EXHIBIT 10.1
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made
and entered into as of May 1, 2002, by and among Motient Corporation, a Delaware
corporation (the "Company"), Prospect Street High Income Portfolio Inc., Xxx
Capital Funding L.P., Highland Legacy Limited, Pamco Cayman Ltd., Prospect
Street Income Shares, Inc., and Xxxxxx Xxxxxxx Investment Management
(collectively, the "Stockholders").
WHEREAS, the Company proposes to issue and deliver shares of
Common Stock, par value $.01 per share, of the Company (the "Common Stock") to
the Stockholders pursuant to the Amended Joint Plan of Reorganization under
Chapter 11 of the Bankruptcy Code (the "Plan"), confirmed by order of the United
States Bankruptcy Court for the Eastern District of Virginia, Alexandria
Division, entered on April 26, 2002, in In re Motient Corporation et al (Case
Nos. 02-80125, 02-80128 and 02-80129-RGM).
WHEREAS, in connection with and pursuant to the Plan, the
Company has agreed to grant to the Stockholders the registration rights
described in Section 1 hereof (the "Registration Rights") with respect to the
Registrable Shares (as defined in Section 1 hereof).
Now, Therefore, in consideration of the mutual covenants
herein contained and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
Section 1. Registration Rights.
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For purposes of this Agreement, "Registrable Shares" means (i)
the shares of Common Stock issued to the Stockholders pursuant to or in
connection with the Plan and (ii) any other shares of Common Stock issued as (or
issuable upon the conversion or exercise of any warrant, right or other security
which is issued as) a dividend or other distribution with respect to, or in
exchange for, or in replacement of, all such shares of Common Stock described in
the immediately preceding clause (i); provided, that a Registrable Share ceases
to be a Registrable Share when (A) it has been registered and sold under the
Securities Act of 1933, as amended (the "Securities Act"), (B) it is sold or
transferred in accordance with the requirements of Rule 144 (or similar
provisions then in effect) promulgated by the Securities and Exchange Commission
("SEC") under the Securities Act ("Rule 144") or (C) it is eligible to be sold
or transferred under Rule 144 without holding period or volume limitations.
1.1 Shelf Registration.
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(a) Shelf Registration Statement. The Company agrees (subject to Section 1.2
hereof), as soon as possible but in all events within five (5) business days
after the effective date of the Plan (the "Effective Date"), to file, without
any request or any other action on the part of the Stockholders, with the SEC a
registration statement for an offering to be made on a continuous basis pursuant
to Rule 415 under the Securities Act (the "Shelf Registration"), covering all of
the Registrable Shares (the "Registration Statement"; and the related prospectus
(including any preliminary prospectus) is referred to as the "Prospectus");
provided, that the Stockholders shall have provided the information required to
be provided to the Company pursuant to Section 1.5(b) hereof. The Registration
Statement and Prospectus (and any other form or document required to be filed in
connection with the exercise of the Registration Rights) shall be on the
appropriate form, reasonably satisfactory to the Stockholders or, in the case of
an underwritten offering, reasonably satisfactory to the Stockholders and the
underwriter, and shall otherwise comply as to form in all material respects with
the requirements of the Securities Act and the rules and regulations promulgated
thereunder, permitting registration of such Registrable Shares for resale by
each Stockholder in the manner or manners designated by it. The Company agrees
(subject to Section 1.2 hereof) to use its reasonable best efforts to cause the
Registration Statement to be declared effective by the SEC as soon as
practicable after filing it and will notify each Stockholder when such
Registration Statement has become effective. The Company agrees (subject to
Section 1.2 hereof) to use its reasonable best efforts to keep the Registration
Statement effective (including the preparation and filing of any amendments and
supplements necessary for that purpose) during the period from the date that the
Registration Statement is declared effective by the SEC until the earlier of (i)
the date on which the Stockholders shall have sold all of the Registrable Shares
and (ii) the date on which all of the Registrable Shares are eligible to be sold
or transferred under Rule 144 without holding period or volume limitations (such
period, the "Effective Period"). Upon seeking to offer and sell its Registrable
Shares pursuant to the Registration Statement, each Stockholder agrees to
provide in a timely manner information regarding the proposed distribution by
such Stockholder of the Registrable Shares and such other information reasonably
requested by the Company in connection with the preparation of and for the
inclusion in the Registration Statement. The Company agrees to provide to each
Stockholder the number of copies of the final Prospectus and any amendments or
supplements thereto as are reasonably requested by such Stockholder. The Company
shall promptly notify the Stockholders of any threatened stop order by the SEC
or if the Registration Statement ceases to be effective for any reason at any
time during the Effective Period (other than because of the sale of all of the
securities registered thereunder or as permitted by Section 1.2 hereof), and the
Company shall use its reasonable best efforts and take all reasonable actions
required to prevent the entry of such stop order or to obtain the prompt
withdrawal of any order suspending the effectiveness thereof.
(b) Offerings and Sales. At any time and from time to time during the Effective
Period, subject to the restrictions set forth in Sections 1.1(c), 1.2 and 4
hereof, each Stockholder may exercise its Registration Rights hereunder with
respect to such Registrable Shares.
