Exhibit 10.1
AGREEMENT
AGREEMENT (the "Agreement"), dated as of November 26, 2001, among Arch
Wireless, Inc. and its affiliates (collectively, "Arch"), the undersigned
lenders under the Third Amended and Restated Credit Agreement, dated as of March
23, 2000, as amended (the "Arch Credit Agreement") and counterparties to
interest rate hedging agreements (collectively, the "Rate Swap Agreements")
entered into or assumed among lenders under the Arch Credit Agreement and Arch
Wireless Holdings, Inc. (together with the lenders under the Arch Credit
Agreement, each a "Lender"), and the undersigned holders (each a "USAM
Noteholder" and collectively with each Lender, each a "Holder") of the notes
(the "USAM Notes") issued under the Arch 9 1/2% Indenture and the Arch 14%
Indenture (collectively, the "USAM Indentures"), in connection with a proposed
financial restructuring of Arch which is proposed to be accomplished by means of
a pre-negotiated chapter 11 plan of reorganization pursuant to chapter 11 of
title 11 of the United States Code (the "Bankruptcy Code").
WHEREAS, on November 9, 2001, three creditors filed an involuntary
petition under the Bankruptcy Code against Arch Wireless Communications, Inc.
("AWCI") in the Bankruptcy Court for the District of Massachusetts (the
"Bankruptcy Court");
WHEREAS, AWCI intends to consent to the petition and each of the other
Arch entities intends to commence a voluntary petition for relief under the
Bankruptcy Code (the "Chapter 11 Cases"). Upon the commencement of the Chapter
11 Cases, Arch intends to propose a plan of reorganization that is in all
material respects consistent with the terms set forth on Exhibit "A" hereto (the
"Plan");
NOW, THEREFORE, in consideration of the foregoing, the parties hereto
agree as follows:
SECTION 1. VOTE FOR THE PLAN. Subject to the terms and conditions
hereof and provided that the documents necessary to effectuate the terms of the
Plan are satisfactory in form and substance to Toronto Dominion (Texas), Inc.,
as Administrative Agent under the Arch Credit Agreement, each of the Holders
agrees and covenants that, prior to the termination of this Agreement pursuant
to Section 4, subject to receipt by such Holder of a disclosure statement and
other solicitation materials in respect of the Plan (collectively, the
"Disclosure Statement") that contains information not materially different from
that previously provided by Arch to the Holder and that is approved by the
Bankruptcy Court as containing "adequate information" under section 1125 of the
Bankruptcy Code:
(a) in connection with any solicitation of ballots by Arch or its
affiliates with respect to the Plan, it will vote its Holdings (as defined
below) to accept the Plan by delivering its duly executed and completed ballot
accepting the Plan and will not change or withdraw (or cause to be changed or
withdrawn) such votes(s); and
(b) will not (i) object to, delay, impede or take any other action to
interfere, directly or indirectly, in any material respect with acceptance or
implementation of the Plan, or (ii) encourage any person or entity to do any of
the foregoing, or (iii) propose, file, support, encourage, vote for or engage in
discussions with any person or entity concerning any restructuring, workout or
plan of reorganization for Arch and its affiliates other than the Plan.
Notwithstanding the foregoing, the Holders may support, vote for or
engage in discussions with any person or entity concerning a restructuring,
workout or plan of reorganization for Arch and its affiliates that involves (x)
the purchase of substantially all of the assets of Arch, (y) a merger of an
entity with Arch or (z) a significant equity or cash investment in Arch.
The foregoing is not intended to, and shall not, limit or restrict any
Holder's right to exercise any rights or remedies such Holder may have under the
Stipulation and Order Authorizing and Restricting Use of Cash Collateral and
Granting Adequate Protection Pursuant To Sections 361, 363, 364, 506, and 552 of
the Bankruptcy Code (the "Cash Collateral Stipulation"), that certain Secured
Super-Priority Debtor in Possession Revolving Credit and Security Agreement (the
"DIP Financing Agreement"), entered into on or before the commencement of the
Chapter 11 Cases (as the same may be amended, supplemented or otherwise modified
from time to time), applicable law or otherwise, or any interim or final order
of the Bankruptcy Court authorizing the DIP Financing Agreement or the Cash
Collateral Stipulation.
