, nor is Seller aware of, any voting agreement, voting trust or similar
agreement or arrangement relating to any of the Repurchase Shares.
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Section 2.3. TITLE TO REPURCHASE SHARES. Seller is the sole record and
beneficial owner of the Repurchase Shares being sold to Motient pursuant to this
Agreement and owns the Repurchase Shares free and clear of any and all liens,
claims and encumbrances of any kind whatsoever, other than pursuant to
applicable securities laws ("SECURITIES LAW ENCUMBRANCES"), with full legal
right, power and authority to sell and transfer the Repurchase Shares to Motient
as contemplated by this Agreement. Seller has not sold, pledged, hypothecated or
otherwise transferred any of the Repurchase Shares or any interest therein to
any other person, and there are no outstanding options, rights, calls,
commitments of any kind relating to, or any presently effective agreements or
understandings with respect to, any of the Repurchase Shares that would affect
or prevent the sale of the Repurchase Shares to Motient as contemplated by this
Agreement. Upon consummation of the transactions hereunder, Motient will acquire
and be vested with valid title to the Repurchase Shares, free and clear of any
liens, claims or encumbrances of any kind whatsoever, other than those pursuant
to Securities Law Encumbrances.
Section 2.4. AUTHORITY. Seller has all requisite partnership 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 partnership action on the part of Seller.
This Agreement has been duly executed and delivered by Seller and constitutes
the valid and binding obligation of Seller enforceable against Seller 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 (a)
any provision of the organizational documents of Seller, or (b) 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 Seller or its 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 Seller
in connection with the execution and delivery of this Agreement by Seller or the
consummation by Seller of the transactions contemplated hereby or thereby,
except for such consents, authorizations, filings, approvals and registrations
which, if not obtained or made, would not have a material adverse effect on
Seller 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 2.5. LITIGATION. There is no private or government proceeding
pending before any agency, court or tribunal, foreign or otherwise, against
Seller or any of Seller's subsidiaries or, to the knowledge of Seller,
threatened against Seller or any of Seller's 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 Seller
to consummate the transactions contemplated by this Agreement. There is no
judgment, decree or order against Seller or any of Seller's subsidiaries, or, to
the knowledge of Seller, 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 Seller to consummate the transactions
contemplated by this Agreement.
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Section 2.6. [INTENTIONALLY OMITTED]
Section 2.7. UNSOLICITED PURCHASE. This Agreement is being entered
into, and the Stock Repurchase contemplated hereby is being effected, at
Seller's request, and neither Motient nor any of Motient's affiliates solicited
Seller or any of Seller's affiliates in any manner to enter into this Agreement
or to effect the Stock Repurchase contemplated hereby. The Stock Repurchase
contemplated hereby is not being effected from or through a broker or dealer, on
a securities exchange or through an inter-dealer quotation system or electronic
communications network, but rather, in a direct transaction between Seller and
Motient, negotiated directly by the parties hereto at arm's length.
Section 2.8. [INTENTIONALLY OMITTED]
Section 2.9. REPRESENTATION AND INVESTIGATION. Seller is sophisticated
in financial and business matters and has sufficient knowledge and experience in
investing in companies similar to Motient and in transactions of the sort
contemplated by this Agreement so as to be able to evaluate the risks and merits
of entering into this Agreement and consummating the transactions contemplated
hereby. Seller has been represented by independent legal counsel in connection
with this Agreement and fully understands all of the provisions of, facts and
circumstances and implications (financial and otherwise) of this Agreement and
has made such investigations with respect to all aspects of this Agreement and
the transactions contemplated hereby as Seller considers necessary, desirable
and appropriate in connection therewith. Seller acknowledges that this Agreement
and the terms and conditions hereof are the result of arm's length negotiations
with Motient and understands that the Purchase Price may be more, less or equal
to the prevailing market price of Motient Common Stock at the time of the
Closing. Seller acknowledges that Motient has made no representations or
warranties with respect to this Agreement or the transactions contemplated
hereby except as expressly set forth in ARTICLE III below.
Section 2.10. BROKERS OR FINDERS. Seller 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 2.11. REPRESENTATIONS COMPLETE. None of the representations or
warranties made by Seller herein contains any untrue statement of a material
fact, or omits 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. The foregoing does not, however, limit or modify the
representations and warranties of Motient set forth in ARTICLE III of this
Agreement or the right of Seller to rely thereon.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF MOTIENT AND SUB
Motient hereby represents and warrants to Seller as follows:
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Section 3.1. ORGANIZATION, STANDING AND POWER. Motient is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and 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 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 the Certificate of
Incorporation and Bylaws of Motient that have been made available to Seller are
complete and correct and in full force and effect on the date hereof.
