Exhibit 10.3
SENIOR INDEBTEDNESS NOTE
$19,000,000.00 May 1, 2002
FOR VALUE RECEIVED, MVH HOLDINGS INC., a Delaware corporation
("Borrower") hereby promises to pay to the order of, RARE MEDIUM GROUP, INC.
(together with any and all of its successors and assigns and/or any other
holder of this Note, "Lender"), without offset, in immediately available funds
in lawful money of the United States of America, the principal sum of NINETEEN
MILLION DOLLARS ($19,000,000.00), together with all interest payments added to
the principal balance of this Note pursuant to Section 1 hereof and all
interest and other amounts that are due and owing pursuant to the provisions
of this Note. This Note is being issued pursuant to the Debtors' Amended Joint
Plan of Reorganization Under Chapter 11 of the Bankruptcy Code (the "Plan") in
the jointly administered cases (the "Bankruptcy Cases") of Motient Corporation
("Motient"), Motient Holdings Inc., Motient Communications Inc. and Motient
Services Inc. ("Services"), pending in the United States Bankruptcy Court (the
"Bankruptcy Court") for the Eastern District of the Virginia, Alexandria
Division, Case Nos. 02-80125, 02-80126, 02-80128 and 02-80129-RGM and the
Settlement Agreement dated as of March 28, 2002 between the Lender and the
Debtors. The Plan was confirmed by order of the Bankruptcy Court entered on
April 26, 2002. Any capitalized terms used herein and not otherwise defined
herein shall have the meaning ascribed thereto in the Plan.
1. Payment Schedule and Maturity Date. Accrued unpaid interest on the
principal balance outstanding hereunder shall be due and payable
semi-annually, in arrears, commencing on the first day of November following
the Effective Date, and continuing on the 1st day of each succeeding November
and May thereafter until all principal and accrued interest owing on this Note
shall have been fully paid and satisfied. Borrower may, in its sole
discretion, elect to make any interest payment by adding the amount of such
payment, as of the date that such payment is due and owing, to the principal
balance of this Note. The entire amount of this Note then unpaid shall be due
and payable in full on the last day of the month which is the thirty-sixth
month following the Effective Date (such date, or any earlier date on which
such amounts may become due and payable pursuant to Section 7 hereof, the
"Maturity Date").
2. Interest Rate.
(a) The unpaid principal balance of this Note from day to day
outstanding shall bear interest at a fixed rate of interest equal to nine
percent (9.0%) per annum until paid.
(b) Interest on this Note shall be computed for the actual
number of days which have elapsed, on the basis of a 365-day year.
3. Prepayment.
(a) Borrower may prepay the principal balance of this Note and
any other amounts that are due and owing on this Note, in full at any time or
in part from time to time, without fee, premium or penalty.
(b) Upon receipt by Xxxxxxxx and/or Ventures of any net cash
proceeds from any assets of Borrower and/or Ventures, Borrower shall prepay
amounts outstanding under this Note within five (5) business days of the
receipt by Borrower and/or Ventures of such net cash proceeds, pro rata to the
Lender and to the holders of any other Senior Indebtedness Notes outstanding
at such time.
(c) Lender shall have the right, upon written notice to
Borrower, to require Borrower to prepay all amounts outstanding under this
Note within thirty (30) days of receiving written notice from Borrower of any
of the following events taking place: (i) any person or group of persons
(within the meaning of Section 13 or 14 of the Securities Exchange Act of
1934, as amended) other than a Permitted Holder (as specified in Exhibit "A"
thereto) or an affiliate of a Permitted Holder (but only to the extent the
Permitted Holder has majority ownership and control of such affiliate),
acquires beneficial ownership (within the meaning of Rule 13d-3 promulgated by
the Securities and Exchange Commission under said Act) of more than 50% of the
outstanding capital stock of Motient, (ii) Motient ceases to own 100% of the
outstanding capital stock of Borrower, (iii) Borrower issues any equity
securities, to any person or entity other than Motient, or (iv) Borrower
issues any debt securities to any person or entity except for any other Senior
Indebtedness Notes as permitted hereunder.
