EXHIBIT 10.24
EXECUTION COPY
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$12,500,000
AMENDED AND RESTATED
TERM CREDIT AGREEMENT
dated as of
January 27, 2003
among
Motient Communications Inc.,
Motient Corporation,
Motient Holdings Inc.,
the Lenders party hereto,
and
M&E Advisors L.L.C.,
as Administrative Agent
and Collateral Agent
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TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS.............................................................................................2
Section 1.01. Definitions................................................................................2
Section 1.02. Construction..............................................................................12
ARTICLE 2 THE CREDITS............................................................................................12
Section 2.01. Commitments...............................................................................12
Section 2.02. Loans and Borrowings......................................................................12
Section 2.03. Requests for Borrowing....................................................................13
Section 2.04. Notes.....................................................................................14
Section 2.05. Maturity of Loans.........................................................................14
Section 2.06. Interest; Fees............................................................................14
Section 2.07. Mandatory Termination; Optional Termination or Reduction of Commitments...................15
Section 2.08. Optional Prepayments......................................................................16
Section 2.09. Mandatory Prepayments Upon Equity Issuance................................................16
Section 2.10. General Provisions as to Payments.........................................................16
Section 2.11. Computation of Interest and Fees..........................................................16
ARTICLE 3 CONDITIONS.............................................................................................16
Section 3.01. Conditions to Closing.....................................................................16
Section 3.02. Conditions to Each Loan...................................................................18
ARTICLE 4 REPRESENTATIONS AND WARRANTIES.........................................................................19
Section 4.01. Corporate Existence and Power.............................................................19
Section 4.02. Corporate Authorization; No Contravention.................................................19
Section 4.03. Government Approvals......................................................................19
Section 4.04. Binding Effect............................................................................20
Section 4.05. Litigation................................................................................20
Section 4.06. No Default................................................................................20
Section 4.07. Title to Property.........................................................................20
Section 4.08. Taxes.....................................................................................20
Section 4.09. Financial Condition.......................................................................21
Section 4.10. Regulated Entities........................................................................21
Section 4.11. Subsidiaries..............................................................................21
Section 4.12. Insurance.................................................................................21
Section 4.13. Business..................................................................................21
Section 4.14. Collateral; Property......................................................................22
Section 4.15. Security Agreement........................................................................22
Section 4.16. Disclosure................................................................................22
ARTICLE 5 COVENANTS..............................................................................................22
Section 5.01. Information...............................................................................22
Section 5.02. Certificates; Other Information...........................................................23
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Section 5.03. Notices...................................................................................24
Section 5.04. Conduct of Business; Preservation of Corporate Existence..................................25
Section 5.05. Maintenance of Property...................................................................25
Section 5.06. Maintenance of Insurance..................................................................25
Section 5.07. Payment of Obligations....................................................................25
Section 5.08. Compliance with Laws......................................................................25
Section 5.09. Inspection of Property and Books and Records..............................................25
Section 5.10. Use of Proceeds...........................................................................26
Section 5.11. Security Agreement and the Pledge Agreements..............................................26
Section 5.12. No Subsidiaries...........................................................................26
Section 5.13. Government Approvals......................................................................26
Section 5.14. Further Assurances........................................................................26
Section 5.15. Limitation on Liens.......................................................................27
Section 5.16. Disposition of Assets, Consolidations and Mergers.........................................28
Section 5.17. Employee Contracts and Arrangements.......................................................29
Section 5.18. Transactions with Affiliates..............................................................29
Section 5.19. Investments...............................................................................29
Section 5.20. Accounting Changes........................................................................30
Section 5.21. Limitation on Indebtedness................................................................30
Section 5.22. Restricted Payments.......................................................................31
Section 5.23. Service Revenue...........................................................................31
Section 5.24. EBITDA....................................................................................32
Section 5.25. Free Cash Flow............................................................................33
ARTICLE 6 DEFAULTS...............................................................................................34
Section 6.01. Events of Default.........................................................................34
ARTICLE 7 PARENT GUARANTY........................................................................................36
Section 7.01. The Parent Guaranty.......................................................................36
Section 7.02. Guaranty Unconditional....................................................................36
Section 7.03. Discharge Only Upon Payment in Full; Reinstatement in Certain Circumstances...............37
Section 7.04. Waiver by the Parent Guarantors...........................................................37
Section 7.05. Subrogation...............................................................................37
Section 7.06. Stay of Acceleration......................................................................37
ARTICLE 8 THE ADMINISTRATIVE AGENT...............................................................................38
ARTICLE 9 MISCELLANEOUS..........................................................................................40
Section 9.01. Notices...................................................................................40
Section 9.02. No Waivers................................................................................40
Section 9.03. Expenses; Indemnification.................................................................40
Section 9.04. Set-off...................................................................................41
Section 9.05. Sharing of Set-offs.......................................................................41
Section 9.06. Amendments and Waivers....................................................................41
Section 9.07. Successors and Assigns....................................................................42
Section 9.08. Governing Law; Submission to Jurisdiction.................................................42
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Section 9.09. Counterparts; Integration; Effectiveness..................................................42
Section 9.10. Waiver of Jury Trial......................................................................42
Section 9.11. Confidentiality...........................................................................42
Section 9.12. Registration..............................................................................43
ARTICLE 1 SECURITY INTEREST......................................................................................
Section 1.01. Collateral................................................................................
Section 1.02. Right of the Collateral Agent to Pay Taxes or Costs Relating to Collateral................
Section 1.03. Financing Statements......................................................................
Section 1.04. Injury to Collateral......................................................................
Section 1.05. Collecting and Servicing Accounts, Chattel Paper, Deposit Accounts, Documents,
General Intangibles, Letter-of-Credit Rights and Instruments............................
Section 1.06. Preservation of Rights....................................................................
ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF PLEDGOR..............................................................
Section 2.01. Title to Collateral.......................................................................
Section 2.02. Names, Etc................................................................................
Section 2.03. Changes in Circumstances..................................................................
Section 2.04. Financing Statements......................................................................
Section 2.05. Non-Subordination.........................................................................
Section 2.06. True at Closing Date......................................................................
ARTICLE 3 AFFIRMATIVE COVENANTS OF PLEDGOR.......................................................................
Section 3.01. Change in Places of Business or Chief Executive Office....................................
Section 3.02. Delivery and Other Perfection.............................................................
Section 3.03. Notice of Default and Loss................................................................
Section 3.04. Special Provisions Relating to Intellectual Property......................................
Section 3.05. Further Assurances........................................................................
ARTICLE 4 NEGATIVE COVENANTS OF PLEDGOR..........................................................................
Section 4.01. Other Agreements..........................................................................
Section 4.02. Other Financing Statements and Liens......................................................
Section 4.03. Location of Collateral....................................................................
ARTICLE 5 EVENTS OF DEFAULT......................................................................................
Section 5.01. Representation and Warranties.............................................................
Section 5.02. Observance of Covenants...................................................................
Section 5.03. Event of Default under Loan Agreement.....................................................
ARTICLE 6 RIGHTS UPON OCCURRENCE OF EVENTS OF DEFAULT............................................................
Section 6.01. Miscellaneous Rights of the Collateral Agent..............................................
Section 6.02. Right of the Collateral Agent to Take Possession and Foreclose............................
Section 6.03. Right of the Collateral Agent to Collect and Service Receivables..........................
Section 6.04. Right of the Collateral Agent to Use and Operate Collateral...............................
Section 6.05. Deficiency................................................................................
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Section 6.06. Private Sale..............................................................................
Section 6.07. Locations, Names..........................................................................
Section 6.08. Application of Proceeds...................................................................
Section 6.09. Attorney-in-Fact..........................................................................
Section 6.10. Right of the Collateral Agent To Appoint Receiver.........................................
ARTICLE 7 MISCELLANEOUS PROVISIONS...............................................................................
Section 7.01. Additional Actions and Documents..........................................................
Section 7.02. Expenses..................................................................................
Section 7.03. Notices...................................................................................
Section 7.04. Waiver of Right to Judicial Hearing.......................................................
Section 7.05. Waiver by the Collateral Agent............................................................
Section 7.06. Governmental Approvals....................................................................
Section 7.07. Release of Collateral.....................................................................
Section 7.08. Benefit and Assignment....................................................................
Section 7.09. Severability..............................................................................
Section 7.10. Survival..................................................................................
Section 7.11. Rights Cumulative.........................................................................
Section 7.12. Entire Agreement, Modification............................................................
Section 7.13. Termination...............................................................................
Section 7.14. Construction..............................................................................
Section 7.15. Pronouns..................................................................................
Section 7.16. Headings..................................................................................
Section 7.17. Payments..................................................................................
Section 7.18. Execution.................................................................................
ARTICLE 8 DEFINITIONS AND REFERENCES.............................................................................
Section 8.01. Defined Terms.............................................................................
Section 8.02. Other Definitional Provisions.............................................................
ARTICLE 1 SECURITY INTEREST......................................................................................
Section 1.01. The Pledge................................................................................
Section 1.02. Financing Statements......................................................................
Section 1.03. Share Certificates........................................................................
Section 1.04. Preservation of Rights....................................................................
ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF PLEDGOR..............................................................
Section 2.01. Title to Collateral.......................................................................
Section 2.02. Pledged Shares............................................................................
Section 2.03. Names, Etc................................................................................
Section 2.04. Changes in Circumstances..................................................................
Section 2.05. Financing Statements......................................................................
Section 2.06. Non-Subordination.........................................................................
Section 2.07. True at Closing Date......................................................................
ARTICLE 3 AFFIRMATIVE COVENANTS OF PLEDGOR.......................................................................
Section 3.01. Change in Places of Business or Chief Executive Office....................................
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Section 3.02. Delivery and Other Perfection.............................................................
Section 3.03. Notice of Default and Loss................................................................
Section 3.04. Collateral................................................................................
Section 3.05. Further Assurances........................................................................
ARTICLE 4 NEGATIVE COVENANTS OF PLEDGOR..........................................................................
Section 4.01. Other Agreements..........................................................................
Section 4.02. Other Financing Statements and Liens......................................................
ARTICLE 5 EVENTS OF DEFAULT......................................................................................
Section 5.01. Representation and Warranties.............................................................
Section 5.02. Observance of Covenants...................................................................
Section 5.03. Event of Default under Loan Agreement.....................................................
ARTICLE 6 RIGHTS UPON OCCURRENCE OF EVENTS OF DEFAULT............................................................
Section 6.01. Rights of the Collateral Agent............................................................
Section 6.02. Deficiency................................................................................
Section 6.03. Private Sale..............................................................................
Section 6.04. Locations, Names..........................................................................
Section 6.05. Application of Proceeds...................................................................
Section 6.06. Attorney-in-Fact..........................................................................
Section 6.07. Right of the Collateral Agent To Appoint Receiver.........................................
ARTICLE 7 MISCELLANEOUS PROVISIONS...............................................................................
Section 7.01. Additional Actions and Documents..........................................................
Section 7.02. Expenses..................................................................................
Section 7.03. Notices...................................................................................
Section 7.04. Waiver of Right to Judicial Hearing.......................................................
Section 7.05. Waiver by the Collateral Agent............................................................
Section 7.06. Governmental Approvals....................................................................
Section 7.07. Release of Collateral.....................................................................
Section 7.08. Benefit and Assignment....................................................................
Section 7.09. Severability..............................................................................
Section 7.10. Survival..................................................................................
Section 7.11. Rights Cumulative.........................................................................
Section 7.12. Entire Agreement, Modification............................................................
Section 7.13. Termination...............................................................................
Section 7.14. Construction..............................................................................
Section 7.15. Pronouns..................................................................................
Section 7.16. Headings..................................................................................
Section 7.17. Payments..................................................................................
Section 7.18. Execution.................................................................................
ARTICLE 8 DEFINITIONS AND REFERENCES.............................................................................
Section 8.01. Defined Terms.............................................................................
Section 8.02. Other Definitional Provisions.............................................................
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Schedules
Schedule 2.01 - Commitment Amounts; Addresses for Notice;
Account Information
Schedule 4.06 - Existing Defaults
Schedule 4.09 - Accounting Changes
Schedule 4.13 - No Material Adverse Effect
Schedule 5.15 - Existing Liens
Schedule 5.21 - Existing Indebtedness
Schedule 5.22 - Existing Warrants
Exhibits
Exhibit A Note
Exhibit B Form of Warrant
Exhibit C Opinion of Counsel for the Borrower
Exhibit D Form of Security Agreement
Exhibit E Form of Pledge Agreement
Exhibit F Form of Parent Guarantor Note Subordination Agreement
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AMENDED AND RESTATED
TERM CREDIT AGREEMENT
THIS AMENDED AND RESTATED TERM CREDIT AGREEMENT (this
"Agreement") dated as of January 27, 2003 among MOTIENT COMMUNICATIONS INC. (the
"Borrower"), a Delaware corporation, MOTIENT CORPORATION ("Motient"), a Delaware
corporation and MOTIENT HOLDINGS INC. ("Holdings"), a Delaware corporation
(each, a "Parent Guarantor" and together, the "Parent Guarantors"), M&E Advisors
L.L.C., as Administrative Agent (the "Administrative Agent") and Collateral
Agent (the "Collateral Agent") and each of the lenders from time to time party
hereto (each, a "Lender" and collectively, the "Lenders").
Whereas, the Borrower, Motient, Holdings, the Administrative
Agent, the Collateral Agent and the Lenders party thereto and their permitted
successors and assigns are party to a Term Credit Agreement dated as of November
20, 2002 (the "Existing Term Credit Agreement").
Whereas, the parties hereto wish to amend and restate the
Existing Term Credit Agreement.
Whereas, the parties hereto hereby agree that the Existing
Term Credit Agreement shall be amended and restated to read as follows:
WHEREAS, the Lenders have agreed, on the terms and conditions
set forth in this Agreement, to lend the Borrower from time to time amounts not
to exceed twelve million five hundred thousand Dollars ($12,500,000) in the
aggregate;
WHEREAS, the Borrower desires to secure all of the Loans made
hereunder by granting to the Lenders a first priority lien on substantially all
of the unencumbered assets of the Borrower as more fully described in and
pursuant to the Security Agreement (as defined herein);
WHEREAS, as an inducement to the Lenders to make the Loans
contemplated hereunder to the Borrower, Motient and Holdings have agreed to
guarantee the full and punctual payment of the principal and interest on all of
the Loans made hereunder as more fully described in and pursuant to this
Agreement;
WHEREAS, Motient has agreed to pledge its shares of capital
stock in Holdings, and Holdings has agreed to pledge the capital stock of
Services, to secure their respective guarantee obligations hereunder as more
fully described in and pursuant to the Pledge Agreements; and
WHEREAS, Motient has further agreed, effective upon the
repayment in full by MVH Holdings Inc. of all obligations owed by it under the
nineteen million seven hundred fifty thousand Dollars ($19,750,000) of senior
notes issued by MVH Holdings Inc. pursuant to Motient's plan of reorganization,
to pledge the capital stock of MVH Holdings Inc. to secure its guarantee
obligations hereunder as more fully described in and pursuant to the Motient
Corporation Share Pledge Agreement.
