13,387,000 shares
XM Satellite Holdings Inc.
Class A Common Stock; par value $.01 per share
UNDERWRITING AGREEMENT
----------------------
April 11, 2002
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Credit Suisse First Boston Corporation
Deutsche Bank Securities Inc.
As Representatives of the Several Underwriters
c/o Morgan Xxxxxxx & Co. Incorporated,
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Dear Sirs:
1. Introductory. XM Satellite Holdings Inc., a Delaware corporation
("Company"), proposes to issue and sell to the several Underwriters named in
Schedule A hereto (the "Underwriters") 13,387,000 shares of its Class A common
stock, par value $.01 per share (the "Firm Shares") and also proposes to issue
and sell to the Underwriters, at the option of the Underwriters, up to an
additional 2,008,050 shares of its Class A common stock (the "Additional
Shares"). The Firm Shares and the Additional Shares are herein collectively
called the "Shares." The Company hereby agrees with the Underwriters as follows:
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the Underwriters that:
(a) The Company has filed with the Securities and Exchange
Commission (the "Commission") a shelf registration statement on Form
S-3 (No. 333-47570), including a prospectus, relating to the Shares and
the registration statement has been declared effective under the
Securities Act of 1933 ("Act"). The Company has filed with the
Commission a registration statement on Form S-3 (No. 333-85804)
pursuant to Rule 462(b) of the Act (the "462(b) Registration
Statement") and the 462(b) Registration Statement became effective
under the Act upon such filing. The shelf registration statement, at
the time it was declared effective by the Commission, including all
material incorporated by reference therein, and as supplemented by the
462(b) Registration Statement, is hereinafter referred to as the
"Registration Statement." The form of prospectus, as included in the
Registration Statement, including all material incorporated by
reference in such prospectus, is hereinafter referred to as the
"Prospectus." The prospectus supplement relating to the Shares as first
filed with the Commission pursuant to and in accordance with Rule
424(b) ("Rule 424(b)") under the Act, is hereinafter referred to as the
"Prospectus Supplement." No document has been or will be prepared or
distributed in reliance on Rule 434 under the Act.
(b) The Registration Statement, the 462(b) Registration Statement
and the Prospectus, at the time the Registration Statement and the
462(b) Registration Statement was declared effective by the Commission,
(i) conformed in all respects to the requirements of the Act and the
rules and regulations of the Commission ("Rules and Regulations") and
(ii) did not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading. The Registration Statement,
the 462(b) Registration Statement and the Prospectus, on the date of
this Agreement, conforms, and at the time of filing of the Prospectus
Supplement pursuant to Rule 424(b), the Registration Statement, the
462(b) Registration Statement, the Prospectus and the Prospectus
Supplement will conform, in all respects to the requirements of the Act
and the Rules and Regulations, and neither of such documents includes,
or will include, any untrue statement of a material fact or omits, or
will omit, to state any material fact required to be stated therein or
necessary to make the statements therein not misleading. The two
preceding sentences do not apply to statements in or omissions from the
Registration Statement, the 462(b) Registration Statement, the
Prospectus or the Prospectus Supplement based upon written information
furnished to the Company by the Underwriters specifically for use
therein, it being understood and agreed that the only such information
is that described as such in Section 7(b) hereof.
(c) Each preliminary prospectus filed as part of the Registration
Statement as originally filed or as part of any amendment thereto, or
filed pursuant to Rule 424 under the Act, complied when so filed in all
material respects with the Act and the applicable Rules and
Regulations.
(d) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware,
with power and authority (corporate and other) to own its properties
and conduct its business as described in the Prospectus Supplement; and
the Company is duly qualified to do business as a foreign corporation
and is in good standing in all other jurisdictions in which its
ownership or lease of property or the conduct of its business requires
such qualification.
(e) Each subsidiary of the Company has been duly incorporated and
is an existing corporation in good standing under the laws of the
jurisdiction of its incorporation, with power and authority (corporate
and other) to own its properties and conduct its business as described
in the Prospectus Supplement; and each subsidiary of the Company is
duly qualified to do business as a foreign corporation and is in good
standing in all other jurisdictions in which its ownership or lease of
property or the conduct of its business requires such qualification;
all of the issued and outstanding shares of capital stock of each
subsidiary of the Company has been duly authorized and validly issued
and is fully paid and nonassessable; and are owned by the Company,
directly or through subsidiaries, free and clear from liens,
encumbrances, defects equities or claims.
(f) The Shares have been duly authorized and reserved for issuance
and, when issued and delivered in accordance with the terms of this
Agreement, will be validly issued, fully paid and nonassessable, and
the issuance of such Shares will not be subject to any preemptive or
similar rights.
(g) The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus.
(h) The shares of Class A common stock, par value $.01 per share,
of the Company (the "Common Stock") outstanding prior to the issuance
of the Shares have been duly authorized and are validly issued, fully
paid and non-assessable.
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(i) Except as disclosed in the Prospectus Supplement, there are no
contracts, agreements or understandings between the Company and any
person that would give rise to a valid claim against the Company or any
Underwriter for a brokerage commission, finder's fee or other like
payment in connection with this offering.
(j) Except as described in the Prospectus Supplement, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Act with respect to any securities of
the Company owned or to be owned by such person or to require the
Company to include such securities in the securities registered
pursuant to a Registration Statement or in any securities being
registered pursuant to any other registration statement filed by the
Company under the Act.
(k) The Shares have been approved for listing on the Nasdaq Stock
Market's National Market subject to notice of issuance.
(l) No consent, approval, authorization, or order of, or filing or
qualification with, any governmental agency or body or any court is
required for the consummation of the transactions contemplated by this
Agreement in connection with the issuance and sale of the Shares by the
Company or the performance by the Company of its obligations under this
Agreement, except such as have been obtained and made under the Act and
such as may be required under state securities laws.
