Exhibit 10.1
****Confidential treatment has been requested for portions of this contract. The
copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as [****]. A complete version of this contract
has been filed separately with the Securities and Exchange Commission.
THIRD AMENDED AND RESTATED
SHAREHOLDERS AND NOTEHOLDERS AGREEMENT
This Third Amended and Restated Shareholders and Noteholders Agreement,
dated as of June 16, 2003 (this "Agreement"), is hereby entered into by and
among XM Satellite Radio Holdings Inc., a corporation duly organized under the
laws of the State of Delaware (the "Company"); Clear Channel Investments, Inc.,
a corporation duly organized under the laws of the State of Nevada ("Clear
Channel"); Columbia XM Radio Partners, LLC, a limited liability company duly
organized under the laws of the Commonwealth of Virginia ("Columbia Radio
Partners"); DIRECTV Enterprises, LLC, a limited liability company duly organized
under the laws of the State of Delaware ("DIRECTV"); General Motors Corporation,
a corporation duly organized under the laws of the State of Delaware (together
with its Affiliate, OnStar Corporation, a Delaware corporation, "GM"); Madison
Dearborn Capital Partners III, L.P. ("Madison Capital"), Madison Dearborn
Special Equity III, L.P. ("Madison Equity"), Special Advisors Fund I, LLC
("Madison Advisors" and, collectively with Madison Capital and Madison Equity,
each an entity duly organized under the laws of the State of Delaware,
"Madison"); AEA XM Investors I LLC, AEA XM Investors II LLC, AEA XM Investors IA
LLC and AEA XM Investors IIA LLC, each a limited liability company organized
under the laws of the State of Delaware (individually or collectively "AEA XM"),
Columbia XM Satellite Partners III, LLC, a limited liability company duly
organized under the laws of the Commonwealth of Virginia ("Columbia Satellite
Partners"), Columbia Capital Equity Partners III (QP), L.P., and Columbia
Capital Equity Partners II (QP), L.P., each a limited partnership duly organized
under the laws of the State of Delaware ("Columbia Equity Partners", and
collectively with Columbia Radio Partners and Columbia Satellite Partners,
"Columbia"); American Honda Motor Co., Inc., a corporation duly organized under
the laws of the State of California ("Honda"); Black Bear Fund I, L.P., a
limited partnership duly organized under the laws of the State of California
("Black Bear I"), Black Bear Fund II, L.L.C., a limited liability company duly
organized under the laws of the State of California ("Black Bear II"), Black
Bear Offshore Master Fund Limited, an exempted company organized under the laws
of the Cayman Islands ("Black Bear Fund", and collectively with Black Bear I and
Black Bear II, "Black Bear"); and each of the other Persons identified on
Exhibit A attached hereto ("Additional Note Purchasers"). Clear Channel,
Columbia Radio Partners, DIRECTV, GM and Madison, each in its capacity as a
holder of securities in the Company other than Series C Convertible Preferred
Stock (as defined below) or Common Stock (as defined below) issuable upon
conversion thereof, are collectively referred to herein as the "Original
Investors." AEA XM, Columbia Satellite Partners, Columbia Equity Partners,
Columbia Radio Partners, DIRECTV, Honda, Madison Capital and Madison Equity,
each in its capacity as a holder of the Series C Convertible Preferred Stock or
Common Stock issuable upon conversion thereof, are collectively referred to
herein as the "Series C Investors." GM, Black Bear, and the Additional Note
Purchasers, each in its or his capacity as a holder of New Notes or GM Note (as
defined below), as the case may be, or Common Stock issuable upon conversion
thereof, are collectively referred to herein as the "Note Investors." The
Original Investors, the Series C Investors and the Note Investors are
collectively referred to herein as the "Investors." The Company and the
Investors are collectively referred to herein as the "Parties."
WITNESSETH
WHEREAS, the Company, the Original Investors, the Series C Investors and
the Note Investors are parties to a Second Amended and Restated Shareholders and
Noteholders Agreement, dated January 28, 2003 (the "January 2003 Agreement");
WHEREAS, the Company owns one hundred percent (100%) of the issued and
outstanding shares of common stock of XM Satellite Radio Inc. ("XM");
WHEREAS, XM Radio Inc., a wholly owned subsidiary of XM, holds a license
awarded by the U.S. Federal Communications Commission for the establishment of a
Satellite Digital Audio Radio Service ("SDARS") system in the United States;
WHEREAS, GM has entered into a note purchase agreement with the Company and
XM, dated as of December 21, 0000 (xxx "XX Note Purchase Agreement"), under
which GM has acquired a 10% Senior Secured Convertible Note due 2009 issued by
the Company and XM, as joint obligors (the "GM Note"), in an aggregate principal
amount of $89,042,387, which GM Note bears interest at a rate of 10% per annum
that may be paid in cash or, at the Company's option, in Class A Common Stock,
and is convertible into Class A Common Stock, on the terms and conditions
described in the GM Note Purchase Agreement, received a warrant to purchase
10,000,000 shares of Class A Common Stock (the "GM Warrant") and entered into a
credit agreement and other agreements under which GM may receive additional
securities of the Company;
WHEREAS, Black Bear and the Additional Note Investors have entered into a
note purchase agreement with the Company and XM, dated as of December 21, 2002
(the "New Note Purchase Agreement"), under which such Note Investors have
purchased 10% Senior Secured Discount Convertible Notes due 2009 of the Company
and XM in an aggregate principal amount of up to $366,300,000 at maturity, under
which they may receive additional notes as payment of certain interest due
thereunder (collectively, the "New Notes" and together with the GM Note, the
"Notes"), on the terms and conditions described in the New Note Purchase
Agreement;
WHEREAS, the January 2003 Agreement was amended on June 16, 2003 with
the written consent of the Company, Investors holding 75% of the aggregate of
the Common Stock Deemed Outstanding held by Investors, and greater than 75% of
the aggregate principal amount at maturity of the then outstanding Notes held by
the Note Investors, which is binding upon each Investor and the Company, by
means of three separate consents (collectively, the "Consent Amendment"), copies
of which have been provided to all Investors as of the date hereof, which
Consent Amendment provided, among other things, for the incorporation of certain
covenants as a new Article VIII hereof (the "New Provisions"); and
WHEREAS, the consent executed by GM also provides that GM consents to
the taking of any actions by the Company and XM from time to time after June 16,
2003 that would be permitted by the New Provisions, particularly those in
Sections 8.3(xvi) and 8.6(b) hereof, if they had been included in the GM Note
Purchase Agreement in lieu of Sections 7.5 through 7.10
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and 7.12 through 7.16 thereof, so long as any approval required by Section
5.1(q) hereof is obtained; and
WHEREAS, the Consent Amendment provided for the amendment and
restatement of the January 2003 Agreement reflecting provisions of the Consent
Amendment without further consent of the Parties, and this document constitutes
such amendment and restatement; and
WHEREAS, the Company and each of the Investors believe it to be in the best
interests of the Company and the mutual best interests of each of the Investors
to set forth herein their agreements with respect to certain matters related to
the ownership and corporate governance of the Company by amending and restating
the January 2003 Agreement.
NOW, THEREFORE, in consideration for the mutual covenants contained herein,
the adequacy, receipt, and sufficiency of which are hereby acknowledged, the
undersigned hereby agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.1 Definitions.
Accredited Investor: has the meaning specified in Rule 501 of Regulation D
promulgated under the Securities Act.
Affiliate: means, as applied to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise. For purposes of
Sections 5.1, 5.2, 6.1 and 7.12, a member of a limited liability company or a
partner of a partnership shall be deemed an Affiliate of said company or
partnership.
Antidilution Protection: means any right to have the relevant price or
price ratio for the conversion of securities of the Company into any class of
common stock of the Company, or the number of securities issuable upon such
conversion, adjusted where the Company sells common stock (or securities
convertible into or exercisable or exchangeable for common stock) for a price
below a specified dollar amount that is less than the then applicable conversion
price of the securities subject to the adjustment or below the market price (as
defined in the terms of such right) of the common stock. As used herein,
Antidilution Protection is not intended to include stock splits,
reorganizations, distributions of stock or rights to all holders of common stock
or similar transactions.
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Board or Board of Directors: means the Board of Directors of the Company or
a committee consisting of one or more directors lawfully exercising the powers
of the Board.
Business Day: means any day other than a Saturday, Sunday or any other day
on which commercial banks are authorized or required by law to be closed in New
York City or the District of Columbia.
Capital Stock: means any and all securities, shares, interests, warrants,
options, rights to acquire equity or equity-linked securities of the Company,
participations or other equivalents (however designated, whether voting or
non-voting) in equity of the Company, whether issued by the Company or its
Subsidiaries, and whether now outstanding or issued subsequently hereto,
including, without limitation, all series and classes of Common Stock and
preferred stock of the Company, and all Convertible Securities, including the
Series A Convertible Preferred Stock, the Series B Convertible Preferred Stock,
the Series C Convertible Preferred Stock, the GM Note, the GM Warrant and the
New Notes.
Class A Common Stock: means the Class A Common Stock, par value $0.01 per
share, of the Company having one (1) vote per share.
Clear Channel Operational Assistance Agreement: means the operational
assistance agreement dated on or about June 7, 1999, between Clear Channel and
the Company, as it may be amended from time to time.
Commission: means the Securities and Exchange Commission or any other
Federal agency at the time administering the Securities Act.
Common Stock: means all classes and series of the common stock of the
Company, any stock into which such common stock shall have been changed or
converted or any stock resulting from any capital reorganization or
reclassification of such common stock, and all other stock of any class or
classes (however designated) of the Company, the holders of which have the
right, without limitation as to amount, either to all or to a share of the
balance of current dividends and liquidating dividends after the payment of
dividends and distributions of any shares entitled to preference.
Common Stock Deemed Outstanding: means, at any given time, the number of
shares of Common Stock actually outstanding at such time, plus the number of
shares of Common Stock issuable upon the conversion, exchange, or exercise in
full, of all Convertible Securities, whether or not the Convertible Securities
are convertible into or exercisable or exchangeable for Common Stock at such
time.
Communications Act: has the meaning specified in Section 2.1.
Concurrent Financing Transactions: means (1) the issuance to GM of the GM
Note in lieu of certain guaranteed payments due to GM during the period from
2003 to 2006 under XM's Distribution Agreement with GM (the "Distribution
Agreement"), (2) the amendment of the Distribution Agreement to provide for,
among other things, the issuance of the GM Note and the payment of up to
$35,000,000 in subscriber bounty payments payable to GM in the form of Class
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A Common Stock, (3) the issuance of XM's 14% Senior Secured Discount Notes due
2009, warrants to purchase Class A Common Stock (the "Exchange Warrants") and
cash in exchange for some or all of XM's outstanding 14% Senior Secured Notes
due 2010, (4) entering into a $100,000,000 Senior Secured Credit Facility with
GM (the "GM Credit Facility") to finance certain revenue share payments owed to
GM under the Distribution Agreement or other amounts which may be owed to GM,
(5) the issuance of the GM Warrant, (6) the issuance and sale, on or before the
closing of the transactions described in this definition, to the extent
determined to be desirable by the Company, or after the closing, to the extent
contemplated by the letter agreement between the Company and BayStar Group, of
Class A Common Stock, with or without warrants to purchase Class A Common Stock,
in accordance with Section 4(2) of the Securities Act or pursuant to the
Company's effective shelf registration statement under the Securities Act,
including the proposed sale of 5,555,556 shares of Class A Common Stock and the
issuance of a warrant to purchase 900,000 shares of Class A Common Stock, (7)
the issuance of the New Notes, and (8) the execution, delivery and performance
of all agreements, documents and instruments, including this Agreement,
evidencing the transactions described in clauses (1) through (7) of this
definition, and all arrangements contemplated thereby.
Concurrent Financing Transactions Issuances: means the issuances or
potential issuances of, without limitation, (1) Class A Common Stock upon
conversion of the GM Note and the New Notes, (2) the GM Warrant and the Class A
Common Stock upon exercise thereof, (3) the Exchange Warrants and the Class A
Common Stock upon exercise thereof, (4) Class A Common Stock as payment of
interest on the GM Note, (5) Class A Common Stock as payment of interest under
the GM Credit Facility, (6) Class A Common Stock pursuant to the Distribution
Agreement in accordance with the terms thereof, and (7) Class A Common Stock and
warrants issued and sold as contemplated by clause (6) of the definition of
Concurrent Financing Transactions.
Convertible Securities: means securities or obligations that are
exercisable for, convertible into or exchangeable for shares of Common Stock.
