UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 2)*
American Mobile Satellite Corporation
_____________________________________________________________________________
______________________________
(Name of Issuer)
Common Stock $.01 Par Value
_____________________________________________________________________________
______________________________
(Title of Class of Securities)
02755R 10 3
____________________________________________________
(CUSIP Number)
Ms. Chan Su Shan, Company Secretary, Singapore Telecommunications Limited
31 Exeter Road, Comcentre, Singapore 239732, Republic of Singapore
(011) (65) 838-2201 */
_____________________________________________________________________________
______________________________
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
July 1, 1996
_____________________________________________________________________________
______
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following
box [ ] .
Check the following box if a fee is being paid with the statement[ ]. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are
to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
*/ With a copy to: Phillip L. Spector, Esq., Paul, Weiss, Rifkind,
Wharton & Garrison, 1615 L Street, N.W., Suite 1300, Washington, DC 20036,
(202) 223-7340.
<PAGE>
SCHEDULE 13D
CUSIP No. 02755R 10 3 Page 2 of Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Singapore Telecommunications Limited
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)[ ]
(b)[X]
3 SEC USE ONLY
4 SOURCE OF FUNDS
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Republic of Singapore
7 SOLE VOTING POWER
4,512,796 shares (if the Issuer's Warrant dated 6/28/96
were exercisable in full: 4,731,546)
NUMBER OF
SHARES
BENEFICIALLY OWNED
BY EACH REPORTING
PERSON
WITH
8 SHARED VOTING POWER
0 shares
9 SOLE DISPOSITIVE POWER
4,512,796 shares (if the Issuer's Warrant dated 6/28/96
were exercisable in full: 4,731,546)
10 SHARED DISPOSITIVE POWER
0 shares
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,512,796 shares (if the Issuer's Warrant dated 6/28/96 were
exercisable in full: 4,731,546)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [X]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
17.8% (if the Issuer's Warrant dated 6/28/96 were exercisable in
full: 18.5%)
14 TYPE OF REPORTING PERSON
CO
<PAGE>
SCHEDULE 13D
CUSIP No. 02755R 10 3 Page 3 of Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Temasek Holdings (Private) Limited
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)
(b)[x]
3 SEC USE ONLY
4 SOURCE OF FUNDS
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Republic of Singapore
7 SOLE VOTING POWER
4,512,796 shares (if the Issuer's Warrant dated 6/28/96 were
exercisable in full: 4,731,546)
NUMBER OF
SHARES
BENEFICIALLY OWNED
BY EACH REPORTING
PERSON
WITH
8 SHARED VOTING POWER
0 shares
9 SOLE DISPOSITIVE POWER
4,512,796 shares (if the Issuer's Warrant dated 6/28/96 were
exercisable in full: 4,731,546)
10 SHARED DISPOSITIVE POWER
0 shares
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,512,796 shares (if the Issuer's Warrant dated 6/28/96 were
exercisable in full: 4,731,546)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [X]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
17.8% (if the Issuer's Warrant dated 6/28/96 were exercisable in
full: 18.5%)
14 TYPE OF REPORTING PERSON
HC
<PAGE>
4
AMENDED SCHEDULE 13D {1/}
Item 3. Source and Amount of Funds or Other Consideration
Item 3 is amended and restated in its entirety as follows:
Prior to November 1992, all of Singapore Telecom's holdings of
Common Stock were held indirectly through Mtel Space Technologies, L.P. ("Mtel
L.P."), a Delaware partnership in which Singapore Telecom's legal predecessor
was a limited partner until November 1992.{2/} The sole assets of Mtel L.P.
were shares of Common Stock. Singapore Telecom provided funds to Mtel L.P. both
by purchasing limited partnership units in Mtel L.P. ("Mtel LPUs") and
by purchasing convertible debentures issued by Mtel L.P. (the "Mtel
Convertible Debentures"). The Mtel Convertible Debentures were, subject
to certain conditions, convertible into Mtel LPUs which, upon conversion,
were to be redeemed immediately for shares of Common Stock held of record by
Mtel L.P.
At the time Mtel L.P. was restructured in November 1992, Singapore
Telecom had contributed $6,667,000 to Mtel L.P. through the purchase of Mtel
LPUs and had loaned Mtel L.P. $24,266,355 through the purchase of Mtel
Convertible Debentures. All such funds came from the working capital of
Singapore Telecom.
As part of the Mtel L.P. restructuring, all Mtel LPUs held by
Singapore Telecom were redeemed for shares of Common Stock, and a portion of
the Mtel Convertible Debentures held by Singapore Telecom were converted.
After the restructuring, Singapore Telecom held directly 467,810 shares of
Common Stock (equivalent to 1,116,363 shares of Common Stock after the
December 1993 stock split by the Issuer). In addition, Singapore Telecom
continued to hold $14,660,015 principal amount of Mtel Convertible Debentures
that, upon conversion into Mtel LPUs, were to be redeemed immediately by Mtel
L.P. for 318,841 shares (760,869 post-split shares) of Common Stock held of
record by Mtel L.P.
On December 20, 1993, Singapore Telecom engaged in the transactions
that required the filing of an initial statement on Schedule 13D. On that
date, Singapore Telecom purchased from the issuer 911,854 shares of Common
Stock for a
- ----------------------------
{1/}
Amending the Amended and Restated Schedule 13D dated December 28, 1995.
{2/}
In April 1992, pursuant to the Telecommunication Authority of Singapore Act
1992, Singapore Telecom became the successor in interest to telecommunications
businesses owned by the Telecommunication Authority of Singapore (which
continues to exercise regulatory oversight over those businesses). Unless
otherwise indicated by the context, "Singapore Telecom" will be used to refer
both to Singapore Telecommunications Limited and to its legal predecessor.
<PAGE>
5
cash purchase price of $18 million. The funds used to make this
purchase came from the working capital of Singapore Telecom.
On that same date, 1,317,460 shares were issued to Singapore Telecom
by the Issuer upon conversion by Singapore Telecom of $27,666,677 principal
amount of subordinated convertible notes previously issued by the Issuer to
Singapore Telecom. The Singapore Telecom funds loaned to the Issuer in
connection with such convertible notes ($20 million in August 1992 and
$7,666,667 in October 1993) came from the working capital of Singapore
Telecom.
In December 1995, Singapore Telecom delivered to Mtel L.P. a notice
of conversion with respect to the remaining Mtel Convertible Debentures. Upon
conversion, Singapore Telecom received 8451.71 Mtel LPUs that, as noted above,
were to be redeemed immediately by Mtel L.P. in exchange for 760,869 shares of
Common Stock held of record by Mtel L.P. On December 27, 1995, Mtel L.P.
redeemed the 8451.71 Mtel LPUs and directed the Issuer to transfer the 760,869
shares of Common Stock to Singapore Telecom (effective as of that date).
On July 1, 1996, upon the closing of a set of agreements providing
long-term bank financing for the Issuer, Singapore Telecom received a warrant
from the Issuer entitling it to purchase 625,000 shares of Common Stock at an
initial exercise price of $24 per share (the "Warrant"). The Warrant was
received as part of the consideration for Singapore Telecom's guaranty of up
to $25 million in principal amount of such long-term financing. The number of
shares of Common Stock for which the Warrant may be exercised is limited to
the extent that certain financial performance tests restrict the Issuer's
ability to borrow fully under the long-term loan agreements (as described
under Item 6 below). As of July 1, 1996, the Warrant is exercisable for only
406,250 shares of Common Stock.
To the best knowledge of the Reporting Persons, the funds used by
the persons listed in Schedules I and II to purchase the shares of Common
Stock specified in Item 5 below came from personal savings of such persons.
Item 4. Purpose of Transaction
Item 4 is amended and restated in its entirety as follows:
The shares of Common Stock held by Singapore Telecom were acquired
for investment purposes, and continue to be held for such purposes. Pursuant
to the cumulative voting rights that exist under the Issuer's Certificate of
Incorporation with respect to the election of the Issuer's board of directors,
and pursuant to the rights that exist under the Stockholders' Agreement
(described in Item 6 below) with respect to appointing directors to the
executive committee of the Issuer's board of directors, Singapore Telecom has
the right to be represented on the Issuer's board of directors and its
executive committee. Singapore Telecom presently has two representatives on
the Issuer's board of directors and one representative on the Issuer's
executive committee. Singapore Telecom representatives also participate in
other committees of the Issuer's board of directors.
<PAGE>
6
The ability of Singapore Telecom to acquire or dispose of shares of
Common Stock is limited to some degree by certain agreements, as described
under Item 6 below. Subject to such agreements, Singapore Telecom may, from
time to time, make additional purchases of Common Stock of the Issuer either
in the open market or in private transactions, depending upon Singapore
Telecom's evaluation of the Issuer's business, prospects, and financial
condition, the market for the Common Stock of the Issuer, other opportunities
available to Singapore Telecom, general economic conditions, money and stock
market conditions, regulatory approvals or restrictions, and other factors.
Depending upon these factors, and subject to such agreements, Singapore
Telecom may also decide to hold or dispose of all or part of its investment in
the Common Stock of the Issuer.
Except as described herein, the Reporting Persons have no present
plan or proposal that relates to or would result in:
(a) the acquisition by any person of additional securities of the Issuer,
or the disposition of securities of the Issuer;
(b) an extraordinary corporate transaction, such as a merger,
reorganization, or liquidation, involving the Issuer or any of its
subsidiaries;
(c) a sale or transfer of a material amount of assets of the Issuer or any
of its subsidiaries;
(d) any change in the present board of directors or management of the
Issuer;
(e) any material change in the present capitalization or dividend policy
of the Issuer;
(f) any other material change in the Issuer's business or corporate
structure;
(g) changes in the Issuer's charter or bylaws or other actions which may
impede the acquisition of control of the Issuer by any person;
(h) any act or course of conduct causing the Common Stock of the Issuer to
cease to be authorized to be quoted in an inter-dealer quotation system of a
registered national securities association;
(i) any act or course of conduct causing the Common Stock of the Issuer to
become eligible for termination of registration pursuant to Section 12(g)(4)
of the Securities Exchange Act of 1934 (the "Act"); or
(j) any action similar to any of those enumerated above.
The Reporting Persons reserve the right to formulate such plans or
proposals, and to take such action, with respect to any or all of the
foregoing matters and any other matters as they may deem appropriate.
<PAGE>
7
To the best knowledge of the Reporting Persons, all shares
identified in Item 5 below as beneficially owned by persons listed in
Schedules I and II were acquired by such persons for investment purposes.
Such persons may buy or sell shares of Common Stock in the future as they deem
appropriate, but, to the best knowledge of the Reporting Persons, and except
as otherwise indicated herein, such persons have no present plan or proposal
that relates to or would result in the actions or events specified in (a)
through (j) above.
Item 5. Interest in Securities of the Issuer
Item 5 is amended and restated in its entirety as follows:
(a) Singapore Telecom owns beneficially 4,512,796 shares of Common Stock.
Of this amount, 4,106,546 shares of Common Stock are owned of record by
Singapore Telecom, and 406,250 shares of Common Stock could be obtained by
Singapore Telecom upon exercise of the Warrant. If the Warrant were presently
exercisable in full, Singapore Telecom would be able to obtain 625,000 shares
of Common Stock upon exercise of the Warrant, and Singapore Telecom's total
beneficial ownership would be 4,731,546 shares of Common Stock. (The
restrictions upon exercise of the Warrant are described in Item 6 below.) By
reason of its ownership stake in Singapore Telecom, Temasek may be deemed to
be the beneficial owner of the shares of Common Stock beneficially owned by
Singapore Telecom.
Based upon the information contained in the Issuer's Form 10-Q dated
May 14, 1996, the 4,512,796 shares of Common Stock beneficially owned by
Singapore Telecom constitute approximately 17.8% of the Common Stock
outstanding as of March 31, 1996.{3/} If the Warrant were presently
exercisable in full, the 4,731,546 shares of Common Stock that would be
beneficially owned by Singapore Telecom would constitute approximately 18.5% of
the Common Stock outstanding as of March 31, 1996.{4/}
To the best knowledge of the Reporting Persons, none of the persons
listed in Schedule I or II beneficially own or have the right to acquire
shares of Common Stock of the Issuer, except as set forth in the table below:
- -----------------------
{3/}
For the purpose of computing this percentage, the Warrant was deemed to be
exercised to the extent presently exercisable, and the shares of Common Stock
issuable upon such exercise were deemed to be outstanding.
{4/}
For the purpose of computing this percentage, the Warrant was deemed to be
fully exercisable and exercised in full, and the shares of Common Stock
issuable upon such exercise were deemed to be outstanding.
<PAGE>
8
Name of
Beneficial Owner Number of Shares Percentage
Lim Toon 2,000 */
Raphael Leong Sai Mooi 1,000 */
Chua Sock Koong 5,000 */
*/ Less than 0.1%
The Reporting Persons may be deemed to comprise a group (within the
meaning of Section 13(d)(3) of the Act) with the following entities by virtue
of certain agreements described in Item 6 below: (1) Hughes Electronics
Corporation ("Hughes Electronics") and Hughes Communications Satellite
Services, Inc. ("Hughes" and, together with Hughes Electronics, the "Hughes
Entities"), an indirect wholly-owned subsidiary of Hughes Electronics; and (2)
Space Technologies Investments ("Investments") and the following affiliates of
Investments: Transit Communications, Inc., and Satellite Communications
Investments Corporation (collectively with Investments, the "AT&T Entities").
{5/}
The Reporting Persons expressly disclaim beneficial ownership of the
shares of Common Stock held by the Hughes Entities and the AT&T Entities, and
the filing of this statement by the Reporting Persons shall not be construed
as an admission by the Reporting Persons that either of them is, for purposes
of Section 13(d) of the Act, the beneficial owner of any of the shares of
Common Stock held by the Hughes Entities or the AT&T Entities.
Based upon the information set forth in the Issuer's Proxy Statement
dated April 1, 1996 and the Issuer's Form 10-Q dated March 31, 1996, and upon
additional information received from the Issuer, the Reporting Persons believe
that the Hughes Entities and the AT&T Entities beneficially own the number of
shares of Common Stock of the Issuer set forth in the table below,
constituting in each case that percentage of the outstanding Common Stock of
the Issuer set forth in the table:
- ---------------------------
{5/}
Prior to the conversion of the remaining Mtel Convertible Debentures in
December 1995, and the resulting transfer of the 760,869 shares of Common
Stock from Mtel L.P. to Singapore Telecom, the following entities might also
have been deemed to be part of such group: Mtel L.P., Mtel Space Technologies
Corporation ("Mtel Corp.") (Mtel L.P.'s general partner), and Mtel
Technologies, Inc. ("Mtel Corp. Affiliate") (Mtel L.P.'s limited partner)
(collectively, the "Mtel Group").
<PAGE>
9
Name of Beneficial Owner Number of Shares Percentage{6/}
Hughes Communications
Satellite Services, Inc.{7/} 6,691,622 26.73
Hughes Electronics Corporation{8/} 2,437,500 8.88
Hughes Entities as a Group 9,129,122 33.23
- ---------------------------------------------------------------------------- -
Space Technologies
Investments, Inc.{9/} 1,855,539 7.23
Transit Communications, Inc. 681,818 2.73
Satellite Communications
Investments Corporation{9/}. 1,344,067 5.32
AT&T Entities as a Group 3,881,424 14.99
- ---------------------------
{6/}
For the purpose of computing the percentage of the Common Stock of the Issuer
beneficially owned by the entities listed here, warrants held by such entities
were deemed to be exercised to the extent presently exercisable, and the
shares of Common Stock issuable upon such exercise were deemed to be
outstanding.
{7/}
Includes 25,000 shares of Common Stock issuable to Hughes upon the exercise of
certain warrants previously issued by the Issuer. These Warrants are
exercisable through January 19, 2001 at an exercise price of $.01 per share.
{8/}
Consists of 2,437,500 shares of Common Stock issuable to Hughes Electronics
upon the exercise of a warrant that Hughes Electronics received as part of the
consideration for a guaranty that it provided in connection with long-term
bank financing for the Issuer ("the Hughes Electronics Warrant"). Like the
Warrant received by Singapore Telecom in connection with the long-term
financing, the Hughes Electronics Warrant is only exercisable in full upon the
fulfillment of certain conditions tied to the Issuer's ability to borrow fully
under the long-term loan agreements. If such conditions are met, the Hughes
Electronics Warrant is ultimately exercisable for 3,750,000 shares of Common
Stock. The Hughes Electronics Warrant is exercisable through June 28, 2001 at
an initial exercise price of $24 per share of Common Stock.
{9/}
Includes 649,347 shares of Common Stock issuable to Investments and 230,932
shares of Common Stock issuable to Satellite Communications Investments
Corporation, respectively, upon the exercise of certain warrants previously
issued by the Issuer. These warrants are exercisable through December 20,
1998 at an exercise price of $21 per share of Common Stock.
