Exhibit 10.2
Apollo Investment Fund IV, L.P.
Apollo Overseas Partners IV, L.P.
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
November 10, 0000
XxxXxxxx Xxxxxxxx, Inc.
00 Xxxx 00xx Xxxxxx, Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxx
Commitment Letter
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Reference is made to that certain Membership Interest Purchase
Agreement dated as of the date hereof (the "Purchase Agreement"), by and among
DTV Network Systems, Inc., a Delaware corporation ("Seller"), SkyTerra
Holdings, Inc., a Delaware corporation ("SkyTerra Holdings"), and the other
persons signatory thereto. Capitalized terms used in this Commitment Letter
(including Exhibit A) and not defined herein shall have meanings ascribed to
such terms in the Purchase Agreement.
The persons identified on Schedule I hereto (each, an "Investor"), in
accordance with its respective Commitment Percentage set forth on Schedule I,
hereby agree, in the aggregate, to provide, or cause to be provided, to
Purchaser a loan in a principal amount equal to $100,000,000 in accordance with
the terms and conditions set forth on Exhibit A attached hereto on or prior to
March 10, 2006 if Purchaser has not consummated on or before January 1, 2006 a
sale of equity securities to its stockholders pursuant to a rights offering
(the "Rights Offering") generating aggregate net proceeds for Purchaser in an
amount equal to or greater than $100,000,000. Notwithstanding anything to the
contrary contained herein, no Investor shall be obligated to provide, or cause
to be provided, any amounts hereunder in an amount in excess of such Investor's
Commitment Percentage of $100,000,000 as reduced by the net proceeds of any
Rights Offering consummated after the date hereof.
The Investors' obligations hereunder are subject to the satisfaction
of the conditions precedent set forth in Sections 7.1 and 7.3 of the Purchase
Agreement on or before the Closing Date (without a waiver of the satisfaction
of such conditions or any amendment to the Purchase Agreement following the
date hereof (in each case, other than with the written consent thereto of the
Investors)).
Except as required by applicable law, each party hereto (and any other
Person who shall receive a copy hereof as permitted pursuant hereto) shall keep
confidential this letter and all information obtained by it with respect to the
other in connection with this letter, and will use such information solely in
connection with the transactions contemplated hereby. Notwithstanding the
foregoing, Purchaser may provide a copy of this letter to Seller provided that
Seller agrees to maintain the confidentiality of this letter.
No Investor Affiliates (as defined below) shall have any liability or
obligation of any nature whatsoever in connection with or under this letter or
the transactions contemplated hereby, and each party hereto hereby waives and
releases all claims against such Investor Affiliates related to such liability
or obligation. "Investor Affiliates" means (a) direct or indirect holders of
any equity interests or securities of any Investor (whether such holder is a
limited or general partner, member, stockholder or otherwise), (b) Affiliates
of any Investor, or (c) directors, officers, employees, representatives or
agents of any Investor.
The Investors' obligations hereunder will automatically terminate
without further action on the earlier of (x) March 10, 2006, if the
transactions contemplated by the Purchase Agreement are not consummated by such
date and (y) the date on which the Purchase Agreement is terminated pursuant to
its terms.
Purchaser hereby agrees to indemnify and hold harmless each Investor
(other than for damages directly arising out of, related to, or resulting from
a breach of such Investor's obligations hereunder) and the Investor Affiliates
from any and all damages arising out of, related to, or resulting from the
transactions contemplated by the Purchase Agreement.
Purchaser may assign its rights and obligations hereunder to SkyTerra
Communications, Inc. ("SkyTerra Communications"), and, in such event, SkyTerra
Communications shall automatically become the "Purchaser" for all purposes of
this Commitment Letter (except with respect to all references to the Rights
Offering). This Commitment Letter shall only be drawn upon by Purchaser if
immediately thereafter Purchaser and/or its affiliate own all of the
outstanding Class A Units of Xxxxxx Network Systems, LLC.
This Commitment Letter shall be governed by the laws of the State of
New York (without reference to the principles of conflicts of law.)
