Exhibit 10.10
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CREDIT AGREEMENT
among
XM SATELLITE RADIO INC.,
as a Borrower
and
XM SATELLITE RADIO HOLDINGS INC.,
as a Borrower
and
GENERAL MOTORS CORPORATION,
as Lender
Dated as of January 28, 2003
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TABLE OF CONTENTS
1. DEFINITIONS............................................................ 1
1.1. Certain Definitions........................................... 1
1.2. Other Definitional Provisions................................. 6
2. LOAN AND TERMS OF PAYMENT.............................................. 6
2.1. Loan Commitment............................................... 6
2.2. Manner of Borrowing........................................... 6
2.3. Interest...................................................... 7
2.4. Payments and Notes............................................ 7
2.5. Payment at Maturity........................................... 8
2.6. Prepayment.................................................... 8
3. COLLATERAL............................................................. 8
3.1. Security Agreements........................................... 8
3.2. Release of Collateral......................................... 9
3.3. Termination of Security Interest.............................. 9
4. CONDITIONS PRECEDENT................................................... 9
4.1. Conditions to Initial Advance................................. 9
4.2. Conditions to Each Advance.................................... 10
5. REPRESENTATIONS AND WARRANTIES OF THE LENDER........................... 11
5.1. Risks of Investment........................................... 11
5.2. Investment Experience......................................... 11
5.3. Ability to Bear Risk.......................................... 11
5.4. Receipt and Review of Documentation........................... 11
5.5. Acquisition for Own Account................................... 11
5.6. No Public Market; Rule 144.................................... 11
5.7. Organization, Good Standing, Corporate Authority.............. 12
5.8. Due Authorization............................................. 12
5.9. Qualified Institutional Buyer or Accredited Investor.......... 12
6. RESTRICTIONS ON TRANSFER............................................... 12
6.1. Restrictions; Restrictive Legend.............................. 12
7. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE BORROWERS............ 13
7.1. Incorporation, Standing, etc.................................. 13
7.2. Authorization of Agreement and Notes.......................... 13
7.3. Absence of Defaults and Conflicts............................. 13
7.4. Governmental Consents......................................... 14
8. DEFAULTS AND REMEDIES.................................................. 14
8.1. Events of Default............................................. 14
8.2. Acceleration.................................................. 15
8.3. Other Remedies................................................ 16
8.4. Waiver of Past Defaults....................................... 16
9. PRIORITY OF OBLIGATIONS................................................ 16
10. EXPENSES............................................................... 16
11. SURVIVAL............................................................... 16
12. AMENDMENTS AND WAIVERS................................................. 16
13. GUARANTEES............................................................. 17
13.1. Execution and Delivery of Agreement Guarantees................ 17
13.2. Subsidiary Guarantors may Consolidate, Etc. on Certain Terms.. 17
13.3. Releases Following Sale of Assets............................. 17
13.4. Application of Certain Terms and Provisions
to the Subsidiary Guarantors................................. 17
13.5. Addition of Subsidiary Guarantors............................. 17
14. NOTICES................................................................ 18
15. EXECUTION IN COUNTERPARTS.............................................. 18
16. BINDING EFFECT......................................................... 18
17. GOVERNING LAW; CHOICE OF FORUM; JURY TRIAL WAIVER...................... 18
18. MISCELLANEOUS.......................................................... 19
18.1. Severability.................................................. 19
18.2. No Waiver..................................................... 19
18.3. Further Assurances............................................ 19
18.4 Joint and Several Liability................................... 19
18.5. Construction.................................................. 20
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Exhibit A Form of Second Amended and Restated Distribution Agreement
Exhibit B Form of Request for Advance
Exhibit C Form of Warrant
Exhibit D Form of FCC License Subsidiary Pledge Agreement
Exhibit E Form of General Security Agreement
Exhibit F Form of Agreement Guarantee
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CREDIT AGREEMENT
CREDIT AGREEMENT (this "Agreement"), dated as of January 28,
2003, by and among XM SATELLITE RADIO INC., a Delaware corporation (the
"Company"), XM SATELLITE RADIO HOLDINGS INC., a Delaware corporation ("Holdings"
and together with the Company, the "Borrowers"), and GENERAL MOTORS CORPORATION,
a Delaware corporation (the "Lender") (collectively, the "Parties," and each, a
"Party").