SECTION 2. HOLDER OF DEBT INSTRUMENTS. Each of the Holders represents
that it is (i) the sole beneficial owner of the principal amount of indebtedness
under the Arch Credit Agreement, the Rate Swap Agreements or USAM Indentures
entered below next to its signature as of the date hereof and/or the investment
advisor or manager for the beneficial holder of such amounts having the power to
vote and dispose of such holdings on behalf of such beneficial owners, and (ii)
entitled (for its own account or for the account of other persons claiming
through it) to all of the rights and economic benefits of such holdings (the
"Holdings").
Each Holder hereby agrees that, from the date hereof and until the
earlier of (i) June 30, 2002, (ii) confirmation of the Plan, or (iii) the
occurrence of a Termination Event (as defined below), it shall not sell, pledge,
assign, hypothecate or otherwise transfer any Holdings except to a purchaser or
other entity who agrees prior to such transfer to be bound by all of the terms
of this Agreement with respect to the relevant Holdings being transferred to
such purchaser. This Agreement shall in no way be construed to preclude the
Holders from acquiring additional holdings, however, any such additional
holdings shall automatically be deemed Holdings and be subject to all of the
terms of this Agreement.
Each Holder represents and warrants that: (i) it is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization with all requisite power and authority to carry on the business in
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which it is engaged, to own the properties it owns, to execute this Agreement
and to consummate the transactions contemplated hereby; and (ii) it has full
power and authority to execute and deliver and to perform its obligations under
this Agreement, and the execution, delivery and performance hereof, and the
instruments and documents required to be executed by it in connection herewith
(a) have been duly and validly authorized by it and (b) are not in contravention
of its organizational documents or any material agreement specifically
applicable to it.
SECTION 3. PURSUE PLAN PROCESS. Arch hereby agrees that it shall
diligently seek to obtain approval, pursuant to section 1125 of the Bankruptcy
Code, of a disclosure statement relating to the Plan and confirmation and
consummation pursuant to section 1129 of the Bankruptcy Code of the Plan.
SECTION 4. TERMINATION OF OBLIGATIONS. The obligations of each Holder
hereunder shall immediately terminate and be of no further force and effect with
respect to each Holder, upon the occurrence of the following (each a
"Termination Event"):
(a) Arch shall not have filed the Plan by January 15, 2002;
(b) An order approving the a Disclosure Statement pursuant to Section
1125 of the Bankruptcy Code relating to the Plan shall not have been entered on
or before March 15, 2002;
(c) An order confirming the Plan shall not have been entered on or
before May 15, 2002;
(d) The terms of the Plan not otherwise set forth on Exhibit A shall
be in a form and substance not reasonably acceptable to the Administrative
Agent;
(e) Arch shall file a motion seeking approval of a retention,
severance and/or bonus plan that is not in all material respects consistent with
the terms set forth on Exhibit "B" hereto (the "Management Retention, Severance
& Bonus Term Sheet");
(f) There shall occur an event which has a material adverse effect on
the business, assets, prospects or operations of Arch, but excluding effects
that customarily occur as a result of events leading up to and following the
commencement of a case under chapter 11 of the Bankruptcy Code;
(g) The Bankruptcy Court shall not enter an order within twenty days
following the commencement of the Chapter 11 Cases authorizing the assumption of
the contract with Motorola Inc. or Motorola Inc. ceases to perform under its
agreements with Arch;
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(h) Arch shall breach any of its obligations under this Agreement or
shall determine to pursue, or announce its intention to pursue, a chapter 11
plan on terms and conditions that are not consistent with the terms and
conditions of the Plan;
