1
EXECUTION COPY
EXHIBIT 99.6
Metromedia International Group, Inc. PLD Telekom Inc.
One Meadowlands Plaza 000 Xxxx Xxxxxx
Xxxx Xxxxxxxxxx, XX 00000-0000 Xxx Xxxx, XX 00000
May 18, 1999
The Travelers Insurance Company
Xxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
The Travelers Indemnity Company
Xxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
Reference is made to (i) the Agreement and Plan of Merger,
dated as of the date hereof (the "Merger Agreement"), by and among PLD Telekom,
Inc., a Delaware corporation (the "Company"), Metromedia International Group,
Inc., a Delaware corporation (the "Parent") and Moscow Communications, Inc., a
Delaware corporation and wholly owned subsidiary of the Parent ("Merger Sub"),
pursuant to which, at the Effective Time (as defined in the Merger Agreement),
Merger Sub will merge with and into the Company (the "Merger"), and following
such Merger, the Company will become a wholly-owned subsidiary of the Parent and
(ii) the Revolving Credit Note and Warrant Agreement, dated as of November 26,
1997, as amended (the "Travelers Credit Agreement") between The Travelers
Insurance Company, The Travelers Indemnity Company (collectively, "Travelers")
and the Company, pursuant to which Travelers made a revolving line of credit
available to the Company. Capitalized terms used but not defined herein shall
have the meanings set forth in the Merger Agreement.
In connection with and as a condition precedent to the
obligations of the Parent and the Merger Sub to effect the Merger and consummate
the other transactions contemplated by the Merger Agreement, the Parent and
Travelers are entering into this letter agreement (the "Travelers Note
Modification Agreement") which provides as follows:
1. Notwithstanding anything to the contrary set forth in
the Travelers Credit Agreement, Travelers shall defer payment by the Company of
the
2
2
mandatory repayments of the outstanding Revolving Credit Loans (and waive any
related Events of Default as provided in Section 3 below) until the earlier to
occur of (x) the Closing Date and (y) the date the Merger Agreement is
terminated or expires (such date referred to as the "Termination Date"). On the
Closing Date, the Company and Travelers will amend and restate the Travelers
Credit Agreement (the "Restated Credit Agreement") to provide that all amounts
payable under the Travelers Credit Agreement shall be payable in the manner set
forth in Section 4 below.
2. Travelers agrees that it shall not exercise any
warrants that it owns or may acquire to purchase shares of the Company's common
stock, par value $.01 per share (the "Company Common Stock") between the date
hereof and the Closing Date.
3. Travelers hereby waives the occurrence of any default
or any Event of Default (as defined in the Travelers Credit Agreement) under
Section 11 of the Travelers Credit Agreement, provided that, notwithstanding
such waiver, through the Closing Date subject to the provisions of Section 2
above, Travelers shall continue to be entitled to all rights it may have under
Section 9.27 of the Travelers Credit Agreement and/or Section 2A of the Warrant
Agreement (the "Warrant Agreement"), dated as of November 26, 1997, between the
Company and the Bank of New York, resulting from the failure of the Company to
make the payment in full of the principal and any accrued but unpaid interest on
the Series A Notes as and when due on December 31, 1998, or as extended
thereafter, or the payment in full of the principal and any accrued but unpaid
interest on the Series B Notes as and when due on September 30, 1998, or as
extended thereafter, (including, in each case, all payments of principal
previously deferred); provided, further that notwithstanding the foregoing
agreement not to exercise any remedies as a result of any default or Event of
Default prior to the Termination Date, any amounts otherwise coming due under
the Travelers Credit Agreement or any promissory note, guarantee or other
instrument issued thereunder prior to the Termination Date, whether at maturity
in accordance to the terms thereof or otherwise, shall be immediately due and
payable, without any action required on the part of Travelers or the Company,
and shall in all respects be deemed to be a currently payable obligation which
shall be paid by the Company and may be asserted by Travelers as a claim in any
proceeding to the fullest extent permitted by law, if the Company shall be
adjudged bankrupt or insolvent, or shall commence any voluntary case (or become
the subject of any involuntary case that remains undismissed for a period of 30
days) under the United States Bankruptcy Code. Travelers agrees that the
Restated Credit Agreement will provide that in consideration for the payments
and issuance of the warrants specified in Section 4 below, Travelers will on the
Closing Date forever waive any rights and relinquishes any claim it might now
have or have had in the past with regard to (i) the reset of the exercises
prices of the Initial Warrants or the Additional Warrants to $.01, (ii) the
issuance of Default Warrants (each as defined in the Warrant Agreement) with an
exercise price of $.01 or (iii) the issuance of any additional Default Warrants.
3
3
4. (a) The Restated Credit Agreement will provide that
on the Closing Date, in consideration for the undertakings of the Company in
Section 4(b) hereunder, any and all warrants to purchase the Company's common
stock, par value $.01 per share, held by Travelers (including the Initial
Warrants, the Additional Warrants and any Default Warrants) shall be canceled
and shall thereafter, no longer be exercisable.
