EXHIBIT 10.42
- --------------------------------------------------------------------------------
ASSET SALE AGREEMENT
BETWEEN
MOTIENT SATELLITE VENTURES LLC
AND
MOTIENT SERVICES INC.
DATED AS OF
June 29, 2000
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
1. DEFINITIONS..............................................................1
2. CLOSING OF ASSET SALE....................................................1
2.1. Sale of Assets..................................................1
2.2. Purchase Price; Deposit.........................................1
2.3. Description of Subject Assets...................................2
2.4. Excluded Assets.................................................4
2.5. Assumption of Specified Liabilities.............................5
2.6. Closing; Closing Date...........................................6
2.7. Agreement on Disposition of Purchase Price......................6
3. ADDITIONAL UNDERTAKINGS AND COVENANTS....................................6
3.1. Consents and Approvals..........................................6
3.2. Operation of Business of Motient Services.......................7
3.3. Disclosure......................................................8
3.4. News Releases...................................................9
3.5. General.........................................................9
3.6. Bulk Sales Laws.................................................9
3.7. Access to Motient Services Information; Business Review Period..9
3.7.1. Business Review.........................................9
3.7.2. Confidentiality........................................10
3.7.3. Basic Financial Information............................10
3.7.4. Newco Information Rights; Confidentiality..............11
3.8. Revision of Disclosure Schedules...............................11
4. REPRESENTATIONS AND WARRANTIES OF MOTIENT SERVICES......................12
4.1. Organization and Standing......................................12
4.2. Subsidiaries...................................................12
4.3. Noncontravention...............................................12
4.4. Real Property..................................................13
4.5. Assets.........................................................13
4.6. Insurance......................................................13
4.7. Intellectual Property..........................................13
4.8. Debt Instruments...............................................14
4.9. Leases.........................................................14
4.10. Other Agreements...............................................14
4.11. Litigation; Disputes...........................................15
4.12. Labor Relations; Employees.....................................15
4.13. Taxes..........................................................16
4.14. Restrictions and Consents......................................16
4.15. Authorization..................................................17
4.16. Absence of Violation...........................................17
4.17. Binding Obligation.............................................17
4.18. Financial Statement............................................17
4.19. Absence of Undisclosed Liabilities.............................18
4.20. Material Adverse Change........................................18
4.21. Assets Used in Satellite Communications Business...............18
4.22. Licenses.......................................................18
4.23. Transactions with Affiliates...................................18
4.24. Employee Benefit Plans.........................................18
4.25. Environmental Matters..........................................19
-i-
5. REPRESENTATIONS AND WARRANTIES OF NEWCO.................................19
5.1. Organization and Standing......................................19
5.2. Authorization..................................................20
5.3. Binding Obligation.............................................20
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF MOTIENT SERVICES.................20
6.1. Representations and Warranties.................................20
6.2. Performance....................................................20
6.3. Legal Proceedings..............................................21
6.4. Hart-Scott-Rodino..............................................21
6.5. Newco's Certificate............................................21
6.6. Federal Communications Commission Consent......................21
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF NEWCO............................21
7.1. Representations and Warranties.................................21
7.2. Performance....................................................22
7.3. Legal Proceedings..............................................22
7.4. Hart-Scott-Rodino..............................................22
7.5. Officer's Certificate..........................................22
7.6. Federal Communications Commission Consent......................22
7.7. Financing......................................................22
7.8. No Material Adverse Effect.....................................23
8. Closing.................................................................23
8.1. Deliveries by Motient Services.................................23
8.2. Deliveries by Newco............................................23
8.3. Transferred Employees..........................................24
8.4. Transitional Matters...........................................25
8.5. Shared Assets; Parent Guaranties...............................26
8.6. Motient Resale Of Newco Products And Services..................27
8.7. Use of Proceeds................................................27
8.8. Insurance Proceeds from Satellite Failure......................27
8.9. Sale of Motient Services or the Satellite
Communications Business........................................28
-ii-
9. SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION; REMEDIES..................30
9.1. Survival of Representations....................................30
9.2. Agreement of Motient Services to Indemnify.....................30
9.3. No Duplication of Remedies.....................................31
9.4. Agreement of Newco to Indemnify................................31
9.5. Notice of Claims...............................................31
9.6. Limitations on Amounts.........................................32
9.7. Force Majeure..................................................33
9.8. Subrogation....................................................33
10. TERMINATION.............................................................33
10.1. Termination....................................................33
10.2. Effect of Termination..........................................34
11. MISCELLANEOUS...........................................................34
11.1. Additional Actions and Documents...............................34
11.2. No Brokers.....................................................34
11.3. Expenses.......................................................34
11.4. Assignment.....................................................35
11.5. Entire Agreement; Amendment....................................35
11.6. Waiver.........................................................35
11.7. Severability...................................................35
11.8. Governing Law..................................................36
11.9. Notices........................................................36
11.10. Headings.......................................................37
11.11. Interpretation; Absence of Presumption.........................37
11.12. Execution in Counterparts......................................38
11.13. Limitation on Benefits.........................................38
11.14. Binding Effect.................................................38
-iii-
ASSET SALE AGREEMENT
ASSET SALE AGREEMENT (this "Sale Agreement") is entered into as of June 29,
2000 by and between Motient Satellite Ventures LLC, a Delaware limited liability
company ("Newco"), and Motient Services Inc., a Delaware corporation ("Motient
Services").
WHEREAS, Motient Services is engaged in the business of providing satellite
communications services (including though a dual-mode communications product
offering) in the United States and surrounding waters and airspace in the
1530-1559 Mhz and 1631.5-1660.5 Mhz band (the "Satellite Communications
Business");
WHEREAS, Motient Services desires to sell and Newco desires to purchase
certain of the assets and assume certain of the liabilities of the Satellite
Communications Business, as more fully described herein.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein, the parties, intending to be legally
bound, hereby agree as follows:
1. DEFINITIONS
For all purposes of this Sale Agreement, certain capitalized terms not
otherwise defined herein shall have the meanings set forth on Exhibit A.
2. CLOSING OF ASSET SALE
2.1. Sale of Assets.
On the basis of the representations, warranties and agreements contained
herein, and subject to the terms and conditions hereof, Motient Services agrees
to sell, assign, transfer, convey and deliver to Newco, and Newco agrees to
purchase from Motient Services, the Subject Assets at the Closing free and clear
of all Claims or Encumbrances other than the Assumed Liabilities.
2.2. Purchase Price; Deposit.
(a) For and in consideration of the conveyances and assignments described
herein and in addition to the assumption of liabilities as set forth in Section
2.5, Newco agrees to pay to Motient Services, and Motient Services agrees to
accept from Newco, the Purchase Price which shall be payable as follows:
(i) For and in consideration of the execution and delivery of this
Agreement, simultaneously with the execution and delivery of this Agreement,
Newco is delivering the amount of Twenty Four Million Dollars ($24,000,000) in
cash to Motient Services as an earnest money deposit (the "Deposit") which is
non-refundable except in connection with (and to the extent of) Motient
Services' obligation to indemnify hereunder and except as otherwise expressly
set forth in this Sale Agreement; and
(ii) At the Closing, Newco shall deliver the balance of the Purchase
Price to Motient Services by wire transfer of immediately available funds in
accordance with Motient Services' wiring instructions.
(b) Motient Services shall have no obligation to hold or otherwise retain
the Deposit in escrow and Motient Services shall have the right to use and apply
the Deposit in its sole discretion, subject to the restrictions set forth in
Section 8.8 hereof.
2.3. Description of Subject Assets
All of the assets that relate to the Satellite Communications Business
shall be the "Subject Assets", excluding in all events, the Excluded Assets (as
hereinafter defined). The Subject Assets include, but are not limited to:
(a) the satellite described on Schedule 2.2(a) and any replacement thereof
(the "Satellite");
(b) subject to regulatory approval, all of Motient Services' rights in any
licenses issued by the Federal Communications Commission, and all other
licenses, permits, franchises and similar authorizations held by Motient
Services, in connection with the Satellite Communications Business (the
"Licenses");
(c) all of Motient Services' rights in customer contracts relating to (i)
voice services, including but not limited to nationwide dispatch service and
satellite telephone service, (ii) data services, including satellite-only and
multi-mode messaging services and (iii) private network customers purchasing
bulk satellite capacity (the "Customer Contracts");
(d) all of Motient Services' rights in the dealer contracts relating to the
Satellite Communications Business (the "Dealer Contracts");
(e) all of Motient Services' rights in the distributor, sale, agent and
reseller contracts with Stratos relating to the Satellite Communications
Business (the "Stratos Contracts");
(f) all of Motient Services' rights and obligations under (i) the contract
to purchase a certain number of MobileMAX2 units, and (ii) all other agreements
related thereto (the "MobileMAX2 Agreements");
(g) subject to Section 8.4 hereof and the Landlord's consent, all of
Motient Services' rights and obligations under the Deed of Lease (the "Lease"),
dated February 4, 1993, as amended, between Motient Services and Trust Company
of the West (the "Landlord") for the premises located at 10802 Parkridge
Boulevard, Reston, Virginia (the "Reston Facility");
-2-
(h) all of Motient Services' rights in the other leases, license
agreements, contracts, agreements, sales orders, purchase orders, open bids and
other commitments primarily relating to the Satellite Communications Business,
including but not limited to (i) agreements relating to telemetry, tracking and
control services, (ii) agreements relating to back-up antenna support, (iii)
supply, distribution and software maintenance agreements, (iv) administrative
services agreements, (v) cross-licensing agreements (including the
Cross-Licensing Agreement), (vi) reciprocal business arrangements, and (vii)
leases relating to real property (the "Other Contracts" and together with the
Customer Contracts, the Dealer Contracts, the Stratos Contracts, the MobileMAX2
Agreements and the Lease, the "Contracts");
(i) all machinery, fixtures, equipment, supplies, computers, computer
systems and computer support equipment, and all other tangible personal
property, relating to the Satellite Communications Business including, but not
limited to, all of the equipment and personal property comprising Motient
Services' land earth stations;
(j) all of Motient Services' rights under the contracts, agreements and
arrangements with employees of Motient Services whose employment is
substantially related to the Satellite Communications Business;
(k) all of the machinery, equipment, furniture, furnishings and other
tangible personal property of Motient Services used primarily in connection with
the Satellite Communications Business (collectively, the "Personal Property");
(l) all of Motient Services' rights in the patents, trademarks, copyrights,
licenses to use patents, trademarks or copyrights of third parties, patent or
trademark or copyright applications or registrations, trade names, service
marks, applications, logos, slogans, computer code and software, trade secrets,
know how, customer lists and proprietary information relating to the Satellite
Communications Business (the "Intellectual Property");
(m) all stock and other outstanding equity securities owned by Motient
Services;
(n) all inventory, work-in-progress, raw materials, parts, stores, spare
parts, repair parts, test units, samples, components, accessories and supplies
related to the Satellite Communications Business;
(o) the prepaid expenses, deposits and retentions of Motient Services
related to the Satellite Communications Business;
(p) all goodwill and going concern value of the Satellite Communications
Business;
(q) all rights or Claims of Motient Services arising out of the breach of
any express or implied warranties by third parties of any of the foregoing
assets or any component part thereof;
-3-
(r) all security deposits and letters of credit provided to Motient
Services from certain customers of the Satellite Communications Business;
(s) all rights of Motient Services as a creditor in the bankruptcy
proceedings listed in Schedule 2.2(r) to the extent such rights are still in
existence at the Closing;
(t) the satellite in-orbit insurance policy and all other insurance
policies substantially related to the Satellite Communications Business;
(u) all rights of Motient Services to any Claims, ongoing or potential
against any third parties arising out of or related to the Satellite
Communications Business;
(v) except as provided in Section 2.4(v) below, all accounts receivable of
the Satellite Communication Business, whether such rights are matured or
unmatured, fixed or contingent, as of the Closing Date;
(w) the cash or cash equivalents held by or deposited with any financial
institution in connection with the letters of credit issued on behalf of Motient
Services; and
(x) all assets reflected on the Financial Statement, other than assets
disposed of in compliance with this Sale Agreement and the Shared Assets listed
on Schedule 2.3(x) of the Disclosure Schedule.
