EXHIBIT 10.34a
--------------
AMENDMENT NO. 1 AND WAIVER
TO
TERM CREDIT AGREEMENT
AMENDMENT AND WAIVER dated as of January 15, 1999 to the $100,000,000
Term Credit Agreement dated as of March 31, 1998 (the "Term Credit Agreement")
among AMERICAN MOBILE SATELLITE CORPORATION (the "Borrower"), the BANKS party
thereto (the "Banks"), ▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK, as
Documentation Agent (the "Documentation Agent"), and TORONTO DOMINION (TEXAS),
INC., as Administrative Agent (the "Administrative Agent").
W I T N E S S E T H :
WHEREAS, the Borrower desires to issue up to $21,500,000 aggregate
principal amount of junior subordinated secured exchangeable notes to Baron
Asset Fund;
WHEREAS, the Borrower will use the proceeds thereof to acquire three
notes issued by AMRC Holdings (the name of which has been changed to "XM
Satellite Radio Holdings Inc.") in the principal amounts of $806,050,
$3,612,478, and $17,000,025 and convertible into 0.9212, 4.1285 and 19.4286
shares, respectively, of common stock of AMRC Holdings ("AMRC Note 1", "AMRC
Note 2" and "AMRC Note 3", respectively);
WHEREAS, as a consequence of the foregoing investment by the Borrower
in AMRC Holdings, the Borrower will no longer be required to transfer shares of
AMRC Holdings to WorldSpace, Inc. as contemplated by the Waiver and Release of
Certain Collateral dated as of July 30, 1998;
WHEREAS, the undersigned Banks and the Guarantors are willing to
consent to the foregoing and to certain other amendments to the Term Credit
Agreement and to waive Section 5.13 of the Term Credit Agreement in connection
with the acquisition by a Subsidiary of the Borrower of the capital stock of
Access Point of Virginia, Inc.;
NOW, THEREFORE, the undersigned parties hereto agree as follows:
SECTION 1. Definitions; References.
(a) Unless otherwise specifically defined herein, each term used
herein which is defined in the Term Credit Agreement has the meaning assigned to
such term in the Term Credit Agreement. Each reference to "hereof", "hereunder",
"herein" and "hereby" and each other similar reference and each reference to
"this Agreement" and each other similar reference contained in the Term Credit
Agreement shall, after this Amendment becomes effective, refer to the Term
Credit Agreement as amended hereby.
(b) The following definition is added to Section 1.01 in the
appropriate alphabetical order:
"Baron Exchangeable Notes" means one or more of the Borrower's junior
subordinated secured exchangeable notes due September 30, 2006 substantially in
the form approved by the Required Banks in writing and issued to Baron Asset
Fund.
(c) The definition of "Reduction Event" is amended by adding the
expression "(other than the sale, transfer or other disposition of securities
issued by AMRC Holdings permitted by Section 5.18(a-1))" immediately after the
words "Asset Sale".
SECTION 2. Waiver. The undersigned Banks hereby waive the failure by
the Borrower to comply with Section 5.13 of the Term Credit Agreement in
connection with the acquisition by a Subsidiary of the Borrower of 100% of the
capital stock of Access Point of Virginia, Inc. for a purchase price of $45,000.
On the Amendment Effective Date, this waiver will be effective as of December
18, 1998.
SECTION 3. Release of Collateral.
(a) The undersigned Banks and the Shareholder Guarantors hereby
consent to the release of, and authorize and instruct the Administrative Agent
and ▇▇▇▇▇▇ (as agent for the Shareholder Guarantors) to release, and the
Administrative Agent and ▇▇▇▇▇▇ hereby release, 23.6502 shares of common stock
of AMRC Holdings (together with all of the Borrower's rights and privileges with
respect thereto and all income and profits thereon, and all interest, dividends
and other payments and distributions with respect thereto, and all proceeds
thereof) from the Security Interests (as defined in the Security and Pledge
Agreement or the Shareholder Guarantor Security Agreement, as the case may be).