The term includes options, warrants or other rights to subscribe for or purchase
Common Stock or to subscribe for or purchase other securities or obligations
that are convertible into or exercisable or exchangeable for Common Stock,
including, without limitation, the Series A Convertible Preferred Stock, the
Series B Convertible Preferred Stock, the Series C Convertible Preferred Stock,
the GM Note, the New Notes and the GM Warrant.
DIRECTV Operational Assistance Agreement: means the operational assistance
agreement dated on or about June 7, 1999 between DIRECTV, Inc. (an Affiliate of
DIRECTV) and XM, as it may be amended from time to time.
Disinterested: means when used in respect of a director, a director who
does not have a direct or indirect interest in the terms or nature of the
transaction to be entered into (other than as a stockholder of the Company), it
being understood that directors of an Affiliate of the Person that designated a
director that is not deemed to be Disinterested shall not be deemed to be
Disinterested.
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Excluded Securities: means any (a) Common Stock or Convertible Securities
outstanding as of January 28, 2003 and any Common Stock issuable upon exercise
of such Convertible Securities, (b) Common Stock or Convertible Securities
issued under a Qualifying Stock Plan and (c) Common Stock or Convertible
Securities issued to Persons who are not Affiliates of the Company as partial
consideration for senior debt financing, equipment lease financing or
underwritten High Yield Debt financing pursuant to a registered public offering
under the Securities Act or pursuant to Rule 144A thereunder.
FCC: means the Federal Communications Commission, or successor agency
thereof.
GM Warrant: has the meaning specified in the recitals hereto.
High Yield Debt: means secured or unsecured debt securities issued by the
Company or a wholly owned Subsidiary of the Company in a registered public
offering or an offering to Qualified Institutional Buyers and/or institutional
Accredited Investors under Rule 144A of the Securities Act of at least $50
million after the Series C Closing Date, with or without attached warrants or
quasi-equity rights issued by the Company or a Subsidiary of the Company.
Investors: means the Persons specified in the Preamble.
Non-Public Capital Stock: means Capital Stock that the Company intends to
issue without registration under the Securities Act.
Notice of Proposed Issuance: has the meaning specified in Section 6.
Offered Non-Public Capital Stock: has the meaning specified in Section 6.
Permitted Transferees: means each transferee of any Capital Stock, with the
transfer being made in compliance with the provisions hereof.
Person: means any individual, partnership, corporation, joint venture,
limited liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.
Private Financing Transaction: means a private placement or similar
transaction which provides financing to the Company in the amount of $25,000,000
or more, excluding the Concurrent Financing Transactions and Concurrent
Financing Transactions Issuances and transactions in which (i) the only
investors are Persons that have, or following such transaction will have,
substantive business relationship with the Company (other than the ownership of
securities of the Company or its Subsidiaries) and (ii) the consideration
received by the Company does not consist solely of cash.
Qualified Institutional Buyer: has the meaning specified in Rule 144A
promulgated under the Securities Act.
Qualifying Stock Plan: means, collectively, all approved stock incentive
plans for employees, consultants and non-employee directors, provided that (i)
issuances under a
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Qualifying Stock Plan do not exceed 10% in the aggregate of the shares of Common
Stock Deemed Outstanding and (ii) such Qualifying Stock Plan has been approved
by a compensation committee of the Board of Directors or the full Board of
Directors, which, in either case, shall include at least one director designated
by the Original Investors and which approval shall include the approval of such
director so designated.
Right of First Offer: means the rights granted to each Investor pursuant to
Section 6.1 hereof.
Securities Act: means the Securities Act of 1933, as amended, or any
similar federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect from time to time.
Series A Convertible Preferred Stock: means the Series A Convertible
Preferred Stock, par value $1.00 per share, of the Company having zero (0) votes
per share.
Series B Convertible Preferred Stock: means the Series B Convertible
Redeemable Preferred Stock, par value $.01 per share, of the Company having zero
(0) votes per share.
Series C Closing Date: means August 8, 2000.
Series C Convertible Preferred Stock: means the Series C Convertible
Redeemable Preferred Stock, par value $.01 per share, of the Company, having the
same voting rights as the Class A Common Stock determined on an as converted
basis.
Subsidiary: means, with respect to any Person, any corporation, association
or other business entity of which more than fifty percent (50%) of the voting
power of the outstanding Capital Stock is owned, directly or indirectly, by such
Person or one or other Subsidiaries of such Person.
TCM Group: means Columbia, Madison and Telcom-XM Investors, L.L.C., a
Delaware limited liability company.
TCM: means TCM, LLC, a Delaware limited liability company.
TCM Operational Assistance Agreement: means the operational assistance
agreement dated on or about August 8, 2000 between TCM and the Company, as
amended by the parties from time to time.
ARTICLE II.
COMPLIANCE WITH COMMUNICATIONS ACT
Section 2.1 Conduct of Business. The Company, XM and XM Radio Inc. shall,
and the Company shall cause XM and its Subsidiaries to, conduct their business
in such manner as to comply with all applicable laws and regulations (including
but not limited to the
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Communications Act of 1934, as amended (the "Communications Act"), and the rules
and regulations of the FCC).
Section 2.2 Cooperation of Investors. The Company and the Investors agree
to work cooperatively in connection with the preservation, maintenance and any
extension or renewal by XM Radio Inc. of its SDARS license and to provide (and
to cause the Company to provide), with reasonable promptness, such information,
and assist in making all filings, as may be required or appropriate in
accordance with the Communications Act, FCC rules, regulations, and processes to
preserve, maintain and extend or renew XM Radio Inc.'s SDARS license.
Section 2.3 Regulatory Approvals. To the extent that any regulatory
approval, notification or other submission or procedure is required or
customarily provided in connection with the exercise of any right or obligations
as set forth in this Agreement with respect to the transfer or assignment of
Capital Stock or changes to the Boards of Directors or appointment rights of
such directors (including, but not limited to, FCC approvals (if required) and
applicable securities laws), such transfer or assignment of Capital Stock or
changes pursuant to this Agreement will be delayed and will only take place
after such approval, notification or other submission or procedure has been
obtained, submitted or completed.
ARTICLE III.
BOARD OBSERVATION; OPERATIONAL INVOLVEMENT
Section 3.1 Observation Rights.
(a) For such time as any of GM and DIRECTV (i) continues to hold, in the
aggregate, in excess of 5% of the Common Stock Deemed Outstanding, or (ii)
retains the full amount of its original investment in the Company (whether or
not converted into shares of Series A Convertible Preferred Stock or Class A
Common Stock), GM and DIRECTV together shall be allowed one observer at Board of
Directors meetings to represent whichever company does not have a representative
serving on the Board of Directors at that time.
(b) For such time as any of Columbia and Madison (i) continues to hold in
excess of 2% of the Common Stock Deemed Outstanding, or (ii) retains at least
50% of its investment in the Company as of the Series C Closing Date, such
Investor shall be allowed to have an observer at Board of Directors meetings so
long as such company does not have an Affiliate serving as a member of the Board
of Directors at that time.
(c) For such time as Clear Channel (i) continues to hold in excess of 5% of
the Common Stock Deemed Outstanding, or (ii) retains the full amount of its
original investment in the Company, Clear Channel shall be allowed an observer
at Board of Directors meetings.
(d) For such time as Honda (i) retains at least 25% of its investment,
including debt and equity securities, in the Company (measured by the purchase
price paid by Honda for such securities and without regard to (A) whether or not
such securities have been converted into any other security of the Company or
(B) the current market value of any such securities) as of
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January 28, 2003 and (ii) Honda does not have an Affiliate serving as a member
of the Board of Directors, Honda shall be allowed an observer at Board of
Directors meetings.
Section 3.2 Operational Involvement of Clear Channel, DIRECTV and the TCM
Group.
(a) For such time as Clear Channel (i) continues to hold in excess of 5% of
the Common Stock Deemed Outstanding, or (ii) retains the full amount of its
original investment in the Company, the Company agrees that Clear Channel shall
have operational rights and involvement as set forth in the Clear Channel
Operational Assistance Agreement, provided that such rights and involvement
shall terminate if Clear Channel ceases to be a wholly-owned subsidiary of Clear
Channel Communications, Inc.
(b) For such time as DIRECTV (i) continues to hold in excess of 5% of the
Common Stock Deemed Outstanding, or (ii) retains the full amount of its original
investment in the Company, (whether or not converted into shares of Series A
Convertible Preferred Stock or Class A Common Stock), the Company agrees that
DIRECTV, Inc. shall have operational rights and involvement as set forth in the
DIRECTV Operational Assistance Agreement. Solely during such time as DIRECTV
remains a wholly owned subsidiary of Xxxxxx Electronics Corporation, any Capital
Stock transferred to Xxxxxx Electronics Corporation by DIRECTV (and held by
Xxxxxx Electronics Corporation) shall be treated as Capital Stock held by
DIRECTV, for purposes of the preceding sentence.
(c) For such time as Columbia and Madison (i) continue to hold, in the
aggregate, in excess of 5% of the Common Stock Deemed Outstanding, or (ii)
retain, in the aggregate, at least 50% of their investment in the Company as of
the Series C Closing Date, the Company agrees that the TCM Group shall have
operational rights and involvement as set forth in the TCM Operational
Assistance Agreement.
ARTICLE IV.
CERTAIN REPRESENTATIONS
Each Party hereby represents and warrants on behalf of itself to each other
Party that:
Section 4.1 Existence and Power. To the extent such Party is an entity:
(a) it is an entity duly organized, validly existing and in good standing
under the laws of its jurisdiction of formation;
(b) it has the power and authority to own its assets, carry on its business
and execute, deliver, and perform its obligations under this Agreement; and
(c) it is duly qualified to do business and is licensed and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its
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business requires such qualification or license except where such failure to
qualify would not have a material adverse effect on the business or financial
condition of such Party.
Section 4.2 Due Authorization; No Contravention. To the extent such Party
is an entity, the execution, delivery and performance by it of this Agreement
have been duly authorized by all necessary action, and do not and will not:
(a) Breach or violate the terms of its certificate of incorporation (or
similar constituent document) or bylaws (or similar constituent document);
(b) Breach or violate the terms of any material agreement to which it is
party; or
(c) Violate any law or regulation applicable to it, including but not
limited to the Communications Act and the rules and regulations promulgated from
time to time by the FCC.
To the extent such Party is an individual, the execution, delivery and
performance by him of this Agreement does not and will not breach or violate the
terms of any material agreement to which he is a party or violate any law or
regulation applicable to him.
Section 4.3 Binding Effect. This Agreement has been duly authorized (to the
extent such Party is an entity), executed and delivered by such Party and
constitutes the legal, valid and binding obligation of such Party enforceable
against such Party in accordance with the terms hereof, subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
similar laws affecting creditors' rights generally and to general principles of
equity (regardless of whether enforcement is sought in a proceeding in equity or
at law).
ARTICLE V.