(c) Limitations on Registration Rights. If a Stockholder wishes to sell
Registrable Shares, such Stockholder shall deliver to the designated
representative of the Company a written notice (a "Shelf Resale Notice") of such
Stockholder's good faith present intention to sell, transfer or otherwise
dispose of some or all of such Stockholder's Registrable Shares, and the number
of Registrable Shares such Stockholder proposes to sell, transfer or otherwise
dispose of. Upon receipt of each Shelf Resale Notice, the Company shall, as soon
as practicable but in no event more than two business days after receipt of such
Shelf Resale Notice, either (i) provide a Materiality Notice pursuant to Section
1.2 of this Agreement or (ii) give written notice (a "Company Shelf Response")
to the Stockholder who gave such Shelf Resale Notice that the prospectus
relating to the Registration Statement is current and that the Registrable
Shares covered by the Shelf Resale Notice may be resold within ten business days
after receipt of such Company Shelf Response. If the Company does not respond
within such two business days, it shall be deemed to have given a Company Shelf
Response. All notices pursuant to this Section 1.1(c) shall be provided by
facsimile or electronic mail delivery and confirmed by direct telephonic
communication with the designated representative. Any Stockholder who receives
or is deemed to have received a Company Shelf Response pursuant to the foregoing
shall then have ten business days after receipt of such Company Shelf Response
in which to sell, transfer or otherwise dispose of the shares subject to the
Shelf Resale Notice. In the event that a Stockholder receives a Materiality
Notice pursuant to this Section 1.1(c), the rights and obligations of the
parties hereto with respect to such Materiality Notice shall be governed by the
provisions of Section 1.2 of this Agreement.
1.2 Suspension of Initial Filing or Offering. The Company may determine at any
time that the initial filing of the Registration Statement pursuant to Section
1.1(a), or the offers and sales by Stockholders under the Registration Statement
or otherwise during the Effective Period, shall be suspended if (i) a
negotiation or consummation of a transaction by the Company or its subsidiaries
is pending or an event has occurred, which negotiation, consummation or event
would, in the Company's reasonable judgment, based upon the advice of counsel,
require additional disclosure by the Company in the Registration Statement of
material information which the Company has a bona fide business purpose for
keeping confidential, and the nondisclosure of which in the Registration
Statement would reasonably be expected to cause the Registration Statement to
fail to comply with applicable disclosure requirements or obtaining any
financial statements relating to an acquisition or business combination required
to be included in the Registration Statement would be impracticable, or (ii) the
offering of such Registrable Shares would, in the Company's reasonable judgment,
based upon the written advice of its underwriter, adversely affect a pending or
proposed underwritten public offering or Rule 144A offering of the Common Stock
or other securities by the Company. Immediately upon making such a
determination, the Company shall give written notice (which shall include a
certificate of the Chief Executive Officer or President of the Company as to the
nature of such determination) to each Stockholder (a "Materiality Notice"), upon
receipt of which each Stockholder agrees, subject to the provisions of this
Section 1.2, that it will immediately discontinue offers and sales of the
Registrable Shares under the Registration Statement or otherwise until (x) in
the case of a Materiality Notice delivered pursuant to clause (i) above, such
Stockholder receives copies of a supplemented or amended Prospectus that
corrects the misstatement(s) or omission(s) referred to above and receives
notice that any post-effective amendment has become effective or (y) in the case
of a Materiality Notice delivered pursuant to clause (ii) above, such
Stockholder receives a subsequent notice from the Company that revokes or
otherwise withdraws such Materiality Notice; provided, that the Company may
delay filing, suspend or withdraw the Registration Statement and such offers and
sales pursuant to clause (i) above, for no more than two (2) business days after
the abandonment or consummation of any of the foregoing negotiations,
transactions or events (or if such negotiations are consummated, then as soon as
practicable to obtain the required financial statements, if any) or, in any
event, for no more than thirty (30) days after delivery of the Materiality
Notice pursuant to clauses (i) or (ii) above, at any one time (and the Company
shall not be entitled to require the Stockholders to delay or discontinue offers
and sales pursuant to this Section 1.2 for more than two occasions during any
twelve (12) month period and not for more than thirty (30) days at a time); and
provided further, that in the case of clause (ii), each Stockholder will be
bound by, and hereby agrees to enter into, the same lockup agreement as is
required for all affiliates of the Company by the underwriter of such offering;
provided that no Stockholder shall be required to be bound by or enter into any
lockup agreement for more than a total of ninety (90) days in any twelve month
period. If so directed by the Company, each Stockholder will deliver to the
Company all copies of the Prospectus covering the Registrable Shares current at
the time of receipt of a Materiality Notice.
