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EXHIBIT 10.120
EXECUTION COPY
AMENDMENT NO. 3 OF REVOLVING CREDIT AGREEMENT,
WAIVER OF REVOLVING CREDIT AGREEMENT
AND TERM CREDIT AGREEMENT AND TERMINATION
AND RELEASE OF SHAREHOLDER GUARANTORS
AMENDMENT AND WAIVER dated as of May 14, 2001 of the Revolving Credit
Agreement dated as of March 31, 1998 (as heretofore amended, the "REVOLVING
CREDIT AGREEMENT") among MOTIENT HOLDINGS INC. (formerly AMSC ACQUISITION
COMPANY, INC.) (the "BORROWER"), MOTIENT CORPORATION (formerly AMERICAN MOBILE
SATELLITE CORPORATION) (the "PARENT GUARANTOR"), the BANKS party thereto (the
"BANKS"), XXXXXX GUARANTY TRUST COMPANY OF NEW YORK, as Documentation Agent
(the "DOCUMENTATION AGENT"), and TORONTO DOMINION (TEXAS), INC., as
Administrative Agent (the "ADMINISTRATIVE AGENT"); WAIVER dated as of May 14,
2001 of the Term Credit Agreement dated as of March 31, 1998 (as heretofore
amended, the "TERM CREDIT AGREEMENT", and together with the Revolving Credit
Agreement, the "CREDIT AGREEMENTS") among the Parent Guarantor, the Banks, the
Documentation Agent and the Administrative Agent; and TERMINATION AND RELEASE
dated as of May 14, 2001 of certain Shareholder Guarantors (collectively, the
"AGREEMENT").
WHEREAS, the Parent Guarantor proposes to create a wholly-owned
Subsidiary which will merge with and into Rare Medium Group, Inc. ("RMG"),
with the merger consideration for RMG's common stock to consist of the
Preferred Stock (as defined below), and the merger consideration for RMG's
preferred stock to consist of (i) 9,000,000 shares of XM Stock (as defined
below), (ii) cash in an amount equal to the SingTel/Baron Amount (as defined
below) and (iii) the Discrepancy Note (as defined below) (collectively,
together with the other transactions, and all as, contemplated by the RMG
Merger Agreement (as defined below), the "RMG TRANSACTION");
WHEREAS, simultaneously with the consummation of the RMG Merger (as
defined below), all outstanding and accrued amounts under the Term Credit
Agreement shall be paid in full and the Commitments shall be reduced;
WHEREAS, the Borrower and the Parent Guarantor have requested, and the
Banks and the Shareholder Guarantors are willing to make, certain amendments
to and waivers of the Revolving Credit Agreement and a waiver of
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the Term Credit Agreement in connection with the RMG Transaction and the other
matters set forth below; and
WHEREAS, the consent of Baron Capital and SingTel to the amendments
and waivers contained herein is conditioned upon the termination of, and
release of all obligations under, their respective Shareholder Guaranties
related to each of the Credit Agreements (collectively, the "BARON/SINGTEL
GUARANTIES");
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions; References. Unless otherwise specifically
defined or noted herein, each term used which is defined in the Revolving
Credit Agreement has the meaning assigned to such term in the Revolving Credit
Agreement. The term "Banks" shall mean the Banks under the Revolving Credit
Agreement, the Term Credit Agreement or both, as the context shall require.
SECTION 2. Amendment of Section 1.01. (a) Each of the following
definitions in Section 1.01 of the Revolving Credit Agreement is amended to
read in its entirety as follows:
"CHANGE IN CONTROL" means (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 Xxxxxx or AT&T Wireless Services, Inc.) shall have
beneficial ownership (within the meaning of Rule 13d-3 promulgated by the
Securities and Exchange Commission under said Act) of more than 25% of the
outstanding capital stock of the Parent Guarantor, (ii) during any period of
24 consecutive calendar months, individuals who were directors of the Parent
Guarantor on the first day of such period shall cease to constitute a majority
of the board of directors of the Parent Guarantor (ignoring for this purpose
replacements of stockholder-designated directors by successor directors
designated by the same stockholder or group of stockholders), or (iii) the
Parent Guarantor shall cease to own all of the outstanding capital stock of
the Borrower.
