EXHIBIT 10.46
PURCHASE AGREEMENT (this "AGREEMENT"), dated as of November
12, 2004, by and among Mobile Satellite Ventures LP, a
Delaware limited partnership ("MSV LP"), Mobile Satellite
Ventures GP Inc., a Delaware corporation ("MSV GP"), and
Motient Ventures Holding Inc., a Delaware corporation (the
"PURCHASER").
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INTRODUCTION
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WHEREAS, pursuant to the terms and subject to the conditions set forth
in this Agreement, the Purchaser desires to make an equity investment in MSV LP
and in MSV GP; and
WHEREAS, immediately prior to the Initial Closing (as defined in
Section 2.1), certain outstanding indebtedness of MSV LP will be converted into
limited partnership interests of MSV LP.
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual promises hereinafter set forth, the parties hereto agree as follows:
ARTICLE I
AGREEMENT TO SELL AND PURCHASE
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1.1. SALE AND PURCHASE OF UNITS OF LIMITED PARTNERSHIP INTEREST OF MSV
LP. Pursuant to the terms and subject to the conditions herein set forth, at the
Closings (as defined in Section 2.3) MSV LP will issue and sell to the Purchaser
and the Purchaser will purchase from MSV LP, up to 4,244,482.17 units
representing limited partnership interests in MSV LP (collectively, the
"INTERESTS"), at a purchase price of $29.45 per unit of limited partnership
interest (the "PURCHASE PRICE").
1.2. SALE AND PURCHASE OF COMMON STOCK OF MSV GP. Pursuant to the terms
and subject to the conditions herein set forth, at the Closings MSV GP will
issue and sell to the Purchaser and the Purchaser will purchase from MSV GP, the
number of shares of common stock, par value $0.01 per share, in MSV GP
(collectively, the "GP COMMON STOCK") as shall be necessary to maintain the
Purchaser's pro rata ownership in MSV GP on a basis proportionate to its
ownership in MSV LP. A portion of the aggregate purchase price for the Interests
and the GP Common Stock shall be deemed to be consideration for the GP Common
Stock, in an amount equal to the number of shares of GP Common Stock purchased
by the Purchaser multiplied by $0.01 per share.
ARTICLE II
CLOSING, DELIVERY AND PAYMENT
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2.1. MOTIENT PIPE. Simultaneously with but in any event conditioned
upon the Initial Closing, Motient Corporation ("MOTIENT") will sell shares of
its equity securities to certain investors (the "PIPE INVESTORS") for an
aggregate amount (net of offering expenses) equal to approximately $125,000,000
(the "FULL PIPE INVESTMENT AMOUNT"). The Purchaser, a direct wholly-owned
subsidiary of Motient, intends to use the net proceeds of this investment to
purchase the Interests from MSV LP and the GP Common Stock from MSV GP pursuant
to this Agreement. In the event that the Purchaser receives the Full PIPE
Investment Amount from the PIPE Investors on the date hereof, the Purchaser
shall purchase the Maximum Interest Amount (as defined in Section 2.2) at the
Initial Closing. In the event that on the date hereof the Purchaser receives at
least $115,000,000 from the PIPE Investors but fails, for any reason, to receive
the Full PIPE Investment Amount from the PIPE Investors, the Purchaser shall
purchase not less than the Minimum Interest Amount (as defined in Section 2.2)
and up to the Maximum Interest Amount at the Initial Closing and may, at
Purchaser's sole discretion, purchase up an additional number of Interests that,
when combined with the Interests purchased at the Initial Closing, does not
exceed the Maximum Interest Amount at the Subsequent Closing (as defined in
Section 2.3).
2.2. INITIAL CLOSING. The initial closing of the sale and purchase (the
"INITIAL CLOSING") under this Agreement of (i) not less than 3,904,923.60
Interests (the "MINIMUM INTEREST AMOUNT") and not more than 4,244,482.17
Interests (the "MAXIMUM INTEREST AMOUNT") and (ii) that number of shares of the
GP Common Stock necessary to maintain the Purchaser's pro rata ownership in MSV
GP on a basis proportionate to its ownership in MSV LP following the Initial
Closing, shall take place at the offices of Xxxxxxxxx & Xxxxxxx, 0000
Xxxxxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000, at 10:00 a.m. EST on the date
hereof. MSV LP, MSV GP and the Purchaser may mutually agree to hold the Initial
Closing at another time or place. The date of the Initial Closing is hereinafter
referred to as the "INITIAL CLOSING DATE."
2.3. SUBSEQUENT CLOSING. If the Purchaser fails to purchase the Maximum
Interest Amount at the Initial Closing, the Purchaser may, at its sole
discretion, elect to purchase and require MSV LP and MSV GP to sell, as
applicable, in one subsequent closing (the "SUBSEQUENT CLOSING") (i) that number
of Interests that shall not exceed, when combined with the Interests purchased
at the Initial Closing, the Maximum Interest Amount, and (ii) that number of
shares of the GP Common Stock necessary to maintain the Purchaser's pro rata
ownership in MSV GP on a basis proportionate to its ownership in MSV LP
following the Subsequent Closing. The Subsequent Closing shall take place at the
offices of Xxxxxxxxx & Xxxxxxx, 0000 Xxxxxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X.
00000, on the date and at the time the Purchaser notifies MSV LP and MSV GP that
the Subsequent Closing shall occur which shall, in any event, be on or prior to
the date that is two business days following the Initial Closing Date (the
"SUBSEQUENT CLOSING DATE"). MSV LP, MSV GP and the Purchaser may mutually agree
to hold the Subsequent Closing at another time or place. The Initial Closing and
the Subsequent Closing shall be referred to herein as a "CLOSING" and the
Initial Closing Date and the Subsequent Closing Date shall be referred to herein
as a "CLOSING DATE").
2.4. DELIVERY. At each Closing, subject to the terms and conditions
hereof, including the conditions set forth in Articles V and VI hereof, the
Purchaser shall receive certificates representing the Interests and the GP
Common Stock to be purchased at such Closing by the Purchaser, against payment
of the purchase price therefor by wire transfer of immediately available funds
pursuant to wire instructions provided to the Purchaser by MSV LP (or by such
other method of funds transfer as may be agreed to by MSV LP and the Purchaser).
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF MSV LP AND MSV GP
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Except as disclosed in the disclosure schedule delivered by MSV LP and
MSV GP and incorporated herein, each of MSV LP and MSV GP hereby represent and
warrant, jointly and severally, to the Purchaser as follows:
3.1. ORGANIZATION, GOOD STANDING AND QUALIFICATION.
(a) MSV LP (i) is duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization and (ii) is duly qualified
and is authorized to do business and is in good standing as a foreign limited
partnership in all jurisdictions in which the nature of its activities and of
its properties (both owned and leased) makes such qualification necessary,
except for those jurisdictions in which failure to do so would not have a
Material Adverse Effect (as defined in Article IX) on MSV LP.
(b) MSV GP is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of organization. MSV GP is duly
qualified and is authorized to do business and is in good standing as a foreign
corporation in all jurisdictions in which the nature of its activities and of
its properties (both owned and leased) makes such qualification necessary,
except for those jurisdictions in which failure to do so would not have a
Material Adverse Effect on MSV GP.
3.2. POWER AND AUTHORITY. MSV LP has all requisite limited partnership
power and authority to own, lease, operate and encumber its properties and
assets, and to carry on its business as presently conducted and as presently
proposed to be conducted. MSV GP has all requisite corporate power and authority
to own, lease, operate and encumber its properties and assets, and to carry on
its business as presently conducted and as presently proposed to be conducted.
The execution, delivery and performance by MSV LP and MSV GP of this Agreement
and each of the Transaction Documents (as defined in Article IX) to which it is
a party, and the consummation by MSV LP and MSV GP of the transactions
contemplated hereby and thereby have been duly authorized by all requisite
action (and do not or will not require any approvals or consents of the limited
partners of MSV LP that have not already been obtained), and this Agreement and
each of the Transaction Documents to which it is a party, when executed will
constitute a legal, valid and binding obligation of MSV LP and MSV GP,
enforceable against MSV LP and MSV GP in accordance with its terms except to the
extent that enforceability may be limited by bankruptcy, insolvency or other
similar laws affecting creditors' rights generally and except to the extent that
the remedy of specific performance and injunction and other forms of equitable
relief may be subject to equitable defenses.