2.4. Excluded Assets; Unassignable Contracts
(a) "Excluded Assets" consist of (i) Motient Services' corporate charter,
qualifications to conduct business as a foreign corporation, arrangements with
registered agents relating to foreign qualifications, taxpayer and other
identification numbers, seals, minute books, stock transfer books, blank stock
certificates, and other documents relating solely to the organization,
maintenance or existence of Motient Services as a corporation, (ii) Motient
Services' rights with respect to Intercompany Agreements (as defined herein),
(iii) except as provided in Sections 2.3(v) and (w) hereof, cash and cash
equivalents (including without limitation the Purchase Price), (iv) the Shared
Assets, (v) that portion of the accounts receivable of Motient Services that
relate to state and local excise, sales and use taxes required to be paid by
Motient Services under Section 2.5(z) hereof and, (vi) the assets listed on
Schedule 2.4.
(b) Notwithstanding anything else in this Sale Agreement to the contrary,
this Sale Agreement shall not constitute an agreement to assign or transfer any
Subject Asset or part thereof or any rights or benefit arising thereunder or
resulting therefrom if an attempted assignment or transfer thereof, without the
consent of a third party thereto, would constitute a breach thereof, or make
Newco, Motient Services or any of their respective Affiliates liable for damages
or other penalties thereunder (although the obligations of Motient Services
thereunder shall remain Assumed Liabilities for all purposes of this Sale
Agreement). If such consent is not obtained, or if an attempted assignment
-4-
thereof would be ineffective or would affect the rights of Newco or Motient
Services so that Newco would not in fact receive all such rights, Motient
Services (i) shall cooperate with Newco, at Newco's request, in endeavoring to
obtain such consent and (ii) if any such consent is unobtainable, shall
cooperate with Newco in an arrangement designed to provide to Newco, at Newco's
expense, the benefits and liabilities following Closing with respect to any such
Subject Asset or part thereof or any right or benefit arising thereunder or
resulting therefrom, including enforcement for the benefit of Newco of any and
all rights of Motient Services against a third party arising out of the breach
or cancellation by such third party or otherwise; provided, however, that such
arrangement shall provide for indemnification by Newco of Motient Services,
reasonably acceptable to Motient Services, against any liability arising out of
such arrangement.
2.5. Assumption of Specified Liabilities
At the Closing, Newco shall assume only the following liabilities and
obligations of the Satellite Communications Business (the "Assumed
Liabilities"): all liabilities and indebtedness relating to the Subject Assets
(other than those incurred in violation of this Sale Agreement and those
excluded by the second paragraph of this Section 2.5), including but not limited
to (i) equipment and insurance financing, (ii) performance payments to Hughes
relating to satellite manufacture, (iii) the SPAR litigation, (iv) obligations
under the Asset Sale Agreement, dated as of November 22, 1996 with Rockwell
Collins, (v) warranty obligations to customers under customer service contracts
assumed by Newco, (vi) accounts payable of the Satellite Communications
Business, whether such obligations are matured or unmatured, fixed or
contingent, as of the Closing Date, (vii) all Claims by customers, vendors,
suppliers, Transferred Employees and similar Claims, relating to any of the
Subject Assets or the Satellite Communications Business, and (viii) any and all
termination penalties under any contracts assigned to Newco that Newco chooses
to terminate.
The Assumed Liabilities shall not include, and Newco shall not assume or be
deemed to assume, and Motient Services shall remain responsible for, any and all
debts, liabilities or obligations of Motient Services (or any officer, director,
employee or shareholder of any of the foregoing) of the following types: (p)
liabilities that were required to be disclosed on the Disclosure Schedule (or
the updated Disclosure Schedule) which were not so disclosed, (q) all taxes
Motient Services is responsible for under the last sentence of Article V of the
R&D agreement, (r) liabilities and obligations to Motient Corporation or any of
its direct or indirect Subsidiaries (except those obligations set forth in the
Cross-Licensing Agreement), (s) indebtedness incurred under and guaranties
related to any bank or credit facilities of Motient Corporation, Motient
Holdings Inc. or any other entity other than Motient Services, (t) liabilities
and obligations arising out of or relating to (including guaranties of)
indebtedness for borrowed money (except for indebtedness for borrowed money
permitted to be incurred under Section 3.2(c)(ii) hereof), (u) any liability
arising out of a breach of this Sale Agreement, the R&D Agreement or any
Agreement or document delivered in connection herewith or therewith, (v) any
costs directly associated with the Closing, including but not limited to legal
and accounting fees, (w) any liability to those former employees of the
Satellite Communication Business whose employment was terminated prior to the
-5-
Closing Date and who are eligible to receive COBRA benefits under Section 4980B
of the Code, (x) any liabilities under any contract of Motient Services not
included in the Subject Assets or any termination payments or other damages
payable with respect to an unassigned contract not disclosed to Newco, (y) any
Liability of Motient Services for the unpaid Taxes of any Person (other than
Motient Services) under Treas. Reg. Section 1.1502-6 (or any similar provision
of state, local or foreign law), as a transferee or successor by contract, or
otherwise, and (z) any Liability of Motient Services for unpaid Taxes with
respect to any Tax year or portion thereof ending on or before the Closing Date;
including for state and local excise, sales and use taxes paid on a monthly
basis, with respect to which Motient Services shall be liable for such Taxes
with respect to sales made prior to the Closing Date.
2.6. Closing; Closing Date.
The closing of the sale of the Subject Assets to Newco and the assumption
of the Assumed Liabilities by Newco (the "Closing" and the date thereof being
sometimes hereinafter referred to as the "Closing Date") shall be as soon as
reasonably practicable after the satisfaction of the conditions precedent set
forth in Sections 6 and 7. The Closing shall be held at the offices of Hogan &
Hartson L.L.P., 8300 Greensboro Drive, Suite 1200, McLean, Virginia 22102, or at
such other location as the parties may mutually agree upon.
2.7. Agreement on Disposition of Purchase Price
Motient Services hereby agrees that the amount of the Purchase Price,
together with the assumption of the Assumed Liabilities, constitutes adequate
and sufficient consideration for the transfer to Newco of all interests held by
Motient Services in and to the Subject Assets and for the performance by Motient
Services of all of its covenants and agreements hereunder. Within ninety (90)
days after the Closing Date, the parties will come to a mutually-agreed upon
allocation of the consideration for tax and accounting purposes.
3. ADDITIONAL UNDERTAKINGS AND COVENANTS
Newco, on the one hand, and Motient Services, on the other hand, hereby
covenant and agree with each other as follows:
3.1. Consents and Approvals
(a) Upon written notice from Newco (the "Notice") delivered to Motient
Services on or prior to the Outside Date (the date of receipt of which is
referred to herein as the "Notice Date") stating that Newco desires to
consummate the purchase of the Subject Assets, Newco and Motient Services shall
use all commercially reasonable efforts to secure such consents, authorizations
and approvals of governmental and supragovernmental authorities including but
not limited to the Federal Communications Commission and of private individuals
or entities with respect to the transactions contemplated by this Sale
Agreement, and to the performance of all other obligations of such parties
hereunder, as may be required by any applicable statute or regulation of the
United States or any country, state or other jurisdiction or by any Agreement of
-6-
any kind whatsoever to which Newco or Motient Services is a party or by which
Newco or Motient Services is bound. Subject to Section 3.1(c), each party shall
be responsible for any expenses incurred relating to obtaining such consents,
authorizations and approvals for which such party bears the responsibility of
obtaining.
(b) After the Notice Date, Newco and Motient Services shall (i) cooperate
in the filing of all forms, notifications, reports and information, if any,
required or reasonably deemed advisable pursuant to applicable statutes, rules,
regulations or orders of any governmental or supragovernmental authority in
connection with the transactions contemplated by this Sale Agreement and (ii)
use all commercially reasonable efforts to cause any applicable waiting periods
thereunder to expire and any objections to the transactions contemplated hereby
to be withdrawn before the Closing.
(c) In addition to the obligations set forth in Section 3.1(b), as promptly
as practicable, and in any event no later than ten (10) business days after the
Notice Date, Motient Services and Newco shall complete any filing that may be
required pursuant to Hart-Scott-Rodino, or shall mutually agree that no such
filing is required. Motient Services and Newco shall diligently take (or fully
cooperate in the taking of) all actions, and provide any additional information,
required or reasonably requested in order to comply with the requirements of
Hart-Scott-Rodino. Each party shall pay any Hart-Scott-Rodino filing fees
payable in connection with any Hart-Scott-Rodino filing required to be made by
such party.
3.2. Operation of Business of Motient Services
(a) Motient Services shall, through the Closing Date, (i) substantially
preserve its business organization, including, without limitation all licenses,
permits or other governmental authorizations to conduct its business, (ii)
operate the Satellite Communications Business in the ordinary course of business
consistent with past practice, (iii) substantially maintain its present
relationships with customers, suppliers, consultants, employees and any other
persons having business relations with it (subject to Motient Services' ability
to terminate arrangements that are detrimental to the well-being of the
Satellite Communications Business), (iv) collect accounts receivable and pay
expenses and accounts payable in the ordinary course of business consistent with
past practice, and (v) maintain the Subject Assets in customary repair and
condition, provided, that a non-ordinary course change in the business condition
occurs beyond the control of Motient Services (excluding, however, such changes
which any company controlling Motient Services causes or instructs Motient
Services to make) shall not be deemed in breach of this Section 3.2.
(b) Prior to the Closing Date, Motient Services will maintain the Subject
Assets in accordance with Section 4.5.
(c) Prior to the Closing Date, Motient Services shall not take any of the
following actions without the consent of Newco, which consent shall not be
unreasonably withheld:
-7-
(i) enter into or amend any employment agreements or arrangements,
except in the ordinary course of business;
(ii) incur any indebtedness for borrowed money, or guaranty any such
indebtedness of another person, in excess of $2,000,000, except in connection
with (1) financing up to $6,000,000 in the aggregate in connection with
satellite insurance policies, (2) equipment or vendor financing up to
$15,000,000 in the aggregate related to the MobileMAX2 Agreements (or any
extensions or renewals thereof), and (3) other equipment or vendor financing up
to $5,000,000 in the aggregate.
(iii) enter into any transactions with an Affiliate of Motient
Services, unless such transaction is either (i) in the ordinary course of
business consistent with Motient Services' past practice in dealing with
Affiliates, or (ii) negotiated at arms length between the parties, on terms at
least as favorable as those that could be obtained by an independent third
party, and is determined to be fair by the board of directors of Motient
Services;
(iv) acquire or agree to acquire, by merging or consolidating with, by
purchasing an equity interest in or a portion of the assets of, or by any other
manner, any business or corporation, partnership, association or other business
organization or division thereof;
(v) fail to maintain satellite and ground station insurance coverage
(to the extent available on commercially reasonable terms), on its own or
through Motient Corporation's policies, that is consistent with past practice
and reasonably consistent with the coverage of Motient Corporation's other
subsidiaries;
(vi) enter into any Agreements that require Motient Services to
repurchase products upon a transfer of such Agreement or upon a change in
control of the Satellite Communication Business;
(vii) hypothecate, mortgage, pledge, charge or encumber, or permit any
mortgage, pledge or encumbrance to exist on, any of its Assets, except in
connection with indebtedness permitted to be incurred under Section 3.2(c)(ii)
above; or
(viii) sell, lease, transfer or otherwise dispose of, or purchase,
lease or otherwise acquire, any Assets, except in the ordinary course of
business.
3.3. Disclosure
If, at any time prior to Closing, Motient Services becomes aware of any
information which would cause any condition set forth in Sections 7.1 or 7.2 not
to be satisfied, Motient Services covenants that it will promptly inform Newco
thereof.