"LOAN DOCUMENTS" means this Agreement, each Subsidiary Guaranty, the
Shareholder Guaranties, all Rate Contracts between the Borrower and any of the
Banks and all agreements, instruments and documents executed and delivered in
connection herewith and therewith, each as amended, supplemented, waived or
otherwise modified from time to time.
"SHAREHOLDER GUARANTIES" means the Xxxxxx Guaranty and the Tranche B/C
Guaranty.
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"SHAREHOLDER GUARANTORS" means Xxxxxx and the Tranche B/C Guarantor.
(b) Section 1.01 of the Revolving Credit Agreement is further amended
by adding in the appropriate alphabetical order the following definitions:
"APOLLO ENTITY" means any of the holders of RMG's preferred stock, as
set forth in RMG's Annual Report on Form 10-K for its fiscal year ended
December 31, 2000, and their respective affiliates.
"DISCREPANCY NOTE" means, collectively, one or more notes in an
aggregate initial principal amount equal to the amount, if any, by which
$115,000,000 exceeds the sum of (i) the value of 9,000,000 shares of XM Stock
(calculated based on the greater of the 10-day volume weighted average share
price for the 10 consecutive trading days ended on the day before the date of
consummation of the RMG Merger and the 10-day volume weighted average share
price for the 10 consecutive trading days ended on September 29, 2001) and
(ii) the SingTel/Baron Amount. The Discrepancy Note will mature on the third
anniversary of its issuance and bear interest at the rate of 12% per annum,
which interest shall be payable in kind quarterly through compounding or
capitalization of interest or issuing additional notes and in cash at
maturity.
"PREFERRED STOCK" means such number of shares of the Parent
Guarantor's Series A Voting Convertible Preferred Stock and Series A
Non-Voting Convertible Preferred Stock as are required to be issued pursuant
to the RMG Merger Agreement, with a liquidation preference of $20.00 per
share. The Preferred Stock will pay no dividend and will convert automatically
to common stock when the weighted average trading price of the Parent
Guarantor's common stock has equaled or exceeded $3.125 for each of ten
consecutive trading days.
"RMG MERGER" means the merger of MR Acquisition Corp., a wholly-owned
Subsidiary of the Parent Guarantor, with and into Rare Medium Group, Inc.
pursuant to the RMG Merger Agreement.
"RMG MERGER AGREEMENT" the Agreement and Plan of Merger, dated as of
May 14, 2001, among Motient Corporation, Rare Medium Group, Inc., and MR
Acquisition Corp.
"SINGTEL/BARON AMOUNT" means the sum of the Tranche B Commitments and
the Tranche C Commitments immediately after giving effect to the RMG Merger
and the substantially simultaneous permanent reduction of the Commitments.
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"TRANCHE B/C GUARANTOR" means, collectively, one or more Persons
reasonably acceptable to the Parent Guarantor, Xxxxxx and the holders of the
Tranche B Commitments, Tranche C Commitments, Tranche B Loans and Tranche C
Loans immediately after giving effect to the RMG Merger and the substantially
simultaneous permanent reduction of the Commitments.
"TRANCHE B/C GUARANTY" means the guaranty of payment of Obligations in
respect of Tranche B Loans and Tranche C Loans made by the Tranche B/C
Guarantor to the Administrative Agent for its own benefit and the benefit of
the Banks, as the same may be amended from time to time.
"XM STOCK" means Class A common stock of XM Satellite Radio Holdings,
Inc.
(c) The definitions of "BARON CAPITAL GUARANTY", "BARON CAPITAL LETTER
OF CREDIT" and "SINGTEL GUARANTY" are deleted from Section 1.01 of the
Revolving Credit Agreement.