1.3 Piggy-Back Registration Rights.
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(a) If the Company proposes to file a registration statement under the
Securities Act with respect to an offering by the Company for its own account or
for the account of any holder of any class of equity security of the Company or
security convertible into or exchangeable for any class of equity security of
the Company (other than a registration statement on Form S-4 or S-8 (or any
substitute form that may be adopted by the SEC), or registrations solely in
connection with employee stock options or other employee benefit plans, or a
registration statement filed in connection with an exchange offer or offering of
securities to the Company's existing securityholders, then the Company shall
give written notice of such proposed filing to the Stockholders as soon as
practicable (but in no event less than thirty (30) days before the anticipated
filing date), and such notice shall offer such Stockholders the opportunity to
register such number and type of shares of Registrable Shares as each such
Stockholder may request ("Piggy-Back Registration"). The Company shall use its
reasonable best efforts to cause the managing underwriter or underwriters of a
proposed underwritten offering to permit the Registrable Shares requested to be
included in a Piggy-Back Registration to be included on the same terms and
conditions as any similar securities of the Company included therein and to
permit the sale or other disposition of such Registrable Shares in accordance
with the intended method of distribution thereof. No registration effected under
this Section 1.3, and no failure to effect a registration under this Section
1.3, shall relieve the Company of its obligations pursuant to Section 1.1, and
no failure to effect a registration under this Section 1.3 and no failure to
complete the sale of shares in connection therewith shall relieve the Company of
any other obligation under this Agreement (including, without limitation, the
Company's obligations under Sections 1.4 and 2.1).
(b) Notwithstanding anything contained herein, if the managing underwriter or
underwriters of an offering described in the foregoing paragraph (a) deliver a
written opinion to the Stockholders requesting inclusion in such offering that
(i) the size of the offering that the Stockholders, the Company and any other
persons intend to make or (ii) the kind of securities that the Stockholders, the
Company and any other persons intend to include in such offering are such that
the success of the offering would be materially and adversely affected by
inclusion of the Registrable Shares requested to be included, then
(A) if the size of the offering is the basis of such
underwriter's opinion, the Company will include the securities in the
registration in the following order of priority: (1) first, all securities the
Company proposes to sell, (2) second, allocated pro rata with respect to all the
Registrable Shares requested to be included in the registration and the
securities that the holder for whom the Company is effecting the registration
proposes to sell, and (3) third, any other securities (provided they are of the
same class as the securities sold by the Company) requested to be included,
allocated among the holders of such securities in such proportions as the
Company and those holders may agree; and
(B) if the combination of securities to be offered is
the basis of such underwriter's opinion, then the Stockholders shall not have
any registration rights pursuant to this Section 1.3 with respect to such
offering;
provided that notwithstanding paragraph (A) above, if the Company receives a
written opinion (the "Second Opinion") within five (5) days of the date that the
Stockholders receive the written opinion from the managing underwriter(s)
pursuant to clause (i) of this paragraph (b)) of a national underwriter (the
"Second Underwriter"), with a reputation comparable to that of the managing
underwriter(s) of the offering, that the inclusion of the Registrable Shares to
be excluded pursuant to paragraph (A) above (the "Excluded Shares") would not
materially and adversely affect the success of the offering, then Company shall
be required to either (i) cause the managing underwriter(s) to include the
Excluded Shares in the offering, or (ii) select the Second Underwriter as the
managing underwriter for the offering; provided further that if the Company
selects the Second Underwriter and the Second Underwriter at any time thereafter
notifies the Company that it cannot consummate the offering on substantially the
same terms as originally proposed by the managing underwriter(s), then Company
shall have the right to replace the Second Underwriter with another underwriter,
in which case, all of the terms of this Section 4.2(b) shall apply again as if
the offering were another offering.
(c) The Stockholders included within such Piggy-Back Registration may withdraw
all or any part of the Registrable Shares from such Piggy-Back Registration at
any time (before but not after the effective date of such Registration
Statement), by delivering written notice of such withdrawal request to the
Company.
(d) If the Company shall determine for any reason (x) not to register or (y) to
delay a registration which includes Registrable Shares pursuant to this Section
1.3, the Company may, at its election, give written notice of such determination
to the Stockholders and, thereupon (i) in the case of a determination not to
register, shall be relieved of its obligation to register any Registrable Shares
in connection with such registration (but not from its obligation to pay the
Registration Expenses in connection therewith), and (ii) in the case of a delay
in registering, shall be permitted to delay registering any Registrable Shares
for the same period as the delay in registering such other shares.
1.4 Expenses. The Company shall pay all expenses incident to the performance by
it of its registration obligations under this Section 1 (the "Registration
Expenses"), regardless of whether a Registration Statement becomes effective,
including, without limitation, (i) all SEC registration and filing fees and
expenses incurred in connection with the preparation, printing and distribution
of the Registration Statement and Prospectus and any other document or amendment
thereto and the mailing and delivery of copies thereof to the dealers, the
Stockholders or the underwriters, (ii) fees and disbursements of the Company,
including, without limitation, fees and disbursements of counsel for the
Company, independent public accountants (including the expenses of any comfort
letters required under this Agreement) and other experts of the Company, (iii)
fees and expenses in connection with the qualification of Registrable Shares for
offering and sale under state securities laws (including fees and expenses
incurred in connection with blue sky qualifications of the Registrable Shares),
(iv) fees and expenses incident to any filing with the National Association of
Securities Dealers, Inc. ("NASD") or securing any required review by NASD of the
terms of the sale of Registrable Shares to be disposed of, (v) all fees and
expenses incurred in connection with the listing of Registrable Shares on each
securities exchange or quotation system on which the Common Stock is then
listed, (vi) reasonable fees and expenses of one counsel for the Stockholders
and (vii) internal expenses of the Company (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties). The Stockholders shall be responsible for the payment of its
allocated pro rata share of any underwriting discounts and fees, brokerage and
sales commissions, and any transfer taxes relating to the sale or disposition of
the Registrable Shares.