<PAGE>
10
(b) Singapore Telecom has sole power to vote or to direct the vote, and
sole power to dispose or to direct the disposition of, the shares of Common
Stock of the Issuer beneficially owned by it, subject to the effect of the
agreements referred to in Item 6. By reason of its ownership stake in
Singapore Telecom, Temasek may be deemed to have the power to direct the vote,
or to direct the disposition of, the shares of Common Stock of the Issuer
beneficially owned by Singapore Telecom, subject to the effect of the
agreements referred to in Item 6.
To the best knowledge of the Reporting Persons, each of the persons
listed in Schedule I or II has sole power to vote and to direct the vote, and
sole power to dispose and direct the disposition of, the Common Stock of the
Issuer beneficially owned by such person.
(c) As noted under Item 3 above, on July 1, 1996, upon the closing of a
set of agreements providing long-term bank financing for the Issuer, Singapore
Telecom received the Warrant from the Issuer, which entitles it to purchase
625,000 shares of Common Stock at an initial exercise price of $24 per share.
The Warrant was received as part of the consideration for Singapore Telecom's
guaranty of up to $25 million in principal amount of such long-term financing.
The number of shares of Common Stock for which the Warrant may be exercised
is limited to the extent that certain financial performance tests restrict the
Issuer's ability to borrow fully under the long-term loan agreements. As of
July 1, 1996, the Warrant is exercisable for only 406,250 shares of Common
Stock.
To the best knowledge of the Reporting Persons, none of the persons
listed in Schedule I or II has sold or purchased shares of Common Stock during
the past sixty days.
As noted under Item 5(a) above, on July 1, 1996, upon the closing of
a set of agreements providing long-term bank financing for the Issuer, Hughes
Electronics received the Hughes Electronics Warrant from the Issuer, which
entitles it to purchase 3,750,000 shares of Common Stock at an initial
exercise price of $24 per share. The Hughes Electronics Warrant was received
as part of the consideration for Hughes Electronics' guaranty of up to $150
million in principal amount of such long-term financing. The number of shares
of Common Stock for which the Hughes Electronics Warrant may be exercised is
limited to the extent that certain financial performance tests restrict the
Issuer's ability to borrow fully under the long-term loan
<PAGE>
11
agreements. As of July 1, 1996, the Hughes Electronics Warrant is exercisable
for only 2,437,500 shares of Common Stock.
The Reporting persons are not aware of transactions in shares of
Common Stock that were effectuated by the AT&T Entities during the past 60
days.
(d) The Reporting Persons do not know of any other person having the right
to receive or the power to direct the receipt of dividends from, or the
proceeds from the sale of, the shares of Common Stock of the Issuer
beneficially owned by the Reporting Persons.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships
with Respect to Securities of the Issuer
Item 6 is amended and restated only with respect to the subject
headings listed below:
* * * * *
Right of First Offer Agreement
The Issuer, Singapore Telecom, Hughes, the AT&T Entities, and the
Mtel Group are parties to a Right of First Offer Agreement ("ROFA") dated
November 30, 1993, pursuant to which each party thereto (other than the
Issuer) (a) granted to each of the other parties (other than the Issuer),
until September 30, 2003, a right of first offer with respect to the shares of
Common Stock, and securities exercisable or convertible into shares of Common
Stock, now or hereafter held by such party (excluding shares of Common Stock
acquired by such party in the open market, and subject to certain other
exceptions), and (b) agreed to terminate the Investment Agreement dated
January 21, 1991 among the holders of Common Stock party to the ROFA (or their
predecessors in interest), pursuant to which the parties had granted each
other certain rights of first refusal in certain circumstances with respect to
the shares of Common Stock held by them.{10/}
On June 28, 1996, in connection with the execution of documentation
for the Issuer's long-term financing, the ROFA was amended so as to limit its
application solely to transfers of shares of Common Stock (and securities
exercisable or convertible into shares of Common Stock) between and among
Singapore Telecom, Hughes, and the AT&T Entities.
- -------------------------
{10/}
Since the redemption of the remaining Mtel Convertible Debentures and the
resulting transfer of the 760,869 shares of Common Stock from Mtel L.P. to
Singapore Telecom causes the collective holding of shares of Common Stock by
the Mtel Group to drop below 5%, the Mtel Group is no longer entitled to
purchase shares of Common Stock from other parties under the ROFA.
<PAGE>
12
* * * * *
Mtel Partnership Agreement
Prior to the conversion by Singapore Telecom of the remaining Mtel
Convertible Debentures in December 1995, Mtel Corp., Mtel Corp. Affiliate, and
Singapore Telecom were parties to the Mtel Partnership Agreement. From
November 18, 1992 (when Mtel L.P. was restructured) through December 8, 1995
(when Singapore Telecom redeemed the remaining Mtel Convertible Debentures),
Mtel Corp. was the general partner of Mtel L.P., and Mtel Corp. Affiliate was
the sole limited partner. Upon conversion of the Mtel Convertible Debentures,
Singapore Telecom received Mtel LPUs, and thus became a limited partner for
the brief period of time necessary for Mtel L.P. to effectuate redemption of
these LPUs in exchange for the 760,869 shares of Common Stock held of record
by Mtel L.P. (Sections 3.1 and 3.2 of the Mtel Partnership Agreement)
The Mtel Partnership Agreement required that, upon any conversion of
the Mtel Convertible Debentures by Singapore Telecom, partnership units of
Singapore Telecom on the one hand and Mtel Corp. and/or Mtel Corp. Affiliate
on the other hand were to be redeemed by Mtel L.P. on a pro rata basis. The
Mtel Partnership Agreement also provided that the Partnership would terminate
upon the sale or other disposition of all shares of Common Stock held by Mtel
L.P. Thus, the conversion in full of the Mtel Convertible Debentures led to a
complete distribution of all shares of Common Stock held by Mtel L.P., which
in turn caused termination of the Partnership. (Sections 3.3 and 10.2 of the
Mtel Partnership Agreement.)
Mtel L.P., Mtel Corp., and Singapore Telecom were also parties to
the Amended and Restated Pledge and Voting Agreement dated November 18, 1992
("Pledge and Voting Agreement"), which was appended to the Mtel Partnership
Agreement. Under the terms of the Mtel Partnership Agreement, the Mtel
Convertible Debentures, and the Pledge and Voting Agreement, the repayment of
those Debentures was secured by the pledge to Singapore Telecom of the shares
of Common Stock purchased by Mtel L.P. with the proceeds received from
Singapore Telecom for the Debentures. Prior to the conversion by Singapore
Telecom of the remaining Mtel Convertible Debentures in December 1995, 999,545
shares of Common Stock held of record by Mtel L.P. were pledged to Singapore
Telecom. Pursuant to the Pledge and Voting Agreement, upon conversion of the
remaining Mtel Convertible Debentures, Singapore Telecom released its security
interest in these pledged shares of Common Stock. (Section 3.5 of the Mtel
Partnership Agreement; Section 8 of the Mtel Convertible Debentures; and
Sections 1.1, 1.2 and 4.4 of the Pledge and Voting Agreement)
Under the Pledge and Voting Agreement, Singapore Telecom, Mtel
Corp., and Mtel L.P. had also agreed to cooperate in certain matters related
to (a) the election of directors to the Issuer's board of directors and (b)
the appointment of directors to the executive committee of the Issuer's board
of directors. These provisions of the Pledge and Voting Agreement terminated
upon the conversion of the remaining Mtel Convertible Debentures by Singapore
Telecom. (Article 5 of the Pledge and Voting Agreement)
<PAGE>
13
Guaranty Issuance Agreement
Singapore Telecom, Hughes Electronics, Baron Capital Partners, L.P.
(a stockholder of the Issuer) ("Baron," and collectively with Singapore
Telecom and Hughes Electronics, the "Guarantors"), the Issuer, and AMSC
Subsidiary Corporation (a subsidiary of the Issuer) ("Issuer Subsidiary") are
parties to the Guaranty Issuance Agreement dated June 28, 1996. The Guaranty
Issuance Agreement specifies the compensation to be provided by the Issuer and
the Issuer Subsidiary to Singapore Telecom, Hughes Electronics, and Baron for
the issuance by the Guarantors of guaranties of the obligations of the Issuer
Subsidiary under the long-term loan agreements that closed on July 1, 1996.
Under the Guaranty Issuance Agreement, the Issuer Subsidiary agreed
to pay each Guarantor a fee equal to 1.5% of the principal amount of its
respective guaranty. In addition, the Issuer agreed to issue to each
Guarantor a warrant to purchase its respective Pro Rata Share of 5,000,000
shares of Common Stock at an initial exercise price of $24 per share. The
"Pro Rata Share" of each Guarantor is equal to the principal amount of its
guaranty divided by $200,000,000. (Section 1)
In addition, the Issuer and the Issuer Subsidiary agreed that the
aggregate outstanding principal amount of the loans under the long-term loan
agreements, plus any amounts paid by the Guarantors with respect to principal,
would not exceed the Borrowing Limit specified in the Performance Schedule.
The Borrowing Limit is $130,000,000 during the period July 1, 1996 through
November 15, 1996, and moves up on a quarterly basis thereafter provided that
(a) the Issuer Subsidiary has met certain Performance Tests specified in the
Performance Schedule, or (b) Guarantors having a Pro Rata Share greater than
50% have waived compliance with the Performance Tests and consented to
increased borrowings by the Issuer Subsidiary. (Section 3)
The Guaranty Issuance Agreement also contains a limited
intercreditor arrangement among the Guarantors. If any Guarantor makes any
payment under its guaranty or acquires any notes or obligations under the
long-term loan agreements, thereafter all decisions to act or refrain from
acting with respect to the enforcement of such notes or obligations against
the Issuer Subsidiary or the Issuer (including enforcement with respect to any
collateral security therefor) must be approved by Guarantors having Pro Rata
Shares equal to at least 80% of the outstanding obligations so paid or
purchased. In addition, if any Guarantor does not make a required payment
under its guaranty, and such payment is made by any other Guarantor, then the
defaulting Guarantor shall be liable to reimburse the paying Guarantor for
such payment on demand, and any amounts which would otherwise be payable to
the defaulting Guarantor by the Issuer Subsidiary or the Issuer or with
respect to any collateral shall first be paid to the paying Guarantor until
such payment has been fully reimbursed. (Section 13)
The Warrant and the Registration Rights Agreement
Pursuant to the terms of the Guaranty Issuance Agreement, the Issuer
issued to Singapore Telecom the Warrant dated June 28, 1996. The Warrant
entitles
<PAGE>
14
Singapore Telecom to purchase from the Issuer 625,000 shares of
Common Stock (the "Warrant Share Amount") at a purchase price of $24 per share
(the "Exercise Price"). The Warrant is exercisable as of July 1, 1996,
subject to certain restrictions, and expires on June 28, 2001. (Section 1 of
the Warrant)
The exercise of the Warrant is restricted where (a) such exercise
would cause the Issuer's Alien Ownership Percentage to exceed the Accepted
Alien Ownership Percentage Limitation (which is derived from alien ownership
restrictions under Section 310(b) of the Communications Act), or (b) such
exercise would require the Issuer to issue Common Stock without first having
the stockholder approval necessary under Rule 4460(i)(1)(D) of the National
Association of Securities Dealers, Inc. Under specified circumstances where
exercise of the Warrant is prevented in whole or in part for either of the
foregoing reasons, the Issuer is required to provide the holder of the Warrant
with a payment of funds in lieu of the shares of Common Stock that are not
issuable to such holder. (Sections 3 and 4 of the Warrant)
The Warrant Share Amount and the Exercise Amount are to be adjusted
under certain conditions, including stock splits and asset distributions to
holders of Common Stock. (Section 10 of the Warrant)
In addition to the restrictions upon exercise of the Warrant
described above, the number of shares of Common Stock for which the Warrant
may be exercised is limited to the extent that certain financial performance
tests restrict the Issuer's ability to borrow fully under the long-term loan
agreements. Specifically, the Warrant provides that it can be exercised at
any given time only for the number of shares of Common Stock which is equal to
the applicable Warrant Share Amount as in effect from time to time, minus the
Warrant Share Amount multiplied by a fraction, the numerator of which is the
amount which, due solely to the applicable Borrowing Limit (as defined in the
Guaranty Issuance Agreement) in effect at such time, is not available to the
Issuer Subsidiary under the long-term loan agreements, and the denominator of
which is $200,000,000. (Section 15 of the Warrant)
The Warrant provides that the holder of the Warrant is entitled to
certain registration rights under the Registration Rights Agreement dated June
28, 1996 with respect to the shares of Common Stock for which the Warrant may
be exercised (the "Warrant Shares"). (Section 16 of the Warrant)
Singapore Telecom, Hughes Electronics, Baron, and the Issuer are
parties to the Registration Rights Agreement dated June 28, 1996. The
Agreement provides a holder of the Warrant or Warrant Shares with certain
demand and piggyback registration rights. The same registration rights are
provided to the holders of the warrants issued to the other Guarantors (i.e.,
Hughes Electronics and Baron).
<PAGE>
15
Item 7. Material to be Filed as Exhibits
Exhibit I -- Joint Filing Agreement dated July 15, 1996
Exhibit II -- Amended and Restated Stockholders' Agreement dated December 1,
1993
Exhibit III -- Right of First Offer Agreement dated November 30, 1993
Exhibit IV -- Letter Agreement dated October 11, 1993
Exhibit V -- Principal Stockholder Holdback and Waiver Agreement dated October
20, 1993
Exhibit VI -- Amended and Restated Limited Partnership Agreement of Mtel Space
Technologies, L.P. dated November 18, 1992
Exhibit VII -- Amendment No. 1 to Right of First Offer Agreement dated June
28, 1996
Exhibit VIII -- Guaranty Issuance Agreement dated June 28, 1996
Exhibit IX -- Warrant dated June 28, 1996
Exhibit X -- Registration Rights Agreement dated June 28, 1996
<PAGE>
16
Signatures
After reasonable inquiry and to the best of its knowledge and
belief, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
SINGAPORE TELECOMMUNICATIONS LTD.
By:/s/ Chia Choon Wei
___________________________
Name: Dr. Chia Choon Wei
Title: Vice President
Dated: July 15, 1996
TEMASEK HOLDINGS (PRIVATE) LTD.
By:/s/ Janet Seow
____________________________
Name: Janet Seow
Title: Company Secretary
Dated: July 15, 1996
<PAGE>
17
EXHIBIT INDEX
Exhibit
No.
Exhibit I Joint Filing Agreement dated July 15, 1996
Exhibit II Amended and Restated Stockholders' Agreement dated December 1,
1993
Exhibit III Right of First Offer Agreement dated November 30, 1993
Exhibit IV Letter Agreement dated October 11, 1993
Exhibit V Principal Stockholder Holdback and Waiver Agreement dated
October 20, 1993
Exhibit VI Amended and Restated Limited Partnership Agreement of Mtel
Space Technologies, L.P. dated November 18, 1992
Exhibit VII Amendment No. 1 to Right of First Offer Agreement dated June
28, 1996
Exhibit VIII Guaranty Issuance Agreement dated June 28, 1996
Exhibit IX Warrant dated June 28, 1996
Exhibit X Registration Rights Agreement dated June 28, 1996
SCHEDULES I & II
<TABLE>
<CAPTION>
SCHEDULE I
SINGAPORE TELECOMMUNICATIONS LIMITED
DIRECTORS & EXECUTIVE OFFICERS
Present Principal
Name Position Business Address Occupation/Employment Citizenship
- ------------------------ ---------------- ----------------- ---------------------------- -----------
<S> <C> <C> <C> <C>
Mr. Koh Boon Hwee Board Member Singapore Telecom Executive Chairman Singapore
Chairman 31 Exeter Road Wuthelam Holdings Pte Ltd.
Comcentre 298 Tiong Bahru Road
Singapore 239732 #08-00 Tiong Bahru Plaza
Singapore 168730
Mr. Wong Hung Khim Board Member Singapore Telecom Chairman Singapore
Deputy Chairman 31 Exeter Road Singapore Bus Service (1978)
Comcentre Ltd.
Singapore 239732 205 Braddell Road
Singapore 579701
BG Lee Hsien Yang Board Member Singapore Telecom President & CEO Singapore
President & CEO 31 Exeter Road Singapore Telecom
Comcentre 31 Exeter Road
Singapore 239732 Comcentre
Singapore 239732
Dr. Hong Hai Board Member Singapore Telecom President & CEO Singapore
31 Exeter Road Haw Par Brothers
Comcentre International Ltd.