Upon receipt of a certificate representing 76.3498 shares of common stock of
AMRC Holdings (accompanied by duly executed instruments of transfer or
assignment in blank), the Administrative Agent shall deliver to the Borrower the
certificate representing 100 shares of common stock of AMRC Holdings. The
Borrower represents that AMRC Holdings' name has been changed to "XM Satellite
Radio Holdings Inc." and that the Borrower is no longer required to transfer
shares of AMRC Holdings to WorldSpace, Inc. as contemplated by the Waiver and
Release of Certain Collateral dated as of July 30, 1998.
(b) The undersigned Banks and the Shareholder Guarantors hereby agree
that AMRC Note 1 (together with all of the Borrower's rights and privileges with
respect thereto and all income and profits thereon, and all interest, dividends
and other payments and distributions with respect thereto, and all proceeds
thereof, including any shares of common stock into which AMRC Note 1 is
convertible) shall not be subject to the Security Interests (as defined in the
Security and Pledge Agreement or the Shareholder Guarantor Security Agreement,
as the case may be).
(c) The undersigned Banks hereby consent to the release of, and
authorize and instruct the Administrative Agent to release, upon receipt of a
written request from ▇▇▇▇▇▇ (as agent for the Shareholder Guarantors) to do so,
AMRC Note 2 and/or AMRC Note 3 (together with all of the Borrower's rights and
privileges with respect thereto and all income and profits thereon, and all
interest, dividends and other payments and distributions with respect thereto,
and all proceeds thereof, including any shares of common stock into which AMRC
Note 2 and/or AMRC Note 3 is convertible) from the Security Interests (as
defined in the Security and Pledge Agreement). The receipt by the Administrative
Agent of such written request shall be deemed to be a consent by each
Shareholder Guarantor to the release so requested.
(d) The Borrower, the undersigned Banks, the Shareholder Guarantors and
the Administrative Agent hereby rescind the Waiver and Release.
SECTION 4. Limitation on Liens. Section 5.17 o the Term Credit
Agreement is amended by adding the following subsection (a-1) immediately after
subsection (a) thereof:
(a-1) Liens on securities issued by AMRC Holdings that are not subject
to the Security Interests (as defined in the Security and Pledge Agreement);
SECTION 5. Limitation on Sales of Assets. Section 5.18 of the Term
Credit Agreement is amended by adding the following subsection (a-1) immediately
after subsection (a) thereof:
(a-1) the sale, transfer or other disposition of securities issued by
AMRC Holdings that are not subject to the Security Interests (as defined in the
Security and Pledge Agreement);
SECTION 6. Limitation on Indebtedness. Section 5.25 of the Term Credit
Agreement is amended by adding the following subsection (a-1) immediately after
subsection (a) thereof:
(a-1) Indebtedness under the Baron Exchangeable Notes in an aggregate
principal amount not to exceed $21,500,000 (less the principal amount thereof
which is exchanged or repaid).
SECTION 7. Restrictions on Payments in Respect of Baron Exchangeable
Notes. The following is added as Section 5.26 of the Term Credit Agreement:
SECTION 5.26. Restrictions on Payments in Respect of Baron
Exchangeable Notes. The Borrower will not, and will not permit any of
its Subsidiaries to, directly or indirectly, redeem, retire, purchase,
acquire, defease or otherwise make any payment in respect of the Baron
Exchangeable Notes; provided that the foregoing shall not prohibit the
exchange of Baron Exchangeable Notes for shares of common stock of AMRC
Holdings in accordance with the terms of the Baron Exchangeable Notes.
The Borrower will not consent to or solicit any amendment, supplement,
waiver or other modification of any agreement or instrument evidencing
or governing the Baron Exchangeable Notes without the prior written
consent of the Required Lenders.
SECTION 8. Events of Default. Section 6.01(s) is amended by adding the
words "or, in the case of the Baron Capital Letter of Credit, as the result of a
draw thereunder pursuant to Section 1(e) of the Baron Capital Guaranty"
immediately after the words "the relevant Shareholder Guarantor's obligations
thereunder".
SECTION 9. Baron Exchangeable Notes. The undersigned Banks hereby
approve the form and substance of the Baron Exchangeable Notes set forth in
Exhibit A hereto.