WITNESSETH
WHEREAS, the Borrowers, with certain of their Subsidiaries
(collectively, "XM"), are engaged in the development of a satellite digital
audio radio service in the United States;
WHEREAS, XM requires significant incremental capital to fund its
operations and is in the process of attempting to restructure certain of its
obligations under its outstanding securities and other contractual obligations;
WHEREAS, as part of XM's refinancing efforts, among other things,
(i) the Lender has agreed to finance payment obligations (the "Contractual
Obligations") from time to time owing by the Borrowers in cash to the Lender or
OnStar Corporation ("OnStar"), a subsidiary of the Lender, by allowing the
Borrowers to make periodic draws in an aggregate amount of up to $100,000,000
and (ii) OnStar has entered into that certain Note Purchase Agreement dated as
of December 20, 2002 (as such agreement may be amended, modified or supplemented
from time to time, the "Note Purchase Agreement"), by and among OnStar and the
Borrowers;
WHEREAS, to induce the Lender to agree to finance such
Contractual Obligations, the Borrowers have agreed to enter into that certain
the Second Amended and Restated Distribution Agreement, dated as of a date on or
about the date hereof (as such agreement may be amended, modified or
supplemented from time to time, the "Second Amended Distribution Agreement"), by
and among OnStar and the Borrowers, substantially in the form attached hereto as
Exhibit A; and
WHEREAS, the Parties desire to set forth the terms and conditions
of such financing.
NOW THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the Parties hereby agree as
follows:
1. DEFINITIONS
1.1. CERTAIN DEFINITIONS
The following terms when used in this Agreement, including its
preamble and recitals, shall, except where the context otherwise requires, have
the following meanings:
"Advance" has the meaning set forth in Section 2.1 of this
Agreement.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
"control," as used with respect to any Person, shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of such Person, whether through the ownership of voting
securities, by agreement or otherwise; provided that beneficial ownership of 10%
or more of the Voting Stock of a Person shall be deemed to be control. For
purposes of this definition, the terms "controlling," "controlled by" and "under
common control with" shall have correlative meanings.
"Agreement" means this Loan Agreement (including any Schedules
and Exhibits hereto), as it may from time to time be amended, supplemented or
modified in accordance with its terms.
"Agreement Guarantee" means (1) the Agreement Guarantee, dated as
of the Closing Date, entered into by XM Leasing Subsidiary in favor of the
Lender and (2) any other guarantee entered into in favor of the Lender pursuant
to Section 13.5 hereof.
"Applicable Margin" means a rate per annum equal to 10%.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal
or state law for the relief of debtors.
"Borrowers" has the meaning set forth in the recitals to this
Agreement.
"Business Day" means any day other than a Legal Holiday.
"Class A Common Stock" means the Class A Common Stock, par value
$0.01 per share, of Holdings.
"Closing" means the consummation of the transactions contemplated
by this Agreement.
"Closing Date" means the date of the Closing.
"Collateral" means (1) the Collateral (as defined in the General
Security Agreement), and (2) the Collateral (as defined in the FCC License
Subsidiary Pledge Agreement).
"Collateral Agent" means the collateral agent under the
applicable Intercreditor Agreement.
"Commitment Period" shall mean the period commencing on the date
hereof, and ending upon the earlier of (i) termination of the Second Amended
Distribution Agreement or (ii) December 31, 2009.
"Concurrent Financing Transactions" means (1) the issuance to
OnStar pursuant to the Note Purchase Agreement of the Company's and Holdings'
Series GM Senior Secured Convertible Notes due 0000 (xxx "XX Notes") in the
principal amount of $89,042,387 in lieu of certain guaranteed payments due to
Lender during the period from 2003 to 2006 under the Company's Distribution
Agreement with the Lender, (2) the amendment of the Distribution Agreement to
provide for, among other things, the issuance of the GM Notes and the payment of
up to $35,000,000 in subscriber bounty payments in the form of Class A Common
Stock, (3) the issuance of the Company's and Holdings'10% Senior Secured
Convertible Discount Notes due 2009 to certain investors, (4) the issuance of a
warrant to the Lender to purchase 10,000,000 shares of Class A Common Stock, (5)
the issuance of the Company's 14% Senior Secured Discount Notes due 2009,
warrants to purchase Holdings' Class A Common Stock and cash in exchange for
some or all of the Company's outstanding 14% Senior Secured Notes due 2010, (6)
the issuance and sale on or before the date hereof, to the extent determined to
be desirable by Holdings, of Class A Common Stock, in accordance with Section
4(2) of the Securities Act or pursuant to a registration statement under the
Securities Act, including the proposed sale of 5,555,556 shares of Class A
Common Stock to U.S. Trust Company and warrants to purchase 900,000 shares of
Class A Common Stock, and (7) the execution, delivery and performance of all
agreements, documents and instruments, including the Noteholders Agreement and
Registration Rights Agreement, evidencing the transactions described in clauses
(1) through (6) above and all arrangements contemplated thereby.
