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
---------
other 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:
/s/Xxxxx X. Xxxxxxx MVH HOLDINGS INC.,
--------------------------- 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.