3.3. SUBSIDIARIES. SCHEDULE 3.3 includes a list of each entity in which
MSV LP or MSV GP owns any equity securities or other interest, indicating, for
each, the percentage of such securities owned directly or indirectly by MSV LP
or MSV GP and the jurisdiction of organization of such entity. Other than the
entities shown in SCHEDULE 3.3, MSV LP and MSV GP do not own or control any
equity security or other interest of any other corporation, limited partnership
or other business entity. As of the date hereof, MSV LP and MSV GP are not
participants in any joint venture, partnership or similar arrangement.
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3.4. CAPITALIZATION. As of the date hereof, the ownership of MSV LP is
as set forth in that certain Limited Partnership Agreement of MSV LP, dated as
of November 26, 2001 and amended from time to time, among MSV GP and each of the
limited partners named therein (the "MSV PARTNERSHIP AGREEMENT"). All such
outstanding ownership interests are validly issued. As of the date hereof, the
managing general partner of MSV LP is MSV GP. Except pursuant to the MSV
Partnership Agreement or that certain Stockholders' Agreement, dated as of
November 26, 2001, as amended (the "GP STOCKHOLDERS' AGREEMENT"), by and among
MSV GP and the stockholders named therein, no limited partner of MSV LP is
entitled to preemptive rights. There are not, as of the date hereof, any
outstanding options or rights to acquire any interest in MSV LP or MSV GP,
except for options to acquire units of limited partnership of MSV LP granted
pursuant to MSV LP's 2001 Unit Incentive Plan, as amended. Except in accordance
with the MSV Partnership Agreement and the GP Stockholders' Agreement, neither
MSV LP nor MSV GP has, since its inception, declared or paid any dividend or
made any other distribution of cash, stock or other property to its respective
partners or stockholders.
3.5. ISSUANCE OF INTERESTS AND GP COMMON STOCK.
(a) The issuance, sale and delivery of the Interests by MSV LP in
accordance with this Agreement has been duly authorized by all necessary action
on the part of MSV LP. The Interests, when so issued, sold and delivered against
payment therefor in accordance with the provisions of this Agreement, will be
validly issued. Assuming the accuracy of the representations and warranties of
the Purchaser contained in Article IV, the offer, sale and issuance of the
Interests will be exempt from the registration requirements of the Securities
Act of 1933, as amended (the "SECURITIES ACT"), and will have been, or following
the Closing will be, registered or qualified (or are exempt from registration
and qualification) under the registration, permit or qualification requirements
of all applicable state securities laws. The sale of the Interests is not
subject to any preemptive rights or rights of first refusal that have not been,
or at the Closing will not have been, properly waived or complied with.
(b) The issuance, sale and delivery of the GP Common Stock by MSV GP in
accordance with this Agreement has been duly authorized by all necessary action
on the part of MSV GP. The shares of GP Common Stock, when so issued, sold and
delivered against payment therefor in accordance with the provisions of this
Agreement, will be validly issued, fully paid and nonassessable. Assuming the
accuracy of the representations and warranties of the Purchaser contained in
Article IV, the offer, sale and issuance of the shares of the GP Common Stock
will be exempt from the registration requirements of the Securities Act, and
will have been, or following the Closing will be, registered or qualified (or
are exempt from registration and qualification) under the registration, permit
or qualification requirements of all applicable state securities laws. The sale
of the shares of GP Common Stock is not subject to any preemptive rights or
rights of first refusal that have not been, or at the Closing will not have
been, properly waived or complied with.
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3.6. NO CONFLICT. Except for (A) filings made pursuant to Regulation D
under the Securities Act or under state securities laws and (B) such
notifications or filings as may be required under the Communications Act of
1934, as amended (the "FCC ACT"), as the case may be, the execution and delivery
by MSV LP and MSV GP of this Agreement and the other Transaction Documents to
which it is a party, and the consummation by each of MSV LP and MSV GP of the
transactions contemplated hereby and thereby and compliance with the provisions
hereof and thereof will not (a) violate or conflict with, or require any
consent, approval, registration, authorization, qualification, designation,
notice or filing under, any provision of any domestic (federal, state or local)
or foreign law, statute, rule or regulation (including but not limited to the
FCC Act or the rules and regulations of the FCC), or any ruling, writ,
injunction, order, declaration, judgment or decree of any court, administrative
agency or other governmental body applicable to it, or any of its properties or
assets other than violations or conflicts which would not reasonably be expected
to have a Material Adverse Effect on MSV LP or MSV GP, (b) conflict with, or
result in any violation or breach of, or constitute (with due notice or lapse of
time, or both) a default or loss of a benefit under, or cause or permit the
acceleration under, the terms, conditions or provisions of any indenture,
mortgage, guaranty, lease, license or other contract, agreement or
understanding, written or oral, to which MSV LP or MSV GP is a party or to which
its properties or assets is subject which could reasonably be expected to have a
Material Adverse Effect on MSV LP or MSV GP, (c) result in the creation or
imposition of any mortgages, liens, pledges, encumbrances, security interests,
deeds of trust, options, encroachments, reservations, orders, decrees,
judgments, conditions, restrictions, charges, agreements, claims or equities of
any kind (each, an "ENCUMBRANCE") upon any of MSV LP's or MSV GP's properties or
assets which could reasonably be expected to have a Material Adverse Effect on
MSV LP or MSV GP, (d) violate MSV LP's or MSV GP's organizational documents, or
(e) cause any cancellation, termination, revocation, forfeiture or material
impairment of any of the Licenses.
3.7. FCC AND INDUSTRY CANADA.
(a) SCHEDULE 3.7(b) contains a true and complete list of all material
licenses, permits and authorizations (collectively, the "LICENSES"), including
the frequencies authorized for and the issuance and expiration dates of each
such License, issued to Mobile Satellite Ventures Subsidiary LLC ("MSV SUB") by
the Federal Communications Commission (the "FCC") in connection with the
operation of MSV LP's business. No such License is subject to any restriction or
condition which would limit in any material respect the full operation of MSV
LP's business as now operated, and no proceeding, inquiry, investigation or
other administrative action is pending or, to MSV LP's knowledge, threatened by
or before the FCC that would reasonably be expected to result in the revocation
of any material FCC authorization or otherwise impair in any material respect
the full operation of MSV LP's business; PROVIDED, HOWEVER, that no such
representation is made with respect to any proceeding, order or other similar
action concerning the FCC's grant of authority with respect to an ancillary
terrestrial component or MSV LP's and its subsidiaries' applications with
respect thereto.
(b) SCHEDULE 3.7(b) contains a true and complete list of all material
pending applications that have been filed by MSV Sub with the FCC, including
requests for extension of construction or other performance milestones
("APPLICATIONS"), and including the frequencies applied for and the filing date
of each such Application.
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(c) MSV Sub is the authorized legal holder of all the Licenses, other
than Licenses held by Mobile Satellite Ventures (Canada) Inc., an Ontario
corporation ("MSV CANADA"), and Mobile Satellite Ventures Corp., a Nova Scotia
unlimited liability company ("MSV CANADA CORP."). The Licenses are in good
standing, are in full force and effect, and are unimpaired by any act or
omission of MSV LP or any of its officers, directors, or employees; and the
operation of the business of MSV LP is in full compliance with the Licenses. The
Licenses are sufficient for the lawful conduct of the business and operation of
the MSV LP's business in the manner and to the full extent it is currently
conducted. All material reports, forms, and statements required to be filed with
the FCC with respect to MSV LP's business have been filed and are complete and
accurate in all material respects and all material fees required to be paid to
the FCC and/or administrators of FCC programs have been paid in full on a timely
basis.
(d) SCHEDULE 3.7(d) contains a true and complete list of all Licenses
issued to MSV Canada and MSV Canada Corp. by Industry Canada necessary to
conduct the operation of the MSV Canada and MSV Canada Corp. businesses
(collectively, the "CANADIAN LICENSES"). Each of MSV Canada and MSV Canada Corp.
is the authorized legal holder of the Canadian Licenses issued to them. The
Canadian Licenses are in good standing, are in full force and effect, and are
unimpaired by any act or omission of MSV Canada or MSV Canada Corp., or any of
the officers, directors, or employees of MSV Canada or MSV Canada Corp.; and the
operation of the respective businesses of MSV Canada and MSV Canada Corp. is in
full compliance with the Canadian Licenses. The Canadian Licenses are sufficient
for the lawful conduct of the business and operation of MSV Canada and MSV
Canada Corp., respectively. All material reports, forms, and statements required
to be filed with Industry Canada and the Canadian Radio-television and
Telecommunications Commission with respect to the MSV Canada and MSV Canada
Corp. businesses have been filed and are complete and accurate in all material
respects.