(m) The execution, delivery and performance of this Agreement, and
the issuance and sale of the Shares and compliance with the terms and
provisions hereof will not result in a breach or violation of any of
the terms and provisions of, or constitute a default under, any
statute, rule or regulation, or any judgment, order or decree of any
governmental agency or body or any court, domestic or foreign, having
jurisdiction over the Company or any subsidiary of the Company or any
of their properties, or any agreement or other instrument to which the
Company or any such subsidiary is a party or by which the Company or
any such subsidiary is bound or to which any of the properties of the
Company or any such subsidiary is subject, or the charter or by-laws of
the Company or any such subsidiary, and the Company has full power and
authority to authorize, issue and sell the Shares as contemplated by
this Agreement.
(n) This Agreement has been duly authorized, executed and
delivered by the Company.
(o) Except as disclosed in the Prospectus Supplement, the Company
and its subsidiaries have good and marketable title to all real
properties and all other properties and assets owned by them, in each
case free from liens, encumbrances and defects that would materially
affect the value thereof or materially interfere with the use made or
to be made thereof by them; and except as disclosed in the Prospectus
Supplement, the Company and its subsidiaries hold any leased real or
personal property under valid and enforceable leases with no exceptions
that would materially interfere with the use made or to be made thereof
by them.
(p) The Company and its subsidiaries possess adequate
certificates, authorities or permits issued by appropriate governmental
agencies or bodies necessary to conduct the business now operated by
them and have not received any notice of proceedings relating to the
revocation or modification of any such certificate, authority or permit
that, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a material
adverse effect on the condition (financial or other), business,
properties or results of operations of the Company and its subsidiaries
taken as a whole ("Material Adverse Effect").
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(q) No labor dispute with the employees of the Company or any
subsidiary exists or, to the knowledge of the Company, is imminent that
might have a Material Adverse Effect.
(r) The Company and its subsidiaries own, possess or can acquire
on reasonable terms, adequate trademarks, trade names and other rights
to inventions, know-how, patents, copyrights, confidential information
and other intellectual property (collectively, "intellectual property
rights") necessary to conduct the business now operated by them, or
presently employed by them, and have not received any notice of
infringement of or conflict with asserted rights of others with respect
to any intellectual property rights that, if determined adversely to
the Company or any of its subsidiaries, would individually or in the
aggregate have a Material Adverse Effect.
(s) Except as disclosed in the Prospectus Supplement, the Company
and its subsidiaries are not in violation of any statute, rule,
regulation, decision or order of any governmental agency or body or any
court, domestic or foreign, relating to the use, disposal or release of
hazardous or toxic substances or waste, pollutants or contaminants, or
relating to the environment or human exposure to hazardous or toxic
substances (collectively, "environmental laws"), do not own or operate
any real property contaminated with any substance that is subject to
any environmental laws, are not liable for any cost or liabilities
associated with environmental laws, including without limitation, any
off-site disposal or contamination pursuant to any environmental laws,
are not subject to any claim relating to any environmental laws and
have received all permits, licenses or other approvals required of them
under applicable environmental laws to conduct their respective
businesses and are in compliance with the terms and conditions of any
such permit, license or approval, which violation, contamination,
liability or claim would individually or in the aggregate have a
Material Adverse Effect; and the Company is not aware of any pending
investigation which might lead to such a claim.
(t) Except as disclosed in the Prospectus Supplement, there are no
pending actions, suits or proceedings against or affecting the Company,
any of its subsidiaries or any of their respective properties that, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect, or
would materially and adversely affect the ability of the Company to
perform its obligations under this Agreement, or which are otherwise
material in the context of the sale of the Shares or which are required
to be described in the Registration Statement or Prospectus Supplement
and are not so described; and no such actions, suits or proceedings are
threatened or, to the Company's knowledge, contemplated.
(u) The financial statements included in each Registration
Statement and the Prospectus Supplement present fairly the financial
position of the Company and its consolidated subsidiaries as of the
dates shown and their results of operations and cash flows for the
periods shown, and such financial statements have been prepared in
conformity with the generally accepted accounting principles in the
United States applied on a consistent basis; and the schedules included
in each Registration Statement present fairly the information required
to be stated therein.
(v) Except as disclosed in the Prospectus Supplement, since the
date of the latest audited financial statements included in the
Prospectus Supplement there has been no material adverse change, nor
any development or event involving a prospective material adverse
change, in the condition (financial or other), earnings, business,
properties or results of operations of the Company and its subsidiaries
taken as a whole, and, except as disclosed in or contemplated by the
Prospectus Supplement, there has been no dividend or distribution of
any kind declared, paid or made by the Company on any class of its
capital stock.
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(w) The Company is not and, after giving effect to the offering
and sale of the Shares and the application of the proceeds thereof as
described in the Prospectus Supplement, will not be an "investment
company" as defined in the Investment Company Act of 1940.
(x) The statistical and market-related data included in the
Prospectus Supplement are based on or are derived from sources which
the Company believes to be reliable and accurate in all material
respects.
3. Purchase, Sale and Delivery of the Shares. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to the
Underwriters, and the Underwriters agree, severally and not jointly, to purchase
from the Company, the Shares at a purchase price of $10.95375 per share (the
"Purchase Price").
The Company will deliver against payment of the purchase price the Firm
Shares in the form of one or more permanent global Securities in definitive form
(the "Firm Global Securities") deposited with The Depository Trust Company
("DTC") and registered in the name of Cede & Co., as nominee for DTC, with any
transfer taxes payable in connection with the transfer of the Firm Shares to the
Underwriters duly paid. Interests in any permanent global Securities will be
held only in book-entry form through DTC, except in the limited circumstances
described in the Prospectus Supplement. Payment for the Firm Shares shall be
made by the Underwriters in Federal (same day) funds by official bank check or
checks or wire transfer to an account at a bank acceptable to Xxxxxx Xxxxxxx &
Co. Incorporated ("Xxxxxx Xxxxxxx") drawn to the order of XM Satellite Radio
Holdings, Inc. at the office of Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, XX
00000 at 10:00 A.M., (New York time), on April 17, 2002, or at such other time
not later than seven full business days thereafter as Xxxxxx Xxxxxxx determines,
such time being herein referred to as the "Closing Date," against delivery to
DTC of the Global Securities representing all of the Shares. The Global
Securities will be made available for checking at the above office of Xxxxxx &
Xxxxxxx at least 24 hours prior to the Closing Date.
