Exhibit 10.35h
EXECUTION COPY
NOTE ISSUANCE
WAIVER UNDER THE
REVOLVING CREDIT AGREEMENT
WAIVER dated as of April 2, 2001 under the Revolving Credit Agreement dated
as of March 31, 1998 (as heretofore amended, the "Revolving Credit Agreement")
among MOTIENT HOLDINGS INC. (formerly AMSC ACQUISITION COMPANY, INC. (the
"Borrower"), MOTIENT CORPORATION (formerly AMERICAN MOBILE SATELLITE
CORPORATION) (the "Parent Guarantor"), 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 Parent Guarantor proposes to borrow up to $50,000,000 from
Rare Medium Group, Inc. and/or its affiliates, substantially on the terms and
conditions set forth in the attached summary, and proposes to retain 75% of the
Net Cash Proceeds of such transaction; and
WHEREAS, the undersigned Banks and the Shareholder Guarantors are willing
to consent to the foregoing, on the terms and conditions set forth below;
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 Revolving Credit Agreement
has the meaning assigned to such term in the Revolving Credit Agreement.
2
SECTION 2. Waivers. To the extent (and only to the extent) necessary to
permit the transaction referred to in the first recital above, the undersigned
Banks waive compliance with the provisions of Sections 2.09(c)(i), 5.15, 5.16,
and 5.23 of the Revolving Credit Agreement. The Parent Guarantor and Borrower
agree that 100% (in lieu of any lesser percentage that might otherwise apply) of
the first $16,500,000 in Net Cash Proceeds received from the Restructured
Satellite Business Transactions (as defined in the Waiver dated as of December
1, 2000) and the first Reduction Event to occur in 2002 shall be applied to
prepay Loans under the Term Credit Agreement or reduce commitments under the
Revolving Credit Agreement.
SECTION 3. Representations of Borrower and Parent Guarantor. Each of the
Borrower and the Parent Guarantor represents and warrants that (i) the
representations and warranties set forth in Article 4 of the Revolving 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, the Parent
Guarantor, 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 HOLDINGS INC. (formerly
AMSC ACQUISITION COMPANY, INC.)
By:/s/Randy Segal
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Name: Randy Segal
Title: Senior Vice President
MOTIENT CORPORATION (formerly
AMERICAN MOBILE SATELLITE CORPORATION)
By:/s/Randy Segal
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Name: Randy Segal
Title: Senior Vice President
TORONTO DOMINION (TEXAS), INC.
By:/s/Jano Mott
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Name: Jano Mott
Title: Vice President
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
By:/s/Robert Bottamedi
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Name: Robert Bottamedi
Title: Vice President
4
BANK OF AMERICA, N.A.
By:/s/Brad W. DeSpain
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Name: Brad W. DeSpain
Title: Managing Director
BANCA COMMERCIALE ITALIANA
LOS ANGELES FOREIGN BRANCH
By:
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Name:
Title:
By:
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Name:
Title:
BANCA DI ROMA - SAN FRANCISCO
By:
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Name:
Title:
By:
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Name:
Title:
THE CHASE MANHATTAN BANK
By:/s/Tracey Navin Ewing
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Name: Tracey Navin Ewing
Title: Vice President
CITICORP USA, INC.
By:
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Name:
Title:
DEUTSCHE BANK AG, NEW YORK BRANCH AND/OR
CAYMAN ISLANDS BRANCH
By:
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Name:
Title:
By:
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Name:
Title:
BANK ONE, N.A.
By:
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Name:
Title:
SANPAOLO IMI S.P.A.
By:
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Name:
Title:
By:
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Name:
Title:
HUGHES ELECTRONICS CORPORATION
By:/s/M.J. Gaines
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Name: M.J. Gaines
Title: Corp. V.P.
SINGAPORE TELECOMMUNICATIONS LTD.
By:/s/Tay Chek Khoon
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Name: Tay Chek Khoon
Title: Vice Presidents
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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Name: Linda S. Martinson
Title: V.P. & General Counsel
Summary of Secured Loan by Rare Medium ("Investor")
of up to $50 million to Motient Corporation ("Company")
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1. The Investor will loan the Company up to $50 million. At the initial
closing, the Investor will loan the Company $25 million and the Company
will issue a promissory note (the "Initial Note") to the Investor for such
amount. The initial closing is expected to occur on April 2, 2001. A two
(2) point funding fee will be payable in cash at the time of each closing.
2. The Initial Note will carry interest at the rate of 12 1/2% per annum,
which shall accrue and be payable at maturity.
3. The Initial Note will mature, and the principal and accrued interest shall
be payable, on the 180th day following the date of issuance of the Initial
Note (the "Initial Closing Date"). The Initial Note (including accrued
interest thereon) may be prepaid in whole or in part by the Company,
without penalty.
4. At maturity, the Company shall repay the principal and accrued interest
under the Initial Note (the "Repayment Amount"). The Repayment Amount may
be paid, at the Company's option, either in cash, or in unregistered shares
of Class A common stock, par value $.01 per share (the "XMSR Shares"), of
XM Satellite Radio Holdings Inc., or in any combination of the foregoing.