CONSENT REQUIREMENTS
Section 5.1 Investor Approval Rights. For so long as an aggregate of at
least 50% of the original aggregate principal amount of the Notes at maturity
continues to be held by the Note Investors, the affirmative vote or consent of
Note Investors holding greater than 75% of the aggregate principal amount at
maturity of the then outstanding Notes held by Note Investors, voting as a
separate class, will be required for the following actions:
(a) Any amendment, alteration or repeal of any provision of the
Certificate of Incorporation (including any certificate of
designations) or By-laws of the Company or any of its Subsidiaries
that is material to the rights of the Note Investors;
(b) Any increase in the outstanding number of shares of the Series A
Convertible Preferred Stock, the Series B Convertible Preferred Stock
or the Series C Convertible Preferred Stock, except for increases in
connection with anti-dilution adjustments under the terms of such
securities;
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(c) The issuance of Common Stock or securities convertible into Common
Stock, (excluding Common Stock issued in respect of (1) Convertible
Securities outstanding on January 28, 2003, (2) securities issued as
payment of or in lieu of a dividend or interest payment on securities
outstanding on January 28, 2003 and (3) any securities issued pursuant
to the agreements contemplated by or which implement the Concurrent
Financing Transactions), which would increase the number of shares of
Common Stock Deemed Outstanding on January 28, 2003 (after giving
effect to the Concurrent Financing Transactions and the Concurrent
Financing Transactions Issuances) by 20% or more in one or more than
one issuance;
(d) The incurrence by the Company or any of its Subsidiaries of any
indebtedness or the issuance of any securities, in each case, that
contain financial, operational or subscriber maintenance or milestone
covenants that if not met would put the Company or any of its
Subsidiaries in default under the terms of any indebtedness or
securities;
(e) The declaration and payment of any dividends on, or the making of any
distribution with respect to, any securities junior to or pari passu
with the Notes, other than dividends consisting solely of Class A
Common Stock to the holders of Series B Convertible Preferred Stock or
the Series C Convertible Preferred Stock to the extent such dividends
are required to be paid by the terms of such securities;
(f) Any merger or consolidation or sale, transfer, assignment, conveyance
or other disposition to a third party of all or substantially all of
the properties or assets of the Company or any of its Subsidiaries in
one or more related transactions;
(g) The dissolution of the Company or any Subsidiary or adoption of a plan
of liquidation for the Company or any Subsidiary;
(h) The purchase, redemption or other acquisition or retirement by the
Company or any Subsidiary for value (including, in connection with any
merger or reorganization) of any securities of the Company or any
Subsidiary, except that (i) the Company or XM may repurchase or redeem
up to 35% of XM's 14% Senior Secured Discount Notes due 2010 (or such
applicable percentage as may be required upon a change of control) and
exercise any similar option to repurchase or redeem contained in
future issuances of High Yield Debt, (ii) the Company or XM may
undertake any redemption under any of the documents contemplated by
the Concurrent Financing Transactions, including without limitation,
an offer to purchase in connection with a change of control, (iii) the
Company may redeem its equity securities in an aggregate amount not to
exceed $5 million; and (iv) the repurchase, redemption, retirement or
acquisition of equity, debt, convertible securities, warrants or
similar securities of the Company or XM in connection with any
exchange transactions involving the issuance of shares of Class A
Common Stock and/or use of cash proceeds of substantially
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concurrent issuances of Class A Common Stock in exchange for or as a
repurchase, redemption, retirement or acquisition of such securities,
approved by the Finance Committee of the Company's Board of Directors
after June 1, 2003;
(i) any change in the terms of the Notes or any securities or debt
obligations of the Company or its Subsidiaries ranking senior to or on
a parity with the Notes (other than with respect to the Company's
credit agreement with Boeing Capital Corporation and the Company's
mortgage with respect to its headquarters facility) or any change in
the terms of securities or debt obligations ranking junior to the
Notes as to right of payment or priority with respect to the
collateral securing the Notes that increases the seniority of such
junior securities or debt obligations so that they rank senior to or
on a parity with the Notes; provided, that (a) any change in the terms
of the New Notes that is not adverse to the GM Note shall require only
the approval of 75% of the aggregate principal amount at maturity of
the then outstanding New Notes and (b) any change in the terms of the
GM Note that is not adverse to the New Notes shall require only the
approval of GM;
(j) Any action that results in any agreement, arrangement or understanding
that would impose material restrictions on the Company's or any of its
Subsidiary's ability to honor the exercise of any rights of the Note
Investors or violate or conflict with, rights of the Note Investors;
(k) The making of loans or advances to, transferring properties to, or
guaranteeing any indebtedness of the Company's Subsidiaries other than
Subsidiaries directly engaged in the satellite radio business;
(l) Any change in the principal nature of the business of the Company and
its Subsidiaries, taken as a whole, to a business other than the
satellite radio business or a business substantially related thereto;
(m) any payments to, or any sale, lease, transfer or other disposition of
any of the Company's or any of its Subsidiaries' properties or assets
to, or purchase of any property or assets from, or entering into or
making or amending any transaction, contract, agreement,
understanding, loan, advance or guarantee with, or for the benefit of,
any Affiliate (each, an "Affiliate Transaction"), unless the following
are complied with:
(i) Such Affiliate Transaction is on terms that are no less favorable
to the Company or the relevant Subsidiary than those that would
have been obtained in a comparable transaction by the Company or
such Subsidiary with an unrelated Person; and
(ii) the Company delivers to the Note Investors:
(A) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate
consideration in excess
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of $5.0 million, a resolution of the Board of Directors set
forth in an officers' certificate certifying that such
Affiliate Transaction complies with this clause (m) and, if
an opinion meeting the requirements of clause (B) below has
not been obtained, that such Affiliate Transaction has been
approved by a majority of the Disinterested members of the
Board of Directors with respect to such Affiliate
Transaction; and
(B) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate
consideration in excess of $20.0 million or any Affiliate
Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $5.0 million
where none of the members of the Board of Directors
qualifies as Disinterested, an opinion as to the fairness to
the Company or such Subsidiary of such Affiliate Transaction
from a financial point of view issued by an accounting,
appraisal or investment banking firm of national standing.
The following items shall not be deemed to be Affiliate
Transactions and, therefore, will not be subject to the provisions of this
clause (m):
(1) any transaction by the Company or any of its Subsidiaries
with an Affiliate directly related to the purchase, sale or
distribution of products in the ordinary course of business
consistent with industry practice which has been approved by
a majority of the members of the Board of Directors of the
Company who are Disinterested with respect to such
transaction;
(2) any employment agreement or arrangement or employee benefit
plan entered into or instituted by the Company or any of its
Subsidiaries in the ordinary course of business of the
Company or Subsidiary and which has been approved by a
majority of the members of the Board of Directors of the
Company who are Disinterested with respect to such
transaction;
(3) transactions between or among the Company and/or its
wholly-owned Subsidiaries;
(4) payment of reasonable directors fees and the provision of
customary indemnification to directors, officers and
employees of the Company and its Subsidiaries;
(5) contractual arrangements existing on January 28, 2003, and
any renewals, extensions, implementations or modifications
thereof that are not materially adverse to the Note
Investors that have been
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approved by a majority of the members of the Board of
Directors of the Company who are Disinterested with respect
to such transaction.
(n) Entering into any transaction that would result in any Subsidiary of
the Company material to the Company's satellite radio business not
being wholly owned, directly or indirectly, by the Company other than
pledges of the common stock of any Subsidiary of the Company permitted
pursuant to the Note Purchase Agreement in connection with the
Concurrent Financing Transactions;
(o) Any optional redemption, repurchase or other acquisition of debt or
equity securities or other debt obligations for cash of the Company or
any Subsidiaries of the Company, which securities or obligations are
pari passu with or junior to the Notes in right of payment, except to
the extent permitted by (h) above;
(p) Any authorization, creation, reclassification or issuance of any debt
or equity securities or other debt obligations senior to (or otherwise
having a preference over) or ranking pari passu with the Notes in
right of payment or priority with respect to the security provided
therefor or otherwise other than as permitted by the Concurrent
Financing Transactions documents as in effect on January 28, 2003;
(q) Any amendment, alteration or waiver of any provision of Article VIII
hereof; or
(r) Agreeing or committing to do any of the foregoing.
Section 5.2 Consent Rights Non-transferable. The consent rights conferred
upon the Note Investors pursuant to Section 5.1 hereof are personal to the Note
Investors and shall not be assignable or otherwise transferable other than to an
Affiliate of a Note Investor or another Note Investor.
ARTICLE VI.
RIGHT OF FIRST OFFER; ANTIDILUTION PROTECTION
Section 6.1 Right of First Offer. The Company shall only issue Non-Public
Capital Stock in a Private Financing Transaction in accordance with the
following terms:
(a) The Company shall not issue any Non-Public Capital Stock in a Private
Financing Transaction unless it first delivers to each Investor who is then an
Eligible Purchaser (as defined below) and who, in the case of Note Investors,
purchases at least $10 million in aggregate principal amount at maturity of New
Notes at the closing of the Concurrent Financing Transactions (each such Person
being referred to in this Section 6 as a "Buyer"), a written notice (the "Notice
of Proposed Issuance") specifying the type and total number of such shares of
Non-Public Capital Stock that the Company then intends to issue (the "Offered
Non-Public Capital Stock"), all of the material terms, including the price upon
which the Company proposes to issue the Offered Non-Public Capital Stock and
stating that the Buyers shall have the right to purchase
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the Offered Non-Public Capital Stock in the manner specified in this Section 6.1
for the same price per share and in accordance with the same terms and
conditions specified in such Notice of Proposed Issuance.
(b) For a period of ten (10) calendar days from the date the Company
delivers to all of the Buyers the Notice of Proposed Issuance (the "Ten Day
Period"), the Buyers may elect to subscribe to purchase Offered Non-Public
Capital Stock at the same price per share and upon the same terms and conditions
specified in the Notice of Proposed Issuance. Each Buyer electing to purchase
Offered Non-Public Capital Stock must give written notice of its election to the
Company prior to the expiration of the Ten Day Period. If the Offered Non-Public
Capital Stock is being offered as part of an investment unit together with debt
or other instruments, any election by a Buyer to purchase Offered Non-Public
Capital Stock shall also constitute an election to purchase a like portion of
such debt or other instruments.
(c) Each Buyer shall have the right to purchase that number of shares of
the Offered Non-Public Capital Stock as shall be equal to the number of shares
of the Offered Non-Public Capital Stock multiplied by a fraction, the numerator
of which shall be the number of shares of Common Stock then held by such Buyer
plus all shares of Common Stock issuable upon conversion of all Convertible
Securities then held by such Buyer and the denominator of which shall be the
aggregate number of shares of Common Stock Deemed Outstanding. The amount of
such Offered Non-Public Capital Stock that each Buyer is entitled to purchase
under this Section 6 shall be referred to as its "Proportionate Share."
(d) Each Buyer shall have a right of oversubscription such that if any
other Buyer fails to elect to purchase his or its full Proportionate Share of
the Offered Non-Public Capital Stock, the other Buyer(s) shall, among them, have
the right to purchase up to the balance of such Offered Non-Public Capital Stock
not so purchased. The Buyers may exercise such right of oversubscription by
electing to purchase more than their Proportionate Share of the Offered
Non-Public Capital Stock by so indicating in their written notice given during
the Ten Day Period. If, as a result thereof, such oversubscription elections
exceed the total number of the Offered Non-Public Capital Stock available in
respect to such oversubscription privilege, the oversubscribing Buyers shall be
cut back with respect to oversubscriptions on a pro rata basis in accordance
with their respective Proportionate Share or as they may otherwise agree among
themselves.
(e) If all of the Offered Non-Public Capital Stock has not been subscribed
for by the Buyers pursuant to the foregoing provisions, then the Company shall
have the right, until the expiration of one-hundred eighty (180) consecutive
days commencing on the first day immediately following the expiration of the Ten
Day Period, to issue the Offered Non-Public Capital Stock not purchased by the
Buyers at not less than, and on terms no more favorable in any material respect
to the purchaser(s) thereof than, the price and terms specified in the Notice of
Proposed Issuance. If such remaining Offered Non-Public Capital Stock is not
issued within such period and at such price and on such terms, the right to
issue in accordance with the Notice of Proposed Issuance shall expire and the
provisions of this Agreement shall continue to be applicable to the Offered
Non-Public Capital Stock.
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(f) The Company may proceed with the issuance of Non-Public Capital Stock
without first following the foregoing procedures provided that within ten (10)
days following the issuance of such Non-Public Capital Stock, the Company or the
purchaser of the Non-Public Capital Stock undertakes steps substantially similar
to those described above to offer to all Buyers the right to purchase from such
purchaser or from the Company such amount of such Non-Public Capital Stock at
the same price and terms applicable to the purchaser's purchase thereof as is
necessary for the Buyers to maintain the same ownership percentage of the
Company on a fully diluted basis as existed prior to such issuance of Non-Public
Capital Stock.
(g) Notwithstanding the foregoing, the Right of First Offer described in
this Section 6 shall not apply with respect to the issuance of Excluded
Securities or to any Investor who is not an Eligible Purchaser. For purposes of
this Section 6, any Investor shall be an "Eligible Purchaser" with respect to a
proposed issuance of Non-Public Capital Stock if such Investor meets the
Company's reasonable requirements for investors generally (such as being an
Accredited Investor or Qualified Institutional Buyer) to purchase Non-Public
Capital Stock in the particular Private Financing Transaction.
(h) The rights granted under this Section 6.1 are personal to the Investors
and shall not be assignable or otherwise transferable other than to an Affiliate
of an Investor.
Section 6.2 Antidilution Protection.
(a) In the event that, at a time when Series C Convertible Preferred Stock
is then outstanding, the Company grants any Antidilution Protection to any
purchaser(s) of 1% or more (on a fully diluted basis) of the Capital Stock which
would (if granted to the holders of the Series C Convertible Preferred Stock) be
materially more favorable (taken as a whole) to the holders of the Series C
Convertible Preferred Stock than the Antidilution Protection then applicable to
the Series C Convertible Preferred Stock (a "New Antidilution Protection"), then
if the holders of a majority of the Series C Convertible Preferred Stock
outstanding so elect by written notice to the Company, the Company and the
Series C Investors shall use their best efforts to take all steps determined in
good faith by the Board of Directors to be reasonably necessary to provide (and
the Investors and their Permitted Transferees, other than Permitted Transferees
of Common Stock sold pursuant to an effective registration statement or Rule 144
or Rule 145 under the Securities Act of 1933, as amended) shall vote in favor of
any amendment to the Certificate of Designation of the Series C Convertible
Preferred Stock which may be necessary), as nearly as practicable under the
circumstances and consistent with the other terms of Certificate of Designation
for the Series C Convertible Preferred Stock, the New Antidilution Protection to
the holders of the Series C Convertible Preferred Stock as a replacement for the
Antidilution Protection then applicable to the Series C Convertible Preferred
Stock.