ARTICLE 1
DEFINITIONS
Section 1.01. Definitions. The following terms, as used
herein, have the following meanings:
"Administrative Agent" has the meaning set froth in the
introductory paragraph hereto.
"Affiliate" means, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person. A Person shall be deemed to control another Person if
the controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities, by contract or otherwise. Without
limitation, any director, executive officer or beneficial owner of twenty-five
percent (25%) or more of the equity of a Person shall, for the purposes of this
Agreement, be deemed to control the other Person.
"Availability Period" means the time period from and including
the Closing Date to, but excluding, the Termination Date.
"Borrower" has the meaning set forth in the introductory
paragraph hereto.
"Borrowing" means a borrowing hereunder consisting of Loans
made to the Borrower on the same day pursuant to Article 2.
"Borrowing Request" has the meaning set forth in Section
2.03(a).
"Business Day" means any day except a Saturday, Sunday or
other day on which commercial lenders in New York City are authorized by law to
close.
"Capital Lease Obligations" means all monetary obligations of
a Person under any leasing or similar arrangement of real or personal property,
or a combination thereof, which, in accordance with GAAP, is classified as a
capital lease on the balance sheet of such Person, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"Cash Equivalents" means the following types of instruments
denominated in Dollars:
(a) Obligations issued or fully guaranteed by the United
States Government or any agency thereof and backed by the full faith
and credit of the United States having maturities of not more than
eighteen (18) months from the date of acquisition;
2
(b) Certificates of deposit, time deposits, Eurodollar time
deposits, or bankers' acceptances having in each case a tenor of not
more than six (6) months, issued by any U.S. commercial bank having
combined capital and surplus of not less than five hundred million
Dollars ($500,000,000) whose short term securities are rated at A-1 by
Standard & Poor's Corporation and P-1 by Xxxxx'x Investors Service,
Inc.;
(c) Commercial paper of an issuer rated either at least A-1 by
Standard & Poor's Corporation and/or P-1 by Xxxxx'x Investors Service
Inc. and in either case having a tenor of not more than two hundred
seventy (270) days;
(d) Repurchase obligations with a term of not more than seven
(7) days for underlying securities of the types described in clauses
(a) and (b) above entered into with any financial institution meeting
the qualifications specified in clause (b) above;
(e) Obligations issued by agencies of the United States
Government not fully guaranteed by the United States Government having
maturities of not more than eighteen (18) months;
(f) Obligations issued by public corporations with a rating of
AAA by Standard & Poor's Corporation; and
(g) Money market mutual funds invested in the instruments
permitted by clauses (a) - (f) above.
"Change In Control" means the Borrower shall cease to have all
of its outstanding capital stock owned by Motient or a direct or indirect
wholly-owned Subsidiary of Motient.
"Closing Date" means the date on or after the date hereof on
which the conditions set forth in Section 3.01 have been satisfied.
"Closing Price" of a share of Motient Common Stock for any day
shall mean the last reported sales price, regular way, or, in the event that no
sale takes place on such day, the average of the reported closing bid and asked
prices, regular way, in either case as reported on the principal national
securities exchange on which such security is listed or admitted to trading or,
if not listed or admitted to trading on any national securities exchange, on the
Nasdaq National Market or the Nasdaq SmallCap Market or, if such security is not
quoted on the Nasdaq National Market or the Nasdaq SmallCap Market, the average
of the closing bid and asked prices on each such day in the over-the-counter
market as reported by Nasdaq or, if bid and asked prices for such security on
each such day shall not have been reported through Nasdaq, the average of the
bid and asked prices for such day as furnished by any reputable investment
banking firm regularly making a market in such security selected for such
purpose by the Board of Directors of Motient or a committee thereof. If the
Closing Price cannot be calculated on such date on any of the foregoing bases,
the Closing Price of such security on such date shall be the fair market value
as reasonably determined by an Independent Financial Expert selected for such
purpose by the Board of Directors of Motient or a committee thereof.
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"Code" means the Internal Revenue Code of 1986, as amended, or
any successor statute.
"Collateral" means all property with respect to which Liens
are created or purported to be created pursuant to the Security Agreement and
the Pledge Agreements.
"Collateral Agent" has the meaning set forth in the
introductory paragraph hereto.
"Commitment" means, with respect to each Lender, the amount
set forth next to its name in the Commitment Schedule, as such amount may be
reduced from time to time pursuant to Section 2.01.
"Commitment Schedule" means the Commitment Schedule attached
hereto.
"Consolidated Capital Expenditures" means, for any period,
expenditures (including the aggregate amount of Capital Lease Obligations
incurred during such period) made by the Parent Guarantors, the Borrower and
their Consolidated Subsidiaries to acquire or construct fixed assets, plant and
equipment (including renewals, improvements and replacements but excluding
repairs) for such period, as determined in accordance with GAAP.
"Consolidated Net Working Investment," as of any date, shall
mean the difference between current assets and current liabilities.
"Consolidated Subsidiary" means at any date and with respect
to any Person, any Subsidiary or other entity the accounts of which would be
consolidated with those of such Person in its consolidated financial statements
if such statements were prepared as of such date.
"Contingent Obligation" means, as applied to any Person, any
direct or indirect liability of that Person with respect to any Indebtedness,
lease, dividend, letter of credit or other obligation (the "primary
obligations") of another Person (the "primary obligor"), including, without
limitation, any obligation of that Person, whether or not contingent, (a) to
purchase, repurchase or otherwise acquire such primary obligations or any
property constituting direct or indirect security therefor, or (b) to advance or
provide funds (i) for the payment or discharge of any such primary obligation,
or (ii) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency or any balance sheet item, level
of income or financial condition of the primary obligor, or (c) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation, or (d) otherwise to assure or hold harmless
the holder of any such primary obligation against loss in respect thereof, or
(e) to purchase or otherwise acquire, or otherwise to assure a creditor against
loss in respect of any Indebtedness. For purposes of this definition, the amount
of any Contingent Obligation shall be deemed to be an amount equal to the
maximum reasonably anticipated liability in respect thereof.
"Contractual Obligation" means, as to any Person, any
provision of any security issued by such Person or of any agreement,
undertaking, contract, indenture, mortgage, deed of trust or other instrument,
document or agreement to which such Person is a party or by which it or any of
its property is bound.
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"Default" means any condition or event which constitutes an
Event of Default or which with the giving of notice or lapse of time or both
would, unless cured or waived, become an Event of Default.
"Disbursement Account" means account number 417-500409366 at
the Chase Manhattan Bank or such other account as the Administrative Agent shall
from time to time designate.
"Dollars" means United States dollars.
"EBITDA" shall mean, for any period, determined in accordance
with GAAP, the sum of (i) net income (or net loss) plus (ii) all amounts treated
as expenses for depreciation and interest and the amortization of intangibles of
any kind to the extent included in the determination of such net income (or
loss), plus (iii) all taxes on or measured by gross or net income to the extent
included in the determination of such net income (or loss). For purposes of the
foregoing, notwithstanding any requirement of GAAP to the contrary, net income
shall exclude:
(a) any restoration to income of any contingencies or
non-recurring charge reserves, except to the extent that
provision for such reserves was made out of income accrued during
such period and except for normal accruals and reversals in the
ordinary course of business;
(b) any write-up or write-down of any asset, and all equity
and earnings and losses of unconsolidated investments in joint
ventures, Subsidiaries, and other business organizations:
(c) any net gain for the collection of the proceeds of life
insurance policies; (d) any gain or loss arising from the
acquisition of any securities or indebtedness and any net loss
arising from the exercise or grant of any warrant or option;
(e) any deferred credit representing the excess of equity in
any Person at the date of acquisition over the cost of the
investment in such Person;
(f) any aggregate net gain (or loss) during such period
arising from the sale, exchange, lease or other disposition of
capital assets (such term to include all fixed assets, whether
tangible or intangible, all inventory sold in conjunction with
disposition of fixed assets, and all securities) other than (i)
any sale, exchange or disposition in the ordinary course of
business and (ii) any sale, exchange or disposition of equipment
utilized in the business of Motient;
(g) any adjustments made related to non-cash employee
incentive or compensation programs;
(h) all extraordinary items; and
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(i) any change in accruals for long-term (more than one (1)
year) personnel-related costs, such as vacation time, pension
liabilities and retirees insurance.
"Event of Default" has the meaning set forth in Section
6.01.
"Existing Term Credit Agreement" has the meaning set forth
in the Recitals hereto.
"Existing Warrant" means any option, warrant, or other right
to acquire any shares of Motient Common Stock outstanding on the Closing Date
and set forth on Schedule 5.22.
"Federal Funds Effective Rate" means, for any day, the
weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for
such day for such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it.
"Free Cash Flow" shall mean, for any period, determined in
accordance with GAAP, (A) EBITDA during such period, less (B) the sum of (1)
Consolidated Capital Expenditures, plus (2) consolidated cash interest expense,
plus (3) amount of any increase between the beginning and end of such period in
Consolidated Net Working Investment, plus (4) cash taxes paid, plus (5)
reductions of the principal amount of long-term debt, vendor financing, capital
leases or other obligations.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the accounting
profession), or in such other statements by such other entity as may be in
general use by significant segments of the U.S. accounting profession, which are
applicable to the circumstances as of the date of determination.
"Government Approvals" means any authorizations, consents,
approvals, licenses, leases, rulings, permits, tariffs, rates, certifications,
exemptions, filings or registrations by or with any Governmental Authority
required to be obtained or held by the Borrower.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, any central Lender (or similar
monetary or regulatory authority) thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"Holdings" has the meaning set forth in the introductory
paragraph hereto.
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"Indebtedness" of any Person means without duplication, (a)
all obligations for borrowed money or with respect to deposits or advances of
any kind; (b) all obligations issued, undertaken or assumed as the deferred
purchase price of capital assets (excluding current accounts payable incurred in
the ordinary course of business); (c) all obligations, contingent or otherwise,
with respect to surety bonds, letters of credit, bankers acceptances and similar
instruments (in each case, whether or not matured), excluding performance bonds
and similar undertakings in the ordinary course of business of the Borrower, to
the extent that such undertakings do not secure an obligation for borrowed money
or the deferred purchase price of a capital asset; (d) all obligations evidenced
by notes, bonds, debentures or similar instruments, including obligations so
evidenced incurred in connection with the acquisition of property, assets or
businesses, excluding performance bonds and similar undertakings in the ordinary
course of business of the Borrower, to the extent that such undertakings do not
secure an obligation for borrowed money or the deferred purchase price of a
capital asset; (e) all obligations under any conditional sale or other title
retention agreement, or incurred as financing, in either case with respect to
property acquired by the Person (even if the rights and remedies of the seller
or Lender under such agreement in the event of default are limited to
repossession or sale of such property); (f) all Capital Lease Obligations; (g)
all net obligations with respect to Rate Contracts; (h) sale-leaseback
financings; (i) all Contingent Obligations; and (j) all Indebtedness of others
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien upon or in property
(including accounts and contract rights) owned or acquired by such Person,
whether or not such Person has assumed or become liable for the payment of such
Indebtedness. For purposes of this definition, the Indebtedness of any Person
shall include the Indebtedness of any other entity to the extent such Person is
liable therefore as a result of such Person's ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefore.
"Indemnitee" has the meaning set forth in Section 9.03(b).
"Independent Financial Expert" means a nationally recognized
investment banking firm that does not (and whose directors, officers, employees
and Affiliates do not) have a direct or indirect financial interest in Motient
or any of its Affiliates, that has not been and at the time it is called upon to
give independent financial advice to Motient is not (and none of whose
directors, officers, employees or Affiliates is) a promoter, director or officer
of Motient or any of its Affiliates, and that does not provide any advice or
opinions to Motient or any of its Affiliates.
"Investment" means any investment in any Person, whether by
means of share purchase, capital contribution, loan, Contingent Obligation, time
deposit or otherwise (but not including any demand deposit).
"Lender" means each Lender listed on the signature pages
hereof or which shall become a lender pursuant to the terms hereof.
"Lien" means any mortgage, deed of trust, pledge,
hypothecation, assignment, charge or deposit arrangement, encumbrance, lien
(statutory or other) or preference, priority or other security interest or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, those created by, arising under or evidenced by any conditional sale
7
or other title retention agreement, the interest of a lessor under a Capital
Lease Obligation, any financing lease having substantially the same economic
effect as any of the foregoing, or the filing of any financing statement naming
the owner of the asset to which such lien relates as debtor, under the UCC or
any comparable law) and any contingent or other agreement to provide any of the
foregoing.
"Loan" means each loan made by the Lenders from time to time
pursuant to this Agreement.
"Loan Documents" means this Agreement, the Security Agreement,
the Parent Guarantor Note Subordination Agreement and the Pledge Agreements, and
all agreements, instruments and documents executed and delivered in connection
herewith and therewith, each as amended, supplemented, waived or otherwise
modified from time to time.
"Material Adverse Effect" means a material adverse change in,
or a material adverse effect upon, any of the operations, business, properties,
condition (financial or otherwise) or liabilities of the Borrower, the Parent
Guarantors and their Subsidiaries, taken as a whole, including a material
adverse effect on:
(a) the ability of any of the Borrower, the Parent Guarantors
or their Subsidiaries to perform its obligations under any Loan
Document to which it is a party in such document's entirety or with
respect to any material provision thereof;
(b) the validity or enforceability of any Loan Document in its
entirety or with respect to any material provision thereof (including,
in the case of the Security Agreement, any Lien in favor of the Secured
Parties thereunder);
(c) any material rights and remedies of any Lender under any
Loan Document to which such Lender is a party or an intended
beneficiary; and
(d) the timely payment of the principal of or interest on any
Loan or other amounts payable in connection therewith;
provided none of the following shall, in and of itself, be deemed to constitute
a Material Adverse Effect: (x) any change attributable to or arising from
general economic conditions, (y) any change that generally affects the
industries in which the Borrower and the Parent Guarantors operate and that is
not specifically related to, and does not have a materially disproportionate
effect (relative to other industry participants, on the Borrower or any Parent
Guarantor and (z) the chapter 11 Reorganization under the United States
Bankruptcy Code of Motient, Holdings, Borrower and Services, and the events and
conditions directly related thereto; provided further that any change or effect
not constituting a Material Adverse Effect by virtue of the preceding proviso to
this definition may, notwithstanding such proviso, otherwise constitute an Event
of Default.
