CONFORMED COPY
WAIVER UNDER THE
TERM CREDIT AGREEMENT
WAIVER dated as of December 1, 2000 under the Term Credit Agreement
dated as of March 31, 1998 (as heretofore amended, the "Term Credit Agreement")
among MOTIENT CORPORATION (formerly AMERICAN MOBILE SATELLITE CORPORATION) (the
"Borrower"), the BANKS party thereto (the "Banks"), MORGAN GUARANTY TRUST
COMPANY OF NEW YORK, as Documentation Agent (the "Documentation Agent"), and
TORONTO DOMINION (TEXAS), INC., as Administrative Agent.
W I T N E S S E T H :
WHEREAS, the Borrower proposes to enter into the Restructured
Satellite Business Transactions (as defined below);
WHEREAS, the undersigned Banks and the Shareholder Guarantors are
willing to consent to the foregoing and to waive certain provisions of the Term
Credit Agreement in connection with the foregoing;
NOW, THEREFORE, the undersigned parties hereto agree as follows:
SECTION 1. Definitions; References. Unless otherwise specifically
defined herein, each term used herein which is defined in the Term Credit
Agreement has the meaning assigned to such term in the Term Credit Agreement. In
addition:
"Restructured Satellite Business Transactions" means the following and
certain related transactions, each as more fully described in the Investment
Agreement, Amended and Restated Motient Services Asset Sale Agreement, Amended
Research & Development, Marketing and Service Agreement, Limited Partnership
Agreement, Amended Registration Rights Agreement, Amended Cross-Licensing and
Bulk Resale Agreement and certain other agreements (collectively, the
"Transaction Documents"), each substantially in the form delivered to each of
the Banks and Shareholder Guarantors prior to December 1, 2000: (i) the
conversion of Motient Satellite Ventures LLC into a Delaware limited partnership
("Newco"), the Borrower's interest in which may subsequently be transferred to
another new directly-owned Subsidiary of the Borrower, and the formation of a
new corporation to serve as the general partner of Newco, the ownership of which
corporation will mirror the economic interests held in Newco; (ii) the increase
from 20% to 40% of the aggregate fully diluted ownership interests in Newco held
by Telcom Ventures, L.L.C., Columbia Capital Corporation and Spectrum Equity
Investors LP or designated subsidiaries or affiliates thereof (each, a
"Purchaser", and collectively, the "Purchasers", and the aggregate amount of
such interests held by the Purchasers, the "Newco Purchaser Interests"), in
consideration of the payment by the Purchasers to Newco of $50,000,000, a
portion of which Newco Purchaser Interests, at the option of each Purchaser, may
be exchanged for common shares of the Borrower; (iii) the issuance by Newco to
the Purchasers of an option (the "Newco Option"), which may be exercised by one
or more of the Purchasers, to purchase an additional 10.66% of the fully diluted
ownership interests in Newco, exercisable for $40,000,000 (the "Newco Option
Exercise Price"); (iv) the contribution by TMI Communications and Company,
Limited Partnership ("TMI") of substantially all of its mobile satellite
business to Newco in exchange for a cash payment of $7,500,000, a note in the
initial principal amount of $11,500,000 (the "TMI Note") and 27.2% of the fully
diluted ownership interests in Newco, as a result of which the Borrower shall
own less than half of the fully diluted membership interests of Newco and Newco
shall thenceforth cease to be a Subsidiary of the Borrower or a member of the
Borrower Group for all purposes under the Term Credit Agreement (even if the
Purchasers later exchange a sufficient amount of Newco Purchaser Interests for
common shares of the Borrower to cause the Borrower to once again own more than
half of the fully diluted membership interests of Newco); (v) the execution by
Newco and Motient Services Inc. (formerly AMSC Subsidiary Corporation), an
indirect wholly-owned Subsidiary of the Borrower ("Motient Services"), of an
amended and restated asset sale agreement pursuant to which, for a cash payment
to Motient Services of $45,000,000 of the $50,000,000 received from the
Purchasers and the issuance to Motient Services of a note in the initial
principal amount of $15,000,000 (the "Motient Services Note"), plus the
$24,000,000 deposit previously paid to Motient Services, Newco shall purchase
Motient Services' satellite communications services business (either directly
from Motient Services or by purchasing the equity of a new, directly-owned
Subsidiary of Motient Services to which such business shall have been
contributed), pending the consummation of which purchase any proceeds of
in-orbit insurance shall be held in escrow and upon the consummation of which
purchase any such escrowed proceeds shall be included in the transferred assets;
(vi) the loan by the Borrower to Newco of $2,500,000, to be evidenced by a note
in the initial principal amount of $2,500,000, the proceeds of which loan,
together with $5,000,000 of the $50,000,000 received from the Purchasers, will
be used to fund the $7,5000,000 cash payment to TMI (such note, like the TMI
Note and the Motient Services Note, to have a stated maturity of five years and
interest accruable at a rate of 10% per annum, which interest will be added to
principal semi-annually in arrears, as well as the other terms set forth in the
Transaction Documents); (vii) the formation by the Borrower of one or more other
directly-owned Subsidiaries, if necessary solely to effect an exchange by the
Purchasers of Newco Purchaser Interests for common shares of the Borrower
(whether through a triangular merger of Newco, such Subsidiaries and the
Borrower or otherwise), and the merger of one or more such Subsidiaries with one
or more of the Purchasers or their transferees; and (viii) the performance by
Newco, Motient Services, Motient Communications Company and the Borrower of
their respective obligations under the Transaction Documents (including, without
limitation, obligations relating to indemnification, the sharing and
cross-licensing of assets and the disposition by the Borrower (directly or
through a transaction involving a Subsidiary) of its remaining membership
interests in Newco in a "drag-along" transaction.
