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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)
RARE MEDIUM GROUP, INC.
(Name of Issuer)
Common Stock, Par Value $0.01 Per Share
(Title of Class of Securities)
-----------------------
449238203
(Cusip Number)
DANIEL G. KELLY, JR.
DAVIS POLK & WARDWELL
1600 EL CAMINO REAL
MENLO PARK, CALIFORNIA 94025
(650) 752-2000
(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications)
August 16, 2000
---------------
(Date of Event which Requires Filing of this Statement)
-----------------------
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this statement because of Rule 13d-1(b)(3) or (4), check the following: [ ]
Check the following box if a fee is being paid with this statement: [ ]
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Page 1 of 14
<PAGE>
SCHEDULE 13D
CUSIP No. 449238203 Page 2 of 14 Pages
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Apollo Investment Fund IV, L.P.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY OWNED BY EACH 29,432,630
REPORTING PERSON WITH
---------------------------------------
8 SHARED VOTING POWER
38,431,808
---------------------------------------
9 SOLE DISPOSITIVE POWER
29,432,630
---------------------------------------
10 SHARED DISPOSITIVE POWER
38,431,808
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
38,431,808
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
43%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
--------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
SEC 1746 (9-88) 2 of 7
Page 2 of 14
<PAGE>
SCHEDULE 13D
CUSIP No. 449238203 Page 3 of 14 Pages
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Apollo Overseas Partners IV, L.P.
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
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NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY OWNED BY EACH 1,578,478
REPORTING PERSON WITH
--------------------------------------
8 SHARED VOTING POWER
38,431,808
--------------------------------------
9 SOLE DISPOSITIVE POWER
1,578,478
--------------------------------------
10 SHARED DISPOSITIVE POWER
38,431,808
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
38,431,808
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
43%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
--------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
SEC 1746 (9-88) 2 of 7
Page 3 of 14
<PAGE>
SCHEDULE 13D
CUSIP No. 449238203 Page 4 of 14 Pages
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
AIF IV/RRRR LLC
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY OWNED BY EACH 7,420,701
REPORTING PERSON WITH
--------------------------------------
8 SHARED VOTING POWER
38,431,808
--------------------------------------
9 SOLE DISPOSITIVE POWER
7,420,701
--------------------------------------
10 SHARED DISPOSITIVE POWER
38,431,808
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
38,431,808
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
43%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
--------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
SEC 1746 (9-88) 2 of 7
Page 4 of 14
<PAGE>
SCHEDULE 13D
CUSIP No. 449238203 Page 5 of 14 Pages
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Apollo Advisors IV, L.P.
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY OWNED BY EACH -0-
REPORTING PERSON WITH
--------------------------------------
8 SHARED VOTING POWER
38,431,808
--------------------------------------
9 SOLE DISPOSITIVE POWER
-0-
--------------------------------------
10 SHARED DISPOSITIVE POWER
38,431,808
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
38,431,808
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
43%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
--------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
SEC 1746 (9-88) 2 of 7
Page 5 of 14
<PAGE>
SCHEDULE 13D
CUSIP No. 449238203 Page 6 of 14 Pages
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Apollo Management IV, L.P.
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY OWNED BY EACH -0-
REPORTING PERSON WITH
-------------------------------------
8 SHARED VOTING POWER
38,431,808
--------------------------------------
9 SOLE DISPOSITIVE POWER
-0-
--------------------------------------
10 SHARED DISPOSITIVE POWER
38,431,808
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
38,431,808
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
43%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
--------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
SEC 1746 (9-88) 2 of 7
Page 6 of 14
<PAGE>
This Amendment No. 2 amends and supplements the following Items of the
Statement on Schedule 13D, as amended (the "Schedule 13D"), of Apollo
Investment Fund IV, L.P., Apollo Overseas Partners IV, L.P., AIF IV/RRRR LLC,
Apollo Advisors IV, L.P. and Apollo Management IV, L.P. (collectively, the
"Reporting Persons") originally filed on June 14, 1999, as amended on August
19, 1999, with the Securities and Exchange Commission with respect to the
shares of Common Stock, par value $.01 per share of Rare Medium Group, Inc.
(the "Issuer"). Unless otherwise indicated, all capitalized terms used but not
defined herein have the meanings set forth in the Schedule 13D.
Responses to each item below are incorporated by reference into each other
item, as applicable.