Section 3.2. AUTHORITY. Motient has 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 and stockholder action on the
part of Motient. This Agreement has been duly executed and delivered by Motient
and constitutes the valid and binding obligations of Motient enforceable against
Motient 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 (a) any provision of the Certificate of Incorporation or Bylaws of Motient
or any of its subsidiaries, as amended, or (b) 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 Motient or its 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 Motient in connection
with the execution and delivery of this Agreement by Motient or the consummation
by Motient of the transactions contemplated hereby or thereby, except for: (i)
the filing of a Form 8-K with the SEC within four (4) business days after the
Closing; and (ii) such other consents, authorizations, filings, approvals and
registrations which, if not obtained or made, would not have a material adverse
effect on Motient 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 3.3. SEC DOCUMENTS. Motient has made available to Seller true
and complete copies of the following reports of Motient (collectively, the "SEC
DOCUMENTS"): (a) the annual report on Form 10-K for the year ended December 31,
2004, (b) the quarterly report on Form 10-Q for the quarter ended March 31,
2005, and (c) each current report on Form 8-K filed with the SEC since December
31, 2004. 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 Motient 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 Motient is a party or to which the property or assets of
Motient 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.
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Section 3.4. LITIGATION. There is no private or government proceeding
pending before any agency, court or tribunal, foreign or otherwise, against
Motient or any of its subsidiaries or, to the knowledge of Motient, threatened
against Motient 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 Motient to consummate the
transactions contemplated by this Agreement. There is no judgment, decree or
order against Motient or any of its subsidiaries, or, to the knowledge of
Motient, 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 Motient to consummate the transactions
contemplated by this Agreement.
Section 3.5. [INTENTIONALLY OMITTED]
Section 3.6. BROKER'S AND FINDERS' FEES. Motient 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 3.7. REPRESENTATION AND INVESTIGATION. Motient has been
represented by independent legal counsel in connection with this Agreement and
fully understands all of the provisions of, facts and circumstances and
implications (financial and otherwise) of this Agreement and has made such
investigations with respect to all aspects of this Agreement and the
transactions contemplated hereby as Motient considers necessary, desirable and
appropriate in connection therewith. Motient acknowledges that this Agreement
and the terms and conditions hereof are the result of arm's length negotiations
with Seller and understands that the Purchase Price may be more, less or equal
to the prevailing market price of Motient Common Stock at the time of the
Closing. Motient acknowledges that Seller has not made any representations or
warranties with respect to this Agreement or the transactions contemplated
hereby except as expressly set forth in ARTICLE II above.
Section 3.8. REPRESENTATIONS COMPLETE. None of the representations or
warranties made by Motient herein contains any untrue statement of a material
fact, or omits 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. The foregoing does not, however, limit or modify the
representations and warranties of Seller set forth in ARTICLE II of this
Agreement or the right of Motient to rely thereon.
ARTICLE IV
ADDITIONAL AGREEMENTS
Section 4.1. FILINGS; OTHER ACTION. Subject to the terms and conditions
herein provided, following the Closing, both Seller and Motient shall (a) use
reasonable efforts to cooperate with one another in (i) 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
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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 (ii) timely making all such filings and timely seeking all such
consents, permits, authorizations or approvals and (b) 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.
Section 4.2. PUBLIC ANNOUNCEMENTS. Except as may be required by
applicable law, neither party hereto shall make any public announcements or
otherwise communicate with any news media or any other person (other than the
other party), with respect to this Agreement or any of the transactions
contemplated hereby, without prior consultation with the other party as to the
timing and content of any such announcement or communications; PROVIDED,
HOWEVER, that nothing contained herein shall prevent either party from (a)
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
(b) 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 4.3. PROHIBITION OF CERTAIN SALES BY SELLER. By execution and
delivery of this Agreement, Seller hereby agrees that it shall not, directly or
indirectly, take any of the following actions (excepting the sale of the
Repurchase Shares to Motient): (1) offer for sale, sell, contract or grant any
option to buy, pledge, transfer or otherwise dispose of (or enter into any
transaction or device that is designed to, or could be expected to, result in
the disposition by any individual or entity at any time in the future of) any
Motient Common Stock (including, without limitation, Motient Common Stock that
may be deemed to be beneficially owned by Seller in accordance with the rules
and regulations of the Securities and Exchange Commission and any Motient Common
Stock that may be issued upon exercise of any option or warrant, excepting (i)
Motient Common Stock held by affiliates of Seller and (ii) Motient Common Stock
that may be issued upon exercise of any option or warrant to an affiliate of
Seller, provided that in each case such Motient Common Stock is not subject to a
similar lock-up agreement with Motient) or securities convertible into or
exchangeable for Motient Common Stock, (2) sell or grant options, right or
warrants with respect to any Motient Common Stock or securities convertible into
or exchangeable for Motient Common Stock, (3) enter into any swap or other
derivatives transaction that transfers to another, in whole or in part, any of
the economic benefits or risks of ownership of such Motient Common Stock,
whether any such transaction described in clause (1), (2) or (3) above is to be
settled by delivery of Motient Common Stock or other securities, in cash or
otherwise, or (4) publicly disclose any intention to do any of the foregoing
between the date hereof through November 15, 2005 (the "LOCK-UP PERIOD").