-8-
3.4. News Releases
Neither party shall issue or approve any news release or other public
announcement (including, but not limited to, any public announcement to clients
and/or vendors) concerning the transactions contemplated by this Sale Agreement
without the prior approval of the other party (which approval shall not be
unreasonably withheld), except as may be otherwise necessary or appropriate for
compliance with federal or state securities laws or applicable requirements of
any securities exchange, automated quotation system or over-the-counter market
as long as such disclosing party uses reasonable efforts to consult the other
prior to such disclosure or filing.
3.5. General
Each of the parties hereto will use all commercially reasonable efforts to
take all action and to do all things necessary, proper, or advisable in order to
consummate and make effective the transactions contemplated by this Sale
Agreement (including satisfaction, but not waiver, of the conditions set forth
in Sections 6 and 7). Notwithstanding the foregoing, nothing contained herein
shall require Motient Corporation, Motient Holdings Inc. or any of their
respective Affiliates to (i) enter into new guaranties or incur new secondary
liabilities of any kind to any customers or vendors of the Satellite
Communications Business, or (ii) except as expressly set forth herein, make any
payments or incur any liability to any third party in connection with the
assignment and transfer of the Contracts or any other Agreement that is part of
the Subject Assets to Newco.
3.6. Bulk Sales Laws.
Newco hereby waives compliance by Motient Services, in connection with the
transactions contemplated hereby, with the provisions of any applicable bulk
transfer laws; provided, however, that Motient Services shall indemnify and hold
harmless Newco from and against any losses attributable to Motient Services'
non-compliance with any applicable bulk transfer laws, without regard to the
provisions of Article 9.
3.7. Access to Motient Services Information; Business Review Period
3.7.1. Business Review.
After the Notice Date, Motient Services shall, upon the request of Newco,
provide to Newco and its representatives full access to all premises,
properties, officers, directors, consultants, contractors, books, records
(including, without limitation, tax returns, tax records and correspondence with
accountants), contracts and documents pertaining to the Satellite Communications
Business as Newco deems necessary (the "Business Review"), and Newco and its
representatives shall have the right to copy such books, records, contracts and
documents at Newco's expense. Motient Services shall cooperate fully with Newco
and its representatives in permitting reasonable access to the Satellite
Communications Business to conduct the Business Review. Such access may be
either during normal business hours or after normal business hours after the
-9-
giving of reasonably advance notice to Motient Services. Newco shall reasonably
restore any property of Motient Services damaged as a result of the Business
Review to its condition prior to any such Business Review and shall indemnify
and defend Motient Services from any and all liability which may arise as a
result of the performance of Business Review by Newco. Motient Services will
furnish to Newco and its representatives such financial and operating data and
other information with respect to the Satellite Communications Business as Newco
may reasonably request, including, without limitation, financial statements,
books and records and Agreements with clients, customers, vendors, lessors,
licensors and suppliers of the Satellite Communications Business.
3.7.2. Confidentiality.
Prior to commencing the Business Review, each of Newco and Motient Services
shall enter into a confidentiality agreement with respect to all information
provided to it pursuant to this Sale Agreement (or in connection with the
transactions contemplated hereby).
3.7.3. Basic Financial Information.
Until the Closing Date, Motient Services hereby covenants and agrees to
furnish the following reports to Newco:
(a) Within 105 days after the end of each fiscal year of Motient Services,
a consolidated balance sheet of Motient Services and its subsidiaries, if any,
as of the end of such fiscal year, which balance sheet shall be prepared
consistently with the Financial Statement (unless otherwise indicated therein).
(b) Within 75 days after the end of each quarterly accounting period in
each fiscal year of Motient Services, (i) a consolidated balance sheet of
Motient Services and its subsidiaries, if any, as of the end of each such
quarterly period, which balance sheet shall be prepared consistently with the
Financial Statement (unless otherwise indicated therein), and (ii) a pro forma
presentation of the operating results of Motient Services for such quarterly
period based upon reasonable assumptions to be agreed upon by Motient Services
and Newco.
(c) Within 45 days after the end of each month, such monthly operating data
and other financial information in form and substance as the parties agree is
reasonable; provided that no such information shall be required to be prepared
in accordance with generally accepted accounting principles.
(d) Along with the statements required to be delivered to Newco in
connection with Sections 3.7.3(a) and (b), management's discussion of any
material changes in any such statement compared to the previously delivered
statement.
(e) As soon as practicable following their release, copies of all material
press releases issued by Motient Services or its Affiliates related to the
Satellite Communications Business or other material reports or communications
delivered by Motient Services or its Affiliates to the financial community with
respect to the Satellite Communications Business.
-10-
Any balance sheet, report or other information delivered by Motient
Services to Newco pursuant to this Section 3.7.3 shall be deemed to satisfy the
obligations of Motient Services under the this Section 3.7.3 so long as such
balance sheet, report or other information was prepared in good faith.
3.7.4. Newco Information Rights; Confidentiality.
At the request of Newco, Motient Services will provide Newco with
reasonable access during its normal business hours to (i) any of the properties
of Motient Services, including its books of account and other records (and to
make copies thereof and take extracts therefrom), (ii) Motient Services'
officers and independent public accountants to discuss its affairs, finances and
accounts; provided that such access shall be conducted in a manner that does not
unreasonably interfere with the business or operations of Motient Services.
Newco hereby agrees to hold in confidence and trust and not to disclose or
misuse any confidential information provided to it pursuant to this Section
3.7.4 and to instruct any parties to whom it may transmit such information as
provided below of the confidential nature of such information; provided,
however, that the foregoing shall not prohibit Newco from disclosing such
information (i) to its board of directors, investment advisers, attorneys,
accountants, consultants and other professionals to the extent necessary to
obtain their services in connection with the possible exercise of its rights
under this Sale Agreement, (ii) to Newco's stockholders and Affiliates, or (iii)
as required by applicable law or regulation, regulatory body, stock exchange,
court or administrative order, or any listing agreement concerning Newco or
Motient Services. 3.8. Revision of Disclosure Schedules
Within ten (10) business days following the Notice Date, Motient Services
shall provide to Newco an update of the Financial Statement as of the end of the
most recently completed month (or, in the event that fewer than fifteen (15)
days have elapsed since the end of the most recently completed fiscal month, as
of the end of the month immediately preceding the most recently completed
month), and shall provide to Newco a certificate of a senior executive officer
of Motient Services, making on behalf of Motient Services the various
representations and warranties set forth in Article 4 and such other
representations and warranties as Newco may reasonably request (except that
Motient Services shall not be required to make any such additional
representations and warranties as to any matters as to which the pertinent
information is not reasonably available to it), together with disclosure
schedules updating the information in the Disclosure Schedules delivered
herewith and taking any necessary exceptions to the representations and
warranties not being made as of the date hereof, all as of the date delivered to
Newco (the "Update Date"). As to representations and warranties made on the
Update Date which are parallel to representations and warranties made on the
date hereof pursuant to Section 4, the Disclosure Schedules delivered on the
Update Date shall be updates of the Disclosure Schedules delivered herewith,
adding relevant information as to any pertinent developments or changes since
the date hereof. As to other representations and warranties made on the Update
Date, the Disclosure Schedules shall be prepared by Motient Services in good
faith to reflect as fairly as possible the nature and scope of exceptions that
the parties hereto have agreed upon in connection with the Disclosure Schedules
delivered herewith.
-11-
4. REPRESENTATIONS AND WARRANTIES OF MOTIENT SERVICES
Except as set forth in the Disclosure Schedule, Motient Services hereby
represents and warrants to Newco as follows:
4.1. Organization and Standing
Motient Services is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, and has the full and
unrestricted corporate power and authority to own, operate and lease its Assets,
to carry on its business as currently conducted, to execute and deliver this
Sale Agreement and to carry out the transactions contemplated hereby. Motient
Services is qualified to transact business as a foreign corporation in, and is
in good standing under the laws of, the jurisdictions listed on Schedule 4.1 to
the Disclosure Schedule.
4.2. Subsidiaries
Motient Services has no subsidiaries and no equity investment or other
interest in any corporation, association, partnership, limited liability
company, joint venture or other entity, except as set forth on Schedule 4.2 to
the Disclosure Schedule. Motient Services has made no advances or loans to any
corporation, association, partnership, limited liability company, joint venture
or other entity or individual, except as set forth on Schedule 4.2 to the
Disclosure Schedule. Motient Services Inc. of Virginia is a wholly-owned
subsidiary of Motient Services with no assets, liabilities or commitments other
than as described on Schedule 4.2 of the Disclosure Schedule
4.3. Noncontravention
Except as disclosed on Schedule 4.3 to the Disclosure Schedule, neither the
execution and the delivery of this Sale Agreement, nor the consummation of the
transactions contemplated hereby, will, (A) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court to which Motient
Services is subject which could reasonably be expected to have a Material
Adverse Effect or, (B) conflict with, result in a breach of, constitute a
default (or an event which, with notice or lapse of time, or both, would
constitute a default) under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, note, bond, mortgage,
deed of trust, or other arrangement existing to which Motient Services is a
party or by which any of its Assets is subject which would reasonably be
expected to have a Material Adverse Effect, (c) result in the creation or
imposition of any Encumbrance upon any of the Subject Assets which could
reasonably be expected to have a Material Adverse Effect, or (d) violate Motient
Services' organizational documents.
-12-
4.4. Real Property
Motient Services does not own and has never owned any Real Property.
4.5. Assets
Motient Services has good, valid and marketable title to the Subject Assets
owned by it, free and clear of all Encumbrances (other than Encumbrances set
forth on Schedule 4.5) except where the failure to have such title or to be free
and clear of such Encumbrances would not reasonably be expected to have a
Material Adverse Effect.
4.6. Insurance
Schedule 4.6 to the Disclosure Schedule lists all policies of title, asset,
fire, hazard, casualty, liability, life, worker's compensation and other forms
of insurance of any kind owned or held by Motient Services and such insurance
coverage is reasonably consistent with industry standards. Motient Services is
in compliance in all material respects with its obligations to pay premiums
under all such insurance policies. Motient Services has not received notice
from, and has no knowledge of any threat by, any insurer (that has issued any
insurance policy to Motient Services) that such insurer intends to deny coverage
under or cancel, discontinue or not renew any insurance policy covering Motient
Services presently in force.
4.7. Intellectual Property
Schedule 4.7 to the Disclosure Schedule lists all franchises, licenses,
trademarks, service marks, trade names, copyrights, patents and applications
therefor used, owned or licensed by or registered in the name of Motient
Services and used in the Satellite Communications Business. Motient Services
owns all of the Intellectual Property listed on Schedule 4.7 to the Disclosure
Schedule except as otherwise indicated on Schedule 4.7 to the Disclosure
Schedule, pays no royalty to anyone with respect to any Intellectual Property
other than as described on Schedule 4.7 to the Disclosure Schedule and has the
right to bring action for the infringement of such Intellectual Property, except
where the failure so to own or to bring such action would not reasonably be
expected to result in a Material Adverse Effect. Motient Services owns or
possesses adequate rights to use all Intellectual Property necessary to the
conduct of the Satellite Communications Business except where failure to own or
possess such rights would not reasonably be expected to result in a Material
Adverse Effect. Motient Services has no knowledge, and has not received any
notice to the effect, that the Satellite Communications Business may or is
claimed to infringe any Intellectual Property or legally protectable right of
another.
-13-
4.8. Debt Instruments
Schedule 4.8 to the Disclosure Schedule lists all mortgages, indentures,
notes, guaranties and other Agreements for or relating to borrowed money
(including, without limitation, conditional sales agreements and capital leases)
to which Motient Services is a party, or which have been assumed by Motient
Services or to which the Subject Assets are subject. Motient Services has
performed all the obligations required to be performed by it to date and is not
in default in any respect under any of the foregoing, and there has not occurred
any event which (whether with or without notice, lapse of time or the happening
or occurrence of any other event) would constitute such a default.