(i) The Bankruptcy Court shall have entered an order, the practical
effect of which is to render it highly unlikely that the Plan can be
consummated;
(j) An entity shall make an offer to purchase substantially all of the
assets of Arch, propose a merger with Arch or propose to make a significant cash
or equity investment in Arch on terms satisfactory to the Administrative Agent;
(k) The chapter 11 case of any of the Arch entities is converted to a
case under chapter 7 of the Bankruptcy Code; and
(l) The earlier of (a) termination of the Cash Collateral Stipulation
or the DIP Financing Agreement and (b) 20 days following the occurrence of an
Event of Default (as defined in the applicable document) under the Cash
Collateral Stipulation or the DIP Financing Agreement (other than pursuant to
Section 9.1(g), (l), (p), (s), and (t)). In determining whether an Event of
Default has occurred under Section 9.1(c) of the DIP Financing Agreement for
purposes of this Agreement only, Section 9.1(c) shall include only the failure
to perform or observe any term, covenant or agreement contained in Sections 2.7,
2.10, 7.9, 7.11, 7.12, 7.13, 8.1 through and including 8.10, 8.17, 8.18, 8.19
and Article V.
At any time after a Termination Event has occurred, a majority of
Holders (in principal dollar amount) may waive the occurrence of the Termination
Event. No such waiver shall affect any subsequent Termination Event or impair
any right consequent thereon.
The Holders shall have no liability to Arch or each other in respect
of any termination of this Agreement in accordance with the terms hereof.
SECTION 5. EFFECTIVE DATE. This Agreement shall become effective upon
the execution and delivery of this Agreement by (a) Arch, (b) holders of at
least a majority in principal amount of the outstanding obligations under the
Arch Credit Agreement and the Rate Swap Agreements, and (c) holders of at least
a majority in principal amount of the USAM Notes.
SECTION 6. SUCCESSOR AND ASSIGNS. This Agreement is intended to bind
and inure to the benefit of each of the Holders and Arch and their respective
successors, assigns, heirs, executors, administrators and representatives. The
agreements, representations and obligations of the Holders under this Agreement
are several only and not joint in any respects.
SECTION 7. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which shall
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constitute one and the same Agreement. Delivery of an executed signature page of
this Agreement by telecopier shall be effective as delivery of a manually
executed signature page of this Agreement.
SECTION 8. SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
SECTION 9. NOTICES. All demands, notices, requests, consents, and
communications hereunder shall be in writing and shall be deemed to have been
duly given if personally delivered by courier service, messenger, or telecopy
at, or if duly deposited in the mails, by certified or registered mail, postage
prepaid-return receipt requested, to the following addresses, or such other
addresses as may be furnished hereafter by notice in writing, to the following
Parties:
(a) if to Arch, to:
0000 Xxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxx, Esq.
Senior Vice President, General Counsel & Secretary
Telecopy: (000) 000-0000
with a copy to:
Xxxx and Xxxx, LLP
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxx Xxxxx, Esq.
Xxxx Xxxxxxxx, Esq.
Telecopy: (000) 000-0000
(b) if to any Holder, to:
such Holder at
the address shown for such
holder on the applicable
signature page hereto,
to the attention of the person who
has signed this Agreement on
behalf of such holder
with a copy to:
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Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Xxxx X. Xxxx, Esq.
Telecopy: (000) 000-0000
Cadwalader, Xxxxxxxxxx & Xxxx
000 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Telecopy: (000) 000-0000
SECTION 10. AMENDMENTS. This Agreement may not be modified, amended or
supplement except in writing signed by Arch and each of the Holders.
SECTION 11. HEADINGS. The section headings of this Agreement are for
convenience of reference only and shall not, for any purpose, be deemed a part
of this Agreement.