SECTION 2. Waiver. The undersigned Banks waive compliance with the
provisions of Article 5 of the Term Credit Agreement (including, without
limitation, Sections 5.04, 5.13, 5.17, 5.18, 5.20 and 5.21) to the extent (and
only to the extent) necessary to permit the Restructured Satellite Business
Transactions. The undersigned Banks agree that the purchase of Motient Services'
satellite communications services business by Newco (and none of the other
Restructured Satellite Business Transactions, with the exception of any transfer
or disposition by the Borrower of any portion of its interest in Newco or any
successor to Newco, to the extent such transfer or disposition is or may be
contemplated by the Restructured Satellite Business Transactions, and the
receipt of proceeds of in-orbit insurance, if the purchase of Motient Services'
satellite communications business by Newco is not consummated) shall constitute
a Reduction Event requiring a prepayment of Loans under Section 2.04(b)(i) to
the extent of any applicable Net Cash Proceeds, with respect to which (x) the
Net Cash Proceeds shall be the sum of $45,000,000 plus all cash payments
received in respect of the Motient Services Note, less any portion thereof to
which the "Reduction Percentage" (as defined in the Revolving Credit Agreement)
is applied to the reduction of the "Commitments" (as defined in the Revolving
Credit Agreement), and (y) the Reduction Percentage shall be 50%.
SECTION 3. Representations of Borrower. The Borrower represents and
warrants that (i) the representations and warranties set forth in Article 4 of
the Term Credit Agreement shall be true on and as of the Effective Date and (ii)
no Default shall have occurred and be continuing on such date.
SECTION 4. Governing Law. This Waiver shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 5. Counterparts. This Waiver 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 6. Effectiveness. This Waiver shall become effective as of the
date hereof on the date (the "Effective Date") when the Documentation Agent
shall have received a counterpart hereof from each of the Borrower, Hughes,
SingTel, Baron Capital and the Required 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.
SECTION 7. Shareholder Guarantor Consent. The Shareholder Guarantors
consent to the foregoing.
IN WITNESS WHEREOF, the parties hereto have caused this Waiver to be
duly executed as of the date first above written.
MOTIENT CORPORATION (formerly
AMERICAN MOBILE SATELLITE CORPORATION)
By: /s/ Randy S. Segal
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Title: Senior Vice President
TORONTO DOMINION (TEXAS), INC.
By: /s/ Lynn Chasin
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Title: Vice President
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
By: /s/ Robert Bottamedi
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Title: Vice President
BANK OF AMERICA, N.A.
By: /s/ Dianne J. Prust
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Title: Principal
BANCA COMMERCIALE ITALIANA LOS ANGELES FOREIGN
BRANCH
By: /s/ Frank Maffei
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Title: Vice President
By: /s/ Charles Dougherty
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Title: Vice President
BANCA DI ROMA - SAN FRANCISCO
By: /s/ Richard G. Dietz
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Title: Vice President
By: /s/ Thomas C. Woodruff
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Title: Vice President
THE CHASE MANHATTAN BANK
By: /s/ Tracey Navin Ewing
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Title: Vice President
CITICORP USA, INC.
By: /s/ Walter L. Larsen
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Title: Managing Director
DEUTSCHE BANK AG, NEW YORK BRANCH AND/OR CAYMAN
ISLANDS BRANCH
By: /s/ Virginia Mahler Cosenza
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Title: Vice President
By: /s/ Andreas Neumeier
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Title: Vice President
BANK ONE, N.A.
By: /s/ Stephen C. Price
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Title: First Vice President
SAN PAOLO IMI S.P.A.
By:
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Title:
By:
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Title:
HUGHES ELECTRONICS CORPORATION
By: /s/ M. J. Gaines
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Title: Corporate Vice President
SINGAPORE TELECOMMUNICATIONS LTD.
By: /s/ for Tay Chek Khoon
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Title: Managing Director
Satellite Business
BARON CAPITAL PARTNERS, L.P., a Delaware limited
partnership
By: BARON CAPITAL MANAGEMENT, INC., a general
partner
By: /s/ Linda S. Martinson
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Title: Vice President & General Counsel