SECTION 3. Reduction Event Agreements and Waivers; Consent. (a) The
Banks waive Sections 2.09(c)(i) and 5.16 of the Revolving Credit Agreement and
Sections 2.04(b)(i) and 5.18 of the Term Credit Agreement to the extent
necessary to permit the Parent Guarantor to sell up to 2,000,000 shares of XM
Stock as contemplated by Section 5.02(f) of the RMG Merger Agreement (which
shares are in addition to the 9,000,000 shares of XM Stock included in the RMG
Merger consideration) and to apply 50% (instead of 100%) of the Net Cash
Proceeds of any such sale to prepay loans under the Term Credit Agreement or
reduce Commitments under the Revolving Credit Agreement as required pursuant
to the terms thereof. The Banks authorize the Administrative Agent to release,
and the Administrative Agent is deemed to have released, the Liens created by
the Security and Pledge Agreement (as defined in the Term Credit Agreement) on
such shares upon any such sale.
(b) The Banks consent to the RMG Transaction, and agree that for
purposes of Section 2.09(c)(i) of the Revolving Credit Agreement, and waive
Section 2.09(c)(i) of the Revolving Credit Agreement to the extent necessary
so that, simultaneously with the consummation of the RMG Merger, there shall
automatically occur a Reduction Event, as a result of which the Commitments
shall be permanently reduced by the amount by which $34,375,000 exceeds the
sum of (x) the aggregate principal amount of loans outstanding under the Term
Credit Agreement immediately prior to consummation and (y) the aggregate
principal amount of loans under the Term Credit Agreement prepaid prior to
consummation from the net cash proceeds of the second loan from RMG to the
Parent Guarantor, if made as contemplated by the Note Issuance Waiver of the
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Term Credit Agreement dated as of April 2, 2001. The Banks agree that, upon
the completion of the Reduction Event referred to in the preceding sentence,
the agreement with respect to the application of certain Net Cash Proceeds
contained in the second sentence of Section 2 of the Note Issuance Waiver of
the Revolving Credit Agreement dated as of April 2, 2001 shall be deemed null
and void and of no further effect. The Banks further agree that the
disposition by the Parent Guarantor of any of the Investments identified as
held for sale in Section 4.13 of the Disclosure Schedule shall give rise to a
Reduction Event under the Revolving Credit Agreement only to the extent that
the aggregate Net Cash Proceeds of all such dispositions exceeds $5,000,000.
SECTION 4. Amendment of Section 5.04. Section 5.04(a) of the Revolving
Credit Agreement is amended to insert before ");" at the end thereof the words
"and, after giving effect to the RMG Merger, RMG".
SECTION 5. Amendment of Section 5.15. Section 5.15(b) of the Revolving
Credit Agreement is amended to replace the word "and" before the words "any
lien" with a comma, and to add before the semi-colon at the end thereof the
words "and any Lien satisfactory to Xxxxxx in favor of the holder of the
Discrepancy Note".
SECTION 6. Amendment of Section 5.16. Section 5.16(e) of the Revolving
Credit Agreement is amended to insert "(i)" at the beginning thereof and to
add before the semi-colon at the end thereof the clauses ", (ii) dispositions
of Investments identified as held for sale in Section 4.13 of the Disclosure
Schedule and (iii) dispositions of up to an aggregate of 1,000,000 shares of
XM Stock (in addition to any other dispositions of shares of XM Stock
previously consented to by the Banks)".
SECTION 7. Amendment of Section 5.17. Section 5.17 of the Revolving
Credit Agreement is amended to insert, after the word "arrangements", the
words "not identified in Section 5.17 of the Disclosure Schedule".