Singapore 239732 180 Clemenceau Avenue
#08-00 Haw Par Glass Tower
Singapore 239722
<PAGE>
2
Present Principal
Name Position Business Address Occupation/Employment Citizenship
- ------------------------ ---------------- ----------------- ---------------------------- -----------
Mr. Liew Heng San Board Member Singapore Telecom Deputy Secretary Singapore
31 Exeter Road (Communications)
Comcentre Ministry of Communications
Singapore 239732 #39-00 PSA Building
460 Alexandra Road
Singapore 119963
Mr. Lim Ho Kee Board Member Singapore Telecom Executive Vice President Singapore
31 Exeter Road & CEO
Comcentre (East Asia)
Singapore 239732 Union Bank of Switzerland
80 Raffles Place
#36-00 UOB Plaza 1
Singapore 048624
Mr. Quek Poh Huat Board Member Singapore Telecom President Singapore
31 Exeter Road Temasek Holdings Pte Ltd.
Comcentre 8 Shenton Way
Singapore 239732 #38-03 Treasury Building
Singapore 068811
Mr. Quek Tong Boon Board Member Singapore Telecom Director Singapore
31 Exeter Road Defence Materiels
Comcentre Organization
Singapore 239732 Ministry of Defence
18th Storey, Tower A
Defence Technology Towers
Depot Road
Singapore 109676
<PAGE>
3
Present Principal
Name Position Business Address Occupation/Employment Citizenship
- ------------------------ ---------------- ----------------- ---------------------------- -----------
Mr. Keith Tay Ah Kee Board Member Singapore Telecom Asia Quest Associates Singapore
31 Exeter Road Pte Ltd.
Comcentre 30 Robinson Road
Singapore 239732 #03-02A Robinson Towers
Singapore 048546
Mrs. Yu-Foo Yee Shoon Board Member Singapore Telecom Assistant Secretary Singapore
31 Exeter Road General
Comcentre National Trades Union
Singapore 239732 Congress
Trade Union House
Shenton Way
Singapore 068810
Mr. Lim Toon Executive Vice Singapore Telecom Executive Vice President Singapore
President 31 Exeter Road (International Network)
(International Comcentre 31 Exeter Road
Network) Singapore 239732 Comcentre
Singapore 239732
Mr. Raphael Leong Executive Vice Singapore Telecom Executive Vice President Singapore
Sai Mooi President 31 Exeter Road (Local Services)
(Local Services) Comcentre Singapore Telecom
Singapore 239732 31 Exeter Road
Comcentre
Singapore 239732
<PAGE>
4
Present Principal
Name Position Business Address Occupation/Employment Citizenship
- ------------------------ ---------------- ----------------- ---------------------------- -----------
<S> <C> <C> <C> <C>
Ms. Chua Sock Koong Senior Vice Singapore Telecom Senior Vice President Singapore
President 31 Exeter Road (Corporate Affairs
(Corporate Comcentre & Finance)
Affairs Singapore 239732 Singapore Telecom
& Finance) 31 Exeter Road
Comcentre
Singapore 239732
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
5
SCHEDULE II
TEMASEK HOLDINGS (PRIVATE) LIMITED
DIRECTORS & EXECUTIVE OFFICERS
Present Principal
Name Position Business Address Occupation/Employment Citizenship
- ------------------- --------------- -------------------- --------------------------- -----------
<S> <C> <C> <C> <C>
Mr. Lee Ek Tieng Board Chairman Temasek Holdings Managing Director, Monetary Singapore
Pte Ltd. Authority of Singapore
8 Shenton Way 10 Shenton Way
#38-03 Treasury Bldg 29th Floor MAS Building
Singapore 068811 Singapore 079117
Mr. Ngiam Tong Dow Deputy Board Temasek Holdings Permanent Secretary Singapore
Chairman Pte Ltd. Ministry of Finance,
(ex-officio) 8 Shenton Way Revenue/Budget Divisions
#38-03 Treasury Bldg 8 Shenton Way #43-00
Singapore 068811 Treasury Bldg
Singapore 068811
<PAGE>
6
Present Principal
Name Position Business Address Occupation/Employment Citizenship
- ------------------- --------------- -------------------- --------------------------- -----------
Mr. Lum Choong Wah Board Member Temasek Holdings Executive Chairman Singapore
Pte Ltd. SNP Corporation Ltd.
8 Shenton Way 303 Upper Serangoon Road
#38-03 Treasury Bldg Singapore 347692
Singapore 068811
Dr. Andrew Chew Board Member Temasek Holdings Chairman Singapore
Guan Khuan Pte Ltd. Central Provident Fund
8 Shenton Way Board
#38-03 Treasury Bldg #41-00 CPF Building
Singapore 068811 79 Robinson Road
Singapore 068897
Mr. Fock Siew Wah Board Member Temasek Holdings Chairman Singapore
Pte Ltd. Land Transport Authority
8 Shenton Way 460 Alexandra Road
#38-03 Treasury Bldg #28-00 PSA Building
Singapore 068811 Singapore 119963
Mr. Lim Siong Guan Board Member Temasek Holdings Permanent Secretary Singapore
Pte Ltd. Public Service Division
8 Shenton Way 8 Shenton Way
#38-03 Treasury Bldg #47-01 Treasury Building
Singapore 068811 Singapore 068811
<PAGE>
7
Present Principal
Name Position Business Address Occupation/Employment Citizenship
- ------------------- --------------- -------------------- --------------------------- -----------
Dr. Michael Y O Fam Board Member Temasek Holdings Chairman Singapore
Pte Ltd. Fraser & Neave Ltd.
8 Shenton Way 438 Alexandra Road
#38-03 Treasury Bldg #21-00 Alexandra Point
Singapore 068811 Singapore 119958
Mr. Peter Chen Min Board Member Temasek Holdings Non-Executive Director Singapore
Liang Pte Ltd. Temasek Holdings Pte Ltd.
8 Shenton Way 8 Shenton Way
#38-03 Treasury Bldg #38-03 Treasury Bldg
Singapore 068811 Singapore 068811
Mr. Quek Poh Huat President Temasek Holdings President Singapore
Pte Ltd. Temasek Holdings Pte Ltd.
8 Shenton Way 8 Shenton Way
#38-03 Treasury Bldg #38-03 Treasury Bldg
Singapore 068811 Singapore 068811
Mr. Quek Chee Hoon Executive Vice Temasek Holdings Executive Vice President Singapore
President Pte Ltd. Temasek Holdings Pte Ltd.
8 Shenton Way 8 Shenton Way
#38-03 Treasury Bldg #38-03 Treasury Building
Singapore 068811 Singapore 068811
<PAGE>
8
Present Principal
Name Position Business Address Occupation/Employment Citizenship
- ------------------- --------------- -------------------- --------------------------- -----------
Mrs. Janet Seow Company Temasek Holdings Company Secretary/ Singapore
Secretary/ Pte Ltd. Vice President
Vice President 8 Shenton Way Temasek Holdings Pte Ltd.
#38-03 Treasury Bldg 8 Shenton Way
Singapore 068811 #38-03 Treasury Bldg
Singapore 068811
</TABLE>
EXHIBIT I
JOINT FILING AGREEMENT
In accordance with Rule 13d-1(f) under the Securities Exchange Act
of 1934, as amended, the persons named below agree to the joint filing on
behalf of each of them of a statement on Schedule 13D dated July 15, 1996 with
respect to the Common Stock, par value $.01 per share, of American Mobile
Satellite Corporation, a Delaware corporation. This Joint Filing Agreement
shall be included as an Exhibit to such joint filing. In evidence thereof
each of the undersigned, being duly authorized, hereby executes this Agreement
this 15th day of July 1996.
SINGAPORE TELECOMMUNICATIONS LTD.
By:/s/ Chia Choon Wei
______________________________
Name: Dr. Chia Choon Wei
Title: Vice President
TEMASEK HOLDINGS (PRIVATE) LTD.
By:/s/ Janet Seow
_____________________________
Name: Janet Seow
Title: Company Secretary
<PAGE>
[ Exhibit II previously filed ]
[ Exhibit III previously filed ]
[ Exhibit IV previously filed ]
[ Exhibit V previously filed ]
[ Exhibit VI previously filed ]
<PAGE>
EXHIBIT VII
AMENDMENT NO. 1 TO RIGHT OF FIRST OFFER AGREEMENT
This Amendment No. 1 (the "Amendment") to the Right of First Offer
Agreement (the "Agreement"), made and entered into as of the 30th day of
November, 1993, by and among AMSC, Hughes, ST, the Investments Entities
(including SMT), and Mtel Group, is entered into as of the 28th day of June,
1996, by the requisite Parties to such Amendment. Capitalized terms used
herein without definition shall have the respective meanings attributed
thereto in the Agreement.
WHEREAS, the Parties desire to limit the scope of the restrictions
contained in the Agreement;
NOW, THEREFORE, in consideration of the Parties' mutual promises and
agreements set forth herein and other good and valuable consideration, receipt
of which is hereby acknowledged, the Parties agree as follows:
1. The Parties agree that the Agreement is amended to apply only to
Transfers between and among Hughes, ST and Investments Entities. The Parties
agree that, except as provided in the foregoing sentence, the Parties may
transfer their shares without restriction under the Agreement.
2. AMSC further agrees that, upon request and tender of a stock
certificate(s) by any Party to the Agreement, AMSC will cause any restrictive
legend relating to the Agreement to be removed.
IN WITNESS WHEREOF, the Parties have executed this Amendment as of the
28th day of June, 1996.
AMERICAN MOBILE SATELLITE CORPORATION
By: /s/ Randy Segal
---------------------------
Name: Randy Segal
Title: Vice President
HUGHES COMMUNICATIONS SATELLITE SERVICES, INC.
By: /s/ Harold E. McDonnell
-----------------------------
Name: Harold E. McDonnell
Title: Executive Vice President
<PAGE>
SINGAPORE TELECOMMUNICATIONS LTD.
By: /s/ Lim Toon
-----------------------------
Name: Lim Toon
Title: Executive Vice President
SATELLITE COMMUNICATIONS INVESTMENTS CORPORATION
By: /s/ Andrew A. Quartner
-------------------------------
Name:
Title:
SPACE TECHNOLOGIES INVESTMENTS, INC.
By: /s/ Andrew A. Quartner
------------------------------
Name:
Title:
SATELLITE MOBIL TELEPHONE COMPANY, L.P.
Satellite Communications Investments Corporation
a General Partner
By: /s/ Andrew A. Quartner
-----------------------------
Name:
Title:
TRANSIT COMMUNICATIONS, INC.
By: Andrew A. Quartner
-------------------------------
Name:
Title
<PAGE>
EXHIBIT VIII
[Execution Copy]
GUARANTY ISSUANCE AGREEMENT
(Longer-Term Financing)
THIS GUARANTY ISSUANCE AGREEMENT (this "Agreement") dated as of
June 28, 1996 is by and among HUGHES ELECTRONICS CORPORATION, a Delaware
corporation ("Hughes"), SINGAPORE TELECOMMUNICATIONS LTD., a Singapore
corporation ("SingTel"), BARON CAPITAL PARTNERS, L.P., a Delaware limited
partnership ("Baron"), AMSC SUBSIDIARY CORPORATION, a Delaware corporation
dually incorporated as a Virginia public service corporation ("AMSC"), and
AMERICAN MOBILE SATELLITE CORPORATION, a Delaware corporation ("AMSC
Parent").
R E C I T A L S:
WHEREAS, each of Hughes, SingTel and Baron is, directly or
indirectly, a shareholder of AMSC Parent;
WHEREAS, AMSC and AMSC Parent have entered into that certain
Securities Purchase Agreement dated as of January 19, 1996 (the "Bridge
Loan") pursuant to which AMSC has issued notes (i) in the aggregate face
amount of $10,000,000 to Hughes Communications Satellite Services, Inc., and
(ii) in the aggregate face amount of $15,000,000 each (for an aggregate of
$30,000,000) to each of Toronto Dominion Investments, Inc. and Morgan Guaranty
Trust Company of New York;
WHEREAS, on April 19, 1996 AMSC borrowed $20,000,000 from Toronto
Dominion (Texas), Inc. and Morgan Guaranty Trust Company of New York and
issued its promissory notes in the aggregate face amount of $20,000,000 to
evidence such loan and on June 7, 1996 borrowed an additional $10,000,000
(collectively, the "Interim Loan," and the additional $10,000,000 loan
individually, the "$10,000,000 Loan");
<PAGE>
WHEREAS, at the request of AMSC and AMSC Parent, Hughes issued its
guaranty of the Bridge Loan (the "Bridge Loan Guaranty") and of the Interim
Loan (as amended or amended and restated from time to time, the "Hughes
Interim Loan Guaranty"), and Hughes, AMSC and AMSC Parent entered into a
Guaranty Issuance Agreement dated as of April 19, 1996, as amended by the
First Amendment to Guaranty Issuance Agreement dated as of June ___, 1996 (the
"Hughes Guaranty Issuance Agreement") providing for certain compensation to
be paid to Hughes in connection with such transactions;
WHEREAS, at the request of Hughes, AMSC and AMSC Parent, SingTel
issued a guaranty of $5,000,000 in principal amount of the $10,000,000 Loan
(the "SingTel Interim Loan Guaranty") and SingTel, AMSC and AMSC Parent
entered into a Guaranty Issuance Agreement dated as of June 7, 1996 (the
"SingTel Guaranty Issuance Agreement") providing for certain compensation to
be paid to SingTel in connection with such transaction;
WHEREAS, AMSC now proposes to enter into that certain $150,000,000
Credit Agreement providing for up to $150,000,000 of term loans (the "Term
Loan Agreement") and that certain $75,000,000 Credit Agreement providing for
up to $75,000,000 of revolving loans (the "Revolving Credit Agreement" and
together with the Term Loan Agreement, the "Credit Agreements");
WHEREAS, in order to obtain the financing under the Credit
Agreements, AMSC and AMSC Parent have requested that each of Hughes, SingTel
and Baron issue a guaranty of a portion of the obligations of AMSC under the
Credit Agreements in substantially the form attached hereto as Exhibit A
(each, a "Guaranty" and collectively, the "Guaranties"); and
WHEREAS, each of Hughes, SingTel and Baron is willing to issue a
Guaranty on the terms, and subject to the conditions, set forth herein (the
parties which issue Guaranties hereunder are hereafter referred to as
"Guarantors").
A G R E E M E N T:
NOW, THEREFORE, in consideration of the foregoing recitals, the
parties hereto hereby agree as follows:
2
<PAGE>
1. Consideration for the Issuance of the Guaranties. In consideration
of the issuance of the respective Guaranties, and concurrently with (and
conditioned upon) the issuance of its Guaranty, (a) AMSC Parent
shall issue to each Guarantor warrants to purchase its "Pro Rata Share" (as
defined below) of 5,000,000 shares of the Common Stock, par value $.01 per
share, of AMSC Parent at an exercise price of $24.00 per share, on the terms
described in the form of warrant attached hereto as Exhibit B (collectively,
the "Warrants"); and (b) AMSC shall pay to each Guarantor a fee equal to one
and one half percent (1.5%) of the principal amount of its Guaranty. For
purposes of this Agreement, the "Pro Rata Share" of a Guarantor shall be
calculated by dividing the principal amount of its Guaranty by $200,000,000.
2. Conditions to the Issuance of the Guaranties. (a) The obligation of
Hughes to issue its Guaranty is subject to the concurrent repayment in full of
the Bridge Loan and the Interim Loan, and the concurrent release of the Bridge
Loan Guaranty and the Hughes Interim Loan Guaranty.
(b) The obligation of SingTel to issue its Guaranty is subject to the
concurrent repayment in full of the $10,000,000 Loan and the concurrent
release of the SingTel Interim Loan Guaranty.
(c) The obligations of each Guarantor are severally subject to the
following conditions:
(1) AMSC Parent shall have executed and delivered to the respective
Guarantor the Warrants and a Registration Rights Agreement in the form
attached hereto as Exhibit C (the "Registration Rights Agreement"), and AMSC
shall have paid to the respective party its fee, all as set forth in Paragraph
1;
(2) AMSC and AMSC Parent shall have received all consents and
approvals (including from shareholders) required for each of them to enter
into this Agreement, the Warrants and the Registration Rights Agreement and to
perform its obligations thereunder, and shall have delivered copies of all
such consents and approvals to each Guarantor;
(3) Each Guarantor shall have approved the form and substance of
the Credit Agreements and all documents and instruments delivered in
connection therewith, and shall have received evidence satisfactory to it that
the liens and security interests of the lenders under the Credit Agreements
have been duly perfected;
(4) Each Guarantor shall have received copies, certified by the
Secretary of each of AMSC and AMSC Parent, of resolutions duly adopted by the
Board of Directors of the applicable
3
<PAGE>
party approving the Credit Agreements and the transactions contemplated
thereby, this Agreement, the Warrants and the Registration Rights Agreement;
(5) Each Guarantor shall have received the written opinions of
counsel to AMSC and AMSC Parent as to the due authorization, execution and
enforceability of this Agreement, the Warrants and the Registration Rights
Agreement, in form and substance satisfactory to each Guarantor;
(6) Each Other Guarantor shall have issued its Guaranty and, in the
case of Hughes and SingTel, Baron shall have obtained the letter of credit
required under the Credit Agreements; and
(7) The Board of Directors of AMSC Parent shall have received an
opinion from Donaldson, Lufkin & Jenrette Securities Corporation to the effect
that the compensation provided to Guarantors pursuant to this Agreement is
fair to AMSC and AMSC Parent from a financial point of view.
