Exhibit 1
AMENDMENT NO. 1
TO GUARANTY ISSUANCE AGREEMENT
AMENDMENT, dated as of March 27, 1997, to the Guaranty Issuance
Agreement, dated as of June 28, 1996, by and among Xxxxxx Electronics
Corporation, Singapore Telecommunications Ltd., Baron Capital Partners, L.P.,
AMSC Subsidiary Corporation and American Mobile Satellite Corporation (the
"Agreement").
W I T N E S S E T H:
WHEREAS, the parties hereto desire to effect certain changes to the
Agreement herein contained;
NOW, THEREFORE, the undersigned parties hereto agree as follows:
SECTION 1. Definitions. Unless otherwise indicated, capitalized
terms used herein shall have the meanings set forth in the Agreement.
SECTION 2. Consideration for the Issuance of the Guaranties. As
consideration for the execution of this Amendment No. 1 by the Guarantors, the
Warrants issued to each of the Guarantors in connection with the Guarantees are
hereby amended to reflect an increase in the aggregate number of Warrant Shares
to 5,500,000 and a change in the exercise price to $13.00. To implement the
foregoing, an amendment to each of such Warrants, in the form annexed hereto,
has been executed concurrently with the execution hereof.
SECTION 3. Change to the Performance Schedule. The Performance
Schedule annexed to the Agreement as Exhibit D is hereby amended in its entirety
and replaced with the Performance Schedule annexed hereto.
SECTION 4. Section 3 of the Agreement is hereby amended in its
entirety and replaced with the following:
Limitations on Amount of Guaranties. AMSC and AMSC Parent have delivered to
Guarantors AMSC's 1997 Budget, including its projected borrowing needs (the
"Plan"), which has formed the basis for the agreement of the Guarantors to enter
into this Amendment No. 1. As consideration for the execution of this Amendment
No. 1 by the Guarantors,
AMSC agrees that the outstanding principal amount of the loans which are
guaranteed (such outstanding amount and any payments made by Guarantors with
respect to principal under the Credit Agreement, the "Guaranteed Amount") shall
not, at any time, exceed the then applicable borrowing limit (the "Borrowing
Limit") specified on the Performance Schedule attached hereto as Exhibit D (the
"Performance Schedule").
AMSC and AMSC Parent agree that the aggregate outstanding principal
amount of the loans under the Credit Agreements plus any amounts paid by the
Guarantors with respect to principal shall not exceed the Guaranteed Amount. The
Guarantors having Pro Rata Shares greater than 50% ("Requisite Guarantors") may,
by written notice delivered to AMSC, waive compliance with the then applicable
Borrowing Limit and consent to borrowings by AMSC which would increase the
Guaranteed Amount up to the "Borrowing Limit" specified by such waiver. A waiver
granted hereunder shall not obligate the Guarantors to grant a waiver for any
subsequent period or consent to any additional increase in the applicable
Borrowing Limit.
If any borrowing causes or would cause the Guaranteed Amount to
exceed the then applicable Borrowing Limit, then Requisite Guarantors may, by a
written notice delivered to AMSC (a "Guarantor's Notice"), decline to increase
the Guaranteed Amount to cover any increased borrowings. Under the terms of the
Guaranties, Guarantors will be required to purchase the outstanding notes upon
the occurrence of a "Guarantor Event" under the Credit Agreements, and the
commitments to extend further financing under the Credit Agreements will
terminate.
Under the terms of the Credit Agreements, at the time of each
borrowing, AMSC will be required to certify that it is in compliance with the
provisions of this Agreement. AMSC or AMSC Parent can so certify if the
outstanding amount of the loans after such borrowing will be less than the then
applicable Borrowing Limit or if, and to the extent that, Requisite Guarantors
shall have modified such Borrowing Limit. At the request of AMSC and AMSC
Parent, any Borrowing Limit may be modified with the written consent of
Requisite Guarantors. If Requisite Guarantors propose to increase the applicable
Borrowing Limit for any period to an amount in excess of that set forth on the
Performance Schedule, such proposal shall be discussed with the other Guarantors
prior to granting such consent.
Any action by Requisite Guarantors in accordance with this Section 3
shall bind all Guarantors. Any notice delivered under this Section shall be
delivered to all Guarantors, but failure of all Guarantors to receive such
notice shall not affect the validity of such notice.