(b) The Restated Credit Agreement will further
provide that in consideration for the cancellation of the warrants held by
Travelers contemplated by Section 4(a) above, the Company shall:
(i) pay to Travelers on the Closing Date the sum
of $8,500,000 by wire transfer to an account designated in advance by
Travelers, which amount will be applied first, to the repayment of the
entire outstanding Series B Revolving Credit Loans (as defined in the
Travelers Credit Agreement), and second, after all Series B Revolving
Credit Loans have been paid in full, to the repayment of outstanding
Series A Revolving Credit Loans;
(ii) issue to Travelers on the Closing Date
100,000 shares of Company Common Stock which will be immediately
converted pursuant to Section 2.1 of the Merger Agreement into shares
of the Parent's common stock, par value $1.00 per share (the "Parent
Common Stock"); provided, however, that Travelers will agree not to
sell, assign, pledge or otherwise transfer such shares of Parent Common
Stock prior to June 30, 2000;
(iii) issue to Travelers on the Closing Date
warrants to purchase 700,000 shares of Parent Common Stock (the
"Warrants"). The Warrants will be exercisable during the period
beginning on the date of the third anniversary of the Closing Date and
ending on the date of the tenth anniversary of the Closing Date at an
exercise price (the "Exercise Price") calculated as follows:
(A) the Exercise Price for the Warrants will
be equal to 125% of the average of the daily closing
price of the Parent Common Stock as reported on the
American Stock Exchange Composite Transactions Tape
(as reported by The Wall Street Journal (national
edition)) (or if the Parent Common Stock is no longer
listed on the American Stock Exchange, such exchange
upon which the Parent Common Stock is principally
traded) for each trading day in December 2000; and
(B) notwithstanding Section 4(b)(iii)(A), if
the Exercise Price calculated pursuant to such
section is at least $15.00 then the Exercise Price
will be $15.00 or if the Exercise
4
4
Price is less than $10.00 then the Exercise Price
will be $10.00; and
(C) notwithstanding anything in this Section
4(b)(iii)(A) or (B) if the new Series A Notes are not
repaid in full on or prior to the Maturity Date (as
defined below), then the Exercise Price will be $.01;
(iv) amend and restate the existing Series A
Notes which evidence the Series A Revolving Credit Loans which remain
outstanding after giving effect to the repayment contemplated by the
foregoing clause (ii) such that (x) the interest rate on the Series A
Revolving Credit Loans evidenced thereby shall be changed to 10.5% and
(y) the Series A maturity date shall be changed to the date (the
"Maturity Date") which is the earlier of (I) August 30, 2000 or (II)
one year from the Closing Date, and issue to Travelers new Series A
Notes reflecting such amendment and restatement in substitution for
such existing Series A Notes;
(v) pay interest on the new Series A Notes at
the rate of 10.5% per annum, payable monthly in arrears; and
(vi) secure the Note with the following
collateral:
(1) the existing guarantee from
Wireless Technology Corporations Limited;
(2) the existing guarantee from
Baltic Communications Limited;
(3) a guarantee from PLD
Holdings Limited in form and substance
satisfactory to the parties;
(4) a guarantee from Metromedia
International Group Inc. in form and
substance satisfactory to the parties;
(5) the existing pledge of 28
ordinary shares of Technocom Limited; and
(6) the existing lien on the
receivables of the Company.
5. The new Series A Notes will not be secured by any
guarantee from News America Incorporated ("News") and at the Closing Date the
existing guarantee of News of certain amounts payable under the Travelers Credit
Agreement will be terminated and canceled by Travelers and returned to News
marked "canceled."
6. Travelers hereby consents pursuant to the Travelers
Credit Agreement (a) to the execution and delivery of the Merger Agreement and
5
5
consummation of the Merger and (b) to the execution by the Company of (i) the
Bridge Loan Agreement and Pledge Agreement, each dated as of the date hereof
between Parent and Company, and (ii) the pledge of the collateral by the Company
to the Parent contemplated by the Pledge Agreement to secure the Company's
obligations under the Bridge Loan Agreement.
7. Except for those amendments expressly contemplated by
this Travelers Note Modification Agreement and to permit the issuance of the new
Parent Senior Notes to the holders of the Company's existing senior notes and
convertible notes as contemplated by the Agreement to Exchange and Consent dated
as of the date hereof, the Restated Credit Agreement shall continue, ratify and
confirm, the terms, covenants and conditions contained in the Travelers Credit
Agreement as in effect on the date hereof and the Travelers Credit Agreement, as
so amended and restated by the Restated Credit Agreement, shall remain in full
force and effect.
8. This Travelers Note Modification Agreement shall
terminate on the Termination Date, in which event the parties hereto will have
no further liability to each other.
9. This letter agreement shall be governed in all
respects by the laws of the State of New York without reference to the choice of
laws principles thereof.
10. This letter agreement may be executed in any number
of counterparts, each of which shall be an original but all of which together
shall constitute one and the same instrument.
11. No amendment, modification, termination or waiver or
any provision of this letter agreement shall be effective unless it shall be in
writing and signed by each of the parties to this agreement.
6
6
If the foregoing sets forth your understanding with regard to
the matter specified herein, please so indicate by signing a copy of this letter
and returning an original to us at the address set forth above.
Sincerely,
METROMEDIA INTERNATIONAL GROUP, INC.
By: /s/ XXXXXX XXXXXX
---------------------------------------
Name: Xxxxxx Xxxxxx
Title: Chief Financial Officer,
Executive Vice President,
Treasurer and Director
PLD TELEKOM INC.
By: /s/ XXXXX X. X. XXXX
---------------------------------------
Name: Xxxxx X. X. Xxxx
Title: Chairman, President and
Chief Executive Officer
ACCEPTED AND AGREED
as of the date first written above:
THE TRAVELERS INSURANCE COMPANY
By: /s/ XXXXX XXXXXXXXXX
-----------------------------------
Name: Xxxxx Xxxxxxxxxx
Title: 2nd Vice President
THE TRAVELERS INDEMNITY COMPANY
By: /s/ XXXXX XXXXXXXXXX
-----------------------------------
Name: Xxxxx Xxxxxxxxxx
Title: 2nd Vice President