3. Limitations on Amounts of Guaranties.
AMSC and AMSC Parent have delivered to Guarantors AMSC's business plan
for the next three fiscal years, including its projected borrowing needs (the
"Plan"), which has formed the basis for the agreement of Guarantors to
deliver their respective Guaranties. In consideration of the agreements of
Guarantors to issue such Guaranties to support the extensions of credit under
the Credit Agreements, 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 be subject to its ability to meet certain
quarterly performance tests based on such Plan (the "Performance Tests"), as
set forth on the schedule attached hereto as Exhibit D (the "Performance
Schedule"). Within 45 days after the end of each fiscal quarter beginning
with the third quarter of 1996, AMSC shall deliver to each Guarantor a
compliance certificate, duly executed by its chief financial officer,
certifying as to AMSC's compliance with each of the four Performance Tests
specified for such fiscal quarter on the Performance Schedule, and showing in
detail the calculation of such compliance. Such certificate shall be
accompanied by 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.
4
<PAGE>
AMSC and AMSC Parent agree that the aggregate outstanding principal
amount of the loans under the Credit Agreements plus any amounts paid by
Guarantors with respect to principal shall not exceed the Guaranteed Amount
and the Guaranteed Amount during each applicable period shall not exceed the
"Borrowing Limit" specified in the Performance Schedule. If as of the end of
any fiscal quarter AMSC has met each of the four Performance Tests specified
for such fiscal quarter on the Performance Schedule, on the forty-sixth day
after the end of the fiscal quarter the Guaranteed Amount shall automatically
increase to the
"Borrowing Limit" on such Performance Schedule for the next
period (each, an "Increased Level"). If AMSC has failed to meet any of the
four Performance Tests specified on the Performance Schedule for that fiscal
quarter, the Borrowing Limit shall remain at its then current level, and shall
not increase to the next Increased Level; provided, however, that Guarantors
having Pro Rata Shares greater than 50% ("Requisite Guarantors") may, by
written notice delivered to AMSC, waive compliance with such Performance Tests
and consent to borrowings by AMSC which would increase the Guaranteed Amount
up to the "Borrowing Limit" specified in such waiver. A waiver granted
hereunder shall be effective only as to the compliance with the Performance
Tests for the specific period and shall not obligate Guarantors to grant a
waiver for any subsequent period or consent to any additional increase in the
applicable Borrowing Limit.
If AMSC has failed to meet any of the four Performance Tests specified in
the Performance Schedule for any fiscal quarter, and compliance with such
tests has not been waived by Requisite Guarantors, or 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. In addition,
the provisions of Section 15 of the Warrants concerning cancellation of
warrants will be applicable.
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 or waived AMSC's noncompliance with the
Performance Tests set forth on the Performance Schedule. At the request of
AMSC and AMSC Parent, any "Borrowing Limit" as specified in the Performance
Schedule or any of the Performance Tests specified thereon 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 (except as to
the adjustments provided on such schedule with respect to the
5
<PAGE>
receipt of insurance proceeds), 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.
4. Amendments, Etc. No amendment or waiver of any provision of this
Agreement shall in any event be effective unless the same shall be in writing
and with respect to its enforcement against any party, signed by such party
except as specifically provided in Section 3 with respect to actions by
Requisite Guarantors.
5. No Waiver; Remedies. No failure on the part of any Guarantor to
exercise, and no delay in it's exercise of, any right hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise of any right
hereunder by any Guarantor preclude any other or further exercise thereof or
the exercise of any other right by such party. Any Guarantor may specifically
waive any breach of this Agreement by AMSC or AMSC Parent; provided that (x)
no such waiver shall be effective or binding unless in writing, (y) no such
waiver shall be effective as to any Guarantor that has not provided a waiver
with respect to such breach, and (z) no such waiver shall constitute a
continuing waiver of similar or other breaches. Any party may specifically
waive any condition to its own obligations hereunder, and such waiver shall
not affect the obligations of any other party.
6. Notices, Etc. All notices, demands, requests, consents, approvals
and other instruments hereunder shall be in writing and shall be deemed to
have been properly given if given to the parties hereto at the addresses or
facsimile number set forth on Exhibit E hereto, or such other address or
facsimile number as may be notified to the other parties hereto in a written
notice. Notices, demands and requests shall be effective if given by
facsimile to the number specified in this Section when confirmation of receipt
is received; or if given by any other means, when delivered.
7. Separability of This Agreement. In case any term or provision of
this Agreement or any application thereof to any circumstance shall, in any
circumstances or jurisdiction and to any extent, be invalid, illegal or
unenforceable, such term or provision shall be ineffective as to such
jurisdiction to the extent of such invalidity, illegality or unenforceability,
without invalidating or rendering unenforceable any remaining terms and
provisions hereof or the application of such term or provision
6
<PAGE>
to circumstances or jurisdictions other than those as to which it is
held invalid, illegal or unenforceable.
8. Further Assurances. AMSC and AMSC Parent hereby agree to execute and
deliver all such instruments and take all such action as Hughes, SingTel or
Baron may from time to time reasonably request in order to fully effectuate
the purposes of this Agreement.
9. Headings. The headings contained in this Agreement are for
convenience of reference only and shall not modify, define or limit any of the
terms or provisions hereof.
10. GOVERNING LAW AND DAMAGE LIMITATION. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH
STATE. THE PARTIES HEREBY IRREVOCABLY WAIVE ANY RIGHT TO A JURY TRIAL WITH
RESPECT TO ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT. THE PARTIES AGREE THAT NO PARTY SHALL BE LIABLE HEREUNDER FOR ANY
SPECIAL, INDIRECT, CONSEQUENTIAL OR INCIDENTAL DAMAGES, INCLUDING, WITHOUT
LIMITATION, DAMAGES FOR LOST PROFITS OR BUSINESS.
11. Representations and Warranties of AMSC and AMSC Parent. Each of
AMSC and AMSC Parent represent and warrant to each Guarantor that:
(a) Each of AMSC and AMSC Parent is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, and has all requisite corporate power and
authority to enter into and perform its obligations under this Agreement.
(b) This Agreement has been duly authorized by all necessary
corporate action on the part of, and has been duly executed and delivered by,
each of AMSC and AMSC Parent, and none of the execution and delivery hereof,
the consummation of the transactions contemplated hereby (including the
issuance of the Warrants and the issuance of the common stock of AMSC Parent
upon exercise of the Warrants and the registration of such stock pursuant to
the Registration Rights Agreement) or compliance by AMSC and AMSC Parent with
any of the terms and provisions hereof or of the Warrants or the Registration
Rights Agreement (i) requires any approval of stockholders (including any
consent under the rules of the National Association of Securities Dealers,
Inc.) or approval or consent of any trustee or holders of any indebtedness or
obligations of AMSC or AMSC Parent other than such approvals or consents as
have been obtained, (ii) contravenes any law,
7
<PAGE>
judgment, governmental rule or
regulation or order applicable to or binding on AMSC or AMSC Parent or any of
their respective properties, the contravention of which would have a material
adverse effect on the financial condition of AMSC and its subsidiaries taken
as a whole or AMSC Parent and its subsidiaries taken as a whole or on the
ability of AMSC and AMSC Parent to perform any of their obligations under this
Agreement, the Warrants or the Registration Rights Agreement, (iii)
contravenes or results in any breach of or constitutes any default under, any
indenture, mortgage, chattel mortgage, deed of trust, conditional sales
contract, bank loan or credit agreement for borrowed money, contract or other
agreement or instrument to which AMSC or AMSC Parent is a party or by which
AMSC or AMSC Parent or any of their respective properties may be bound, the
contravention, breach or default of which would have a material adverse effect
on the financial condition of AMSC and its subsidiaries taken as a whole or
AMSC Parent and its subsidiaries taken as a whole or on the ability of AMSC
and AMSC Parent to perform any of their obligations under this Agreement, the
Warrants or the Registration Rights Agreement or (iv) contravenes its
corporate charter or by-laws.
(c) Neither the execution, delivery and performance by AMSC and
AMSC Parent of this Agreement nor the consummation of any of the transactions
contemplated hereby (including the issuance of the Warrants and the issuance
of the common stock of AMSC Parent upon the exercise of any Warrants) requires
the consent, approval or authorization of, the giving of notice to, or the
registration, recording or filing of any document with, or the taking of any
other action in respect of, any governmental agency or authority, other than
any registration or other action required under the Registration Rights
Agreement.
(d) This Agreement constitutes, and the Warrants and the
Registration Rights Agreement will, upon execution thereof, constitute, the
legal, valid and binding obligation of each of AMSC and AMSC Parent,
enforceable against each of AMSC and AMSC Parent in accordance with their
terms, except as such enforcement may be subject to bankruptcy, insolvency,
moratorium or other similar laws affecting creditors' rights generally and to
general principles of equity.
(e) AMSC Parent has delivered copies of the consolidated balance
sheet of AMSC Parent and its consolidated subsidiaries as of December 31,
1995, and related statements of consolidated income and cash flow and
stockholder's equity for the fiscal year then ended, accompanied by the report
of Arthur Andersen LLP, independent accountants. Such statements fairly
present, in accordance with generally accepted accounting principles, the
financial position of AMSC Parent and its consolidated subsidiaries as of such
date and the results of their operations and cash flows for such fiscal year.
8
<PAGE>
(f) AMSC Parent has duly reserved shares of its Common Stock for
issuance upon exercise of the Warrants.
12. Reimbursement Agreement. If Hughes, SingTel or Baron makes any
payments under its Guaranty, each of AMSC and AMSC Parent agrees that it shall
be jointly and severally liable to reimburse such Guarantor for such payments,
and that such Guarantor will be fully subrogated to the extent of such payment
to the rights and remedies (including any collateral security) of the lenders
under the Credit Agreements. If Hughes, SingTel or Baron acquires any notes
evidencing the loans under either Credit Agreement, or any of such
obligations, from the lenders, then such Guarantor shall acquire all of the
rights and remedies (including any collateral security) of such lenders under
the applicable Credit Agreement. Neither Hughes, SingTel nor Baron shall have
any duties to AMSC or AMSC Parent with respect to the exercise or non-exercise
of any of such rights and remedies.
13. Intercreditor Agreements. (a) If Hughes, SingTel or Baron makes any
payments under its Guaranty or acquires any notes or obligations under either
Credit Agreement, thereafter all decisions to act or refrain from acting with
respect to the enforcement of such notes or obligations against AMSC or AMSC
Parent (including enforcement with respect to any collateral security
therefor) shall be approved by Guarantors having Pro Rata Shares equal to at
least 80% of the outstanding obligations so paid or purchased. Prior to
taking any such action, each Guarantor shall discuss with each other Guarantor
the actions proposed to be taken.
(b) If any Guarantor does not make any required payment under its
Guaranty (a "defaulting Guarantor"), and such payment is made by any other
Guarantor (a "funding Guarantor"), then the defaulting Guarantor shall be
liable to reimburse the funding Guarantor for such payments on demand, and any
amounts which would otherwise be payable to the defaulting Guarantor by AMSC
or AMSC Parent or with respect to any collateral shall first be paid to the
funding Guarantor until such payment has been fully reimbursed. For purposes
of this Section 13, any payment made by a funding Guarantor shall be added to
the Pro Rata Share of the funding Guarantor and subtracted from the Pro Rata
Share of the defaulting Guarantor. The funding Guarantor shall be subrogated
to the rights of the lenders to enforce the Guaranty of the defaulting
Guarantor.
[signature page follows]
9
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its duly authorized officer.
AMSC SUBSIDIARY CORPORATION
By:/s/ Richard J. Burnheimer
_______________________
Name: Richard J. Burnheimer
Title: Treasurer
AMERICAN MOBILE SATELLITE CORPORATION
By:/s/ Richard J. Burnheimer
______________________
Name: Richard J. Burnheimer
Title: Treasurer
HUGHES ELECTRONICS CORPORATION
By:/s/ Charles H. Noski
______________________
Name: Charles H. Noski
Title: Senior Vice President and
Chief Financial Officer
SINGAPORE TELECOMMUNICATIONS LTD.
By:/s/ Lim Toon
_______________________
Name: Lim toon
Title: Executive Vice President
(International Services)
BARON CAPITAL PARTNERS, L.P.,
a Delaware limited partnership
By: Baron Capital Management, Inc.,
a General Partner
By:/s/ Morty Schaja
____________________
Name: Morty Schaja
Title: Vice President
<PAGE>
EXHIBIT B
[Form of Warrant -- Excluded]
[See Exhibit IX to Schedule 13D]
EXHIBIT C
[Form of Registration Rights Agreement -- Excluded]
[See Exhibit X to Schedule 13D]
<PAGE>
EXHIBIT D
American Mobile Satellite Corporation
Guarantee Issuance Agreement
Performance Schedule
($000's)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
7/1/96 11/16/96 2/16/97 5/16/97 8/16/97 After
-11/15/96 -2/15/97 -5/15/97 -8/15/97 -11/15/97 11/15/97
Borrowing Limit* 130,000 155,000 170,000 180,000 190,000 200,000
3Q96 4Q96 1Q97 2Q97 3Q97 4Q97
Covenants
Subscribers 12,224 19,809 27,336 35,969 45,514 55,058
Net Revenue 2,851 6,628 10,083 13,347 17,090 21,072
EBITDA bef. (19,907) (17,949) (14,697) (11,500) (8,782) (5,657)
Capitalized Exp.
Operating Cash (30,618) (19,539) (10,260) (2,639) (1,264) (12,529)
Flow
* Assumes receipt of $60 million of insurance proceeds in 3Q96. If $60
million is not received until 4Q96, the Borrowing Limit increases by $60M in
3Q96 to $190M availability. When proceeds are received in 4Q96, they must be
applied to reduce debt and the Borrowing Limit is reduced to $155M.
<PAGE>
EXHIBIT E
Notice Addresses
AMERICAN MOBILE SATELLITE CORPORATION
AMSC SUBSIDIARY CORPORATION
10802 Parkridge Blvd.
Reston, Virginia 22091
Attention: Chief Financial Officer
Fax: (703) 758-6142
HUGHES ELECTRONICS CORPORATION
7200 Hughes Terrace
M/S CI/A 700
Los Angeles, California 90045-0066
Attention: Treasurer
Fax: (310) 568-7834
SINGAPORE TELECOMMUNICATIONS LTD.
31 Exeter Road, Comcentre
Singapore 239732
Republic of Singapore
Attention: Dr. Chia Choon Wei
Fax: 011-65-732-0673
BARON CAPITAL PARTNERS, L.P.
a Delaware limited partnership
450 Park Avenue
Suite 2800
New York, NY 10022
Attention: Linda S. Martinson
Fax: (212) 759-7579
After August 1, 1996:
767 Fifth Avenue
24th Floor
New York, New York 10153
<PAGE>
</TABLE>
EXHIBIT IX
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR SOLD
EXCEPT IN COMPLIANCE THEREWITH OR PURSUANT TO AN EXEMPTION THEREFROM.
AMERICAN MOBILE SATELLITE CORPORATION
WARRANT FOR THE PURCHASE OF SHARES OF
COMMON STOCK OF AMERICAN MOBILE SATELLITE CORPORATION
NO. ___ WARRANT TO PURCHASE
625,000 SHARES
FOR VALUE RECEIVED, AMERICAN MOBILE SATELLITE CORPORATION, a
Delaware corporation (the "Company"), hereby certifies that SINGAPORE
TELECOMMUNICATIONS LTD., its successor or permitted assigns (the "Holder"),
is entitled, subject to the provisions of this Warrant, to purchase from the
Company, at the times specified herein, Six Hundred Twenty Five Thousand
(625,000) (the "Warrant Share Amount") fully paid and non-assessable shares
of Common Stock of the Company, par value $.01 per share (the "Common
Stock"), at a purchase price per share equal to the Exercise Price (as
hereinafter defined). The Warrant Share Amount and the Exercise Price are
subject to adjustment from time to time as hereinafter set forth.
DEFINITIONS. The following terms, as used herein, have the
following meanings:
"Accepted Alien Ownership Percentage Limitation" means 24.99% or,
in the event of a modification of the Alien Ownership Restrictions subsequent
to the date hereof, such percentage limitation upon the Company's Alien
ownership as may be in effect from time to time as a result of such
modification, less 0.01%.
"Alien" means any alien or a representative thereof, or a foreign
government or a representative thereof, or a corporation or other entity
organized under the laws of any foreign government.
"Alien Ownership Percentage" means, with respect to any Person,
the percentage of total ownership in such Person owned of record, as well as
the percentage of total ownership in such Person voted, by Aliens; provided,
that if under the Alien Ownership Restrictions such Person would be deemed to
have a percentage of total ownership owned of record or voted by Aliens other
than the actual percentage so owned or voted, then such Person's Alien
Ownership Percentage shall be such deemed percentage.