In addition, the Company hereby grants to the Underwriters the option
to purchase up to 2,008,050 Additional Shares at the same purchase price per
share to be paid by the Underwriters to the Company for the Firm Shares as set
forth in this Section 3, for the sole purpose of covering over-allotments in the
sale of Firm Shares by the Underwriters. This option may be exercised at any
time, in whole or in part, on or before the thirtieth day following the date of
the Prospectus Supplement, by written notice by the Underwriters to the Company.
Such notice shall set forth the aggregate number of Additional Shares as to
which the option is being exercised and the date and time, as reasonably
determined by the Underwriters, when the Additional Shares are to be delivered
(such date and time being herein sometimes referred to as the "Additional
Closing Date"); provided, however, that the Additional Closing Date shall not be
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earlier than the Closing Date or earlier than the second full business day after
the date on which the option shall have been exercised nor later than the eighth
full business day after the date on which the option shall have been exercised.
Global securities for the Additional Shares shall be registered in such name or
names and in such authorized denominations as the Underwriters may request in
writing at least two full business days prior to the Additional Closing Date.
The Company will permit the Underwriters to examine and package such global
securities for delivery at least one full business day prior to the Additional
Closing Date.
Payment for the Additional Shares shall be made by wire transfer in
same day funds each payable to the order of the Company at the office of Xxxxxx
& Xxxxxxx, 000 Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx, 00000, or such
other location as may be mutually acceptable, upon delivery of the certificates
for the Additional Shares to the Underwriters.
4. Offering by Underwriters. It is understood that the Underwriters
propose to offer the Shares for sale to the public as set forth in the
Prospectus Supplement.
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5. Certain Agreements of the Company. The Company agrees with the
Underwriters that:
(a) The Company will file the Prospectus Supplement with the
Commission pursuant to and in accordance with subparagraph (1) or (2)
(as consented to by the Underwriters) of Rule 424(b) not later than the
second business day following the execution and delivery of this
Agreement) (or, if applicable and if consented to by the Underwriters,
subparagraph (4) or (5)). The Company will advise the Underwriters
promptly of any such filing pursuant to Rule 424(b).
(b) The Company will advise the Underwriters promptly of any
proposal to amend or supplement the Registration Statement or the
Prospectus and will not effect such amendment or supplementation
without the Underwriters' consent; and the Company will also advise the
Underwriters promptly of the effectiveness of the Registration
Statement and of any amendment or supplementation of the Registration
Statement or the Prospectus and of the institution by the Commission of
any stop order proceedings in respect of the Registration Statement and
will use its best efforts to prevent the issuance of any such stop
order and to obtain as soon as possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the Shares is
required to be delivered under the Act in connection with sales by the
Underwriters or any dealer, any event occurs or condition exists as a
result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, or if it
is necessary at any time to amend the Prospectus to comply with
applicable law, the Company will promptly notify the Underwriters of
such event or condition and will promptly prepare, file with the
Commission and furnish, at its own expense, to the Underwriters and
dealers to which Shares may have been sold and to any other dealers
upon request an amendment or supplement which will correct such
statement or omission or an amendment which will effect such
compliance. The Underwriters' consent to, and their delivery of, any
such amendment or supplement shall not constitute a waiver of any of
the conditions set forth in Section 6.
(d) As soon as practicable, but not later than the Availability
Date (as defined below), the Company will make generally available to
its securityholders an earnings statement covering a period of at least
12 months beginning after the Effective Date of the Registration
Statement (or, if later, the date of any prospectus supplement) which
will satisfy the provisions of Section 11(a) of the Act. For the
purpose of the preceding sentence, "Availability Date" means the 45th
day after the end of the fourth fiscal quarter following the fiscal
quarter that includes such Effective Date, except that, if such fourth
fiscal quarter is the last quarter of the Company's fiscal year,
"Availability Date" means the 90th day after the end of such fourth
fiscal quarter.
(e) The Company will furnish to the Underwriters, without charge,
copies of the Registration Statement (three (3) copies of which will be
signed and will include all exhibits), each related preliminary
prospectus supplement, and, so long as a prospectus relating to the
Shares is required to be delivered under the Act in connection with
sales by the Underwriters or any dealer, the Prospectus Supplement and
all amendments and supplements to such documents, in each case in such
quantities as the Underwriters request. The Prospectus Supplement shall
be so furnished on or prior to 3:00 P.M., New York time, on the
business day following the later of the execution and delivery of this
Agreement or the Effective Time of the Registration Statement. All
other documents shall be so furnished as soon as available. The Company
will pay the expenses of printing and distributing to the Underwriters
all such documents.
(f) The Company will arrange for the qualification of the Shares
for sale and the determination of their eligibility for investment
under the laws of such jurisdictions as the
6
Underwriters designate and will continue such qualifications in effect
so long as required for the distribution.
(g) During the period of five years hereafter, the Company will
furnish to the Underwriters, as soon as practicable after the end of
each fiscal year, a copy of its annual report to stockholders for such
year; and the Company will furnish to the Underwriters (i) as soon as
available, a copy of each report and any definitive proxy statement of
the Company filed with the Commission under the Securities Exchange Act
of 1934 or mailed to stockholders, and (ii) from time to time, such
other information concerning the Company as the Underwriters may
reasonably request.