Notwithstanding anything to the contrary contained herein, no person
shall be deemed to be a third party beneficiary of this Commitment Letter.
[Remainder of Page Intentionally Left Blank]
Very truly yours,
APOLLO INVESTMENT FUND IV, L.P.
By: Apollo Advisors IV, L.P.,
its general partner
By: Apollo Capital Management IV, L.P.,
its general partner
By: /s/ XXXXXX XXXXXX
-----------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
APOLLO OVERSEAS PARTNERS IV, L.P.
By: Apollo Advisors IV, L.P.,
its general partner
By: Apollo Capital Management IV, L.P.,
its general partner
By: /s/ XXXXXX XXXXXX
-----------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
ACCEPTED AND AGREED TO
as of the date first written above.
SKYTERRA HOLDINGS, INC.
By: /s/ XXXXXXX X. XXXXX
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Name: Xxxxxxx X. Xxxxx
-------------------------------------
Title: President & Chief Executive Officer
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Apollo Commitment Letter
Exhibit A
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Terms of Loan
Note Issuer: Purchaser. SkyTerra Holdings may assign its
rights and obligations hereunder to
SkyTerra Communications, and, in such
event, SkyTerra Communications shall
automatically become the "Purchaser" for all
purposes of this Commitment Letter (except
with respect to all references to the Rights
Offering).
Guarantor: SkyTerra Communications shall guarantee the
repayment of the Loan until such time as
SkyTerra Holdings owns all of the Class A
Units of Xxxxxx Network Systems, LLC.
Principal Amount: $100,000,000 (as reduced by the proceeds of
the Rights Offering consummated after the date
hereof).
Use of Proceeds: To pay the Purchase Price contemplated by the
Purchase Agreement.
Interest: 8.0% per annum. Accrued and unpaid interest
will be added to the Principal Amount on a
quarterly basis, and will thereafter accrue
interest in accordance with the terms hereof.
Maturity: Twelve (12) months after the consummation of
the loan.
Collateral: Unless prohibited by the first lienholder, a
second lien in all equity interests of Xxxxxx
Network Systems, LLC owned by Purchaser and
SkyTerra Communications, as applicable.
Rights Offering: If (i) SkyTerra Holdings has not conducted the
Rights Offering prior to the Closing and (ii)
the stock of SkyTerra Holdings has been
distributed to the stockholders of SkyTerra
Communications, SkyTerra Holdings will use its
best efforts to consummate the Rights Offering
with proceeds sufficient to pay off the Note
(including all accrued and unpaid interest
thereon) as soon as practicable following the
Closing.
Each Investor will subscribe for the maximum
amount allocated to the Investors in the
Rights Offering by SkyTerra Holdings
(including the exercise of over-subscription
rights in connection therewith). In no event
shall the Investors be obligated to exercise
their subscription rights in the Rights
Offering in an amount in excess of the
outstanding Principal Amount and all accrued
interest under the Note. The consideration
payable by the Investors in connection with
their subscription in the Rights Offering
shall be payable from the conversion of the
outstanding amounts due under the Note (as
adjusted below) into a number of equity
securities offered in the Rights Offering
(such number based on the subscription price
in the Rights Offering). The Principal Amount
and interest under the Note converted pursuant
to the foregoing shall be reduced by the
amount of proceeds received by SkyTerra
Holdings in the Rights Offering from all
persons other than the Investors and such
unconverted obligations under the Note shall
be repaid in cash immediately upon the
consummation of the Rights Offering.
The equity securities offered in the Rights
Offering shall be priced by SkyTerra Holdings
in good faith to encourage subscription by its
equityholders, taking into account the
Purchase Price paid in connection with the
transactions contemplated by the Purchase
Agreement.
Documentation: Customary for a transaction of this type
(including, but not limited to, covenants,
events of default, conditions, representations
and indemnities).
Governing Law: New York.
Expenses: Purchaser and SkyTerra Communications shall
reimburse the Investors for all costs, fees
and expenses (including legal fees and
expenses) incurred by the Investors in
connection with the transactions contemplated
hereby.