1.5 Registration Procedures.
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(a) If and whenever the Company is required to effect the registration under the
Securities Act of Registrable Shares as provided in this Agreement, the Company
will, as expeditiously as possible:
(i) use its reasonable best efforts to register or qualify the Registrable
Shares by the time the applicable Registration Statement is declared
effective by the SEC under all applicable state securities or "blue
sky" laws of such jurisdictions as the Stockholders or managing
underwriter shall reasonably request in writing, to keep each such
registration or qualification effective during the Effective Period,
and to do any and all other acts and things which may be reasonably
necessary or advisable to enable the Stockholders to consummate the
disposition in each such jurisdiction of the Registrable Shares owned
by such Stockholders; provided, that the Company shall not be required
to (x) qualify generally to do business
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in any jurisdiction or to register as a broker or dealer in any
jurisdiction where it would not otherwise be required to qualify but
for this Section 1.5, (y) subject itself to taxation in any such
jurisdiction, or (z) submit to the general service of process in any
such jurisdiction;
(ii) prepare and file with the SEC such amendments and supplements to the
Registration Statement and the Prospectus as may be (x) necessary to
keep the Registration Statement effective and to comply with the
provisions of the Securities Act with respect to the disposition of all
Registrable Shares until such time as all Registrable Shares have been
disposed of in accordance with the intended methods of disposition by
the Stockholder set forth in the Registration Statement or (y)
reasonably requested by the Stockholders or any underwriter of the
Registrable Shares;
(iii) furnish to each Stockholder and, as the case may be, underwriter, such
number of conformed copies of the Registration Statement and of each
such amendment and supplement thereto (in each case including all
exhibits), such number of copies of the Prospectus included in the
Registration Statement (including each preliminary prospectus), in
conformity with the requirements of the Securities Act, such documents
incorporated by reference in the Registration Statement or Prospectus,
and such other documents as each Stockholder or underwriter may
reasonably request;
(iv) cause the Registrable Shares to be listed on any national securities
exchange or quotation system, if the listing of such securities is then
permitted under the rules of such exchange or quotation system;
(v) enter into customary agreements and take such other actions as are
reasonably required in order to expedite or facilitate the disposition
of such Registrable Shares;
(vi) notify each Stockholder in writing promptly upon (A) the happening of
any event as a result of which a Prospectus included in a Registration
Statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, and, subject to the provisions of Section
1.2 hereof, at the request of a Stockholder prepare and furnish to
such Stockholder as many copies of a supplement to or an amendment of
such Prospectus as such Stockholder reasonably requests so that, as
thereafter delivered to the purchasers of such Registrable Shares, such
Prospectus shall not include an untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading; (B) the receipt by the Company of any notification with
respect to any comments by the SEC with respect to such Registration
Statement or Prospectus or any amendment or supplement thereto or any
request by the SEC for the amending or supplementing thereof or for
additional information with respect thereto; (C) the receipt by the
Company of any notification with respect to the issuance by the SEC of
any stop order suspending the effectiveness of such Registration
Statement or Prospectus or any amendment or supplement thereto or the
initiation or threatening of any proceeding for that purpose; and (D)
the receipt by the Company of any notification with respect to the
suspension of the qualification of such Registrable Shares for sale in
any jurisdiction or the initiation or threatening of any proceeding for
such purposes;
(vii) the Company will, at least five (5) business days prior to filing a
Registration Statement or Prospectus or any amendment or supplement
thereto, furnish to each Stockholder and each underwriter, if any, of
the Registrable Shares covered by such Registration Statement copies of
such Registration Statement as proposed to be filed, and thereafter
furnish to such Stockholder and underwriter, if any, such number of
copies of such Registration Statement, each amendment and supplement
thereto (in each case including all exhibits thereto and documents
incorporated by reference therein that are specifically requested to be
provided), the Prospectus included in such Registration Statement
(including each preliminary prospectus)and such other documents as such
Stockholder or underwriter may reasonably request in order to
facilitate the disposition of the Registrable Shares owned by such
Stockholder;
(viii) use its reasonable best efforts to cause the Registrable Shares to be
registered with or approved by such other governmental agencies or
authorities as may be necessary by virtue of the business and
operations of the Company to enable the Stockholders holding the
Registrable Shares to consummate the disposition of the Registrable
Shares;
(ix) subject to the execution of customary confidentiality agreements in
form and substance reasonably satisfactory to the Company, make
available upon reasonable notice and during normal business hours, for
inspection by the Stockholders holding such Registrable Shares, any
underwriter participating in any disposition pursuant to such
Registration Statement and any attorney, accountant or other agent
retained by such Stockholders or underwriter (collectively, the
"Inspectors"), all pertinent financial and other records, pertinent
corporate documents and properties of the Company (collectively, the
"Records"), as shall be reasonably necessary to enable them to exercise
their due diligence responsibility, and cause the Company's officers,