However, nothing in this SECTION 4.3 is intended to, or shall prevent, Seller
from (i) transferring any shares, options or warrants to any family members or
affiliates or for estate planning purposes or to the members, partners,
stockholders or other equity holders, as the case may be, of Seller pro-rata in
accordance with the governing documents of Seller and without consideration,
provided that (A) the transferee agrees in writing to be bound by the terms of
this Agreement and (B) such transfer does not require the transferee to make a
filing under Section 16 of the Securities Exchange Act of 1934 reflecting such
transfer with the Securities and Exchange Commission during the Lock-Up Period
or (ii) exercising any options or warrants held by Seller, provided that any
shares so issued shall be subject to the lock-up agreement set forth in this
SECTION 4.3, except as follows:
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Seller may offer for sale, sell, contract or grant any option to buy, pledge,
transfer or otherwise dispose of (or enter into any transaction or device that
is designed to, or could be expected to, result in the disposition by any
individual or entity at any time in the future of) Motient Common Stock as
follows:
(i) up to [------------------] shares of Motient Common Stock
after July 7, 2005; and
(ii) any and all shares of Motient Common Stock after the
expiration of the Lock-up Period (collectively, the "RELEASED
SHARES").
Any and all restrictions set forth in this SECTION 4.3 shall not apply to the
Released Shares. Nothing in this SECTION 4.3 shall limit Motient's obligations
under the Registration Rights Agreement, and if the Registration Statement is
declared effective prior to expiration of the Lock-Up Period, Seller shall be
permitted to sell any and all Motient Common Stock held by Seller and registered
on the Registration Statement pursuant to such Registration Statement (provided
that any such sales pursuant to the Registration Statement are otherwise made in
compliance with the limits on the sale of such shares provided for by this
Section 4.3). In furtherance of this SECTION 4.3, Motient and its transfer agent
are hereby authorized to decline to make any transfer of any Motient Common
Stock if such transfer would constitute a violation or breach of this SECTION
4.3.
Section 4.4. DELAY NOT UNREASONABLE. Seller hereby acknowledges and
agrees that following the Closing, the Motient Shares (other than the Repurchase
Shares) will remain subject to the Registration Rights Agreement and will
constitute a portion of the shares of Motient Common Stock registered for resale
under the Registration Statement and that the consummation of the TerreStar
Transaction will delay the effectiveness of the Registration Statement. By
execution and delivery of this Agreement, Seller hereby consents for all
purposes, including, without limitation, under the Registration Rights
Agreement, to a reasonable delay in the effectiveness of the Registration
Statement in connection with the consummation of TerreStar Transaction, and
Seller hereby acknowledges and agrees that so long as such delay does not extend
beyond August 15, 2005, any such delay shall be conclusively deemed to be
"reasonable" for all purposes, including, without limitation, under the
Registration Rights Agreement; PROVIDED, HOWEVER, that any delay beyond such
date shall not necessarily be or be deemed to be "unreasonable."
ARTICLE V
INDEMNIFICATION
Section 5.1. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
warranties, representations, covenants and agreements of Motient and Seller
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
(the "SURVIVAL PERIOD"), and shall in no way be affected by any investigation of
the subject matter thereof made by any party hereto.
Section 5.2. OBLIGATION TO INDEMNIFY.
(a) SELLER OBLIGATION TO INDEMNIFY. From and after the Closing, Seller
shall indemnify, defend and hold harmless Motient and Motient's officers,
directors, stockholders, partners, employees, subsidiaries, agents and
8
affiliates (each, a "MOTIENT INDEMNITEE"), from and against all losses, claims,
damages, liabilities, obligations, fines, penalties, judgments, settlements,
costs, expenses and disbursements (including 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
Seller 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 Seller contained in this Agreement for which a claim is
initiated prior to the expiration of the Survival Period.