3.8. FINANCIAL STATEMENTS. Each of the balance sheets included in the
most recent unaudited monthly and quarterly financial statements of MSV LP for
the period ended August 31, 2004 (the "MSV FINANCIAL STATEMENTS") fairly
presented the financial position of the entity or entities to which it relates
as of its date and each of the statements of operations, members' capital or
unit holders' equity (deficit) and cash flows included in the most recent
unaudited monthly and quarterly MSV Financial Statements fairly presented the
results of operations, members' capital or retained earnings or cash flows, as
the case may be, of the entity or entities to which it relates for the periods
set forth therein, in each case in accordance with GAAP consistently applied
during the periods involved, except as may be noted therein and except for the
absence of notes thereto, and subject to normal recurring year-end adjustments
which have not been and will not be material in nature or amount.
3.9. NO UNDISCLOSED LIABILITIES. Except as disclosed in the MSV
Financial Statements, and except for normal or recurring liabilities incurred
since the date of the MSV Financial Statements in the ordinary course of
business consistent with past practices, MSV LP does not have any liabilities,
either accrued, contingent or otherwise, of the type required to be reflected in
financial statements in accordance with GAAP, and whether due or to become due,
which individually or in the aggregate, have had or are reasonably likely to
have a Material Adverse Effect on MSV LP.
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3.10. ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in the
MSV Financial Statements, since the date of the MSV Financial Statements, MSV LP
has conducted its business only in the ordinary course, and there has not been
(a) any change, circumstance or event that could reasonably be expected to
result in a Material Adverse Effect on MSV LP, (b) any declaration, setting
aside or payment of any dividend or other distribution with respect to the
Interests, (c) any commitment, contractual obligation, borrowing, capital
expenditure or transaction (each, a "COMMITMENT") entered into by MSV LP outside
the ordinary course of business, or (d) any material change in MSV LP's
accounting principles, practices or methods.
3.11. LITIGATION; ORDERS. There is no civil, criminal or administrative
action, suit, claim, notice, hearing, inquiry, proceeding or investigation at
law or in equity by or before any court, arbitrator or similar panel,
governmental instrumentality or other agency now pending or, to the best
knowledge of MSV LP, threatened against MSV LP or the assets (including any
Proprietary Rights (as hereinafter defined)) of MSV LP (a "LITIGATION") which if
determined adversely to MSV LP could reasonably be expected to have a Material
Adverse Effect on MSV LP. MSV LP is not subject to any order, writ, injunction
or decree of any court of any federal, state, municipal or other domestic or
foreign governmental department, commission, board, bureau, agency or
instrumentality; PROVIDED, HOWEVER, that no such representation is made with
respect to any proceeding, order or other similar action concerning the FCC's
grant of authority with respect to an ancillary terrestrial component or MSV
LP's and its subsidiaries' applications with respect thereto.
3.12. COMPLIANCE WITH LAWS; PERMITS. MSV LP is and has been, since its
date of organization, in compliance with, and has conducted its business in
compliance with, all federal, state, local and foreign laws, rules, ordinances,
codes, consents, authorizations, registrations, regulations, decrees,
directives, judgments and orders, including environmental and including the FCC
Act and rules and regulations of the FCC, applicable to it which if MSV LP
failed to comply could reasonably be expected to have a Material Adverse Effect
on MSV LP. MSV LP has all Permits (as defined in Article IX) materially
necessary in the conduct of its business as currently conducted. All such
Permits are in full force and effect, and no material violations have occurred
in respect of any such Permits; no material proceeding is pending or, to the
best knowledge of MSV LP, threatened to revoke or limit any such Permit;
PROVIDED, HOWEVER, that no such representation is made with respect to any
proceeding, order or other similar action concerning the FCC's grant of
authority with respect to an ancillary terrestrial component or MSV LP's and its
subsidiaries' applications with respect thereto; and no such Permit will be
suspended, cancelled or adversely modified in any material respect as a result
of the execution and delivery of this Agreement or the Transaction Documents or
the consummation of the transactions contemplated hereby and thereby.
3.13. TITLE. MSV LP has good and marketable title to all of its
material properties and assets, real and personal, and has good title to all its
leasehold interests, in each case subject only to Encumbrances created in the
ordinary course of business.
3.14. ERISA MATTERS. Each plan maintained by or contributed to by MSV
LP is in compliance in all respects with all presently applicable provisions of
law, including, without limitation, the Employee Retirement Income Security Act
of 1974, as amended, including the regulations and published interpretations
thereunder ("ERISA"); neither MSV LP nor any entity that is or was at any time
treated as a single employer with MSV LP under Section 414(b), (c), (m) or (o)
of the Internal Revenue Code of 1986, as amended, including the regulations and
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published interpretations thereunder (the "CODE") has incurred or expects to
incur liability with respect to a plan subject to Title IV of ERISA or Section
412 of the Code; and each "pension plan" (as defined in ERISA) for which MSV LP
would have any liability that is intended to be qualified under Section 401(a)
of the Code is so qualified in all material respects and nothing has occurred,
whether by action or by failure to act, which would cause the loss of such
qualification.
3.15. INSURANCE. MSV LP maintains property and casualty, general
liability, personal injury, director and officer and other similar types of
insurance with financially sound and reputable insurers that is adequate and
consistent with industry standards. MSV LP has not received notice from, and has
no knowledge of any threat by, any insurer (that has issued any insurance policy
to MSV LP) that such insurer intends to deny coverage under or cancel,
discontinue or not renew any insurance policy covering MSV LP presently in
force.
3.16. LABOR RELATIONS; EMPLOYEES. (a) MSV LP is not delinquent in
payments to any of its employees, for any wages, salaries, commissions, bonuses
or other direct compensation for any services performed by the date hereof or
amounts required to be reimbursed by them to the date hereof, (b) MSV LP is in
compliance with all applicable federal, state and local laws, rules and
regulations respecting employment, employment practices, labor, terms and
conditions of employment and wages and hours except where failure to comply
would not, individually or in the aggregate, have a Material Adverse Effect on
MSV LP, (c) MSV LP is not bound by or subject to (and none of its assets or
properties is bound by or subject to) any written or oral, express or implied,
commitment or arrangement with any labor union, and no labor union has requested
or, to the best knowledge of MSV LP, has sought to represent any of the
employees, representatives or agents of MSV LP, (d) there is no labor strike,
dispute, slowdown or stoppage actually pending, or, to the best knowledge of MSV
LP, threatened against or involving MSV LP, and (e) to the best knowledge of MSV
LP, no salaried key employee has any plans to terminate his or her employment
with MSV LP. Each of the executive officers of MSV LP who has or had access to
confidential information of MSV LP has executed a confidentiality agreement, and
such agreements are in full force and effect.
3.17. CONTRACTS.
(a) MSV LP is not a party to, or bound or subject to, any Contract (as
defined in Article IX), other than (1) any Contract which (A) pursuant to its
terms, has expired, been terminated or fully performed by the parties, and in
each case, under which MSV LP has no liability, contingent or otherwise, or (B)
involves monthly payments to or from MSV LP (as opposed to an indemnity
agreement or similar contract under which a party is not required to make fixed
monthly payments) which monthly payments do not aggregate on an annual basis to
$250,000 or more, and in each case, is not material to the business, condition
(financial or otherwise), operations or prospects of MSV LP and (2) as set forth
in SCHEDULE 3.17(a).