"Contractual Obligations" shall have the meaning set forth in the
recitals hereof.
"Default" means any event that is, or with the passage of time or
the giving of notice or both would be, an Event of Default.
"Excess Cash" means, for any fiscal year, the excess, if any, of
(a) the sum, without duplication, of (i) consolidated net income of Holdings and
its subsidiaries for such fiscal year, as reported in Holdings' reports filed
with the Securities and Exchange Commission, (ii) an amount equal to the amount
of all non-cash charges (including depreciation and amortization) deducted in
arriving at such consolidated net income, (iii) decreases in
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consolidated working capital of Holdings and its subsidiaries for such fiscal
year, (iv) an amount equal to the aggregate net non-cash loss on the disposition
of property by Holdings and its subsidiaries during such fiscal year (other than
sales of inventory in the ordinary course of business), to the extent deducted
in arriving at such consolidated net income and (v) the net increase during such
fiscal year (if any) in deferred tax accounts of Holdings and its subsidiaries
over (b) the sum, without duplication, of (i) an amount equal to the amount of
all non-cash credits included in arriving at such consolidated net income, (ii)
the aggregate amount actually paid by Holdings and its subsidiaries in cash
during such fiscal year on account of capital expenditures, (iii) the aggregate
amount of all prepayments of all amounts owing to the Lender, whether under this
Agreement, the Second Amended Distribution Agreement or any obligations arising
out of the Concurrent Financing Transactions during such fiscal year, (iv) the
aggregate amount of all regularly scheduled principal payments of obligations
made during such fiscal year with respect to borrowed money outstanding on the
date hereof, under this Agreement, or arising out of the Concurrent Financing
Transactions, (v) increases in consolidated working capital of Holdings and its
subsidiaries for such fiscal year, (vi) an amount equal to the aggregate net
non-cash gain on the disposition of property by Holdings and its subsidiaries
during such fiscal year (other than sales of inventory in the ordinary course of
business), to the extent included in arriving at such consolidated net income,
(vii) the net decrease during such fiscal year (if any) in deferred tax accounts
of Holdings and its subsidiaries, (viii) $10 million, and (ix) an amount equal
to the amount of all funds set aside during such fiscal year solely for
financing or paying the cost of (A) one or more replacement satellites, (B)
other expenditures relating to infrastructure, back-office, user equipment and
subscriber acquisition, and (C) research and development activities.
"Event of Default" has the meaning set forth in Section 8.1 of
this Agreement.
"Fair Market Value" means, with respect to the Class A Common
Stock on any Interest Payment Date, the average, calculated to two decimal
places, of the weighted average daily trading prices of such stock over the ten
(10) Trading Day period ending on the Trading Day prior such Interest Payment
Date as reported on Bloomberg. If at any time the Class A Common Stock is not
listed on any national securities exchange or quoted on the Nasdaq Stock Market
or the over-the-counter market, the Fair Market Value of the Class A Common
Stock shall be the fair value thereof as determined by the Board of Directors of
Holdings in good faith.
"FCC License Subsidiary" means XM Radio Inc., a Delaware
corporation, and any and all successors thereto.
"FCC License Subsidiary Pledge Agreement" means the Amended and
Restated Security Agreement, dated as of the Closing Date, between the Company
and the Collateral Agent, providing for the pledge of the stock of the FCC
License Subsidiary as security for the obligations of the Company under the
Prior Indenture and the Concurrent Financing Transactions as such agreement may
be amended, restated, supplemented or otherwise modified from time to time.
"FCC License Subsidiary Pledge Intercreditor Agreement" means the
Intercreditor and Collateral Agency Agreement, dated as of the Closing Date,
pursuant to which the collateral agent named therein will be appointed on behalf
of the various secured creditor parties to serve as collateral agent under the
FCC License Subsidiary Pledge Agreement.
"Funding Date" shall mean each date upon which an Advance is made
hereunder.