4.9. Leases
Schedule 4.9 to the Disclosure Schedule lists all leases used in the
Satellite Communications Business under which Motient Services is lessee or
lessor of any asset (including, but not limited to, any lease which Motient
Services subleases to or from another party), or holds, manages or operates any
asset owned by any third party, or under which any asset owned by Motient
Services is held, operated or managed by a third party. Motient Services is the
owner and holder of all the leasehold estates purported to be granted to it by
the Documents described on Schedule 4.9 to the Disclosure Schedule and is the
owner or lessee of all equipment, machinery and other Assets thereon or in
buildings and structures thereon, in each case free and clear of all
Encumbrances (other than Encumbrances on a third-party landlord's fee or
leasehold ownership of leased or subleased property, Encumbrances in connection
with Personal Property subject to financing leases described on Schedule 4.9 and
Encumbrances described on Schedule 4.9). Each such lease and other Agreement is
in full force and effect and constitutes a legal, valid and binding obligation
of, and is legally enforceable against, Motient Services, and to the best of
Motient Services' knowledge, the respective third parties thereto and grants the
leasehold estate it purports to grant free and clear of all Encumbrances (other
than Encumbrances on a third-party landlord's fee or leasehold ownership of
leased or subleased property, Encumbrances in connection with Personal Property
subject to financing leases described on Schedule 4.9 and Encumbrances described
on Schedule 4.9). Motient Services has in all respects performed all obligations
thereunder required to be performed by it to date where the failure to so
perform would reasonably be expected to have a Material Adverse Effect. Neither
Motient Services nor, to the best of Motient Services' knowledge, any third
party is in default in any respect under any of the foregoing, and there has not
occurred any event which (whether with or without notice, lapse of time or the
happening or occurrence of any other event) would constitute such a default.
4.10. Other Agreements
Schedule 4.10 to the Disclosure Schedule lists all material Agreements
(other than those described in Section 4.9) of Motient Services or any of its
Affiliates connected to the operation of the Satellite Communications Business
(other than the Excluded Assets). Except as otherwise described on Schedule 4.10
to the Disclosure Schedule, each such Agreement is in full force and effect and
-14-
constitutes a legal, valid and binding obligation of, and is legally enforceable
against, Motient Services and, to the best of Motient Services' knowledge, the
respective third parties thereto. Motient Services has in all respects performed
all the obligations thereunder required to be performed by it, except where the
failure to so perform would reasonably be expected to have a Material Adverse
Effect. Neither Motient Services nor, to the best of Motient Services'
knowledge, any third party is in default in any respect under any of the
foregoing, and there has not occurred any event which (whether with or without
notice, lapse of time or the happening or occurrence of any other event) would
constitute such a default. Schedule 4.10 to the Disclosure Schedule identifies
all material Agreements (other than those described in Section 4.9) used in the
Satellite Communications Business to which Motient Services is a party or by
which Motient Services is bound that contains provisions that are triggered upon
a change of control of the Satellite Communication Business.
4.11. Litigation; Disputes
(a) There are no actions, suits, Claims, arbitrations, proceedings or
investigations pending, threatened or reasonably anticipated against, affecting
or involving Motient Services, the Satellite Communications Business or the
Subject Assets, or the transactions contemplated by this Sale Agreement, at law
or in equity or admiralty, or before or by any court, arbitrator or governmental
authority, domestic or foreign, other than as set forth on Schedule 4.11 to the
Disclosure Schedule. None of such actions, suits, Claims, arbitrations,
proceedings or investigations set forth on Schedule 4.11 to the Disclosure
Schedule would, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect. Motient Services is not operating under, subject to
or in default with respect to any order, award, writ, injunction, decree or
judgment of any court, arbitrator or governmental authority.
(b) Except for matters governed by Section 4.25, Motient Services has
complied with all applicable Laws of federal, state, local, and foreign
governments (and all agencies thereof) with respect to the Satellite
Communications Business and has complied with all licenses, permits and
authorizations with respect to the Satellite Communications Business, where
Motient Services' failure to comply would be reasonably likely to have a
Material Adverse Effect. Motient Services has all federal, state, local and
foreign governmental licenses, permits, qualifications and authorizations
("Permits") materially necessary in the conduct of the Satellite Communications
Business as currently conducted. All such Permits are in full force and effect,
and no material violations have been recorded in respect of any such Permits; no
material proceeding is pending or, to the knowledge of Motient Services,
threatened to revoke or limit any such Permit; 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 Sale Agreement or the Ancillary Agreements
and the consummation of the transactions contemplated hereby or thereby.
4.12. Labor Relations; Employees
There are no strikes, work stoppages, grievance proceedings, union
organization efforts or other controversies pending, or, to the knowledge of
Motient Services, threatened or reasonably anticipated, with respect to the
Satellite Communications Business between Motient Services and (i) any current
-15-
or former employees of Motient Services or (ii) any union or other collective
bargaining unit representing such employees. Motient Services has complied and
is in compliance with all Laws relating to employment or the workplace,
including, without limitation, provisions relating to wages, hours, collective
bargaining, safety and health, work authorization, equal employment opportunity,
immigration, withholding, unemployment compensation, worker's compensation,
employee privacy and right to know, except where failure to comply with such
Laws would not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect. There are no collective bargaining agreements,
employment agreements between Motient Services and any of its employees, or
professional service agreements not terminable at will with respect to the
Satellite Communications Business.
4.13. Taxes
(a) Motient Services has timely filed (or has had timely filed on its
behalf) all material Tax Returns required by applicable law to be filed by it
prior to the date hereof, and all such material Tax Returns were true, correct
and complete in all material respects.
(b) Motient Services has paid (or has had paid on its behalf) all Taxes
shown due with respect to Tax Returns filed prior to the date hereof;
(c) There are no material Encumbrances for Taxes on any assets of Motient
Services (other than for current Taxes not yet due and payable);
(d) Motient Services has complied in all material respects with all
applicable laws, rules and regulations relating to the payment and withholding
of Taxes;
(e) Motient Services is not a party to any tax allocation, tax sharing, tax
indemnity or similar agreement (whether or not in writing), arrangement or
practice with respect to Taxes (including any adverse pricing agreement, closing
agreement or other agreement relating to Taxes with any authority), except with
Motient Corporation;
(f) No federal, state, local or foreign audits or administrative
proceedings are presently ongoing with regard to any material Taxes or Tax
Returns of Motient Services and Motient Services has not received a written
notice of any proposed audit or proceeding regarding any pending audit or
proceeding.
4.14. Restrictions and Consents
Except as set forth on Schedule 4.14 to the Disclosure Schedule, there are
no Agreements, Laws or other restrictions of any kind to which Motient Services
(or any Subject Asset) is party or subject that would (a) prevent or restrict
the execution, delivery or performance of this Sale Agreement, or (b) result in
any penalty, forfeiture, Agreement termination, or restriction on business
operations of Newco as a result of the execution, delivery or performance of
this Sale Agreement, which would be reasonably likely to have a Material Adverse
Effect.
-16-
4.15. Authorization
The execution, delivery and performance by Motient Services of this Sale
Agreement and all other Documents contemplated hereby, the fulfillment of and
compliance with the respective terms and provisions hereof and thereof, and the
consummation by Motient Services of the transactions contemplated hereby and
thereby, (a) have been duly authorized by all necessary corporate action on the
part of Motient Services, (b) except as set forth on Schedule 4.15 to the
Disclosure Schedule, do not and will not require any consent or approval of
Motient Services, any of its Affiliates or any third party which has not already
been obtained, (c) do not and will not conflict with, or violate any provision
of, any Law having applicability to Motient Services or the Subject Assets,
except for such conflicts or violations which would not reasonably be expected
to have a Material Adverse Effect, or any provision of the certificate or
articles of incorporation or bylaws of Motient Services, (d) except as set forth
on Schedule 4.15 to the Disclosure Schedule, do not and will not conflict with,
or result in any breach of, or constitute a default under (i) the Indenture,
dated March 31, 1998, among Motient Holdings Inc., State Street Bank and Trust
Company and the Guarantor named therein (the "Indenture") with respect to the
Series A and Series B 12 1/4% Senior Notes Due 2008 (the "Senior Notes"), and
(ii) any other Agreement to which Motient Services is a party or by which it or
any of the Subject Assets may be bound which would be reasonably likely to have
a Material Adverse Effect, or (e) do not and will not result in or require the
creation or imposition of or result in the acceleration of any indebtedness, or
of any Encumbrance of any nature upon, or with respect to, Motient Services or
any of the Subject Assets now owned or hereafter acquired by Motient Services
which would be reasonably likely to have a Material Adverse Effect.
4.16. Absence of Violation
Motient Services has complied and is in full compliance with all Laws
applicable to the Satellite Communications Business, the Subject Assets or the
Assumed Liabilities except where failure to so comply would not be reasonably
likely to have a Material Adverse Effect.
4.17. Binding Obligation
This Sale Agreement constitutes a legal, valid and binding obligation of
Motient Services, enforceable in accordance with its terms; and each Document to
be executed by Motient Services pursuant hereto, when executed and delivered in
accordance with the provisions hereof, shall be a valid and binding obligation
of Motient Services, enforceable in accordance with its terms.
4.18. Financial Statement
Motient Services has previously furnished to Newco the unaudited balance
sheet of Motient Services dated as of March 31, 2000 (the "Financial
Statement"). The Financial Statement is in accordance with the books and records
of Motient Services and presents fairly the financial position of Motient
Services at March 31, 2000 in all material respects, subject to the absence of
footnotes and to normal and customary year-end adjustments.
-17-
4.19. Absence of Undisclosed Liabilities
Except as described in the Financial Statement, there are no liabilities or
obligations (whether absolute or contingent, matured or unmatured, known or
unknown) of Motient Services which would be required to be disclosed on a
financial statement prepared in accordance with generally accepted accounting
principles, except for those liabilities or obligations (i) reflected or
reserved against in the Financial Statement, (ii) that have been incurred after
March 31, 2000 in the ordinary course of business consistent with past practice,
or (iii) that are not reasonably likely to have a Material Adverse Effect.
4.20. Material Adverse Change
Except as set forth in Section 4.20 of the Disclosure Schedule, since
December 31, 1999 there has been no change, circumstance or event that could
reasonably be expected to result in a Material Adverse Effect or have a material
adverse effect on the transactions contemplated by this Sale Agreement.
4.21. Assets Used in Satellite Communications Business
The Subject Assets constitute all of the Assets (other than the Excluded
Assets) used by Motient Services in the Satellite Communications Business.
4.22. Licenses
Motient Services possesses all licenses issued by the Federal
Communications Commission, and all other licenses, permits, franchisers and
similar authorizations, that are required for the operation of the Satellite
Communications Business as presently conducted and the ownership, operation,
lease and holding by Motient Services of the Subject Assets (the "Company
Permits"). Motient Services is in compliance with the terms of the Company
Permits.
4.23. Transactions with Affiliates.
Except as set forth on Schedule 4.23 of the Disclosure Schedule, there are
no material Agreements or transactions with any Affiliate of Motient Services.
4.24. Employee Benefit Plans.
Schedule 4.24 of the Disclosure Schedule contains a list of all of the
employee benefit plans covering the employees of the Satellite Communications
Business.
-18-
4.25. Environmental Matters.
Except as set forth on Schedule 4.25 of the Disclosure Schedule, there are,
with respect to Motient Services, no past or present violations of Environmental
Law (as defined below), 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 pursuant
to any Environmental Law, and Motient Services has not received any written
notice with respect to any of the foregoing nor is any Litigation pending or, to
the knowledge of Motient Services, threatened in connection with any of the
foregoing.
For purposes of this Section 4.25, capitalized terms used herein shall have
the following meanings:
"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, 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.
Sect. 9601 et seq., and any other laws imposing or creating liability with
respect to Hazardous Materials.
"Hazardous Material" shall mean any substance regulated by any
Environmental Law.
"Public Authority" shall mean any supranational, national, regional, state
or local government court, governmental agency, authority, board, bureau,
instrumentality or regulatory body.