(h) Whether or not the transactions contemplated in this Agreement
are consummated, the Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
fees, disbursements and expenses of the Company's counsel and the
Company's accountants in connection with the registration and delivery
of the Shares under the Act and all other fees or expenses in
connection with the preparation and filing of the Registration
Statement, any preliminary prospectus supplement, the Prospectus
Supplement and amendments and supplements to any of the foregoing,
including all printing costs associated therewith, (ii) all costs and
expenses related to the transfer and delivery of the Shares to the
Underwriters, including any transfer or other taxes payable thereon,
(iii) for any filing fees and other expenses (including fees and
disbursements of counsel) incurred in connection with qualification of
the Shares for sale under the laws of such jurisdictions as the
Underwriters designate and the printing of memoranda relating thereto,
(iv) all filing fees incurred in connection with the review and
qualification of the offering of the Shares by the National Association
of Securities Dealers, Inc., (v) all costs and expenses incident to
listing the Shares on the Nasdaq National Market, (vi) the cost of
printing certificates representing the Shares, (vii) the costs and
charges of any trustee, transfer agent, registrar or depositary, (viii)
any expenses of the Company in connection with attending or hosting
meetings with prospective purchasers of the Shares and for expenses
incurred in distributing preliminary prospectus supplements and the
Prospectus Supplement (including any amendments and supplements
thereto) to the Underwriters, (ix) for any travel expenses of the
Company's officers and employees and (x) all other costs and expenses
incident to the performance of the obligations of the Company hereunder
for which provision is not otherwise made in this Section 5(i).
(i) For a period of 90 days after the date of the initial public
offering of the Shares, the Company will not offer, sell, contract to
sell, pledge or otherwise dispose of, directly or indirectly, or file
with the Commission a registration statement under the Act relating to,
any shares of Common Stock or securities convertible into or
exchangeable or exercisable for any shares of Common Stock, or publicly
disclose the intention to make any such offer, sale, pledge,
disposition or filing, without the prior written consent of Xxxxxx
Xxxxxxx, except issuances of shares of Common Stock pursuant to the
conversion or exchange of convertible or exchangeable securities or the
exercise of warrants or options, in each case outstanding on the date
hereof, grants of employee stock options pursuant to the terms of the
employee stock option plan or talent stock plan in effect on the date
hereof, grants of options or warrants to outside vendors from the pool
authorized by the Board of Directors as of the date hereof, or
issuances of shares of Common Stock pursuant to the exercise of such
options.
6. Conditions of the Obligations of the Underwriters. The several
obligations of the Underwriters to purchase and pay for the Shares on the
Closing Date will be subject to the accuracy of the representations and
warranties on the part of the Company herein, to the accuracy of the statements
of Company officers made pursuant to the provisions hereof, to the performance
by the Company of its obligations hereunder and to the following additional
conditions precedent:
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(a) The Underwriters shall have received a letter, dated the date
of delivery thereof (which, shall be on or prior to the date of this
Agreement), of KPMG LLP confirming that they are independent public
accountants within the meaning of the Act and the applicable published
Rules and Regulations thereunder and stating to the effect that:
(i) in their opinion the financial statements and schedules
examined by them and included in the Registration Statement
comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published
Rules and Regulations;
(ii) on the basis of a reading of the latest available
interim financial statements of the Company, inquiries of
officials of the Company who have responsibility for financial
and accounting matters and other specified procedures, nothing
came to their attention that caused them to believe that:
(A) at the date of the latest available
balance sheet read by such accountants, or at a
subsequent specified date not more than three
business days prior to the date of this Agreement,
there was any change in the capital stock or any
increase in short-term indebtedness or long-term debt
of the Company and its consolidated subsidiaries or,
at the date of the latest available balance sheet
read by such accountants, there was any decrease in
consolidated net current assets or net assets, as
compared with amounts shown on the latest balance
sheet included in the Prospectus Supplement; or
(B) for the period from the closing date of
the latest income statement included in the
Prospectus Supplement to the closing date of the
latest available income statement read by such
accountants there were any decreases, as compared
with the corresponding period of the previous year
and with the period of corresponding length ended the
date of the latest income statement included in the
Prospectus Supplement, in consolidated net sales, net
operating income, in the total or per share amounts
of consolidated income before extraordinary items,
net income or in the ratio of earnings to fixed
charges;
except in all cases set forth in clauses (A) and (B) above for
changes, increases or decreases which the Prospectus
Supplement discloses have occurred or may occur or which are
described in such letter; and
(iii) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other
financial information contained in the Registration Statement
(in each case to the extent that such dollar amounts,
percentages and other financial information are derived from
the general accounting records of the Company and its
subsidiaries subject to the internal controls of the Company's
accounting system or are derived directly from such records by
analysis or computation) with the results obtained from
inquiries, a reading of such general accounting records and
other procedures specified in such letter and have found such
dollar amounts, percentages and other financial information to
be in agreement with such results, except as otherwise
specified in such letter.
All financial statements and schedules included in material
incorporated by reference into the Prospectus Supplement shall be
deemed included in the Registration Statement for purposes of this
subsection.
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(b) The Registration Statement and the 462(b) Registration
Statement shall have become effective and the Prospectus Supplement
shall have been filed with the Commission in accordance with the Rules
and Regulations and Section 5(a) of this Agreement. Prior to such
Closing Date, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for
that purpose shall have been instituted or, to the knowledge of the
Company or the Underwriters, shall be contemplated by the Commission.
(c) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) any change, or any
development or event involving a prospective change, in the condition
(financial or other), earnings, business, properties or results of
operations of the Company and its subsidiaries taken as a whole which,
in your judgment, is material and adverse and makes it impractical or
inadvisable to proceed with completion of the public offering or the
sale of and payment for the Shares or (ii) any downgrading in the
rating of any debt securities of the Company by any "nationally
recognized statistical rating organization" (as defined for purposes of
Rule 436(g) under the Act), or any public announcement that any such
organization has under surveillance or review its rating of any debt
securities of the Company (other than an announcement with positive
implications of a possible upgrading, and no implication of a possible
downgrading, of such rating).