"General Security Agreement" means the Security Agreement, dated
as of the Closing Date, among the Borrowers, XM Leasing Subsidiary, the
Collateral Agent and the other parties thereto.
"General Intercreditor Agreement" means the Intercreditor and
Collateral Agency Agreement, dated as of the Closing Date, pursuant to which the
collateral agent named therein will be appointed on behalf of the various
secured creditor parties to serve as collateral agent under the General Security
Agreement.
"GM Revenues" means all revenues attributable to XM Receivers
installed in Enabled GM Vehicles (as such terms are defined in the Second
Amended Distribution Agreement).
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"GM Subscribers" means all Subscribers whose subscriptions are
attributable to XM Receivers installed in Enabled GM Vehicles (as such terms are
defined in the Second Amended Distribution Agreement).
"Holdings" has the meaning set forth in the recitals to this
Agreement.
"Intercreditor Agreements" means the General Intercreditor
Agreement and the FCC License Subsidiary Pledge Agreement.
"Interest Payment Date" means the 30th day of June and the 31st
day of December of each year; provided, that if any Interest Payment Date is not
a Business Day, the Interest Payment Date will be deferred until the next
succeeding Business Day.
"Interest Rate" means, for any day during a Quarterly Period, a
rate per annum equal to the LIBOR Rate in effect for such Quarterly Period plus
the Applicable Margin.
"Internal Revenue Code" means the Internal Revenue Code of 1986,
as amended.
"Lender" has the meaning set forth in the recitals to this
Agreement.
"Legal Holiday" means a Saturday, a Sunday or a day on which
banking institutions in the City of New York or at a place of payment are
authorized by law, regulation or executive order to remain closed.
"LIBOR Rate" means, for any Quarterly Period, the rate that is
reported on the Quarterly Date on which such Quarterly Period commences as the
6-month London Interbank Offered Rate in The Wall Street Journal's listing of
Money Rates, or if such newspaper shall have ceased publishing, then in any
successor publication designated by the Lender.
"Loan Commitment" shall mean the obligation of the Lender to make
Advances to the Borrowers in the maximum aggregate principal amount of
$100,000,000 for the purpose of making payments in respect of the Contractual
Obligations.
"Material Subsidiary" shall have the meaning set forth in the
Note Purchase Agreement.
"Maturity Date" means December 31, 2009.
"Note Purchase Agreement" has the meaning set forth in the
recitals hereto.
"Noteholders Agreement" means the Second Amended and Restated
Shareholder and Noteholders Agreement, dated as of the Closing Date, by and
among the Borrowers and the other parties named on the signature pages thereof,
as such agreement may be amended, modified or supplemented from time to time.
"Obligations" means any principal, interest, penalties,
indemnifications, reimbursements, damages and other liabilities payable
hereunder.
"Officer" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating Officer,
the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary or any Vice-President of such Person.
"OnStar" has the meaning set forth in the recitals hereto.
"Parent Company Merger" means (a) a merger or consolidation of
the Company with or into Holdings or a merger or consolidation of Holdings with
or into the Company, provided that the holders of Voting Stock of Holdings
immediately prior to such transaction own substantially all of the Voting Stock
of the surviving entity immediately after such transaction or (b) any
assignment, transfer, conveyance or other disposition of all or substantially
all of the properties or assets of the Company to Holdings or of Holdings to the
Company.
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"Pari Passu Indebtedness" means, with respect to a Borrower,
Indebtedness of such Borrowers that is pari passu in right of payment to the
Indebtedness under this Agreement.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
limited liability company or government or other entity.
"Pre-Marketing Cash Flow" means earnings before interest income
and expense, other income, taxes, depreciation (including amounts related to
research and development) and amortization ("EBITDA"), calculated in the same
manner as in consolidated financial statements contained in the reports of
Holdings filed with the Securities and Exchange Commission, but excluding from
such calculation all marketing, advertising, subscriber acquisition and
distribution expenses and also excluding all GM Revenues.
"Prior Indenture" means the Indenture, dated as of March 15,
2000, between the Company and U.S. Trust Company of New York, as Trustee, as
amended or supplemented from time to time.
"Quarterly Date" means the 31st day of March, the 30th day June,
the 30th day of September and the 31st day of December of each year; provided
that (i) if any Quarterly Date is not a Business Day, the Quarterly Date will be
deferred to the next following Business Day, and (ii) if any Quarterly Date
would occur after the Maturity Date, such Quarterly Date shall be the Maturity
Date.