ITEM 4. PURPOSE OF TRANSACTIONS
On June 4, 1999, AIF IV, Overseas IV and AIF LLC (collectively, the
"Purchasers") acquired the Securities pursuant to the Amended and Restated
Securities Purchase Agreement with the Issuer (the "Agreement") for an
aggregate purchase price of $87,000,000. The original Securities consisted of
126,000 shares of Series A Preferred Stock, 126,000 Series 1-A Warrants and
1,916,994 Series 2-A Warrants, in addition to the Series B Securities. The
issuer sought and obtained shareholder approval for the conversion (the "Series
B-to-A Conversion") of the Series B Securities into an equal amount of Series A
Securities as well as the creation of Non-Voting Stock, on August 19, 1999.
Pursuant to the Series B-to-A Conversion, the Series B Preferred Stock, the
Series 1-B Warrants and the Series 2-B Warrants were automatically converted
into 744,000 shares of Series A Preferred Stock, 744,000 Series 1-A Warrants
and 10,345,548 Series 2-A Warrants, respectively.
The Series A Preferred Stock is entitled to vote with the holders of
Common Stock on all matters. Following the Series B-to-A Conversion the number
of votes to which the Series A Preferred Stock is entitled is .875 per
underlying share of Common Stock (provided that the aggregate vote shall not
exceed a total of 9,750,000 votes). In addition, the holders of the Series A
Preferred Stock have the right to elect two members of the Issuer's Board of
Directors.
In addition to the foregoing, the Purchasers (so long as they own at least
100,000 shares of Series A Preferred Stock) will have approval rights over
certain matters, including matters described in Items 4 (a) through (f) of
Schedule 13D.
The following is a description of certain additional terms of the Series A
Securities:
Series A Preferred Stock.
Liquidation Preference. The Series A Preferred Stock has a liquidation
preference of $100 per share (the "Liquidation Preference") plus all accrued
and unpaid dividends. No distributions may be made to holders of the Common
Stock until the holders of the Series A Preferred Stock have received the
Liquidation Preference.
Dividends. Holders of Series A Preferred Stock are initially entitled to
receive quarterly dividends at the rate of 7.50% of the Liquidation Preference
per share from the original issuance date of such shares to June 30, 2002 and
thereafter at the rate of 4.65%. From the date of the original issuance of the
Series A Preferred Stock until June 30, 2002, the Issuer shall pay dividends
through the issuance of additional shares of Series A Preferred Stock
("Additional Securities"). From June 30, 2002 until June 30, 2004, the Issuer
shall pay dividends through the issuance of Additional Securities, provided
that at the option of either the holders of a majority of the then outstanding
shares of Series A Preferred Stock or the Issuer, the Issuer shall pay the
dividends in whole in cash. After June 30, 2004, all dividends on the Series A
Preferred Stock shall be paid in cash.
Conversion Price. Holders of Series A Preferred Stock may convert their
shares at any time into a number of shares of Common Stock determined by
dividing (x) $100 plus accrued and unpaid dividends, by (y) $7.00 per share,
subject to adjustment in accordance with certain antidilution provisions (the
"Conversion Price").
Optional Redemption. The Series A Preferred Stock is not redeemable for
five years; thereafter, the Issuer may redeem all of the Series A Preferred
Stock at any time at 103% of the Liquidation Preference plus accrued and unpaid
dividends.
Page 7 of 14
<PAGE>
Mandatory Redemption. Holders of Series A Preferred Stock have the right
to require the Issuer to redeem the Preferred Stock on the earliest of a change
of control, the date upon which the Common Stock is not listed for trading on a
United States national securities exchange or the National Market System or
June 30, 2012 at a price equal to the Liquidation Preference plus all accrued
and unpaid dividends thereon.
Series 1-A Warrants
Each share of Series A Preferred Stock (including Additional Shares) was,
and any Additional Shares issued in payment of dividends in the future will be,
issued with a Series 1-A Warrant entitling the holder to acquire 13.5 shares of
Common Stock at a variable exercise price between $4.20 and $0.01 per share,
subject to adjustment. The Series 1-A Warrants have no voting rights.
Series 2-A Warrants
Each Series 2-A Warrant entitled the holder to acquire one share of Common
Stock initially for $7.00, subject to adjustment. The strike price would have
been reduced to $0.01 if the issuer's stockholders did not approve the Series
B-to-A Conversion on or prior to the Outside Date. The Series 2-A Warrants have
no voting rights.