SECTION 8. Amendment of Section 5.18. Section 5.18 of the Revolving
Credit Agreement is amended to insert before the semi-colon at the end of
clause (a) the words "and in Persons identified in Section 4.13 of the
Disclosure Schedule"; to delete the word "and" at the end of clause (b); to
change "(c)" to "(d)" each place it appears; and then to insert the following
new clause (c) after clause (b):
(c) Investments in promissory notes accepted in the ordinary course
of business by Rare Medium Group, Inc. and its Subsidiaries in
satisfaction
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of receivables due from customers in an aggregate principal amount
which does not exceed $10,000,000 during the term of this Agreement;
and
SECTION 9. Amendment of Section 5.21. Section 5.21 of the Revolving
Credit Agreement is amended to add the following proviso before the period at
the end thereof:
; provided that the Parent Guarantor may issue common stock to the
holders of the Preferred Stock upon the conversion thereof
SECTION 10. Amendment of Section 5.23. Section 5.23 of the Revolving
Credit Agreement is amended to delete the word "and" at the end of clause (k);
to change "(l)" to "(n)"; and then to insert the following new clauses (l),
(m) and (n) after clause (k):
(l) Indebtedness of (i) Rare Medium, Inc. to a leading software
company under a strategic alliance agreement and an incentive funding
agreement in an aggregate principal amount outstanding at any time not
to exceed $18,600,000, and (ii) Rare Medium Group, Inc. consisting of
guarantees of its Subsidiaries' obligations under real property leases
for office space;
(m) the Discrepancy Note (so long as no cash payment is made in
respect thereof);
(l) Indebtedness under the Guaranty Issuance Agreement and any
similar agreement with the Tranche B/C Guarantor; and
SECTION 11. Amendment of Section 6.01.
(a) Section 6.01(q) of the Revolving Credit Agreement is amended to
delete the words "(other than Baron Capital, so long as, with respect to any
failure to make a payment described in clause (ii) below, an amount equal to
such payment is paid under the Baron Capital Letter of Credit)".
(b) Sections 6.01(r) and (s) of the Revolving Credit Agreement are
amended to delete the words "(other than Baron Capital)" and "or Baron Capital
Letter of Credit" wherever they appear.
(c) Section 6.01 of the Revolving Credit Agreement is amended to move
the word "and" from the end of clause (t) to the end of clause (u) and to
insert the following clause (v) after clause (u):
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(v) unless Xxxxxx (in its sole discretion) shall have agreed
otherwise, the Parent Guarantor shall have failed to sell 1,000,000
shares of XM Stock and apply all of the Net Cash Proceeds thereof in
accordance with Section 2.09(c)(i) on or before September 30, 2001;
(d) The second line of the portion of Section 6.01 of the Revolving
Credit Agreement beginning after clause (v) is amended to insert after the
word "Commitments" the words "(excluding any Commitments held by the Borrower,
the Parent Guarantor, any Shareholder Guarantor, any Affiliate of the
foregoing or any Apollo Entity)", and the fifth line of such portion is
amended to insert after the words "amount of the Loans" the words "(excluding
any Loans held by the Borrower, the Parent Guarantor, any Shareholder
Guarantor, any Affiliate of the foregoing or any Apollo Entity)".
SECTION 12. Amendment of Pricing Schedule. The Pricing Schedule is
amended to read in its entirety as set forth in the attached Pricing Schedule.
SECTION 13. Amendment of Disclosure Schedule. Sections 4.05, 4.07 and
4.13 of the Disclosure Schedule are amended, and Section 5.17 is added to the
Disclosure Schedule, in each case to read as set forth in the Disclosure
Schedule Addendum attached hereto; provided that the portions of Section 4.13
of the Disclosure Schedule relating to equity investments held for sale may be
further amended on the Agreement Effective Date (without the consent of the
Banks or the Shareholder Guarantors) to reflect dispositions of equity
investments held for sale permitted pursuant to the Revolving Credit Agreement
(in the case of dispositions by the Parent Guarantor) or the RMG Merger
Agreement (in the case of dispositions by RMG).