(b) Assuming the due execution and delivery by the other parties
thereto, each of such Contracts is, as of the date hereof, legal, valid, binding
and in full force and effect and enforceable in accordance with its terms. There
is no breach, violation or default by MSV LP (or, to the best knowledge of MSV
LP, any other party) under any such Contract except where such breach, violation
or default would not, individually or in the aggregate, have a Material Adverse
Effect on MSV LP, and no event (including, without limitation, the consummation
of the transactions contemplated by this Agreement) which, with notice or lapse
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of time or both, would (A) constitute a breach, violation or default by MSV LP
(or, to the best knowledge of MSV LP, any other party) under any such Contract
except where such breach, violation or default would not, individually or in the
aggregate, have a Material Adverse Effect on MSV LP, or (B) give rise to any
lien or right of termination, modification, cancellation, prepayment,
suspension, limitation, revocation or acceleration against MSV LP under any such
Contract. MSV LP is not or, to the knowledge of MSV LP, no other party to any of
such Contracts (i) is in arrears in respect of the performance or satisfaction
of the terms and conditions on its part to be performed or satisfied under any
of such Contracts or (ii) has granted or has been granted any waiver or
indulgence under any of such Contracts or has repudiated any provision thereof.
3.18. CONSENTS. No permit, authorization, consent or approval of or by,
or any notification of or filing with, any person (governmental or private) is
required by MSV LP or MSV GP in connection with the execution, delivery and
performance of this Agreement, or by each of MSV LP or MSV GP in connection with
the execution, delivery and performance of the Transaction Documents to which it
is a party, the consummation by MSV LP and MSV GP of the transactions
contemplated hereby or thereby, or the issuance, sale or delivery of the
Interests and GP Common Stock (other than (a) such notifications or filings
required under the FCC Act and applicable federal or state securities laws, if
any, which shall be made on a timely basis and (b) permits, authorizations,
consents and approvals which, if not obtained, could not reasonably be expected
to have a Material Adverse Effect on MSV LP or MSV GP).
3.19. PUBLIC UTILITY HOLDING COMPANY, ETC. Neither MSV LP nor any
subsidiary of MSV LP is: (a) a "public utility company" or a "holding company,"
or an "affiliate" or a "subsidiary company" of a "holding company," or an
"affiliate" of a " public utility company," a "holding company" or a "subsidiary
company" of a holding company as such terms are defined in the Public Utility
Holding Company Act of 1935, as amended, or (b) a "public utility," as defined
in the Federal Power Act, as amended, or (c) an "investment company", as such
term is defined in the Investment Company Act of 1940, as amended (the
"INVESTMENT COMPANY ACT").
3.20. RESTRICTIONS. Other than MSV LP's obligations under the TMI Note
(as defined in Article IX), the MSI Note and the Convertible Notes, MSV LP is
not a party to any loan agreement or other financing document giving rise to any
obligations, restrictions, limitations or Encumbrances with respect to MSV LP or
its assets.
3.21. ENVIRONMENTAL MATTERS. There are, with respect to MSV LP, no past
or present violations of Environmental Law (as hereinafter defined), nor any
actions, activities, circumstances, conditions, events, incidents, or
contractual obligations which are reasonably likely to give rise to any
liability which would have a Material Adverse Effect on MSV LP pursuant to any
Environmental Law, and MSV LP has not received any written notice with respect
to any of the foregoing nor is any Litigation pending or, to the knowledge of
MSV LP, threatened in connection with any of the foregoing. For purposes of this
Section 3.21, capitalized terms used herein shall have the following meanings:
(a) "ENVIRONMENTAL LAWS" shall mean, all applicable provisions of
federal, state, local or foreign law (including applicable principles of common
and civil law), statutes, ordinances, rules, regulations, published standards
and directives that have the force and effect of law, permits, licenses,
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judgments, writs, injunctions, decrees and orders enacted, promulgated or issued
by any Public Authority, and all indemnity agreements and other contractual
obligations, as in effect at such date, relating to (i) the protection of the
environment, including the air, surface and subsurface soils, surface waters,
groundwaters and natural resources, and (ii) occupational health and safety and
exposure of persons to Hazardous Materials. Environmental Laws shall include the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
xx.xx. 9601 ET SEQ., and any other laws imposing or creating liability with
respect to Hazardous Materials.
(b) "HAZARDOUS MATERIAL" shall mean any substance regulated by any
Environmental Law.
(c) "PUBLIC AUTHORITY" shall mean any supranational, national,
regional, state or local government court, governmental agency, authority,
board, bureau, instrumentality or regulatory body.
3.22. PROPRIETARY RIGHTS. Except for matters which would not, in the
aggregate, have a Material Adverse Effect on MSV LP, (a) MSV LP is the sole
owner, free and clear of any Encumbrance, of, or has a valid license, without
the payment of any royalty except with respect to off-the-shelf software and
otherwise on commercially reasonable terms, to, all U.S. and foreign trademarks,
service marks, logos, designs, trade names, internet domain names and corporate
names, and the goodwill of the business connected therewith and symbolized
thereby, patents, registered designs, copyrights, computer software and
databases, whether or not registered, web sites and web pages and related items
(and all intellectual property and proprietary rights incorporated therein) and
all other trade secrets, research and development, formulae, know-how,
proprietary and intellectual property rights and information, including all
grants, registrations and applications relating thereto (collectively, the
"PROPRIETARY RIGHTS") that are necessary or useful for the operation of its
business (such Proprietary Rights owned by or licensed to MSV LP, collectively,
the "MSV RIGHTS"); (b) MSV LP has taken, and will take, all actions which are
necessary or advisable in order to protect the MSV Rights, and to acquire
Proprietary Rights, consistent with prudent commercial practices in the
telecommunications industry; (c) MSV LP's rights in the MSV Rights are valid and
enforceable; (d) MSV LP has not received any demand, claim, notice or inquiry
from any person or entity in respect of the MSV Rights which challenges,
threatens to challenge or inquires as to whether there is any basis to
challenge, the validity of, or the rights of MSV LP in, any such MSV Rights, and
MSV LP does not know of any basis for any such challenge; (e) MSV LP is not in
violation or infringement of, and has not violated or infringed, any Proprietary
Rights of any other person or entity; (f) to the knowledge of MSV LP, no person
or entity is infringing any MSV Rights; and (g) except on an arm's-length basis
for value and other commercially reasonable terms, MSV LP has not granted any
license with respect to any MSV Rights to any person or entity.
3.23. DISCLOSURE. Neither this Agreement nor any Transaction Document
(nor any certificate or instrument executed in connection with this Agreement or
any Transaction Document) furnished or made to the Purchaser by or on behalf of
MSV LP does not omit to state a material fact required to be stated herein or
therein or necessary in order to make the statements contained herein or
therein, in light of the circumstances under which they were made, not
misleading.
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3.24. GENERAL PARTNER. MSV GP has no assets or liabilities other than
its general partnership interest in MSV LP and does not engage in any business
activities other than holding the general partnership interest in MSV LP.
Immediately prior to the transactions contemplated by this Agreement, there are
2,894.28 shares of GP Common Stock outstanding, all of which have been issued to
the limited partners of MSV LP.
ARTICLE IV
REPRESENTATIONS OF WARRANTIES OF THE PURCHASER
----------------------------------------------
The Purchaser hereby represents and warrants to each of MSV LP and MSV
GP as follows:
4.1. ORGANIZATION, GOOD STANDING; POWER AND AUTHORITY. The Purchaser
(a) is duly organized, validly existing and in good standing under the laws of
its jurisdiction of organization and (b) has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as presently conducted. The Purchaser has all requisite power and authority to
enter into and carry out the transactions contemplated by this Agreement and the
Transaction Documents to which it is a party.
4.2. AUTHORIZATION OF DOCUMENTS. The execution, delivery and
performance by the Purchaser of this Agreement and the Transaction Documents to
which it is a party and the consummation of the transactions contemplated hereby
and thereby have been duly authorized by all requisite corporate action on the
part of the Purchaser, and this Agreement and the Transaction Documents when
executed will constitute a legal, valid and binding obligation of the Purchaser,
enforceable against the Purchaser in accordance with its terms, except to the
extent that enforceability may be limited by bankruptcy, insolvency or other
similar laws affecting creditors' rights generally and except to the extent that
the remedy of specific performance and injunction and other forms of equitable
relief may be subject to equitable defenses.