Nothing in this Section shall limit the enforceability by the
"Guaranteed Parties" of any Guaranty in accordance with its terms.
Within 45 days after the end of each fiscal quarter, AMSC Parent
shall deliver to each Guarantor the unaudited consolidated and consolidating
balance sheets of AMSC and AMSC Parent as of the end of such quarter and the
related consolidated and consolidating statements of income, stockholders'
equity and cash flows, and certified by the chief financial officer as fairly
presenting, in all material respects, in accordance with generally accepted
accounting principles (except for the absence of footnote disclosure), the
financial position and the results of operations of AMSC and AMSC Parent.
SECTION 5. Miscellaneous.
AMSC and AMSC Parent hereby represent to the Guarantors that, as of
the date hereof, and after giving effect to this Amendment No. 1 and
the transactions contemplated hereby, no Default (as such term in
defined in the Credit Agreements) has occurred and is continuing.
AMSC hereby reaffirms that the Registration Rights Agreement is in
full force and effect and that all of the shares of common stock of
AMSC Parent issuable upon exercise of the Warrants, as such number
of shares has been increased as described in this Amendment No. 1,
constitute Registrable Securities (as such term is defined in the
Registration Rights Agreement).
AMSC and AMSC Parent hereby represent to the Guarantors that each
representation and warranty set forth in Section 11 of the Agreement
is true and correct as of the date hereof, except that (i) each
reference therein to "this Agreement" shall be deemed to be a
reference to this Amendment No. 1, (ii) all references to the
Warrants, the Registration Rights Agreement and the Common Stock
shall give effect to the transactions contemplated hereby, and (iii)
the reference in Section 11(e) of the Agreement to December 31, 1995
instead shall be to December 31, 1996.
Except as expressly amended hereby, the terms of the Agreement
remain unchanged and the Agreement, as amended hereby, continues in
full force and effect.
Concurrently with the execution hereof, each Guarantor shall receive
the written opinion of counsel to AMSC and AMSC Parent as to the due
authorization, execution and enforceability of this Amendment No. 1
and Amendment No. 1 to the Warrant Certificates, in form and
substance satisfactory to each Guarantor; and
AMSC Parent hereby advises each of the Guarantors that the Board of
Directors of AMSC Parent has received an opinion from Xxxxxxxxx,
Lufkin Xxxxxxxx Securities Corporation to the effect that the
transactions contemplated hereby, including the increase in the
number of shares covered by the Warrants and the reduction of the
exercise price of the Warrants, are fair to AMSC and AMSC Parent
from a financial point of view.
SECTION 6. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 7. Counterparts. This Amendment 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 8. Effectiveness. This Amendment shall become effective when
AMSC has received signature pages hereof signed by the Requisite Guarantors or
facsimile or other written confirmation that such parties have signed a
counterpart hereof.
IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment
No. 1 to the Agreement to be executed by its duly authorized officer.
AMSC SUBSIDIARY CORPORATION SINGAPORE TELECOMMUNICATIONS
LTD.
By: /s/ Xxxxxxx X. Xxxxxxxxxx By: /s/ Ho Siaw Hong
------------------------------ -------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx Name: Ho Siaw Hong
Title: VP & Treasurer Title: Senior Director
AMERICAN MOBILE SATELLITE BARON CAPITAL PARTNERS, L.P., a
CORPORATION Delaware limited partnership
By: Baron Capital Management, Inc.,
By: /s/ Xxxxxxx X. Xxxxxxxxxx a General Partner
------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx By: /s/ Xxxxx Xxxxxx
Title: VP & Treasurer -------------------------------
Name: Xxxxx Xxxxxx
Title: X.X.
XXXXXX ELECTRONICS CORPORATION
By: /s/ Xxxxx Xxxx
------------------------------
Name: Xxxxx Xxxx
Title: Assistant Treasurer
EXHIBIT D
TO
GUARANTEE ISSUANCE AGREEMENT
(As Amended by Amendment No. 1 thereto)
Performance Schedule
($000's)
01/01/97 04/01/97 07/01/97 10/01/97
to to to to
03/31/97 06/30/97 09/30/97 12/31/97
--------------------------------------------
Borrowing Limit $170,000 $180,000 $190,000 $200,000