5. REPRESENTATIONS AND WARRANTIES OF NEWCO
Newco hereby represents and warrants to Motient Services as follows:
5.1. Organization and Standing
Newco is a limited liability company duly organized, validly existing and
in good standing under the laws of the State of Delaware, and has the full and
unrestricted limited liability company power and authority to own, operate and
lease its Assets, to carry on its business as currently conducted, to execute
and deliver this Sale Agreement and to carry out the transactions contemplated
hereby, except where the failure to have such limited liability company power
and authority would not reasonably be expected to have a material adverse effect
on the business operations, financial condition, assets or liabilities of Newco
(a "Newco Material Adverse Effect").
-19-
5.2. Authorization
The execution, delivery and performance by Newco of this Sale Agreement and
all other Documents contemplated hereby, the fulfillment of and compliance with
the respective terms and provisions hereof and thereof, and the consummation by
Newco of the transactions contemplated hereby and thereby, (a) have been duly
authorized by all necessary action on the part of Newco, (b) do not and will not
conflict with, or violate any provision of, any Law having applicability to
Newco or any of its Assets, except for such conflicts or violations which would
not, individually or in the aggregate, reasonably be expected to have a material
adverse effect on the ability of the parties to this Sale Agreement to close the
transactions contemplated hereby, or any provision of the certificate of
formation or operating agreement of Newco, (c) do not and will not conflict
with, or result in any breach of, or constitute a default under any material
Agreement to which Newco is a party or by which it or any of its assets may be
bound which would be reasonably likely to have a Newco Material Adverse Effect,
or (d) do not and will not result in or require the creation or imposition of or
result in the acceleration of any indebtedness, or of any material Encumbrance
upon, or with respect to, Newco or any of the assets now owned or hereafter
acquired by Newco which would be reasonably likely to have a Newco Material
Adverse Effect.
5.3. Binding Obligation
This Sale Agreement constitutes a valid and binding obligation of Newco,
enforceable in accordance with its terms. Each Document to be executed by Newco
pursuant hereto, when executed and delivered in accordance with the provisions
hereof, shall be a valid and binding obligation of Newco, enforceable in
accordance with its terms.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF MOTIENT SERVICES
The obligations of Motient Services to effect the Closing are subject to
the fulfillment, at or prior to the Closing, of each of the following
conditions, and failure to satisfy any such condition shall excuse and discharge
all obligations of Motient Services to effect the Closing, unless such failure
was caused by, or is waived in writing by, Motient Services:
6.1. Representations and Warranties
The representations and warranties made by Newco in this Sale Agreement
shall be true and complete in all respects as of the date made and as of the
Closing Date.
6.2. Performance
Newco shall have performed and complied in all material respects with all
Agreements and conditions required by this Sale Agreement to be performed or
complied with by Newco prior to the Closing Date.
-20-
6.3. Legal Proceedings
No action or proceeding by or before any governmental authority shall have
been instituted (and not subsequently dismissed, settled or otherwise
terminated) which is reasonably expected to restrain, prohibit or invalidate the
transactions contemplated by this Sale Agreement, other than any action or
proceeding instituted by or on behalf of Motient Services or any of its
Affiliates.
6.4. Hart-Scott-Rodino
All applicable waiting periods under Hart-Scott-Rodino shall have expired.
6.5. Newco's Certificate
Newco shall have delivered to Motient Services a certificate, dated as of
the Closing Date and executed by a senior officer of Newco, certifying to the
fulfillment of the conditions set forth in Sections 6.1 and 6.3.
6.6. Federal Communications Commission Consent
All applicable consents and approvals from the Federal Communications
Commission (the "FCC") necessary for the consummation of the transactions
described hereunder shall have been obtained, including the receipt of the Final
FCC Order.
6.7. Other Consents
Newco and Motient Services shall have received all governmental consents
and approvals, in each case, necessary in connection with the transactions
contemplated hereby.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF NEWCO
The obligations of Newco to effect the Closing are subject to the
fulfillment, at or prior to the Closing, of each of the following conditions,
and failure to satisfy any such condition shall excuse and discharge all
obligations of Newco to effect the Closing, unless such failure was caused by,
or is agreed to in writing, by Newco:
7.1. Representations and Warranties
The representations and warranties made by Motient Services in this Sale
Agreement and the statements contained in the Disclosure Schedule shall be true
and complete in all respects when made.
Each of the representations and warranties made pursuant to Section 3.8 as
of the Update Date shall be true and correct as of the Closing as though made at
the Closing, except for changes permitted by or consistent with this Sale
Agreement. Newco shall have received a certificate of the chief executive
officer or chief financial officer of Motient Services to the foregoing effect.
-21-
7.2. Performance
Motient Services shall have performed and complied in all material respects
with all Agreements and conditions required by this Sale Agreement to be
performed or complied with by Motient Services prior to the Closing Date.
7.3. Legal Proceedings
No action or proceeding by or before any governmental authority shall have
been instituted (and not subsequently settled, dismissed or otherwise
terminated) which is reasonably expected to restrain, prohibit or invalidate the
transactions contemplated by this Sale Agreement other than an action or
proceeding instituted by Newco.
7.4. Hart-Scott-Rodino
All applicable waiting periods under Hart-Scott-Rodino shall have expired.
7.5. Officer's Certificate
Motient Services shall have delivered to Newco a certificate, dated as of
the Closing Date and executed by a senior officer of Motient Services,
certifying to the fulfillment of the conditions specified in Sections 7.1
through 7.3 and 7.8.
7.6. Federal Communications Commission Consent
All applicable consents and approvals from the FCC necessary for the
consummation of the transactions described hereunder shall have been obtained,
including the receipt of the Final FCC Order.
7.7. Financing
Newco shall have completed financing arrangements on terms satisfactory to
it in its sole discretion providing it with access to funds sufficient to pay
the balance of the Purchase Price.
7.8. Other Consents
Motient Services and Newco shall have received all governmental,
shareholder and third party consents and approvals (including the consents of
lenders), in each case, necessary or, in the reasonable judgment of Newco,
desirable in connection with the transactions contemplated hereby.
-22-
7.9. No Material Adverse Effect
No Material Adverse Effect shall have occurred, nor shall any event or
events have occurred which would be reasonably likely to have a Material Adverse
Effect, with respect to Motient Services or the Satellite Communications
Business.
7.10. Revocation of Notice
If the Closing shall not occur due to a failure of any of the conditions
listed in this Section 7, then the Notice shall be deemed revoked and the Notice
can be given again at any time prior to the Outside Date.
8. Closing
8.1. Deliveries by Motient Services
At the Closing, Motient Services shall deliver to Newco the following:
(a) a certified copy of the resolutions adopted by the Board of Directors
of Motient Services on or prior to the date hereof authorizing the Closing;
(b) certificates of incumbency and specimen signatures of the signatory
officers of Motient Services;
(c) the certificate required pursuant to Section 7.5 hereof;
(d) a bill of sale and limited assignment and assumption agreement
substantially in the form attached as Exhibit B, and such other instruments of
transfer as Newco shall reasonably require to transfer to Newco title to the
Subject Assets free and clear of all Claims and Encumbrances other than the
Assumed Liabilities and to cause Newco to assume the Assumed Liabilities (the
"Transfer Instruments");
(e) the certificate required pursuant to Section 7.1 hereof;
(f) an opinion of Hogan & Hartson L.L.P., counsel to Motient Services,
dated as of the Closing Date, reasonably acceptable to Newco; and
(g) such other Documents as Newco may reasonably request.
8.2. Deliveries by Newco
At the Closing, Newco shall deliver the following:
(a) a wire transfer of the balance of the Purchase Price payable in
accordance with Section 2.2;
-23-
(b) a certified copy of the resolutions adopted by the Board of Directors
of Newco authorizing the Closing;
(c) the certificate required by Section 6.5;
(d) the Transfer Instruments (to the extent required to be executed by
Newco); and
(e) such other Documents as Motient Services may reasonably request.
8.3. Transferred Employees
(a) As used in this Agreement, "Transferred Employees" means the employees
of the Satellite Communications Business which shall be identified on an
"Employee Schedule" to be delivered by Motient Services to Newco on the Update
Date.
(b) Newco shall offer employment to all the Transferred Employees effective
as of the day following the Closing Date at the same salary or hourly wage set
forth in the Employee Schedule, subject to Newco's right to terminate any such
Transferred Employee, in accordance with applicable Laws, at any time with or
without cause, for any reason or no reason at all.
(c) During the period commencing as of the Closing Date and ending on the
first (1st) anniversary thereof, Newco shall cause the Transferred Employees who
accept such employment offer (the "Accepting Employees") to be provided with
compensation and employee benefit plans (excluding stock option or other plans
involving the potential issuance of securities of Motient Corporation) which in
the aggregate are not materially less favorable than those provided to such
employees by Motient Services and its Affiliates immediately prior to the
Closing Date, to the extent permitted under applicable Laws. The provisions of
this Section 8.3 shall not create in any Transferred Employee or any other
current or former employee of Motient Services or any of its Affiliates any
rights to employment or continued employment with Newco, Motient Services or any
of their respective Affiliates or any right to specific terms or conditions of
employment. Promptly following the Closing Date, Motient Services shall transfer
to Newco all personnel files pertaining to the Accepting Employees.
(d) Newco shall provide each Accepting Employee full credit for such
Accepting Employee's service with Motient Services or its Affiliates or
predecessors for purposes of eligibility, vesting and benefit accrual (except
for benefit accruals under any defined benefit pension plan) under the employee
benefit plans or arrangements of Newco in which such Accepting Employees
participate for such Accepting Employee's service with Motient Services or its
Affiliates, to the same extent recognized under similar plans or arrangements of
Motient Services or its Affiliates immediately prior to the Closing.
(e) Newco shall (i) waive all limitations as to preexisting conditions,
exclusions and waiting periods with respect to participation and coverage
requirements applicable to any Accepting Employee under any welfare benefit
plans in which such Accepting Employees may be eligible to participate after the
-24-
Closing, other than limitations or waiting periods that are already in effect
with respect to such Accepting Employee and that have not been satisfied as of
the Closing under any welfare plan maintained for such Accepting Employee
immediately prior to the Closing, and (ii) provide each Accepting Employee with
credit for any co-payments and deductibles paid prior to the Closing under
welfare plans of Motient Services or any of its Affiliates for the plan year in
which the Closing occurs in satisfying any applicable deductible or
out-of-pocket requirements under any welfare plans that such Accepted Employee
is eligible to participate in after the Closing.
(f) Following the Closing, Newco shall honor and maintain all vacation and
other leave earned or accrued by, but not taken by or paid to, Accepted
Employees through the Closing (as calculated or determined under policies or
plans in effect immediately prior to the Closing). The preceding sentence to the
contrary notwithstanding, nothing set forth herein shall impair or otherwise
affect the rights of Newco or its Affiliates to amend, suspend or terminate any
such agreement, policy or plan in accordance with its terms as in effect from
time to time.
(g) Each of Motient Services and Newco shall provide any notifications to
its respective employees (including, in the case of Newco, the Accepting
Employees and, in the case of Motient Services, Transferred Employees who do not
become Accepting Employees) required under the Workers Adjustment and Retraining
Notification Act (the "WARN Act") and shall bear any liabilities arising under
the WARN Act with respect to such employees.
(h) With respect to each Accepting Employee, Newco hereby agrees to give
Motient Services notice of the termination of such Accepting Employee's
employment with Newco within 30 days of the date thereof, and provide Motient
Services with such information with respect thereto as Motient Services shall
reasonably request to enable it to determine if such event would give rise to a
right of distribution to such Accepting Employee under Motient Services' 401(k)
plan.
8.4. Transitional Matters
(a) The parties acknowledge that a transition period from the Closing Date
until the date 12 months immediately following the Closing Date (the "Transition
Period") is required in order to allow Motient Services and its Affiliates to
relocate to another facility and to provide Newco with certain transitional
services as described in Section 8.5 below.
(b) Motient Services and Newco hereby agree to use all commercially
reasonable efforts to obtain the Landlord's consent to the transfer of Motient
Services' rights and obligations under the Lease to Newco on the Closing Date.