SECTION 12. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
law of the State of New York. Following the commencement of the Chapter 11
Cases, each of the parties hereby irrevocably and unconditionally submits to the
jurisdiction of the Bankruptcy Court for purposes of any action, suit or
proceeding arising out of or relating to this Agreement. Each party irrevocably
waives any objection it may have to the venue of any action, suit or proceeding
brought in such court or to the convenience of the forum.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date set forth above.
ARCH WIRELESS, INC.
0000 Xxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000
Telecopy: (000) 000-0000
By:________________________________
Name:
Title:
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PAGING NETWORK CANADIAN HOLDINGS, INC.
PAGENET SMR SUB, INC.
ARCH WIRELESS COMMUNICATIONS, INC.
ARCH WIRELESS HOLDINGS, INC.
ARCHTEL, INC.
ARCH CONNECTICUT VALLEY, INC.
ARCH COMMUNICATIONS ENTERPRISES LLC
XXXXXX INVESTMENTS, INC.
PAGING NETWORK, INC.
MOBILEMEDIA COMMUNICATIONS, INC.
MOBILE COMMUNICATIONS CORPORATION OF AMERICA
MOBILEMEDIA LICENSE CO., LLC.
PAGENET, INC.
PAGING NETWORK OF COLORADO, INC.
PAGING NETWORK OF NORTHERN CALIFORNIA, INC.
PAGING NETWORK OF MICHIGAN, INC.
PAGING NETWORK FINANCE CORP.
PAGING NETWORK INTERNATIONAL, INC.
PAGING NETWORK OF SAN FRANCISCO, INC.
PAGING NETWORK OF AMERICA, INC.
By:____________________________
Name:
Title:
0
XXXXXXX XXXXXXXX (XXXXX), INC.
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telecopy: (000) 000-0000
By:________________________________
Name:
Title:
Name of Holder: _____________________________________
Address: ___________________________________________
___________________________________________
Amount of USAM Notes Beneficially Owned: ______________
Amount of Arch Credit Agreement Beneficially Owned: ______________
Amount of Rate Swap Agreements Beneficially Owned: ______________
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EXHIBIT A
THIS OUTLINE IS NOT AN OFFER WITH RESPECT TO ANY SECURITIES OR SOLICITATION OF
ACCEPTANCES OF A CHAPTER 11 PLAN. SUCH OFFER OR SOLICITATION ONLY WILL BE MADE
IN COMPLIANCE WITH ALL APPLICABLE SECURITIES LAWS AND/OR PROVISIONS OF THE
BANKRUPTCY CODE.
ARCH WIRELESS, INC.
CHAPTER 11 PLAN OF REORGANIZATION
TERM SHEET
This Term Sheet describes the principal terms of a Chapter 11 Plan of
Reorganization (the "Plan") for Arch Wireless, Inc. ("AWI") and its subsidiaries
(collectively, the "Company"). The transactions described herein are subject in
all respects to, among other things, definitive documentation, including the
Plan, appropriate disclosure material, note indentures and all documents
necessary to effectuate the Plan.
EXIT FINANCING A new Revolving Credit Facility, in an
amount to be determined, but not to
exceed $35 million, will be provided to
Arch Wireless Holdings, Inc. ("AWHI")
and its subsidiaries (collectively, the
"AWHI Group") on terms reasonably
acceptable to a majority of Secured
Creditors (as defined below) (in
principal amount) with proceeds
available to fund operating expenses,
working capital requirements, capital
expenditures and debt service
obligations. The Revolving Credit
Facility will be secured by a first lien
on all of the Company's assets and
contain customary terms and conditions.
The Revolving Credit Facility will have
a maturity of no greater than five
years.