<PAGE>
"Alien Ownership Restrictions" means Section 310(b) of the
Communications Act, as modified by any interpretation, ruling or order of the
Federal Communications Commission (or any successor agency) applicable to the
Company or any of its subsidiaries.
"AMSC" means AMSC Subsidiary Corporation, a Delaware corporation
dually incorporated as a Virginia public service corporation.
"Board of Directors" means the Board of Directors of the Company.
"Business Day" means any day except a Saturday, Sunday or other
day on which commercial banks in the City of New York are authorized by law to
close.
"Communications Act" means the Communications Act of 1934, as
amended, or any successor statute.
"Credit Agreements" means, collectively, that certain Term Loan
Agreement providing for up to $150,000,000 of term loans and that certain
Revolving Credit Facility Agreement providing for up to $75,000,000 of
revolving loans, in each case as described in the Guaranty Issuance Agreement.
"Current Market Price Per Common Share" has the meaning set forth
in Section 10.D.
"Exercise Date" means the applicable date of exercise of this
Warrant, as indicated on the Warrant Exercise Notice delivered by the Holder.
"Exercise Price" means initially $24.00 per Warrant Share, as
adjusted from time to time.
"Expiration Date" means June 28, 2001, at 5:00 p.m. New York City
time.
"Guaranty Issuance Agreement" means that certain Guaranty Issuance
Agreement dated as of June 28, 1996 by and among the Company, AMSC, Hughes
Electronics Corporation, Singapore Telecommunications Ltd. and Baron Capital
Partners, L.P.
"Holder's Guaranty" means the guaranty by the Holder of a
specified portion (as it may be adjusted from time to time) of the obligations
of AMSC under the Credit Agreements.
"Person" means an individual, corporation, partnership, limited
liability company, association, trust, or any other entity or organization,
including a government or political subdivision or an agency or
instrumentality thereof.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
"Warrant Exercise Notice" means the Warrant Exercise Notice
forming a part hereof.
"Warrant Margin" means, on any date, the difference of (x) the
greater of (A) the average of the Closing Prices (as defined in Section 10.D)
on each of the 20 trading days immediately preceding such date and (B) the
Closing Price on the trading day two trading days prior to such date, minus
(y) the Exercise Price.
2
<PAGE>
"Warrant Share Amount" has the meaning set forth in the preamble
hereof.
"Warrant Shares" means the shares of Common Stock deliverable upon
exercise of this Warrant, as adjusted from time to time.
2. EXERCISE OF WARRANT.
A. Subject to Section 15 hereof, the Holder is entitled to
exercise this Warrant in whole or in part at any time, or from time to time,
to and including the Expiration Date or, if such day is not a Business Day,
then on the next succeeding day that shall be a Business Day. To exercise
this Warrant, the Holder shall execute and deliver to the Company at its
address set forth in Section 12 hereof a Warrant Exercise Notice substantially
in the form annexed hereto and shall deliver to the Company (x) this Warrant
Certificate, including the Warrant Exercise Subscription Form forming a part
hereof duly executed by the Holder, and (y) subject to Section 2.B, payment of
the Exercise Price then in effect for such Warrant Shares. Upon such delivery
and payment, the Holder shall be deemed to be the holder of record of the
Warrant Shares subject to such exercise, notwithstanding that the stock
transfer books of the Company shall then be closed or that certificates
representing such Warrant Shares shall not then be actually delivered to the
Holder.
B. The Exercise Price may be paid in cash or by certified or
official bank check or bank cashier's check payable to the order of the
Company or by wire transfer of immediately available funds to an account
designated by the Company or by cancellation of indebtedness owed to the
Holder or by any combination of such methods. In the alternative, the Holder
may exercise its right to receive Warrant Shares on a net basis, such that,
without the exchange of any funds, the Holder will receive that number of
Warrant Shares (and such other consideration) otherwise issuable (or payable)
upon exercise of this Warrant less that number of Warrant Shares having an
aggregate Current Market Price Per Common Share on the Exercise Date equal to
the aggregate Exercise Price that would otherwise have been paid by the Holder
for the Warrant Shares. The Company shall pay any and all documentary, stamp
or similar issue or transfer taxes payable in respect of the issue or delivery
of this Warrant and the issue and delivery of the Warrant Shares.
C. If the Holder exercises this Warrant in part, this Warrant
Certificate shall be surrendered by the Holder to the Company and a new
Warrant Certificate of the same tenor and for the unexercised number of
Warrant Shares shall be executed by the Company. The Company shall register
the new Warrant Certificate in the name of the Holder or in such name or names
of its transferee(s) pursuant to Section 8 hereof as may be directed in
writing by the Holder and deliver the new Warrant Certificate to the Person or
Persons entitled to receive the same.
D. Except as otherwise provided in Section 3, upon surrender
of this Warrant Certificate in conformity with the foregoing provisions, the
Company shall transfer to the Holder of this Warrant Certificate appropriate
evidence of ownership of the shares of Common Stock or other securities or
property (including any money) to which the Holder is entitled, registered or
otherwise placed in, or payable to the order of, the name or names of the
Holder or its transferee(s) as may be directed in writing by the Holder, and
shall deliver such evidence of ownership and any other securities or property
(including any money) to the Person or Persons entitled to receive the same,
together with an amount in cash in lieu of any fraction of a share as provided
in Section 7 below.
3. OWNERSHIP LIMITATION. If at any time the exercise of any
Warrants pursuant to Section 2 would cause the Company's Alien Ownership
Percentage to exceed the Accepted
3
<PAGE>
Alien Ownership Percentage Limitation, then in lieu of issuing shares of Common
Stock pursuant to Section 2:
A. the Company shall issue to each Holder exercising Warrants at
such time (each an "Exercising Holder") whose Alien Ownership Percentage is
less than or equal to the Accepted Alien Ownership Percentage Limitation the
number of shares of Common Stock to which such Exercising Holder is entitled
pursuant to Section 2;
B. the Company shall issue to each Exercising Holder whose Alien
Ownership Percentage is greater than the Accepted Alien Ownership Percentage
Limitation (each, an "Affected Exercising Holder") a number of shares of
Common Stock equal to the quotient of (x) the product of (A) the number of
shares of Common Stock that, immediately after giving effect to any issuances
of Common Stock pursuant to the foregoing Section 3.A, could be issued to a
Person with a 100% Alien Ownership Percentage without causing the Company's
Alien Ownership Percentage to exceed the Accepted Alien Ownership Percentage
Limitation, multiplied by (B) the number of shares of Common Stock to which
such Affected Exercising Holder would be entitled pursuant to Section 2 but
for the application of this Section 3, divided by (y) the product of (A) the
aggregate number of shares of Common Stock to which all Affected Exercising
Holders would be entitled pursuant to Section 2 but for the application of
this Section 3, multiplied by (B) such Affected Exercising Holder's Alien
Ownership Percentage; provided that in no event shall the number of shares
of Common Stock issuable to any Affected Exercising Holder pursuant to this
Section 3.B exceed the number of shares of Common Stock to which such Affected
Exercising Holder would have been entitled pursuant to Section 2 but for the
application of this Section 3; and
C. the Company shall deliver by wire transfer of immediately
available funds to the account of each Affected Exercising Holder specified in
such Affected Exercising Holder's Warrant Exercise Notice, an amount equal to
the product of (x) the number of shares of Common Stock to which such Affected
Exercising Holder would have been entitled pursuant to Section 2 that are not
issuable to such Affected Exercising Holder pursuant to the foregoing Section
3.B, multiplied by (y) the Warrant Margin on the Exercise Date.
4. NASD LIMIT. Notwithstanding the provisions of Sections 2 and
3, in no event shall this Warrant be exercisable for an aggregate number of
shares of Common Stock equal to or greater than such number of shares as would
require the approval of the Company's stockholders pursuant to Rule
4460(i)(1)(D) of the National Association of Securities Dealers, Inc. (the
"NASD Limit") unless the Company's stockholders have, prior to any exercise
of this Warrant that would require the issuance of Common Stock equal to or
greater than the NASD Limit, approved the exercise of Warrants for an
aggregate number of shares of Common Stock equal to or greater than the NASD
Limit. If, upon any exercise of this Warrant, shares of Common Stock that
would otherwise be issuable upon such exercise are not issuable due to the
provisions of the foregoing sentence, then in lieu of issuing shares of Common
Stock pursuant to Sections 2 or 3:
(i) the Company shall issue the maximum number of shares of
Common Stock, if any, issuable up to the NASD Limit; provided, that if more
than one holder of Warrants is exercising Warrants at such time, such issuance
shall be prorated in proportion to the number of shares of Common Stock to
which each holder of Warrants exercising Warrants at such time would be
entitled but for the provisions of this Section 4; and
4
<PAGE>
(ii) the Company shall deliver by wire transfer of immediately
available funds to the account of each Exercising Holder specified in such
Exercising Holder's Warrant Exercise Notice, an amount equal to the product of
(x) the number of shares of Common Stock to which such Exercising Holder would
have been entitled pursuant to the foregoing Sections 2 and 3 that are not
issuable to such Exercising Holder pursuant to the foregoing clause (i),
multiplied by the Warrant Margin on the Exercise Date.
5. RESTRICTIVE LEGEND. Upon original issuance thereof, and until
such time as the same shall have been registered under the Securities Act or
sold pursuant to Rule 144 promulgated thereunder (or any similar rule or
regulation), each Warrant Certificate and any certificates evidencing Warrant
Shares shall bear a legend substantially in the form of the legend set forth
on the first page hereof, unless in the opinion of counsel reasonably
satisfactory to the Company, such legend is no longer required by the
Securities Act.
6. RESERVATION OF SHARES. The Company hereby agrees that at all
times it shall reserve for issuance and delivery upon exercise of this Warrant
such number of its authorized but unissued shares of Common Stock as will be
sufficient to permit the exercise in full of this Warrant. All such shares
shall be duly authorized and, when issued upon such exercise, shall be validly
issued, fully paid and non-assessable, free and clear of all liens, security
interests, charges and other encumbrances or restrictions on sale and free and
clear of all preemptive rights.
7. FRACTIONAL SHARES. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant and in
lieu of delivery of any such fractional share upon any exercise hereof, the
Company shall pay to the Holder an amount in cash equal to such fraction
multiplied by the Current Market Price Per Common Share on the Exercise Date.
8. EXCHANGE, TRANSFER OR ASSIGNMENT OF WARRANT.
A. The Company shall from time to time register the
exchange or transfer of any outstanding Warrant Certificates in a Warrant
register to be maintained by the Company upon surrender thereof accompanied by
a written instrument or instruments of transfer in form satisfactory to the
Company, duly executed by the registered Holder or Holders thereof or by the
duly appointed legal representative thereof or by a duly authorized attorney.
Each taker and holder of this Warrant Certificate by taking or holding the
same, consents and agrees that the registered holder hereof may be treated by
the Company and all other Persons dealing with this Warrant Certificate as the
absolute owner hereof for any purpose and as the Person entitled to exercise
the rights represented hereby.
B. Prior to any proposed transfer of the Warrants or the
Warrant Shares, unless such transfer is made pursuant to an effective
registration statement under the Securities Act, the Holder will deliver to
the Company, if so requested by the Company, an opinion of counsel reasonably
satisfactory in form and substance to the Company, to the effect that the
Warrants or Warrant Shares, as applicable, may be sold or otherwise
transferred without registration under the Securities Act. Subject to the
preceding sentence, the Holder of this Warrant shall be entitled, without
obtaining the consent of the Company, to assign and transfer this Warrant, at
any time in whole or from time to time in part, to any Person or Persons.
Subject to the foregoing, upon surrender of this Warrant to the Company,
together with the attached Warrant Assignment Form duly executed, the Company
shall, without charge, execute and deliver a new Warrant in the name of the
assignee or assignees named in such instrument of assignment and, if the
Holder's entire interest is not being assigned, in the name of the Holder, and
this Warrant shall promptly be cancelled.
5
<PAGE>
9. LOSS OR DESTRUCTION OF WARRANT CERTIFICATE. Upon receipt by
the Company of evidence satisfactory to it (in the exercise of its reasonable
discretion) of the loss, theft, destruction or mutilation of this Warrant
Certificate, and (if requested by the Company in the case of loss, theft or
destruction) of reasonably satisfactory indemnification, and upon surrender
and cancellation of this Warrant Certificate, if mutilated, the Company shall
execute and deliver a new Warrant Certificate of like tenor and date
representing the right to purchase an equivalent number of Warrant Shares.
10. ANTI-DILUTION PROVISIONS.
A. In case the Company shall at any time after the date
hereof (i) declare a dividend or make a distribution on Common Stock payable
in Common Stock or other shares of the Company's capital stock, (ii)
subdivide, split or reclassify the outstanding Common Stock into a larger
number of shares, (iii) combine or reclassify the outstanding Common Stock
into a smaller number of shares, or (iv) issue any shares of its capital stock
in a reclassification of Common Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is the
continuing corporation), then in each such case the Warrant Share Amount shall
be adjusted to equal the number of shares to which the holder of this Warrant
would have been entitled upon the occurrence of such event if this Warrant had
been exercised immediately prior to such time. Such adjustment shall be made
successively whenever any event listed above shall occur.
B. In case the Company shall fix a record date for the
making of a distribution to holders of Common Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation) of evidences of indebtedness, assets or
other property (excluding cash dividends, other cash distributions from
current or retained earnings or dividends payable in Common Stock for which an
adjustment has been made pursuant to Section 10.A), the Warrant Share Amount
to be in effect after such record date shall be determined by multiplying the
Warrant Share Amount in effect immediately prior to such record date by a
fraction, the numerator of which shall be the Current Market Price Per Common
Share, and the denominator of which shall be such Current Market Price Per
Common Share on such record date, less the fair market value (determined by
the Board of Directors of the Company; provided that if the Holder shall
object to any such determination, the Board of Directors shall retain an
independent appraiser reasonably satisfactory to the Holder to determine such
fair market value) of the portion of the assets, other property or evidence of
indebtedness so to be distributed which is applicable to one share of Common
Stock. Such adjustments shall be made successively whenever such a record
date is fixed; and in the event that such distribution is not so made, the
Warrant Share Amount shall again be adjusted to be the Warrant Share Amount
which would then be in effect if such record date had not been fixed.
C. If as a result of any event or for any other reason, any
adjustment is made which increases the number of shares of Common Stock
issuable upon conversion, exercise or exchange of, or in the conversion or
exercise price or exchange ratio applicable to, any outstanding securities of
the Company that are convertible into, or exercisable or exchangeable for,
Common Stock of the Company, then a corresponding adjustment shall be made
hereunder to increase the Warrant Share Amount, but only to the extent that no
such adjustment has been made pursuant to Sections 10.A or B hereof with
respect to such event or for such other reason.
D. For the purpose of any computation under Section 3 or
Section 10.B hereof, on any determination date the "Current Market Price Per
Common Share" shall be deemed to be the average (weighted by daily trading
volume) of the Closing Prices (as defined below) per share of
6
<PAGE>
Common Stock for
the 20 consecutive trading days immediately prior to such date. "Closing
Price" means (1) if shares of Common Stock then are listed and traded on the
New York Stock Exchange, Inc. ("NYSE"), the closing price on such day as
reported on the NYSE Composite Transactions Tape; (2) if shares of Common
Stock then are not listed and traded on the NYSE, the closing price on such
day as reported by the principal national securities exchange on which the
shares are listed and traded; (3) if shares of Common Stock then are not
listed and traded on any such securities exchange, the last reported sale
price on such day on the National Market of the National Association of
Securities Dealers, Inc. Automated Quotation System ("NASDAQ"); or (4) if
shares of Common Stock then are not traded on the NASDAQ National Market, the
average of the highest reported bid and lowest reported asked price on such
day as reported by NASDAQ. If on any determination date shares of Common
Stock are not quoted by any such organization, the Current Market Price Per
Common Share shall be the fair market value of such shares on such
determination date as reasonably determined by the Board of Directors. If the
Holder shall object to any determination by the Board of Directors of the
Current Market Price Per Common Share, the Current Market Price Per Common
Share shall be the fair market value per share of Common Stock as determined
by an independent appraiser retained by the Company at its expense and
reasonably acceptable to the Holder. For purposes of any computation under
this Section 10, the number of shares of Common Stock outstanding at any given
time shall not include shares owned or held by or for the account of the
Company.
E. Upon each adjustment of the Warrant Share Amount
pursuant to this Section 10, the Exercise Price applicable to each Warrant
outstanding prior to the making of the adjustment in the Warrant Share Amount
shall thereafter be adjusted to reflect an adjusted Exercise Price (calculated
to the nearest tenth of a cent) obtained from the following formula:
E' = E x W
W'
where:
E' = the adjusted Exercise Price per share following the
adjustment of the Warrant Share Amount.