Newco and Motient Services shall negotiate in good faith the terms of a sublease
or other arrangement to provide Motient Services and its Affiliates with the
right to use and occupy, during the Transition Period, that portion of the
Reston Facility used by Motient Services and its Affiliates for their respective
businesses (other than the Satellite Communications Business) immediately prior
-25-
to the Closing. In the event that Motient Services is unable to transfer or
otherwise assign its rights and obligations under the Lease to Newco, Newco and
Motient Services shall negotiate in good faith the terms of a sublease or other
arrangement to provide Newco with the right to use and occupy that portion of
the Reston Facility during the Transition Period used by Motient Services to
conduct the Satellite Communications Business immediately prior to the Closing.
The parties agree that in either case the rent and other actual out-of-pocket
costs associated with the Lease shall be shared pro rata based on the parties'
actual usage of the Reston Facility measured in square feet.
8.5. Shared Assets; Parent Guaranties
(a) The parties acknowledge that as of the date hereof (and as of the
Closing Date) that there are certain Assets and Agreements of Motient
Corporation and its Subsidiaries, which are listed on Schedule 8.5 to the
Disclosure Schedule, that are used by Motient Services in connection with its
Satellite Communications Business that will not be part of the Subject Assets,
but will remain with Motient Corporation and its Subsidiaries (the "Shared
Assets"). The parties agree to cooperate in good faith so that such Shared
Assets can reasonably be divided or, if such a division is not possible, shared
in a way so that such Shared Assets can reasonably be used by both (i) Newco in
connection with the Satellite Communications Business, and (ii) Motient
Corporation and its subsidiaries in connection with their respective businesses
(excluding the Satellite Communications Business). Without limiting the
generality of the foregoing, on the Closing Date, Motient Services shall provide
Newco with access to, and use of (A) the telephones, facsimile machines and
computers at the Reston Facility then used by the Accepting Employees for their
intended and usual purpose in connection with the operation of the Satellite
Communications Business until the last day of the Transition Period and (B)
Motient Services' computer network and programs for accounting applications
until the earlier of (i) Newco's installation of an autonomous computer network
for accounting purposes and (ii) the last day of the Transition Period. Motient
Services and Newco shall negotiate in good faith to equitably apportion the
costs and liabilities associated with the shared use or division, as the case
may be, of such Assets or Agreements, and, if appropriate, enter into transition
services agreement which shall provide for the foregoing and such other
transition services as the parties shall in good faith agree.
(b) The parties agree to use all commercially reasonable efforts (but
without any obligation to expend funds) so that the guaranties made by Motient
Corporation and its Affiliates for the benefit of Motient Services relating to
the Subject Assets and the Assumed Liabilities (the "Parent Guaranties") will be
terminated or otherwise released on or prior to the Closing, or if not possible,
as soon as practicable thereafter. In the event that the Parent Guaranties are
not terminated by the Closing, Newco shall indemnify, defend and hold harmless
Motient Services from and against all Losses of Motient Services and its
Affiliates which (i) arise under any unreleased Parent Guaranty, (ii) relate to
any Assumed Liability, and (iii) arise out of the ownership or operation of the
Satellite Communication Business following the Closing; without regard to the
provisions of Article 9.
-26-
8.6. Motient Resale Of Newco Products And Services
Following the Closing, to the extent the ordinary course of business of
Newco includes marketing its products or services through resellers, Newco
shall, at the request of Motient Corporation or any of its wholly-owned
subsidiaries (including Motient Communications, Inc.), offer to enter into a
Newco Standard Reseller Arrangement with such requesting party, on terms that
are, on the whole, at least as favorable as the terms Newco then offers under
any Newco Standard Reseller Arrangement to any reseller that has purchased or
committed to purchase a similar volume of products or services from Newco,
provided that this Section 8.7 shall not require Newco to offer products or
services to such requesting party that it does not offer for resale or to enter
into any arrangement if Newco determines in good faith that such arrangement
would prevent or significantly hinder its ability to capitalize upon a material
business opportunity. As used herein, the term "Newco Standard Reseller
Arrangement" shall mean an agreement in the form used by Newco in the ordinary
course of its business with third parties whose only material business
relationship with Newco involves reselling Newco products or services in the
ordinary course of business. Unless otherwise agreed by Newco, the Newco
Standard Reseller Arrangement offered by Newco pursuant hereto shall not be
required to have a term that extends beyond the third anniversary of the
Closing.
8.7. Use of Proceeds
Motient Services covenants and agrees to use and apply the Purchase Price
consistent with any restrictions set forth in any loan documents, bank
agreements, indenture or similar documents applicable to Motient Services or its
Affiliates.
8.8. Insurance Proceeds from Satellite Failure
(a) In the event that prior to Closing, an event occurs causing the full or
partial failure of the Satellite (a "Satellite Casualty Event"), Motient
Services shall send written notice to Newco within ten (10) business days
describing the Satellite Casualty Event in reasonable detail, including
information as to whether the casualty is or may be covered by insurance (the
"Casualty Notice"). As soon as possible after ascertaining whether or not it
will be required to apply any insurance proceeds relating to the Satellite
Casualty Event (the "Insurance Proceeds") to the reduction of indebtedness,
Motient Services shall notify Newco as to such requirement (the "Lender
Notice"). The Outside Date shall be automatically extended to the date which is
60 days after the date of receipt by Newco of the Lender Notice. If the Lender
Notice shall state that the Insurance Proceeds are not required to be paid in
accordance with Motient Corporation's or any of its subsidiaries' financing
agreements and, therefore, Motient Services is entitled to retain the Insurance
Proceeds, then the parties hereto shall proceed on the same terms and conditions
as otherwise provided in this Sale Agreement (including with respect to the
Purchase Price)(without application of clause (b) of this Section 8.8) except
that the Insurance Proceeds shall be deemed to be part of the Subject Assets and
in the event of a total failure where Motient Services no longer owns the
Satellite, the Satellite shall not be part of the Subject Assets. If the Lender
Notice shall state that the Insurance Proceeds are required to be paid in
accordance with Motient Corporation's or any of its subsidiaries' financing
agreements, then the Outside Date shall be automatically extended to the date
which is 60 days after the date on which Motient Services notifies Newco (the
"Insurance Notice") that it and the insurance carrier finally resolve the amount
of the Insurance Proceeds.
-27-
(b) The Insurance Notice shall contain Motient Services' election to either
(i) reduce the Purchase Price by an amount equal to the Insurance Proceeds, or
(ii) proceed on the same terms and conditions as otherwise provided in this Sale
Agreement (including with respect to the Purchase Price) with the Insurance
Proceeds (and in the event of a total failure where Motient Services no longer
owns the Satellite, the Satellite) to be deemed Excluded Assets. If Motient
Services selects option (i), then this Agreement shall continue on the same
terms and conditions except for the reduction in the Purchase Price as set forth
in clause (i). If Motient Services selects option (ii), then Newco can elect to
either (y) proceed on the same terms and conditions as otherwise provided in
this Sale Agreement (including with respect to the Purchase Price) with the
Insurance Proceeds (and in the event of a total failure where Motient Services
no longer owns the Satellite, the Satellite) to be deemed Excluded Assets, or
(z) terminate this Sale Agreement and receive an irrevocable refund in the
amount equal to the Deposit and the R&D Fee (i.e., a total of $44 million)
subject to reduction pursuant to 8.11 hereof (the "Refund"), in which case,
Motient Services shall be obligated to pay such amount to Newco within sixty
(60) days of Newco's election.
(c) Notwithstanding the foregoing, at any time prior to earlier of (i) the
Outside Date (as it may be extended pursuant to this Section 8.8) and (ii)
payment of the Refund pursuant to Section 8.8(b)(z), Newco may elect to proceed
on the terms otherwise specified in this Sale Agreement (including with respect
to the Purchase Price) with the Insurance Proceeds (and in the event of a total
failure where Motient Services no longer owns the Satellite, the Satellite) to
be deemed Excluded Assets.
(d) So long as Motient Services complies with clauses (a) ,(b) and (c) of
this Section 8.8, including refunding any amount due to Newco under section
8.8(b)(z), Motient Corporation and its direct and indirect subsidiaries
(including Motient Services) shall have no further liability with respect to the
failure of the Satellite under this Sale Agreement, the R&D Agreement or any
other Agreement, and Newco shall have be deemed to have waived its rights, if
any, with respect to any indemnity or other remedy from Motient Services related
to the failure of the Satellite.
8.9. Sale of Motient Services or the Satellite Communications Business
(a) In the event that following the first anniversary of the date hereof
and prior to earlier of (i) the termination of this Sale Agreement and the
Closing, Motient Corporation or Motient Services shall receive a bona fide offer
that Motient Services reasonably believes is capable of being consummated on the
terms proposed, and that Motient Corporation or Motient Services proposes to
accept (an "Offer") from any unaffiliated third party (the "Offeror") to acquire
all or substantially all of the assets of, or otherwise a substantial interest
(by means of a stock purchase, merger, business combination or otherwise) in,
Motient Services or the Satellite Communications Business, other than a
transaction of the type contemplated by Section 7.4(b) of the Investment
Agreement, Motient Services shall give written notice (the "Offer Notice," the
-28-
date of receipt of which is referred to as the "Offer Notice Date") to Newco of
such Offer, which notice shall contain a reasonably detailed description of the
proposed transaction, including the identity of the Offeror (including any known
affiliates), a description of the consideration to be received in respect
thereof and a description of all the material terms of the Offer. Until the 60th
day after the Offer Notice Date, no action shall be taken by Motient Corporation
or Motient Services or any of their Affiliates to accept the Offer or to create
any obligation to the Offeror in respect of the Offer. If, on or prior to such
60th day, Newco delivers the Notice (as defined in Section 3.1 hereof), Motient
Corporation and Motient Services shall continue to refrain from pursuing the
Offer and shall proceed in accordance with the terms of this Sale Agreement.
(b) In the event that Newco shall not have delivered the Notice prior to
the 60th day after the Offer Notice Date, Motient Services may accept the Offer
and consummate the transactions contemplated thereby on terms not materially
less favorable to Motient Services than the terms contained in the Offer Notice
and this Sale Agreement shall be deemed to be terminated pursuant to Section
10.1 hereof as of the closing of the transactions contemplated by the Offer;
provided that Motient Services shall give Newco not more than ten nor less than
five business days notice of the closing of the transactions contemplated by the
Offer (the "Offer Closing Notice Date"), and within three business days of the
Offer Closing Notice Date, Newco may notify Motient Services as to whether Newco
will be liquidated in accordance with Section 13.1(c) of the LLC Operating
Agreement, in which case Motient Services may not consummate the transactions
contemplated by the Offer unless prior thereto or simultaneously therewith
Motient Services shall irrevocably refund to Newco an amount equal to the
Refund.
8.10. Loss of FCC Licenses
In the event that prior to Closing, any of the Licenses in effect with the
Federal Communications Commission lapse, terminate or are not renewed so that it
is commercially unreasonable to continue the business of Motient Services as
currently conducted, then Motient Services shall send written notice to Newco no
later than ten (10) business days following the date Motient Services becomes
aware of any such lapse, termination or non-renewal. Newco at its option can
elect to (i) proceed on the same terms and conditions as otherwise provided in
this Sale Agreement (including with respect to the Purchase Price) except that
any such license that lapses, terminates or is not renewed shall not be deemed
part of the Licenses (and therefore, not part of the Subject Assets), or (ii)
terminate this Sale Agreement and receive an irrevocable refund of an amount
equal to the Refund, in which case, Motient Services shall be obligated to pay
such amount to Newco within sixty (60) days of Newco's election. So long as
Motient Services complies with this Section 8.10, including refunding any amount
due to Newco under clause (ii) of this Section 8.10, Motient Corporation and its
direct and indirect subsidiaries (including Motient Services) shall have no
further liability with respect to any such Licenses under this Sale Agreement,
the R&D Agreement or any other Agreement and Newco shall have be deemed to have
waived its rights, if any, with respect to any indemnity or other remedy from
Motient Services related to such lapse, termination or non-renewal of any of
such Licenses.