The foregoing descriptions do not purport to be complete and are qualified
in their entirety by reference to the Agreement, the Certificates of
Designation of the Series A Preferred Stock, and the terms of the Series 1-A
and 2-A Warrants, a copy of each of which was filed as Exhibit 2 to the
Schedule 13D and is incorporated herein by reference.
The Reporting Persons retain the right to change their investment intent,
to propose one or more possible transactions to the Issuer's Board of
Directors, to acquire additional shares of Series A Preferred Stock or Common
Stock or other securities of the Issuer from time to time, or to sell or
otherwise dispose of all or part of the Series A Securities or Common Stock
beneficially owned by them (or any shares of Common Stock into which such
securities are converted) in any manner permitted by law. The Reporting Persons
may engage from time to time in ordinary course transactions, including
collateral arrangements, with financial institutions with respect to the
securities described herein. To the extent such transactions materially affect
the Reporting Persons' ownership of such securities, or in the event of a
material change in the present plans or intentions of the Reporting Persons,
the Reporting Persons will amend this Schedule 13D to reflect such change.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) and (b) On August 16, 2000, the Reporting Persons exercised all
of the issued and outstanding Series 1-A Warrants for
an aggregate of 12,709,499 Common Shares of the
Issuer. The exercise price of the Series 1-A Warrants
was $0.01 per share, which was paid through withheld
securities. Following such exercise, the Reporting
Persons beneficially own 12,709,499 shares of Common
Stock, 942,184 shares of Series A Preferred Stock, O
Series 1-A Warrants and 12,262,542 Series 2-A
Warrants. The shares of Common Stock represent
approximately 20.0% of the class. Each share of Series
A Preferred Stock is currently convertible into
approximately 14.2857 shares of Common Stock as
described in Item 4, or an aggregate of 13,463,811
shares of the Common Stock, which represents
approximately 21.0% of the class. As described in Item
4, the Reporting Persons are entitled to receive
additional Series 1-A Warrants in the future as
dividends are paid on the Series A Preferred Stock.
The Series 2-A Warrants are currently exercisable for
12,262,542 shares of Common Stock, representing
approximately 19.5% of the class. Beneficial ownership
of all such securities was acquired as described in
Item 3 and Item 4.
(c), (d) and (e) None or not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
The responses to Item 2, Item 3 and Item 4 are incorporated herein by
reference.
Page 8 of 14
<PAGE>
Rare Medium Acquisition, LLC, which is an affiliate of Bear Stearns & Co.
Inc., is the principal equity holder of a membership interest in AIF LLC.
The foregoing response to this Item 6 is qualified in its entirety by
reference to the Agreement, the full text of which was filed as Exhibit 1 to
the Schedule 13D and incorporated herein by this reference.
Page 9 of 14
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
September 6, 2000
APOLLO INVESTMENT FUND IV, L.P.
By: Apollo Advisors IV, L.P.,
its General Partner
By: Apollo Capital Management
By: /s/ Michael D. Weiner
---------------------------------
Name: Michael D. Weiner
Title: Vice President
Page 10 of 14
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
September 6, 2000
APOLLO OVERSEAS PARTNERS IV, L.P.
By: Apollo Advisors IV, L.P.,
its General Partner
By: Apollo Capital Management IV,
Inc., its General Partner
By: /s/ Michael D. Weiner
---------------------------------
Name: Michael D. Weiner
Title: Vice President
Page 11 of 14
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
September 6, 2000
AIF IV/RRRR LLC IV, L.P.
By: Apollo Management IV, L.P.,
its Manager
By: AIF IV Management, Inc.,
its General Partner
By: /s/ Michael D. Weiner
---------------------------------
Name: Michael D. Weiner
Title: Vice President
Page 12 of 14
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
September 6, 2000
APOLLO ADVISORS IV, L.P.
By: Apollo Capital Management IV,
Inc., its General Partner
By: /s/ Michael D. Weiner
---------------------------------
Name: Michael D. Weiner
Title: Vice President
Page 13 of 14
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
September 6, 2000
APOLLO MANAGEMENT IV, L.P.
By: AIF IV Management, Inc.,
its General Partner
By: /s/ Michael D. Weiner
---------------------------------
Name: Michael D. Weiner
Title: Vice President
Page 14 of 14