"Maturity Date" means, with respect to each Loan hereunder,
the third anniversary of the date such Loan was extended.
"Motient" has the meaning set forth in the introductory
paragraph hereto.
8
"Motient Common Stock" has the meaning set forth in Section
2.06(b).
"Motient Corporation Share Pledge Agreement" means the
agreement dated as of the Closing Date herewith between Motient and the
Collateral Agent.
"Motient Holdings Share Pledge Agreement" means the agreement
dated as of the Closing Date herewith between Holdings and the Collateral Agent.
"Net Cash Proceeds" means the net cash proceeds (net of
underwriting discounts and commissions, placement and similar fees to brokers,
agents and investment bankers) of any issuance of equity securities less any
out-of-pocket costs and expenses (excluding administrative expenses and
overhead) reasonably incurred by such Person in respect of such issuance.
"Notes" means promissory notes of the Borrower, substantially
in the form of Exhibit A hereto, evidencing the obligation of the Borrower to
repay the Loans, and "Note" means any one of such promissory notes issued
hereunder.
"Notice of Lien" means any "notice of lien" or similar
document intended to be filed or recorded with any court, registry, recorder's
office, central filing office or Governmental Authority for the purpose of
evidencing, creating, perfecting or preserving the priority of a Lien securing
obligations owing to a Governmental Authority.
"Obligations" means all Loans, and other Indebtedness,
advances, debts, liabilities, and obligations, owing by the Borrower to any
Lender or any other Person required to be indemnified under any Loan Document,
of any kind or nature, present or future, whether or not evidenced by any note,
guaranty or other instrument, arising under this Agreement, under any other Loan
Document, whether or not for the payment of money, whether arising by reason of
an extension of credit, loan, guaranty, indemnification or in any other manner,
whether direct or indirect (including those acquired by assignment), absolute or
contingent, due or to become due, now existing or hereafter arising and however
acquired.
"Parent Guarantor Note" means the promissory note dated August
3, 1999 by Motient Holdings Inc. (formerly known as AMSC Acquisition Company,
Inc.) in favor of Motient Corporation (formerly known as American Mobile
Satellite Corporation) in the face amount of $8,000,000 and (b) the promissory
note dated September 28, 1999 by Motient Holdings Inc. (formerly known as AMSC
Acquisition Company, Inc.) in favor of Motient Corporation (formerly known as
American Mobile Satellite Corporation) in the face amount of $6,000,000, and in
each case subject to the Parent Guarantor Note Subordination Agreement.
"Parent Guarantor Note Subordination Agreement" means the
subordination agreement among the Parent Guarantors and the Lenders with respect
to Indebtedness under the Parent Guarantor Notes, substantially in the form of
Exhibit F.
"Parent Guarantors" has the meaning set forth in the
introductory paragraph hereto.
"Permitted Liens" has the meaning set forth in Section 5.15.
9
"Person" means an individual, a corporation, a limited
liability company, a partnership, an association, a trust or any other entity or
organization, including any Governmental Authority or an agency or
instrumentality thereof.
"Pledge Agreements" means, collectively, the Motient
Corporation Share Pledge Agreement and the Motient Holdings Share Pledge
Agreement, substantially in the form of Exhibit E.
"Qualified Equity Issuance" means the issuance of any equity
securities by Motient or any of its Subsidiaries (other than equity securities
(t) issued pursuant to any stock option, stock purchase or other plan intended
to benefit or compensate the officers, directors or employees of Motient or any
of its Subsidiaries, (u) issued to Motient or any of its Subsidiaries (v) issued
upon the exercise of any Existing Warrant, (w) issued to the Lenders as
contemplated by any Loan Document, (x) issued to financial institutions,
financial syndicates or lessors in connection with bona fide commercial credit
arrangements, equipment financings, or similar transactions for primarily other
than equity financing purposes, (y) issued in connection with a strategic
alliance or similar commercial arrangement or similar transactions for primarily
other than equity financing purposes, and (z) issued in connection with an
acquisition of another Person by Motient or any of its Subsidiaries by merger or
purchase of all or substantially all of the capital stock of such Person or
purchase of all or substantially all of the assets of such Person) where the Net
Cash Proceeds to the issuer of such securities exceeds fifteen million Dollars
($15,000,000). The description of any transaction as falling within the above
definition does not affect any limitation on such transaction imposed by Article
5 of this Agreement.
"Rate Contracts" means interest rate and currency swap
agreements, cap, floor and collar agreements, interest rate insurance, currency
spot and forward contracts and other agreements or arrangements designed to
provide protection against fluctuations in interest or currency exchange rates;
provided that such agreements or arrangements are documented under master
netting agreements.
"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"Related Parties" means, with respect to any specified Person,
such Person's Affiliates and the respective directors, officers, employees,
agents and advisors of such Person and such Person's Affiliates.
"Repayment Account" means account number 417-500409365 at the
Chase Manhattan Bank or such other account as the Administrative Agent shall
from time to time designate.
"Repayment Date" means the date that each of the Loans,
together with all accrued interest thereon and any fees or other amounts due any
Lender hereunder or under any other Loan Document, are irrevocably repaid in
full.
"Required Lenders" means, at any time, Lenders having
outstanding Loans and unused Commitments representing at least 66?% of the sum
of the total outstanding Loans and unused Commitments at such time.
10
"Requirement of Law" means, as to any Person, any law
(statutory or common), treaty, rule or regulation or determination of an
arbitrator or of a Governmental Authority, in each case applicable to or binding
upon the Person or any of its property or to which the Person or any of its
property is subject.
"Responsible Officer" means, with respect to any Person, the
Chief Executive Officer, the President or a duly authorized Vice President or,
with respect to financial matters, the Chief Financial Officer or the Treasurer,
of such Person.
"Restricted Payment" means any dividend or other distribution
(whether in cash, securities or other property) with respect to any shares of
any class of capital stock of the Parent Guarantors, the Borrower or any of
their Subsidiaries, or any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
any such shares of capital stock of the Parent Guarantors, the Borrower or any
of their Subsidiaries or any option, warrant or other right to acquire any such
shares of capital stock of the Parent Guarantors, the Borrower or any of their
Subsidiaries; provided, however, that the following shall not be considered a
Restricted Payment: (i) any Qualified Equity Issuance approved by the Lenders,
(ii) any warrants (or the issuance of Motient Common Stock upon the exercise of
such warrants) issued by Motient to a Lender to purchase shares of common stock
of Motient (as such warrants are described in Section 2.06(b) hereof), (iii) any
Existing Warrant (and the issuance of Motient Common Stock upon the exercise
thereof) or (iv) any dividend or distribution approved by the Lenders.
"Secured Parties" means the Lenders.
"Security Agreement" means the Security Agreement dated as of
even date herewith between the Borrower and the Collateral Agent, substantially
in the form of Exhibit D.
"Service Revenue" shall mean, for any period, gross revenues
from services, including but not limited to, data service, consulting fees, and
extended warranty fees, but "Service Revenue" shall exclude revenues derived
from sales of equipment or lease proceeds.
"Services" means Motient Services Inc.,a Delaware corporation.
"Subsidiary" means, as to any Person, any corporation or other
entity of which securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other persons performing
similar functions are at the time directly or indirectly owned by such Person.
"Termination Date" means December 31, 2003, or if such date is
not a Business Day, the next succeeding Business Day.
"UCC" means the Uniform Commercial Code as in effect in the
State of New York.
"United States" means the United States of America, including
the States thereof and the District of Columbia, but excluding its territories
and possessions.
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"Vendor Financing Indebtedness" means Indebtedness incurred by
the Borrower, the proceeds of which are used solely to acquire equipment or
inventory.
Section 1.02. Construction.
(a) Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with GAAP as
in effect from time to time, applied on a basis consistent (except for changes
concurred in by Motient's independent public accountants) with the most recent
audited consolidated or combined financial statements of Motient and its
Consolidated Subsidiaries, delivered to the Lenders.
(b) For purposes of this Agreement, whenever the context
requires: the singular number shall include the plural, and vice versa; the
masculine gender shall include the feminine and neuter genders; the feminine
gender shall include the masculine and neuter genders; and the neuter gender
shall include masculine and feminine genders.
(c) As used in this Agreement, the words "include" and
"including," and variations thereof, shall not be deemed to be terms of
limitation, but rather shall be deemed to be followed by the words "without
limitation."
(d) Except as otherwise indicated, all references in this
Agreement to "Sections" and "Exhibits" are intended to refer to Sections of this
Agreement and Exhibits to this Agreement.
ARTICLE 2
THE CREDITS
Section 2.01. Commitments. During the Availability Period, each Lender
severally agrees, on the terms and conditions set forth in this Agreement, to
make Loans to the Borrower from time to time in an aggregate principal amount
not to exceed such Lender's Commitment, and in an aggregate principal amount for
all Lenders not to exceed twelve million five hundred thousand Dollars
($12,500,000). The Commitments are not revolving in nature and amounts repaid or
prepaid may not be reborrowed.
Section 2.02. Loans and Borrowings.
(a) Obligations of Lenders. Each Loan shall be made as part of
a Borrowing consisting of Loans made by Lenders ratably in accordance with their
respective Commitments. The failure of any Lender to make any Loan required to
be made by it shall not relieve any other Lender of its obligations hereunder,
provided that the Commitments of the Lenders are several and no Lender shall be
responsible for any other Lender's failure to make Loans as required herein.
(b) Borrowing Amounts. Each Borrowing shall be in the
aggregate principal amount of five hundred thousand Dollars ($500,000) or any
larger multiple of five hundred thousand Dollars ($500,000), provided, that no
single Borrowing may exceed one million five hundred thousand Dollars
($1,500,000).
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Section 2.03. Requests for Borrowing.
(a) The Borrower shall give the Administrative Agent
irrevocable telephonic notice, confirmed immediately by telecopy (a
"Borrowing Request"), not later than 10:30 A.M. (New York City time) on
the first Business Day of any calendar month during the Availability
Period during which a Borrowing is proposed, and no more than one
Borrowing may be requested during any single calendar month:
(i) specifying the proposed date of such Borrowing, which
shall be a Business Day;
(ii) stating the aggregate amount of such Borrowing; and
(iii) certifying that the Boards of Directors of the Borrower
and each of the Parent Guarantors have specifically approved the
proposed Borrowing and the guaranty of the repayment thereof.
The Borrower may submit its initial Borrowing Request concurrently with the
closing hereunder.
(b) Promptly following the receipt of a Borrowing Request in
accordance with this Section, the Administrative Agent shall advise each Lender
of the details thereof and of the amount of such Lender's Loan to be made as
part of the requested Borrowing.
(c) Each Lender shall make each Loan to be made by it
hereunder on the proposed date thereof by wire transfer of immediately available
funds by 5:00 PM, New York City time, to the Disbursement Account; provided,
however, that the failure by any one Lender to fund its ratable share of any
Borrowing shall not increase the amount that any other Lender is obligated to
fund for any Borrowing hereunder. The Administrative Agent will make each Loan
available to the Borrower by promptly crediting the amounts so received, in like
finds, to an account of the Borrower maintained with the Administrative Agent in
New York City and designated by the Borrower in the applicable Borrowing
Request.
(d) Unless the Administrative Agent shall have received notice
from a Lender prior to the proposed date of any Borrowing that such Lender will
not make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (c) of this Section
and may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Administrative Agent, then the
applicable Lender agrees to pay to the Administrative Agent forthwith on demand
such corresponding amount with interest thereon, for each day from and including
the date such amount is made available to the Borrower to but excluding the date
of payment to the Administrative Agent, at the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation. If such Lender pays such
amount to the Administrative Agent, then such amount shall constitute such
Lender's Loan included in such Borrowing. In the event that the Lender has not
13
made its share of the applicable Borrowing available to the Administrative Agent
within 30 days, then such amount, together with interest thereon at the Federal
Funds Effective Rate, shall be payable by the Borrower upon demand from the
Administrative Agent.
Section 2.04. Notes.
(a) The Loans of each Lender shall each be evidenced by a
single Note payable to the order of such Lender. Each reference in this
Agreement to the "Note" of a Lender shall be deemed to refer to and include the
Notes of such Lender described in this Section, as the context may require.
(b) Each Lender may, by notice to the Borrower, request that
each of its Loans made to the Borrower hereunder be evidenced by a separate Note
in an amount equal to the aggregate unpaid principal amount of such Loan. Each
Note shall be substantially in the form of Exhibit A hereto with appropriate
modifications, if applicable, to reflect the fact that it evidences a separate
Loan.
(c) Each Lender may record the date and amount of each Loan
made by it and the date and amount of each payment of principal made by the
Borrower with respect thereto on the Note received by such Lender pursuant to
Section 3.01(a), and may, if such Lender so elects in connection with any
transfer or enforcement of any of its Notes, endorse on the schedule forming a
part thereof appropriate notations to evidence the foregoing information with
respect to each Loan then outstanding thereunder; provided that the failure of
any Lender to make any such recordation or endorsement shall not affect the
obligations of the Borrower hereunder or under the Notes. Each Lender is hereby
irrevocably authorized by the Borrower so to endorse its Notes and to attach to
and make a part of its Notes a continuation of any such schedule as and when
required.
Section 2.05. Maturity of Loans. Each Loan (together with accrued interest
thereon) shall be due and payable in full on such Loan's Maturity Date.
Section 2.06. Interest; Fees.
(a) Each Loan shall bear interest on the outstanding principal
amount thereof, for each day from the date such Loan is made until it becomes
due and payable, at a rate per annum equal to twelve percent (12%). Interest
shall accrue during the term of each such Loan and shall be compounded annually
on each anniversary of the making of such Loan, and shall accrue interest
hereunder on principal until paid. Accrued interest on Loans shall be payable
upon the earlier of (i) the Maturity Date of such Loan and (ii) such other date
that such Loan's principal is prepaid (on the amount so repaid or prepaid). Any
overdue principal of or interest on any Loan shall bear interest, payable on
demand, for each day until paid in full at a rate per annum equal to fourteen
percent (14%) per annum.
