SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported):
December 3, 2001 (November 26, 2001)
Rare Medium Group, Inc.
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(Exact Name of Registrant as Specified in Charter)
Delaware 000-13865 23-2368845
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(State or Other (Commission File No.) (IRS Employer Identification
Jurisdiction of No.)
Incorporation)
28 West 23rd Street, New York, New York 10010
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(Address of Principal Executive Offices, including Zip Code)
(646) 638-9600
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(Registrant's telephone number, including area code)
565 Fifth Avenue, 29th Floor, New York, NY 10017
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(Former Name or Former Address, if Changed Since Last Report)
ITEM 5. Other Events.
On November 26, 2001, MSV Investors, LLC ("MSV Investors"), an
80%-owned subsidiary of Rare Medium Group, Inc. (the "Company"), purchased a
$50 million joint venture interest in Mobile Satellite Ventures, LP (the "MSV
Joint Venture"). The MSV Joint Venture provides satellite services utilizing
the satellite systems assets and capabilities formerly owned by Motient
Corporation ("Motient") and TMI Communications and Company, Limited
Partnership ("TMI"). The 20% minority interest in MSV Investors is held by
unaffiliated third parties.
MSV Investors purchased a convertible note (the "Note") issued by the
MSV Joint Venture with a principal amount of $50 million. The Note bears
interest at a rate of 10% per year, has a maturity date of November 26, 2006,
and is convertible at any time at the option of MSV Investors into equity
interests in the MSV Joint Venture representing approximately 30.8% of the
fully-diluted equity interests in the MSV Joint Venture. The Note was
purchased with cash on hand and the proceeds from the sale of short-term
investments.
The Note was issued pursuant to an agreement among the MSV Joint
Venture, MSV Investors, Motient, TMI and certain other investors (the "Other
Investors"). The approximate ownership of the MSV Joint Venture equity
interests, on a fully-diluted basis, is as follows: MSV Investors, 30.8%; TMI,
26.4%; Motient, 33.3%; and the Other Investors, 9.5%.
The joint venture arrangements provide for a subsequent closing upon
the receipt of further regulatory approvals (the "Additional Regulatory
Approvals") which, if obtained, would permit the MSV Joint Venture to develop,
build and operate a spot beam satellite system complemented by ancillary
terrestrial base stations. At the subsequent closing, the Other Investors
would provide an additional $50 million in cash to the MSV Joint Venture in
exchange for additional equity interests in the MSV Joint Venture and the Note
would be automatically converted into equity interests in the MSV Joint
Venture. If the subsequent closing occurs, the approximate ownership of the
MSV Joint Venture equity interests would be as follows: MSV Investors, 23.6%;
TMI, 20.1%; Motient, 25.5%; and the Other Investors, 30.8%.
The Company, through its ownership of MSV Investors, expects to be an
active participant in the MSV Joint Venture. MSV Investors has designated
three members of the 12-member Board of Directors of the MSV Joint Venture's
corporate general partner. Each of these three designees is currently a
director of the Company.
The business conducted and proposed to be conducted by the MSV Joint
Venture involves a high degree of risk. In addition, there is significant
uncertainty as to whether the Additional Regulatory Approvals will be received
in the form requested or at all. Accordingly, no assurances can be given that
the venture will ever be profitable or that any Additional Regulatory
Approvals will be obtained.
ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits
Number Description
99.1 Amended and Restated Investment Agreement, dated as of
October 12, 2001, by and among Motient Corporation, Mobile
Satellite Ventures LLC, TMI Communications and Company,
Limited Partnership, MSV Investors, LLC and the other
investors named therein.1
99.2 Form of Stockholders' Agreement of Mobile Satellite Ventures
GP Inc.2
99.3 Form of Limited Partnership Agreement of Mobile Satellite
Ventures LP.3
99.4 Form of Convertible Note of Mobile Satellite Ventures LP in
the principal amount of $50 million, issued to MSV
Investors, LLC.4
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereto duly authorized.
RARE MEDIUM GROUP, INC.
(Registrant)
DATE: December 3, 2001 By: /s/Robert C. Lewis
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Name: Robert C. Lewis
Title: Senior Vice President and General Counsel
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1 Incorporated by reference to Exhibit 10.55 to Motient Corporation's
Quarterly Report on Form 10-Q (Commission File No. 000-23044) for the
quarter ended September 30, 2001.
2 Incorporated by reference to Exhibit 10.56 to Motient Corporation's
Quarterly Report on Form 10-Q (Commission File No. 000-23044) for the
quarter ended September 30, 2001.
3 Incorporated by reference to Exhibit 10.57 to Motient Corporation's
Quarterly Report on Form 10-Q (Commission File No. 000-23044) for the
quarter ended September 30, 2001.
4 Incorporated by reference to Exhibit 10.58 to Motient Corporation's
Quarterly Report on Form 10-Q (Commission File No. 000-23044) for the
quarter ended September 30, 2001.