EXHIBIT 10.50
SECOND AMENDED AND RESTATED PARENT TRANSFER/DRAG ALONG AGREEMENT
----------------------------------------------------------------
November 12, 2004
This SECOND AMENDED AND RESTATED PARENT TRANSFER/DRAG ALONG
AGREEMENT is entered into by and among Motient Corporation ("MOTIENT"), Motient
Ventures Holding Inc. ("MOTIENT SUB"), TMI Communications and Company, Limited
Partnership ("TMI"), TMI Communications Delaware, Limited Partnership ("TMI
Sub"), Mobile Satellite Ventures LP ("MSV LP"), Mobile Satellite Ventures GP
Inc. ("GENERAL PARTNER"), each investor set forth on SCHEDULE I hereto (each, an
"INVESTOR") and each of the Investor's parents set forth on SCHEDULE I hereto
(each, an "INVESTOR PARENT").
1. Each of the Investor Parents (other than SkyTerra
Communications, Inc. ("SKYTERRA")) hereby represents and
warrants to Motient, TMI and each other Investor Parent that
it directly owns 100% of the capital stock of its Investor as
set forth on SCHEDULE I hereto.
2. Motient hereby represents and warrants to TMI and 3924505
Canada Inc. ("TMI SUB GP" and together with TMI, the "TMI
ENTITIES") and each Investor Parent that it directly owns 100%
of the capital stock of MVH Holdings Inc. ("MVH"), which, in
turn, directly owns 100% of the capital stock of Motient Sub.
3. The TMI Entities hereby jointly and severally represent and
warrant to Motient and each Investor Parent that the TMI
Entities directly own 100% of the equity interests of TMI Sub.
4. SkyTerra hereby represents and warrants to Motient, TMI and
each other Investor Parent that it directly owns 100% of the
capital stock of MSV Investors Holdings, Inc. ("MSV INVESTORS
HOLDINGS"), which, in turn, directly owns 80% of the
membership interests of MSV Investors, L.L.C. ("MSV
INVESTORS"). The remaining membership interests in MSV
Investors are owned by other investors (the "OTHER SKYTERRA
INVESTORS"), all of whom have agreed to be bound by the
provisions hereof applicable to a Blocker Parent (as
hereinafter defined).
5. Each Blocker Parent (as defined below) other than SkyTerra
hereby agrees that the Other SkyTerra Investors may, without
any restriction or limitation imposed by this Agreement,
exchange all of their membership interests in MSV Investors
solely for shares of common stock of MSV Investors Holding or
SkyTerra, in a transaction or series of transactions the
ultimate effect of which is that 100% of the outstanding
membership interests of MSV Investors is owned solely by MSV
Investors Holding.
6. Each Blocker Parent hereby agrees that certain of the Blocker
Parents may, without any restriction or limitation imposed by
this Agreement, effectuate the Columbia/Spectrum Transfers (as
hereinafter defined). For purposes hereof, the
"COLUMBIA/SPECTRUM TRANSFERS" means, collectively, the
transfer of all limited partnership interests of MSV LP and
shares of GP Stock by (i) Columbia Space (QP) II, Inc.
("COLUMBIA QP II") to Columbia Space (QP), Inc. ("COLUMBIA
QP"), pursuant to the merger of Columbia QP II with and into
Columbia QP; (ii) Columbia Space (AI) II, Inc. ("COLUMBIA AI
II") to Columbia Space (AI), Inc. ("COLUMBIA AI"), pursuant to
the merger of Columbia AI II with and into Columbia AI; (iii)
Columbia Space Partners II, Inc. ("COLUMBIA SPACE II") to
Columbia Space Partners, Inc. ("COLUMBIA PARTNERS"), pursuant
to the merger of Columbia Space II with and into Columbia
Partners; (iv) Spectrum Space Equity Investors IV-II, Inc.
("SPECTRUM IV-II") to Spectrum Space Equity Investors IV, Inc.