(b) On the Closing Date, the Borrower shall pay to the
Administrative Agent for the account of the Lenders (for distribution to each
Lender ratably in proportion to its Commitment) a commitment fee of two hundred
fifty thousand Dollars ($250,000) and a closing fee of two hundred fifty
thousand Dollars ($250,000). On the Closing Date, as additional compensation for
14
the Commitments made by the Lenders hereunder, Motient shall issue to each
Lender, a warrant to purchase shares of common stock of Motient ("Motient Common
Stock") substantially in the form of Exhibit B hereto. The exercise price for
such warrants shall be one Dollar and six cents ($1.06). The aggregate number of
shares of Motient Common Stock underlying such warrants shall be three million
one hundred and twenty five thousand (3,125,000) and the number of shares of
Motient Common Stock underlying each Lender's warrant shall be determined
ratably in proportion to each Lender's Commitments.
(c) On the Termination Date, the Borrower shall pay to the
Administrative Agent for the account of the Lenders (for distribution to each
Lender ratably in proportion to its Commitment), a commitment fee equal to a per
annum rate of .0125 (for the actual number of days elapsed) multiplied by the
average daily undrawn amount of aggregate Commitments of the Lenders during the
period from the Closing Date to the Termination Date.
(d) The Borrower agrees to pay to the Administrative Agent,
for its own account, fees in the amount of $15,000 per annum, payable in advance
on the Closing Date and on each anniversary thereof.
(e) All fees payable hereunder shall be paid on the dates due,
in immediately available funds, to the Administrative Agent for distribution, as
applicable, to the Lenders. Fees paid shall not be refundable under any
circumstances.
Section 2.07. Mandatory Termination; Optional Termination or Reduction of
Commitments.
(a) All Commitments shall terminate on the Termination Date.
(b) During the Availability Period, the Borrower may, upon at
least three Business Days' notice to the Administrative Agent, (i) terminate the
Commitments in their entirety and this Agreement at any time, if no Loans are
outstanding at such time, or (ii) ratably reduce from time to time by an
aggregate amount of $1,000,000 or a larger multiple of $1,000,000, the aggregate
amount of the Commitments in excess of the aggregate outstanding principal
amount of the Loans. Promptly following the receipt of any such notice, the
Administrative Agent shall advise the Lenders of the contents thereof. Each
notice delivered by the Borrower pursuant to this Section shall be irrevocable
and any termination or reduction of the Commitments shall be permanent. Each
reduction of Commitments pursuant to this Section 2.07(b) shall be applied
ratably to the respective Commitments of the Lenders. If the Borrower terminates
all of the Commitments and this Agreement, the Lenders shall, to the extent that
all obligations owing to the Lenders have been fully satisfied, and no Lender
has any further obligation hereunder or under any Loan Document, execute such
documents, agreements, and filings as the Borrower may reasonably request in
order to terminate all liens and security interests relating to the Collateral,
and shall take such other action as the Borrower may reasonably request to
evidence the termination of all obligations under this Agreement, the Security
Agreement, the Pledge Agreements, and any other related or ancillary agreement
or document.
15
Section 2.08. Optional Prepayments. The Borrower may, upon at least one (1)
Business Day's notice to the Administrative Agent, prepay any Borrowing in whole
or in part at any time, or from time to time in part in amounts aggregating five
hundred thousand Dollars ($500,000) or any larger multiple of five hundred
thousand Dollars ($500,000), by paying the principal amount to be prepaid
together with accrued interest thereon to the date of prepayment. Each such
notice shall be irrevocable and shall specify the prepayment date, the principal
amount of each Borrowing or portion thereof to be repaid and each such
prepayment shall further be made in accordance with Section 2.10. Promptly
following the receipt of any such notice, the Administrative Agent shall advise
the Lenders of the contents thereof. Each such optional prepayment shall be
applied to the Borrowings in the inverse order of their maturity.
Section 2.09. Mandatory Prepayments Upon Equity Issuance. In the event that
there occurs (a) a Qualified Equity Issuance, the Borrower shall, within two (2)
Business Days after the consummation of such Qualified Equity Issuance, prepay
the Loans in an amount equal to the lesser of (i) twenty-five percent (25%) of
the Net Cash Proceeds in excess of fifteen million Dollars ($15,000,000) from
such Qualified Equity Issuance and (ii) the aggregate amount outstanding under
the Loans at the time of the consummation of such Qualified Equity Issuance or
(b) a disposition of assets by the Borrower or a Parent Guarantor other than as
permitted pursuant to Section 5.16, the Borrower shall, within two (2) Business
Days of such disposition, prepay Loans in an aggregate principal amount equal to
one hundred percent (100%) of the value received for such assets disposed of.
Section 2.10. General Provisions as to Payments. The Borrower shall make each
payment or prepayment of principal of, and interest on, the Loans, and of fees
hereunder, not later than 12:00 noon (New York City time) on the date when such
payment is due, or such optional prepayment is scheduled to be made, in Federal
or other funds immediately available, without set-off or counterclaim, to the
Administrative Agent for the account of each Lender by wire transfer to the
Repayment Account. The Administrative Agent shall distribute any such payments
received by it for the account of the Lenders pro rata in accordance with the
Commitments of the Lenders promptly following the receipt thereof. Whenever any
prepayment or payment of principal of, or interest on, the Loans or of fees
shall be due on a day which is not a Business Day, the date for payment thereof
shall be extended to the next succeeding Business Day. If the date for any
payment of principal is extended by operation of law or otherwise, interest
thereon shall be payable for such extended time. Each payment or prepayment of
principal or other amount specified herein shall be applied ratably to the Loans
included in such repaid or prepaid Borrowing.
Section 2.11. Computation of Interest and Fees. Interest and commitment fees
hereunder shall be computed on the basis of a year of 365 days (or 366 days in a
leap year) and paid for the actual number of days elapsed (including the first
day but excluding the last day).
ARTICLE 3
CONDITIONS
Section 3.01. Conditions to Closing. The obligations of the Lenders hereto as
set forth herein, shall not become effective until the date on which each of the
following conditions is satisfied (the "Closing Date"):
16
(a) the Administrative Agent shall have received all of the
following, in form and substance satisfactory to the Lenders and (other
than the Notes) in sufficient copies for each Lender:
(i) from each party hereto, a counterpart of this
Agreement signed on behalf of such party;
(ii) a duly executed Note for the account of each
Lender dated the Closing Date complying with the provisions of
Section 2.04;
(iii) the Security Agreement duly executed by the
Borrower;
(iv) the Pledge Agreements duly executed by Motient
and Holdings, as applicable;
(v) the Parent Guarantor Note Subordination Agreement
duly executed by each Parent Guarantor;
(vi) the articles and certificate of incorporation of
each of the Borrower and the Parent Guarantors as in effect on
the Closing Date, certified by the Secretary of State or
equivalent official of the jurisdiction of incorporation of
such person as of a recent date and by the Secretary or
Assistant Secretary of such Person as of the Closing Date, and
the bylaws of such Person as in effect on the Closing Date,
certified by the Secretary or Assistant Secretary of such
Person as of the Closing Date;
(vii) a good standing certificate for each of the
Borrower and the Parent Guarantors from the Secretary of State
of its state of incorporation and each state where such Person
is qualified to do business as a foreign corporation as of a
recent date, together with a bring-down certificate by telex
or telecopy, dated the Closing Date;
(viii) copies of the resolutions of the board of
directors of: (x) the Borrower approving and authorizing the
execution, delivery and performance by the Borrower of this
Agreement and the other Loan Documents to be delivered by it
and authorizing the borrowing and repayment of the Loans from
time to time pursuant to this Agreement, certified as of the
Closing Date by the Secretary or an Assistant Secretary of the
Borrower, and (y) each of the Parent Guarantors approving and
authorizing the execution, delivery and performance by such
Person of each Loan Document to be delivered by it, certified
as of the Closing Date by the Secretary or an Assistant
Secretary of such Person;
(ix) a certificate of the Secretary or an Assistant
Secretary of the Borrower and each of the Parent Guarantors,
certifying the names and true signatures of its officers
authorized to execute, deliver and perform, as applicable, all
Loan Documents to be delivered by it hereunder;
17
(x) a certificate signed by a Responsible Officer of
the Borrower, dated as of the Closing Date, stating that the
conditions set forth in Sections 3.01(b) and 3.01(c) are
satisfied as of such date;
(xi) written advice relating to such Lien and
judgment searches as Lenders shall have requested of the
Borrower, and such termination statements or other documents
as may be necessary to release any Lien in favor of any third
party not otherwise permitted by Section 5.15;
(xii) evidence (A) that all filings, recordations,
registrations and other actions necessary or, in the opinion
of the Lenders, desirable to perfect and protect a first
priority (except for Permitted Liens arising by operation of
law) security interest in and Lien on the Collateral in favor
of the Lenders have been duly effected or taken; (B) that each
Lien created by the Security Agreement and the Pledge
Agreements in the Collateral constitutes a perfected Lien on
or in all right, title, estate and interest of the Borrower in
such Collateral prior and superior to all Liens other than
Permitted Liens arising by operation of law; and (C) that all
necessary and appropriate consents to the creation and
perfection of such Liens will have been obtained;
(xiii) an opinion of Xxxxxx X. Xxxxxxx, associate
counsel to the Borrower, substantially in the form of Exhibit
C hereto;
(xiv) a copy of the financial statements of Motient
and its Consolidated Subsidiaries referred to in Section
4.09(a) and (b), certified by a Responsible Officer of
Motient;
(b) all costs, accrued and unpaid fees and expenses (including
the commitment fees and legal fees and expenses) to the extent then due
and payable on the Closing Date by the Borrower hereunder shall have
been paid;
(c) all approvals, licenses, authorizations, consents, filings
and registrations of or with all Governmental Authorities and other
Persons which shall be necessary in connection with the execution,
delivery, performance and validity of this Agreement, the Notes, the
Security Agreement and the Pledge Agreements and the warrants to be
issued pursuant to Section 2.06, and the transactions contemplated
hereby and thereby shall have been obtained; and
(d) the matters referred to on Schedule 4.13 under "Motorola
Default; Related Issues and Possible HP Default" and on Schedule 4.06
generally, shall have been resolved or addressed, in a manner
reasonably satisfactory to the Required Lenders.
Section 3.02. Conditions to Each Loan. The obligation of each Lender to
make each Loan on the occasion of any Borrowing is subject to the satisfaction
of the following conditions:
(a) receipt by the Administrative Agent of a Borrowing Request
as required by Section 2.03(a);
18
(b) immediately after giving effect to such Borrowing, the
aggregate outstanding principal amount of the Loans will not exceed the
aggregate amount of the Commitments;
(c) immediately before and after giving effect to such
Borrowing, no Default shall have occurred and be continuing; and
(d) immediately before and after giving effect to such
Borrowing, the representations and warranties of the Borrower and the
Parent Guarantors contained in the Loan Documents shall be true in all
material respects on and as of the date of such Borrowing, except to
the extent that any such representation or warranty is made as of a
specified date, in which case such representation or warranty shall be
true in all material respects as of such specified date.
The delivery of each Borrowing Request hereunder shall be deemed to be a
representation and warranty by the Borrower and the Parent Guarantors on the
date of delivery of such Borrowing Request and on the date of such Borrowing
that the facts specified in clauses (b) through (d) of this Section 3.02 are
true and correct.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Each of the Borrower and the Parent Guarantors represents and
warrants that, as of the Closing Date:
Section 4.01. Corporate Existence and Power. Each of the Borrower and the
Parent Guarantors, and each of their Subsidiaries, respectively (a) is a
corporation duly incorporated, validly existing and in good standing under the
laws of the jurisdiction of its incorporation; (b) has the power and authority
and all material governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted; (c) is duly qualified as a
foreign corporation, licensed and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of property or the conduct
of its business requires such qualification; and (d) is in compliance with all
Requirements of Law except, in the case of clauses (c) and (d), where the
failure to be so qualified or in compliance could not reasonably be expected to
have a Material Adverse Effect. Section 4.02. ...Corporate Authorization; No
Contravention. The execution, delivery and performance by each of the Borrower
and the Parent Guarantors of any Loan Document to which it is a party have been
duly authorized by all necessary corporate action and do not and will not: (a)
contravene the terms of such Person's certificate of incorporation, bylaws or
other organization document; (b) conflict with or result in any breach or
contravention of, or the creation of any Lien under, any indenture, agreement,
lease, instrument, Contractual Obligation, injunction, order, decree or
undertaking to which such Person is a party; or (c) violate any Requirement of
Law.
Section 4.03. Government Approvals. All material Government Approvals
heretofore required to be obtained have been duly obtained, were validly issued,
are in full force and effect, are not subject to appeal and are held in the name
of, or for the benefit of, the appropriate Persons. There has not occurred any
19
event that would make unlikely the delivery or issuance as anticipated of, and
when and as needed all such Government Approvals. No such Government Approval
already obtained is subject to any restriction, condition, limitation or other
provision that would have a Material Adverse Effect. No other material consent,
approval or authorization of, or declaration or filing with, any other Person is
required in connection with the execution, delivery, performance, validity or
enforceability of this Agreement or any other Loan Document.
Section 4.04. Binding Effect. This Agreement and each other Loan Document to
which the Borrower or the Parent Guarantors is a party constitute the legal,
valid and binding obligations of such Person, enforceable against such Person in
accordance with their respective terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, or similar laws affecting the enforcement
of creditors' rights generally or by equitable principles relating to
enforceability.
Section 4.05. Litigation. Except for matters arising after the date hereof
which could not reasonably be expected to have a Material Adverse Effect, there
are no actions, suits, proceedings, claims or disputes pending, or to the best
knowledge of the Parent Guarantors or the Borrower, threatened or contemplated
at law, in equity, in arbitration or before any Governmental Authority, against
the Parent Guarantors or any of their Subsidiaries or any of their respective
properties which: (a) purport to affect or pertain to this Agreement, or any
Loan Document, or any of the transactions contemplated hereby or thereby; or (b)
if determined adversely to the Parent Guarantors or any of their Subsidiaries,
could have a Material Adverse Effect. No injunction, writ, temporary restraining
order or any order of any nature has been issued by any court or other
Governmental Authority purporting to enjoin or restrain the execution, delivery
and performance of this Agreement or any other Loan Document, or directing that
the transactions provided for herein or therein not be consummated as herein or
therein provided.
Section 4.06. No Default. Except as set forth in Schedule 4.06, no Default or
Event of Default exists or would result from the incurring of Obligations by the
Parent Guarantors or any of their Subsidiaries under any Loan Document. Neither
the Parent Guarantors nor any of their Subsidiaries is in default under or with
respect to any Contractual Obligation in any respect which, individually or
together with all such defaults, could have a Material Adverse Effect.