(d) Upon either: (i) receipt by Services or any other affiliate
of Motient of proceeds from the sale or transfer of the note originally issued
by Mobile Satellite Ventures LP ("MSV") to Services on November 26, 2001 in
the principal amount of $15,000,000 (the "MSV Note"); or (ii) full or partial
payment of the MSV Note to Services or any other affiliate of Motient,
Borrower shall prepay, pro rata to the Lender and the holders of any other
Senior Indebtedness Notes, in an amount equal to 25% of such proceeds or
payment (as the case may be) within five (5) business days of receipt by
Services or any other affiliate of Motient of such proceeds or payment.
4. Certain Provisions Regarding Payments. All payments made as
scheduled on this Note shall be applied, to the extent thereof, first to
accrued but unpaid interest, second to unpaid principal, and third to any
other sums due and unpaid to Lender pursuant to the terms hereof. All
permitted prepayments on this Note shall be applied, to the extent thereof,
first to accrued but unpaid interest on the amount prepaid, second to the
principal, and third any other sums due and unpaid to Lender pursuant to the
terms hereof.
5. Representations and Warranties. Borrower hereby represents and
warrants to Lender as follows:
(a) Borrower is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and has the power
and authority to own its property and to carry on its business in each
jurisdiction in which Borrower does business.
(b) Borrower has full power and authority to execute and deliver
this Note and to incur and perform the obligations provided for herein, all of
which have been duly authorized by all proper and necessary action of the
appropriate governing body of Borrower and the Bankruptcy Court. No consent or
approval of any public authority or other third party is required as a
condition to the validity of this Note.
(c) This Note constitutes a valid and legally binding obligation
of Borrower, enforceable in accordance with its terms, except as enforcement
hereof may be limited by bankruptcy or other similar laws affecting
enforcement of creditors' rights generally and by general principles of equity
(whether in a court of law or equity).
(d) Xxxxxxxx is the owner of all of the outstanding capital
stock (the "Venture Stock") of Ventures, free and clear of liens and
encumbrances of any manner whatsoever. Other than the Venture Stock, Ventures
has no other securities (whether debt or equity) issued or outstanding.
(e) Neither Borrower nor Ventures has any liabilities of any
kind or nature, whatsoever, other than this Note and any other outstanding
Senior Indebtedness Notes, except for (i) such obligations and liabilities as
are provided for or contemplated by the MSV Agreements (as hereinafter
defined), and (ii) other liabilities not exceeding $10,000 in the aggregate.
(f) Ventures is the owner of 8,000,000 common units of limited
partnership interest in MSV, which constitute approximately twenty-five point
five percent (25.5%) of the outstanding limited partnership interests in MSV
on a fully diluted basis (assuming conversion of all convertible notes of MSV
currently outstanding and assuming such additional dilution as is currently
contemplated by the agreements, listed on Exhibit "B" to this Note (the "MSV
Agreements"), pertaining to MSV) ("Ventures' Interest in MSV"), free and clear
of liens and encumbrances of any manner whatsoever, except for such
encumbrances as are provided for or contemplated by the MSV Agreements.
(g) The only property and assets of Borrower is the Venture
Stock, and the only property and assets of Ventures is (i) Ventures' Interest
in MSV, (ii) the shares of common stock of Mobile Satellite Ventures GP Inc.
("MSV GP") owned by Ventures constituting approximately twenty-five point five
percent (25.5%) of the outstanding capital stock of MSV GP on a fully diluted
basis (assuming such dilution as is currently contemplated by the MSV
Agreements), and (iii) the $2.5 million convertible note issued to Ventures by
MSV (collectively, the "Assets of Ventures").
(h) The aggregate principal amount of all Senior Indebtedness
Notes does not exceed $21 million. (i) All representations and warranties made
under this Note shall be deemed to be made at and as of the date hereof.
6. Covenants. Until all principal, accrued interest and amounts
outstanding hereunder are paid in full, Borrower:
(a) Will maintain its existence, good standing and qualification
to do business, where required and comply with all laws, regulations and
governmental requirements.