("SPECTRUM EQUITY"), pursuant to the merger of Spectrum IV-II
with and into Spectrum Equity; (v) Spectrum Space IV Parallel
II, Inc. ("SPECTRUM IV") to Spectrum Space IV Parallel, Inc.
("SPECTRUM PARALLEL"), pursuant to the merger of Spectrum IV
with and into Spectrum Parallel; and (vi) Spectrum Space IV
Managers II, Inc. ("SPECTRUM II") to Spectrum Space IV
Managers, Inc. ("SPECTRUM MANAGERS"), pursuant to the merger
of Spectrum II with and into Spectrum Managers.
7. Each of Motient, TMI, TMI Sub GP and each Investor Parent
(each, a "BLOCKER PARENT" and collectively, the "BLOCKER
PARENTS") hereby represents and warrants that that certain
First Amended and Restated Investment Agreement, dated as of
August 8, 2003, as amended (the "INVESTMENT Agreement"), among
MSV LP, Motient, TMI Sub and the investors named therein, as
amended, the Ancillary Agreements (as defined in the
Investment Agreement) and the Transaction Documents (as
defined in the Investment Agreement (including this
Agreement)) are the only agreements between or among Motient,
Motient Sub, TMI, TMI Sub GP, TMI Sub and any of Investor
Parents or the Investors relating to the Investment Agreement
or the transactions contemplated thereby.
8. Each of the Blocker Parents hereby agree, that, subject to the
exception contained in Paragraph 9 below, if any of them shall
propose to transfer any of its respective interests in Parent
Sub, MVH, TMI Sub or an Investor that holds Percentage
Interests (as defined in that certain Amended and Restated
Limited Partnership Agreement, dated as of November 12, 2004,
by and among General Partner and the limited partners named
therein (as amended, restated or otherwise modified from time
to time, the "LP AGREEMENT")) in MSV LP, as the case may be
(each, a "SUBSIDIARY" and collectively, the "SUBSIDIARIES"),
owned by such Blocker Parent, such transfer shall be subject
to the rights and obligations contained in Section 8.2 of that
certain Amended and Restated Stockholders' Agreement, dated as
of November 12, 2004 (as amended, restated or otherwise
modified from time to time, the "GP AGREEMENT"), by and among
the General Partner and the stockholders named therein (the
provisions of which are hereby incorporated herein by
reference, mutatis mutandis) as if such Blocker Parent were a
Limited Partner (as defined in the LP Agreement) of MSV LP and
the interests being transferred were Percentage Interests in
MSV LP.
2
9. Notwithstanding the previous paragraph, any Investor Parent
may, without any restriction or limitation by virtue of this
Agreement, transfer up to 10% to any single transferee, or up
to 20% in the aggregate, of its interest in an Investor,
provided such transferee executes a joinder to this Agreement
agreeing to be bound by the provisions hereof applicable to
the transferor.