Section 4.07. Title to Property. Each of the Parent Guarantors and the
Borrower has good record and marketable title in fee simple to or valid
leasehold interests in all real property used in its business, except for such
defects in title as could not, individually or in the aggregate, have a Material
Adverse Effect. Such real property is free and clear of all Liens or rights of
others, except Permitted Liens.
Section 4.08. Taxes. Each of the Parent Guarantors and the Borrower and its
Subsidiaries have filed all Federal and other material tax returns and reports
required to be filed and have paid all Federal and other material taxes,
assessments, fees and other governmental charges levied or imposed upon them or
their properties, income or assets otherwise due and payable except those which
are being contested in good faith by appropriate proceedings and for which
20
adequate reserves have been provided in accordance with GAAP and no Notice of
Lien has been filed or recorded. There is no proposed tax assessment against the
Parent Guarantors or any of their Subsidiaries which would, if the assessment
were made, have a Material Adverse Effect.
Section 4.09. Financial Condition.
(a) Except as set forth on Schedule 4.09, the audited
consolidated statements of financial position of Motient and its Consolidated
Subsidiaries dated December 31, 2001, and the related consolidated statements of
loss, stockholders' equity and cash flows for the fiscal year ended on that
date: (i) were prepared in accordance with GAAP consistently applied throughout
the periods covered thereby, except as otherwise expressly noted therein, (ii)
fairly present, in all material respects, the financial condition of Motient and
its Consolidated Subsidiaries as of the date thereof and results of operations
and cash flows for the period covered thereby and (iii) show all material
Indebtedness and other liabilities, direct or contingent, of Motient and its
Consolidated Subsidiaries as of the date thereof (including liabilities for
taxes and material commitments).
(b) Except as set forth on Schedule 4.09, the unaudited
summary consolidated condensed balance sheet of Motient and its Consolidated
Subsidiaries as of September 30, 2002, together with the related summary
condensed statement of operations data for the nine (9) months then ended fairly
present, in conformity with GAAP applied on a basis consistent with the
financial statements referred to in subsection (a) above, the consolidated
financial position of Motient and its Consolidated Subsidiaries as of such date,
based on the assumptions set forth therein. As of such date and the Closing
Date, Motient and its Consolidated Subsidiaries had and have no material
liabilities, contingent or otherwise, which are not properly reflected on such
balance sheet (including liabilities for taxes and material commitments).
Section 4.10. Regulated Entities. None of the Parent Guarantors, any Person
controlling any of the Parent Guarantors, or any Subsidiary thereof, is (a) an
"Investment Company" within the meaning of the Investment Company Act of 1940;
or (b) subject to regulation under the Public Utility Holding Company Act of
1935, the Federal Power Act, the Interstate Commerce Act, any state public
utilities code or any other Federal or state statute or regulation limiting its
ability to incur Indebtedness.
Section 4.11. Subsidiaries. As of the Closing Date, the Borrower does not
have any Subsidiaries and has no equity investments in any other corporation or
entity.
Section 4.12. Insurance. The properties of the Borrower are insured in
accordance with Section 5.06 hereof with financially sound and reputable
insurance companies, in such amounts, with such deductibles and covering such
risks as is customarily carried on by companies engaged in similar businesses
and owning similar properties in localities where the Borrower operates and all
such insurance policies are in full force and effect and all premiums due and
payable as of the date hereof have been paid.
Section 4.13. Business. Except as disclosed on Schedule 4.13, since May 1,
2002 there has been no Material Adverse Effect, and neither the business nor the
properties of the Borrower are or have been affected by any fire, explosion,
21
accident, strike, lockout or other labor dispute, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy or other casualty
(whether or not covered by insurance) which has had, or would reasonably be
expected to have, a Material Adverse Effect.
Section 4.14. Collateral; Property. All contracts and all property now owned
by the Borrower are held by it free and clear of all Liens other than Permitted
Liens. The Borrower has good, marketable and valid title in and to all of the
Collateral now owned by it, in each case free and clear of all Liens other than
Permitted Liens.
Section 4.15. Security Agreement. The Security Agreement creates in favor of
the Lenders, for the equal and ratable (except as expressly provided therein)
benefit of the Secured Parties, legal, valid and enforceable Liens on or in all
of the Collateral to the extent that such Liens may legally be given and be
effective and enforceable. All filings, recordations, registrations and other
actions necessary to perfect such Liens have been duly effected, and, to the
extent that such Liens may legally be given and be effective and enforceable,
each Lien created by the Security Agreement constitutes a perfected Lien on or
in all right, title, estate and interest of the Borrower in the Collateral
covered thereby, prior and superior to all other Liens except Permitted Liens
arising by operation of law, and all necessary and appropriate consents to the
creation and perfection of such Liens have been obtained.
Section 4.16. Disclosure. The information furnished in writing at or prior to
the Closing Date by the Parent Guarantors or the Borrower to any Lender in
connection with this Agreement and the transactions contemplated hereby is true,
complete and accurate in every material respect or based on reasonable estimates
on the date as of which such information is stated or certified and is not
incomplete by omitting to state any material fact necessary to make such
information (taken as a whole) not misleading in light of the circumstances
under which such information was made. There is no fact known to the Parent
Guarantors or the Borrower on the date as of which this representation and
warranty is made that has not been disclosed in writing to the Lenders which
could reasonably be expected to have a Material Adverse Effect.
ARTICLE 5
COVENANTS
Each of the Borrower and the Parent Guarantors agrees that, so
long as any Lender has any Commitment hereunder or any amount payable hereunder
or under any Note remains unpaid:
Section 5.01. Information. The Borrower will deliver to the Administrative
Agent with sufficient copies for each of the Lenders:
(a) as soon as available, but not later than ninety (90) days
after the end of each fiscal year of Motient and its Consolidated
Subsidiaries, commencing with the fiscal year ending December 31, 2002,
a copy of the audited consolidated balance sheets of Motient and its
Consolidated Subsidiaries as at the end of such year and the related
audited consolidated statements of income, stockholders' equity and
cash flows for such fiscal year, setting forth in each case in
comparative form the figures for the previous year, and accompanied by
22
the opinion of Motient's independent public accounting firm (subject,
in the case of such balance sheets and statements of income,
stockholders' equity and cash flows for the period ending December 31,
2002, to the accounting matters set forth on Schedule 4.09) which
report shall state that such consolidated financial statements present
fairly, in all material respects, the financial position, results of
operations and cash flows for the periods indicated in conformity with
GAAP applied on a basis consistent with prior years; and
(b) as soon as available, but not later than forty-five (45)
days after the end of each of the first three fiscal quarters of each
year, commencing with the first such fiscal quarter to end after the
date hereof, a copy of the unaudited consolidated balance sheets of
Motient and its Consolidated Subsidiaries as of the end of such quarter
and the related consolidated statements of income, stockholders' equity
and cash flows for the period commencing on the first day and ending on
the last day of such quarter, and certified by an appropriate
Responsible Officer (subject, in the case of such balance sheets and
statements of income, stockholders' equity and cash flows for the
period ending September 30, 2002, to the accounting matters set forth
on Schedule 4.09) as fairly presenting, in all material respects, in
accordance with GAAP (except for the absence of footnote disclosure),
the financial position and the results of operations of Motient and its
Consolidated Subsidiaries; and
(c) as soon as available, but not later than twenty-five (25)
days after the end of each month, commencing with the month ended
October 31, 2002, a copy of the unaudited consolidated balance sheets
of Motient and its Consolidated Subsidiaries as of the end of such
month and the related consolidated statements of income and cash flows
for the period commencing on the first day and ending on the last day
of such month, and certified by an appropriate Responsible Officer
(subject, in the case of such balance sheets and statements of income,
stockholders' equity and cash flows for the period ending January 31,
2003, February 28, 2003 and March 31, 2003, to the accounting matters
set forth on Schedule 4.09) as fairly presenting, in all material
respects, in accordance with GAAP (except for the absence of footnote
disclosure), the financial position and the results of operations of
Motient and its Consolidated Subsidiaries.
Section 5.02. Certificates; Other Information. The Borrower will deliver to
the Administrative Agent with sufficient copies for each of the Lenders:
(a) concurrently with the delivery of the financial statements
referred to in Section 5.01(a) above, a certificate of a Responsible
Officer of the Borrower (i) stating that the Borrower, during such
period, has observed or performed all of its covenants and other
agreements, and satisfied every condition contained in this Agreement
to be observed, performed or satisfied by it, and that no Default or
Event of Default has occurred except as specified in such certificate
and (ii) when applicable, showing in detail the calculations supporting
such statement in respect of Article 5;
(b) promptly after the same are filed, copies of all financial
statements and annual, quarterly and current reports which Motient may
make to, or file with, the Securities and Exchange Commission or
similar Governmental Authorities; and
23
(c) promptly, such additional financial and other information
as the Lenders may from time to time reasonably request.
Section 5.03. Notices. The Borrower shall promptly notify the
Administrative Agent and the Lenders in writing of:
(a) the occurrence of any Default or Event of Default, and of
the occurrence or existence of any event or circumstance that could
reasonably be expected to become a Default or Event of Default;
(b) any (i) breach or non-performance of, or any default under
any Contractual Obligation which could reasonably be expected to result
in a Material Adverse Effect; or (ii) dispute, litigation,
investigation, proceeding or suspension which may exist at any time
between any of the Borrower or the Parent Guarantors and any
Governmental Authority and which, if determined adversely to such
Person, could reasonably be expected to result in a Material Adverse
Effect;
(c) the commencement of, or any material development in, any
litigation or proceeding affecting any of the Borrower or the Parent
Guarantors (i) in which the amount of damages claimed is Five Million
Dollars ($5,000,000) (or its equivalent in another currency or
currencies) or more, (ii) in which injunctive or similar relief is
sought and which, if adversely determined, could have a Material
Adverse Effect, or (iii) in which the relief sought is an injunction or
other stay of the performance of any Loan Document or the operations of
the Borrower or the Parent Guarantors;
(d) any other litigation or proceeding affecting the Borrower
or the Parent Guarantors which Motient would be required to report to
the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934, within four (4) days after reporting the same to
the Securities and Exchange Commission;
(e) any Material Adverse Effect subsequent to the date of the
most recent audited financial statements of Motient delivered to the
Lenders pursuant to Section 5.01(a);
(f) any material change in accounting policies or financial
reporting practices;
(g) any labor controversy resulting in or threatening to
result in any strike, work stoppage, boycott, shutdown or other labor
disruption against or involving the Borrower or the Parent Guarantors;
(h) the delivery of, or receipt of, any notice of (i) a
material reduction in coverage of any insurance required to be
maintained by Section 5.06 or otherwise procured by the Borrower
covering loss or damage to any material property of the Borrower (other
than a reduction in coverage or amount resulting from a payment
thereunder) or (ii) the cancellation or non-renewal of any such
insurance policy.
Each notice pursuant to this Section shall be delivered promptly after a
Responsible Officer becomes aware of the subject matter of such notice and shall
be accompanied by a written statement by a Responsible Officer of the Borrower
24
setting forth details and effective date of the occurrence referred to therein
and stating what action the Borrower proposes to take with respect thereto.
Section 5.04. Conduct of Business; Preservation of Corporate Existence. Each
of the Parent Guarantors and the Borrower shall: (a) engage in business of the
same general type as now conducted by such Person; (b) preserve and maintain in
full force and effect its corporate existence and good standing under the laws
of its State or jurisdiction of incorporation; (c) preserve and maintain in full
force and effect all rights, privileges, qualifications, permits, licenses and
franchises necessary or desirable in the normal conduct of its business; (d) use
its reasonable efforts, in the ordinary course and consistent with past
practice, to preserve its business organization and preserve the goodwill and
business of the customers, suppliers and others having business relations with
it; and (e) preserve or renew all of its registered trademarks, trade names and
service marks, the non-preservation of which could have a Material Adverse
Effect.
Section 5.05. Maintenance of Property. Each of the Parent Guarantors and the
Borrower shall maintain and preserve all its property which is used or useful in
its business in good working order and condition, ordinary wear and tear
excepted.
Section 5.06. Maintenance of Insurance. The Borrower shall maintain in full
force and effect at all times on and after the date hereof property insurance
with financially sound and reputable insurance companies, in such amounts, with
such deductibles and covering such risks as is customarily carried by companies
engaged in similar businesses and owning similar properties in localities where
the Borrower operates.
Section 5.07. Payment of Obligations. Each of the Parent Guarantors and the
Borrower shall pay and discharge as the same shall become due and payable, all
its obligations and liabilities, including: (a) all tax liabilities, assessments
and governmental charges or levies upon it or its properties or assets, unless
the same are being contested in good faith by appropriate proceedings and
adequate reserves in accordance with GAAP are being maintained by such Person;
(b) all lawful claims which, if unpaid, might by law become a Lien upon its
property (excluding claims being contested in good faith by the Borrower or the
Parent Guarantors, and for which adequate reserves have been made or as to which
the corresponding liens have been bonded); and (c) all Indebtedness as and when
due and payable but subject to any subordination provisions contained in any
instrument or agreement evidencing such Indebtedness.
Section 5.08. Compliance with Laws. Each of the Parent Guarantors and the
Borrower shall comply in all material respects with all Requirements of Law of
any Governmental Authority having jurisdiction over it or its business, except
(i) such as may be contested in good faith or as to which a bona fide dispute
may exist and (ii) where the failure to do so could not reasonably be expected
to have a Material Adverse Effect.
Section 5.09. Inspection of Property and Books and Records. Each of the
Parent Guarantors and the Borrower shall maintain proper books of record and
account, in which full, true and correct entries in conformity with GAAP
25
consistently applied shall be made of all financial transactions and matters
involving the assets and business of the Parent Guarantors and the Borrower.
Each of the Parent Guarantors and the Borrower will permit representatives of
any Lender to visit and inspect any of its properties, to examine its corporate,
financial and operating records and make copies thereof or abstracts therefrom,
and to discuss its affairs, finances and accounts with its directors, officers,
employees and independent public accountants at such reasonable times during
normal business hours and as often as may be reasonably desired, upon reasonable
advance notice to the Parent Guarantors or the Borrower, as the case may be.
Section 5.10. Use of Proceeds. The Borrower shall use the proceeds of the
Loans for general corporate purposes, including without limitation financing of
working capital, capital expenditures and improvements. No portion of the Loans
will be used, directly or indirectly, for the purpose, whether immediate,
incidental or ultimate, of buying or carrying any "margin stock" within the
meaning of Regulation U or any other purpose that entails a violation of any of
the regulations of the Board of Governors of the Federal Reserve System of the
United States of America. No proceeds of any Loans will be used to acquire any
security in any transaction which is subject to Section 13 or 14 of the
Securities Exchange Act of 1934, as amended.