SECTION 10. Representations of Borrower. The Borrower represents and
warrants that (i) the representations and warranties set forth in Article 4 of
the Credit Agreement shall be true on and as of the Amendment Effective Date and
(ii) no Default shall have occurred and be continuing on such date.
SECTION 11. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 12. 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 13. Effectiveness. This Amendment shall become effective as of
the date hereof on the date (the "Amendment Effective Date") when the
Documentation Agent shall have received a counterpart hereof from each of the
Borrower, ▇▇▇▇▇▇, SingTel, Baron Capital and the Required Banks signed by such
party or a facsimile or other written confirmation (in form satisfactory to the
Documentation Agent) that such party has signed a counterpart hereof.
SECTION 14. Shareholder Guarantor Consent. The Shareholder Guarantors
consent to the foregoing.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first above written.
AMERICAN MOBILE SATELLITE
CORPORATION
By /s/▇▇▇▇▇ ▇▇▇▇▇
-----------------------------
Title:Vice President
TORONTO DOMINION (TEXAS), INC.,
as Administrative Agent and Bank
By /s/▇▇▇▇ ▇▇▇▇
-----------------------------
Title:Vice President
▇▇▇▇▇▇ GUARANTY TRUST
COMPANY OF NEW YORK
By /s/▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------
Title:Vice President
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION
By /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Title:Vice President
BANCA COMMERCIALE ITALIANA
LOS ANGELES FOREIGN BRANCH
By /s/▇. ▇▇▇▇▇▇▇▇
-----------------------------
Title:V.P. & Manager
By /s/▇. ▇▇▇▇▇▇
-----------------------------
Title: V.P.
BANCA DI ROMA - SAN FRANCISCO
By /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (97271)
-----------------------------
Title:Vice President
By /s/▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (97911)
-----------------------------
Title:First Vice President
THE CHASE MANHATTAN BANK
By /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Title:Vice President
CITIBANK, N.A.
By /s/▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Title:Attorney-In-Fact
DEUTSCHE BANK AG, NEW YORK
BRANCH AND/OR CAYMAN
ISLANDS BRANCH
By /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------
Title:Director
By /s/▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------
Title:Vice President
THE FIRST NATIONAL BANK OF
CHICAGO
By /s/▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Title:First Vice President
ISTITUTO BANCARIO SAN PAOLO DI
TORINO ISTITUTO MOBILIARE
ITALIANO S.P.A.
By /s/▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------
Title:Deputy Manager
By /s/▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Title:Vice President
NATIONSBANK, N.A.
By /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Title:Vice President
▇▇▇▇▇▇ ELECTRONICS CORPORATION,
as Guarantor and agent for the
Shareholder Guarantors
By /s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------
Title:Corporate Vice President
and Treasurer
SINGAPORE TELECOMMUNICATIONS
LTD.
By /s/Ho Siaw Hong
-----------------------------
Title:Assistant Vice President
(Satellite Services)
BARON CAPITAL PARTNERS, L.P., a
Delaware limited partnership
By: BARON CAPITAL MANAGEMENT,
INC., a general partner
By /s/▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Title:Chief Operating Officer
EXHIBIT A
JUNIOR SUBORDINATED SECURED EXCHANGEABLE NOTE
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT") OR ANY APPLICABLE STATE SECURITIES LAWS. IT MAY NOT BE
SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND COMPLIANCE WITH SUCH STATE SECURITIES LAWS OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION AND/OR
COMPLIANCE IS NOT REQUIRED.
$21,500,000 January 15, 1999
FOR VALUE RECEIVED, American Mobile Satellite Corporation, a Delaware
corporation (the "Company"), promises to pay to the order of Baron Asset Fund on
behalf of The Baron Asset Fund Series, or its registered assigns (the "Holder"),
the principal sum of $21,500,000 or such lesser amount as shall then equal the
outstanding principal amount hereof, together with interest from the date of
issuance of this Note on the unpaid principal balance hereof at a rate equal to
six percent (6%) per annum, computed on the basis of the actual number of days
elapsed and a year of 365 days. All unpaid principal, together with any accrued
but unpaid interest and other amounts payable hereunder, shall be due and
payable on September 30, 2006 (the "Maturity Date"). Interest on this Note shall
accrue on a quarterly basis on January 1, April 1, July 1 and October 1, (each
an "Interest Accrual Date") with the first such Interest Accrual Date being
April 1, 1999; provided, however, that right to accrued interest on this Note is
subject to Section 7(b) herein.