(b) MOTIENT'S OBLIGATION TO INDEMNIFY. From and after the Closing,
Motient shall indemnify, defend and hold harmless Seller and Seller's officers,
directors, managers, partners, members, employees, agents and affiliates (each,
a "SELLER INDEMNITEE") from and against any and all Losses to the extent
resulting from or relating to any (i) breach or inaccuracy of any representation
or warranty of Motient 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 Motient contained in this Agreement
for which a claim is initiated prior to the expiration of the Survival Period.
(c) INDEMNIFICATION BASKET AMOUNT. Notwithstanding the foregoing, an
Indemnifying Party (defined below) shall not be required to indemnify an
Indemnified Party (defined below) pursuant to SECTION 5.2(A) or SECTION 5.2(B),
as applicable, unless and until the amount of all Losses incurred by such
Indemnified Party exceeds $[0.5% of Purchase Price] 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); PROVIDED, HOWEVER, that the limitation set forth in this SECTION
5.2(C) shall not apply to any Losses resulting from a breach of the
representations and warranties set forth in SECTIONS 2.2, 2.3, 2.7, 2.11, and
3.8.
Section 5.3. 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, in the case of a Third Party Claim (defined below), they have
received written notification, or in the case of all other claims, they have
actual knowledge. 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 (10) 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 prior to the expiration of the Notice
Response Period, 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.
9
(b) With respect to each Indemnification Matter (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
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
5.4 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 (10) 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 5.4(B), render payment to the
Indemnified Party for all Losses resulting from such claim, subject to the
provisions of SECTION 5.5.
Section 5.4. NOTICES AND PAYMENTS.
With respect to each separate matter which is subject to
indemnification under this ARTICLE V (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 5.3; 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 (10)
days after such determination) pay to the Indemnified Party all amounts owing by
the Indemnifying Party under this ARTICLE V with respect to such Indemnification
Matter, subject to the limitations set forth in SECTION 5.5.
10
Section 5.5. LIMITED AND EXCLUSIVE REMEDY(a) MOTIENT INDEMNITEE
INDEMNIFICATION LIMIT. The maximum amount all Motient Indemnitees may recover in
the aggregate pursuant to the indemnity set forth in SECTION 5.2(A) hereof shall
be limited to the Purchase Price, plus attorneys', accountants' and
investigatory fees and expenses reasonably incurred by Motient related to such
Indemnification Matters.
(b) SELLER INDEMNITEE INDEMNIFICATION LIMIT. The maximum amount all
Seller Indemnitees may recover in the aggregate pursuant to the indemnity set
forth in SECTION 5.2(b) shall be limited to the Purchase Price, plus attorneys',
accountants' and investigatory fees and expenses reasonably incurred by Seller
related to such Indemnification Matters.
(c) the indemnification rights in this ARTICLE V are and shall be the
sole and exclusive remedies of all Motient Indemnitiess and Seller Indemnitiess
with respect to this Agreement and the transactions contemplated hereby;
PROVIDED that this sentence shall not be deemed a waiver by any party of its
right to specific performance or injunctive relief.
ARTICLE VI
MISCELLANEOUS
Section 6.1. EXPENSES. Whether or not the transactions contemplated
hereby are 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 6.2. 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 6.3. 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 6.4. 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
(3) business days after the date sent by certified or registered mail (return
receipt requested), one (1) 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.
11
To Motient:
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 Seller:
[------------------]
with a copy (which shall not constitute notice) to:
Xxxxxxx & Xxxxxx, LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000 XXX
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx
Section 6.5. ASSIGNMENT; BINDING EFFECT. Neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by either of
the parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other party. 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 6.6. 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.
Section 6.7. 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: (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.
12
Section 6.8. 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 6.9. CERTAIN DEFINITIONS. References in this Agreement to
"SUBSIDIARIES" of Seller or Motient 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 Seller or Motient, 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 or 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 6.10. AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of each of the parties hereto.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this Stock
Repurchase Agreement to be duly executed and delivered as of the date first
above written.
MOTIENT CORPORATION
By:
-------------------------------------
Name: Xxxxxxxxxxx Xxxxxx
Title: Executive Vice President and Chief
Operating Officer
[------------------]
By:
-------------------------------------
Name: [------------------]
Title: [------------------]