4.3. NO LIMITATIONS. Except as may be provided in the Existing
Investment Documents (as defined in Article IX), the Purchaser has not, directly
or indirectly, made any commitment, representation, or undertaking to any third
party, nor is the Purchaser or any of its subsidiaries or affiliates party to,
nor are the Purchaser's or any of its subsidiary's or affiliate's assets or
properties subject to, any agreement, contract, commitment, obligation,
understanding or document, that (a) conflicts or could conflict with, or results
or could result in any violation or breach of, or constitutes or could
constitute (with due notice or lapse of time, or both) a default or loss of a
benefit under, any of the Existing Investment Documents, this Agreement or the
other Transaction Documents, (b) limits or that could limit the Purchaser's or
its affiliates' ability to perform their obligations, or that adversely impacts
or could adversely impact any of the Purchaser's or its affiliates' rights under
any of the Existing Investment Documents, this Agreement or the other
Transaction Documents, (c) restricts or that could restrict the Purchaser's or
its affiliates' right to vote, sell, or otherwise dispose of the Interests and
the GP Common Stock or any other securities of MSV LP or MSV GP owned by them,
or (d) affects or that could affect the operation, governance, management,
results, assets, or regulatory status of MSV LP or MSV GP or any of their
respective subsidiaries. Whether in connection with any offering of securities
11
of the Purchaser the proceeds of which are used to fund the investment
contemplated by this Agreement, or otherwise, Purchaser has not granted any
rights to any party that would, or could reasonably be expected to, have any
adverse effect on the business, assets, operations, governance, or regulatory
status of MSV LP or MSV GP or any of their respective subsidiaries.
4.4. INVESTMENT REPRESENTATIONS.
(a) The Purchaser understands that the Interests and the GP Common
Stock (i) have not been, and will not be, registered under the Securities Act or
any state securities laws, (ii) are being offered and sold pursuant to an
exemption from registration contained in the Securities Act based in part on the
representations of the Purchaser contained in this Agreement, and (iii) the
Interests and the GP Common Stock may not be sold unless such disposition is
registered under the Securities Act and applicable state securities laws or is
exempt from registration thereunder.
(b) ACQUISITION FOR OWN ACCOUNT. The Purchaser will acquire the
Interests and the GP Common Stock for its own account, for investment only and
not with a view to the distribution thereof within the meaning of the Securities
Act.
(c) ACCREDITED INVESTOR; DOMICILE. The Purchaser is an "accredited
investor" (as defined in Rule 501(a) under the Securities Act). The Purchaser is
a resident of the State of Illinois, and the Interests and the GP Common Stock
were offered and sold to the Purchaser solely in the State of Illinois.
(d) PURCHASER ABLE TO BEAR ECONOMIC RISK. The Purchaser has substantial
experience in evaluating and investing in private transactions of securities in
companies similar to MSV LP and MSV GP so that it is capable of evaluating the
merits and risks of its investment in MSV LP and MSV GP and has the capacity to
protect its own interests. The Purchaser understands that an investment in the
Interests and the GP Common Stock acquired pursuant to this Agreement is highly
speculative and involves substantial economic risk. The Purchaser understands
that it must bear the economic risk of this investment indefinitely unless the
Interests and the GP Common Stock that the Purchaser purchases are registered
pursuant to the Securities Act, or an exemption from registration is available
for the resale of such securities, and that the Purchaser may sustain, and is
financially able to sustain, a complete loss of its investment pursuant to this
Agreement. The Purchaser understands that MSV LP has no present intention of
registering the Interests and that MSV GP has no present intention of
registering the GP Common Stock. The Purchaser also understands that there is no
assurance that any exemption from registration under the Securities Act for the
resale of such securities will be available and that, even if available, such
exemption may not allow the Purchaser to transfer all or any portion of
Interests or of GP Common Stock under the circumstances, in the amounts or at
the times the Purchaser might propose.
(e) PURCHASER CAN PROTECT ITS INTEREST. By reason of its or of its
management's business or financial experience, the Purchaser has the capacity to
protect its own interests in connection with the transactions contemplated by
this Agreement. Further, the Purchaser is aware of no publication of any
advertisement in connection with the transactions contemplated by this
Agreement.
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(f) MSV INFORMATION. The Purchaser has had an opportunity to discuss
the business, management and financial affairs of MSV LP and MSV GP with
directors, officers and management of MSV LP and of MSV GP. The Purchaser has
also had the opportunity to ask questions of, and receive answers from, MSV LP
and MSV GP and its management regarding the terms and conditions of its
investment. The Purchaser is not relying on any representations, warranties or
information as to MSV LP or MSV GP other than the representations and warranties
made to it herein or pursuant hereto.
4.5. NO CONFLICT. The execution and delivery by the Purchaser of this
Agreement and the Transaction Documents to which it is a party, and the
consummation by the Purchaser of the transactions contemplated hereby and
thereby and compliance with the provisions hereof and thereof will not (a)
violate or conflict with, or require any consent, approval, notice or filing
under, any provision of any domestic (federal, state or local) or foreign law,
statute, rule or regulation, or any ruling, writ, injunction, order, judgment or
decree of any court, administrative agency or other governmental body applicable
to it, or any of its properties or assets, (b) conflict with, or result in any
violation or breach of, or constitute (with due notice or lapse of time, or
both) a default or loss of a benefit under, or cause or permit the acceleration
under, the terms, conditions or provisions of any indenture, mortgage, guaranty,
lease, license or other contract, agreement or understanding, written or oral,
to which it is a party or to which its properties or assets is subject, which
could reasonably be expected to have a Material Adverse Effect on the Purchaser
or on the Purchaser's ability to consummate the transactions contemplated by the
Agreement, (c) result in the creation or imposition of any Encumbrance upon any
of its properties or assets, which could reasonably be expected to have a
Material Adverse Effect on the Purchaser or the Purchaser's ability to
consummate the transactions contemplated by this Agreement or (d) violate its
organizational documents.
4.6. CONSENTS. No permit, authorization, consent or approval of or by,
or any notification of or filing with, any person (governmental or private) is
required by Purchaser in connection with the execution, delivery and performance
of this Agreement, or in connection with the execution, delivery and performance
of the Transaction Documents to which it is a party, or the consummation by the
Purchaser of the transactions contemplated hereby or thereby (other than (i)
notifications or filings required under the Xxxx-Xxxxx-Xxxxxx Act, if any, the
FCC Act and applicable federal or state securities law, if any, which shall be
made on a timely basis and (ii) permits, authorizations, consents and approvals
which, if not obtained, could not reasonably be expected to have a Material
Adverse Effect on the Purchaser's ability to consummate the transactions
contemplated by this Agreement and the Transaction Documents).
4.7. LITIGATION; ORDERS. There is no civil, criminal or administrative
action, suit, claim, notice, hearing, inquiry, proceeding or investigation at
law or in equity by or before any court, arbitrator or similar panel,
governmental instrumentality or other agency now pending or, to the best
knowledge of the Purchaser, threatened against the Purchaser which if determined
adversely to the Purchaser could reasonably be expected to have a Material
Adverse Effect on the Purchaser's ability to consummate the transactions
contemplated by this Agreement. The Purchaser is not subject to any order, writ,
injunction or decree of any court of any federal, state, municipal or other
domestic or foreign governmental department, commission, board, bureau, agency
or instrumentality.
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4.8. COMPLIANCE WITH LAWS; PERMITS. The Purchaser is and has been,
since the date of its incorporation, in compliance with, and has conducted its
business in compliance with, all federal, state, local and foreign laws, rules,
ordinances, codes, consents, authorizations, registrations, regulations,
decrees, directives, judgments and orders applicable to it, which if the
Purchaser failed to comply would be reasonably likely to have a Material Adverse
Effect on the Purchaser's ability to consummate the transactions contemplated by
this Agreement and the Transaction Documents.
4.9. INVESTMENT COMPANY ACT. The Purchaser is not, and immediately
after giving effect to the purchase of the Interests and the GP Common Stock as
contemplated by this Agreement, will not be an "investment company" as such term
is defined in the Investment Company Act.
4.10. TRANSFER RESTRICTIONS. The Purchaser acknowledges and agrees that
the Interests and the GP Common Stock will be subject to restrictions on
transfer as set forth in the GP Stockholders' Agreement and the MSV Partnership
Agreement.
4.11. LEGENDS. It is understood that the certificates evidencing the
Interests and the GP Common Stock may bear one or all of the following legends,
in addition to any other legends required by applicable federal or state
securities laws:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE ENCUMBERED,
PLEDGED, HYPOTHECATED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID
ACT AND SAID LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY AND CONCURRED IN BY THE COMPANY'S COUNSEL THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR SAID LAWS OR SUCH
TRANSACTION COMPLIES WITH RULES PROMULGATED BY THE SECURITIES AND
EXCHANGE COMMISSION UNDER SAID ACT AND PROMULGATED BY THE
APPLICABLE STATE SECURITIES REGULATORS UNDER SAID LAWS."