directors and employees to supply all information (together with the
Records, the "Information") reasonably requested by any such Inspector
in connection with such Registration Statement. Any of the Information
which the Company determines in good faith to be confidential, and of
which determination the Inspectors are so notified, shall not be
disclosed by the Inspectors unless (A) the disclosure of such
Information is necessary to avoid or correct a misstatement or omission
in the Registration Statement, (B) the release of such Information is
ordered pursuant to a subpoena or other order from a court of competent
jurisdiction or (C) such Information has been made generally available
to the public; the Stockholders holding such Registrable Shares agree
that they will, upon learning that disclosure of such Information is
sought in a court of competent jurisdiction, give notice to the Company
and allow the Company, at the Company's expense, to undertake
appropriate action to prevent disclosure of the Information deemed
confidential;
(x) if an underwritten offering or otherwise reasonably necessary, use its
reasonable best efforts to obtain from its independent certified public
accountants "cold comfort" letters in customary form and at customary
times and covering matters of the type customarily covered by cold
comfort letters;
(xi) if an underwritten offering or otherwise reasonably necessary, use its
reasonable best efforts to obtain from its counsel an opinion or
opinions in customary form naming the Stockholders holding such
Registrable Shares as additional addressees or parties who may rely
thereon;
(xii) provide a transfer agent and registrar (which may be the same entity
and which may be the Company) for such Registrable Shares;
(xiii) issue to any underwriter to which the Stockholders holding such
Registrable Shares may sell shares in such offering certificates
evidencing such Registrable Shares;
(xiv) make available for reasonable inspection by, or give reasonable access
to, each Stockholder and any attorney, accountant or other agent
retained by such Stockholder, all pertinent financial and other records
and pertinent corporate documents and properties of the Company, and
cause the Company's officers, directors and employees to supply all
information reasonably requested by any Stockholder or any other person
in connection with the offering thereunder; and
(xv) otherwise use its reasonable best efforts to comply with all applicable
rules and regulations of the SEC.
(b) The Company may require each Stockholder, upon selling Registrable Shares as
to which any registration is being effected, to furnish the Company with such
information in writing regarding such Stockholder and the distribution of such
securities as required to be included in the Registration Statement or
Prospectus (or preliminary prospectus) included therein as the Company may from
time to time reasonably request. No Stockholder may include any of its
Registrable Shares in the Registration Statement pursuant to this Agreement
unless and until such Stockholder furnishes to the Company such information in
writing. Each Stockholder agrees to furnish promptly to the Company all
information required to be disclosed in order to make the information previously
furnished to the Company by such Stockholder not materially misleading.
Section 2. Indemnification.
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2.1 Indemnification by the Company. The Company agrees to indemnify and hold
harmless each Stockholder in any offering or sale of Registrable Shares, each
person (if any) who participates as an underwriter in any offering and sale of
Registrable Shares, and each person, if any, who controls such Stockholder or
such underwriter within the meaning of Section 15 of the Securities Act or
Section 20 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and their respective directors, trustees, officers, partners, agents,
employees and affiliates as follows:
(a) against any and all loss, liability, claim, damage and expense (including
reasonable legal fees and expenses) and action or proceeding (whether commenced
or threatened) whatsoever (collectively, "Losses"), as incurred, arising out of
or based upon any untrue statement or alleged untrue statement of a material
fact contained in any Prospectus or Registration Statement (or any amendment or
supplement thereto) pursuant to which the Registrable Shares were registered
under the Securities Act, including all documents incorporated therein by
reference, or the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements therein not
misleading or arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in any Prospectus (or any
amendment or supplement thereto), including all documents incorporated therein
by reference, or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading;
(b) against any and all Losses, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or investigation or proceeding by
any governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such alleged
untrue statement or omission, if such settlement is effected with the written
consent of the Company (which consent will not be unreasonably withheld); and
(c) against any and all expense whatsoever, as incurred (including reasonable
fees and disbursements of counsel), reasonably incurred in investigating,
preparing or defending against any Losses or any litigation, or investigation or
proceeding by any governmental agency or body, commenced or threatened, in each
case whether or not a party, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, to the
extent that any such expense is not paid under subparagraph (a) or (b) above;
provided, that the indemnity provided pursuant to this Section 2.1 does not
apply to any indemnified party with respect to any Losses or expenses to the
extent arising out of (i) any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with written
information furnished to the Company by such indemnified party for use in the
Registration Statement (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto), or (ii) such indemnified party's failure to
deliver an amended or supplemental Prospectus if such Losses would not have
arisen had such delivery occurred.