(d) The Underwriters shall have received an opinion, dated
such Closing Date, of Xxxxx & Xxxxxxx, counsel for the Company, to the
effect that:
(i) Each of the Company, XM Satellite Radio Inc., XM Radio
Inc. ("XM Radio") and XM Innovations Inc. ("XM
Innovations") was incorporated, and is validly existing
and in good standing, under the laws of the State of
Delaware. Each of XM Equipment Leasing L.L.C. ("XM
Equipment") and XM 1500 Eckington L.L.C. ("XM
Eckington") was organized, and is validly existing and
in good standing. Each of the Company, XM Satellite, XM
Radio and XM Innovations has the corporate power and
corporate authority under the Company Certificate of
Incorporation, the XM Satellite Certificate of
Incorporation, the XM Radio Certificate of
Incorporation and the XM Innovations Certificate of
Incorporation, respectively, and the Delaware General
Corporation Law to own, lease and operate its current
properties and to conduct its business as described in
the Prospectus Supplement. Each of XM Equipment and XM
Eckington have the limited liability company power and
limited liability company authority under the XM
Equipment Certificate of Formation and the XM Equipment
Operating Agreement, and the XM Eckington Certificate
of Formation and the XM Eckington Operating Agreement,
respectively, and the Delaware LLC Act to own, lease
and operate its current properties and to conduct its
business as described in the Prospectus Supplement. The
Company, XM Radio and XM Eckington are authorized to
transact business as foreign corporations in the
District of Columbia. XM Satellite is authorized to
transact business as a foreign corporation in the
District of Columbia, the State of Florida, the State
of Michigan and the Commonwealth of Virginia.
(ii) All shares of capital stock of the Company shown as
issued and outstanding on an actual basis under the
caption "Capitalization" in the Prospectus Supplement
are duly authorized and, assuming the receipt of
consideration therefor as provided in resolutions of
the Company's Board of Directors authorizing issuance
thereof, are validly issued, fully paid and
nonassessable and were not issued in violation of any
statutory preemptive rights under the Delaware General
Corporation Law or, to our knowledge, any contractual
right to subscribe for any of the Shares. The capital
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stock conforms in all material respects to the
description thereof set forth in the Prospectus under
the caption "Description of Capital Stock."
(iii) All of the issued and outstanding shares of capital
stock of XM Satellite have been duly authorized and,
assuming the receipt of consideration therefor as
provided in resolutions of XM Satellite's Board of
Directors authorizing issuance thereof, are validly
issued, fully paid and nonassessable, were not issued
in violation of any statutory preemptive rights under
the Delaware General Corporation Law or, to our
knowledge, any contractual right to subscribe for any
of such shares, and are owned of record by the Company.
(iv) All of the issued and outstanding shares of capital
stock of XM Radio have been duly authorized and,
assuming the receipt of consideration therefor as
provided in the organizational actions taken by the
sole incorporator of XM Radio authorizing issuance
thereof, are validly issued, fully paid and
nonassessable, were not issued in violation of any
statutory preemptive rights under the Delaware General
Corporation Law or, to our knowledge, any contractual
right to subscribe for any of such shares, and are
owned of record by XM Satellite.
(v) All of the issued and outstanding shares of capital
stock of XM Innovations have been duly authorized and,
assuming the receipt of consideration therefor as
provided in the organizational actions taken by the
sole incorporator of XM Innovations authorizing
issuance thereof, are validly issued, fully paid and
nonassessable, were not issued in violation of any
statutory preemptive rights under the Delaware General
Corporation Law or, to our knowledge, any contractual
right to subscribe for any of such shares, and are
owned of record by XM Satellite.
(vi) All of the issued and outstanding limited liability
interests of XM Equipment have been duly authorized
and, assuming the receipt of consideration therefor as
provided in the organizational actions taken by the
sole member of XM Equipment authorizing issuance
thereof, are validly issued, were not issued in
violation of any statutory preemptive rights under the
Delaware LLC Act or, to our knowledge, any contractual
right to subscribe for any of such limited liability
interests, and are owned of record by XM Satellite.
(vii) All of the issued and outstanding limited liability
interests of XM Eckington have been duly authorized
and, assuming the receipt of consideration therefor as
provided in the organizational actions taken by the
sole member of XM Eckington authorizing issuance
thereof, are validly issued, were not issued in
violation of any statutory preemptive rights under the
Delaware LLC Act or, to our knowledge, any contractual
right to subscribe for any of such limited liability
interests, and are owned of record by the Company.
(viii) To our knowledge, none of the Company or any of the XM
Subsidiaries have issued any outstanding securities
convertible into or exchangeable for, or outstanding
options, warrants or other rights to purchase or to
subscribe for, any shares of stock or other securities
of the Company or any of the XM Subsidiaries,
respectively, except as described in the Prospectus
Supplement (other than options issued pursuant to the
Company's 1998 Shares Award Plan, Employee Stock
Purchase Plan and Talent Option Plan).
10
(ix) The Company has the corporate power and corporate
authority under the Company Certificate of
Incorporation and the Delaware General Corporation Law
to execute, deliver and perform as of the date hereof
its obligations under this Agreement and to consummate
the transactions contemplated by this Agreement,
including, without limitation, to issue, sell and
deliver the Shares as provided therein. When issued in
accordance with the provisions of this Agreement, the
Shares will be validly issued, fully paid and
nonassessable under the Delaware General Corporation
Law, will not be issued in violation of any statutory
preemptive rights under the Delaware General
Corporation Law or, to our knowledge, any contractual
right to subscribe for such shares and will be free and
clear of any liens or encumbrances and statutory
restrictions.
(x) This Agreement has been duly authorized, executed and
delivered on behalf of the Company.
(xi) The Registration Statement and the 462(b) Registration
Statement have become effective under the Securities
Act, the required filings of the Prospectus Supplement
pursuant to Rule 424(b) promulgated pursuant to the
Securities Act have been made in the manner and within
the time period required by Rule 424(b) and, to our
knowledge, no stop order suspending the effectiveness
of the Registration Statement or suspending or
preventing the use of the Prospectus Supplement has
been issued and no proceedings for that purpose have
been instituted or are threatened by the Commission.
(xii) The Registration Statement, the 462(b) Registration
Statement, Prospectus and the Prospectus Supplement
(except for the financial statements and supporting
schedules included therein, as to which we express no
opinion) comply as to form in all material respects
with the requirements of the Securities Act and the
applicable rules and regulations thereunder.