Section 5.11. Security Agreement and the Pledge Agreements. The Borrower
shall at all times ensure that (i) the Security Agreement and the Pledge
Agreements create in favor of the Secured Parties, legal, valid and enforceable
Liens on or in all Collateral covered thereby; (ii) all filings, recordations,
registrations and other actions necessary or desirable to perfect the Liens
created or purported to be created by the Security Agreement and the Pledge
Agreements have been duly effected; (iii) each Lien created by the Security
Agreement and the Pledge Agreements constitutes a perfected Lien on or in all
right, title, estate and interest of the Borrower, as applicable, in the
Collateral, prior and superior to all Liens other than Permitted Liens arising
by operation of law; and (iv) all necessary and appropriate consents to the
creation and perfection of the Liens created or purported to be created by the
Security Agreement and the Pledge Agreements have been obtained.
Section 5.12. No Subsidiaries. The Borrower shall not have any Subsidiaries
or equity investments in any other corporation or entity.
Section 5.13. Government Approvals. The Borrower shall comply with the terms
of and maintain in full force and effect all licenses and other Government
Approvals which are necessary under applicable laws and regulations in
connection with the Borrower's business. No such Government Approval shall be
subject to any restriction, condition, limitation or other provision that would
have a Material Adverse Effect.
Section 5.14. Further Assurances.
(a) Each of the Borrower and the Parent Guarantors shall
certify that all written information, exhibits and reports furnished to the
Lenders do not and will not contain any untrue statement of a material fact and
do not and will not omit to state any material fact or any fact necessary to
make the statements contained therein not misleading in light of the
circumstances in which made, and will promptly disclose to the Lenders and
correct any defect or error that may be discovered therein or in any Loan
Document or in the execution, acknowledgement or recordation thereof.
26
(b) Promptly upon written request by the Administrative Agent
or the Lenders, the Borrower shall do, execute, acknowledge, deliver, record,
re-record, file, re-file, register and re-register, any and all such further
acts, deeds, conveyances, security agreements, mortgages, assignments, estoppel
certificates, financing statements and continuations thereof, termination
statements, notices of assignment, transfers, certificates, assurances and other
instruments as the Administrative Agent or the Lenders may reasonably require
from time to time in order (i) to carry out more effectively the purposes of
this Agreement or any other Loan Document, (ii) to subject to the Liens created
by the Security Agreement and the Pledge Agreements any of the properties,
rights or interests covered thereby, (iii) to perfect and maintain the validity,
effectiveness and priority of the Security Agreement and the Pledge Agreements
and the Liens intended to be created thereby, and (iv) to better assure, convey,
grant, assign, transfer, preserve, protect and confirm to the Lenders the rights
granted or now or hereafter intended to be granted to the Lenders under any Loan
Document or under any other instrument executed in connection therewith.
Section 5.15. Limitation on Liens. Neither the Parent Guarantors nor the
Borrower shall make, create, incur, assume or suffer to exist any Lien upon or
with respect to any part of its property or assets, whether now owned or
hereafter acquired, or offer or agree to do so or assign or sell any income or
revenues (including accounts receivable) or rights in respect of any thereof,
other than the following ("Permitted Liens"):
(a) any Lien existing on the date hereof securing Indebtedness
existing on the date hereof and identified on Schedule 5.15;
(b) any Lien in favor of the Lenders created under any Loan
Document;
(c) Liens for taxes, fees, assessments or other governmental
charges which are not delinquent or remain payable without penalty, or
to the extent that non-payment thereof is permitted by Section 5.07,
provided that no Notice of Lien has been filed or recorded;
(d) carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's or other similar Liens arising in the
ordinary course of business which do not secure Indebtedness and are
not delinquent or remain payable without penalty;
(e) Liens (other than any Lien imposed by ERISA) on the
property of Borrower incurred, or pledges or deposits required, in
connection with workmen's compensation, unemployment insurance and
other social security legislation;
(f) Liens on the property of any of the Parent Guarantors or
the Borrower securing (i) the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, and
(ii) obligations on surety and appeal bonds, and (iii) other
obligations of a like nature incurred in the ordinary course of
business which do not secure Indebtedness, provided that all such Liens
in the aggregate could not cause a Material Adverse Effect;
27
(g) easements, rights-of-way, zoning, restrictions and other
similar encumbrances incurred in the ordinary course of business which,
in the aggregate, are not substantial in amount, and which do not in
any case materially detract from the value of the property subject
thereto or interfere with the ordinary conduct of the businesses of the
Borrower and the Parent Guarantors;
(h) Liens on any asset which is the subject of a capital lease
securing Indebtedness incurred or assumed for the purpose of financing
all or any part of the cost of acquiring such asset, provided that (x)
such Lien attaches concurrently with or within thirty (30) days after
the acquisition thereof, and (y) the sum of the aggregate principal
amount of such Indebtedness secured by such Liens shall not exceed five
million Dollars ($5,000,000);
(i) Liens on contract rights under subscriber equipment leases
sold, pledged or otherwise transferred pursuant to any bona fide
financing of such leases;
(j) Liens to secure Vendor Financing Indebtedness permitted by
Section 5.21(g) provided that such Liens cover only the assets acquired
with such Vendor Financing Indebtedness; and
(k) Liens securing other Indebtedness that, together with the
aggregate amount of Indebtedness secured by Liens described under
clauses (a), (h), (i) or (j) (other than the Lien, if any, securing
Indebtedness described in clause (h) of Section 5.21), shall not at any
time exceed ten million Dollars ($10,000,000) in the aggregate.
Section 5.16. Disposition of Assets, Consolidations and Mergers. None of the
Parent Guarantors and the Borrower shall (i) sell, assign, lease, convey,
transfer or otherwise dispose of (whether in one or a series of transactions)
any of its assets, business or property (including accounts and notes receivable
(with or without recourse) and equipment sale-leaseback transactions) or (ii)
merge or consolidate with any other Person, or enter into any agreement to do
any of the foregoing described in clauses (i) or (ii) except for the following;
provided that immediately after giving effect to any of the following, no
Default or Event of Default would otherwise exist:
(a) sales, transfers, or other dispositions of inventory, or
used, worn-out or surplus property, or property of no further use to
the Parent Guarantors or the Borrower, all in the ordinary course of
business;
(b) sales, transfers, or other dispositions of equipment in
the ordinary course of business to the extent that such equipment is
exchanged for credit against the purchase price of similar replacement
equipment or the proceeds of such sale are reasonably promptly applied
to the purchase price of such replacement equipment;
(c) sales, transfers, or other dispositions of communications
services, capacity or equipment pursuant to the customer contracts
providing for the sale of communications services, capacity or
equipment in the ordinary course of business;
28
(d) sales, transfers or other dispositions pursuant to bona
fide sale-leaseback financings in which the lease gives rise solely to
Capital Lease Obligations; provided, however, that any such sales,
transfers or other dispositions are not permitted with any assets of
the communications network;
(e) sales, transfers, or other dispositions of assets in the
ordinary course of business having a fair market value not exceeding
five hundred thousand Dollars ($500,000) per item or one million
Dollars ($1,000,000) in the aggregate in any fiscal year (excluding
sales, transfers and dispositions theretofore approved in accordance
with the terms hereof in such fiscal year);
(f) non-exclusive licenses of technology and other intangible
assets;
(g) any Subsidiary of a Parent Guarantor may merge,
consolidate or combine with or into, or transfer assets to the Borrower
or a Parent Guarantor or any other Subsidiary of a Parent Guarantor;
provided that with respect to any such transaction involving the
Borrower, the Borrower shall be the continuing or surviving
corporation;
(h) any Subsidiary of a Parent Guarantor may sell, lease,
transfer or otherwise dispose of any or all of its assets (upon
voluntary liquidation or otherwise), to the Borrower; and
(i) the Borrower or any Subsidiary of the Borrower may merge,
consolidate or combine with another entity if the Borrower or such
Subsidiary, respectively, is the corporation surviving the merger.
Section 5.17. Employee Contracts and Arrangements. None of the Parent
Guarantors and the Borrower shall enter into any employment contracts or
arrangements whose terms, including salaries, benefits and other compensation,
are not normal and customary and commercially reasonable for companies of like
size and circumstances.
Section 5.18. Transactions with Affiliates. The Borrower and Parent
Guarantors will not, nor will they permit any of their Subsidiaries to, sell,
lease or otherwise transfer any material property or assets to, or purchase,
lease or otherwise acquire any property or assets from, or otherwise engage in
any other material transactions with, any of its Affiliates, except transactions
in the ordinary course of business at prices and on terms and conditions not
less favorable to the Borrower, Parent Guarantor or such Subsidiary than could
be obtained on an arm's-length basis from unrelated third parties; provided,
that the foregoing shall not prohibit transactions between or amongst the
Borrower or the Parent Guarantors, on one hand, and the Lenders or the Lenders'
Affiliates or successors on the other hand, which are provided for or
contemplated by this Agreement or any other Loan Document.
Section 5.19. Investments. None of the Parent Guarantors and the Borrower
shall make or acquire any Investment in any Person other than:
(a) Cash Equivalents;
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(b) Investments in Persons which are Subsidiaries of the
Borrower or a Parent Guarantor on the date hereof; and
(c) any Investment not otherwise permitted by the foregoing
clauses of this Section if, immediately after such Investment is made
or acquired, the aggregate net book value of all Investments permitted
by this clause (c) does not exceed one million Dollars ($1,000,000).
Section 5.20. Accounting Changes. Other than as set forth on Schedule 4.09,
Motient will not, and will not permit any Consolidated Subsidiary to, make any
significant change in accounting treatment and reporting practices, except as
required by GAAP, or change the fiscal year of Motient or any Consolidated
Subsidiary.
Section 5.21. Limitation on Indebtedness. None of the Parent Guarantors and
the Borrower shall create, incur, assume, guaranty, suffer to exist, or
otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness, except for:
(a) the Indebtedness created hereunder;
(b) accounts payable to trade creditors for goods and services
and current operating liabilities (not the result of the borrowing of
money) incurred in the ordinary course of the Parent Guarantors' or the
Borrower's business, as the case may be, in accordance with customary
terms and paid within the specified time, unless contested in good
faith by appropriate proceedings and reserved for in accordance with
GAAP;
(c) income taxes payable and deferred taxes;
(d) accrued expenses and deferred income;
(e) Contingent Obligations incurred in connection with any
lease financing of mobile communications terminals, not exceeding one
million five hundred thousand Dollars ($1,500,000) in the aggregate in
principal amount;
(f) Indebtedness outstanding on the date hereof and identified
on Schedule 5.21;
(g) Vendor Financing Indebtedness in an aggregate amount
outstanding at any time not to exceed five million Dollars
($5,000,000);
(h) Any Indebtedness under the Master Lease Agreement No.
100911 dated as of May 4, 1990, between Compaq Financial Services
Corporation and Motient Communications Corporation (such lease
agreement originally executed by XXXXX Company and Tandem Computers
Credit Corporation as Tandem Credit Lease Agreement No. 1232057), as in
effect on the Closing Date, provided that no such Indebtedness shall be
secured by a Lien in any assets other than the assets purchased with
the proceeds of such Indebtedness and the amount or terms of such
Indebtedness should not be amended without the consent of the Required
Lenders; and
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(i) any other Indebtedness incurred after the date hereof;
provided that the aggregate outstanding principal amount of all such
Indebtedness, together with all Indebtedness described in clauses (d),
(e), (f) (other than the Parent Guarantor Note and the Indebtedness
referred to in clause (h)) and (g), shall not at any time exceed ten
million Dollars ($10,000,000).
Section 5.22. Restricted Payments. Unless the Lenders consent in writing,
neither the Parent Guarantors or the Borrower will, nor will they permit their
Subsidiaries to, declare or make, or agree to pay or make, directly or
indirectly, any Restricted payment, except that (A) the Parent Guarantors and
the Borrower may declare and pay dividends with respect to their capital stock
payable solely in additional shares of their respective common stock; (B) the
Parent Guarantors and the Borrower may make Restricted Payments pursuant to and
in accordance with stock option plans or other benefit plans for management or
employees of the Parent Guarantors, the Borrower and their Subsidiaries; and (C)
the Parent Guarantors and the Borrower may make Restricted Payments pursuant to
and in accordance with the terms of any Existing Warrants; provided that no
Default or Event of Default shall have occurred and be continuing immediately
prior to, or shall result from, the making of such Restricted Payment.
Nothing herein shall be deemed to prohibit the payment of
dividends by any Subsidiary of the Borrower or the Parent Guarantors to the
Borrower, the Parent Guarantors or to any of their respective Subsidiaries.
Section 5.23. Service Revenue. The Parent Guarantors and the Borrower shall
not suffer the aggregate amount of Service Revenue of Motient and its
Consolidated Subsidiaries determined on the basis of a one (1) month period
ending on any date set forth below to be less than the amount set forth below
for such one month period:
Date Amount (in $000s)
---- -----------------
January 31, 2003 $4,400
February 28, 2003 $4,450
March 31, 2003 $4,550
April 30, 2003 $4,650
May 31, 2003 $4,800
June 30, 2003 $4,850
July 31, 2003 $4,950
August 31, 2003 $5,100
September 30, 2003 $5,250
October 31, 2003 $5,400
November 30, 2003 $5,500
December 31, 2003 $5,700
In addition, the Parent Guarantors and the Borrower shall not
suffer the aggregate amount of Service Revenue of Motient and its Consolidated
Subsidiaries determined on the basis of a three (3) month period ending on any
date set forth below to be less than the amount set forth below for such
three-month period:
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March 31, 2004 $17,500
June 30, 2004 $19,000
September 30, 2004 $20,000
December 31, 2004 $22,000
Every Quarter Thereafter $23,500
The Borrower and the Lenders shall mutually review in good
faith such Service Revenue amounts on a quarterly basis and may adjust the
minimum Service Revenue amounts set forth above upon mutual agreement.
Notwithstanding the foregoing, to the extent that for any monthly period set
forth above the actual amount of Service Revenue of Motient and its Consolidated
Subsidiaries exceeds the dollar amount set forth above with respect to such
monthly period (such excess amount being referred to herein as the "Service
Revenue Surplus"), such Service Revenue Surplus may be carried over and counted
towards satisfying the minimum Service Revenue targets in succeeding monthly
periods within the same fiscal quarter in which such Service Revenue Surplus
arose.