This Note is issued pursuant to the Note Purchase Agreement (the
"Purchase Agreement") dated as of January 15, 1999 by and between the Company
and the Holder.
The following is a statement of the rights of the Holder and the
conditions to which this Note is subject, and to which the Holder hereof, by the
acceptance of this Note, agrees:
1. Definitions. As used in this Note, the following capitalized
terms have the following meanings:
(a) "Business Day" means any day other than a Saturday,
Sunday or other day on which the national or state banks located in the State of
New York are authorized to be closed.
(b) "Exchange Price" has the meaning set forth in Section
7(a) hereof.
(c) "Obligations" means the principal, interest and other
amounts payable under this Note.
(d) "Senior Debt" shall mean the principal of (and premium,
if any), unpaid interest on and fees, expenses, costs of enforcement and other
amounts due in connection with (a) all outstanding indebtedness of the Company
for money borrowed (other than this Note) for the payment of which the Company
is responsible or liable, or the payment of which the Company has guaranteed,
whether such indebtedness is outstanding as of the date hereof or thereafter
created, incurred, assumed or guaranteed by the Company, unless in the
instrument creating or evidencing the same or pursuant to which the same is
outstanding it is specifically provided that such indebtedness is not superior
in right of payment to this Note, (b) capital lease obligations determined in
accordance with generally accepted accounting principles, (c) any obligation of
the Company to reimburse banks pursuant to letters of credit extended by such
banks, advances made by such banks and other credit arrangements entered into
with such banks in connection with tax-exempt obligations issued for the benefit
of the Company, and (d) renewals extensions, modifications and refundings of any
such indebtedness or obligations, provided however, that Senior Debt shall not
mean the principal of (and premium, if any), unpaid interest on and fees,
expenses, costs of enforcement and other amounts due in connection with any such
indebtedness that is expressly subordinated to this Note.
(e) "XM" means XM Satellite Radio Holdings, Inc., a
corporation organized under the laws of the State of Delaware.
(f) "XM Common Stock" means the common stock of XM, having a
par value of $0.10 per share.
(g) "XM Convertible Note" means the Convertible Note, dated
as of January 15, 1999, for a principal amount of up to $806,050, issued by XM
to the Company.
(h) "XM Note Shares" means the shares of XM Common Stock
issuable upon exercise of the conversion rights under the XM Convertible Note.
(i) "XM Owned Shares" means the 23.6502 shares of XM Common
Stock owned by the Company.
2. Exchange Event. The occurrence of any of the following shall
constitute an "Exchange Event" under this Note:
(a) Failure to Pay. The Company shall fail to pay (i) when due
any principal payment on this Note or (ii) any interest or other payment
required under the terms of this Note within five Business Days of its due date;
(b) Breaches of Covenants. The Company shall fail to observe
or to perform any other covenant, obligation, condition or agreement contained
in this Note, and such failure shall continue for 30 days.
(c) Voluntary Bankruptcy or Insolvency Proceedings. The
Company shall (i) apply for or consent to the appointment of a receiver,
trustee, liquidator or custodian of itself or of all or a substantial part of
its property, (ii) be unable, or admit in writing its inability, to pay its
debts generally as they mature, (iii) make a general assignment for the benefit
of its or any of its creditors, (iv) be dissolved or liquidated in full or in
part, (v) become insolvent (as such term may be defined or interpreted under any
applicable statute), (vi) 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 consent to any such relief or to the appointment of or taking possession of
its property by any official in an involuntary case or other proceeding
commenced against it or (vii) take any action for the purpose of effecting any
of the foregoing;
(d) Involuntary Bankruptcy or Insolvency Proceedings.