(xiii) The execution, delivery and performance on the date
hereof by the Company of the Agreement and the
consummation by the Company of the transactions therein
contemplated (including the issuance and sale of the
Shares) do not (a) violate the Company Certificate of
Incorporation or Company Bylaws, (b) breach or
constitute a default under any agreement or contract
filed as an exhibit to the Registration Statement, (c)
to our knowledge, violate any Applicable Law, or any
order, judgment or decree applying Applicable Law of
any federal or State of Delaware court or governmental
or regulatory authority having jurisdiction over the
Company, any of the XM Subsidiaries or any of their
respective properties or assets, or (d) to our
knowledge, result in the imposition of a lien or
encumbrance on any property or assets of the Company or
any of the XM Subsidiaries, except for such violations,
breaches, defaults or impositions referred to in
clauses (b), (c) and (d) of this Paragraph (xiii) that
(X) would not, singly or in the aggregate, have a
Material Adverse Effect or (Y) are disclosed in the
Prospectus Supplement.
(xiv) No approval or consent of, or registration or filing
with, any federal or State of Delaware governmental
agency, court, or regulatory authority (other than the
Federal Communications Commission or any state or local
communications authority, as to which we express no
opinion) having jurisdiction over the Company under any
Applicable Law is required to be obtained or made by
the Company in connection with the execution, delivery
and performance (including the issuance
11
and sale of the Shares) as of the date hereof by the
Company of the Agreement, except (a) such as may be
required under federal securities statutes and
regulations (certain matters with respect to which are
addressed elsewhere in this opinion) or state
securities or blue sky statutes and regulations (as to
which we express no opinion), (b) such as have been
obtained or made or have been disclosed in the
Prospectus Supplement or (c) where the failure to
obtain such consents or waivers would not, singly or in
the aggregate, have a Material Adverse Effect.
(xv) None of the Company or the XM Subsidiaries is an
"investment company," as such term is defined in the
Investment Company Act of 1940, as amended.
(xvi) Except as set forth in the Agreement or in the
Prospectus Supplement, to our knowledge, there are no
holders of any securities of the Company who, by reason
of the execution, delivery or performance as of the
date hereof by the Company of the Agreement, have the
right to request or demand that the Company register
under the Securities Act securities held by them.
(xvii) The information in the Prospectus Supplement under the
following captions (or, as applicable, certain portions
of such information as indicated below), to the extent
that such information constitutes matters of law or
legal conclusions, or purports to describe certain
provisions of specified documents, has been reviewed by
us, and is correct in all material respects: "Risk
Factors--Large payment obligations under our
distribution agreement with General Motors may prevent
us from becoming profitable" and the second paragraph
of "Shareholders' Agreement" contained under "Certain
Capital Stock and Stockholder Information."
During the course of the preparation of the
Registration Statement, we participated in conferences
with officers and other representatives of the Company,
with representatives of the independent certified
public accountants of the Company and with you and your
representatives. While we have not undertaken to
determine independently, and we do not assume any
responsibility for, the accuracy, completeness, or
fairness of the statements in the Registration
Statement or Prospectus Supplement, we may state on the
basis of these conferences and our activities as
counsel to the Company in connection with the
Registration Statement that no facts have come to our
attention which cause us to believe that: (i) the
Registration Statement, at the time it became effective
and at the time the 462(b) Registration Statement
became effective, contained an untrue statement of a
material fact or omitted to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading, or that the
Prospectus Supplement, as of its date and as of the
date hereof, contains an untrue statement of a material
fact or omits to state a material fact necessary in
order to make the statement therein, in the light of
the circumstances under which they were made, not
misleading, (ii) there are any legal or governmental
proceedings pending or threatened against the Company
or any of the XM Subsidiaries that are required to be
disclosed in the Registration Statement or the
Prospectus Supplement, other than those disclosed
therein, or (iii) there are any contracts, or documents
of a character required to be described in the
Registration Statement or the Prospectus Supplement or
to be filed as exhibits to the Registration Statement
that are not described or referred to therein or so
filed; provided that in making the foregoing statements
-------- ---- (which shall not constitute an opinion),
we are not expressing any views as to the financial
statements and supporting schedules and other financial
information
12
included in or omitted from the Registration Statement
or the Prospectus Supplement.
(e) The Underwriters shall have received from ShawPittman,
counsel for the Company, such opinion or opinions, dated such Closing
Date, in form and substance satisfactory to the Underwriters and
counsel to the Underwriters, to the effect set forth in Exhibit A
hereto.
(f) The Underwriters shall have received from Xxxxxx &
Xxxxxxx, counsel for the Underwriters, such opinion or opinions, dated
such Closing Date, with respect to the incorporation of the Company,
the validity of the Shares delivered on such Closing Date, the
Registration Statement, the 462(b) Registration Statement, the
Prospectus and other related matters as the Underwriters may require,
and the Company shall have furnished to such counsel such documents as
they request for the purpose of enabling them to pass upon such
matters.
(g) The Underwriters shall have received a certificate,
dated such Closing Date, of the President or any Vice President and a
principal financial or accounting officer of the Company in which such
officers, to the best of their knowledge after reasonable
investigation, shall state that: the representations and warranties of
the Company in this Agreement are true and correct; the Company has
complied with all agreements and satisfied all conditions on its part
to be performed or satisfied hereunder at or prior to such Closing
Date; no stop order suspending the effectiveness of any Registration
Statement has been issued and no proceedings for that purpose have
been instituted or are contemplated by the Commission; and, subsequent
to the dates of the most recent financial statements in the Prospectus
Supplement, there has been no material adverse change, nor any
development or event involving a prospective material adverse change,
in the condition (financial or other), earnings, business, properties
or results of operations of the Company and its subsidiaries taken as
a whole except as set forth in or contemplated by the Prospectus
Supplement or as described in such certificate.
(h) The Underwriters shall have received a letter, dated
such Closing Date, of KPMG LLP which meets the requirements of
subsection (a) of this Section, except that the specified date
referred to in such subsection will be a date not more than three days
prior to such Closing Date for the purposes of this subsection.
(i) On or prior to the date of this Agreement, the
Underwriters shall have received lockup letters from each of the
executive officers and directors of the Company of the Company
identified on Schedule I attached hereto and from certain stockholders
identified on Schedule II attached hereto.
