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