If paid in XMSR Shares, the number of XMSR Shares to be delivered shall be
determined by dividing (A) the portion of the Repayment Amount to be paid
in such shares, by (B) the product of (i) the XMSR Share Price as of the
maturity date and (ii) .95.
5. To secure its obligations under the Initial Note, the Company will pledge
to the Investor 3,000,000 of its XMSR Shares. The Company may use such
pledged XMSR Shares to satisfy its repayment or exchange obligations under
the Initial Note, including, without limitation, its right to repay such
note by delivering XMSR Shares as described above.
6. In accordance with Section 7 of the Waiver dated as of April 2, 2001, to
which this summary is attached, the Banks and Shareholder Guarantors will
retain a junior lien on any pledged XMSR Shares described above, until such
time as the XMSR Shares are delivered to the Investor as payment of or in
exchange for outstanding principal and interest under the Initial Note. In
addition, the pledge agreement with Investor shall contain a provision
requiring the Investor to release any XMSR Shares remaining in the pledge,
and return them to the Banks' collateral agent, after the Company has
satisfied all its obligations under the Initial Note.
7. An amount (the "Cash Collateral") equal to (A) the net cash proceeds of the
Initial Note, less (B) the amount required to be used to repay debt as
described in the proposed waiver (i.e. $6.25 million), less (C) $4 million,
shall be contributed into the Shareholder Guarantors' collateral pool, to
secure the Company's obligations to the Shareholder Guarantors under the
Guaranty Issuance Agreement (as amended). Any subsequent release of the
Cash Collateral to the Company shall be subject to the written consent of
each of the three Shareholder Guarantors, and shall be given in increments
of no less than $1 million each.
8. At the option of the Company at any time after the Initial Closing Date,
and assuming the accuracy of the representations and warranties and that
there is no default at the time, the Investor will loan the Company an
additional amount (the "Second Loan"), in an amount equal to the lesser of
(A) $25 million and (B) the difference between (i) the product of the XMSR
share price as of the closing date of the Second Loan (the "Second Closing
Date") and 5,000,000, and (ii) $25 million. The Company will issue a
promissory note (the "Second Note") to the Investor for the amount of the
Second Loan. The Second Note will carry the same terms (including the
maturity date) as the Initial Note.
9. To secure its obligations under the Second Note, the Company will pledge to
the Investor 2,000,000 of its XMSR Shares. The Company may use such pledged
XMSR Shares to satisfy its repayment and exchange obligations under the
Second Note, including, without limitation, its right to repay such note by
delivering XMSR Shares as described above. The pledge agreement will
contain the same provision described above, requiring the Investor to
release any XMSR Shares remaining in the pledge, and return them to the
Banks' collateral agent, after the Company has satisfied all its
obligations under the Second Note.
10. At any time, and from time to time, prior to maturity and prior to the date
preceding the prepayment date set forth in a Company prepayment notice, the
Investor shall have the right to exchange the Initial Note and/or the
Second Note, or any portion thereof, for XMSR Shares. The number of XMSR
Shares to be delivered upon any such exchange shall be determined by
dividing (A) the principal amount of the Note to be exchanged (or portion
thereof) by (B) the product of (i) the XMSR share price as of either (a)
the Initial Closing Date (in the case of the Initial Note) or (b) the
Second Closing Date (in the case of the Second Note) and (ii) 1.5.
11. If the Company makes an offering involving its equity or derivative
securities (of the Company or XMSR) while any of the Notes remain
outstanding, the Investor shall have a right of first refusal to
participate in such offering.
12. Subject to the provisos below, the Banks and Shareholder Guarantors will
release up to 5 million XMSR shares from the bank collateral pool (3
million shares for the Initial Loan and 2 million shares for the Second
Loan), as needed for delivery in connection with the Notes, subject to the
Banks and Shareholder Guarantors retaining a junior security interest in
such shares until such time as the shares are actually delivered to the
Investor as payment of or in exchange for the Notes; provided, that any
release of XMSR shares from the bank collateral pool in excess of 3 million
shares shall be subject to the written consent of each of the three
Shareholder Guarantors, provided further, that the 3 million shares for the
Initial Loan will include the 1 million shares authorized for sale (but not
yet sold) under the Stock Sale Waiver under each of the Term Credit
Agreement and Revolving Credit Agreement dated October 18, 2000 (the
"October 18, 2000 Waiver"). Notwithstanding the foregoing, in the event and
when the Company seeks to sell the 1 million shares authorized under the
October 18, 2000 Waiver, 1 million additional shares will be released from
pledge upon request of the Company consistent with the terms of the October
18, 2000 Waiver.
13. The XMSR shares described above may be disposed of in connection with this
transaction in the following ways: (a) delivered to the Investor in
satisfaction of a repayment obligation or upon exchange of the Notes, (b)
pledged to the Investor as described above, or (c) delivered to, or sold
by, the Investor in connection with the Investor foreclosing on its
security pursuant to the terms of the pledge described above.
14. Upon delivery of any pledged Class B XMSR shares to Rare, such shares will
convert to Class A XMSR shares.