"[THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
TERMS OF A STOCKHOLDERS' AGREEMENT AND ALL TRANSFERS ARE MADE
SUBJECT TO THE TERMS OF SAID STOCKHOLDERS' AGREEMENT. A COPY OF
THE STOCKHOLDERS AGREEMENT IS AVAILABLE FOR INSPECTION AND
EXAMINATION AT THE PRINCIPAL OFFICE OF THE COMPANY. THE COMPANY
WILL FURNISH TO ANY STOCKHOLDER UPON REQUEST TO ITS PRINCIPAL
OFFICE AND WITHOUT CHARGE, A FULL STATEMENT OF THE POWERS,
DESIGNATIONS, PREFERENCES AND RELATIVE RIGHTS OF THE SHARES OF
EACH CLASS OR SERIES OF STOCK, AND THE QUALIFICATIONS, LIMITATIONS
OR RESTRICTIONS OF SUCH RELATIVE RIGHTS AND PREFERENCES.]"
14
"[THE UNITS REPRESENTED HEREBY MAY NOT BE RE-OFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED
OF EXCEPT IN ACCORDANCE WITH THE AMENDED AND RESTATED LIMITED
PARTNERSHIP AGREEMENT OF THE PARTNERSHIP DATED AS OF NOVEMBER 12,
2004 (AS THE SAME MAY BE AMENDED FROM TIME TO TIME, THE
"PARTNERSHIP AGREEMENT"). THE DESIGNATION, RIGHTS, POWERS,
PRIVILEGES, RESTRICTIONS, PREFERENCES AND OTHER TERMS AND
PROVISIONS OF THE UNITS REPRESENTED HEREBY ARE SET FORTH IN,
ISSUED UNDER, AND SHALL IN ALL RESPECTS BE SUBJECT TO, THE
PROVISIONS OF THE PARTNERSHIP AGREEMENT. CAPITALIZED TERMS USED
HEREIN BUT NOT DEFINED SHALL HAVE THE MEANING GIVEN THEM IN THE
PARTNERSHIP AGREEMENT. THE LIMITED PARTNERSHIP INTERESTS (AS SUCH
TERM IS DEFINED IN THE PARTNERSHIP AGREEMENT) REPRESENTED BY THIS
CERTIFICATE ARE "SECURITIES" GOVERNED BY ARTICLE 8 OF THE UNIFORM
COMMERCIAL CODE AS IN EFFECT IN THE STATE OF NEW YORK.]"
ARTICLE V
CONDITIONS TO THE PURCHASER'S OBLIGATIONS
-----------------------------------------
The obligation of the Purchaser to purchase the Interests and the GP
Common Stock is subject to the satisfaction (or waiver by the Purchaser) as of
the Closing of the following conditions:
5.1. REPRESENTATIONS AND WARRANTIES; COVENANTS. The representations and
warranties of MSV LP and MSV GP made in this Agreement that are qualified by
materiality shall be true and correct in all respects as of the Initial Closing
Date, and the representations and warranties of MSV LP and MSV GP made in this
Agreement that are not qualified by materiality shall be true and correct in all
material respects as of the Initial Closing Date, except to the extent such
representations and warranties expressly relate to an earlier time. MSV LP and
MSV GP shall have performed each of their respective covenants and agreements
contained in this Agreement and the other Transaction Documents to which it is a
party required to be performed by them at or prior to the Closing.
5.2. OTHER CONSENTS AND APPROVALS. MSV LP and MSV GP shall have
obtained all consents, authorizations, approvals, orders, licenses, permits and
qualifications from, or secured exemptions therefrom, and made all necessary
filings, declarations and registrations with, any governmental authority and any
other person (if any), required to be obtained or made by or with respect to MSV
LP and MSV GP in connection with the offer and sale of the Interests and the GP
Common Stock, the execution and delivery of this Agreement and the other
Transaction Documents and the consummation of the transactions contemplated
thereby.
15
5.3. TRANSACTION DOCUMENTS. Each of MSV LP and MSV GP shall have
entered into the Transaction Documents to which it is a party, and this
Agreement and the other Transaction Documents to which each is a party shall be
in full force and effect with respect to MSV LP and MSV GP and, to the extent
applicable, the transactions that are contemplated by the Transaction Documents
to be consummated on the Closing shall have been consummated.
5.4. INTEREST AND GP COMMON STOCK CERTIFICATES. The Purchaser shall
have received from MSV LP original certificates evidencing the purchase of the
Interests. The Purchaser shall have received from MSV GP original stock
certificates evidencing the purchase of the GP Common Stock.
5.5. OTHER CLOSING DOCUMENTS. MSV GP shall have delivered to the
Purchaser the following:
(a) a certificate of the chief executive officer of MSV GP, dated the
Initial Closing Date, to the effect that the conditions specified in Sections
5.1 and 5.2 have been satisfied or waived;
(b) incumbency certificates dated the Initial Closing Date for the
officers of MSV GP executing this Agreement, the other Transaction Documents and
the Closing documents;
(c) a certificate of the Secretary or an Assistant Secretary of MSV GP,
dated as of the Initial Closing Date, certifying as to (i) the Certificate of
Incorporation of MSV GP and the by-laws of MSV GP, (ii) the MSV Partnership
Agreement and (iii) the resolutions and consents adopted by the limited partners
of MSV LP and the Board of Directors of MSV GP authorizing the execution and
delivery by MSV LP and MSV GP of this Agreement, the other Transaction Documents
to which each is a party and the consummation of the transactions contemplated
hereby and thereby, including the issuance and sale of the Interests and the
issuance and sale of the GP Common Stock;
(d) a certificate of the Secretary of State of the State of Delaware,
dated the Initial Closing Date, certifying that MSV LP is in good standing in
the State of Delaware;
(e) a certificate of the Secretary of State of the State of Delaware,
dated the Initial Closing Date, certifying that MSV GP is in good standing in
the State of Delaware; and
(f) such other certificates or documents as the Purchaser or its
counsel may reasonably request relating to the transactions contemplated hereby.
5.6. OPINIONS OF COUNSEL TO MSV LP. The Purchaser shall have received
an opinion of Xxxxxxxxx & Xxxxxxx, counsel to MSV LP, and an opinion of the
general counsel of MSV LP, each dated the Initial Closing Date, reasonably
satisfactory to the Purchaser with respect to matters customarily addressed by
legal counsel in connection with transactions of the type contemplated hereby to
occur in connection with the Initial Closing, and consistent with the opinions
of counsel delivered in MSV LP's previous investment transactions involving the
existing owners.
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ARTICLE VI
CONDITIONS TO MSV LP'S AND MSV GP'S OBLIGATIONS
The obligation of MSV LP to issue and sell the Interests and MSV GP to
issue and sell the GP Common Stock to the Purchaser is subject to the
satisfaction (or waiver by MSV LP) as of the Closing Date of the following
conditions:
6.1. REPRESENTATIONS AND WARRANTIES. The representations and warranties
of the Purchaser made in this Agreement that are qualified by materiality shall
be true and correct in all respects as of the Closing Date, and the
representations and warranties of the Purchaser made in this Agreement that are
not qualified by materiality shall be true and correct in all material respects
as of Closing Date except to the extent such representations and warranties
expressly relate to an earlier time.
6.2. OTHER CONSENTS AND APPROVALS. MSV LP and MSV GP shall have
obtained all consents, authorizations, approvals, orders, licenses, permits and
qualifications from, or secured exemptions therefrom, and made all necessary
filings, declarations and registrations with, any governmental authority and any
other person (if any) required to be obtained or made by or with respect to MSV
LP and MSV GP in connection with the offer and sale of the Interests and the GP
Common Stock, the execution and delivery of this Agreement and the other
Transaction Documents and the consummation of the transactions contemplated
thereby.
6.3. TRANSACTION DOCUMENTS. The Purchaser shall have entered into the
Transaction Documents to which it is a party, and this Agreement and the other
Transaction Documents to which it is a party shall be in full force and effect
and, to the extent applicable, the transactions that are contemplated by the
Transaction Documents to be consummated on the Closing shall have been
consummated.