"Quarterly Period" means each period commencing on and including
a Quarterly Date through, but not including, the next following Quarterly Date.
"Registration Rights Agreement" means the Second Amended and
Restated Registration Rights Agreement, dated as of the Closing Date, by and
among Holdings and the other parties named on the signature pages thereof, as
such agreement may be amended, modified or supplemented from time to time.
"Revenue Share" has the meaning set forth in the Second Amended
Distribution Agreement.
"Revenue Share Note" shall have the meaning set forth in Section
2.4 (c).
"Request for Advance" has the meaning set forth in Section
2.2(a).
"Second Amended Distribution Agreement" has the meaning set forth
in the recitals to this Agreement.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Agreements" means the FCC License Subsidiary Pledge
Agreement and the General Security Agreement.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof.
"Subscriber" means a subscriber in good standing to the XM Radio
Service that has paid subscription fees for at least one month of such service
and whose subscription payments are not delinquent.
"Subsidiary" means, with respect to any specified Person:
(1) any corporation, association or other business entity of
which more than 50% of the total voting power of shares of Voting Stock is at
the time owned or controlled, directly or indirectly, by such Person or one or
more of the other Subsidiaries of that Person (or a combination thereof); and
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(2) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or one or more Subsidiaries
of such Person (or any combination thereof).
"Subsidiary Guarantor" means any entity that enters into an
Agreement Guarantee pursuant to Section 13.5 hereof. As of the date hereof, XM
Leasing Subsidiary is the only Subsidiary Guarantor.
"Trading Day" means any day on which the Class A Common Stock is
traded on the Nasdaq National Market or such other primary national securities
exchange on which the Class A Common Stock is then listed or quoted.
"Transaction Documents" means all documents delivered in
connection with the transactions contemplated by this Agreement, including the
Agreement Guarantees, the Note Purchase Agreement, the Security Agreements, the
Noteholders Agreement, the Intercreditor Agreements, the Registration Rights
Agreement and the Second Amended Distribution Agreement.
"Voting Stock" has the meaning set forth in the Note Purchase
Agreement.
"XM" has the meaning set forth in the recitals to this Agreement.
"XM Leasing Subsidiary" means XM Equipment Leasing LLC, a
Delaware limited liability company, and any and all successors thereto.
"XM Radio Service" means digital radio programming transmitted by
satellites and terrestrial repeating stations to vehicle, home and portable
radios in the United States.
1.2. OTHER DEFINITIONAL PROVISIONS
Capitalized terms used in this Agreement but not defined in
Section 1.1 hereof shall have the meanings ascribed to them in the Note Purchase
Agreement. The words "hereof," "herein," and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement. Defined terms in the singular
shall include the plural and vice versa.
2. LOAN AND TERMS OF PAYMENT
2.1. LOAN COMMITMENT.
(a) Advances. Subject to the terms of this Agreement, the Lender
agrees to make advances (each, an "Advance", collectively, the "Advances") to
the Borrowers during the Commitment Period in an aggregate principal amount not
to exceed the Loan Commitment.
(b) Purpose. The Borrowers shall use the Advances solely to pay
the Contractual Obligations owed to Lender or OnStar.
2.2. MANNER OF BORROWING
(a) Request for Advance. Either Borrower may request an Advance
by delivering Lender a completed Request for Advance in the form attached hereto
as Exhibit B (a "Request for Advance") not later than 3:00 p.m., New York City
time on the date such Advance is to be funded. Such Request for Advance shall be
signed by an authorized officer of such Borrower and shall indicate the amount
of the requested Advance, a description of the Contractual Obligations for which
such Advance is being requested, and the date for such Advance, which shall be
the date on which the Contractual Obligations being funded by such Advance
become due
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and owing (the "Funding Date"). Each Request for Advance shall be irrevocable
and effective only upon receipt by the Lender.
(b) Funding. The Lender shall make each Advance on the date
requested by making a notation on its books of account (or, if applicable, the
books of account of OnStar) that the Contractual Obligations due and owing by
the applicable Borrower on the date of the Advance have been paid in an amount
equal to the amount of the Advance.
2.3. INTEREST
(a) Interest Accrual. Interest shall accrue at the Interest Rate
on a daily basis during each Quarterly Period on the unpaid principal amount of
all Advances and shall be payable in arrears on each Interest Payment Date for
the most recent two Quarterly Periods then ended.