10. Each of the Blocker Parents hereby agrees with each other
Blocker Parent that if one or more of the Blocker Parents
which own Subsidiaries holding, in the aggregate, a majority
of the Percentage Interests propose to transfer or exchange
(in a merger, stock transfer or otherwise) all of their
interests in such Subsidiaries to an unrelated and
unaffiliated third party ("BUYER"), such Blocker Parents shall
have, with respect to each other Blocker Parent and their
respective ownership interests in the Subsidiaries, the rights
and obligations contained in Section 8.5(b) of the GP
Agreement (the provisions of which are hereby incorporated
herein by reference, mutatis mutandis), as if the Blocker
Parents were Limited Partners in MSV LP and the Subsidiaries
being transferred were Percentage Interests in MSV LP (the
"BLOCKER PARENT DRAG ALONG"). The Blocker Parent Drag Along
shall be on the same terms as would be obtained by applying
such Section 8.5(b) of the GP Agreement, except that the
Blocker Parents and their respective Subsidiaries may be
required to provide different representations, warranties and
covenants to Buyer to the extent reasonably required to
reflect the differences in the nature of the interests being
transferred (i.e., a transfer of TMI Sub equity interests
versus a transfer of Investor capital stock). Without limiting
the generality of the foregoing, the Blocker Parent Drag Along
shall provide each of the Blocker Parents with the same
percentage of the consideration to be received from Buyer as
would be obtained by applying Section 8.5(b) of the GP
Agreement (i.e., as if Buyer had acquired MSV LP partnership
interests directly, and the proceeds of such acquisition were
distributed by each Subsidiary to its respective Blocker
Parent); PROVIDED, HOWEVER, that if any of the Subsidiaries
has any liabilities, then such liabilities shall be taken into
account and reduce the consideration to be received by the
owners of such entity. Without limiting the foregoing, each of
the parties expressly acknowledges and agrees that the most
likely method of structuring a sale or disposition of MSV LP's
business is not by means of a sale of MSV LP's assets or
partnership interests but rather by means of the transfer of
the ownership interests in the various entities that hold
interests in MSV LP by sale, merger or otherwise and that a
merger or series of mergers or similar transaction involving
securities of the acquirer or its affiliates may be fully
3
taxable to TMI and/or TMI Sub GP (and to any other Investor
Parent or Other SkyTerra Investor who owns an Investor
organized as a limited partnership or limited liability
company (a "LLC INVESTOR")) if TMI Sub (or such LLC Investor)
were treated as a partnership for U.S. tax purposes while
being treated as a tax-free reorganization by others or may
otherwise involve tax consequences that are different for, and
potentially adverse to, TMI, TMI Sub GP and/or TMI Sub (and to
any other Investor Parent or Other SkyTerra Investor who owns
a LLC Investor) compared to the other parties to this
Agreement if TMI Sub (or a LLC Investor) were treated as a
partnership for U.S. tax purposes.
11. The Blocker Parents and the Subsidiaries hereby severally
agree that, notwithstanding anything to the contrary in the GP
Agreement, without the consent ("CONSENT") of a majority in
interest of each of the Columbia Investor Group and the
Spectrum Investor Group (each, as defined in the GP
Agreement), they shall not (i) allow MSV LP or the General
Partner to sell or transfer all or substantially all of its
assets or (ii) allow any Subsidiary to sell or transfer its
interests in MSV LP or the General Partner, if in either
event, any stockholder of any blocker C corporation that is a
member of the Columbia Investor Group or the Spectrum Investor
Group ("STOCKHOLDER") would incur greater tax liability than
if such Stockholder had held its ownership interests in MSV LP
or the General Partner directly instead of through blocker C
corporations ("ADVERSE TAX CONSEQUENCES"). Without limiting
the foregoing, the parties acknowledge and agree that under
present law, (A) a sale or transfer of the type described in
clause (i) above would result in Adverse Tax Consequences, and
(B) a sale or transfer of the type described in clause (ii)
above would result in Adverse Tax Consequences if either the
Columbia Investor Group or the Spectrum Investor Group joined
in such sale or transfer on the same basis as the proposed
transferor. The parties further acknowledge and agree that a
sale or transfer of the type described in clause (ii) above
would not result in Adverse Tax Consequences if such sale or
transfer is effected pursuant to the terms of Section 8.2(c)
or Section 8.2(d) of the GP Agreement and neither the Columbia
Investor Group nor the Spectrum Investor Group joins in such
sale or transfer. The parties intend that the after tax
consequences to the Stockholders in their indirect investments
in MSV LP and the General Partner be no different than if the
investment by such Stockholders had been made directly in MSV
LP and the General Partner by such Stockholders and,
accordingly, agree that Consent will not be required if a
disproportionate amount of sale proceeds from a sale or
transfer of the type described in clauses (i) and (ii) is
allocated to the Stockholders or blocker corporations of the
Columbia Investor Group and the Spectrum Investor Group, as
the case may be, so as to mitigate any Adverse Tax
Consequences to the Stockholders and to put the Stockholders
in the same after tax economic position (as collectively
determined by the Columbia Investor Group and the Spectrum
Investor Group) as if such investments had been made directly
in MSV LP and the General Partner by the Stockholders instead
of through blocker C corporations.