(b) In the event that a New Antidilution Protection is granted to the
holders of the Series C Convertible Preferred Stock as a replacement for the
Antidilution Protection then applicable to the Series C Convertible Preferred
Stock, if the Note Investors holding a majority of the outstanding aggregate
principal amount at maturity of the New Notes so elect, the Company and the Note
Investors shall use their best efforts to take all steps determined in good
faith by the Board of Directors to be reasonably necessary to provide, as nearly
as practicable under the
-16-
circumstances and consistent with the GM Note Purchase Agreement, the New Note
Purchase Agreement, the Notes and this Agreement, the New Antidilution
Protection to the Note Investors.
ARTICLE VII.
MISCELLANEOUS
Section 7.1 Amendment and Restatement. This Agreement hereby restates,
amends and supersedes the January 2003 Agreement.
Section 7.2 Notices. Except as otherwise provided in this Agreement,
notices and other communications under this Agreement shall be in writing and
shall be deemed properly served if: (i) mailed by registered or certified mail,
return receipt requested, (ii) delivered by a recognized overnight courier
service, (iii) delivered personally, or (iv) sent by facsimile transmission
addressed to each Party at its address for notices specified on Schedule I
attached hereto, or at such other address, or to the attention of such officer,
as any Party shall have furnished to each other Party in writing pursuant to
this Section 7.2. Such notice shall be deemed to have been received: (i) three
(3) Business Days after the date of mailing if sent by certified or registered
mail, (ii) one (1) Business Day after the date of delivery if sent by overnight
courier, (iii) the date of delivery if personally delivered, or (iv) the next
succeeding Business Day after transmission by facsimile with confirmation of
receipt.
Section 7.3 Amendment. Any term of this Agreement may be amended only with
the written consent of (a) the Company, (b) Investors holding, (i) in the case
of amendments to provisions of this Agreement generally, 75% of the aggregate of
the Common Stock Deemed Outstanding held by Investors, and (ii) in the case of
any non-material change or technical correction of this Agreement, a majority of
the aggregate of the Common Stock Deemed Outstanding held by Investors, (c) in
the case of amendments to Section 6.1 or 6.2(a) of this Agreement, in addition
to the consents listed in clauses (a) and (b) of this Section, at least 66-2/3%
of the aggregate of the Common Stock Deemed Outstanding held by Series C
Investors, (d) in the case of amendments to Section 6.1 or 6.2(b) of this
Agreement, in addition to the consents listed in clauses (a) and (b) of this
Section, at least 66-2/3% of the aggregate principal amount at maturity of the
then outstanding Notes, and (e) in the case of amendments to Section 5.1 of this
Agreement, in addition to the consents listed in clauses (a) and (b) of this
Section, greater than 75% of the aggregate principal amount at maturity of the
then outstanding Notes held by the Note Investors; provided, however, that in
the event the rights, preferences or obligations hereunder of one or more
Investors are being amended in a manner that is materially adverse to such
Investors and in a manner that is different from those of other Investors, such
rights, preferences or obligations may be so amended only with the consent of
the Investors holding at least 75% in the aggregate of the Common Stock Deemed
Outstanding held by Investors whose rights, preferences or obligations are being
materially adversely amended in such different manner. Any amendment effected in
accordance with this Section 7.3 shall be binding upon each Investor and the
Company.
Section 7.4 Specific Performance. Each Party acknowledges (i) that it will
be impossible to measure in money the damage to each other Party if any of them
or any legal
-17-
representative of any Party fails to comply with any of the provisions of this
Agreement, (ii) that every such provision is material, and (iii) that in the
event of any such failure, the Company and the Investors will not have an
adequate remedy at law or in damages. Accordingly, each Party hereto consents to
the issuance of an injunction or the enforcement of other equitable remedies
against it at the suit of an aggrieved Party without the posting of any bond or
other security, to compel specific performance of all of the terms hereof and to
prevent any disposition of shares of Capital Stock in contravention of any terms
of this Agreement, and waives any defense thereto, including, without
limitation, the defenses of (i) failure of consideration, (ii) breach of any
other provision of this Agreement and (iii) availability or relief in damages.
Section 7.5 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT GIVING
EFFECT TO ANY CONFLICT OF LAW PROVISIONS THEREOF.
EACH OF THE PARTIES ACKNOWLEDGES THAT (i) IT IS A KNOWLEDGEABLE, INFORMED,
SOPHISTICATED BUSINESS ENTITY CAPABLE OF UNDERSTANDING AND EVALUATING THE
PROVISIONS SET FORTH IN THIS AGREEMENT, INCLUDING THIS SECTION 7.5, AND (ii) IT
HAS BEEN REPRESENTED BY SUCH COUNSEL AND OTHER ADVISORS OF ITS CHOOSING AS IT
HAS DEEMED APPROPRIATE IN CONNECTION WITH ITS DECISION TO ENTER INTO THIS
AGREEMENT.
Section 7.6 Parties In Interest. This Agreement shall be binding upon and
shall inure to the benefit of each Party and their respective successors and
assigns as provided for herein, and by their signatures hereto, and each Party
intends to and does hereby become bound. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any Person other than the
Parties hereto and their respective successors and assigns any legal or
equitable right, remedy or claim under or in or in respect of this Agreement or
any provision herein contained.
Section 7.7 Severability of Provisions. In case any one or more of the
provisions contained in this Agreement should be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby.
Section 7.8 Plural; Singular. When used herein, the singular of each term
includes the plural and the plural of each term includes the singular.
Section 7.9 Counterparts. This Agreement may be executed in any number of
counterparts all of which taken together shall constitute one agreement and any
Party hereto may execute this Agreement by signing any such counterpart.
Section 7.10 Descriptive Headings. The descriptive headings of the several
sections of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
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Section 7.11 Future Assurances. Each Party shall execute and deliver all
such future instruments and take such other and further action as may be
reasonably necessary or appropriate to carry out the provisions of this
Agreement and the intention of the Parties as expressed herein.
Section 7.12 Termination. This Agreement shall be immediately terminated
upon any of the following: (i) the unanimous written consent to the termination
hereof by the Parties hereto, (ii) the dissolution, bankruptcy or receivership
of the Company, or (iii) at such time as only one (1) Investor remains a Party
hereto. This Agreement shall be immediately terminated as to any Party that
transfers all of its Capital Stock to any Person that is not an Affiliate of
such Party.
ARTICLE VIII.
COVENANTS
The Obligors hereby covenant and agree with each Note Investor who is a
holder of consent rights under Section 5.1 (after giving effect to Section 5.2)
of this Agreement as follows:
Section 8.1. Restricted Payments. Neither of the Obligors shall directly or
indirectly (through a Material Subsidiary or otherwise): (i) declare or pay any
dividend or make any other payment or distribution on account of the Equity
Interests of either Obligor (including any payment in connection with any merger
or consolidation involving an Obligor) or to the direct or indirect holders of
such Equity Interests in their capacities as such (other than dividends or
distributions payable in Equity Interests (other than Disqualified Stock) of an
Obligor and cash in lieu of fractional interests not to exceed 1% of the Equity
Interests distributed or paid); (ii) other than pursuant to a Parent Company
Merger, purchase, redeem or otherwise acquire or retire for value (including in
connection with any merger or consolidation involving an Obligor) any Equity
Interests of an Obligor (other than any such Equity Interests owned by an
Obligor or any of its Material Subsidiaries) or any Affiliate of an Obligor
(other than any of its Material Subsidiaries); (iii) make any payment on or with
respect to, or purchase, redeem, defease or otherwise acquire or retire for
value any Indebtedness that is subordinated in right of payment to the Notes
except a payment of interest or a payment of principal at Stated Maturity
thereof; or (iv) make any Investment other than a Permitted Investment (all such
payments and other actions set forth in clauses (i) through (iv) above being
collectively referred to as "Restricted Payments"). So long as no Default has
occurred and is continuing or would be caused thereby, the foregoing provisions
shall not prohibit: (1) the redemption, repurchase, retirement, defeasance or
other acquisition of any Subordinated Indebtedness of an Obligor or of any
Equity Interests of the Company in exchange for, or out of the net cash proceeds
of the substantially concurrent sale (other than to a Subsidiary of an Obligor)
of, Equity Interests of the Company (other than Disqualified Stock) and cash
payments in lieu of fractional interests not to exceed 1% of the Equity
Interests so redeemed, repurchased, retired, defeased or otherwise acquired; (2)
the purchase, redemption, defeasance or other acquisition or retirement for
value of Subordinated Indebtedness of an Obligor in exchange for, or out of the
net cash proceeds of a substantially concurrent incurrence (other than to a
Subsidiary of an Obligor) of, Permitted Refinancing Indebtedness; (3) the
declaration or payment of any dividend or distribution by a Wholly Owned
Subsidiary of an Obligor to the holders of its common Equity Interests; (4) the
repurchase,
-19-
redemption or other acquisition or retirement for value of any Equity Interests
of The Company or any Subsidiary thereof held by any member of such Obligor's
(or any of its Subsidiaries') management pursuant to any management equity
subscription agreement or stock option agreement in effect as of January 28,
2003; provided that the aggregate price paid for all such repurchased, redeemed,
acquired or retired Equity Interests shall not exceed $250,000 in any
twelve-month period; (5) the purchase of any Subordinated Indebtedness of an
Obligor at a purchase price not greater than 100% of the principal amount or
accreted value thereof, as the case may be, together with accrued interest, if
any, following an Asset Sale in accordance with provisions similar to those
contained in Section 8.4; provided, however, that prior to making any such
purchase the Obligor has made the Asset Sale Offer as provided in such covenant
with respect to the Notes and has purchased all Notes validly tendered for
payment in connection with such Asset Sale Offer; (6) making payments to
dissenting shareholders pursuant to applicable law in connection with a
consolidation or merger of an Obligor made in compliance with the provisions of
this Agreement; (7) Investments, other than Permitted Investments, in an amount
equal to 100% of Total Incremental Equity determined as of the date any such
Investment is made; (8) the purchase of (a) any Subordinated Indebtedness of an
Obligor at a purchase price not greater than 101% of the principal amount or
accreted value thereof, as the case may be, together with accrued interest, if
any, in the event of a Change of Control in accordance with provisions similar
to those of Section 8.7 or (b) any Preferred Stock of an Obligor at a purchase
price not greater than 101% of the liquidation preference thereof, together with
accrued dividends, if any, in the event of a Change of Control in accordance
with provisions similar to those of Section 8.7; provided, however, that, in
each case, prior to such purchase the Obligors have made the Change of Control
Offer required by this Agreement with respect to the Notes and have purchased
all Notes validly tendered for payment in connection with such Change of Control
Offer; (9) the payment of any dividend required pursuant to the Tax Sharing
Agreement, as such is in effect on January 28, 2003; and (10) any payments
required by Section 9.7(b) of the New Note Purchase Agreement (as defined in
this Agreement).
The amount of all Restricted Payments (other than cash) shall be the fair
market value on the date of the Restricted Payment of the assets or securities
proposed to be transferred or issued to or by an Obligor pursuant to the
Restricted Payment. The fair market value of any assets or securities that are
required to be valued by this covenant shall be determined by the Board of
Directors of such Obligor whose Board Resolution with respect thereto shall be
conclusive. Such Board of Directors' determination must be based upon an opinion
or appraisal issued by an accounting, appraisal or investment banking firm of
national standing if the fair market value of such assets or securities exceeds
$20,000,000.
Section 8.2. Dividend and Other Payment Restrictions Affecting Material
Subsidiaries. Neither of the Obligors shall, or permit any of the Material
Subsidiaries to, directly or indirectly, create or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Material Subsidiary to (a) pay dividends or make any other distributions on its
Capital Stock to such Obligor or any of its Material Subsidiaries or with
respect to any other interest or participation in, or measured by, its profits
or pay any indebtedness owed to either of the Obligors or any of the Material
Subsidiaries, (b) make loans or advances to either of the Obligors or any of the
Material Subsidiaries, (c) transfer any of its properties or assets to either of
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the Obligors or any of the Material Subsidiaries, or (d) guarantee any
Indebtedness of either of the Obligors or any of the Material Subsidiaries.