-29-
8.11. Reduction in the Refund Amount
To the extent that any one or more Investors (as defined in the Investment
Agreement) has effected or exercised its right to effect (which election has not
been revoked) a Parent Conversion (as defined in the Investment Agreement) at
the time the Refund is to be irrevocably paid, the $44 million required to be
paid by Motient Services to Newco as a refund of the Deposit and the R&D Fee
pursuant to Sections 8.8(b), 8.9(b) or 8.10 hereof shall be reduced by an amount
equal to $44 million multiplied by the result of (a) the total Investor
Interests (as defined in the Investment Agreement) of such Investor which have
effected Parent Conversions immediately prior to such Parent Conversions,
divided by (b) the total Investor Interests of all the Investors immediately
prior to such Parent Conversions. (By way of illustration only, if one Investor
had effected a Parent Conversion and owned a 6.67% Investor Interest immediately
prior to the Parent Conversion, the refund of the Deposit and the R&D Fee due to
Newco would be reduced by $14.67 million (which number is $44 million multiplied
by .3335 (6.67/20 = .3335)).
9. SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION; REMEDIES
9.1. Survival of Representations
All representations and warranties made by in or pursuant to this Sale
Agreement and in or pursuant to the Ancillary Agreements shall survive the
Closing until two years after the date made (except to the extent that the
representations and warranties set forth in Sections 4.3 and 4.15 apply to the
Indenture, such representations and warranties shall survive until the
expiration of the statute of limitations applicable to any claims made by the
holders of the Senior Notes), and shall in no way be affected by any
investigation or knowledge of the subject matter thereof made by or on behalf of
Newco. If the Closing shall occur, indemnification pursuant to this Article 9
shall be the exclusive remedy for any breach of representations and warranties
or of any covenant or Agreement in this Sale Agreement which survives the
Closing by either party or any other matter pertaining to this Sale Agreement or
the transactions contemplated hereby, other than Claims relating to other
written Agreements between the parties and Claims relating to fraud or violation
of securities laws; provided that nothing in Article 9 shall prevent any party
from obtaining equitable relief in order to require the other party to perform
its obligations hereunder.
9.2. Agreement of Motient Services to Indemnify
From and after the Closing, Motient Services shall indemnify and hold
harmless Newco from and against all damages, losses, claims, liabilities and
obligations, costs and expenses (including attorneys' fees) ("Losses") arising
in any way out of or related to (i) the breach by Motient Services of any
representation or warranty made by Motient Services in this Sale Agreement or
-30-
any Ancillary Agreement or in any in any document delivered pursuant hereto or
thereto, (ii) the breach by Motient Services of any covenant or agreement
contained herein or any Ancillary Agreement or in any document delivered
pursuant hereto or thereto, or (iii) liabilities of Motient Services or its
Affiliates which are not Assumed Liabilities. For purposes of this Section 9.2,
the terms "material" and "Material Adverse Effect", and other materiality
qualifiers in the representations and warranties contained herein or in the
Ancillary Agreements and in any documents delivered pursuant hereto or thereto,
shall be deemed to refer to matters, and groups of related matters, that have a
financial or economic impact, or are capable of having a financial or economic
impact, of $100,000 or more. For purposes of the foregoing sentence, matters
shall be considered to be within a "group of related matters" if they relate to
any given Section of the representations and warranties. (For purposes of
illustration only, Section 4.19 would be deemed to be breached if Motient
Services had failed to disclose a liability of $25,000 and a liability of
$90,000, but not if Motient Services had failed to disclose seven liabilities of
$10,000 each.).
9.3. 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.
9.4. Agreement of Newco to Indemnify
From and after the Closing, Newco shall indemnify and hold harmless Motient
Services from and against all Losses arising in any way out of or related to (i)
the breach by Newco of any representation or warranty made by Newco in this Sale
Agreement or in any document delivered pursuant hereto or thereto, (ii) the
breach by Newco of any covenant or agreement contained herein or in any document
delivered pursuant hereto or thereto, or (iii) the Assumed Liabilities.
9.5. Notice of Claims.
All claims for indemnification hereunder shall be resolved in accordance
with the following procedures:
(i) 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, and further referencing the sections of this Agreement or in any other
document delivered pursuant hereto upon which the claim for indemnification for
such Losses is based (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.
-31-
(ii) 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 thirty (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 ten (10) days of
the end of such 30-day objection period.
(iii) 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 9) and is financially capable of satisfying its indemnification
obligations, 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 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.
(iv) 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, 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.
(v) 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.
9.6. Limitations on Amounts
The Indemnifying Party shall not be obligated to pay any amounts for
indemnification under this Article 9 until the aggregate indemnification
-32-
obligation of such Indemnifying Party hereunder (and under the R&D Agreement)
exceeds $500,000, whereupon the Indemnifying Party shall be liable for all
amounts for which indemnification may be sought which exceed $500,000.
Notwithstanding the foregoing, in no event shall the aggregate liability of
Motient Services to Newco exceed the Purchase Price (to the extent actually
paid) plus the R&D Fee (the "Cap"), except in the case of (i) a fraud or willful
breach by Motient Services, (ii) a breach by Motient Services of the
representations and warranties contained in Sections 4.3 or 4.15 hereof with
respect to the Indenture, (iv) liabilities with respect to the Satellite
Communications Business accruing prior to the Closing that are not Assumed
Liabilities. For purposes of calculating the Cap, all amounts received by Newco
for Losses under the R&D Agreement and any Agreements delivered pursuant hereto
shall be included in calculating the Cap.
9.7. Force Majeure
Notwithstanding any other provision of this Article 9, neither Motient
Services nor Newco shall be liable for any failure of performance of the terms
of this Agreement due solely to acts of God, fires, floods or other natural
catastrophes; national emergencies, insurrections, riots or wars; strikes,
lockouts, work stoppages or other labor difficulties beyond such parties'
reasonable control.
9.8. Subrogation
If any indemnified party receives any payment or other indemnification from
an indemnifying party with respect to any Claim or demand by any third party
against the indemnified party, the indemnifying party shall be subrogated to the
extent of such payment or indemnification to all rights in respect of the
subject matter of such Claim to which the indemnified party may be entitled, to
institute appropriate action for the recovery thereof, and the indemnified party
agrees to provide reasonable levels of assistance and cooperation to such
subrogated party, in enforcing such rights.
10. TERMINATION
10.1. Termination
Subject to the provisions of Sections 10.2 hereof, this Sale Agreement may,
by written notice given at or prior to the Closing in the manner hereinafter
provided, be terminated:
(a) at any time prior to the Closing by mutual written consent of the
parties hereto;
(b) pursuant to Section 8.8, 8.9 or 8.10 hereof; or
(c) if the Notice (as defined in Section 3.1 hereof) has not been delivered
to Motient Services on or prior to the Outside Date.
-33-
10.2. Effect of Termination
In the event this Sale Agreement is terminated as provided in this Section
10, this Sale Agreement shall forthwith be of no further force and effect, and
the parties shall be released from all future obligations hereunder; provided,
however, that (i) the termination shall not relieve any party hereto of
liability for any breach of this Sale Agreement, (ii) Newco shall return all
Documents provided by Motient Services to Newco pursuant to this Sale Agreement
and (iii) the indemnification obligations set forth in Sections 3.7.1, 9.2 and
9.4 and the obligations set forth in Sections 3.4 and 11.3 shall survive. If the
Closing shall not occur, in no event shall Newco be liable for any amount over
and above the Deposit and the R&D Fee.
11. MISCELLANEOUS
11.1. Additional Actions and Documents
Each party hereto hereby agrees that, from time to time, whether before, at
or after the Closing, such party will take or cause to be taken such further
actions, to execute, deliver and file or cause to be executed, delivered and
filed such further Documents, and will obtain such consents, as may be necessary
or as may be reasonably requested in order to fully effectuate the purposes,
intents, terms and conditions of this Sale Agreement.
11.2. No Brokers
Each party hereto represents and warrants to the other party that such
party has not engaged any broker, finder or agent in connection with the
transactions contemplated by this Sale Agreement that will give rise to any
unpaid liability to any broker, finder or agent for any brokerage fees, finders'
fees or commissions, with respect to the transactions contemplated by this Sale
Agreement for which Motient Services or Newco will be responsible. Each party
hereto agrees to indemnify, defend and hold harmless the other party from and
against any and all Claims asserted against such party for any such fees or
commissions by any persons purporting to act or to have acted for or on behalf
of the indemnifying party.
11.3. Expenses
Subject to the indemnity provisions of Article 9, each party hereto shall
pay its own expenses incident to this Sale Agreement and the transactions
contemplated hereunder, including all legal and accounting fees and
disbursements. Each party shall pay any Hart-Scott-Rodino filing fees payable in
connection with any Hart-Scott-Rodino filing required to be made by such party.
-34-
11.4. Assignment
Motient Services shall not assign its rights and obligations under this
Sale Agreement, in whole or in part, whether by operation of law or otherwise,
without the prior written consent of Newco. Newco shall not assign its rights
and obligations under this Sale Agreement, in whole or in part, whether by
operation of law or otherwise, unless the assignee agrees to be bound by all of
the terms and conditions hereof applicable to Newco hereunder. Any assignment
contrary to the terms of this Section 11.4 shall be null and void and of no
force and effect. In no event shall the assignment by Motient Services or Newco
of such party's respective rights or obligations under this Sale Agreement,
whether before, at or after the Closing, release such party from such party's
respective liabilities and obligations hereunder.
11.5. Entire Agreement; Amendment
This Sale Agreement, including the Disclosure Schedule, the Exhibits and
other Documents referred to herein or furnished pursuant hereto, constitutes the
entire Agreement among the parties hereto with respect to the transactions
contemplated hereby, and it supersedes all prior oral or written Agreements,
commitments or understandings with respect to the matters provided for herein.
No amendment, modification or discharge of this Sale Agreement shall be valid or
binding unless set forth in writing and duly executed and delivered by the party
against whom enforcement of the amendment, modification, or discharge is sought.
11.6. Waiver
No delay or failure on the part of any party hereto in exercising any
right, power or privilege under this Sale Agreement or under any other Documents
furnished in connection with or pursuant to this Sale Agreement shall impair any
such right, power or privilege or be construed as a waiver of any default or any
acquiescence therein. No single or partial exercise of any such right, power or
privilege shall preclude the further exercise of such right, power or privilege,
or the exercise of any other right, power or privilege. No waiver shall be valid
against any party hereto unless made in writing and signed by the party against
whom enforcement of such waiver is sought and then only to the extent expressly
specified therein.
11.7. Severability
If any part of any provision of this Sale Agreement or any other Agreement
or document given pursuant to or in connection with this Sale Agreement shall be
invalid or unenforceable in any respect, such part shall be ineffective to the
extent of such invalidity or unenforceability only, without in any way affecting
the remaining parts of such provision or the remaining provisions of this Sale
Agreement; unless such invalid or unenforceable provision(s) are an essential
part of the agreed exchange.
-35-
11.8. Governing Law
This Sale Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Virginia, without regard to its principles of
conflicts of law that would give effect to the application of the law of another
jurisdiction. Each of the parties hereto hereby irrevocably and unconditionally
consents to submit to the exclusive jurisdiction of the courts of the
Commonwealth of Virginia and of the United States of America, in each case
having jurisdiction over the County of Fairfax, for any dispute arising out of
or relating to this Sale Agreement and the Ancillary Agreements and the
transactions contemplated hereby and thereby (and agrees not to commence any
litigation relating thereto except in such courts), and further agrees that
service of any process, summons, notice or document by U.S. registered mail to
its respective address set forth in this Sale Agreement shall be effective
service of process for any litigation brought against it in any such court. Each
of the parties hereto hereby irrevocably and unconditionally waives any
objection to the laying of venue of any litigation arising out of this Sale
Agreement or the transactions contemplated hereby in the courts of the
Commonwealth of Virginia or the United States of America, in each case having
jurisdiction over the County of Fairfax, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such litigation brought in any such court has been brought in an
inconvenient forum.