SECTION 14. Termination and Release of Baron/SingTel Guaranties. The
parties hereto agree that, notwithstanding any provision to the contrary in
any Loan Document (as such term is defined in each of the Credit Agreements),
including, without limitation, Section 6 of each of the Baron/SingTel
Guaranties, the Baron/SingTel Guaranties are hereby terminated in all
respects, and each of Baron Capital and SingTel is unconditionally and
irrevocably released from any and all obligations or liabilities to the Banks
or any other person or entity under or in respect of the Baron/SingTel
Guaranties, whether or not such obligation or liability heretofore exists or
arises. The Banks hereby authorize and instruct the Administrative Agent to
return each Baron Capital Letter of Credit (as defined in each of the Credit
Agreements) to Baron Capital.
SECTION 15. Representations of Borrower and Parent Guarantor. Each of
the Borrower and the Parent Guarantor represents and warrants that, after
giving effect to this Agreement, (i) the representations and warranties set
forth in
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Article 4 of the Credit Agreements shall be true on and as of the Agreement
Effective Date and (ii) no Default shall have occurred and be continuing on
such date.
SECTION 16. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 17. Counterparts. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as
if the signatures thereto and hereto were upon the same instrument.
SECTION 18. Effectiveness. This Agreement shall become effective as
of the date of consummation of the RMG Merger (the "AGREEMENT EFFECTIVE
DATE"), provided that on or before such date (i) the Documentation Agent shall
have received a counterpart hereof from each of the Borrower, the Parent
Guarantor, Xxxxxx, SingTel, Baron Capital and the Banks, signed by such party,
or a facsimile or other written confirmation (in form satisfactory to the
Documentation Agent) that such party has signed a counterpart hereof, (ii) the
RMG Merger shall have been consummated, (iii) the Administrative Agent shall
have received evidence satisfactory to it of (x) the payment in full of all
Obligations (as defined in the Term Credit Agreement), and (y) the
effectiveness of the assignment to and assumption by one or more Apollo
Entities of all rights and obligations of the Banks with respect to the
Tranche B Commitments, Tranche B Loans, Tranche C Commitments and Tranche C
Loans under the Revolving Credit Agreement in accordance with Section 10.06(c)
of the Revolving Credit Agreement, and (iv) the Administrative Agent shall
have received for the account of each Bank an amendment fee of $15,000;
provided further that Section 3(a) of this Agreement shall become effective
upon the date when the condition set forth in clause (i) of the preceding
proviso shall have been satisfied.
SECTION 19. Shareholder Guarantor Consent. The Shareholder Guarantors
consent to the foregoing, and authorize Xxxxxx to release, and Xxxxxx is
deemed to have released, (i) as of the Amendment Effective Date, the Liens
created by the Shareholder Guarantor Security Agreement on the shares of XM
Stock referred to in the first recital above (it being understood that such
shares include the shares of XM Stock already pledged to RMG) and (ii) upon
their sale, the Liens created by the Shareholder Guarantor Security Agreement
on the shares of XM Stock referred to in Section 5.16(e)(iii). In addition,
the Shareholder Guarantors consent to the release of the Liens created by the
Shareholder Guarantor Security Agreement on 2,000,000 shares of XM Stock, but
only for the purpose of the sale by the Parent Guarantor of such shares for
Net Cash Proceeds of at least $10.00 per share. It is understood that Xxxxxx'
consent to the foregoing shall be conditioned upon there
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not having been any waiver, amendment or modification (i) of the RMG Merger
Agreement in violation of Section 8.04 thereof insofar as such section relates
to Xxxxxx, or (ii) without the prior written consent of Xxxxxx, of Section
7.02(c) of the RMG Merger Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
MOTIENT HOLDINGS INC. (formerly
AMSC ACQUISITION COMPANY, INC.)
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
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Name: Xxxxxx X. Xxxxxxx, Xx.
Title: President and Chief Executive
Officer
MOTIENT CORPORATION (formerly
AMERICAN MOBILE SATELLITE
CORPORATION)
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
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Name: Xxxxxx X. Xxxxxxx, Xx.
Title: President and Chief Executive
Officer
TORONTO DOMINION (TEXAS), INC.