However, the preceding restrictions will not apply to encumbrances or
restrictions existing under or by reason of:
(1) Existing Indebtedness as in effect on January 28, 2003, and any
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings thereof, provided that such amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacement or refinancings are no more restrictive, taken as a whole, with
respect to such dividend and other payment restrictions than those contained in
such Existing Indebtedness or Indebtedness pursuant to the Concurrent Financing
Transactions, as in effect on January 28, 2003;
(2) Indebtedness pursuant to the Notes and this Agreement;
(3) applicable law;
(4) any instrument governing Indebtedness or Capital Stock of a Person
acquired by either of the Obligors or any of the Material Subsidiaries as in
effect at the time of such acquisition (except to the extent such Indebtedness
was incurred in connection with or in contemplation of such acquisition), which
encumbrance or restriction is not applicable to any Person, or the properties or
assets of any Person, other than the Person, or the property or assets of the
Person, so acquired, provided that, in the case of Indebtedness, such
Indebtedness was permitted by the terms of this Agreement to be incurred;
(5) customary non-assignment provisions in leases or contracts or real
property mortgages or related documents entered into in the ordinary course of
business and consistent with past practices;
(6) purchase money obligations, Capital Lease Obligations or mortgage
financings that impose restrictions on the property so acquired of the nature
described in clause (c) of the preceding paragraph;
(7) any agreement for the sale or other disposition of a Material
Subsidiary that restricts distributions by that Subsidiary pending its sale or
other disposition;
(8) Permitted Refinancing Indebtedness, provided that the restrictions
contained in the agreements governing such Permitted Refinancing Indebtedness
are no more restrictive, taken as a whole, than those contained in the
agreements governing the Indebtedness being refinanced;
(9) Liens securing Indebtedness that limit the right of the debtor to
dispose of the assets subject to such Lien;
(10) provisions with respect to the disposition or distribution of assets
or property in joint venture agreements, asset sale agreements, stock sale
agreements and other similar agreements entered into in the ordinary course of
business; and
-21-
(11) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of business.
Section 8.3. Incurrence of Indebtedness and Issuance of Preferred Stock.
Neither of the Obligors shall, or shall permit any of its Material Subsidiaries
to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect to
(collectively, "incur") any Indebtedness (including Acquired Debt), and neither
of the Obligors shall issue any Disqualified Stock.
Neither of the Obligors shall incur any Indebtedness (including Permitted
Debt) that is contractually subordinated in right of payment to any other
Indebtedness of such Obligor unless such Indebtedness is also contractually
subordinated to the Notes on substantially identical terms; provided, however,
that no Indebtedness of such Obligor shall be deemed to be contractually
subordinated in right of payment to any other Indebtedness of such Obligor
solely by virtue of being unsecured.
The provisions of the first paragraph of this Section 8.3 shall not apply
to the incurrence of any of the following items of Indebtedness (collectively,
"Permitted Debt"):
(i) the incurrence by an Obligor of Pari Passu Indebtedness in an aggregate
principal amount (including the aggregate principal amount of all Permitted
Refinancing Indebtedness incurred to refund, refinance or replace any
Indebtedness incurred pursuant to this clause (i)), which does not exceed
$100,000,000 (in the aggregate for both Obligors), provided that (A) no more
than $50,000,000 thereof (less any amount of Indebtedness incurred under clause
(xii) below) may consist of Indebtedness under revolving credit working capital
facilities entered into with one or more commercial bank or similar
institutional lenders and (B) none of which may consist of Indebtedness under
any other type of borrowing arrangement with a commercial bank or similar
institutional lender;
(ii) unsecured Subordinated Indebtedness or Disqualified Stock of an
Obligor incurred to finance the construction, expansion, development or
acquisition of music libraries and other recorded music programming, furniture,
fixtures and equipment (including satellites, ground stations and related
equipment) if such Subordinated Indebtedness or Disqualified Stock, as
applicable, has a Weighted Average Life to Maturity longer than the Weighted
Average Life to Maturity of the Notes and has a final Stated Maturity of
principal later than the Stated Maturity of principal of the Notes;
(iii) unsecured Subordinated Indebtedness or Disqualified Stock of an
Obligor in an aggregate principal amount (or liquidation preference, as
applicable) (including the aggregate principal amount (or liquidation
preference, as applicable) of all Permitted Refinancing Indebtedness incurred to
refund, refinance or replace any Indebtedness or Disqualified Stock, as
applicable, incurred pursuant to this clause (iii)) at any time outstanding not
to exceed the product of (a) $100.00 and (b) the number of Subscribers at such
time if such Subordinated Indebtedness or Disqualified Stock, as applicable, has
a Weighted Average Life to Maturity longer than the Weighted Average Life to
Maturity of the Notes and has a final Stated Maturity of principal later than
the Stated Maturity of principal of the Notes;
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(iv) the incurrence by an Obligor or a Material Subsidiary of Existing
Indebtedness and the incurrence by an Obligor or a Material Subsidiary of
Indebtedness pursuant to the Concurrent Financing Transactions;
(v) the incurrence by the Obligors of the Indebtedness represented by the
Notes;
(vi) the incurrence by an Obligor or a Material Subsidiary of Indebtedness
represented by Capital Lease Obligations, mortgage financings or purchase money
obligations, in each case, incurred for the purpose of financing all or any part
of the purchase price or cost of acquisition, construction or improvement of (A)
replacement satellites and related equipment and launches in an aggregate
principal amount (or initial accreted value if such indebtedness is issued with
original issue discount), including all Permitted Refinancing Indebtedness
incurred to refund, refinance or replace any Indebtedness incurred pursuant to
this clause (vi)(A), not to exceed $200,000,000 at anytime outstanding in the
aggregate for both of the Obligors and all of the Material Subsidiaries and (B)
property, plant or equipment used in the business of such Obligor or Material
Subsidiary, in an aggregate principal amount, including all Permitted
Refinancing Indebtedness incurred to refund, refinance or replace any
Indebtedness incurred pursuant to this clause (vi), not to exceed $30,000,000 at
any time outstanding in the aggregate for both of the Obligors and all of the
Material Subsidiaries;
(vii) the incurrence by an Obligor or a Material Subsidiary of Permitted
Refinancing Indebtedness in exchange for, or the net proceeds of which are used
to refund, refinance or replace Indebtedness (other than intercompany
Indebtedness) that was permitted by this Agreement to be incurred under clauses
(i), (ii), (iii), (iv), (v), (vi), (xii), (xiii), (xiv) or (xv) of this
paragraph;
(viii) the incurrence by an Obligor or a Material Subsidiary of
intercompany Indebtedness between or among such Obligor and any of its Material
Subsidiaries; provided, however, that: (a) if such Obligor is the obligor on
such Indebtedness, such Indebtedness must be expressly subordinated to the prior
payment in full in cash of all Obligations with respect to the Notes; and (b)
(i) any subsequent issuance or transfer of Equity Interests that results in any
such Indebtedness being held by a Person other than such Obligor or a Material
Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness
to a Person that is not either such Obligor or a Material Subsidiary thereof;
shall be deemed, in each case, to constitute an incurrence of such Indebtedness
by such Obligor or such Material Subsidiary, as the case may be, that was not
permitted by this clause (viii);
(ix) the incurrence by an Obligor of Hedging Obligations that are incurred
for the sole purpose of fixing or hedging (x) interest rate risk with respect to
any floating rate Indebtedness that is permitted by the terms of this Agreement
to be outstanding or (y) fluctuation in currency values;
(x) the accrual of interest, the accretion or amortization of original
issue discount, the payment of interest on any Indebtedness in the form of
additional Indebtedness with the same terms, and the payment of dividends on
Disqualified Stock in the form of additional shares of the
-23-
same class of Disqualified Stock will not be deemed to be an incurrence of
Indebtedness or an issuance of Disqualified Stock for purposes of this covenant;
(xi) the incurrence by an Obligor of additional Indebtedness (including
Acquired Debt) or Disqualified Stock in an aggregate principal amount (or
liquidation preference or accreted value, as applicable) at any time
outstanding, including all Permitted Refinancing Indebtedness incurred to
refund, refinance or replace any Indebtedness or Disqualified Stock incurred
pursuant to this clause (xi), not to exceed $30,000,000 in the aggregate for
both Obligors;
(xii) Indebtedness the proceeds of which are utilized solely to finance
working capital in an aggregate principal amount not to exceed the lesser of (a)
$50,000,000 and (b) 80% of Qualified Receivables (in the aggregate for both
Obligors);
(xiii) financing provided by a satellite or satellite launch vendor or
Affiliate thereof of all or part of the cost of construction, launch and
insurance of one or more replacement satellites or satellite launches relating
to such satellites provided by such vendor or its Affiliates;
(xiv) Indebtedness for which the Obligors have received consent of the Note
Investors in accordance with Section 5.1 of this Agreement;
(xv) any Qualified Sale and Leaseback Transaction; and
(xvi) the incurrence by the Obligor of Reissued Pari Passu Indebtedness and
Indebtedness ("Satellite Insurance Shortfall Indebtedness") up to the amount of
any Satellite Insurance Shortfall, it being understood that any such Reissued
Pari Passu Indebtedness shall not reduce the amount of Pari Passu Indebtedness
the Obligors are permitted to issue under Section 8.3(i).
For purposes of determining compliance with this Section 8.3, in the event
that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (i) through (xvi) above, an
Obligor shall, in its sole discretion, classify such item of Indebtedness in any
manner that complies with this Section 8.3 and such item of Indebtedness shall
be treated as having been incurred pursuant to only one of such clauses.
Section 8.4. Asset Sales. Neither of the Obligors shall, or shall permit
any of its Material Subsidiaries to, consummate an Asset Sale unless (x) such
Obligor or Material Subsidiary receives consideration at the time of such Asset
Sale at least equal to the fair market value of the assets or Equity Interests
issued, sold or otherwise disposed of; (y) such fair market value shall be
determined by such Obligor's Board of Directors (whose good faith determination
shall be conclusive) and evidenced by a Board Resolution; and (z) at least 75%
of the consideration received therefore by such Obligor or Material Subsidiary
is in the form of cash or Cash Equivalents; provided, however, that the amount
of (A) any liabilities (as shown on such Obligor's or Material Subsidiary's most
recent balance sheet or in the notes thereto) of such Obligor or Material
Subsidiary (other than contingent liabilities and liabilities that are by their
terms contractually subordinated in right of payment to the Notes or any
Guarantee thereof) that
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are assumed by the transferee of any such assets pursuant to a customary
novation agreement that releases such Obligor or Material Subsidiary from
further liability and (B) any securities, notes or other obligations received by
such Obligor or Material Subsidiary from such transferee that are converted by
such Obligor or Material Subsidiary into cash (to the extent of the cash
received in that conversion) within 30 days of receipt thereof, shall be deemed
to be cash for purposes of this provision.
A transfer of assets by the Company to a Material Subsidiary or by a
Material Subsidiary to an Obligor or to another Material Subsidiary, and an
issuance of Equity Interests by a Material Subsidiary to an Obligor or to
another Material Subsidiary, shall not be deemed to be an Asset Sale. Any
Restricted Payment that is permitted by Section 8.1 hereof will not be deemed to
be an Asset Sale.
Within 360 days after the receipt of any Net Proceeds from an Asset Sale,
the Obligor or a Material Subsidiary may (a) apply the Net Proceeds from such
Asset Sale, at its option, (i) to acquire all or substantially all of the assets
of, or a majority of the Voting Stock of, another Permitted Business, or Voting
Stock of a Subsidiary engaged in a Permitted Business (other than any such
Voting Stock owned or held by an Obligor or a Material Subsidiary), (ii) to make
a capital expenditure, or (iii) to acquire other assets that are used or useful
in a Permitted Business that have an expected useful life of one year or longer;
(b) enter into a legally binding agreement to apply such Net Proceeds as
described in the preceding clause (a) within six months after such agreement is
entered into and apply such Net Proceeds in accordance with the terms of such
agreement or the provisions of clause (a) above; provided that if such agreement
terminates such Obligor shall have until the earlier of (i) 90 days after the
date of such termination and (ii) six months after the date of the Asset Sale
resulting in such Net Proceeds to effect such an application; or (c) permanently
repay (and reduce the commitments with respect to) Pari Passu Indebtedness and
the Notes, pro rata. Pending the final application of any such Net Proceeds, the
Obligor or a Material Subsidiary may temporarily reduce revolving credit
borrowings or otherwise invest such Net Proceeds in any manner that is not
prohibited by this Agreement. Any Net Proceeds from such Asset Sale that are not
finally applied or invested as provided in the first sentence of this paragraph
will be deemed to constitute "Excess Proceeds." Within five days of each date on
which the aggregate amount of Excess Proceeds exceeds $10,000,000, the Obligors
shall commence an offer (an "Asset Sale Offer") pursuant to this Section 8.4 to
all Holders of Notes and all holders of Pari Passu Indebtedness containing
provisions similar to those set forth in this Agreement with respect to offers
to purchase or redeem with the proceeds of sales of assets (including the
Indebtedness under the Indenture) to purchase the maximum principal amount (or,
if applicable, accreted value) of Notes and such Pari Passu Indebtedness that
may be purchased out of the Excess Proceeds at an offer price in cash in an
amount equal to 100% of the Accreted Value of the Notes or the accreted value or
principal amount (as appropriate) of such Pari Passu Indebtedness, plus accrued
and unpaid interest thereon, if any, to the date fixed for the closing of such
offer, in accordance with the procedures set forth in this Section 8.4. To the
extent that the aggregate amount of Accreted Value of the Notes tendered
pursuant to an Asset Sale Offer, together with any accrued and unpaid interest
thereon, is less than the Excess Proceeds, the Obligors may use such difference
for any purpose not otherwise prohibited by this Agreement or the New Note
Purchase Agreement. If the aggregate Accreted Value of the Notes and accreted
value or principal amount (as appropriate) of such Pari Passu Indebtedness
tendered
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into such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee
shall select the Notes and such Pari Passu Indebtedness to be purchased on a pro
rata basis based on the Accreted Value of the Notes and the accreted value or
principal amount (as appropriate) of such Pari Passu Indebtedness. Upon
completion of each Asset Sale Offer, the amount of Excess Proceeds shall be
deemed to be reset at zero.