6.4. PURCHASE BY THE PURCHASER. The Purchaser shall have purchased the
number of Interests and GP Common Stock to be purchased by the Purchaser in
accordance with the terms of this Agreement.
6.5. PAYMENT OF PURCHASE PRICE. The Purchaser shall have paid the
purchase price to be paid by the Purchaser for such Purchaser's Interests and GP
Common Stock.
ARTICLE VII
INDEMNIFICATION
---------------
7.1. INDEMNIFICATION BY THE PURCHASER. The Purchaser shall indemnify
and hold harmless MSV LP and MSV GP and each of their respective officers,
directors, employees and representatives from and against any and all claims,
damages, losses, liabilities, obligations, costs and expenses (including
attorney's fees) ("LOSSES") that may be incurred by or asserted or awarded
against any such person, in each case arising out of or in connection with: (a)
any offering of securities by the Purchaser the proceeds of which are used to
fund the investment contemplated by this Agreement to the extent such losses do
not directly relate to or arise from a breach by MSV LP or MSV GP of their
17
representations, warranties, covenants or agreements hereunder or in any
Transaction Document, (b) the breach by the Purchaser of any representation or
warranty made to MSV LP or MSV GP by the Purchaser herein or in any document
delivered pursuant hereto, or (c) the breach by the Purchaser of any covenant or
agreement contained herein or in any document delivered pursuant hereto.
7.2. INDEMNIFICATION BY MSV. MSV LP and MSV GP, jointly and severally,
shall indemnify and hold harmless the Purchaser and its officers, directors,
employees and representatives from and against any and all Losses that may be
incurred by or asserted or awarded against any such person, in each case arising
out of or in connection with: (a) the breach by MSV LP or MSV GP of any
representation or warranty made to the Purchaser by MSV LP or MSV GP herein or
in any document delivered pursuant hereto and thereto, or (b) the breach by MSV
LP or MSV GP of any covenant or agreement contained herein or in any document
delivered pursuant hereto.
7.3. NO DUPLICATION OF REMEDIES. To the extent any party may have more
than one remedy for any Losses incurred by it, it may pursue all available
remedies but in no event shall be entitled to collect and retain any amount
hereunder in excess of its Losses.
7.4. NOTICE OF CLAIMS. All claims for indemnification hereunder shall
be resolved in accordance with the following procedures:
(a) If the party seeking indemnification (the "INDEMNIFIED PARTY") has
incurred or reasonably believes that it may incur any Losses, it shall deliver
promptly written notice to the indemnifying party (the "INDEMNIFYING PARTY"),
setting forth the nature and amount of the Losses or potential Losses, if
possible (a "CLAIM NOTICE"). If an Indemnified Party receives notice of a
third-party claim for which it intends to seek indemnification hereunder, it
shall give the Indemnifying Party written notice of such claim, so that the
Indemnifying Party's defense of such claim under this Agreement may be timely
instituted. The failure by an Indemnified Party to provide such written notice
shall not constitute a waiver of the Indemnified Party's right to indemnity
unless such failure has prejudiced the Indemnifying Party's ability to defend
such claim, and then only to the extent of such prejudice.
(b) If, after receiving a Claim Notice, the Indemnifying Party desires
to dispute such claim or the amount claimed in the Claim Notice, it shall
deliver to the Indemnified Party a written objection to such claim or payment
setting forth the basis for disputing such claim or payment. Such notice shall
be delivered within 30 days after the date the Claim Notice to which it relates
is received by the Indemnifying Party. If no such notice is received within the
aforementioned 30-day period, the Indemnified Party shall be entitled to payment
for such Losses from the Indemnifying Party within 10 days of the end of such
30-day objection period.
(c) If the Indemnifying Party shall agree that it is responsible for
all amounts that may be recovered in connection with a third-party claim, action
or suit (including waiving any deductible or limit that might otherwise apply
under this Article VII) the Indemnifying Party shall have the right to conduct
and control through counsel of its own choosing, which counsel shall be
reasonably acceptable to the Indemnified Party, any third-party claim, action or
suit; provided, that the Indemnifying Party (i) demonstrates to the Indemnified
18
Party's reasonable satisfaction that it has the financial ability to mount an
appropriate defense of such claim and (ii) diligently contests and defends such
claim. The Indemnified Party shall be entitled at any time, at its own cost and
expense (except that such cost and expense shall be paid by the Indemnifying
Party if the Indemnified Party reasonably determines that the Indemnifying Party
is not adequately representing or, because of a conflict of interest, may not
adequately represent the interests of the Indemnified Party) to participate in
such defense and to be represented by attorneys of its choosing. Except with the
prior written consent of the Indemnified Party no Indemnifying Party, in the
defense of such claim or litigation, shall consent to entry of any judgment or
order, interim or otherwise, or enter into any settlement that provides for
injunctive or other nonmonetary relief affecting the Indemnified Party or that
does not include as an unconditional term thereof the giving by each claimant or
plaintiff to such Indemnified Party of a release from all liability with respect
to such claim or litigation.
(d) In the event that the Indemnifying Party does not elect to defend
against any third-party claim, the Indemnified Party may defend against such
claim in such manner as it may deem appropriate and the Indemnifying Party shall
be liable for any legal expenses reasonably incurred in connection with such
defense; PROVIDED, HOWEVER, that the Indemnified Party shall not, without the
consent of the Indemnifying Party, which consent shall not be unreasonably
withheld, settle or consent to the entry of judgment with respect to such
third-party claim.
(e) In the event of any claim by a third party, the parties hereto
agree that they will cooperate fully with each other in connection with the
defense or settlement of such matter.
7.5. LIMITATION ON AMOUNTS. The Indemnifying Party shall not be
obligated to pay any amounts for indemnification under this Article VII with
respect to breaches of representations and warranties until the aggregate
indemnification obligation of such Indemnifying Party hereunder exceeds
$500,000, whereupon the Indemnifying Party shall be liable for all amounts for
which indemnification may be sought which exceed $500,000. No Indemnifying
Party's liability under this Article VII shall exceed the amount of the purchase
price for the Interests and the GP Common Stock pursuant to this Agreement.
ARTICLE VIII
GENERAL PROVISIONS
------------------
8.1. CONFIDENTIALITY. Each party hereto agrees that, except with the
prior written consent of the other party, it shall at all times keep
confidential and not divulge, furnish or make accessible to anyone any
confidential information, knowledge or data concerning or relating to the
business or financial affairs of the other parties to which such party has been
or shall become privy by reason of this Agreement or the other Transaction
Documents, discussions or negotiations relating to this Agreement or the other
Transaction Documents, the performance of its obligations hereunder or the
ownership of the Interests or the GP Common Stock purchased hereunder. The
provisions of this Section 8.1 shall be in addition to, and not in substitution
for, the provisions of any separate nondisclosure agreement executed by the
parties hereto.
8.2. PUBLICITY; SEC FILINGS. Neither MSV LP, MSV GP, nor the Purchaser
shall, without the prior written consent of the other parties, except as may be
required by law, advertise, issue any press release or otherwise publicize the
fact that the parties have entered into this Agreement. MSV LP, MSV GP and the
Purchaser will use commercially reasonable efforts to draft and issue a mutually
agreed upon press release announcing the consummation of the transactions
19
contemplated by this Agreement. The Purchaser shall give MSV LP and MSV GP a
reasonable opportunity to review and comment on any current report on Form 8-K,
or any other report or filing with the Securities and Exchange Commission, that
discloses or describes the transactions contemplated by this Agreement.
8.3. SURVIVAL. The representations, warranties, covenants and
agreements made herein shall survive any investigation made by the Purchaser and
the closing of the transactions contemplated hereby.
8.4. GOVERNING LAW. This Agreement shall be governed in all respects by
the law of the State of New York as such law is applied to agreements between
New York residents entered into and performed entirely in the State of New York,
without regard to the conflict of laws provisions thereof.
8.5. SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto and shall inure to the benefit of and be enforceable by each
person who shall be a holder of the Interests and the GP Common Stock, from time
to time. Nothing in this Agreement, express or implied, is intended to confer
upon any other party (other than the parties to this Agreement or their
respective successors and assigns) any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
8.6. SEVERABILITY. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby;
provided that no such severability shall be effective if it materially and
adversely affects the economic benefit of this Agreement to any party.