SENIOR SECURED BANK Holders of (i) AWHI's existing bank debt
CLAIMS AND USAM NOTES CLAIMS under the Third Amended and Restated
Credit Agreement, dated as of March 23,
2000, as amended (the "Arch Credit
Agreement") and counterparties to
interest rate hedging agreements
(collectively, the "Rate Swap
Agreements") entered into or assumed
among lenders under the Arch Credit
Agreement and Arch Wireless Holdings,
Inc. (collectively, the "Senior Secured
Bank Debt") and (ii) Arch Wireless
Communications, Inc.'s 9-1/2% Senior
Notes and 14% Senior Notes (the "USAM
Notes") (together, with the Senior
Secured Bank Debt, the "Secured
Creditors") will receive on the
Effective Date of the Plan, in complete
satisfaction of the secured portion of
their claims (the "Secured Creditor
Distribution"): (i) the Initial Cash
Distribution Amount, as defined below;
(ii) New Senior Secured Notes, as
described in Attachment A, in the
principal amount of $200 million; (iii)
secured Subordinated Pay-In-Kind Notes,
as described in Attachment B, in the
principal amount of $100 million; and
(iv) 70% of the New Common Stock, as
defined below, of AWI to be issued as of
the Effective Date.
91.1% of the Secured Creditor
Distribution will be distributed pro
rata to the holders of the Senior
Secured Bank Debt and 8.9% of the
Secured Creditor Distribution will be
distributed pro rata to the holders of
the USAM Notes.
For purposes of this Term Sheet, the
term Initial Cash Distribution Amount
means the amount of the Company's cash
balances as of the Effective Date of the
Plan, less the sum of (i) an amount
equal to $45 million less the amount
available to be borrowed under the
Revolving Credit Facility as of the
Effective Date, (ii) the remaining
amount of expenses of administration
reasonably expected to be payable for
services provided and fees earned
through the Effective Date, and (iii)
the remaining costs for closing the
transactions contemplated by the Plan,
subject to the reasonable approval of
Toronto Dominion (Texas), Inc. as
Administrative Agent under the Arch
Credit Agreement.
DETERMINATION OF SENIOR SECURED BANK The aggregate amount of the Senior
CLAIMS AND USAM NOTES CLAIMS Secured Bank Claims and USAM Notes
Claims shall be equal to all
indebtedness and other monetary
obligations of the Company under or in
respect of the Arch Credit Agreement,
Rate Swap Agreements and the USAM Notes,
whether for principal, interest
(including interest at the applicable
default rate after the Event of Default
under the applicable debt instrument
through and including the commencement
date of these chapter 11 cases), fees,
expenses, indemnification or otherwise,
less any cash received during the
pendency of these chapter 11 cases.
OTHER SECURED CLAIMS OF THE Other Secured Claims of the Company
COMPANY shall either be unimpaired within the
meaning of 11 X.X.X.xx. 1124, receive
treatment that satisfies the
requirements of 11 U.S.C. 1129(b) or
receive such other treatment as to which
the Company and the holder of the claim
agrees.
ADMINISTRATIVE EXPENSE CLAIMS All obligations under the Debtor in
Possession Financing Agreement to be
paid in full in cash on the Effective
Date. All other administrative expense
claims to be paid in full in cash on the
Effective Date or when due, whichever is
later.
PRIORITY TAX CLAIMS To be paid pursuant to section
1129(a)(9)(C) of the Bankruptcy Code.
PRIORITY CLAIMS To be paid in full in cash on the
Effective Date or when allowed,
whichever is later.
UNSECURED CLAIMS OF Unsecured claims of the AWHI Group shall
ARCH WIRELESS HOLDINGS INC. AND include all prepetition trade claims,
ITS SUBSIDIARIES rejection claims, the deficiency claims
of the Secured Creditors and all other
prepetition claims of the AWHI Group
that are not entitled to priority or
secured and which are not the subject of
a court approved critical vendor motion
or party to an assumed executory
contract or unexpired lease (the "AWHI
Group Unsecured Claims"). Holders of
AWHI Group Unsecured Claims shall
receive in full satisfaction of their
claims a pro rata share of shares of New
Common Stock that will constitute 24.4%
of the shares of New Common Stock to be
issued on the Effective Date. The AWHI
Group Unsecured Claims other than the
deficiency claims of the Secured
Creditors shall not be allowed in an
amount that exceeds $120 million.