The Obligors shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with each
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the Asset Sales
provisions of this Agreement, the Obligors shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under the Asset Sale provisions of this Agreement by virtue of such
conflict.
In the event that the Obligors shall be required to commence an Asset Sale
Offer, they shall follow the procedures specified below.
The Asset Sale Offer shall remain open for a period of 20 Business Days
following its commencement and no longer, except to the extent that a longer
period is required by applicable law (the "Offer Period"). No later than five
Business Days after the termination of the Offer Period (the "Purchase Date"),
the Obligors shall purchase the Accreted Value of Notes required to be purchased
pursuant to this Section 8.4 (the "Offer Amount") or, if less than the Offer
Amount has been tendered, all Notes tendered in response to the Asset Sale
Offer. Payment for any Notes so purchased shall be made in cash.
Any accrued and unpaid interest on the Notes so purchased shall be paid to
the Holders who tender Notes pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Obligors shall send a
notice to the Holders. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Asset Sale
Offer. The Asset Sale Offer shall be made to all Holders. The notice, which
shall govern the terms of the Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this Section 8.4
and the length of time the Asset Sale Offer shall remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment shall continue to
accrete or accrue interest;
(d) that, unless the Obligors default in making such payment, any Note
accepted for payment pursuant to the Asset Sale Offer shall cease to accrete or
accrue interest after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to any Asset
Sale Offer shall be required to surrender the Note, with the form entitled
"Option of Holder to Elect
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Purchase" on the reverse of the Note completed, to the Obligors at the address
specified in the notice at least three days before the Purchase Date;
(f) that Holders shall be entitled to withdraw their election if the
Obligors receive, not later than the expiration of the Offer Period, a telegram,
telex, facsimile transmission or letter setting forth the name of the Holder,
the principal amount of the Note the Holder delivered for purchase and a
statement that such Holder is withdrawing its election to have such Note
purchased;
(g) that, if the aggregate Accreted Value of Notes surrendered by Holders
exceeds the Offer Amount, the Obligors shall select the Notes to be purchased on
a pro rata basis; and
(h) that Holders whose Notes were purchased only in part shall be issued
new Notes equal in principal amount at maturity to the unpurchased portion of
the Notes surrendered.
On or before the Purchase Date, the Obligors shall, to the extent lawful,
accept for payment, on a pro rata basis to the extent necessary, the Offer
Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer,
or if less than the Offer Amount has been tendered, all Notes tendered. The
Obligors shall promptly (but in any case not later than five Business Days after
the Purchase Date) mail or deliver to each tendering Holder an amount equal to
the purchase price of the Notes tendered by such Holder and accepted by the
Obligors for purchase, and the Obligors shall promptly issue a new Note, and
shall mail or deliver such new Note to such Holder, in a principal amount at
maturity equal to any unpurchased portion of the Note surrendered. Any Note not
so accepted shall be promptly mailed or delivered by the Obligors to the Holder
thereof.
Section 8.5. Transactions with Affiliates. Neither of the Obligors shall,
or shall permit any of its Material Subsidiaries to, make any payment to, or
sell, lease, transfer or otherwise dispose of any of its properties or assets
to, or purchase any property or assets from, or enter into or make or amend any
transaction, contract, agreement, understanding, loan, advance or guarantee
with, or for the benefit of, any Affiliate (each, an "Affiliate Transaction"),
unless: (a) such Affiliate Transaction is on terms that are no less favorable to
such Obligor or Material Subsidiary than those that would have been obtained in
a comparable transaction by such Obligor or such Material Subsidiary with an
unrelated Person; and (b) (i) with respect to any Affiliate Transaction or
series of related Affiliate Transactions involving aggregate consideration in
excess of $5,000,000, if an opinion meeting the requirements set forth in clause
(ii) of this paragraph has not been obtained, such Affiliate Transaction has
been approved by a majority of the members of such Obligor's Board of Directors
who have no direct financial interest in such Affiliate Transaction (other than
as a stockholder of such Obligor), and (ii) with respect to (x) any Affiliate
Transaction or series of related Affiliate Transactions involving aggregate
consideration in excess of $20,000,000, or (y) any Affiliate Transaction or
series of related Affiliate Transactions involving aggregate consideration in
excess of $5,000,000 where none of the members of such Obligor's Board of
Directors qualify as having no direct financial interest in such Affiliate
Transaction (other than as a stockholder of such Obligor), such Obligor obtains
an opinion as to the fairness to such Obligor or such Material Subsidiary of
such Affiliate Transaction from a financial point of view issued by an
accounting, appraisal or investment
-27-
banking firm of national standing; provided however that the following items
shall not be deemed to be Affiliate Transactions and, therefore, will not be
subject to the provisions of this paragraph:
(1) any transaction by an Obligor or any Material Subsidiary with an
Affiliate directly related to the purchase, sale or distribution of products in
the ordinary course of business consistent with industry practice which has been
approved by a majority of the members of the Board of Directors who are
disinterested with respect to such transaction;
(2) any employment agreement or arrangement or employee benefit plan
entered into by an Obligor or any of its Material Subsidiaries in the ordinary
course of business of such Obligor or such Material Subsidiary;
(3) transactions between or among an Obligor and its Material Subsidiaries;
(4) payment of reasonable directors fees and provisions of customary
indemnification to directors, officers and employees of an Obligor and its
Material Subsidiaries;
(5) sales of Equity Interests (other than Disqualified Stock) to Affiliates
of an Obligor;
(6) Restricted Payments that are permitted by the provisions of Section 8.1
hereof (other than clause (7) thereof);
(7) transactions pursuant to the Tax Sharing Agreement;
(8) contractual arrangements existing on January 28, 2003, and any
renewals, extensions, implementations or modifications thereof that are not
materially adverse to the Holders;
(9) the Concurrent Financing Transactions (including all agreements
evidencing the same in substantially the form provided to the Investors on
December 19, 20 or 21, 2002 and arrangements contemplated thereby); and
(10) a Parent Company Merger.
Section 8.6. Liens. Neither of the Obligors shall, or shall permit any of
its Material Subsidiaries to, create, incur, assume or otherwise cause or suffer
to exist or become effective any Lien of any kind (other than (a) Permitted
Liens and (b) Liens on any assets of an Obligor or its Material Subsidiaries
securing Satellite Insurance Shortfall Indebtedness or Permitted Refinancing
Indebtedness in respect thereof provided that the Notes shall be equally and
ratably secured by such assets) upon any of their property or assets, now owned
or hereafter acquired, other than any Liens for which the Obligors have received
consent of the Note Investors (as defined therein) in accordance with Section
5.1 of this Agreement.
Section 8.7. Offer to Purchase upon Change of Control.
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(a) Upon the occurrence of a Change of Control, the Obligors shall make an
offer (a "Change of Control Offer") to each Holder to repurchase all or any part
(equal to $1,000 or an integral multiple thereof) of each Holder's Notes at a
purchase price equal to 101% of the Accreted Value thereof plus accrued and
unpaid interest, if any, to the date of purchase (the "Change of Control
Payment"). Within 30 days following any Change of Control, the Obligors shall
mail a notice to each Holder stating: (1) that the Change of Control Offer is
being made pursuant to this Section 8.7 and that all Notes tendered will be
accepted for payment; (2) the purchase price and the purchase date, which shall
be no earlier than 30 and no later than 60 calendar days from the date such
notice is mailed (the "Change of Control Payment Date"); (3) that any Note not
tendered will continue to accrete or accrue interest; (4) that, unless the
Obligors default in the payment of the Change of Control Payment, all Notes
accepted for payment pursuant to the Change of Control Offer shall cease to
accrete or accrue interest after the Change of Control Payment Date; (5) that
Holders electing to have any Notes purchased pursuant to a Change of Control
Offer will be required to surrender the Notes, with the form entitled "Option of
Holder to Elect Purchase" on the reverse of the Notes completed, to the Obligors
at the address specified in the notice prior to the close of business on the
third Business Day preceding the Change of Control Payment Date; (6) that
Holders will be entitled to withdraw their election if the Obligors receive, not
later than the close of business on the second Business Day preceding the Change
of Control Payment Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount at maturity of Notes
delivered for purchase, and a statement that such Holder is withdrawing his
election to have the Notes purchased; and (7) that Holders whose Notes are being
purchased only in part will be issued new Notes equal in principal amount at
maturity to the unpurchased portion of the Notes surrendered, which unpurchased
portion must be equal to $1,000 in principal amount at maturity or an integral
multiple thereof. The Obligors shall comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations thereunder
to the extent such laws and regulations are applicable in connection with the
repurchase of Notes in connection with a Change of Control. To the extent that
the provisions of any securities laws or regulations conflict with the Change of
Control provisions of this Agreement, the Obligors will comply with the
applicable securities laws and regulations and will not be deemed to have
breached their obligations under the Change of Control provisions of this
Agreement by virtue of such conflict.
(b) On the Change of Control Payment Date, the Obligors shall, to the
extent lawful, accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer. The Obligors shall promptly
mail to each Holder of Notes so tendered the Change of Control Payment for such
Notes, and shall promptly mail (or cause to be transferred by book entry) to
each Holder a new Note equal in principal amount at maturity to any unpurchased
portion of the Notes surrendered by such Holder, if any; provided, that each
such new Note shall be in a principal amount at maturity of $1,000 or an
integral multiple thereof. The Obligors shall publicly announce the results of
the Change of Control Offer on or as soon as practicable after the Change of
Control Payment Date.
(c) The Obligors shall not be required to make a Change of Control Offer
upon a Change of Control if a third party makes the Change of Control Offer in
the manner, at the times and otherwise in compliance with the requirements set
forth in this Agreement applicable to a
-29-
Change of Control Offer made by the Obligors and purchases all Notes validly
tendered and not withdrawn under such Change of Control Offer.
Section 8.8. Limitation on Sale and Leaseback Transactions. Neither of the
Obligors shall, or shall permit any of its Material Subsidiaries to, enter into
any sale and leaseback transaction; provided that an Obligor may enter into a
sale and leaseback transaction if: (i) the lease is for a period, including
renewal rights, of not in excess of five years; (ii) the transaction is solely
between such Obligor and any Material Subsidiary or solely between Material
Subsidiaries; (iii) such Obligor or such Material Subsidiary, within 12 months
after the sale or transfer of any assets or properties is completed, applies an
amount not less than the Net Proceeds received from such sale in accordance with
Section 8.4 hereof; or (iv) such sale and leaseback transaction is a Qualified
Sale and Leaseback Transaction.
Section 8.9. Limitation on Issuances and Sales of Equity Interests of
Material Subsidiaries. Neither of the Obligors (i) shall, or shall permit any of
its Material Subsidiaries to, transfer, convey, sell, lease or otherwise dispose
of any Equity Interests in a Material Subsidiary of such Obligor to any Person
or (ii) shall permit any of its Material Subsidiaries to issue any Equity
Interests other than:
(a) to an Obligor or another Material Subsidiary;
(b) issuances of directors' qualifying shares to the extent necessary to
comply with applicable law;
(c) to the extent required by applicable law, issuances or transfers to
nationals of the jurisdiction in which a Material Subsidiary is organized in an
amount not to exceed 1% of the total Equity Interests of such Material
Subsidiary;
(d) distributions of Capital Stock other than Disqualified Stock to all
common shareholders of a Material Subsidiary on a pro rata basis; or
(e) the sale of all the Equity Interests in such Material Subsidiary
(excluding the Company), provided that the cash Net Proceeds from such transfer,
conveyance, sale, lease or other disposition are applied in accordance with
Section 8.4 hereof.