2.2 Indemnification by each Stockholder. Each Stockholder (and each permitted
assignee of such Stockholder) agrees, severally and not jointly, to indemnify
and hold harmless the Company, each person (if any) who participates as an
underwriter in any offering and sale of Registrable Shares and each person, if
any, who controls the Company within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, and their respective directors, trustees,
officers, partners, agents, employees and affiliates, as follows:
(a) against any and all Losses whatsoever, as incurred, arising out of or based
upon any untrue statement or alleged untrue statement of a material fact and
contained in any Prospectus or Registration Statement (or any amendment or
supplement thereto) pursuant to which the Registrable Shares were registered
under the Securities Act, including all documents incorporated therein by
reference, or the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements therein not
misleading or arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in any Prospectus, including all
documents incorporated therein by reference, or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading;
(b) against any and all Losses whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, investigation or
proceeding by any governmental agency or body, commenced or threatened, or of
any claim whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, if such settlement is effected with
the written consent of the Stockholder (which consent will not be unreasonably
withheld);
(c) against any and all expense whatsoever, as incurred (including reasonable
fees and disbursements of counsel), reasonably incurred in investigating,
preparing or defending against any Losses or any litigation, investigation or
proceeding by any governmental agency or body, commenced or threatened, in each
case whether or not a party, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, to the
extent that any such expense is not paid under subparagraph (a) or (b) above;
and
(d) notwithstanding the provisions of subparagraphs (a), (b) and (c) above, the
indemnity provided pursuant to this Section 2.2 shall only apply with respect to
any Losses to the extent arising out of any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with written information furnished to the Company by such Stockholder expressly
for use in the Registration Statement (or any amendment thereto) or the
Prospectus (or any amendment or supplement thereto). Notwithstanding the
provisions of this Section 2.2 or any other provision of this Agreement, none of
any Stockholder nor any permitted assignee shall be required to indemnify the
Company or any other indemnified party hereunder with respect to any amount in
excess of the amount of the total proceeds to such Stockholder or such permitted
assignee, as the case may be, from sales of the Registrable Shares of such
Stockholder under the Registration Statement with respect to such offering.
2.3 Conduct of Indemnification Proceedings. The indemnified party shall give
prompt notice to the indemnifying party of any action or proceeding commenced
against it in respect of which indemnity may be sought hereunder, but failure to
so notify the indemnifying party shall not relieve it from any liability which
it may have under the indemnity agreement provided in Section 2.1 or 2.2 above,
unless and to the extent it did not otherwise learn of such action and the lack
of notice by the indemnified party results in the forfeiture by the indemnifying
party of substantial rights and defenses. If the indemnifying party so elects
within a reasonable time after receipt of such notice, the indemnifying party
may assume the defense of such action or proceeding at such indemnifying party's
own expense with counsel chosen by the indemnifying party and approved by the
indemnified party, which approval shall not be unreasonably withheld; provided,
that the indemnifying party will not settle any such action or proceeding
without the written consent of the indemnified party (which consent will not be
unreasonably withheld) unless, as a condition to such settlement, the
indemnifying party secures the unconditional release of the indemnified party;
and provided further that if the indemnified party reasonably determines that a
conflict of interest exists where it is advisable for the indemnified party to
be represented by separate counsel or that, upon advice of counsel, there may be
legal defenses available to it which are different from or in addition to those
available to the indemnifying party, then the indemnifying party shall not be
entitled to assume such defense and the indemnified party shall be entitled to
separate counsel at the indemnifying party's expense. If the indemnifying party
is not entitled to assume the defense of such action or proceeding as a result
of the proviso to the preceding sentence, the indemnifying party's counsel shall
be entitled to conduct the indemnifying party's defense and counsel for the
indemnified party shall be entitled to conduct the defense of the indemnified
party, it being understood that both such counsel will cooperate with each other
to conduct the defense of such action or proceeding as efficiently as possible.
If the indemnifying party is not so entitled to assume the defense of such
action or does not assume such defense, after having received the notice
referred to in the first sentence of this paragraph, the indemnifying party will
pay the reasonable fees and expenses of counsel for the indemnified party. In
such event, however, the indemnifying party will not be liable for any
settlement effected without the written consent of the indemnifying party (which
consent will not be unreasonably withheld). Except as expressly stated herein,
if an indemnifying party is entitled to assume, and assumes, the defense of such
action or proceeding in accordance with this paragraph, the indemnifying party
shall not be liable for any fees and expenses of counsel for the indemnified
party incurred thereafter in connection with such action or proceeding.
2.4 Contribution. In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in this Section 2 is
unavailable to an indemnified party, the indemnifying party shall contribute to
the aggregate Losses of the nature contemplated by such indemnity agreement
incurred by any indemnified party, (i) in such proportion as is appropriate to
reflect the relative fault of the indemnifying party on the one hand and the
indemnified parties on the other, in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities or expenses, or (ii)
if the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative fault
of but also the relative benefits to the Company on the one hand and each
Stockholder on the other, in connection with the statements or omissions which
resulted in such Losses, as well as any other relevant equitable considerations.
The relative benefits to the indemnifying party and the indemnified party shall
be determined by reference to, among other things, the total proceeds received
by the indemnifying party and the indemnified party in connection with the
offering to which such Losses relate. The relative fault of the indemnifying
party and indemnified party shall be determined by reference to, among other
things, whether the action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact, has been made by, or relates to information supplied by, the indemnifying
party or the indemnified party, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such action.
The parties hereto agree that it would not be just or
equitable if contribution pursuant to this Section 2.4 were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 2.4, each Stockholder
shall not be required to contribute any amount in excess of the amount of the
total net proceeds to such Stockholder from sales of the Registrable Shares of
the Stockholder under the Registration Statement.
