Exhibit 1.1
10,000,000 SHARES
XM SATELLITE HOLDINGS INC.
CLASS A COMMON STOCK; PAR VALUE $.01 PER SHARE
UNDERWRITING AGREEMENT
December 5, 2001
XXXXXX 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 Xxxxxx Xxxxxxx & Co. Incorporated
(the "UNDERWRITER") 10,000,000 shares of its Class A common stock, par value
$.01 per share (the "FIRM SHARES") and also proposes to issue and sell to the
Underwriter, at the option of the Underwriter, up to an additional 1,500,000
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 Underwriter as follows:
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to, and agrees with, the Underwriter 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 shelf registration statement, at
the time it was declared effective by the Commission, including all
material incorporated by reference therein, is hereinafter referred to
as the "REGISTRATION STATEMENT." The form of prospectus, as included in
a 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 and the Prospectus, at the time the
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
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 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 a Registration Statement, the
Prospectus or the Prospectus Supplement based upon written information
furnished to the Company by the Underwriter 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.
(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) 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.
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(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,
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").
(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
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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.
(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
Underwriter, and the Underwriter agrees to purchase from the Company, the Shares
at a purchase price of $11 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
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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 Underwriter 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 Underwriter in Federal (same
day) funds by official bank check or checks or wire transfer to an account at a
bank acceptable to the Underwriter 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 December 10, 2001, or at such other
time not later than seven full business days thereafter as the Underwriter
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 Underwriter the option to
purchase up to 1,500,000 Additional Shares at the same purchase price per share
to be paid by the Underwriter 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 Underwriter. 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 Underwriter 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
Underwriter, 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 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 Underwriter may request in writing at least two
full business days prior to the Additional Closing Date. The Company will permit
the Underwriter 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 Underwriter.
4. OFFERING BY UNDERWRITER. It is understood that the Underwriter
proposes to offer the Shares for sale to the public as set forth in the
Prospectus Supplement.
5. CERTAIN AGREEMENTS OF THE COMPANY. The Company agrees with the
Underwriter 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 Underwriter) 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 Underwriter,
subparagraph (4) or (5)). The Company will advise the Underwriter
promptly of any such filing pursuant to Rule 424(b).
(b) The Company will advise the Underwriter promptly of any
proposal to amend or supplement the Registration Statement or the
Prospectus and will not effect such amendment or supplementation
without the Underwriter's consent; and the Company will also advise the
Underwriter promptly of the effectiveness of the Registration Statement
and of any amendment or supplementation of a Registration Statement or
the Prospectus and of the institution by the Commission of any stop
order proceedings in respect of a 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.
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(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
Underwriter 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 Underwriter of
such event or condition and will promptly prepare, file with the
Commission and furnish, at its own expense, to the Underwriter 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 Underwriter's consent to, and its 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 Initial
Registration Statement (or, if later, the Effective Date of the
Additional Registration Statement) 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 Underwriter, 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 Underwriter or any dealer, the Prospectus Supplement and
all amendments and supplements to such documents, in each case in such
quantities as the Underwriter requests. 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 Underwriter
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 Underwriter designates 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 Underwriter, 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 Underwriter (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 Underwriter 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
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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
Underwriter, 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
Underwriter designates 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 Underwriter, (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 the
Underwriter, 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 or talent stock option 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 UNDERWRITER. The obligations of
the Underwriter 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:
(a) The Underwriter 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) they have performed the procedures specified by the
American Institute of Certified Public Accountants for a
review of interim financial information as described in
Statement of Auditing Standards No. 71, Interim Financial
Information, on the unaudited financial statements included in
the Registration Statement;
(iii) on the basis of the review referred to in clause (ii)
above, a reading of the latest available interim financial
statements of the Company, inquiries of officials of the
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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) the unaudited financial statements
included in the Registration Statement do not comply
as to form in all material respects with the
applicable accounting requirements of the Act and the
related published Rules and Regulations or any
material modifications should be made to such
unaudited financial statements for them to be in
conformity with generally accepted accounting
principles;
(B) the unaudited operating loss, cash and
cash equivalents, total assets, total liabilities and
long term debt for the nine-month periods ended
September 30, 2001 and September 30, 2000 included in
the Prospectus do not agree with the amounts set
forth in the unaudited consolidated financial
statements for those same periods or were not
determined on a basis substantially consistent with
that of the corresponding amounts in the audited
statements of income;
(C) 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
(D) 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 (C) and (D) above for
changes, increases or decreases which the Prospectus
Supplement discloses have occurred or may occur or which are
described in such letter; and
(iv) 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.
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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.
(b) The 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 a 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 Underwriter, 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 the judgment of the Underwriter, 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 Underwriter 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
and Form 8-K. 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 and Form 8-K. 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
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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 stock conforms in all material respects
to the description thereof set forth in the Form 8-K
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
10
or other securities of the Company or any of the XM
Subsidiaries, respectively, except as described in
the Prospectus Supplement and Form 8-K (other than
options issued pursuant to the Company's 1998 Shares
Award Plan and Employee Stock Purchase Plan).