The Company will furnish the Underwriters with such conformed copies of such
opinions, certificates, letters and documents as the Underwriters reasonably
request.
7. Indemnification and Contribution. (a) The Company will indemnify
and hold harmless the Underwriters, its partners, directors and officers and
each person, if any, who controls the Underwriters within the meaning of Section
15 of the Act or Section 20 of the Securities and Exchange Act of 1934, as
amended, against any losses, claims, damages or liabilities, joint or several,
to which the Underwriters may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any Registration Statement, the
Prospectus Supplement, or any amendment or supplement thereto, or any related
preliminary prospectus supplement, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse the Underwriters for any legal or other expenses reasonably
incurred by the Underwriters in connection with investigating or defending any
such
13
loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement in or omission or alleged
omission from any of such documents in reliance upon and in conformity with
written information furnished to the Company by the Underwriters specifically
for use therein, it being understood and agreed that the only such information
furnished by the Underwriters consists of the information described as such in
subsection (b) below.
(b) Each Underwriter will, severally and not jointly, indemnify and
hold harmless the Company, its directors and officers and each person, if any
who controls the Company within the meaning of Section 15 of the Act or Section
20 of the Securities and Exchange Act of 1934, as amended, against any losses,
claims, damages or liabilities to which the Company may become subject, under
the Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in any Registration
Statement, the Prospectus Supplement, or any amendment or supplement thereto, or
any related preliminary prospectus supplement, or arise out of or are based upon
the omission or the alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company by the
Underwriters specifically for use therein, and will reimburse any legal or other
expenses reasonably incurred by the Company in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses are
incurred, it being understood and agreed that the only such information
furnished by the Underwriters consists of the following information in the
Prospectus Supplement furnished on behalf of the Underwriters: the concession
and reallowance figures appearing in the third paragraph under the caption
"Underwriting" and the information contained in the sixth paragraph under the
caption "Underwriting."
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under subsection (a) or (b) above. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Section for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation, unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such counsel or
(ii) the named parties to any such proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified party and representation
of both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the fees and expenses of more than one
separate firm (in addition to any local counsel) for all such indemnified
parties and that all such fees and expenses shall be reimbursed as they are
incurred. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened action in
respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party unless such
settlement (i) includes an unconditional release of such indemnified party from
all liability on any claims that are the subject matter of such action and (ii)
does not
14
include a statement as to, or an admission of, fault, culpability or a failure
to act by or on behalf of an indemnified party.
(d) If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above, then each indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of the losses, claims, damages or liabilities
referred to in subsection (a) or (b) above (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other from the offering of the Shares or (ii)
if the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company on the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from the offering of the Shares (before deducting expenses) received by the
Company and the total underwriting discounts and commissions received by the
Underwriters bear to the aggregate public offering price of the Shares. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or the Underwriters and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such untrue statement or
omission. The Company and the Underwriters agree that it would not be just or
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in this Section 7(d). The amount paid
by an indemnified party as a result of the losses, claims, damages or
liabilities referred to in the first sentence of this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any action or
claim which is the subject of this subsection (d). Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total discounts, fees
and commissions received by such Underwriter exceeds the amount of any damages
which such Underwriter has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters' obligations in this
subsection (d) to contribute are several in proportion to their respective
purchase obligations and not joint.
(e) The obligations of the Company under this Section are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity and shall be in addition to any
liability which the Company may otherwise have and shall extend, upon the same
terms and conditions, to each person, if any, who controls the Underwriters
within the meaning of the Act; and the obligations of the Underwriters under
this Section shall be in addition to any liability which the Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to each
director of the Company, to each officer of the Company who has signed a
Registration Statement and to each person, if any, who controls the Company
within the meaning of the Act.
8. Default of Initial Purchasers. If any Underwriter or Underwriters
default in their obligations to purchase Shares hereunder and the number of
Shares that such defaulting Underwriter or Underwriters agreed but failed to
purchase does not exceed 10% of the total number of Shares, Xxxxxx Xxxxxxx may
make arrangements satisfactory to the Company for the purchase of such Shares by
other persons, including any of the Underwriters, but if no such arrangements
are made by the Closing Date, the non-defaulting Underwriters shall be obligated
severally, in proportion to their respective commitments hereunder, to purchase
the Shares that such defaulting Underwriters agreed but failed to purchase. If
any Underwriter or Underwriters so default and the aggregate number of Shares
with respect to which such
15
default or defaults occur exceeds 10% of the total number of Shares and
arrangements satisfactory to Xxxxxx Xxxxxxx and the Company for the purchase of
such Shares by other persons are not made within 36 hours after such default,
this Agreement will terminate without liability on the part of any
non-defaulting Underwriter or the Company, except as provided in Section 9. As
used in this Agreement, the term "Underwriter" includes any person substituted
for an Underwriter under this Section. Nothing herein will relieve a defaulting
Underwriter from liability for its default.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the Underwriters set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation, or statement as to the results thereof, made by or on behalf of
the Underwriters, the Company or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of
and payment for the Shares. If this Agreement is terminated pursuant to Section
8 or if for any reason the purchase of the Shares by the Underwriters is not
consummated, the Company shall remain responsible for the expenses to be paid or
reimbursed by it pursuant to Section 5 and the respective obligations of the
Company and the Underwriters pursuant to Section 7 shall remain in effect, and
if any Shares have been purchased hereunder the representations and warranties
in Section 2 and all obligations under Section 5 shall also remain in effect. If
the purchase of the Shares by the Underwriters is not consummated for any reason
other than solely because of the termination of this Agreement pursuant to
Section 8 or the occurrence of any event specified in clause (iii), (iv) or (v)
of Section 6(c), the Company will reimburse the Underwriters for all
out-of-pocket expenses (including fees and disbursements of counsel) reasonably
incurred by them in connection with the offering of the Shares.