Section 5.24. ...EBITDA. The Parent Guarantors and the Borrower shall not suffer
the aggregate consolidated amount of EBITDA of Motient and its Consolidated
Subsidiaries determined for any one (1) month period ending on any date set
forth below to be less than the amount set forth below for such one month
period:
Date Amount (in $000s)
---- -----------------
January 31, 2003 $(1,250)
February 28, 2003 $(1,300)
March 31, 2003 $(1,140)
April 30, 2003 $(985)
May 31, 2003 $(850)
June 30, 2003 $(850)
July 31, 2003 $(750)
August 31, 2003 $(570)
September 30, 2003 $(450)
October 31, 2003 $(300)
November 30, 2003 $(200)
December 31, 2003 $(30)
In addition, the Parent Guarantors and the Borrower shall not
suffer the aggregate amount of EBITDA of Motient and its Consolidated
Subsidiaries determined on the basis of a three (3) month period ending on any
date set forth below to be less than the amount set forth below for such
three-month period:
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March 31, 2004 $400
June 30, 2004 $1,500
September 30, 2004 $2,600
December 31, 2004 $4,100
Every Quarter Thereafter $4,500
The Borrower and the Lenders shall mutually review in good
faith such EBITDA amounts on a quarterly basis and may adjust the minimum EBITDA
amounts set forth above upon mutual agreement. Notwithstanding the foregoing, to
the extent that for any monthly period set forth above the actual amount of
EBITDA of Motient and its Consolidated Subsidiaries exceeds the dollar amount
set forth above with respect to such monthly period (such excess amount being
referred to herein as the "EBITDA Surplus"), such EBITDA Surplus may be carried
over and counted towards satisfying the minimum EBITDA targets in succeeding
monthly periods within the same fiscal quarter in which such EBITDA Surplus
arose.
Section 5.25. Free Cash Flow. The Parent Guarantors and the Borrower shall
not suffer the aggregate consolidated amount of Free Cash Flow of Motient and
its Consolidated Subsidiaries determined for any one (1) month period ending on
any date set forth below to be less than the amount set forth below for such one
month period ending on such date:
Date Amount (in $000s)
---- -----------------
January 31, 2003 $(2,700)
February 28, 2003 $(1,450)
March 31, 2003 $(1,250)
April 30, 2003 $(1,440)
May 31, 2003 $(1,150)
June 30, 2003 $(1,150)
July 31, 2003 $1,100
August 31, 2003 $(2,050)
September 30, 2003 $(1,050)
October 31, 2003 $(850)
November 30, 2003 $(1,450)
December 31, 2003 $2,200
The Borrower and the Lenders shall mutually review in good
faith the Free Cash Flow amounts set forth above on a quarterly basis and may
adjust the minimum Free Cash Flow amounts set forth above upon mutual agreement.
Notwithstanding the foregoing, to the extent that for any monthly period the
actual amount of Free Cash Flow exceeds the amount set forth above (such excess
amount being referred to herein as the "Cash Flow Surplus"), such Cash Flow
Surplus may be carried over and counted towards satisfying the minimum Free Cash
Flow targets in succeeding monthly periods within the same fiscal quarter in
which such Cash Flow Surplus arose.
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ARTICLE 6
DEFAULTS
Section 6.01. Events of Default. If one or more of the following events
(each, an "Event of Default") shall have occurred and be continuing:
(a) the Borrower shall fail to pay any principal of any Loan
when due or any interest, any fees or any other amount payable
hereunder or under any other Loan Document within two (2) Business Days
of the date when due;
(b) any of the Borrower and the Parent Guarantors shall fail
to comply with the covenants contained in Section 5.23, Section 5.24 or
Section 5.25;
(c) any of the Borrower and the Parent Guarantors shall fail
to observe or perform any covenant or agreement contained in this
Agreement (other than those covered by clause (a) or (b) above) or any
other Loan Document and such failure shall continue unremedied (if
capable of remedy) for more than twenty (20) days after the occurrence
of such failure;
(d) any representation or warranty made or deemed made by or
on behalf of the Borrower or the Parent Guarantors in connection with
this Agreement or any other Loan Document or in any amendment or
modification hereof or thereof or in any certificate, financial
statement or other document delivered pursuant to this Agreement or any
other Loan Document or any amendment or modification hereof or thereof,
shall prove to have been incorrect in any material respect when made
(or deemed made);
(e) any of the Parent Guarantors or the Borrower shall fail to
make any payment in respect of any Indebtedness or Contingent
Obligation having an aggregate principal and face amount of more than
five million Dollars ($5,000,000), in each case when due (whether by
scheduled maturity, required prepayment, acceleration, demand or
otherwise) and such failure continues after the applicable grace period
or notice period, if any, specified in the document relating thereto;
(f) any event or condition shall occur which results in the
acceleration of the maturity of any Indebtedness or Contingent
Obligation of the Borrower or the Parent Guarantors having an aggregate
principal or face amount of more than five million Dollars ($5,000,000)
or enables (or, with the giving of notice or lapse of time or both,
would enable) the holder of any such Indebtedness or Contingent
Obligation or any Person acting on such holder's behalf to accelerate
the maturity thereof;
(g) any of the Parent Guarantors or the Borrower shall
commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts
under any bankruptcy, insolvency or other similar law now or hereafter
in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief
or to the appointment of or taking possession by any such official in
an involuntary case or other proceeding commenced against it, or shall
make a general assignment for the benefit of creditors, or shall fail
34
generally to pay its debts as they become due, or shall take any
corporate action to authorize any of the foregoing;
(h) an involuntary case or other proceeding shall be commenced
against the Borrower or the Parent Guarantors seeking liquidation,
reorganization or other relief with respect to it or its debts under
any bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of
its property, and such involuntary case or other proceeding shall
remain undismissed and unstayed for a period of sixty (60) days; or an
order for relief shall be entered against the Borrower or the Parent
Guarantors under the federal bankruptcy laws as now or hereafter in
effect;
(i) one or more final judgments, orders or decrees shall be
entered against the Borrower or the Parent Guarantors involving in the
aggregate a liability (not fully covered by insurance and as to which
the insurer has not acknowledged liability) more than an amount equal
to the greater of (i) five million Dollars ($5,000,000) and (ii) ten
percent (10%) of Motient's net worth, and the same shall remain
unvacated, undischarged, unstayed or unbonded pending appeal for a
period of sixty (60) days after the entry thereof;
(j) any non-monetary judgment, order or decree shall be
rendered against the Parent Guarantors or the Borrower which could
reasonably be expected to have a Material Adverse Effect, and
enforcement proceedings shall have been commenced by any Person upon
such judgment or order which shall remain unstayed for any period of
ten (10) consecutive days or more;
(k) (i) any provision of the Security Agreement or the Pledge
Agreements shall for any reason cease to be valid and binding on or
enforceable against the Borrower or the Parent Guarantors, as the case
may be if the effect thereof may materially deprive the Lenders of the
benefits of the Collateral covered thereby; (ii) the Security Agreement
or either Pledge Agreement shall for any reason (other than pursuant
to, or contemplated by, the terms thereof) cease to create a valid
security interest in the Collateral purported to be covered thereby or
such security interest shall for any reason cease to be a perfected and
(except for Permitted Liens arising by operation of law) first priority
security interest; (iii) any of the outstanding Obligations of the
Borrower hereunder shall not be Secured Obligations (as defined in the
Security Agreement); or (iv) there shall occur an event of loss which,
together with all other events of loss since the date hereof, results
in a material reduction in the value (as determined in the reasonable
opinion of the Lenders) of the Collateral net of any cash proceeds
received by the Borrower in respect of such event or events of loss;
(l) any Governmental Authority shall revoke or fail to renew
any material license, permit or franchise of the Borrower; the Borrower
shall for any reason lose any material license, permit or franchise; or
the Borrower shall suffer the imposition of any restraining order,
escrow, suspension or impound of funds in connection with any
proceeding (judicial or administrative) with respect to any material
license, permit or franchise; or
35
(m) there shall occur a Change in Control;
then, in such event, and at any time during the continuance of such event, the
Administrative Agent may, and at the request of the Required Lenders shall, by
notice to the Borrower terminate the Commitments and they shall thereupon
terminate, and, by notice to the Borrower declare the Loans (together with
accrued interest thereon and all fees and other obligations of the Borrower
accrued hereunder) to be, and the Loans shall thereupon become, immediately due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower; provided that in the case of any
of the Events of Default specified in clause (g) or (h) above with respect to
the Borrower, without any notice to the Borrower or any other act by the
Lenders, the Commitments shall thereupon terminate and the Loans (together with
accrued interest thereon) shall become immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower.
ARTICLE 7
PARENT GUARANTY
Section 7.01. The Parent Guaranty. Each Parent Guarantor hereby jointly and
severally, unconditionally guarantees to each Lender and its successors and
assigns the full and punctual payment (whether at stated maturity, upon
acceleration or otherwise) of the principal of and interest on each Note issued
by the Borrower pursuant to this Agreement, and the full and punctual payment of
all other amounts payable by the Borrower under this Agreement or any other Loan
Document. Upon failure by the Borrower to pay punctually any such amount, the
Parent Guarantors shall forthwith on demand pay the amount not so paid to the
same extent as, and at the place and in the manner specified in this Agreement.
Section 7.02. Guaranty Unconditional. The obligations of the Parent
Guarantors hereunder shall be continuing unconditional, irrevocable and absolute
and, without limiting the generality of the foregoing, shall not be released,
discharged or otherwise affected by:
(a) any extension, renewal, settlement, compromise, waiver or
release in respect of any obligation of the Borrower under this
Agreement or any Note, by operation of law or otherwise;
(b) any modification or amendment of or supplement to this
Agreement or any Note;
(c) any release, impairment, non-perfection or invalidity of
any direct or indirect security for any obligation of the Borrower
under this Agreement or any Note;
(d) any change in the corporate existence, structure or
ownership of the Borrower, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting the Borrower or
its assets or any resulting release or discharge of any obligation of
the Borrower contained in this Agreement or any Note;
(e) the existence of any claim, set-off or other rights which
any Parent Guarantor may have at any time against the Borrower or any
other Person, whether in connection herewith or any unrelated
36
transactions, provided that nothing herein shall prevent the assertion
of any such claim by separate suit or compulsory counterclaim;
(f) any invalidity or unenforceability relating to or against
the Borrower for any reason of this Agreement or any Note, or any
provision of applicable law or regulation purporting to prohibit the
payment by the Borrower of the principal of or interest on any Note or
any other amount payable by the Borrower under this Agreement; or
(g) any other act or omission to act or delay of any kind by
the Borrower or any other Person or any other circumstance whatsoever
which might, but for the provisions of this paragraph, constitute a
legal or equitable discharge of the Parent Guarantors' obligations
hereunder.
Section 7.03. Discharge Only Upon Payment in Full; Reinstatement in Certain
Circumstances. The Parent Guarantors' obligations hereunder shall remain in full
force and effect until the Commitments shall have terminated and the principal
of and interest on the Notes and all other amounts payable by the Borrower under
this Agreement shall have been paid in full. If at any time any payment of the
principal of or interest on any Note or any other amount payable by the Borrower
under this Agreement is rescinded or must be otherwise restored or returned upon
the insolvency, bankruptcy or reorganization of the Borrower or otherwise, the
Parent Guarantors' obligations hereunder with respect to such payment shall be
reinstated at such time as though such payment had been due but not made at such
time.
Section 7.04. Waiver by the Parent Guarantors. The Parent Guarantors
irrevocably waive acceptance hereof, presentment, demand, protest and any notice
not provided for herein, all other suretyship and defenses generally available
to guarantors, as well as any requirement that at any time any action be taken
by any Person against the Borrower or any other Person.
Section 7.05. Subrogation. Until such time as all principal of and interest
on each Note issued by the Borrower pursuant to this Agreement and all other
amounts payable by the Borrower under this Agreement have indefeasibly been paid
in full, the Parent Guarantors shall not assert any rights to which they may be
entitled, by operation of law or otherwise, upon making any payment hereunder to
be subrogated to the rights of the payee against the Borrower with respect to
such payment or against any direct or indirect security therefor, or otherwise
to be reimbursed, indemnified or exonerated by or for the account of the
Borrower in respect thereof.
Section 7.06. Stay of Acceleration. If acceleration of the time for payment
of any amount payable by the Borrower under this Agreement or any Note is stayed
upon insolvency, bankruptcy or reorganization of the Borrower, all such amounts
otherwise subject to acceleration under the terms of this Agreement shall
nonetheless be payable by the Parent Guarantor hereunder forthwith on demand by
the Lenders.
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ARTICLE 8
THE ADMINISTRATIVE AGENT
Each of the Lenders hereby irrevocably appoints the
Administrative Agent as its agent hereunder and under the other Loan Documents
(including without limitation as Collateral Agent under the Loan Documents),
authorizes the Administrative Agent to take such actions on its behalf and to
exercise such powers as are delegated to the Administrative Agent by the terms
hereof, together with such actions and powers as are reasonably incidental
thereto.
The Person serving as the Administrative Agent hereunder shall
have the same rights and powers in its capacity as a Lender as any other Lender
and may exercise the same as though it were not the Administrative Agent, and
such Person and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Borrower or any Subsidiary or
other Affiliate thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or
obligations except those expressly set forth herein and in the other Loan
Documents. Without limiting the generality of the foregoing, (a) the
Administrative Agent shall not be subject to any fiduciary or other implied
duties, regardless of whether a Default has occurred and is continuing, (b) the
Administrative Agent shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby or by the other Loan Documents that the
Administrative Agent is required to exercise in writing as directed by the
Required Lenders, and (c) except as expressly set forth herein and in the other
Loan Documents, the Administrative Agent shall not have any duty to disclose,
and shall not be liable for the failure to disclose, any information relating to
the Borrower or any of its Subsidiaries that is communicated to or obtained by
the bank serving as Administrative Agent or any of its Affiliates in any
capacity. The Administrative Agent shall not be liable for any action taken or
not taken by it with the consent or at the request of the Required Lenders or in
the absence of its own gross negligence or willful misconduct. The
Administrative Agent shall be deemed not to have knowledge of any Default unless
and until written notice thereof is given to the Administrative Agent by the
Borrower or a Lender, and the Administrative Agent shall not be responsible for
or have any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with this Agreement or any other Loan
Document, (ii) the contents of any certificate, report or other document
delivered hereunder or in connection herewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein, (iv) the validity, enforceability, effectiveness or genuineness of
this Agreement, any other Loan Document or any other agreement, instrument or
document, or (v) the satisfaction of any condition set forth in Article 3 or
elsewhere herein, other than to confirm receipt of items expressly required to
be delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and
shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or by
telephone and believed by it to be made by the proper Person, and shall not
incur any liability for relying thereon. The Administrative Agent may consult
with legal counsel (who may be counsel for the Borrower), independent
accountants and other experts selected by it, and shall not be liable for any
38
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.