11.9. Notices
All notices, demands, requests, or other communications which may be or are
required to be given, served, or sent by any party to any other party pursuant
to this Sale Agreement shall be in writing and shall be hand delivered, sent by
overnight courier or mailed by first-class, registered or certified mail, return
receipt requested, postage prepaid, or transmitted by telecopy addressed as
follows:
(i) If to Newco:
Motient Satellite Ventures LLC
10802 Parkridge Boulevard
Reston, Virginia 20191-5416
Attn: Randy S. Segal, Esq.
Telecopy No.: 703-758-6134
with copies to:
Motient Satellite Ventures LLC
211 North Union Street, Suite 300
Alexandria, Virginia 22314
Attn: Hal B. Perkins, Esq.
Telecopy No.: 703-706-3801
and
-36-
Dewey Ballantine LLP
1301 Avenue of the Americas
New York, NY 10019
Attn: William J. Phillips, Esq.
Telecopy No.: 212-259-6333
(ii) If to Motient Services:
Motient Services Inc.
10802 Parkridge Boulevard
Reston, Virginia 20191-5416
Attn: Randy S. Segal, Esq.
Telecopy No.: 703-758-6134
and
Hogan & Hartson L.L.P
8300 Greensboro Drive
Suite 1100
McLean, VA 22102
Attn: Richard K.A. Becker, Esq.
Telecopy No.: 703-610-6200
Each party may designate by notice in writing a new address to which any notice,
demand, request or communication may thereafter be so given, served or sent.
Each notice, demand, request, or communication which shall be hand delivered,
sent, mailed or telecopied in the manner described above shall be deemed
sufficiently given, served, sent, received or delivered for all purposes at such
time as it is delivered to the addressee (with the return receipt, the delivery
receipt, or (with respect to a telecopy or telex) the answerback being deemed
conclusive, but not exclusive, evidence of such delivery) or at such time as
delivery is refused by the addressee upon presentation.
11.10. Headings
Section headings contained in this Sale Agreement are inserted for
convenience of reference only, shall not be deemed to be a part of this Sale
Agreement for any purpose, and shall not in any way define or affect the
meaning, construction or scope of any of the provisions hereof.
11.11. Interpretation; Absence of Presumption
(a) For the purposes hereof, (i) words in the singular shall be held to
include the plural and vice versa and words of one gender shall be held to
include the other gender as the context requires, (ii) the terms "hereof",
"herein", and "herewith" and words of similar import shall, unless otherwise
stated, be construed to refer to this Sale Agreement as a whole (including all
of the Exhibits hereto) and not to any particular provision of this Sale
Agreement, and Article, Section, paragraph, Exhibit and Schedule to the
Disclosure Schedule references are to the Articles, Sections, paragraphs,
Exhibits and Schedule to the Disclosure Schedule to this Sale Agreement unless
otherwise specified, (iii) the word "including" and words of similar import when
used in this Sale Agreement shall mean "including, without limitation," unless
the context otherwise requires or unless otherwise specified, (iv) the word "or"
shall not be exclusive, and (v) provisions shall apply, when appropriate, to
successive events and transactions.
-37-
(b) This Sale Agreement shall be construed without regard to any
presumption or rule requiring construction or interpretation against the party
drafting or causing any instrument to be drafted.
11.12. Execution in Counterparts
To facilitate execution, this Sale Agreement may be executed in as many
counterparts as may be required. It shall not be necessary that the signatures
of, or on behalf of, each party, or that the signatures of all persons required
to bind any party, appear on each counterpart; but it shall be sufficient that
the signature of, or on behalf of, each party, or that the signatures of the
persons required to bind any party, appear on one or more of the counterparts.
All counterparts shall collectively constitute a single Agreement. It shall not
be necessary in making proof of this Sale 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 hereto.
11.13. Limitation on Benefits
The covenants, undertakings and agreements set forth in this Sale Agreement
shall be solely for the benefit of, and shall be enforceable only by, the
parties hereto and their respective successors, heirs, executors,
administrators, legal representatives and permitted assigns.
11.14. Binding Effect
Subject to any provisions hereof restricting assignment, this Sale
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors, heirs, executors, administrators, legal
representatives and assigns.
- -38-
IN WITNESS WHEREOF, the parties hereto have duly executed this Sale
Agreement, or have caused this Sale Agreement to be duly executed on their
behalf, as of the day and year first above written.
MOTIENT SATELLITE VENTURES LLC
By: /s/Gary M. Parsons
------------------
Name: Gary M. Parsons
Title: Chairman
MOTIENT SERVICES INC.
By: /s/Gary M. Parsons
------------------
Name: Gary M. Parsons
Title: Chairman
Exhibit Reference Section
A Definitions 1
B Form of Bill of Sale and Limited Assignment
and Assumption Agreement 8.1(e)
EXHIBIT A
TO ASSET SALE AGREEMENT
DATED AS OF JUNE 29, 2000
DEFINITIONS
"Affiliate" means: (a) with respect to a person, any member of such
person's family; (b) with respect to an entity, any officer, director, ten
percent or more stockholder, ten percent or more partner or ten percent or more
member of or in such entity or of or in any Affiliate of such entity; and (c)
with respect to a person or entity, any person or entity which directly or
indirectly, through one or more intermediaries, Controls, is Controlled by, or
is under common Control with such person or entity.
"Agreement" means any concurrence of understanding and intention between
two or more persons (or entities) with respect to their relative rights and/or
obligations or with respect to a thing done or to be done (whether or not
conditional, executory, express, implied, in writing or meeting the requirements
of contract), including, without limitation, contracts, leases, promissory
notes, covenants, easements, rights of way, covenants, commitments, arrangements
and memorandum understandings.
"Ancillary Agreements" means the R&D Agreement and the Cross-Licensing
Agreement of even date herewith.
"Assets" means assets of every kind and everything that is or may be
available for the payment of liabilities (whether inchoate, tangible or
intangible), including, without limitation, real and personal property.
"Claims" means all demands, claims, actions or causes of action,
assessments, losses, damages, liabilities, charges, complaints, injunctions,
judgments, orders, decrees, rulings, dues, fines, amounts paid in settlement,
obligations, liens, costs of environmental investigations and/or cleanups,
Taxes, costs and expenses, including, without limitation, interest, penalties
and attorneys' fees and disbursements.
"Code" means the Internal Revenue Code of 1986, as amended.
"Control" means possession, directly or indirectly, of power to direct or
cause the direction of management or policies (whether through ownership of
voting securities, by Agreement or otherwise).
"Cross-Licensing Agreement" means the Cross-Licensing and Bulk Resale
Agreement of even date herewith among Motient Communications, Inc., Motient
Services and Newco.
"Disclosure Schedule" means the disclosure schedule identified as the
Disclosure Schedule to this Sale Agreement.
"Documents" means any paper or other material (including, without
limitation, computer storage media) on which is recorded (by letters, numbers or
otherwise) information that may be evidentially used, including, without
limitation, legal opinions, mortgages, indentures, notes, instruments, leases,
Agreements, insurance policies, reports, studies, financial statements
(including, without limitation, the notes thereto), other written financial
information, schedules, certificates, charts, maps, plans, photographs, letters,
memoranda and all similar materials.
"Encumbrance" means any mortgage, lien, pledge, encumbrance, security
interest, deed of trust, option, encroachment, reservation, order, decree,
judgment, condition, restriction, charge, Agreement, Claim or equity of any
kind.
"Final FCC Order" means an order (or orders) of the FCC: (1) consenting to
the assignment or transfer of control of the Licenses to Newco or one or more of
its subsidiaries, without the imposition of any conditions that may reasonably
be expected to result in a Newco Material Adverse Effect, and (2) with respect
to which: (a) no request for a stay is pending, no stay is in effect, and any
deadline that may be designated by statute or regulation for filing such a
request is passed; (b) no petition for rehearing or reconsideration or
application for review is pending, and the time that may be designated by
statute or regulation for filing any such petition or application is passed; (c)
there is no reconsideration by the FCC on its own motion and the time that may
be designated by statute or regulation for initiating any such reconsideration
has passed; and (c) no appeal is pending or in effect, and any deadline time
that may be designated by statute or regulation for filing any such appeal has
passed.
"Financial Statement" shall have the meaning given such term in Section
4.18.
"Hart-Scott-Rodino" means the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended, and all Laws promulgated pursuant thereto or in connection
therewith.
"Intercompany Agreements" means all Agreements, liabilities and obligations
between Motient Services and Motient Corporation or any of its direct or
indirect subsidiaries, except for the Ancillary Agreements or any other
Agreements delivered in connection herewith.
"Investment Agreement" means that certain Investment Agreement, of even
date herewith, by and among Motient Corporation, Newco and the Investors named
therein.
"Investor Option" means the option to acquire an additional number of
shares of Newco interests described in Section 2.1 of the Investment Agreement.
"Laws" means all foreign, federal, state and local statutes, laws,
ordinances, regulations, rules, resolutions, orders, determinations, writs,
injunctions, awards (including, without limitation, awards of any arbitrator),
judgments and decrees applicable to the specified persons or entities and to the
businesses and assets thereof (including, without limitation, Laws relating to
securities registration and regulation; the sale, leasing, ownership or
management of real property; employment practices, terms and conditions, and
wages and hours; building standards, land use and zoning; safety, health and
fire prevention; but excluding Environmental Laws).
"Liability" means any liability (whether known or unknown, whether asserted
or unasserted, whether absolute or contingent, whether accrued or unaccrued,
whether liquidated or unliquidated, and whether due or to become due) including
any liability for Taxes.
"Losses" means all demands, losses, Claims, actions or causes of action,
assessments, damages, liabilities, costs and expenses, including, without
limitation, interest, penalties and reasonable attorneys' fees and
disbursements.
"Material Adverse Effect" means a material adverse effect on the
properties, business, prospects, operations, earnings, assets, liabilities or
the condition (financial or otherwise) of Motient Services.
"Motient Services Tax Returns" means all federal, state, local, foreign and
other applicable tax returns, declarations of estimated tax reports required to
be filed by Motient Services.
"Ordinary Course of Business" means ordinary course of business consistent
with past practices.
"Outside Date" means the second anniversary of the date hereof subject to
extension pursuant to Section 8.8 hereof.
"Notice" shall have the meaning given such term in Section 3.1.
"Purchase Price" means (i) One Hundred Forty Four Million Dollars
($144,000,000) if the Investment Commitment Date (as defined in the Investment
Agreement) shall occur on or prior to the first anniversary of the date hereof,
or (ii) One Hundred Forty Four Million Dollars ($144,000,000) plus $118,356 per
day for each day between the first anniversary of the date hereof and the
Investment Commitment Date if the Investment Commitment Date shall occur after
the first anniversary of the date hereof. The Purchase Price shall be increased
by an amount equal to any increase in the Option Price (as defined in the
Investment Agreement) pursuant to the last three sentences of Section 2.1 of the
Investment Agreement.
"Real Property" means the real property owned, operated, or used by Motient
Services as of December 31, 1997, any additional real property so owned,
operated, or used since that date, and for purposes of Section 4.4, any real
property formerly so owned, operated, or used.
"R&D Agreement" means the Research & Development, Marketing and Service
Agreement between Newco and Motient Services.
"R&D Fee" means the $20 million fee paid by Newco to Motient Services
pursuant to the R&D Agreement.
"Securities Act" means the Securities Act of 1933, as amended, and all laws
promulgated pursuant thereto or in connection therewith.
"Shared Assets" shall have the meaning given such term in Section 8.5(a).
"Taxes" means all federal, state, local and foreign taxes (including,
without limitation, income, profit, franchise, sales, use, real property,
personal property, ad valorem, excise, employment, social security and wage
withholding taxes) and installments of estimated taxes, assessments,
deficiencies, levies, imposts, duties, withholdings, or other similar charges of
every kind, character or description imposed by any governmental authorities,
and any interest, penalties or additions to tax imposed thereon or in connection
therewith.
"Tax Liabilities" means any action, suit, proceeding, audit, investigation
or Claim pending or threatened in respect of any Taxes for which Motient
Services is or may become liable, or any deficiency or Claim for any such Taxes
that has been to Motient Services' knowledge proposed, asserted or threatened.
"Tax Return" means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.