E = the Exercise Price prior to adjustment.
W' = the adjusted Warrant Share Amount.
W = the Warrant Share Amount prior to adjustment.
F. No adjustment in the Warrant Share Amount or the
Exercise Price shall be required unless such adjustment would require an
increase or decrease of at least one percent of such amount; provided that
any adjustments which by reason of this Section 10.F are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 10 shall be made to the
nearest one tenth of a cent or to the nearest hundredth of a share, as the
case may be.
G. In the event that, at any time as a result of the
provisions of this Section 10, the holder of this Warrant upon subsequent
exercise shall become entitled to receive any shares of capital stock of the
Company other than Common Stock, the number of such other shares so receivable
7
<PAGE>
upon exercise of this Warrant shall thereafter be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to
the provisions contained herein.
H. Upon any adjustment pursuant to this Section 10, the
Company shall promptly thereafter (i) cause to be filed with the Company a
certificate of an officer of the Company setting forth the Warrant Share
Amount and Exercise Price after such adjustment and setting forth in
reasonable detail the method of calculation and the facts upon which such
calculations are based, and (ii) cause to be given to each registered Holder
of this Warrant Certificate at the address as set forth in Section 12 written
notice of such adjustments. Where appropriate, such notice may be given in
advance and included as a part of the notice required to be delivered pursuant
to Section 13.B.
11. REORGANIZATION, CONSOLIDATION, MERGER, OR SALE OF ASSETS. In
case of any reclassification, redesignation, reorganization or
recapitalization by the Company (other than as set forth in Section 10) or
consolidation of the Company with, or merger of the Company into, any other
Person, any merger of another Person into the Company (other than a merger
which does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock) or any sale or transfer of
all or substantially all of the assets of the Company or of the Person formed
by such consolidation or resulting from such merger or which acquires such
assets, as the case may be, the Holder shall have the right thereafter to
exercise this Warrant for the kind and amount of securities, cash and other
property receivable upon such reclassification, redesignation, reorganization,
recapitalization, consolidation, merger, sale or transfer by a holder of the
number of shares of Common Stock for which this Warrant may have been
exercised in full immediately prior to such reclassification, redesignation,
reorganization, recapitalization, consolidation, merger, sale or transfer,
assuming (i) such holder of Common Stock is not a Person with which the
Company consolidated or into which the Company merged or which merged into the
Company or to which such sale or transfer was made, as the case may be
("constituent Person"), or an Affiliate of a constituent Person and (ii) in
the case of a consolidation, merger, sale or transfer which includes an
election as to the consideration to be received by the holders, such holder of
Common Stock failed to exercise its rights of election, as to the kind or
amount of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer (provided that if the kind or amount
of securities, cash and other property receivable upon such consolidation,
merger, sale or transfer is not the same for each share of Common Stock held
immediately prior to such consolidation, merger, sale or transfer by other
than a constituent Person or an Affiliate thereof and in respect of which such
rights of election shall not have been exercised ("non-electing share"),
then for the purpose of this Section 11 the kind and amount of securities,
cash and other property receivable upon such consolidation, merger, sale or
transfer by each non-electing share shall be deemed to be the kind and amount
so receivable per share by a plurality of the non-electing shares).
Adjustments for events subsequent to the effective date of such
reclassification, redesignation, reorganization, recapitalization,
consolidation, merger and sale of assets shall be as nearly equivalent as may
be practicable to the adjustments provided for in this Warrant. In any such
event, effective provisions shall be made in the certificate or articles of
incorporation of the resulting or surviving corporation, in any contract of
sale, conveyance, lease or transfer, or otherwise so that the provisions set
forth herein for the protection of the rights of the Holder shall thereafter
continue to be applicable; and any such resulting or surviving corporation
shall expressly assume the obligation to deliver, upon exercise, such shares
of stock, other securities, cash and property. The provisions of this Section
11 shall similarly apply to successive consolidations, mergers, sales, leases
or transfers.
12. NOTICES. Any notice, demand or delivery authorized or required
by this Warrant Certificate shall be in writing and shall be given to the
Holder or the Company, as the case may
8
<PAGE>
be, at its address (or telecopier
number) set forth below, or such other address (or telecopier number) as shall
have been furnished to the party giving or making such notice, demand or
delivery:
If to the Company: American Mobile Satellite Corporation
10802 Parkridge Blvd.
Reston, VA 22091
Telecopy: (703) 758-6134
Attention: Randy Segal, General Counsel
If to the Holder: Singapore Telecommunications Ltd.
31 Exeter Road, Comcentre
Singapore 239732
Republic of Singapore
Telecopy: 011-65-732-0673
Attention: Dr. Chia Choon Wei
Each such notice, demand or delivery shall be effective (i) if given by
telecopy, when such telecopy is transmitted to the telecopy number specified
herein and the intended recipient confirms the receipt of such telecopy or
(ii) if given by any other means, when received at the address specified
herein.
13. NOTICES TO WARRANT HOLDERS.
A. The Company shall provide to each Holder, at its address
and in the manner set forth in Section 12, a notice of expiration of this
Warrant not less than 90 nor more than 120 days prior to the Expiration Date.
B. In the event:
a. the Company shall authorize the issuance to holders of
shares of Common Stock of rights, options or warrants to subscribe for or
purchase shares of Common Stock or of any other subscription rights or
warrants; or
b. the Company shall authorize the distribution to holders of
shares of Common Stock of assets, including cash, evidences of its
indebtedness, or other securities; or
c. of any reorganization, consolidation or merger to which
the Company is a party and for which approval of any shareholders of the
Company is required, or of the conveyance or transfer of the properties and
assets of the Company substantially as an entirety, or of any reclassification
or change of Common Stock issuable upon exercise of the Warrants, or a tender
offer or exchange offer for shares of Common Stock; or
d. of the voluntary or involuntary dissolution, liquidation
or winding up of the Company; or
9
<PAGE>
e. the Company proposes to take any action that would require
an adjustment to the Warrant Share Amount or the Exercise Price pursuant to
Section 10 hereof;
then the Company shall cause to be given to each registered Holder of this
Warrant Certificate, at least 20 days prior to the applicable record date
hereinafter specified, or 20 days prior to the date of the event in the case
of events for which there is no record date a written notice stating (i) the
date as of which the holders of record of shares of Common Stock entitled to
receive any such rights, options, warrants or distribution are to be
determined, or (ii) the initial expiration date set forth in any tender offer
or exchange offer for shares of Common Stock, or (iii) the date on which any
such reorganization, reclassification, consolidation, merger, conveyance,
transfer, dissolution, liquidation or winding up is expected to become
effective or consummated, and the date as of which it is expected that holders
of record of shares of Common Stock shall be entitled to exchange such shares
for securities or other property, if any, deliverable upon such
reorganization, reclassification, consolidation, merger, conveyance, transfer,
dissolution, liquidation or winding up. The failure to give the notice
required by this Section 13.B or any defect therein shall not affect the
legality or validity of any distribution, right, option, warrant,
consolidation, merger, conveyance, transfer, dissolution, liquidation or
winding up, or the vote upon any action.
14. RIGHTS OF THE HOLDER. Prior to the exercise of any Warrant,
the Holder shall not, by virtue hereof, be entitled to any rights of a
stockholder of the Company, including, without limitation, the right to vote,
to receive dividends or other distributions, to exercise any preemptive right
or to receive any notice of meetings of stockholders or any notice of any
proceedings of the Company except as may be specifically provided for herein.
Nothing contained herein shall impose any obligation on the Holder to purchase
any securities or impose any liabilities on such Holder as a stockholder of
the Company, whether such obligation or liabilities are asserted by the
Company or by creditors of the Company.
15. LIMITATION ON EXERCISE OF WARRANT; CANCELLATION OF WARRANTS.
Notwithstanding anything to the contrary in this Warrant, this Warrant shall
be exercisable at any given time only for the number of Warrant Shares which
is equal to the applicable Warrant Share Amount as in effect from time to
time, minus the Warrant Share Amount multiplied by a fraction, the numerator
of which is the amount which, due solely to the applicable Borrowing Limit (as
defined in the Guaranty Issuance Agreement) in effect at such time, is not
available to AMSC under the Credit Agreements and the denominator of which is
$200,000,000 (provided, that if the numerator of such fraction is zero,
there shall be no limitation on the exercise of this Warrant). In the event
that AMSC receives a Guarantor's Notice (as defined in the Guaranty Issuance
Agreement), the Company shall be entitled, upon written notice to the Holder,
to cancel a portion of this Warrant such that the applicable Warrant Share
Amount in effect at the time of delivery of the Guarantor's Notice shall equal
the number of Warrant Shares determined in accordance with the preceding
sentence.
16. REGISTRATION RIGHTS. The Holder of this Warrant is entitled to
certain registration rights with respect to the Warrant Shares issuable upon
the exercise thereof. Said registration rights are set forth in a
Registration Rights Agreement dated as of June 28, 1996, by and among the
Company and certain holders of warrants of the Company named therein (the
"Registration Rights Agreement"). By acceptance of this Warrant
Certificate, the Holder hereof agrees that upon exercise of this Warrant, in
whole or in part, such Holder will be bound by the Registration Rights
Agreement as a holder of Registrable Securities thereunder. The Company
agrees that upon transfer of this Warrant, in whole or in part, pursuant to
Section 8 hereof, the transferee shall be entitled to become a party to the
10
<PAGE>
Registration Rights Agreement if not already a party thereto. A copy of the
Registration Rights Agreement may be obtained by the Holder hereof upon
written request to the Company.
17. GOVERNING LAW AND WAIVER OF JURY TRIAL. THIS WARRANT
CERTIFICATE AND ALL RIGHTS ARISING HEREUNDER SHALL BE CONSTRUED AND DETERMINED
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, AND THE
PERFORMANCE THEREOF SHALL BE GOVERNED AND ENFORCED IN ACCORDANCE WITH SUCH
LAWS. THE PARTIES HERETO IRREVOCABLY WAIVE ANY RIGHT TO A JURY TRIAL WITH
RESPECT TO ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT.
18. AMENDMENTS; WAIVERS. Any provision of this Warrant Certificate
may be amended or waived if, and only if, such amendment or waiver is in
writing and signed, in the case of an amendment, by the Holder and the
Company, or in the case of a waiver, by the party against whom the waiver is
to be effective. No failure or delay by either party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof 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.
19. COUNTERPARTS. This Warrant Certificate may be executed in any
number of counterparts, each of which shall be deemed to be an original and
all of which together shall constitute one and the same instrument.
(signature page follows)
11
<PAGE>
IN WITNESS WHEREOF, the Company has duly caused this Warrant
Certificate to be signed by its duly authorized officer and to be dated as of
June 28, 1996.
AMERICAN MOBILE SATELLITE CORPORATION
By:/s/ Richard J. Burnheimer
_______________________________
Name: Richard J. Burnheimer
Title: Treasurer
Acknowledged and Agreed:
SINGAPORE TELECOMMUNICATIONS LTD.
By:/s/ Lim Toon
______________________________
Name: Lim Toon
Title: Executive Vice President
(International Services)
S-1
<PAGE>
WARRANT EXERCISE NOTICE
(To be delivered prior to exercise of the Warrant
by execution of the Warrant Exercise Subscription Form)
To: American Mobile Satellite Corporation
10802 Parkridge Blvd.
Reston, VA 22091
The undersigned hereby notifies you of its intention to exercise the
Warrant to purchase shares of Common Stock, par value $.01 per share, of
American Mobile Satellite Corporation. The undersigned intends to exercise
the Warrant to purchase _____________ shares (the "Shares") [at $_______
per Share (the "Exercise Price")] [pursuant to the net exercise provisions
of Section 2.B of the Warrant]. [The undersigned intends to pay the aggregate
Exercise Price for the Shares in cash, certified or official bank or bank
cashier's check or by wire transfer of immediately available funds to an
account to designated by the Company or by cancellation of indebtedness owed
to the Holder (or a combination of such methods) as indicated below.]
The undersigned hereby certifies that to the best of its knowledge
its Alien Ownership Percentage as of the date hereof is_____________________.
Date:________________,______ .
---------------------------------------
(Signature of Owner)
---------------------------------------
(Street Address)
---------------------------------------
(City) (State) (Zip Code)
Payment: $ ___________ cash
$ ___________ check
$ ___________ wire transfer
$ ___________ cancellation of indebtedness
[Wire Transfer Instructions, if required pursuant to Section 3 or 4 of the
Warrant:______________________________________________________________________
_____________________________________________________________________________]
<PAGE>
WARRANT EXERCISE SUBSCRIPTION FORM
(To be executed only upon exercise of the Warrant
after delivery of Warrant Exercise Notice)
To: American Mobile Satellite Corporation
10802 Parkridge Blvd.
Reston, VA 22091
The undersigned irrevocably exercises the Warrant for the purchase
of shares (the "Shares") of Common Stock, par value $.01
per share, of American Mobile Satellite Corporation (the "Company") at
$_______ per Share (the "Exercise Price") and herewith makes payment of $
(such payment being made in cash or by certified or
official bank or bank cashier's check payable to the order of the Company or
by wire transfer or by cancellation of indebtedness owed to the Holder or any
combination of such methods) (unless the undersigned Holder is exercising the
Warrant pursuant to the net exercise provisions of Section 2.B of the
Warrant), all on the terms and conditions specified in the within Warrant
Certificate, surrenders this Warrant Certificate and all right, title and
interest therein to the Company and directs that the Shares deliverable upon
the exercise of this Warrant be registered or placed in the name and at the
address specified below and delivered thereto. If said number of Shares is
less than all of the shares of Common Stock for which the Warrant is
exercisable, the undersigned requests that a new Warrant Certificate
representing the remaining balance of such shares be registered in the name of
the undersigned or nominee hereinafter set forth, and further that such
certificate be delivered to the undersigned at the address hereinafter set
forth or to such other person or entity as is hereinafter set forth.
Date:__________________,_______ .
--------------------------------------
(Signature of Owner)
--------------------------------------
(Street Address)
--------------------------------------
(City) (State) (Zip Code)
<PAGE>
Securities and/or check to be issued to:
Please insert social security or identifying number:__________________________
Name:_________________________________________________________________________
Street Address:_______________________________________________________________
City, State and Zip Code:_____________________________________________________
Any unexercised portion of the Warrant evidenced by the within Warrant
Certificate to be issued to:
Please insert social security or identifying number:__________________________
Name:_________________________________________________________________________
Street Address:_______________________________________________________________
City, State and Zip Code:_____________________________________________________
<PAGE>
WARRANT ASSIGNMENT FORM
Dated,______,_____
FOR VALUE RECEIVED,________________________________________________
hereby sells, assigns and transfers unto_____________________________________
____________________________________________________________(the "Assignee"),
(please type or print in block letters)
______________________________________________________________________________
(insert Assignee's address)
______________________________________________________________________________
(insert Assignee's social security or taxpayer ID number)
its right to purchase up to ________ shares of Common Stock represented by
this Warrant and does hereby irrevocably constitute and appoint
_____________________ Attorney, to transfer the same on the books of the
Company, with full power of substitution in the premises.
___________________________________
Signature
Signature Guarantee:
<PAGE>
EXHIBIT X
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT dated as of June 28, 1996 among
American Mobile Satellite Corporation, a Delaware corporation (the
"Company"), Hughes Electronics Corporation, Singapore Telecommunications
Ltd., and Baron Capital Partners, L.P. (collectively, the "Guarantors") and
each other Person who executes this Agreement.
W I T N E S E T H
WHEREAS, the Company and AMSC Subsidiary Corporation, a Delaware
corporation dually incorporated as a Virginia public service corporation
("AMSC Subsidiary"), and the Guarantors have entered into a Guaranty
Issuance Agreement (the "Guaranty Issuance Agreement") dated as of June 28,
1996; and
WHEREAS, in order to induce the Guarantors to enter into the
Guaranty Issuance Agreement and issue the Guaranties specified therein, the
Company has agreed to provide the registration rights set forth in this
Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE
DEFINITIONS
SECTION 1.1. Definitions . The following terms, as used herein,
have the following meanings:
"Affiliate", as applied to any specified Person, shall mean any
other Person directly or indirectly controlling or controlled by or under
direct or indirect common control with such specified Person. For the
purposes of this definition, "control", when used with respect to any
Person, means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Board of Directors" means the Board of Directors of the Company.
"Bridge Shares" means the shares of Common Stock issued or
issuable upon exercise of the Bridge Warrants in accordance with the terms
thereof and any Common Stock issued as or issuable upon the conversion or
exercise or any warrant, option, right, or other security which is issued as a
dividend or other distribution with respect to or in exchange for or in
replacement of the shares of Common Stock issued or issuable upon exercise of
the Bridge Warrants.
"Bridge Registration Rights Agreement" means the registration
rights agreement dated as of April 19, 1996 among the Company, Toronto
Dominion Investments, Inc., Morgan Guaranty Trust Company of New York and
Hughes Communications Satellite Services, Inc. with respect to the
registration of the Bridge Shares.