The Administrative Agent may perform any and all its duties
and exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor
Administrative Agent as provided in this paragraph, the Administrative Agent may
resign at any time by notifying the Lenders and the Borrower, and the
Administrative Agent may be removed at any time with or without cause by the
Required Lenders. Upon any such resignation or removal, the Required Lenders
shall have the right, in consultation with the Borrower, to appoint a successor.
If no successor shall have been so appointed by the Required Lenders and shall
have accepted such appointment within 30 days after the retiring Administrative
Agent gives notice of its resignation or the Required Lenders' removal of the
retiring Administrative Agent, then the retiring Administrative Agent's
resignation or removal shall nonetheless become effective and (1) the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder and (2) the Required Lenders shall perform the duties of the
Administrative Agent (and all payments and communications provided to be made
by, to or through the Administrative Agent shall instead be made by or to each
Lender directly) until such time as the Required Lenders appoint a successor
agent as provided for above in this paragraph. Upon the acceptance of its
appointment as Administrative Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring (or retired) Administrative Agent and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder (if not already discharged therefrom as provided above in this
paragraph). The fees payable by the Borrower to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor. After the Administrative Agent's
resignation or removal hereunder, the provisions of this Article 8 shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as Administrative Agent.
Each Lender acknowledges that it has, independently and
without reliance upon the Administrative Agent or any other Lender and based on
such documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or any related agreement or any document furnished
hereunder or thereunder.
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ARTICLE 9
MISCELLANEOUS
Section 9.01. Notices. All notices, requests and other communications to any
party hereunder shall be in writing (including Lender wire, facsimile
transmission or similar writing) and shall be given to such party: (a) in the
case of the Administrative Agent, the Borrower, a Parent Guarantor or any
Lender, at its address or facsimile number set forth on Schedule 2.01, or (b) in
the case of any party, such other address or facsimile number as such party may
hereafter specify for the purpose by notice to the Administrative Agent and the
Borrower. Each such notice, request or other communication shall be effective
(i) if given by facsimile transmission, when transmitted to the facsimile number
specified on the signature page hereof and confirmation of receipt is received,
(ii) if given by mail, upon receipt or (iii) if given by any other means, when
delivered at the address on the signature page hereof; provided that notices to
the Administrative Agent or Lenders under Article 2 or Article 9 shall not be
effective until received.
Section 9.02. No Waivers. No failure or delay by the Administrative Agent or
any Lender in exercising any right, power or privilege hereunder or under any
Note shall operate as a waiver thereof nor shall any single or partial exercise
thereof, or any abandonment or discontinuance of steps to enforce such a right,
power or privilege preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law. No waiver of any provision of this Agreement or consent to any
departure by the Borrower or any Parent Guarantor therefrom shall in any event
be effective unless the same shall be permitted by Section 9.06 hereof, and then
such waiver or consent shall be effective only in the specific instance and for
the purpose which given. The making of a Borrowing shall not be construed as a
waiver of any Default, regardless of whether the Administrative Agent or Lenders
may have had notice or knowledge of such Default at the time.
Section 9.03. Expenses; Indemnification.
(a) The Borrower shall reimburse the Administrative Agent and
each Lender on demand for its expenses, in connection with the preparation and
administration of this Agreement and the other Loan Documents, any waiver or
consent hereunder or thereunder or any amendment hereof or thereof. If an Event
of Default occurs, the Borrower shall pay all out-of-pocket expenses incurred by
the Administrative Agent or each Lender, including (without duplication) the
reasonable fees and disbursements of counsel, in connection with such Event of
Default and collection, bankruptcy, insolvency and other enforcement proceedings
resulting therefrom.
(b) Each of the Borrower and the Parent Guarantors agrees to
indemnify the Administrative Agent and each Lender, their respective affiliates
and the respective directors, officers, agents and employees of the foregoing
(each, an "Indemnitee") and hold each Indemnitee harmless from and against any
and all liabilities, losses, claims, damages, costs and expenses of any kind,
including, without limitation, the reasonable fees and disbursements of counsel,
which may be incurred by such Indemnitee in connection with any investigative,
administrative or judicial proceeding (whether or not such Indemnitee shall be
designated a party thereto) brought or threatened relating to or arising out of
40
this Agreement or any actual or proposed use of proceeds of Loans hereunder;
provided that no Indemnitee shall have the right to be indemnified hereunder for
such Indemnitee's own gross negligence or willful misconduct as finally
determined, not subject to appeal, by a court of competent jurisdiction. The
obligations of the Borrower and each Parent Guarantor shall survive the
termination of this Agreement and the payment of the Loans.
Section 9.04. Set-off. The Administrative Agent and each Lender is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set-off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by such Person to or for the credit or the account of the Borrower or
any Parent Guarantor against any of and all the obligations of the Borrower or
any Parent Guarantor now or hereafter existing under this Agreement or any other
Loan Document held by the Administrative Agent or such Lender, irrespective of
whether or not such Person shall have made any demand under this Agreement or
such Loan Document and although such obligations may be unmatured. The rights of
the Administrative Agent and each Lender under this Section 9.04 are in addition
to other rights and remedies (including other rights of set-off) which such
Person may have.
Section 9.05. Sharing of Set-offs. The Borrower agrees, to the fullest extent
it may effectively do so under applicable law, that any holder of a
participation in a Note, whether or not acquired pursuant to the foregoing
arrangements, may exercise rights of set-off or counterclaim and other rights
with respect to such participation as fully as if such holder of a participation
were a direct creditor of the Borrower in the amount of such participation. Each
Lender agrees that if it shall, by exercising any right of set-off or
counterclaim or otherwise receive payment of a proportion of the aggregate
amount of principal and interest due with respect to any Note held by it which
is greater than the proportion received by any other Lender in respect of the
aggregate amount of principal and interest due with respect to any Note held by
such other Lender, the Lender receiving such proportionately greater payment
shall purchase such participations in the Notes held by the other Lenders, and
such other adjustments shall be made, as may be required so that all such
payments of principal and interest with respect to the Notes held by the Lenders
shall be shared by the Lenders pro rata; provided that nothing in this Section
shall impair the right of any Lender to exercise any right of set-off or
counterclaim it may have and to apply the amount subject to such exercise to the
payment of indebtedness of the Borrower other than its indebtedness hereunder.
The Borrower agrees, to the fullest extent it may effectively
do so under applicable law, that any holder of a participation in a Note,
whether or not acquired pursuant to the foregoing arrangements, may exercise
rights of set-off or counterclaim and other rights with respect to such
participation as fully as if such holder of a participation were a direct
creditor of the Borrower in the amount of such participation.
Section 9.06. Amendments and Waivers. Neither this Agreement nor any
provision hereof may be waived, amended or modified except pursuant to an
agreement or agreements in writing entered into by the Borrower and the Required
Lenders or by the Borrower and the Administrative Agent with the consent of the
Required Lenders; provided that no such agreement shall (i) increase the
41
Commitment of any Lender without the written consent of such Lender, (ii)
postpone the scheduled date of payment of the principal amount of any Loan or
any interest thereon, or any fees payable hereunder, or reduce the amount of,
waive or excuse any such payment, or postpone the scheduled date of any
Commitment, without the written consent of each Lender affected thereby, (iv)
change Section 2.10 in a manner that would alter the pro rata sharing of
payments required thereby, without the written consent of each Lender, or (v)
change any of the provisions of this Section or the definition of "Required
Lenders" or any other provision hereof specifying the number or percentage of
Lenders required to waive, amend or modify any rights hereunder or make any
determination or grant any consent hereunder, without the written consent of
each Lender; provided further that no such agreement shall amend, modify or
otherwise affect the rights or duties of the Administrative Agent hereunder
without the prior written consent of the Administrative Agent.
Section 9.07. Successors and Assigns. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that neither the Borrower nor any
Guarantor may assign or otherwise transfer any of its rights under this
Agreement without the prior written consent of the Lenders.
Section 9.08. Governing Law; Submission to Jurisdiction. This Agreement and
each Note shall be governed by and construed in accordance with the laws of the
State of New York (excluding the choice of law provisions thereof). Each of the
Borrower and the Parent Guarantors for itself and its property hereby submits to
the nonexclusive jurisdiction of the United States District Court for the
Southern District of New York and of any New York State court sitting in New
York City and any applicable court from any thereof, for the purposes of all
legal proceedings arising out of or relating to this Agreement or the
transactions contemplated hereby or for the recognition or enforcement of any
judgment. Each of the Borrower and the Parent Guarantors irrevocably waives, to
the fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of the venue of any such proceeding brought in such a court
and any claim that any such proceeding brought in such a court has been brought
in an inconvenient forum.
Section 9.09. Counterparts; Integration; Effectiveness. This Agreement 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. This Agreement constitutes the entire agreement and understanding
among the parties hereto and supersedes any and all prior agreements and
understandings, oral or written, relating to the subject matter hereof.
Section 9.10. Waiver of Jury Trial. EACH OF THE PARENT GUARANTORS, THE
BORROWER, THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVES ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 9.11. Confidentiality. Each Lender agrees to take normal and
reasonable precautions and exercise due care to maintain the confidentiality of
all non-public information provided to it by the Parent Guarantors or any of
their Subsidiaries in connection with this Agreement or any other Loan Document
and neither they nor any of their Affiliates shall use any such information for
any purpose or in any manner other than pursuant to the terms contemplated by
42
this Agreement, except to the extent such information (a) was or becomes
generally available to the public other than as a result of a disclosure by such
Lender, or (b) was or becomes available on a non-confidential basis from a
source other than the Parent Guarantors, provided that such source is not bound
by a confidentiality agreement with the Parent Guarantors known to such Lender;
and provided, further, that any Lender may disclose any non-public information
(A) to any other Lender, (B) at the request of any regulatory authority or in
connection with an examination of such Lender by any such authority, (C)
pursuant to subpoena or other court process, (D) when required to do so in
accordance with the provisions of any applicable law, (E) at the express
direction of any other agency of any State of the United States of America or of
any other jurisdiction in which such Lender conducts its business and (F) to
such Lender's independent auditors and legal counsel.
Section 9.12. Registration. Borrower hereby acknowledges and makes each Loan
made pursuant to this Agreement a registered obligation for United States
withholding tax purposes. Administrative Agent shall be the registrar for this
Note (the "Registrar") with full power of substitution. In the event the
Registrar becomes unable or unwilling to act as registrar under this Agreement,
Administrative Agent, or its successor or assign, shall designate a successor
Registrar. Any Lender who is a foreign person, by its execution of this
Agreement, hereby agrees to provide Administrative Agent with a completed
Internal Revenue Service Form W-8 (Certificate of Foreign Status) or a
substantially similar form for such lender. Notwithstanding any contrary
provision contained in this Agreement, neither this Agreement, any Loan or any
interests therein may be sold, transferred, hypothecated, participated or
assigned to any person except upon satisfaction of the conditions specified in
this paragraph. The Registrar shall keep at its principal executive office (or
an office or agency designated by it by notice to the last registered Holder) a
ledger, in which, subject to such reasonable regulations as it may prescribe, it
shall provide for the registration and transfer of this Agreement. No sale,
transfer, hypothecation, participation or assignment of this Agreement, a Note,
or a Loan or any interest herein or therein shall be effective for any purpose
until it shall be registered on the books of the Registrar to be maintained for
such purpose. The Registrar shall records such transfer on the books maintained
for this purpose upon receipt by the Registrar at the office or agency
designated by the Registrar of (a) a written assignment of this Agreement, Note
or Loan (or the applicable interest therein), (b) funds sufficient to pay any
transfer taxes payable upon the making of such transfer as well as the cost of
reviewing the documents presented to the Registrar, and (c) such evidence of due
execution as the Registrar shall reasonable require.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
43
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
MOTIENT COMMUNICATIONS INC.,
in its capacity as Borrower
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
------------------------------------------------
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: President and Chief Executive Officer
MOTIENT CORPORATION,
in its capacity as Parent Guarantor
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
------------------------------------------------
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: President and Chief Executive Officer
MOTIENT HOLDINGS INC.,
in its capacity as Parent Guarantor
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
------------------------------------------------
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: President and Chief Executive Officer
F-1
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
M&E ADVISERS L.L.C.,
as a Lender, Administrative Agent and
Collateral Agent
By: /s/ Xxxx Xxxxxx
-----------------------------------------------
Name: Xxxx Xxxxxx
Title: Investment Advisor
F-2
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
CSFC WAYLAND ADVISERS, INC. AS AGENT ON BEHALF OF
MILLENNIUM PARTNERS, L.P.,
as a Lender
By: /s/ Xxxxxx Xxxxx
-----------------------------------------------
Name: Xxxxxx Xxxxx
Title: Assistant Vice President
F-3
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
BAY HARBOUR 90-1,
as a Lender
By: /s/ Xxxxx Xxx Xxxx
-----------------------------------------------
Name: Xxxxx Xxx Xxxx
Title: Managing Principal
BAY HARBOUR PARTNERS, LTD.,
as a Lender
By: /s/ Xxxxx Xxx Xxxx
------------------------------------------------
Name: Xxxxx Xxx Xxxx
Title: Managing Principal
F-4
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
YORK OFFSHORE INVESTOR UNIT TRUST,
as a Lender
By: /s/ Xxxx Xxxxxx
-----------------------------------------------
Name: Xxxx Xxxxxx
Title: Senior Vice President
YORK CAPITAL MANAGEMENT, L.P.,
as a Lender
By: /s/ Xxxx Xxxxxx
-----------------------------------------------
Name: Xxxx Xxxxxx
Title: Senior Vice President
YORK INVESTMENT LIMITED,
as a Lender
By: /s/ Xxxx Xxxxxx
-----------------------------------------------
Name: Xxxx Xxxxxx
Title: Senior Vice President
YORK DISTRESSED OPPORTUNITIES FUND, L.P.
as a Lender
By: /s/ Xxxx Xxxxxx
-----------------------------------------------
Name: Xxxx Xxxxxx
Title: Senior Vice President
F-5
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
LC CAPITAL MASTER FUND, LTD.,
as a Lender
By: /s/ Xxxxxx Xxxxx
---------------------------------------------
Name: Xxxxxx Xxxxx
Title: Managing Member
F-6
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
CANPARTNERS INVESTMENTS IV, LLC.
as a Lender
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Authorized Signatory
F-7