(b) Will not incur, and will cause Ventures not to incur, any
obligations or liabilities of any kind or nature whatsoever except (i) as to
Borrower, the obligations under this Note and any other Senior Indebtedness
Notes issued pursuant to the Plan, so long as the aggregate principal amount
of all Senior Indebtedness Notes does not exceed $21 million, (ii) as to
Ventures, existing obligations under, or obligations contemplated by, the MSV
Agreements (iii) as to Borrower or Ventures, (x) obligations incurred in the
ordinary course of business; (y) consistent with prior practice; and (z) in an
aggregate amount not to exceed $10,000.
(c) Will not grant, permit or suffer to exist any liens or
encumbrances on any of the property and assets of Borrower or Ventures,
except, in the case of Ventures, encumbrances provided for, or contemplated
by, the MSV Agreements.
(d) Will maintain the ownership of the Venture Stock, will cause
Ventures to not issue any additional stock or interests of any manner
whatsoever, and will cause Ventures to agree to maintain ownership of, and not
sell, transfer, pledge, grant a security interest in or assign (collectively,
"Transfer"), the Assets of Ventures, subject to any dilution as may occur
pursuant to the terms of MSV Agreements, without receiving the written consent
of Lender, unless (i) Lender consents in writing prior to such Transfer or
(ii) upon the consummation of such Transfer all principal, accrued interest
and other amounts outstanding under the Note will be paid in full.
(e) Except as contemplated hereby or by the Plan, will not enter
into any transactions with any Affiliates (as defined in Section 101(2) of the
Bankruptcy Code) and will cause Ventures, except as may be provided for or
contemplated by the MSV Agreements, to enter into no transactions with any
Affiliates.
7. Events of Default.
(a) It shall be an event of default ("Event of Default") under
this Note if (i) any principal, accrued interest or other amount of money due
hereunder is not paid in full when due, regardless of how such amount may have
become due; (ii) any covenant, agreement or condition contained herein is not
fully and timely performed, observed or kept except as to the covenant
contained in section 6(b)(iii) only, Borrower shall have five (5) business
days from the day on which it becomes aware of any violation to cure; (iii)
any representations and warranties set forth in Section 5 above shall be
untrue in any material respect as of the date hereof; (iv) Borrower owns less
than all of the issued and outstanding capital stock of Ventures; (v) the
filing of a petition or the institution of proceedings of, by, or against
Motient pursuant to the Bankruptcy Reform Act of 1978, as amended, (excluding
the Bankruptcy Cases) or any successor statute or pursuant to any state
bankruptcy, insolvency, moratoria, reorganization, or similar laws which is
not dismissed within ninety (90) days; or (vi) Motient's making a general
assignment for the benefit of its creditors, or the entering by Motient into
any compromise or arrangement with its creditors generally. Upon the
occurrence of an Event of Default, Lender may immediately by written Notice to
Xxxxxxxx (i) declare the unpaid principal balance and all accrued but unpaid
interest on this Note, and all other amounts due hereunder, at once due and
payable (and upon such declaration, the same shall be at once due and
payable), and (ii) exercise any of its other rights, powers and remedies under
this Note, or at law or in equity. Borrower shall give notice to Xxxxxx
promptly upon becoming aware of any Event of Default.
(b) All of the rights, remedies, powers and privileges
(together, "Rights") of Lender provided for in this Note are cumulative of
each other and of any and all other Rights at law or in equity. The resort to
any Right shall not prevent the concurrent or subsequent employment of any
other appropriate Right. No single or partial exercise of any Right shall
exhaust it, or preclude any other or further exercise thereof, and every Right
may be exercised at any time and from time to time. No failure by Xxxxxx to
exercise, nor delay in exercising any Right, including but not limited to the
right to accelerate the maturity of this Note, shall be construed as a waiver
of any Event of Default or as a waiver of any Right.
(c) If any holder of this Note retains an attorney in connection
with any Event of Default or at maturity or to collect, enforce or defend this
Note in any lawsuit or in any reorganization, bankruptcy, arbitration or other
proceeding, or if Borrower sues any holder in connection with this Note and
does not prevail, then Borrower agrees to pay to each such holder, in addition
to principal, interest and any other sums owing to Lender hereunder, all costs
and expenses incurred by such holder in trying to collect this Note or in any
such suit or proceeding, including, without limitation, reasonable attorneys'
fees and expenses, investigation costs and all court costs, whether or not
suit is filed hereon, whether before or after the Maturity Date, or whether in
connection with bankruptcy, insolvency or appeal, or whether collection is
made against Borrower or any guarantor or endorser or any other person
primarily or secondarily liable hereunder.