Proceedings for the appointment of a receiver, trustee, liquidator or custodian
of the Company or of all or a substantial part of the property thereof, or an
involuntary case or other proceedings seeking liquidation, reorganization or
other relief with respect to the Company or the debts thereof under any
bankruptcy, insolvency or other similar law now or hereafter in effect shall be
commenced and an order for relief entered, or such case or proceeding shall not
be dismissed or discharged within 45 days of commencement; or
(e) Event of Default on Senior Debt. A default in the payment
of principal premium, if any, or interest with respect to Senior Debt.
3. Rights of Holder Upon Exchange Event. Upon the occurrence or
existence of any Exchange Event, the Note shall automatically be exchanged for
the XM Owned Shares and XM Note Shares, and all rights, title and interest in
the Collateral shall be transferred to Holder.
4. Subordination. The indebtedness evidenced by this Note is hereby
expressly subordinated, to the extent and in the manner hereinafter set forth,
in right of payment to the prior payment in full of all of the Company's Senior
Debt.
(a) Event of Default on Senior Debt. No payments by the
Company on account of principal or interest on this Note shall be made unless
full payment of amounts then due for principal, premium, if any, and interest on
Senior Debt has been made or duly provided for in money or money's worth. No
payment by the Company on account of principal or interest on this Note shall be
made if, at the time of such payment or immediately after giving effect thereto,
(i) there shall exist a default in the payment of principal, premium, if any, or
interest with respect to any Senior Debt, or (ii) there shall have occurred an
event of default (other than a default in the payment of principal, premium, if
any, or interest) with respect to any Senior Debt, as defined therein or in the
instrument under which the same is outstanding, permitting the holders thereof,
or any trustee under any such instrument, to accelerate the maturity thereof,
and such event of default shall not have been cured or waived or shall not have
ceased to exist. Nothing in this Section 4(a) shall be deemed to restrict the
Holder's exchange rights set forth in Section 2(e).
(b) Insolvency Proceedings. If there shall occur any
receivership, insolvency, assignment for the benefit of creditors, bankruptcy,
reorganization, or arrangements with creditors (whether or not pursuant to
bankruptcy or other insolvency laws), sale of all or substantially all of the
assets, dissolution, liquidation, or any other marshaling of the assets and
liabilities of the Company, no amount shall be paid by the Company in respect of
the principal of, interest on or other amounts due with respect to this Note at
the time outstanding, unless and until the principal of (premium, if any),
interest on, and any fees and expenses relating to, the Senior Debt then
outstanding shall be paid in full.
(c) Subrogation. Subject to the payment in full of all Senior
Debt, the Holder of this Note shall be subrogated to the rights of the holder(s)
of such Senior Debt (to the extent of the payments or distributions made to the
holder(s) of such Senior Debt) pursuant to the provisions of this Section 4 to
receive payments and distributions of assets of the Company applicable to the
Senior Debt until the principal of and interest on this Note is paid in full and
no such payments or distributions to the Holder of assets of the Company
otherwise distributable to the holders of Senior Debt shall, as between the
Company, its creditors other than the holders of Senior Debt, and the Holder, be
deemed to be a payment by the Company to the Holder of or on account of the
Note. It is understood that the provisions of this Section 4(c) are and are
intended solely for the purpose of defining the relative rights of the Holder,
on the one hand, and the holders of Senior Debt, on the other hand.
(d) No Impairment. Nothing contained in this Section 4 shall
impair, as between the Company and the Holder, the obligation of the Company,
subject to the terms and conditions hereof, to pay to the Holder the principal
hereof and interest hereon as and when the same become due and payable, or shall
prevent the Holder of this Note, upon default hereunder, from exercising all
rights, powers and remedies otherwise provided herein or by applicable law.
(e) Reliance of Holders of Senior Debt. The Holder, by its
acceptance hereof, shall be deemed to acknowledge and agree that the foregoing
subordination provisions are, and are intended to be, an inducement to and a
consideration of each holder of Senior Debt, whether such Senior Debt was
created or acquired before or after the creation of the indebtedness evidenced
by this Note, and each such holder of Senior Debt shall be deemed conclusively
to have relied on such subordination provisions in acquiring and holding, or in
continuing to hold, such Senior Debt.