(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 has 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, 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 (i) violate the Company
Certificate of Incorporation or Company Bylaws, (ii)
breach or constitute a default under any agreement or
contract filed as an exhibit to the Registration
Statement, (iii) 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 (iv) 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 (ii), (iii) and (iv) of this Paragraph (m)
that (X) would not, singly or in the aggregate, have
a Material Adverse Effect or (Y) are disclosed in the
Prospectus Supplement or Form 8-K.
(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
11
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 and sale of the Shares) as of the date
hereof by the Company of the Agreement, except (i)
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), (ii)
such as have been obtained or made or have been
disclosed in the Prospectus Supplement and Form 8-K
or (iii) 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 and Form 8-K, 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 and Form
8-K 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" and the first paragraph of
"Proposed Shareholder's Rights Plan," each as
contained under "Certain Capital Stock and
Stockholder Information."
(e) The Underwriter shall have received from ShawPittman,
counsel for the Company, such opinion or opinions, dated such Closing
Date, in form and substance satisfactory to the Underwriter and counsel
to the Underwriter, to the effect set forth in Exhibit A hereto.
(f) The Underwriter shall have received from Xxxxxx & Xxxxxxx,
counsel for the Underwriter, 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 Prospectus and other related matters as the Underwriter
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 Underwriter 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
12
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 Underwriter 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 Underwriter
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 Underwriter with such conformed copies of such
opinions, certificates, letters and documents as the Underwriter reasonably
requests.
7. INDEMNIFICATION AND CONTRIBUTION. (a) The Company will indemnify and
hold harmless the Underwriter, its partners, directors and officers and each
person, if any, who controls the Underwriter 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 Underwriter 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
Underwriter for any legal or other expenses reasonably incurred by the
Underwriter in connection with investigating or defending any such 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 Underwriter specifically for use
therein, it being understood and agreed that the only such information furnished
by the Underwriter consists of the information described as such in subsection
(b) below.
(b) The Underwriter will 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
Underwriter 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 Underwriter consists of the following information in the
Prospectus
13
Supplement furnished on behalf of the Underwriter: 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 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 Underwriter 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 Underwriter 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 Underwriter 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 Underwriter
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
Underwriter and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
Company and the Underwriter 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
14
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), the Underwriter shall not be required to
contribute any amount in excess of the amount by which the Purchase Price
exceeds the amount of any damages which the 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.
(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 Underwriter
within the meaning of the Act; and the obligations of the Underwriter under this
Section shall be in addition to any liability which the Underwriter 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. SURVIVAL OF CERTAIN REPRESENTATIONS AND OBLIGATIONS. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the Underwriter 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 Underwriter, 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 for any reason the purchase of the Shares by the
Underwriter 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 Underwriter 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 Underwriter is
not consummated for any reason other than the occurrence of any event specified
in clause (iii), (iv) or (v) of Section 6(c), the Company will reimburse the
Underwriter for all out-of-pocket expenses (including fees and disbursements of
counsel) reasonably incurred by them in connection with the offering of the
Shares.
9. TERMINATION. This Agreement shall be subject to termination by
notice given by you to the Company, if (a) after the execution and delivery of
this Agreement and prior to each Closing Date (i) 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, (ii) trading of any
securities of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in your judgment, is material and adverse and (b) in the case of any of
the events specified in clauses 9(a)(i) through 9(a)(iv), such event, singly or
together with any other such event, makes it, in your judgment, impracticable to
market the Shares on the terms and in the manner contemplated in the Prospectus
Supplement.
10. NOTICES. All communications hereunder will be in writing and, if
sent to the Underwriter, will be mailed, delivered or telegraphed and confirmed
to the Underwriter 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
15
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 Underwriter pursuant to Section 7 will be mailed,
delivered or telegraphed and confirmed to the Underwriter.
11. 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.
12. 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.
15. 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.
16. 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.
16
If the foregoing is in accordance with the Underwriter's 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
Underwriter in accordance with its terms.
Very truly yours,
XM SATELLITE RADIO HOLDINGS, INC.
By............................
[INSERT TITLE]
The foregoing Underwriting Agreement is hereby
confirmed and accepted as of the date first
above written.
XXXXXX XXXXXXX & CO. INCORPORATED
By..................................
[INSERT TITLE]
17
EXHIBIT A
FORM OF OPINION OF SHAWPITTMAN
1. Except as set forth in the Prospectus Supplement or Form
8-K, (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.
18
SCHEDULE I
Officers and Directors
Xxxxxxx Xxxx
Xxxxxxxxx Xxxxx
Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxx
Xxxx X. Xxxxxxx
Xxxx Xxxxxx
Xx. Xxxxxxx Xxxxxxxxx
Xxxxxx X. Xxxxxxx, Xx.
Xxxxx X. Xxxxx
Xxxx Xxxx
Xx. Xxxxxxxx Xxxxx
Xxxxxx X. Xxxxxxxxx
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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.
20