By: /s/ Xxxx Xxxxxx
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Name: Xxxx Xxxxxx
Title: Vice President
XXXXXX GUARANTY TRUST
COMPANY OF NEW YORK
By: /s/ Xxxxxx Xxxxxxxxx
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Name: Xxxxxx Xxxxxxxxx
Title: Vice President
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BANK OF AMERICA, N.A.
By: /s/ Xxx Xxxxxx
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Name: Xxx Xxxxxx
Title: Vice President
INTESABCI LOS ANGELES FOREIGN
BRANCH
By: /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
Title: Vice President
By: /s/ Xxxxxxx Xxxxxxxxx
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Name: Xxxxxxx Xxxxxxxxx
Title: Vice President
BANCA DI ROMA - SAN FRANCISCO
By: /s/ Xxxx Xxxxxxxx
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Name: Xxxx Xxxxxxxx
Title: 25050
By: /s/ Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
Title: 97271
THE CHASE MANHATTAN BANK
By: /s/ Xxxxxx Xxxxx Xxxxx
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Name: Xxxxxx Xxxxx Xxxxx
Title: Vice President
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CITICORP USA, INC.
By: /s/ Xxxxxx Xxxxxx
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Name: Xxxxxx Xxxxxx
Title: Vice President
DEUTSCHE BANK AG, NEW YORK
BRANCH AND/OR CAYMAN ISLANDS
BRANCH
By: /s/ Xxxxxxxx Xxxxxxxxx
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Name: Xxxxxxxx Xxxxxxxxx
Title: Director
By: /s/ Xxxxx X. Satl
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Name: Xxxxx X. Satl
Title: Associate
BANK ONE, N.A.
By: /s/ Xxxxx X. Xxxx
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Name: Xxxxx X. Xxxx
Title: Vice President
SAN PAOLO IMI S.P.A.
By: /s/ Carlo Persioo
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Name: Carlo Persioo
Title: GM
By: /s/ Xxxxxx Xxxxxxx
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Name: Xxxxxx Xxxxxxx
Title: EVP
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XXXXXX ELECTRONICS
CORPORATION
By: /s/ Xxxxxxx Xxxxxx
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Name: Xxxxxxx Xxxxxx
Title: Corp. Vice President
SINGAPORE TELECOMMUNICATIONS
LTD.
By: Tay Chek Khoon
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Name: Tay Chek Khoon
Title: Vice President (Satellite
Business and Global Mgmt)
BARON CAPITAL PARTNERS, L.P.,
a Delaware limited partnership
By: BARON CAPITAL MANAGEMENT,
INC., as general partner
By: /s/ Xxxxxx Xxxxx
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Name: Xxxxxx Xxxxx
Title: Chairman and CEO
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PRICING SCHEDULE
"EURO-DOLLAR MARGIN" and "COMMITMENT FEE PERCENTAGE" mean for any date
the rates set forth below in the column corresponding to the "PRICING LEVEL"
that applies at such date:
------------------------------------------------------------------------
Level I Level II Level III
------------------------------------------------------------------------
Euro-Dollar Margin 0.750% 1.000% 1.250%
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Commitment Fee 0.125% 0.150% 0.175%
Percentage
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For purposes of this Schedule, the following terms have the following
meanings:
"LEVEL I PRICING" applies at any date if, as of such date, Xxxxxx'
long-term debt is rated A3 or higher by Moody's and A- or higher by S&P
"LEVEL II PRICING" applies at any date if, as of such date, (i)
Xxxxxx' long-term debt is rated Baa2 or higher by Moody's and BBB or higher by
S&P and (ii) Level I Pricing does not apply.
"LEVEL III PRICING" applies at any date if neither Level I nor Level
II Pricing applies.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"PRICING LEVEL" refers to the determination of which of Level I, Level
II or Level III applies at any date.
"S&P" means Standard & Poor's Rating Service.
The credit ratings to be utilized for purposes of this Schedule are
those assigned to the senior unsecured long-term debt securities of Xxxxxx
without third-party credit enhancement, and any rating assigned to any other
debt security of Xxxxxx shall be disregarded. The ratings in effect for any
day are those in effect at the close of business on such day.
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