<PAGE>
"Bridge Warrants" means the warrants to purchase Common Stock
originally issued by the Company to Toronto Dominion Investments, Inc., Morgan
Guaranty Trust Company of New York and Hughes Communications Satellite
Services, Inc. on January 19, 1996.
"Commission" means the Securities and Exchange Commission, or any
successor agency.
"Common Stock" means the common stock, par value $.01 per share,
of the Company.
"Deferral Period" has the meaning set forth in Section 2.1.
"Demand Registration" has the meaning set forth in Section 2.1.
"Demand Registration Notice" has the meaning set forth in Section
2.1.
"Demanding Group" has the meaning set forth in Section 2.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Holder" means the holder of any Warrants or Warrant Shares other
than Warrant Shares that are acquired in a public distribution pursuant to a
registration statement under the Securities Act or pursuant to transactions
exempt from registration under the Securities Act where securities sold in
such transaction may be resold without subsequent registration under the
Securities Act.
"NASD" means the National Association of Securities Dealers, Inc.
"Person" means an individual, corporation, partnership, limited
liability company, association, trust, or any other entity or organization,
including a government or political subdivision or an agency or
instrumentality thereof.
"Piggy-Back Registration" has the meaning set forth in Section
2.2.
"Registrable Securities" means the Warrant Shares until (i) a
Registration Statement covering such Warrant Shares has been declared
effective by the Commission and they have been disposed of pursuant to such
effective Registration Statement, (ii) they are sold under circumstances in
which all of the applicable conditions of Rule 144 (or any similar provisions
then in force) under the Securities Act are met or under which they may be
sold pursuant to Rule 144(k) or (iii) the Company has delivered a new
certificate or other evidence of ownership for them not bearing the legend
required pursuant to the Warrants and they may be resold without subsequent
registration under the Securities Act.
"Registration Statement" means any registration statement of the
Company relating to a Demand Registration pursuant to Section 2.1 or a
Piggy-Back Registration pursuant to Section 2.2, in each case, including the
prospectus included therein, all amendments and supplements thereto (including
post-effective amendments) and all exhibits and material incorporated by
reference therein.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
2
<PAGE>
"Selling Holder" means a Holder who is selling Registrable
Securities pursuant to a Registration Statement under the Securities Act.
"Underwriter" means a securities dealer who purchases any
Registrable Securities as principal and not as part of such dealer's
market-making activities.
"Warrants" means the warrants dated June 28, 1996 to purchase
Common Stock.
"Warrant Shares" means the shares of Common Stock issued or
issuable upon exercise of the Warrants, in each case in accordance with the
terms thereof, and any Common Stock or other securities issued or issuable
upon the exercise of any warrant, option, right, or other security which is
issued as a dividend or other distribution with respect to or in exchange for
or in replacement of the shares of Common Stock issued or issuable upon
exercise of the Warrants.
ARTICLE II
REGISTRATION RIGHTS
SECTION 2.1. Demand Registration.
Right to Demand. At any time and from time to time
prior to June 28, 2001, Holders of Registrable Securities representing at
least 25% of the original aggregate number of Warrant Shares for which the
Warrants were exercisable, as a group (each, a "Demanding Group") may make a
written request of the Company for registration with the Commission, under and
in accordance with the provisions of the Securities Act, of all or part of
their Registrable Securities (a "Demand Registration"). Within 5 days after
receipt of the request for a Demand Registration, the Company will send
written notice (the "Demand Registration Notice") of such registration
request and its intention to comply therewith to each Holder and, subject to
paragraph (c) below, the Company will include in such registration all
Registrable Securities of such Holders with respect to which the Company has
received written requests for inclusion therein within 20 days after the
Holder's receipt of the Demand Registration Notice and such Holders will be
deemed to be members of the Demanding Group. All requests made pursuant to
this paragraph (a) will specify the aggregate number of Registrable Securities
requested to be registered.
Promptly after receipt of any request for registration under this
paragraph (a), but in no event later than 60 days after receipt of such
request, the Company shall file a Registration Statement with the Commission
with respect to the Registrable Securities included in such request and shall
use its best efforts to have such Registration Statement declared effective as
promptly as practicable; provided, however, that the Company may postpone
the filing of such Registration Statement for a period of up to 90 days (the
"Deferral Period") if (x) the Board of Directors reasonably determines that
(i) such a filing would adversely affect any proposed financing, acquisition,
divestiture or other material transaction by the Company or (ii) such a filing
would otherwise represent an undue hardship for the Company, and (y) such
determination is reflected in a certificate signed by the Chief Executive
Officer or President of the Company. The Company shall not be entitled to
request more than one such deferral with respect to any Demand Registration
within any 365-day period. If the Company does elect to defer any such Demand
Registration, the Holders requesting such Demand Registration may, at their
election by written notice to the Company, (i) confirm their request to
proceed with such Demand Registration upon the expiration of the Deferral
Period or (ii) withdraw their request for such Demand Registration in which
case no such
3
<PAGE>
request for a Demand Registration shall be deemed to have
occurred for purposes of Section 2.1(b) or for any other purposes under this
Agreement (and if such Deferral Period extends past June 28, 2001, the Holders
shall nevertheless be entitled to make subsequent requests for Demand
Registration hereunder).
(b) Number of Demand Registrations. The Demanding Group(s)
shall collectively be entitled to two Demand Registrations hereunder. A
Demand Registration shall not be counted as a Demand Registration hereunder
(i) until such Demand Registration has been declared effective by the
Commission and maintained continuously effective for a period of at least 120
days or such shorter period as will terminate when all Registrable Securities
included therein have been sold in accordance with such Demand Registration
and (ii) unless the number of Registrable Securities in such Demand
Registration by the Demand Group is at least 80% of the number of shares
originally requested to be included by such group after giving effect to any
reductions pursuant to paragraph (c) below.
(c) Priority on Demand Registrations. If in any Demand
Registration the managing Underwriter or Underwriters thereof advise the
Company in writing that in its or their reasonable opinion or, in the case of
a Demand Registration not being underwritten, the Company shall reasonably
determine after consultation with an investment banking firm of nationally
recognized standing, that the number of Registrable Securities proposed to be
sold in such Demand Registration exceeds the number that can be sold in such
offering or will adversely affect the success of such offering (including,
without limitation, an impact on the selling price or the number of
Registrable Securities that any participant may sell), the Company shall
include in such registration only the number of Registrable Securities, if
any, which in the opinion of such Underwriter or Underwriters, or the Company,
as the case may be, can be sold without having an adverse effect on the
success of the offering and in accordance with the following priority: (i)
first, subject to the priority rights of the holders of Bridge Shares
pursuant to the Bridge Registration Rights Agreement, Registrable Securities
requested to be included in such offering by Holders in the Demanding Group
requesting such registration, allocated pro rata among such Demanding Group
(based upon the number of Registrable Securities requested to be included in
such Demand Registration), (ii) second, pro rata (based upon the number of
Registrable Securities or similar securities requested to be included in such
registration by such Holders and other Persons, if any) among the other
Holders of Registrable Securities and other Persons having similar rights who
have requested to include Registrable Securities or similar securities in such
registration pursuant to the piggy-back registration provisions of Section 2.2
or other registration rights agreements other than the Bridge Registration
Rights Agreement, and (iii) third, securities proposed to be issued by the
Company for its own account.
(d) Selection of Underwriters. If any Demand Registration
is to be in the form of an underwritten offering, the managing Underwriter or
Underwriters that will administer the offering shall be selected by the
holders of a majority of the Registrable Securities to be included in such
offering; provided that such managing underwriter or underwriters must be of
recognized national standing and reasonably satisfactory to the Company. The
Company shall (together with all Holders of Registrable Securities proposing
to distribute Registrable Securities through such underwriting) enter into an
underwriting agreement in customary form with the Underwriter or Underwriters
selected for such underwriting in the manner set forth above.
(e) Withdrawal. If any Holder of Registrable Securities
disapproves of the terms of any such underwriting, such Holder may elect to
withdraw therefrom by written notice to the Company and the managing
Underwriter. If by the withdrawal of such Registrable Securities a greater
number of Registrable Securities held by other Holders may be included in such
registration (up to the
4
<PAGE>
maximum of any limitation imposed by the
Underwriters), then the Company shall offer to all Holders who have included
Registrable Securities in the registration the right to include additional
Registrable Securities in the priority and proportions specified in Section
2.1(c).
SECTION 2.2. Piggy-Back Registration .
(a) If the Company proposes to file a registration statement
under the Securities Act with respect to an offering by the Company for its
own account or for the account of any of its respective securityholders of any
class of equity security or security convertible into or exchangeable for any
class of equity security (other than a registration statement on Form S-4 or
S-8 (or any substitute form that may be adopted by the Commission), or a
registration filed in connection with an exchange offer or offering of
securities solely to the Company's existing securityholders or other
registrations solely in connection with employee stock options or other
employee benefit plans), then the Company shall give written notice of such
proposed filing to the Holders of Registrable Securities as soon as
practicable (but in no event less than 30 days before the anticipated filing
date), and such notice shall offer such Holders the opportunity to register
such number of shares of Registrable Securities as each such Holder may
request (a "Piggy-Back Registration"). The Company shall use its best
efforts to cause the managing Underwriter or Underwriters of a proposed
underwritten offering to permit the Registrable Securities requested to be
included in a Piggy-Back Registration to be included on the same terms and
conditions as any similar securities of the Company included therein and to
permit the sale or other disposition of such Registrable Securities in
accordance with the intended method of distribution thereof.
No registration effected under this Section 2.2, and no failure
to effect a registration under this Section 2.2, shall relieve the Company of
its obligations pursuant to Section 2.1, and no failure to effect a
registration under this Section 2.2 and complete the sale of shares in
connection therewith shall relieve the Company of any other obligation under
this Agreement (including, without limitation, the Company's obligations under
Sections 3.2 and 4.1).
(b) Notwithstanding anything contained herein, if the managing
Underwriter or Underwriters of an offering described in the foregoing
paragraph (a) deliver a written opinion to the Holders of the Registrable
Securities proposed to be included in such offering that (i) the size of the
offering that the Holders, the Company and such other Persons intend to make
or (ii) the kind of securities that the Holders, the Company and any other
Persons intend to include in such offering are such that the success of the
offering would be materially and adversely affected by inclusion of the
Registrable Securities requested to be included, then subject to the priority
rights of the holders of Bridge Shares pursuant to the Bridge Registration
Rights Agreement, (A) if the size of the offering is the basis of such
Underwriter's opinion, the amount of securities to be offered for the accounts
of Holders and the amount of securities to be offered for the account of the
Company shall be reduced pro rata (based upon the number of Registrable
Securities or other securities proposed to be included in such registration by
the Holders and the Company) and the amount of securities to be offered for
the account of any other Persons (other than the holders of Bridge Shares)
shall be reduced to zero; and (B) if the combination of securities to be
offered is the basis of such Underwriter's opinion, (x) the amount of
securities to be offered for the accounts of Holders and the amount of
securities to be offered for the account of the Company shall be reduced pro
rata (based upon the number of Registrable Securities or other securities
proposed to be included in such registration by the Holders and the Company)
and the amount of securities to be offered for the account of such other
Persons (other than the holders of Bridge Shares) shall be reduced to zero to
the extent necessary, in the judgment of the managing Underwriter, to
substantially eliminate the adverse effect that inclusion of the Registrable
Securities requested to be included would have on such offering.
5
<PAGE>
(c) The Holders of Registrable Securities included within
such Piggy-Back Registration may withdraw all or any part of the Registrable
Securities from such Piggy-Back Registration at any time (before but not after
the effective date of such Registration Statement), by delivering written
notice of such withdrawal request to the Company.
(d) If the Company shall determine for any reason (x) not
to register or (y) to delay a registration which includes Registrable
Securities pursuant to this Section 2.2, the Company may, at its election,
give written notice of such determination to the Holders of the Registrable
Securities and, thereupon (i) in the case of a determination not to register,
shall be relieved of its obligation to register any Registrable Securities in
connection with such registration (but not from its obligation to pay the
Registration Expenses in connection therewith), without prejudice, however, to
the rights, if any, of any Holder or Holders of Registrable Securities to
request that such registration be effected as a Demand Registration under
Section 2.1, and (ii) in the case of a delay in registering, shall be
permitted to delay registering any Registrable Securities for the same period
as the delay in registering such other shares.
ARTICLE III
REGISTRATION PROCEDURES
SECTION 3.1. Filings; Information . Whenever Registrable Securities
are to be registered pursuant to Section 2.1 hereof, the Company will use its
best efforts to effect the registration and the sale of such Registrable
Securities in accordance with the intended method of disposition thereof as
quickly as practicable, and in connection with any such request:
(a) The Company will as expeditiously as possible (and in any event
within the time period specified in Section 2.1(a)) prepare and file with the
Commission a Registration Statement on any form for which the Company then
qualifies or which counsel for the Company and counsel for the Selling Holders
shall deem appropriate and which form shall be available for the sale of the
Registrable Securities to be registered thereunder in accordance with the
intended method of distribution thereof, and if the offering is an
underwritten offering, shall be reasonably satisfactory to the managing
Underwriter or Underwriters. The Company will use its best efforts to cause
such filed Registration Statement to become and remain continuously effective
in accordance with Section 2.1(b).
(b) The Company will prior to filing a Registration Statement or
prospectus or any amendment or supplement thereto, furnish to each Selling
Holder and each Underwriter, if any, of the Registrable Securities covered by
such Registration Statement copies of such Registration Statement as proposed
to be filed, and thereafter furnish to such Selling Holder and Underwriter, if
any, such number of copies of such Registration Statement, each amendment and
supplement thereto (in each case including all exhibits thereto and documents
incorporated by reference therein), the prospectus included in such
Registration Statement (including each preliminary prospectus) and such other
documents as such Selling Holder or Underwriter may reasonably request in
order to facilitate the disposition of the Registrable Securities owned by
such Selling Holder.
(c) After the filing of the Registration Statement, the Company
will promptly notify each Selling Holder of Registrable Securities covered by
such Registration Statement of
6
<PAGE>
any stop order issued or threatened by the Commission and take all reasonable
actions required to prevent the entry of such stop order or to remove it if
entered.
(d) The Company will use its best efforts to (i) register or
qualify the Registrable Securities under such other securities or blue sky
laws of such jurisdictions in the United States as any Selling Holder or
managing Underwriter reasonably (in light of such Selling Holder's intended
plan of distribution) requests and (ii) cause such Registrable Securities to
be registered with or approved by such other governmental agencies or
authorities as may be necessary by virtue of the business and operations of
the Company and do any and all other acts and things that may be reasonably
necessary or advisable to enable such Selling Holder and the Underwriters, if
any, to consummate the disposition of the Registrable Securities owned by such
Selling Holder; provided that the Company will not be required to (A)
qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this paragraph (d), (B) subject
itself to taxation in any such jurisdiction or (C) consent to general service
of process in any such jurisdiction.
(e) The Company will immediately notify each Selling Holder, at any
time when a prospectus relating thereto is required to be delivered under the
Securities Act, of the occurrence of an event requiring the preparation of a
supplement or amendment to such prospectus so that, as thereafter delivered to
the purchasers of such Registrable Securities, such prospectus will not
contain an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading, in light of the circumstances in which they were made, and
promptly file with the Commission and make available to each Selling Holder
any such supplement or amendment.
(f) The Company will enter into customary agreements (including an
underwriting agreement in customary form if the offering is an underwritten
offering) and take such other actions as are reasonably required in order to
expedite or facilitate the disposition of such Registrable Securities,
including, in the case of an offering pursuant to Section 2.1, cooperating in
the marketing efforts of the Underwriters and the Selling Holders by, among
other things, making available, as reasonably requested by the Underwriters
and the Selling Holders, senior executive officers of the Company for
attendance at, and active participation with the Underwriters in,
informational meetings with prospective purchasers of the Registrable
Securities being offered, including meeting with groups of such purchasers or
with individual purchasers, providing information and answering questions
about the Company at such meetings, and traveling to locations at reasonable
times and as reasonably selected by the Underwriters.
(g) The Company will make available for inspection by any Selling
Holder, any Underwriter participating in any disposition pursuant to such
Registration Statement and any attorney, accountant or other professional
retained by any such Selling Holder or Underwriter (collectively, the
"Inspectors"), all financial and other records, pertinent corporate
documents and properties of the Company (collectively, the "Records") as
shall be reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers, directors and employees to
supply all information reasonably requested by any Inspectors in connection
with such Registration Statement. Records which the Company determines, in
good faith, to be confidential and which it notifies the Inspectors are
confidential shall not be disclosed by the Inspectors unless (i) the
disclosure of such Records is necessary to avoid or correct a misstatement or
omission in such Registration Statement or (ii) the release of such Records is
ordered pursuant to a subpoena or other order from a court of competent
jurisdiction. Each
7
<PAGE>
Selling Holder of such Registrable Securities agrees that
information obtained by it as a result of such inspections shall be deemed
confidential and shall not be used by it as the basis for any market
transactions in the securities of the Company or its Affiliates unless and
until such is made generally available to the public. Each Selling Holder of
such Registrable Securities further agrees that it will, upon learning that
disclosure of such Records is sought in a court of competent jurisdiction,
give notice to the Company and allow the Company, at its expense, to undertake
appropriate action to prevent disclosure of the Records deemed confidential.