Notwithstanding the foregoing, no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 2.4, each person, if
any, who controls an indemnified party within the meaning of Section 15 of the
Securities Act shall have the same rights to contribution as such indemnified
party, and each director of the Company, each officer of the Company who signed
a Registration Statement and each person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act shall have the same
rights to contribution as the Company. The Stockholders' obligations under this
Section 2.4 are several and not joint and shall, at all times, be subject to the
limitations set forth in Section 2.2(d) hereof.
The indemnity agreements contained in this Section 2 shall be
in addition to any other rights (indemnification, contribution or otherwise)
which any indemnified party may have pursuant to law or contract and shall
remain operative and in full force and effect regardless of any investigation
made or omitted by or on behalf of any indemnified party and shall survive the
transfer of any Registrable Shares by a Stockholder.
Section 3. Rule 144 Compliance.
-------------------
The Company covenants that it will use its reasonable best
efforts to timely file the reports required to be filed by the Company under the
Securities Act and the Securities Exchange Act of 1934, as amended, so as to
enable each Stockholder to sell Registrable Shares pursuant to Rule 144. In
connection with any sale, transfer or other disposition by a Stockholder of any
Registrable Shares pursuant to Rule 144, the Company shall cooperate with such
Stockholder to facilitate the timely preparation and delivery of certificates
representing Registrable Shares to be sold and not bearing any Securities Act
legend, and enable certificates for such Registrable Shares to be for such
number of shares and registered in such names as such Stockholder may reasonably
request at least ten (10) business days prior to any sale of Registrable Shares
hereunder.
Section 4. Miscellaneous.
-------------
4.1 Integration; Amendment. This Agreement constitutes the entire agreement
among the parties hereto with respect to the matters set forth herein and
supersedes and renders of no force and effect all prior oral or written
agreements, commitments and understandings among the parties with respect to the
matters set forth herein. Except as otherwise expressly provided in this
Agreement, no amendment, modification or discharge of this Agreement shall be
valid or binding unless set forth in writing and duly executed by the Company
and each Stockholder.
4.2 Waivers. No waiver by a party hereto shall be effective unless made in a
written instrument duly executed by the party against whom such waiver is sought
to be enforced, and only to the extent set forth in such instrument. Neither the
waiver by any of the parties hereto of a breach or a default under any of the
provisions of this Agreement, nor the failure of any of the parties, on one or
more occasions, to enforce any of the provisions of this Agreement or to
exercise any right or privilege hereunder shall thereafter be construed as a
waiver of any subsequent breach or default of a similar nature, or as a waiver
of any such provisions, rights or privileges hereunder.
4.3 Successors and Assigns; Third Party Beneficiaries. Each Stockholder may
assign its rights hereunder to any transferee of Registrable Shares; provided,
however, that such transferee shall, as a condition to the effectiveness of such
assignment, be required to execute a counterpart to this Agreement agreeing to
be treated as a Stockholder, whereupon such transferee shall have the benefits
of and shall be subject to the restrictions contained in this Agreement as if
such transferee was originally included in the definition of a Stockholder and
had originally been a party hereto. The Company may not assign any of its rights
or delegate any of its duties under this Agreement without the prior written
consent of the designated representative of the Stockholders, provided that as a
condition to any merger, reorganization or consolidation of the Company with any
person (as defined in the Securities Act) in which the holders of Common Stock
receive securities of any other person (the "Successor Issuer") the Company
shall assign all of its rights, and delegate all of its obligations under this
Agreement to such Successor Issuer in which event the Successor Issuer will
agree in writing to become the "Company" for all purposes of this Agreement. Any
purported assignment, merger, reorganization or consolidation in violation of
this Section shall be void. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person other than the Stockholders
(who shall be third party beneficiaries of this Agreement entitled to the
benefit of, and enforce, its terms) and the Company and their respective
successors, any legal or equitable right, remedy or claim under or in respect of
this Agreement or any provision herein contained. This Agreement and all
conditions and provisions hereof are intended to be for the sole and exclusive
benefit of the Stockholders and the Company and their respective successors, and
for the benefit of no other Person. No purchaser of Common Stock from a
Stockholder (other than another Stockholder) shall be deemed to be a successor
or assignee by reason merely of such purchase.
4.4 Benefits of Registration Rights. The Stockholders may severally
-------------------------------
or jointly exercise the Registration Rights hereunder in such proportion as they
shall agree among themselves.
4.5 Notices; Designated Representative. Except as otherwise provided in this
Agreement, notices and other communications required by this Agreement shall be
in writing and delivered by hand against receipt or sent by recognized overnight
delivery service or by certified or registered mail, postage prepaid, with
return receipt requested or by confirmed facsimile or confirmed electronic mail
transmission, properly addressed to the addresses of the parties set forth on
the signature pages hereto or to such other address(es) as the respective
parties hereto shall from time to time designate to the other(s) in writing. The
designated representative of the Company shall initially be its General Counsel
or such other person as the Company shall from time to time designate to the
Stockholders in writing.