8. General Provisions. Time is of the essence with respect to
Xxxxxxxx's obligations under this Note. Borrower hereby waives demand,
presentment for payment, notice of dishonor and of nonpayment, protest, notice
of protest, notice of intent to accelerate, notice of acceleration and all
other notices (except any notices which are specifically required by this
Note), filing of suit and diligence in collecting this Note or enforcing any
provision of this Note. A determination that any provision of this Note is
unenforceable or invalid shall not affect the enforceability or validity of
any other provision, and the determination that the application of any
provision of this Note to any person or circumstance is illegal or
unenforceable shall not affect the enforceability or validity of such
provision as it may apply to other persons or circumstances. THIS NOTE, AND
ITS VALIDITY, ENFORCEMENT AND INTERPRETATION, SHALL BE GOVERNED BY NEW YORK
LAW (WITHOUT REGARD TO ANY CONFLICT OF LAWS PRINCIPLES) AND APPLICABLE UNITED
STATES FEDERAL LAW.
9. Notices; Time. All notices, requests, consents, approvals or
demands (collectively, "Notice") required or permitted by this Note to be
given by any party to any other party hereunder shall, unless specified
otherwise, be in writing (including facsimile (fax) transmission) and shall be
given to such party at its address or fax number set forth below, or such
other address or fax number as such party may hereafter specify for the
purpose by Notice to the other party.
If to Lender:
Xxxxxx X. Xxxxx, Esq.
Rare Medium Group, Inc.
00 X. 00xx Xxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
Telecopier No.: (000) 000-0000
If to Borrower:
MVH Holdings Inc.
c/o Motient Corporation
00000 Xxxxxxxxx Xxxxxxxxx
Xxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx, Esq.
Telecopier No.: (000) 000-0000
Each such Notice shall be effective when actually received by the addressee or
when the attempted initial delivery is refused or when it cannot be made
because of a change of address of which the sending party has not been
notified.
IN WITNESS WHEREOF, Xxxxxxxx has duly executed this Note under seal as of the
date first above written.
WITNESS/ATTEST: BORROWER:
MVH HOLDINGS INC.,
/s/ Xxxxx X. Xxxxxxx
------------------------- a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxx, Xx. [SEAL]
------------------------------------
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: President and Chief Executive Officer
Address:
00000 Xxxxxxxxx Xxxx
Xxxxxx, XX 00000
Exhibit A
(To Rare Senior Indebtedness Note)
Bay Harbour Management, LC
CFSC Wayland Advisers, Inc.
Highland Capital Management, X.X.
Xxxxxx Xxxxxxx Investment Management
Romulus Holdings
Exhibit B
(To Rare Senior Indebtedness Note)
MSV Agreements
1. Amended and Restated Investment Agreement, dated as of October 12, 2001,
as amended, by and among Mobile Satellite Ventures LLC, Motient
Corporation, TMI Communications and Company, Limited Partnership, and the
other parties named therein.
2. Limited Partnership Agreement, dated as of November 26, 2001, of Mobile
Satellite Ventures LP.
3. Stockholders' Agreement, dated as of November 26, 2001, of Mobile
Satellite Ventures GP Inc.
4. Certificate of Incorporation of Mobile Satellite Ventures GP Inc.
5. Bylaws of Mobile Satellite Ventures GP Inc.
6. Convertible Notes, in an aggregate principal amount of $55 million,
issued by Mobile Satellite Ventures LP on November 26, 2001.
7. Parent Transfer/Drag Along Agreement, dated as of November 26, 2001, by
and among Mobile Satellite Ventures LP, Motient Corporation, Motient
Ventures Holding Inc., TMI Communications and Company, Limited
Partnership, and the other parties named therein.
8. Amended and Restated Document Standstill and Termination Agreement, dated
as of October 12, 2001, by and among Mobile Satellite Ventures LLC,
Motient Corporation, Motient Services Inc., and the other parties named
therein.