8.7. AMENDMENT AND WAIVER. This Agreement may be amended or modified,
and the obligations of MSV LP and MSV GP and the rights of the Purchaser under
this Agreement may be waived, only upon the written consent of MSV LP, MSV GP
and the Purchaser.
8.8. DELAYS OR OMISSIONS. No delay or omission to exercise any right,
power or remedy accruing to any party, upon any breach, default or noncompliance
by another party under this Agreement or the other Transaction Documents shall
impair any such right, power or remedy, nor shall it be construed to be a waiver
of any such breach, default or noncompliance, or any acquiescence therein, or of
or in any similar breach, default or noncompliance thereafter occurring. Any
waiver, permit, consent or approval of any kind or character on the Purchaser's
part of any breach, default or noncompliance under this Agreement or the other
Transaction Documents or any waiver on such party's part of any provisions or
conditions of this Agreement or the other Transaction Documents must be in
writing and shall be effective only to the extent specifically set forth in such
writing. All remedies, either under this Agreement, the other Transaction
Documents, by law or otherwise afforded to any party, shall be cumulative and
not alternative.
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8.9. NOTICES. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given (a) upon personal delivery to the
party to be notified, (b) when sent by confirmed facsimile if sent during normal
business hours of the recipient, if not, then on the next business day, (c) five
days after having been sent by registered or certified mail, return receipt
requested, postage prepaid, or (d) one day after deposit with a nationally
recognized overnight courier, specifying next day delivery, with written
verification of receipt. All communications shall be sent to MSV LP, MSV GP and
the Purchaser at the addresses set forth on the signature pages of this
Agreement or at such other address as MSV LP, MSV GP or the Purchaser may
designate by 10 days advance written notice to the other parties hereto.
8.10. EXPENSES. Each party shall pay all costs and expenses that it
incurs with respect to the negotiation, execution, delivery and performance of
this Agreement. For the avoidance of doubt, the Purchaser shall have no
liability to MSV LP in respect of any fees, commissions or other compensation
that may be payable by MSV LP or MSV GP to any brokers, finders, investment
banks or similar entities in connection with the transactions contemplated by
this Agreement. Similarly, neither MSV LP nor MSV GP shall have any liability to
the Purchaser in respect of any fees, commissions or other compensation that may
be payable by the Purchaser to any brokers, finders, investment banks or similar
entities in connection with the transactions contemplated by this Agreement.
8.11. ATTORNEYS' FEES. In the event that any suit or action is
instituted to enforce any provision in this Agreement, the prevailing party in
such dispute shall be entitled to recover from the losing party all fees, costs
and expenses of enforcing any right of such prevailing party under or with
respect to this Agreement, including without limitation, such reasonable fees
and expenses of attorneys and accountants, which shall include, without
limitation, all fees, costs and expenses of appeals.
8.12. INTERPRETATION. The titles of the sections and subsections of
this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement. All pronouns contained herein, and any
variations thereof, shall be deemed to refer to the masculine, feminine or
neutral, singular or plural, as to the identity of the parties hereto may
require.
8.13. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument. Delivery of an executed counterpart of a
signature page of this Agreement by facsimile shall be effective as delivery of
a manually executed counterpart of this Agreement.
8.14. ENTIRE AGREEMENT. This Agreement, the Exhibits and the Schedules
hereto, the Transaction Documents and any other documents delivered pursuant
hereto constitute the full and entire understanding and agreement between the
parties with regard to the subjects hereof and supersede any and all prior and
contemporaneous agreements or understandings, whether expressed or implied,
written or oral, between the parties with respect hereto and thereto. No party
shall be liable or bound to any other in any manner by any representations,
warranties, covenants and agreements except as specifically set forth herein and
therein.
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ARTICLE IX
CERTAIN DEFINED TERMS
---------------------
"CONVERTIBLE NOTE" and "CONVERTIBLE NOTES" shall mean, collectively,
any convertible note and the other convertible notes of like tenor issued on (i)
November 26, 2001, as amended (including pursuant to amendments dated as of
August 21, 2003 and April 2, 2004), totaling $55,000,000 in original principal
amount, and (ii) August 12, 2002, as amended (including pursuant to amendments
dated as of August 21, 2003 and April 2, 2004), totaling $3,000,000 in original
principal amount.
"CONTRACT" means any indenture, mortgage, guaranty, lease, license or
other contract, agreement or understanding, written or oral.
"EXISTING INVESTMENT DOCUMENTS" shall mean (i) the MSV Partnership
Agreement; (ii) the GP Stockholders' Agreement; (iii) the MSI Note; (iv) the
Convertible Notes; (v) that certain Amended and Restated Parent Transfer/Drag
Along Agreement, dated as of August 21, 2003, by and among MSV LP and the parent
entities and their respective subsidiaries named therein; and (vi) that certain
Pledge and Guarantee Agreement, dated as of November 26, 2001, by and among TMI
Communications and Company, Limited Partnership, TMI Communications Delaware,
Limited Partnership and the other parties thereto.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on the
properties, business, prospects, operations, earnings, assets, liabilities or
the condition (financial or otherwise) of the specified entity.
"MSI NOTE" shall mean that certain promissory note, dated as of
November 26, 2001 and amended on August 21, 2003 and April 2, 2004, issued by
MSV LP to the Purchaser, as assignee, in the original principal amount of
$15,000,000.
"PERMITS" means all federal, state, local and foreign governmental
licenses, permits, qualifications and authorizations.
"TMI NOTE" means that certain promissory note, dated as of November 26,
2001, as amended and amended on August 21, 2003 and April 2, 2004, issued by MSV
LP to TMI Communications and Company, Limited Partnership in the principal
amount of $11,500,000.
"TRANSACTION DOCUMENTS" shall mean (i) this Agreement, (ii) that
certain Amended and Restated Limited Partnership Agreement of MSV LP, to be
dated as of the Initial Closing Date and amended from time to time, among MSV GP
and each of the limited partners named therein, (iii) that certain Amended and
Restated Stockholders' Agreement, to be dated as of the Initial Closing Date, by
and among MSV GP and each of the stockholders named therein, (iv) that certain
Exchange and Conversion Agreement, to be dated as of the Initial Closing Date,
by and among MSV LP, the convertible noteholders named therein and the
22
Purchaser, (v) that certain First Amendment to Pledge and Guarantee Agreement,
to be dated as of the Initial Closing Date, by and among TMI Communications
Delaware, Limited Partnership and the other parties thereto; and (vi) that
certain Second Amended and Restated Parent Transfer/Drag Along Agreement, to be
dated as of Initial Closing Date, by and among MSV LP and the parent entities
and their respective subsidiaries named therein.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have executed this Purchase
Agreement as of the date first set forth above.
Mobile Satellite Ventures GP INc.
By: /S/ XXXXX XXXXX
------------------------
Name: Xxxxx Xxxxx
Title: Secretary
ADDRESS FOR NOTICE:
-------------------
00000 Xxxxxxxxx Xxxxxxxxx
Xxxxxx, XX 00000-0000
Attention: General Counsel
Facsimile: (000) 000-0000
With a copy to
(which shall not constitute
notice to MSV GP):
------------------
Xxxxxxxxx & Xxxxxxx
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
SIGNATURE PAGE TO PURCHASE AGREEMENT
24
Mobile Satellite Ventures LP
By: Its General Partner, Mobile Satellite
Ventures GP Inc.
By: /S/ XXXXX XXXXX
---------------------------------
Name: Xxxxx Xxxxx
Title: Secretary
ADDRESS FOR NOTICE:
-------------------
00000 Xxxxxxxxx Xxxxxxxxx
Xxxxxx, XX 00000-0000
Attention: General Counsel
Facsimile: (000) 000-0000
With a copy to
(which shall not constitute
notice to MSV LP):
------------------
Xxxxxxxxx & Xxxxxxx
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
25
PURCHASER:
----------
MOTIENT VENTURES HOLDING INC.
By: /S/ XXXXX XXXXXX
-------------------------------
Name: Xxxxx Xxxxxx
Title: CFO
ADDRESS FOR NOTICE:
-------------------
000 Xxxxxxxxxxxxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: General Counsel
Facsimile: (000) 000-0000
26