4.6 Specific Performance. The parties hereto acknowledge that the obligations
undertaken by them hereunder are unique and that there would be no adequate
remedy at law if any party fails to perform any of its obligations hereunder,
and accordingly agree that each party, in addition to any other remedy to which
it may be entitled at law or in equity, shall be entitled to (i) compel specific
performance of the obligations, covenants and agreements of any other party
under this Agreement in accordance with the terms and conditions of this
Agreement and (ii) obtain preliminary injunctive relief to secure specific
performance and to prevent a breach or contemplated breach of this Agreement in
any court of the United States or any State thereof having jurisdiction.
4.7 No Conflict of Rights. The Company shall not grant any
---------------------
registration rights which conflict with the Registration Rights.
4.8 Governing Law. This Agreement, the rights and obligations of the parties
hereto, and any claims or disputes relating thereto, shall be governed by and
construed in accordance with the laws of the State of Delaware (but not
including the choice of law rules thereof).
4.9 Headings. Section and subsection headings contained in this Agreement are
inserted for convenience of reference only, shall not be deemed to be a part of
this Agreement for any purpose, and shall not in any way define or affect the
meaning, construction or scope of any of the provisions hereof.
4.10 Pronouns. All pronouns and any variations thereof shall be deemed to refer
to the masculine, feminine, neuter, singular or plural, as the identity of the
person or entity may require.
4.11 Execution in Counterparts. To facilitate execution, this Agreement may be
executed in as many counterparts as may be required. It shall not be necessary
that the signature of or on behalf of each party appears on each counterpart,
but it shall be sufficient that the signature of or on behalf of each party
appears on one or more of the counterparts. All counterparts shall collectively
constitute a single agreement. It shall not be necessary in any proof of this
Agreement to produce or account for more than a number of counterparts
containing the respective signatures of or on behalf of all of the parties.
4.12 Severability. If fulfillment of any provision of this Agreement, at the
time such fulfillment shall be due, shall transcend the limit of validity
prescribed by law, then the obligation to be fulfilled shall be reduced to the
limit of such validity; and if any clause or provision contained in this
Agreement operates or would operate to invalidate this Agreement, in whole or in
part, then such clause or provision only shall be held ineffective, as though
not herein contained, and the remainder of this Agreement shall remain operative
and in full force and effect.
4.13 Effectiveness of Agreement; Termination. This Agreement shall not become
effective until the Effective Date, at which time this Agreement shall take full
force and effect, and shall terminate on the date that all Registrable Shares
cease to be a Registrable Share, except that the provisions of Section 2 shall
survive indefinitely.
[remainder of page intentionally left blank]
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed on its behalf as of the date first hereinabove set
forth.
MOTIENT CORPORATION
By:/s/ Xxxxxx X. Xxxxxxx, Xx.
--------------------------
Xxxxxx X. Xxxxxxx, Xx.
President and Chief
Executive Officer
Address for Notices:
00000 Xxxxxxxxx Xxxx.
Xxxxxx, XX 00000-0000
PROSPECT STREET HIGH INCOME
PORTFOLIO INC.
By:/s/ R. Xxxxxx Xxxxxxxxx
-----------------------
Name: R. Xxxxxx Xxxxxxxxx
Title: Senior Vice President,
Secretary
Address for Notices:
Highland Capital Management, L.P.
1300 Two Galleria Tower
00000 Xxxx Xx. XX #00
Xxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
XXX CAPITAL FUNDING L.P.
By: Highland Capital Management, L.P.
as Collateral Manager
By:/s/ Xxxx X. Xxxxx
---------------------
Name: Xxxx X. Xxxxx, CFA
Title: Executive Vice President,
Highland Capital
Management, L.P.
Address for Notices:
Highland Capital Management, L.P.
1300 Two Galleria Tower
00000 Xxxx Xx. XX #00
Xxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
HIGHLAND LEGACY LIMITED
By: Highland Capital Management, L.P.
as Collateral Manager
By:/s/ Xxxx X. Xxxxx
--------------------
Name: Xxxx X. Xxxxx, CFA
Title: Executive Vice President,
Highland Capital
Management, L.P.
Address for Notices:
Highland Capital Management, L.P.
1300 Two Galleria Tower
00000 Xxxx Xx. XX #00
Xxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
PAMCO CAYMAN LTD.
By: Highland Capital Management, L.P.
as Collateral Manager
By:/s/ Xxxx X. Xxxxx
---------------------
Name: Xxxx X. Xxxxx, CFA
Title: Executive Vice President,
Highland Capital
Management, L.P.
Address for Notices:
Highland Capital Management, L.P.
1300 Two Galleria Tower
00000 Xxxx Xx. XX #00
Xxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
PROSPECT STREET INCOME SHARES, INC.
By: Highland Capital Management, L.P.
as Collateral Manager
By:/s/ Xxxx X. Xxxxx
---------------------
Name: Xxxx X. Xxxxx, CFA
Title: Executive Vice President,
Highland Capital
Management, L.P.
Address for Notices:
Highland Capital Management, L.P.
1300 Two Galleria Tower
00000 Xxxx Xx. XX #00
Xxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
XXXXXX XXXXXXX INVESTMENT MANAGEMENT
By:/s/ Xxxxxx X. Xxxxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Executive Director
Address for Notices:
1 Tower Bridge
000 Xxxxx Xxxxxx
Xxxx Xxxxxxxxxxxx, XX 00000