(h) The Company will furnish to each Selling Holder and to each
Underwriter, if any, a signed counterpart, addressed to such Selling Holder or
Underwriters of (i) an opinion or opinions of counsel to the Company and (ii)
a comfort letter or comfort letters from the Company's independent public
accountants, each in customary form and covering such matters of the type
customarily covered by opinions or comfort letters, as the case may be, as the
holders of a majority of the Registrable Securities included in such offering
or the managing Underwriter therefor reasonably requests.
(i) If requested by the Selling Holders, the Company will provide a
CUSIP number for all Registrable Securities not later than the effective date
of the Registration Statement covering such Registrable Securities and provide
the Company's transfer agent(s) and registrar(s) for the Registrable
Securities with printed certificates for the Registrable Securities.
(j) The Company will cooperate and assist in any filings required
to be made with the NASD and in the performance of any due diligence
investigation by any Underwriter (including any "qualified independent
underwriter") that is required to be retained in accordance with the rules and
regulations of the NASD, and use its best efforts to cause such Registration
Statement to become effective and approved by such governmental agencies or
authorities as may be necessary to enable the Selling Holders or Underwriters,
if any, to consummate the disposition of such Registrable Securities.
(k) The Company will otherwise use its best efforts to comply with
all applicable rules and regulations of the Commission, and make available to
its securityholders, as soon as reasonably practicable, an earnings statement
covering a period of 12 months, beginning within three months after the
commencement of any public offering of securities pursuant to the Registration
Statement, which earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act.
(l) The Company will use its best efforts to cause all such
Registrable Securities to be listed on each securities exchange on which
similar securities issued by the Company are then listed.
The Company may require each Selling Holder to promptly furnish in
writing to the Company such information regarding the distribution of the
Registrable Securities as the Company may from time to time reasonably request
and such other information as may be legally required in connection with such
registration.
Each Selling Holder agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 3.1(e)
hereof, such Selling Holder will forthwith discontinue disposition of
Registrable Securities pursuant to the Registration Statement covering such
Registrable Securities until such Selling Holder's receipt of the copies of
the supplemented or amended
8
<PAGE>
prospectus contemplated by Section 3.1(e) hereof,
and, if so directed by the Company, such Selling Holder will deliver to the
Company (at the Company's expense) all copies, other than permanent file
copies then in such Selling Holder's possession, of the most recent prospectus
covering such Registrable Securities at the time of receipt of such notice.
In the event the Company shall give such notice, the Company shall extend the
period during which such Registration Statement shall be maintained effective
(including the period referred to in Section 3.1(a) hereof) by the number of
days during the period from and including the date of the giving of notice
pursuant to Section 3.1(e) hereof to the date when the Company shall make
available to the Selling Holders a prospectus supplemented or amended to
conform with the requirements of Section 3.1(e) hereof.
SECTION 3.2. Expenses. The Company shall pay the following
expenses incurred in connection with any registration required hereunder (the
"Registration Expenses"), regardless of whether a Registration Statement
becomes effective: (i) all registration and filing fees, (ii) fees and
expenses of compliance with securities or blue sky laws (including reasonable
fees and disbursements of counsel in connection with blue sky qualifications
of the Registrable Securities), (iii) printing and engraving expenses, (iv)
internal expenses of the Company (including, without limitation, all salaries
and expenses of its officers and employees performing legal or accounting
duties), (v) all fees and expenses incurred in connection with the listing of
the Registrable Securities, (vi) reasonable fees and disbursements of counsel
for the Company and customary fees and expenses for independent certified
public accountants retained by the Company (including the expenses of any
comfort letters or costs associated with the delivery by independent certified
public accountants of a comfort letter or comfort letters requested pursuant
to Section 3.1(h) hereof), (vii) the reasonable fees and expenses of any
special experts retained by the Company in connection with such registration,
(viii) reasonable fees and expenses of one counsel (who shall be reasonably
acceptable to the Company) for the Holders, (ix) in connection with any
underwritten offering or proposed underwritten offering of Registrable
Securities hereunder, the reasonable fees and disbursements of the
Underwriters and counsel for the Underwriters (excluding any underwriting
discounts or commissions with respect to Registrable Securities not being sold
for the account of the Company), and reasonable expenses in connection with
the marketing efforts of the Underwriters and the Selling Holders, including
expenses related to meetings with prospective purchasers of the Registrable
Securities and any travel costs related thereto and (xi) fees and expenses
associated with any NASD filing required to be made in connection with the
registration of the Registrable Securities, including, if applicable, the
reasonable fees and expenses of any "qualified independent underwriter" (and
its counsel) that is required to be retained in accordance with the rules and
regulations of the NASD.
ARTICLE IV
INDEMNIFICATION AND CONTRIBUTION
SECTION 4.1. Indemnification by the Company. The Company agrees to
indemnify and hold harmless each Selling Holder, its officers, directors and
agents, and each Person, if any, who controls such Selling Holder within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
from and against any and all losses, claims, damages and liabilities caused by
any untrue statement or alleged untrue statement of a material fact contained
in any Registration Statement or prospectus relating to the Registrable
Securities (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) or any preliminary prospectus, or caused by
any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading
(in the case of a prospectus, in light of the circumstances under which they
were made), except insofar as such losses, claims, damages or liabilities are
caused by
9
<PAGE>
any such untrue statement or omission or alleged untrue statement or
omission based upon information furnished in writing to the Company by such
Selling Holder or on such Selling Holder's behalf expressly for use therein;
provided, however, that the foregoing indemnity agreement with respect to
any preliminary prospectus shall not inure to the benefit of any Selling
Holder from whom the Person asserting any such loss, claim, damage or
liability purchased the Registrable Securities if it is determined that it was
the responsibility of such Selling Holder to provide such Person with a
current copy of the prospectus and such current copy of the prospectus would
have cured the defect giving rise to such loss, claim, damage or liability.
In connection with any underwritten offering, the Company also agrees to
indemnify the Underwriters of the Registrable Securities, their officers and
directors and each Person who controls such Underwriters on substantially the
same basis as that of the indemnification of the Selling Holders provided in
this Section 4.1.
SECTION 4.2. Indemnification by Selling Holders. Each Selling
Holder agrees, severally but not jointly, to indemnify and hold harmless the
Company, its officers, directors and agents and each Person, if any, who
controls the Company within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act to the same extent as the foregoing
indemnity from the Company to such Selling Holder, but only with reference to
information related to such Selling Holder furnished in writing to the Company
by such Selling Holder or on such Selling Holder's behalf expressly for use in
any Registration Statement or prospectus relating to the Registrable
Securities, or any amendment or supplement thereto, or any preliminary
prospectus. In connection with any underwritten offering, each Selling Holder
also agrees to indemnify and hold harmless the Underwriters of the Registrable
Securities, their officers and directors and each Person who controls such
Underwriters on substantially the same basis as that of the indemnification of
the Company provided in this Section 4.2. Notwithstanding anything in this
Agreement to the contrary, in no event shall any Selling Holder be obligated
to provide indemnification hereunder in connection with any offering in an
amount that exceeds the proceeds of such offering received by such Selling
Holder.
SECTION 4.3. Conduct of Indemnification Proceedings . In case any
proceeding (including any governmental investigation) shall be instituted
involving any Person in respect of which indemnity may be sought pursuant to
Section 4.1 or 4.2, such Person (an "Indemnified Party") shall promptly
notify the Person against whom such indemnity may be sought (an "Indemnifying
Party") in writing and the Indemnifying Party shall assume the defense
thereof, including the employment of counsel reasonably satisfactory to such
Indemnified Party, and shall assume the payment of all fees and expenses. In
any such proceeding, any Indemnified Party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such Indemnified Party unless (i) the Indemnifying Party and the
Indemnified Party shall have mutually agreed to the retention of such counsel
or (ii) the named parties to any such proceeding (including any impleaded
parties) include both the Indemnified Party and the Indemnifying Party and
representation of both parties by the same counsel would be inappropriate due
to actual or potential differing interests between them. It is understood
that the Indemnifying Party shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys (in addition to
any local counsel) at any time for all such Indemnified Parties, and that all
such fees and expenses shall be reimbursed as they are incurred. In the case
of any such separate firm for the Indemnified Parties, such firm shall be
designated in writing by the Indemnified Parties. The Indemnifying Party
shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent, or if there be a final
judgment for the plaintiff, the Indemnifying Party shall indemnify and hold
harmless such Indemnified Parties from and against any loss or liability (to
the extent stated above) by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an Indemnified Party
shall have requested an Indemnifying Party
10
<PAGE>
to reimburse the Indemnified Party
for fees and expenses of counsel as contemplated by the third sentence of this
paragraph, the Indemnifying Party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 business days after receipt by such
Indemnifying Party of the aforesaid request and (ii) such Indemnifying Party
shall not have reimbursed the Indemnified Party in accordance with such
request prior to the date of such settlement. No Indemnifying Party shall,
without the prior written consent of the Indemnified Party, effect any
settlement of any pending or threatened proceeding in respect of which any
Indemnified Party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability arising out
of such proceeding.
SECTION 4.4. Contribution. If the indemnification provided for in
this Article 4 is unavailable to an Indemnified Party in respect of any
losses, claims, damages or liabilities referred to herein, then each
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, claims, damages or liabilities. As between the Company on the
one hand and each Selling Holder on the other, the amount of contribution
shall be in such proportion as is appropriate to reflect the relative fault of
the Company and of each Selling Holder in connection with such statements or
omissions, as well as any other relevant equitable considerations. The
relative fault of the Company on the one hand and of each Selling Holder on
the other shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
such party, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company and the Selling Holders agree that it would not be just
and equitable if contribution pursuant to this Section 4.4 were determined by
pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an Indemnified Party as a
result of the losses, claims, damages or liabilities referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred
by such Indemnified Party in connection with investigating or defending any
such action or claim. Notwithstanding anything to the contrary in this
Agreement, in no event shall any Selling Holder be obligated to contribute in
connection with any offering in an amount that exceeds the proceeds of such
offering received by such Selling Holder, minus the amount of any damages
which such Selling Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation. The Selling Holders'
obligations to contribute pursuant to this Section 4.4 are several and not
joint.
ARTICLE V
MISCELLANEOUS
SECTION 5.1. Participation in Underwritten Registrations . No
Person may participate in any underwritten registration hereunder unless such
Person (a) agrees to sell such Person's securities on the basis provided in
any underwriting arrangements approved by the Persons entitled hereunder to
approve such arrangements and (b) completes and executes all questionnaires,
powers of attorney,
11
<PAGE>
indemnities, underwriting agreements and other documents
reasonably required under the terms of such underwriting arrangements and
these Registration Rights.
SECTION 5.2. Rule 144. The Company covenants that it will file any
reports required to be filed by it under the Securities Act and the Exchange
Act and that it will take such further action as any Holder may reasonably
request, all to the extent required from time to time to enable Holders to
sell Registrable Securities without registration under the Securities Act
within the limitation of the exemptions provided by (a) Rule 144 under the
Securities Act, as such Rule may be amended from time to time, or (b) any
similar rule or regulation hereafter adopted by the Commission. Upon the
request of any Holder, the Company will deliver to such Holder a written
statement as to whether it has complied with such requirements.
SECTION 5.3. Holdback Agreements. (a)Restrictions on Public Sale by
Holder of Registrable Securities. In the case of an underwritten public
offering, to the extent not inconsistent with applicable law, each Holder
whose securities are included in a Registration Statement agrees, except as
part of such public offering, not to effect any public sale or distribution of
the issue being registered or a similar security of the Company, or any
securities convertible into or exchangeable or exercisable for such
securities, including a sale pursuant to Rule 144 under the Securities Act,
during the 14 days prior to, and during the 90-day period beginning on, the
commencement of a public distribution of Registrable Securities, if and to the
extent requested by the managing Underwriter or Underwriters.
(b) Restrictions on Public Sale by the Company and Others.
The Company agrees, on behalf of itself and its Affiliates, (i) not to effect
any public sale or distribution of any securities similar to those being
registered in accordance with Section 2.1 or Section 2.2 hereof, or any
securities convertible into or exchangeable or exercisable for such
securities, (in each case other than in connection with the Company's Employee
Stock Purchase Plan, Employee Stock Option Plan, Non-Employee Director Stock
Ownership Plan, 401(k) Plan or other similar employee stock option or
incentive plan) during the 30 days prior to, and during the 180-day period
beginning on, the commencement of a public distribution of Registrable
Securities (or such other period of time as may be required by the Underwriter
effecting such public distribution); and (ii) that any agreement entered into
after the date of this Agreement pursuant to which the Company issues or
agrees to issue any privately placed securities shall contain a provision
under which holders of such securities agree not to effect any public sale or
distribution of any such securities during the periods described in (i) above,
in each case including a sale pursuant to Rule 144 under the Securities Act;
provided, however, that the provisions of this paragraph (b) shall not
prevent the conversion or exchange of any securities pursuant to their terms
into or for other securities.
SECTION 5.4. Specific Performance. Each Holder, in addition to
being entitled to exercise all rights provided herein or granted by law,
including recovery of liquidated or other damages, will be entitled to
specific performance of its rights under this Agreement. The Company agrees
that monetary damages would not be adequate compensation for any loss incurred
by reason of a breach by it of the provisions of this Agreement and hereby
agrees to waive the defense in any action for specific performance that a
remedy at law would be adequate.
SECTION 5.5. Notices. Any notice, demand or delivery authorized or
required by this Agreement shall be in writing and shall be given to the
Holder or the Company, as the case may be, at its address (or telecopier
number) set forth below, or such other address (or telecopier number) as shall
have been furnished to the party giving or making such notice, demand or
delivery:
12
<PAGE>
If to the Company: American Mobile Satellite Corporation
10802 Parkridge Blvd.
Reston, VA 22091
Telecopy: (703) 758-6134
Attention: Randy Segal, General Counsel
If to any Holder: at the address and telecopy number set forth
in the Guaranty Issuance Agreement.
Each such notice, demand or delivery shall be effective (i) if given by
telecopy, when such telecopy is transmitted to the telecopy number specified
herein and the intended recipient confirms the receipt of such telecopy or
(ii) if given by any other means, when received at the address specified
herein.
SECTION 5.6. No Inconsistent Agreements. The Company will not on or
after the date of this Agreement enter into any agreement with respect to its
securities that is inconsistent with the rights granted to the Holders in this
Agreement or otherwise conflicts with the provisions hereof. The Company
hereby represents that the rights granted to the Holders hereunder do not in
any way conflict with and are not inconsistent with the rights granted to the
holders of the Company's securities under any agreement in effect on the date
hereof. In addition, the Company agrees that it will not amend its
Certificate of Incorporation, by-laws or other governing documents in any
respect that would materially and adversely affect the rights of the Holders
hereunder.
SECTION 5.7. Further Assurances. Each party shall cooperate and
take such action as may be reasonably requested by another party in order to
carry out the provisions and purposes of this Agreement and the transactions
contemplated hereby.
SECTION 5.8. Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
SECTION 5.9. GOVERNING LAW AND WAIVER OF JURY TRIAL. THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO THE CHOICE OF LAW PRINCIPLES THEREOF. THE PARTIES
HERETO IRREVOCABLY WAIVE ANY RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
SECTION 5.10. Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance,
is held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.
SECTION 5.11. Amendments; Waivers. Any provision of this Agreement
may be amended or waived if, and only if, such amendment or waiver is in
writing and signed, in the case of an amendment, by all parties to this
Agreement, or in the case of a waiver, by the party against whom the waiver is
to be effective. No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights
and
13
<PAGE>
remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.
SECTION 5.12. Counterparts. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.
(signature page follows)
14
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers, as of the date first
above written.
AMERICAN MOBILE SATELLITE CORPORATION
By:/s/ Richard J. Burnheimer
_____________________________________
Name: Richard J. Burnheimer
Title: Treasurer
HUGHES ELECTRONICS CORPORATION
By: /s/ Charles H. Noski
_____________________________________
Name: Charles H. Noski
Title: Senior Vice President and Chief
Financial Officer
SINGAPORE TELECOMMUNICATIONS LTD.
By: /s/ Lim Toon
____________________________________
Name: Lim Toon
Title: Executive Vice President
(International Services)
BARON CAPITAL PARTNERS, L.P.
By: Baron Capital Management, Inc., a General
Partner
By: /s/ Morty Schaja
__________________________________
Name: Morty Schaja
Title: Vice President
S-1
<PAGE>
