Exhibit 10.1
[METROMEDIA LETTERHEAD]
November __, 2006
[ ]
Dear [ ]:
Reference is made to the Lock Up Agreement dated October 1, 2006 (the "Lock
Up Agreement"), between Metromedia International Group, Inc. and [_______]
(each, a "Consenting Preferred Stockholder" and collectively, the "Consenting
Preferred Stockholders" and together with Metromedia International Group, Inc.,
the "Parties" ). All defined terms used but not defined herein shall have the
meaning given to them in the Lock Up Agreement.
The Parties hereby agree that the sections headed "Preferred Stock" and
"Common Stock" in Exhibit A to the Lock Up Agreement shall be amended by
deleting them in their entirety and replacing them with the following:
Preferred Stock.... On the Effective Date, each holder of preferred stock, that
was issued and outstanding on or prior to the Effective
Date, shall receive the following consideration: If the net
sales proceeds after allowed claim payments and payments of
all costs and expenses associated with the sale and the
Chapter 11 case (including, but not limited to: (i) payments
of or, in the case of disputed claims or expenses, reserves
for, all administrative expense claims, priority tax claims,
secured claims and general unsecured claims; (ii) necessary
reserves for the final liquidation of the Company and its
subsidiaries; (iii) professional fees; and (iv) taxes
arising out of the sale of assets), plus any cash on hand
and the proceeds of the liquidation of any other of the
Company's assets (the "Net Distributable Consideration") is
$420 million or less, $68 in cash for each share of
preferred stock plus payment of any Additional Amounts
(defined below) due and owing. If the Net Distributable
Consideration is above $420 million but less than $465
million, $68 in cash for each share of preferred stock, plus
payment of any Additional Amounts due and owing, plus their
pro rata share in cash of 50% of the Net Distributable
Consideration above $420 million. If the Net Distributable
Consideration is $465 million or above, $68 in cash for each
share of preferred stock, plus payment of any Additional
Amounts due and owing, plus their pro rata share in cash of
50% of the Net Distributable Consideration between $420
million and $465 million plus their pro rata share in cash
of 20% of any remaining Net Distributable Consideration.
If, prior to April 1, 2007, holders of Preferred Stock have
not received $68.00 per share in cash payable to them in
accordance with the Term Sheet, the holders of Preferred
Stock shall, from and after such date, be entitled to
receive additional amounts per share equal to an annual rate
of five percent (5 %) on the difference between (a) $68.00
and (b) any amounts per share received in cash pursuant to
the Term Sheet prior to April 1, 2007. As of July 1, 2007,
such annual rate shall increase and the holders of Preferred
Stock shall, be entitled to receive additional amounts per
share equal to an annual rate of seven and a quarter percent
(7.25 %) on the difference, if any, between (a) $68.00 and
(b) any amounts per share received in cash pursuant to the
Term Sheet prior to July 1, 2007. The amounts referred to in
this paragraph shall be deemed the "Additional Amounts." For
the avoidance of doubt, payment of any Additional Amounts to
the holders of Preferred Stock shall be paid out of the
initial $420 million of Net Distributable Consideration.
Common Stock....... On the Effective Date, each holder of existing common stock
shall receive the following consideration: If the Net
Distributable Consideration is $420 million or less, their
pro rata share of the remaining Net Distributable
Consideration after payment of $68 in cash for each share of
existing preferred stock plus any Additional Amounts due and
owing per share of Preferred Stock. If the Net Distributable
Consideration is above $420 million but less than $465
million, in addition to receiving the amounts described
above, and after payment of any Additional Amounts due and
owing to the holders of Preferred Stock, their pro rata
share of 50% of the Net Distributable Consideration above
$420 million. If the Net Distributable Consideration is $465
million or above, in addition to receiving the amounts
described above, and after payment of any Additional Amounts
due and owing to the holders of Preferred Stock, their pro
rata share of 80% of any remaining Net Distributable
Consideration.
As of the date hereof, the Company hereby represents and warrants to each
of the Consenting Preferred Stockholders and each of the Consenting Preferred
Stockholders hereby represents and warrants to the Company as to itself only
that: (i) it has all requisite corporate power and authority to enter into this
agreement and to carry out the transactions contemplated by, and perform its
obligations under, this agreement; (ii) the execution and delivery of this
agreement and the performance of its obligations hereunder have been duly
authorized by all necessary corporate action on its part; (iii) the execution,
delivery and performance by it of this agreement does not and shall not (x)
violate any provision of law, rule, regulation, injunction or court order
applicable to it or any of its subsidiaries, if applicable, or its certificate
of incorporation or bylaws or other organizational documents or those of any of
its subsidiaries, or (y) conflict with, result in a breach of or constitute
(with due notice or lapse of time or both) a default under any material
contractual obligation to which it or any of its subsidiaries is a party; (iv)
the execution, delivery and performance by it of this agreement does not and
shall not require any registration or filing with, other than potentially filing
a form 8K by the Company or potentially filing a Schedule 13D by the Consenting
Preferred Stockholders, as applicable, consent or approval of, or notice to, or
other action to, with or by, any federal, state or other governmental authority
or regulatory body, other than the approval of the Bankruptcy Court; and (v)
subject to the provisions of sections 1125 and 1126 of the Bankruptcy Code, this
agreement is the legally valid and binding obligation of the Company or the
applicable Consenting Preferred Stockholders, as appropriate, enforceable
against it in accordance with its terms, except to the extent that enforcement
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other laws relating to the rights of a creditor against a debtor, or by
equitable principles relating to enforceability.
The Company hereby (i) agrees to file a Form 8-K with the Securities and
Exchange Commission disclosing the material terms of this amendment to the Lock
Up Agreement promptly after the Effective Date (as defined below) and (ii)
agrees and acknowledges that the Consenting Preferred Stockholders may disclose
such terms in, and/or attach this amendment to the Lock Up Agreement to, a 13D
filing to be made promptly after the Effective Date.
This amendment to the Lock Up Agreement shall not become effective unless
and until (i) the Company has entered into substantially similar letter
agreements with entities or persons holding in the aggregate (together with the
Consenting Preferred Stockholders) at least sixty-seven percent of the issued
and outstanding shares of Preferred Stock and (ii) the Company has informed the
Consenting Preferred Stockholders in writing that the condition set forth in
clause (i) above has been satisfied (the date the conditions set forth in
clauses (i) and (ii) above are satisfied being referred herein as the "Effective
Date"). If the Effective Date has not occurred on or before November 21, 2006,
each Consenting Preferred Stockholder may withdraw its signature page hereto and
its agreement to be bound hereunder, and the Parties agree that this amendment
to the Lock Up Agreement shall be deemed to have never come into effect.
Very truly yours,
Metromedia International Group, Inc.
By:
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Name:
Title:
Accepted and Agreed to,
this _____ day of November, 2006
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