Section 8.10. Insurance.
(a) The Obligors shall obtain prior to the launch of each satellite and
shall maintain launch insurance with respect to each satellite launch covering
the period from the launch to 180 days following the launch of each satellite in
an amount equal to or greater than the sum of (1) the cost to replace such
satellite with a satellite of comparable or superior technological capability
(as determined by the Board of Directors of the Company, whose determination
shall be conclusive and evidenced by a Board Resolution) and having at least as
much transmission capacity as the satellite to be replaced, (2) the cost to
launch a replacement satellite pursuant to the contract whereby a replacement
satellite will be launched and (3) the cost of launch insurance for such
replacement or, in the event that the Obligors have reason to believe that the
cost of
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obtaining comparable insurance for a replacement would be materially higher, the
Obligors' best estimate of the cost of such comparable insurance (in each case
such costs being determined as of the date such insurance is procured by the
Board of Directors of the Company, whose determination shall be conclusive and
evidenced by a Board Resolution). Notwithstanding the foregoing, at any time
when the Obligors have two primary satellites in orbit and fully functioning,
the Obligors shall not be obligated to obtain insurance pursuant to this
paragraph (a) with respect to the launch of any satellite that the Obligors do
not intend to use as a replacement for one of the two primary satellites used by
them to provide the XM Radio Service.
(b) The Obligors shall maintain full in-orbit insurance with respect to
each satellite they own and launch in an amount at least equal to the sum of (1)
the cost to replace such satellite with a satellite of comparable or superior
technological capability (as determined by the Board of Directors of the
Company, whose determination shall be conclusive and evidenced by a Board
Resolution) and having at least as much transmission capacity as the satellite
to be replaced (or such percentage of replacement value as is then reasonably
obtainable in the insurance market at a commercially reasonable cost), (2) the
cost to launch a replacement satellite pursuant to the contract pursuant to
which a replacement satellite will be launched and (3) the cost of launch
insurance for such replacement or, in the event that the Obligors have reason to
believe that the cost of obtaining comparable insurance for a replacement would
be materially higher, the Obligors' best estimate of the cost of such comparable
insurance (provided, however, that with respect to any satellite as to which
there has been an insured loss, the required amount of such insurance shall
equal the lesser of such sum and the amount reasonably obtainable in the
insurance market at a commercially reasonable cost, as determined by the Board
of Directors of the Company, whose determination shall be conclusive and
evidenced by a Board Resolution). The in-orbit insurance required by this
paragraph shall provide that if 50% or more of a satellite's capacity is lost,
the full amount of insurance shall become due and payable, and that if a
satellite is able to maintain more than 50% but less than 100% of its capacity,
a portion of such insurance shall become due and payable.
(c) In the event that the Obligors receive proceeds from insurance relating
to any satellite, the Obligors shall be entitled to use all or any portion of
such proceeds for any purpose, including (1) to repay any vendor or third-party
purchase money financing pertaining to such satellite that is required to be
repaid by reason of the loss giving rise to such insurance proceeds, (2) to
develop and construct a replacement satellite, or (3) general corporate
purposes.
Section 8.11. Merger, Consolidation, or Sale of Assets.
(a) Neither of the Obligors shall, directly or indirectly, consolidate or
merge with or into (whether or not such Obligor is the surviving corporation),
or sell, assign, transfer, convey or otherwise dispose of all or substantially
all of the properties or assets of such Obligor and its Material Subsidiaries
taken as a whole, in one or more related transactions to, another Person unless
(i) such Obligor is the surviving corporation or the Person formed by or
surviving any such consolidation or merger (if other than such Obligor) or to
which such sale, assignment, transfer, conveyance or other disposition shall
have been made is a corporation organized or existing under the laws of the
United States, any state thereof or the District of Columbia, (ii) the Person
formed by or surviving any such consolidation or merger (if other than such
Obligor) or
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the Person to which such sale, assignment, transfer, conveyance or other
disposition shall have been made assumes all the obligations of the Obligors
under the Registration Rights Agreement, the Security Agreements, the
Intercreditor Agreements, the Notes and this Agreement pursuant to agreements in
a form reasonably satisfactory to the Majority Holders, (iii) immediately after
such transaction, no Default or Event of Default exists and (iv) such Obligor or
the Person formed by or surviving any such consolidation or merger (if other
than such Obligor), or to which such sale, assignment, transfer, conveyance or
other disposition shall have been made (A) shall have Consolidated Net Worth
immediately after the transaction equal to or greater than the Consolidated Net
Worth of such Obligor immediately preceding the transaction and (B) shall, on
the date of such transaction after giving pro forma effect thereto and any
related financing transactions as if the same had occurred at the beginning of
such Obligor's latest four fiscal quarters for which consolidated financial
statements of such Obligor are available immediately preceding the date of such
transaction, have a ratio of Total Consolidated Indebtedness to Adjusted
Consolidated Operating Cash Flow for such four-quarter period less than 6.0 to
1.0. In addition, each Obligor shall not, directly or indirectly, lease all or
substantially all of its properties or assets, in one or more related
transactions, to any other Person. The provisions of this Section 8.11(a) shall
not be applicable to a consolidation, merger, sale, assignment, transfer,
conveyance or other disposition of properties or assets between or among (i)
either Obligor and its Material Subsidiaries or (ii) the Obligors.
(b) Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of an Obligor in accordance with Section 8.11(a) hereof, the successor
corporation formed by such consolidation or into or with which such Obligor is
merged or to which such sale, assignment, transfer, lease, conveyance or other
disposition is made shall succeed to, and be substituted for (so that from and
after the date of such consolidation, merger, sale, lease, conveyance or other
disposition, the provisions of this Agreement referring to such "Obligor" shall
refer instead to the successor corporation), and may exercise every right and
power of such Obligor under this Agreement with the same effect as if such
successor Person had been named as such Obligor herein; provided, however, that
the predecessor Obligor shall not be relieved from the obligation to pay the
principal of and interest (and premium, if any) on the Notes except in the case
of a sale, assignment, transfer, conveyance or other disposition of all of the
Obligor's assets that meets the requirements of Section 8.11(a) hereof.
Section 8.12. Definitions.
(a) Capitalized terms used but not defined in this Article VIII shall have
the respective meanings set forth in the New Note Purchase Agreement.
(b) For purposes of Section 8.3(xvi), the following terms have the
indicated meanings:
"Comprehensive Satellite Insurance Settlement" means a written agreement
entered into between the Company and/or XM and the insurance companies that
issued the insurance on XM-Rock and XM-Roll, which agreement resolves all or
substantially all of the claims made by XM or the Company under its satellite
insurance policies with regard to XM-Rock and XM-Roll and
-32-
*****Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
described in the Company's Annual Report on Form 10-K for the year ended
December 31, 2002.
"Reissued Pari Passu Indebtedness" means any Pari Passu Indebtedness issued
on a date after June 1, 2003 in an amount not to exceed:
(i) the aggregate principal amount of all Pari Passu Indebtedness retired
or redeemed prior to stated maturity after June 1, 2003 and during the
Applicable Period by XM, the Company or a Wholly-Owned Subsidiary of
XM or the Company, less
(ii) the aggregate principal amount of all Reissued Pari Passu Indebtedness
issued after June 1, 2003 and during the Applicable Period.
If more than one such retirement or redemption of Pari Passu
Indebtedness described in the preceding clause (i) is or was so effected, the
principal amounts of such retired or redeemed Pari Passu Indebtedness shall be
netted against the principal amounts of Reissued Pari Passu Indebtedness in the
chronological order in which such retirements or redemptions were effected and
such Reissued Pari Passu Indebtedness was issued (starting with the earliest
occurring retirement or redemption and the earliest occurring issuance of
Reissued Pari Passu Indebtedness). Any such netted principal amounts of retired
or redeemed Pari Passu Indebtedness and Reissued Pari Passu Indebtedness shall
not be taken into account in calculating clause (i) or (ii) above, respectively.
For purposes of this definition, "Applicable Period" means the six-month period
ending immediately prior to the issue date, or, if the issue date occurs on or
after the date of the Comprehensive Satellite Insurance Settlement, the
one-month period ending immediately prior to the issue date.
Notwithstanding the foregoing, Pari Passu Indebtedness that is convertible
into equity securities of XM or the Company and is then converted into equity
securities of XM or the Company shall not be considered to be a retirement or
redemption for these purposes, except to the extent that cash is paid to the
holder of such retired or redeemed Pari Passu Indebtedness.
"Satellite Insurance Shortfall" means the amount, determined as of the date
of a Comprehensive Satellite Insurance Settlement, by which the sum of all
payments to be made to XM or the Company under the Comprehensive Satellite
Insurance Settlement is less than $[****].
Section 8.13 Treatment of 12% Notes.
The 12% Senior Secured Notes due 2010 of XM, guaranteed by the Company,
issued in June 2003, plus any over-allotment amount issued in June or July 2003,
not to exceed $200,000,000 in aggregate principal amount (the "12% Notes"), (i)
are deemed to be
-33-
Indebtedness of the type described in, and shall be applied against the amount
provided by, Section 8.3(vi)(A) hereof, up to the maximum amount specified
therein; and (ii) to the extent applied under Section 8.3(vi)(A) hereof, shall
not constitute Pari Passu Indebtedness for purposes of Section 8.3(i) hereof.
For the avoidance of doubt, to the extent that actions taken by the Company
or XM from and after January 28, 2003 through June 16, 2003 have resulted in the
incurrence of Permitted Debt, such Indebtedness shall continue to be taken into
account, and shall be applied against the maximum amount permitted, in
determining whether approvals may be required under Section 5.1 hereof.
Section 8.14 Definitions.
Capitalized terms used in this Article VIII and not otherwise defined
herein have the meanings set forth in the New Note Purchase Agreement.
-34-
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly
signed as of the date first above written.
XM SATELLITE RADIO HOLDINGS INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Executive Vice President
Signature Page to Third Amended and Restated Shareholders and Noteholders
Agreement
CLEAR CHANNEL INVESTMENTS, INC.
By: /s/ Xxxxxxx X. Xxxx
---------------------------
Name:
Title:
Signature Page to Third Amended and Restated Shareholders and Noteholders
Agreement
GENERAL MOTORS CORPORATION
By: /s/ Xxxx X. Xxxxx
---------------------------
Name: Xxxx X. Xxxxx
Title: Assistant Secretary
Signature Page to Third Amended and Restated Shareholders and Noteholders
Agreement
DIRECTV ENTERPRISES, LLC
By:
---------------------------
Name:
Title:
Signature Page to Third Amended and Restated Shareholders and Noteholders
Agreement
MADISON DEARBORN CAPITAL PARTNERS III, L.P.
By Madison Dearborn Partners III, L.P., its general partner
By Madison Dearborn Partners LLC, its general partner
By: /s/ Xxxxx X. Xxxxx, Xx.
---------------------------
Name: Xxxxx X. Xxxxx, Xx.
Title: Managing Director
MADISON DEARBORN SPECIAL EQUITY III, L.P.
By Madison Dearborn Partners III, L.P., its general partner
By Madison Dearborn Partners LLC, its general partner
By: /s/ Xxxxx X. Xxxxx, Xx.
---------------------------
Name: Xxxxx X. Xxxxx, Xx.
Title: Managing Director
SPECIAL ADVISORS FUND I, LLC
By Madison Dearborn Partners III, L.P., its manager
By Madison Dearborn Partners LLC, its general partner
By: /s/ Xxxxx X. Xxxxx, Xx.
---------------------------
Name: Xxxxx X. Xxxxx, Xx.
Title: Managing Director
Signature Page to Third Amended and Restated Shareholders and Noteholders
Agreement
AEA XM INVESTORS I LLC AEA XM INVESTORS II LLC
By XM Investors I LP, its Sole Member By XM Investors II LP, its Sole Member
By AEA XM Investors Inc., its General Partner By AEA XM Investors Inc., its General Partner
By: /s/ Xxxxx Xxxxxxx By: /s/ Xxxxx Xxxxxxx
--------------------------- ---------------------------
Name: Xxxxx Xxxxxxx Name: Xxxxx Xxxxxxx
Title: President Title: President
AEA XM INVESTORS IA LLC AEA XM INVESTORS IIA LLC
By XM Investors IA LP, its Sole Member By XM Investors IIA LP, its Sole Member
By AEA XM Investors Inc., its General Partner By AEA XM Investors Inc., its General Partner
By: /s/ Xxxxx Xxxxxxx By: /s/ Xxxxx Xxxxxxx
--------------------------- ---------------------------
Name: Xxxxx Xxxxxxx Name: Xxxxx Xxxxxxx
Title: President Title: President
Signature Page to Third Amended and Restated Shareholders and Noteholders
Agreement
COLUMBIA XM SATELLITE PARTNERS III, LLC COLUMBIA XM RADIO PARTNERS, LLC
By: Columbia Capital III, L.L.C., its Managing Member By Columbia Capital L.L.C., its Managing Member
By: /s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxxx
--------------------------- ---------------------------
Name: Xxxxxx X. Xxxxxxx Name: Xxxxxx X. Xxxxxxx
Title: Chief Financial Officer Title: Chief Financial Officer
COLUMBIA CAPITAL EQUITY PARTNERS III COLUMBIA CAPITAL EQUITY PARTNERS II
(QP), L.P. (QP), L.P.