(b) Default Interest. In the event the Borrowers shall fail to
make any payment of the principal or interest when due, after giving effect to
any applicable grace period provided for in this Agreement, the Borrowers shall
pay interest on such unpaid amount, payable from time to time on demand, from
the date such amount shall have become due to the date of payment thereof (after
as well as before judgment), accruing on a daily basis, at a per annum rate
equal to the sum of the Interest Rate in effect at such time plus one percent
(1.0%).
2.4. PAYMENTS AND NOTES
(a) Form of Payment. Each payment of principal or interest will
be made to the Lender by certified or bank cashier's check or wire transfer of
immediately available funds, at such address or to such account as the Lender
specifies in writing to the Borrowers at least five (5) Business Days before
such payment is to be made, except that the Borrowers may, at their option and
subject to the provisions of the last sentence of this Section 2.4, make any
interest payment with shares of Class A Common Stock having an aggregate Fair
Market Value as calculated on the applicable Interest Payment Date equal to the
amount of the interest due. If the Borrowers elect to pay interest in Class A
Common Stock, the number of shares to be issued to the Lender shall be
calculated by dividing the amount of interest due by the Fair Market Value of a
share of Class A Common Stock on the applicable Interest Payment Date; provided,
however, that with respect to any resulting fraction of a share of Class A
Common Stock, the Borrowers may, at their option, either (a) round up such
fraction to the nearest whole share, or (b) pay an amount in cash equal to the
product of (i) such fraction, multiplied by (ii) the Fair Market Value of a
share of Class A Common Stock on such Interest Payment Date, computed to the
nearest whole cent, in lieu of issuing a fractional share. Section 9.3 of the
Note Purchase Agreement shall govern the procedures for the issuance of
certificates upon any such payment of interest in Class A Common Stock. The
ability of the Borrowers to pay interest in Class A Common Stock shall be
expressly conditioned on such issuance not requiring a stockholder approval
(which has not been obtained) under, or otherwise being in violation of, any
applicable law or regulation, or of any requirements of the Nasdaq Stock Market
or any domestic securities exchange or other public trading market upon which
the Class A Common Stock may be listed or quoted.
(b) Application of Insufficient Payments. If at any time
insufficient funds are received by and available to the Lender to pay fully all
amounts of principal and interest, due hereunder, such funds shall be applied
(i) first, to pay interest due hereunder, and (ii) second, to pay principal then
due hereunder.
(c) Promissory Note. The Lender may request that the Advances be
evidenced by a promissory note (the "Revenue Share Note"). In such event, the
Borrowers shall prepare, execute and deliver to the Lender a promissory note
payable to the Lender and in a form approved by the Lender. In the event that a
Revenue Share Note is issued, the Borrowers will pay all sums becoming due
hereunder for interest or principal, without the presentation or surrender of
the Revenue Share Note or the making of any notation thereon, except that if the
Revenue Share Note is paid in full, following such payment, the Revenue Share
Note shall be surrendered to the Borrowers for cancellation.
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2.5. PAYMENT AT MATURITY
The outstanding principal amount of all Advances, together with
any accrued interest thereon, shall be due and payable in full in immediately
available U.S. Dollars on the earlier of: (i) the Maturity Date, or (ii) such
earlier date as the Advances become due and payable pursuant to this Agreement.
2.6. PREPAYMENT
(a) Optional Prepayment. The Advances, including all accrued
interest thereon, may be prepaid only in whole and not in part at any time,
without premium or penalty; provided that the Borrowers shall give the Lender
not less than one (1) Business Day's written notice prior to making such
prepayment, specifying the amount to be prepaid and the date of prepayment. Each
such notice of prepayment shall be irrevocable upon receipt by the Lender.
(b) Mandatory Prepayments.
(i) Commencing January 1, 2005, the Borrowers shall, on or
before March 31st of each calendar year, prepay all or part of
the amount of any outstanding Advances, including all accrued
interest thereon, without premium or penalty, in an amount equal
to the lesser of (x) fifty percent (50%) of Excess Cash for the
fiscal year most recently then ended, and (y) the amount
necessary to prepay the Obligations in full.