4
12. Motient and Motient Sub hereby represent and warrant to TMI
and the Investor Parents that from and after the date hereof,
Motient Sub (i) shall have no assets or liabilities other than
the Percentage Interests, the shares of common stock, $0.001
par value per share (the "TERRESTAR STOCK"), of TerreStar
Networks Inc. owned by it, the shares of common stock, $0.01
per share (the "GP STOCK"), of the General Partner owned by
it, and the rights and obligations under the Investment
Agreement, the Ancillary Agreements, the Transaction Documents
and that certain Purchase Agreement, dated as of November 12,
2004, by and among MSV LP and Motient Sub and (ii) shall not
engage in any business activities other than holding the
Percentage Interests, the GP Stock and the TerreStar Stock.
13. TMI, TMI Sub GP and TMI Sub hereby represent and warrant to
Motient and the Investor Parents that from and after the date
hereof, TMI Sub (i) shall have no assets or liabilities other
than the Percentage Interests, the GP Stock owned by it, the
TerreStar Stock owned by it, and the rights and obligations
under the Investment Agreement, the Ancillary Agreements, the
Transaction Documents, that certain Purchase Agreement, dated
as of November 12, 2004, by and among MSV LP and TMI Sub, that
certain Voting Agreement, dated as of November 12, 2004 (the
"MSV VOTING Agreement"), by and among TMI Sub and the other
investors named therein and a similar voting agreement amongst
the same parties to the MSV Voting Agreement (or affiliates of
such parties) relating to the TerreStar Stock (the "TERRESTAR
VOTING AGREEMENT" and together with the MSV Voting Agreement,
the "VOTING AGREEMENTS"), by and among TMI Sub and the other
investors named therein and (ii) shall not engage in any
business activities other than holding the Percentage
Interests, the GP Stock and the TerreStar Stock and performing
its obligations under the Pledge Agreement (as defined in the
GP Agreement) and the Voting Agreements.
14. Each Investor Parent and Other SkyTerra Investor hereby
represents and warrants to Motient and TMI that from and after
the date hereof, each of their respective Investors shall (i)
have no assets or liabilities other than the Percentage
Interests, the GP Stock owned by it, the TerreStar Stock owned
by it, and the rights and obligations under the Investment
Agreement, the Ancillary Agreements, the Transaction Documents
and the Voting Agreements and (ii) not engage in any business
activities other than holding the Percentage Interests, the GP
Stock and the TerreStar Stock and performing its obligations
under the Voting Agreements.
15. This Agreement shall be governed by and construed according to
the law of the State of New York. This Agreement may be
executed in any number of counterparts, each of which shall be
deemed an original and enforceable against the parties
actually executing such counterpart, and all of which, when
taken together, shall constitute one instrument.
5
16. Upon the consolidation (by a series of mergers or otherwise)
of MSV LP, the Investors, Motient Sub and TMI Sub into one
corporate entity, this Agreement shall automatically
terminate, whereupon the restrictions set forth herein shall
be replaced by provisions pertaining to the ownership
interests in such corporate entity that are substantially
identical to those set forth in Sections 8.1 and 8.2 of the GP
Agreement. The parties hereto agree to execute such documents
or agreements necessary or appropriate to accomplish the
foregoing.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
6
IN WITNESS WHEREOF, the undersigned indicate their agreement
to the foregoing as of the day and year first above written.
MOBILE SATELLITE VENTURES LP
By: Mobile Satellite Ventures GP Inc.,
Its General Partner
By: /S/ RANDY SEGAL
-------------------------------------
Name: Randy Segal
Title: Secretary
MOBILE SATELLITE VENTURES GP INC.