By Columbia Capital Equity Partners III, L.P., By Columbia Capital Equity Partners III, L.L.C.,
its General Partner its General Partner
By: /s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxxx
--------------------------- ---------------------------
Name: Xxxxxx X. Xxxxxxx Name: Xxxxxx X. Xxxxxxx
Title: Chief Financial Officer Title: Chief Financial Officer
Signature Page to Third Amended and Restated Shareholders and Noteholders
Agreement
BLACK BEAR FUND I, L.P. BLACK BEAR FUND II, L.L.C.
By Eastbourne Capital Management, L.L.C., By Eastbourne Capital Management, L.L.C.,
its general partner its manager
By: /s/ Xxxx X. Xxxxxx By: /s/ Xxxx X. Xxxxxx
--------------------------- ---------------------------
Xxxx X. Xxxxxx Xxxx X. Xxxxxx
Chief Operating Officer Chief Operating Officer
BLACK BEAR OFFSHORE MASTER FUND LIMITED
By Eastbourne Capital Management, L.L.C., its
investment adviser and attorney in fact
By: /s/ Xxxx X. Xxxxxx
---------------------------
Xxxx X. Xxxxxx
Chief Operating Officer
Signature Page to Third Amended and Restated Shareholders and Noteholders
Agreement
HEARST COMMUNICATIONS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President, Hearst Interactive Media, a division
of Hearst Communications, Inc.
Signature Page to Third Amended and Restated Shareholders and Noteholders
Agreement
AMERICAN HONDA MOTOR CO., INC.
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President
Signature Page to Third Amended and Restated Shareholders and Noteholders
Agreement
BAYSTAR CAPITAL II, L.P.
By BayStar Capital Management, LLC, its general partner
By:
---------------------------
Name:
Title:
BAYSTAR INTERNATIONAL II LTD.
By BayStar Capital Management LLC, its investment manager
By:
---------------------------
Name:
Title:
ROYAL BANK OF CANADA
By its agent, RBC Dominion Securities Corporation
By:
---------------------------
Name:
Title:
By:
---------------------------
Name:
Title:
Signature Page to Third Amended and Restated Shareholders and Noteholders
Agreement
SUPERIUS SECURITIES GROUP, INC. MONEY PURCHASE PLAN
By:
---------------------------
Name:
Title:
Signature Page to Third Amended and Restated Shareholders and Noteholders
Agreement
SF CAPITAL PARTNERS, LTD.
By:
---------------------------
Name:
Title:
Signature Page to Third Amended and Restated Shareholders and Noteholders
Agreement
XXXXXXX X. XXXXXX
-------------------------------
Signature Page to Third Amended and Restated Shareholders and Noteholders
Agreement
XXXX XXXXXXXXX
-------------------------------
Signature Page to Third Amended and Restated Shareholders and Noteholders
Agreement
XXXXXX ELECTRONICS CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
---------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President, Treasurer and Controller
Signature Page to Third Amended and Restated Shareholders and Noteholders
Agreement
AVDAN PARTNERS, L.P.
By:
---------------------------
Name:
Title:
Signature Page to Third Amended and Restated Shareholders and Noteholders
Agreement
XXXXX XXXXX and XXXXXXXX XXXXX JTWROS
-------------------------------
-------------------------------
XXXXX XXX SINGH EDUCATIONAL TRUST
By:
-------------------------------
Name:
Title: Trustee
-------------------------------
Name:
Title: Trustee
SAMIR XXX XXXXX EDUCATIONAL TRUST
By:
-------------------------------
Name:
Title: Trustee
-------------------------------
Name:
Title: Trustee
Signature Page to Third Amended and Restated Shareholders and Noteholders
Agreement
XXXX XXXXX
/s/ Xxxx Xxxxx
-------------------------------
Signature Page to Third Amended and Restated Shareholders and Noteholders
Agreement
A.R. XXXXXXX, JR.
-------------------------------
Signature Page to Third Amended and Restated Shareholders and Noteholders
Agreement
XXXXXX XXXXXXX
/s/ Xxxxxx Xxxxxxx
-------------------------------
Signature Page to Third Amended and Restated Shareholders and Noteholders
Agreement
PRISM PARTNERS OFFSHORE FUND PRISM PARTNERS I, L.P.
By: Xxxxxxxxx Capital Management LLC, By: Xxxxxxxxx Capital Management LLC,
its Investment Manager its Investment Manager
By: By:
--------------------------- ---------------------------
Name: Xxxxxx X. Xxxxxxxxx Name:
Title: Managing Partner Title:
PRISM PARTNERS II OFFSHORE FUND
By: Xxxxxxxxx Capital Management LLC,
its Investment Manager
By:
---------------------------
Name:
Title:
Signature Page to Third Amended and Restated Shareholders and Noteholders
Agreement
EVEREST CAPITAL MASTER FUND LP
By: Everest Capital Limited, its General
Partner
By: /s/ Xxxxxxx Xxxxx
---------------------------
Name: Xxxxxxx Xxxxx
Title: Chief Operating Officer
By: /s/ Simon Onabowald
---------------------------
Name: Simon Onabowald
Title: Principal
EVEREST CAPITAL SENIOR DEBT FUND LP
By: Everest Capital Limited, its General
Partner
By: /s/ Xxxxxxx Xxxxx
---------------------------
Name: Xxxxxxx Xxxxx
Title: Chief Operating Officer
By: /s/ Simon Onabowald
---------------------------
Name: Simon Onabowald
Title: Principal
Signature Page to Third Amended and Restated Shareholders and Noteholders
Agreement
U.S. TRUST COMPANY
By: /s/ Xxxxx Xxxxxxxx
---------------------------
Name: Xxxxx Xxxxxxxx
Title: Managing Director
Signature Page to Third Amended and Restated Shareholders and Noteholders
Agreement
EXHIBIT A
Additional Note Purchasers
AEA
AEA XM Investors IA LLC
AEA XM Investors IIA LLC
Columbia Capital
Columbia Capital Equity Partners II (QP), L.P.
Columbia XM Radio Partners, LLC
Columbia Capital Equity Partners III (QP), L.P.
Columbia XM Satellite Partners III, LLC
Xxxxxx Electronics Corporation
Xxxxxx Xxxxxxx
Hearst Communications, Inc.
BayStar Group
BayStar Capital II, LP
BayStar International II, Ltd.
Royal Bank of Canada
American Honda Motor Co., Inc.
Superius Securities Group, Inc. Money Purchase Plan
Xxxx Xxxxx
Avdan Partners, L.P.
Xxxxxxx X. Xxxxxx
Xxxx Xxxxxxxxx
SF Capital Partners, Ltd.
Xxxxx Xxxxx and Xxxxxxxx Xxxxx JWTROS
Xxxxx Xxx Singh Educational Trust
Samir Xxx Xxxxx Educational Trust
A.R. Xxxxxxx, Jr.
Prism Partners Offshore Fund
Prism Partners II Offshore Fund
Prism Partners I, L.P.
Everest Capital Master Fund LP
Everest Capital Senior Debt Fund LP
U.S. Trust Company
SCHEDULE I
NAMES, ADDRESSES AND FACSIMILE NUMBERS OF PARTIES
The Company: XM Satellite Radio Holdings Inc. 000-000-0000
0000 Xxxxxxxxx Xxxxx, X.X.
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
Clear Channel: Clear Channel Investments, Inc. 000-000-0000
000 X. Xxxxx Xxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxx Xxxxx, Esq.
Columbia: Columbia Capital LLC 000-000-0000
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxxxx
DIRECTV: DIRECTV Enterprises, Inc. 000-000-0000
0000 Xxxx Xxxxxxxx Xxxxxxx
Xx Xxxxxxx, XX 00000
Attention: Xx. Xxxxxx X. Xxx
GM: General Motors Corporation 000-000-0000
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000 - 1000
Attention: Xxxx Xxxxx, Esq.
Telcom: Telcom-XM Investors, L.L.C. 000-000-0000
0000 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
XxXxxx, XX 00000
Attention: Xxx X. Xxxxxxx, Esq.
Madison: Madison Dearborn Partners, Inc. 000-000-0000
Three First Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxx
AEA XM: AEA Investors Inc. 212-702-0518
00 X. 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
Black Bear Fund I, L.P. c/o Eastbourne Capital Management, L.L.C. 000-000-0000
Black Bear Fund II, L.L.C. 0000 Xxxxx Xxxxxx, Xxxxx 000
Black Bear Offshore Master Fund Xxx Xxxxxx, XX 00000
Limited
Xxxxxx Xxxxxxx c/x Xxxxxx & Vris, LLP 718-832-8292
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Honda: America Honda Motor Co., Inc. 000-000-0000
0000 Xxxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxxxx Xxxxxxxx
Honda North America, Inc. 310-781-4970
000 Xxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Law Department
U.S. Trust Company 0 Xxxxx Xxxxxx 000-000-0000
Xxxxx, XX 00000
Xxxxxx Electronics Corporation 000 X. Xxxxxxxxx Xxxxxxxxx 000-000-0000
Xx Xxxxxxx, Xxxxxxxxxx 00000
Hearst Communications, Inc. c/o Hearst Interactive Media 212-582-7739
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: President, Hearst Interactive Media
The Hearst Corporation 000-000-0000
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: General Counsel
BayStar Group c/o BayStar Capital Management, LLC 000-000-0000
BayStar Capital II, LP 00 X. Xxx Xxxxxxx Xxxxx Xxxx., Xxxxx 0X
XxxXxxx International II, Ltd Xxxxxxxx, Xxxxxxxxxx 00000
Superius Securities Group, Inc. Money Superius Securities Group, Inc. 000-000-0000
Purchase Plan Money Purchase Plan 00 Xxxxx Xxx.
Xxxxxxxxx, Xxx Xxxxxx 00000
Xxxx Xxxxx c/o XM Satellite Radio Holdings Inc. 000-000-0000
0000 Xxxxxxxxx Xxxxx, XX
Xxxxxxxxxx, Xxxxxxxx xx Xxxxxxxx 00000-0000
Avdan Partners, X.X. Xxxxx Partners, L.P. 415-239-3946
000 Xxxxxxxxx Xxxxxxx, Xxxxx 000-X
Xxxx Xxxxxx, Xxxxxxxxxx 00000
Xxxxxxx X. Xxxxxx c/o Harris & Panels 315-472-2481
000 Xxxx Xxxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, Xxx Xxxx 00000
Xxxx Xxxxxxxxx c/o Harris & Panels 315-472-2481
000 Xxxx Xxxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, Xxx Xxxx 00000
SF Capital Partners, Ltd. c/o Staro Asset Management, LLC 414-294-7687
0000 Xxxxx Xxxx Xxxxx
Xx. Xxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxx
Xxxxx Xxxxx and Xxxxxxxx Xxxxx JWTROS 0000 Xxxxx Xxxxxx Xxxxx 000-000-0000
Xxxxx Xxx Xxxxx Educational Trust Suite 6400
Samir Xxx Xxxxx Educational Trust XxXxxx, Xxxxxxxx 00000
Attn: General Counsel
X.X. Xxxxxxx, Xx. 0000 Xxxxxxx 000-000-0000
Xxxxxx, Xxxxx 00000
Prism Partners Offshore Fund c/x Xxxxxxxxx Capital Management LLC 000-000-0000
Prism Partner I, L.P. 00 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Prism Partners II Offshore Fund Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Everest Capital Master Fund LP c/o Everest Capital Limited 000-000-0000
Everest Capital Senior Debt Fund LP The Bank of Xxxxxxxxxxx Xxxxxxxx, 0xx Xxxxx
00 Xxxxx Xxxxxx
Xxxxxxxx XX 00, Xxxxxxx
Attn: Compliance Officer
Royal Bank of Canada c/o RBC Dominion Securities Corporation 000-000-000
000 Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx XX 00000
Attention: Xxxxxxx Xxxxxxx