5. Collateral.
(a) To secure the Company's payment and performance of the
Obligations and to secure the Company's prompt, full and faithful performance
and observance of all of the provisions under this Note and the Note Purchase
Agreement, the Company (i) hereby grants the Holder a security interest in all
of the Company's right, title and interest in and to the XM Owned Shares and the
XM Convertible Note including any right to XM Note Shares exchangeable therefor
(collectively, the "Collateral"), and (ii) delivers herewith, the stock
certificates representing the XM Owned Shares with stock powers executed in
blank and the XM Convertible Note.
(b) The Company covenants and agrees with Holder that: (a) the
security interest granted under this Note is in addition to any other security
interest from time to time held by the Holder; (b) the Holder may realize upon
all or part of any Collateral in any order it desires and any realization by any
means upon any Collateral will not bar realization upon any other Collateral;
and (c) the security interest created is a continuing security interest and will
cover and secure all Obligations both present and future of the Company to
Holder pursuant to this Note. The Company further covenants and agrees to take
all actions requested by the Holder to establish or perfect the security
interest granted under this Note.
6. Prepayment. This Note may be prepaid as a whole or in part at any
time prior to the Maturity Date upon at least ten Business Days prior written
notice to the Holder. Any such prepayment shall be applied first to the payment
of expenses due under this Note, second to interest accrued on this Note and
third, if the amount of prepayment exceeds the amount of all such expenses and
accrued interest, to the payment of principal of this Note.
7. Exchange.
(a) Exchange for XM Common Stock. The Holder, at its option,
may, on two Business Days prior written notice (each an "Exchange Notice"), on
one or more occasions any time after the earlier of an Exchange Event and
January 15, 2000, and on or prior to repayment in full of principal, interest
and any other amounts due and owing hereunder (each an "Exchange Date"),
exchange all of the principal then outstanding on this Note, or a portion
thereof in an amount not less than $250,000 (and if greater than $250,000, in
increments of $1,000 above such amount), for (i) XM Owned Shares, (ii) XM Note
Shares issued to the Company on or prior to such Exchange Date, or (iii) rights
to XM Note Shares issuable to the Company, at an exchange rate of $875,000
principal amount for each one (1) share of XM Owned Shares or XM Note Shares
issued or issuable to the Company (the "Exchange Price"). Any principal
exchanged under this Section 7(a) shall be exchanged first for, and to the
extent of, XM Owned Shares, second for XM Note Shares issued to the Company, if
any, and then for the XM Note. Upon full exchange of this Note, the Company
shall be forever released from all its obligations and liabilities under this
Note. If, on the Maturity Date, the Company has not received a timely Exchange
Notice for the then outstanding principal amount under this Note, the Company
may, at its option, (x) require the Holder to exchange such remaining principal
for XM Owned Shares and/or XM Note Shares pursuant to the terms set forth in
this Section 7 in full satisfaction of all Obligations hereunder, or (y) repay
all remaining principal and accrued interest due as of the Maturity Date. Upon
such exchange or repayment pursuant to the immediately preceding sentence, the
Company shall be forever released from all its obligations and liabilities under
this Note.
(b) Mechanics and Effect of Exchange. This Section 7(b) shall
apply to any partial exchange of this Note other than in connection with the
exercise by the Company of its option under Section 7(a)(x) above. On any
exchange covered by this Section 7(b), the Company shall transfer to the Holder
(i) the XM Owned Shares, XM Note Shares or XM Convertible Note for which a
portion of this Note is exchanged and (ii) a replacement promissory note having
identical terms to this Note, except that the principal amount thereof shall
equal the difference between (x) the principal amount of this Note immediately
prior to such exchange minus (y) the portion of such principal amount exchanged
for XM Owned Shares, XM Note Shares or XM Convertible Note. Upon exchange of
this Note pursuant to this Section 7(b), the Holder shall surrender this Note,
duly endorsed, at the principal office of the Company. At its expense, the
Company shall, as soon as practicable thereafter, deliver to such Holder at such
principal office a certificate or certificates for the number of XM Owned Shares
or XM Note Shares held by the Company to which the Holder shall be entitled upon
such exchange, together with any other securities and property to which the
Holder is entitled upon such exchange under the terms of this Note. The Holder's
right to all accrued interest relating to the portion of the principal amount
exchanged pursuant to this Section 7(b) shall be extinguished upon such
exchange.