By: /S/ RANDY SEGAL
-------------------------------------
Name: Randy Segal
Title: Secretary
MOTIENT CORPORATION
By: /S/ CHRIS DOWNIE
-------------------------------------
Name: Chris Downie
Title: CFO
MOTIENT VENTURES HOLDING INC.
By: /S/ CHRIS DOWNIE
-------------------------------------
Name: Chris Downie
Title: CFO
TMI COMMUNICATIONS AND COMPANY,
LIMITED PARTNERSHIP
By: /S/ RORY MCCORMICK
-------------------------------------
Name: Rory McCormick
Title: President
[SIGNATURE PAGE - A&R PARENT TRANSFER/DRAG ALONG AGREEMENT]
7
TMI COMMUNICATIONS DELAWARE,
LIMITED PARTNERSHIP
By: 3924505 CANADA INC.,
Its General Partner
By: /S/ RORY MCCORMICK
-------------------------------
Name: Rory McCormick
Title: President
INVESTOR PARENTS:
/S/ RAJENDRA SINGH
-------------------------------
Rajendra Singh
/S/ NEERA SINGH
-------------------------------
Neera Singh
THE HERSH RAJ SINGH EDUCATION TRUST
By: /s/ Rajendra Singh
-------------------------------
Name:
Title:
THE SAMIR RAJ SINGH EDUCATION TRUST
By: /s/ Rajendra Singh
-------------------------------
Name:
Title:
[SIGNATURE PAGE - A&R PARENT TRANSFER/DRAG ALONG AGREEMENT]
8
COLUMBIA CAPITAL EQUITY PARTNERS
III (QP), L.P.
By: Columbia Capital Equity Partners
III, L.P., as General Partner
By: /S/ DONALD A. DOERING
---------------------------------
Name: Donald A. Doering
Title: Chief Financial Officer
COLUMBIA CAPITAL EQUITY PARTNERS III
(AI), L.P.
By: Columbia Capital Equity Partners
III, L.P., as General Partner
By: /S/ DONALD A. DOERING
---------------------------------
Name: Donald A. Doering
Title: Chief Financial Officer
COLUMBIA CAPITAL EQUITY PARTNERS III
(CAYMAN), L.P.
By: Columbia Capital Equity Partners
Cayman) III, Ltd., as General Partner
By: /S/ DONALD A. DOERING
---------------------------------
Name: Donald A. Doering
Title: Chief Financial Officer
COLUMBIA CAPITAL INVESTORS III, LLC
By: Columbia Capital Equity Partners
III, L.P., as General Partner
By: /S/ DONALD A. DOERING
---------------------------------
Name: Donald A. Doering
Title: Chief Financial Officer
COLUMBIA CAPITAL EMPLOYEE INVESTORS III,
L.L.C.
By: Columbia Capital III, L.L.C., its
Manager
By: /S/ DONALD A. DOERING
---------------------------------
Name: Donald A. Doering
Title: Chief Financial Officer
[SIGNATURE PAGE - A&R PARENT TRANSFER/DRAG ALONG AGREEMENT]
9
SPECTRUM EQUITY INVESTORS IV, L.P.
By: Spectrum Equity Associates IV, L.P.
Its General Partner
By: KEVIN J. MARONI
----------------------------------
Name: Kevin J. Maroni
Title: General Partner
SPECTRUM IV INVESTMENT MANAGERS' FUND,
L.P.
By: KEVIN J. MARONI
----------------------------------
Name: Kevin J. Maroni
Title: General Partner
SPECTRUM EQUITY INVESTORS PARALLEL IV,
L.P.
By: Spectrum Equity Associates IV, L.P.,
its General Partner
By: /S/ KEVIN J. MARONI
----------------------------------
Name: Kevin J. Maroni
Title: General Partner
SKYTERRA COMMUNICATIONS, INC.
By: /s/ Jeffrey Ledey
-----------------------------------
Name:
Title:
[SIGNATURE PAGE - A&R PARENT TRANSFER/DRAG ALONG AGREEMENT]
10