10. Termination. This Agreement shall be subject to termination by
notice given by you to the Company at any time at or prior to the Closing Date,
if (a) after the execution and delivery of this Agreement and prior to each
Closing Date (i) there shall have occurred any change, or any development or
event involving a prospective change, in the condition (financial or other),
earnings, business, properties or results of operations of the Company and its
subsidiaries taken as a whole which, in your judgment, is material and adverse,
(ii) trading generally shall have been suspended or materially limited on or by,
as the case may be, any of the New York Stock Exchange, the American Stock
Exchange, the National Association of Securities Dealers, Inc., the Chicago
Board of Options Exchange, the Chicago Mercantile Exchange or the Chicago Board
of Trade, (iii) trading of any securities of the Company shall have been
suspended or materially limited on any exchange or in any over-the-counter
market, (iv) a material disruption in securities settlement, payment or
clearance services in the United States shall have occurred, (v) a general
moratorium on commercial banking activities in New York shall have been declared
by either Federal or New York State authorities or (vi) there shall have
occurred any change in financial markets in the United States or in the
international financial markets, any outbreak of hostilities or escalation
thereof or any other calamity or crisis that, in your judgment, is material and
adverse and (b) in the case of any of the events specified in clauses 10(a)(i)
through 10(a)(vi), such event, singly or together with any other such event,
makes it, in your judgment, impracticable or inadvisable to market the Shares or
to enforce contracts for the sale of the Shares on the terms and in the manner
contemplated in the Prospectus Supplement.
11. Notices. All communications hereunder will be in writing and, if
sent to the Underwriters, will be mailed, delivered or telegraphed and confirmed
to the Underwriters, c/o Morgan Xxxxxxx & Co. Incorporated at Xxxxxx Xxxxxxx &
Co. Incorporated, 0000 Xxxxxxxx, Xxx Xxxx, XX 00000, Attention: Equity Capital
Markets Syndicate Desk, telecopy number: (000) 000-0000, or, if sent to the
Company, will be mailed, delivered or telegraphed and confirmed to it at 0000
Xxxxxxxxx Xxxxx X.X., Xxxxxxxxxx XX 00000, Attention: Chief Financial Officer,
telecopy number: (000) 000-0000; provided, however, that any notice to the
Underwriters pursuant to Section 7 will be mailed, delivered or telegraphed and
confirmed to the Underwriters.
16
12. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 7, and no other
person will have any right or obligation hereunder.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. Applicable Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York, without regard to
principles of conflicts of laws.
15. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
The Company hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
17
If the foregoing is in accordance with the Underwriters' understanding
of our agreement, kindly sign and return to the Company one of the counterparts
hereof, whereupon it will become a binding agreement between the Company and the
Underwriters in accordance with its terms.
Very truly yours,
XM SATELLITE RADIO HOLDINGS, INC.
By:___________________________
Name:
Title:
The foregoing Underwriting Agreement is hereby
confirmed and accepted as of the date first
above written.
Xxxxxx Xxxxxxx & Co. Incorporated,
By:_______________________________
Name:
Title:
Acting on behalf of itself and as the
Representative of the several Underwriters
SCHEDULE A
Number of Shares
-----------
Underwriter
-----------
Xxxxxx Xxxxxxx & Co. Incorporated ........................
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated .......
Credit Suisse First Boston Corporation ...................
Deutsche Bank Securities Inc. ............................
-----------
Total ................................... 13,387,000
2
EXHIBIT A
Form of Opinion of ShawPittman
1. Except as set forth in the Prospectus Supplement, (i) the FCC
has granted XM Satellite Radio Holdings Inc. (the "Company") all material
-------
authorizations needed to construct, launch, and operate a satellite radio
service and offer a subscription service on a non-common carrier basis, and (ii)
the FCC has assigned XM two orbital locations at 85 degrees X.X. and 105 degrees
X.X. for XM Radio's two satellites and the frequency band 2332.5-2345 MHz to
provide such satellite radio service.
2. Except for such FCC consents, approvals, authorizations or
orders that have already been obtained, no material consent, approval,
authorization or order of the FCC is required to be obtained by the Company or
its subsidiaries under the Communications Laws for the consummation of the
transactions contemplated under the Underwriting Agreement, except that, from
time to time, the Company and its subsidiaries may be required to obtain certain
authorizations that would be required in the ordinary course of business.
3. The execution and delivery of the Underwriting Agreement, and
the consummation of the transactions contemplated thereunder, by the Company do
not and will not violate any material provision of the Communications Laws.
4. The statements set forth in the Prospectus Supplement under
the captions "Risk Factors --Failure to comply with FCC requirements could
damage our business," "Risk Factors--If the challenge to our FCC license is
successful, our business could be harmed" and "Business--Regulatory Matters,"
insofar as such statements constitute a summary of material (a) legal matters,
(b) documents, or (c) proceedings under the Communications laws, fairly present
the information contained under such captions in light of the circumstances in
which they were made.
5. Except as set forth in the Prospectus Supplement, to our
knowledge, there is no investigation or complaint before the FCC pending or
threatened in writing that is specifically directed against or in respect of the
Company or its subsidiaries, or any of the FCC licenses held by the Company or
its subsidiaries that would reasonably be expected to result in the revocation
of any material FCC authorizations or otherwise to materially impair the
operations of the Company or its subsidiaries.
3
SCHEDULE I
Officers and Directors
Xxxxxxx Xxxx
Xxxxxxxxx Xxxxx
Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
Xxxx Xxxxx
Xxxxxxx X. Xxxx
Xxxx X. Xxxxxxx
Xxxx Xxxxxx
Xx. Xxxxxxx Xxxxxxxxx
Xxxxxx X. Xxxxxxx, Xx.
Xxxx Xxxx
Xx. Xxxxxxxx Xxxxx
Xxxxxx X. Xxxxxxxxx
4
SCHEDULE II
Stockholders
AEA XM Investor I LLC
AEA XM Investors II LLC
Clear Channel Investments, Inc.
Columbia XM Radio Partners L.L.C.
DIRECTV Enterprises, Inc.
General Motors Corporation
Madison Dearborn Capital Partners III, L.P.
Madison Dearborn Special Equity III, L.P.
Special Advisors Fund I, LLC
Telecom-XM Investors, L.L.C.
5