(c) Interest on XM Convertible Note. Interest, if any, paid in
cash by XM under the XM Convertible Note shall be allocated and paid to the
Company to the extent such interest accrued before any Exchange Date relating to
the XM Convertible Note, and to the Holder to the extent such interest accrued
after any such Exchange Date.
8. Successors and Assigns. Subject to the restrictions on transfer
described in Sections 10 and 11 hereof, the rights and obligations of the
Company and the Holder of this Note shall be binding upon and benefit the
successors, assigns, heirs, administrators and transferees of the parties.
9. Waiver and Amendment. The waiver or failure of the Company or the
Holder to exercise in any respect any right provided in this Note on a
particular occasion shall not be deemed a waiver of such right on any other
occasion or a waiver of any other right. To be effective, a waiver must be in
writing and be signed by the party that is entitled to the benefit of the right
that is being waived. No amendment or modification of this Note shall be made or
deemed effective unless in writing and executed and delivered by the party
against whom enforcement of such amendment or modification is sought.
10. Transfer of this Note or Securities Issuable on Exchange Hereof.
This Note may not be transferred in violation of the restrictive legend set
forth at the head hereof. Each new Note issued upon transfer of this Note shall
bear a legend as to the applicable restrictions on transferability in order to
ensure compliance with the Securities Act, unless in the opinion of counsel for
the Company such legend is not required in order to ensure compliance with the
Securities Act. The Company may issue stop transfer instructions to its transfer
agent in connection with such restrictions. Subject to the foregoing, transfers
of this Note shall be registered upon registration books maintained for such
purpose by or on behalf of the Company. Prior to presentation of this Note for
registration of transfer, the Company shall treat the registered holder hereof
as the owner and holder of this Note for the purpose of receiving all payments
of principal and interest hereon and for all other purposes whatsoever, whether
or not this Note shall be overdue, and the Company shall not be affected by
notice to the contrary.
11. Assignment by the Company. Neither this Note nor any of the rights,
interests or obligations hereunder may be assigned, by operation of law or
otherwise, in whole or in part, by the Company, without the prior written
consent of the Holder.
12. Treatment of Note. To the extent permitted by generally accepted
accounting principles, the Company will treat, account and report the Note as
debt and not equity for accounting purposes and with respect to any returns
filed with federal, state or local tax authorities.
13. Notices. Any notice, request or other communication required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given if personally delivered or mailed by registered or certified mail, postage
prepaid, or by recognized overnight courier, personal delivery or facsimile
transmission at the respective addresses or facsimile number of the parties as
set forth below:
If to the Company:
American Mobile Satellite Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇, Esq.
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Holder:
The Baron Asset Fund Series
c/o Baron Asset Fund
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Any party hereto may by notice so given change its address or facsimile
number for future notice hereunder. Notice shall conclusively be deemed to have
been given when received.
14. Expenses; Waivers. If action is instituted to collect this Note,
the Company promises to pay all costs and expenses, including, without
limitation, reasonable attorneys' fees and costs, incurred in connection with
such action. The Company hereby waives notice of default, presentment or demand
for payment, protest or notice of nonpayment or dishonor and all other notices
or demands relative to this instrument.
15. Governing Law. This Note and all actions arising out of or in
connection with this Note shall be governed by and construed in accordance with
the laws of the State of New York, without regard to conflict of laws provisions
of the State of New York or of any other state. In the event of any dispute
among or between any of the parties to this Note arising out of the terms of
this Note, the parties hereby consent to the exclusive jurisdiction of the
federal and state courts located in the State of New York for resolution of such
dispute, and agree not to contest such exclusive jurisdiction or seek to
transfer any action relating to such dispute to any other jurisdiction.
IN WITNESS WHEREOF, the Company has caused this Note to be issued as of
the date first written above.
AMERICAN MOBILE
SATELLITE CORPORATION
By:__________________________
Name:________________________
Title:_______________________