UNSECURED CLAIMS OF ARCH WIRELESS Unsecured claims of AWCI shall include
COMMUNICATIONS, INC. ("AWCI") all prepetition trade claims, rejection
claims, the deficiency claims of the
Secured Creditors and all other
prepetition claims against AWCI which
are not entitled to priority or secured
and which are not the subject of a court
approved critical vendor motion or an
assumed executory contract or unexpired
lease ("AWCI Unsecured Claims"). Holders
of AWCI Unsecured Claims shall receive
in full satisfaction of their claims a
pro rata share of shares of New Common
Stock that will constitute .6% of the
shares of New Common Stock to be issued
on the Effective Date.
UNSECURED CLAIMS OF ARCH WIRELESS, Unsecured claims of the AWI Group shall
INC.,PAGING NETWORK CANADIAN HOLDINGS, include all prepetition trade claims,
INC. AND PAGENET SMR SUB, INC. rejection claims, deficiency claims of
(COLLECTIVELY, THE "AWI GROUP") the Secured Creditors and all other
prepetition claims against the AWI Group
which are not entitled to priority or
secured and which are not the subject of
a court approved critical vendor motion
or an assumed executory contract or
unexpired lease (the "AWI Group
Unsecured Claims"). The AWI Group
Unsecured Claims will not receive any
payment or distribution of any kind.
INTERCOMPANY CLAIMS To be determined on a basis mutually
acceptable to the Administrative Agent
and the Company.
PREFERRED STOCK OF AWI All preferred stock of AWI and rights to
acquire preferred stock of AWI existing
immediately prior to the Effective Date
will be cancelled and extinguished as of
the Effective Date.
COMMON STOCK OF AWI, OPTIONS, WARRANTS All common stock of AWI, options,
AND OTHER RIGHTS TO EQUITY INTERESTS warrants and other rights to acquire any
equity security of AWI existing
immediately prior to the Effective Date
and all rights related thereto will be
cancelled and extinguished or rejected,
as applicable, as of the Effective Date.
SUBSIDIARY STOCK All shares of a debtor which are owned
by another debtor will remain
outstanding, except to the extent that
the Plan provides for one or more
mergers of one or more debtors with
another debtor.
CHARTER, BY-LAWS To be determined on a basis mutually
acceptable to the Administrative Agent
and the Company.
POST-EFFECTIVE DATE BOARD OF DIRECTORS To be elected by the holders of the New
Common Stock.
RELEASES Mutual customary and standard
exculpation and releases for officers,
directors, employees, professionals and
representatives of the Company and
Secured Creditors, as permitted under
applicable law.
Management Retention, Severance & Bonus
A pool of shares of New Common Stock
that will constitute 5% of the shares of
New Common Stock to be issued on the
Effective Date will be available to be
granted to the post Effective Date
management of the Company (the
"Management Retention Shares"). The
Management Retention Shares will vest
one third on each of the first, second
and third anniversaries of the Effective
Date. All retention, severance and bonus
plans which are approved by the
Bankruptcy Court will continue in effect
after the Effective Date. All retention,
severance and bonus plans shall be on
the terms and conditions set forth on
Exhibit "B" hereto (the "Management
Retention, Severance & Bonus Term
Sheet").
NEW COMMON STOCK Reorganized AWI's single class of common
stock, $.001 par value, which as of the
Effective Date shall constitute the only
outstanding equity securities of
Reorganized AWI. AWI will use reasonable
efforts to have the New Common Stock
listed on a nationally recognized market
or exchange. Secured Creditors who
receive 10% or more of the New Common
Stock will be granted two demand and
unlimited piggyback registration rights.
POST-EFFECTIVE DATE CORPORATE STRUCTURE To be determined on a basis mutually
(INCLUDING TAX CONSEQUENCES) acceptable to the Administrative Agent
and Arch.