(ii) In the event that a Borrower shall, without the
Lender's prior written consent, directly or indirectly,
consolidate or merge with or into another entity (whether or not
such Borrower is the surviving corporation), or sell, assign,
transfer, convey or otherwise dispose of all or substantially all
of its properties or assets, in any such case, other than in
connection with a Parent Company Merger or a consolidation or
merger permitted under Section 13.2 hereof or under any Agreement
Guarantee, then the Advances shall be immediately prepaid in
whole, including all interest thereon, without premium or
penalty.
(c) Loan Commitment Termination. Any amounts prepaid pursuant to
this Section 2.6 may not be reborrowed and any prepayment in whole of the
Advances shall constitute a termination of the Loan Commitment.
3. COLLATERAL
3.1. SECURITY AGREEMENTS
The due and punctual payment of the principal and interest on the
Advances when and as the same shall be due and payable, whether on an Interest
Payment Date, at maturity, by acceleration, prepayment or otherwise, and
interest on any overdue principal and interest and performance of all other
obligations of the Borrowers to the Lender under this Agreement, according to
the terms hereunder, shall be secured as provided in the Security Agreements and
the Intercreditor Agreements. In the event that any Subsidiary of Holdings
becomes required to become a Subsidiary Guarantor pursuant to Section 13 hereof,
such Subsidiary shall, as promptly as practicable following such occurrence,
become party to the General Security Agreement in accordance with the provisions
of Section 5.2 thereof. The Lender, by its acceptance hereof, consents and
agrees to the terms of the Security Agreements and the Intercreditor Agreements
(including, without limitation, the provisions providing for foreclosure and
release of Collateral), as the same may be in effect or may be amended from time
to time in accordance with its terms, and authorizes and directs the Collateral
Agent named in the Intercreditor Agreements to enter into the Security
Agreements and to perform its obligations and exercise its rights thereunder in
accordance therewith. In furtherance of the foregoing, the Lender is entering
into the Intercreditor Agreements concurrently with the execution hereof. The
Borrowers shall do or cause to be done all such acts and things as may be
required by the provisions of the Security Agreements, to assure and confirm to
the Lender and the Collateral Agent the
8
security interests in the Collateral contemplated hereby and thereby, as from
time to time constituted, so as to render the same available for the security
and benefit of this Agreement, according to the intent and purposes herein and
therein expressed.
3.2. RELEASE OF COLLATERAL.
(a) Collateral may be released only in accordance with the terms
of the Intercreditor Agreements and the Security Agreements.
(b) At any time when a Default or Event of Default shall have
occurred and be continuing and the Obligations shall have been accelerated
(whether by declaration or otherwise) and the Lender shall have delivered a
notice of acceleration to the Collateral Agent, no release of Collateral
pursuant to the provisions of the Intercreditor Agreements or the Security
Agreements shall be effective as against the Lender.
3.3. TERMINATION OF SECURITY INTEREST.
Upon the payment in full of all Obligations of the Borrowers
under this Agreement, the Lender shall, at the request of either Borrower,
promptly deliver a certificate to the Collateral Agent stating that such
Obligations have been paid in full, and instruct the Collateral Agent to release
all rights and interests of the Lender with respect to the Liens under the
Security Agreements.
4. CONDITIONS PRECEDENT
4.1. CONDITIONS TO INITIAL ADVANCE
The obligation of the Lender to make the initial Advance is
subject to the receipt of each of the following, in form and substance
reasonably satisfactory to the Lender, and to the Lender's determination that
the following conditions precedent have been satisfied on or prior to the
Closing Date:
(a) Each of the Borrowers shall have duly executed and delivered
this Agreement.
(b) The Second Amended Distribution Agreement shall be in full
force and effect and no defaults (or events which, with the giving of notice or
lapse of time or both would result in a default) on the part of the Borrowers,
and to the knowledge of the Borrowers, on the part of the Lender, shall have
occurred and be continuing thereunder.
(c) The Note Purchase Agreement shall be in full force and
effect.
(d) Holdings shall have issued warrants to the Lender,
substantially in the form of Exhibit C attached hereto, to purchase 10,000,000
shares of Class A Common Stock with an exercise term of 5 years.
(e) The representations and warranties made by the Borrowers in
Section 6 hereof shall be true and correct in all material respects when made,
and shall be true and correct in all material respects at the Closing Date with
the same force and effect as if they had been made on and as of said date, and
shall be so certified by an Officer of the Borrowers.
(f) All covenants, agreements and conditions contained in this
Agreement and the other Transaction Documents to which a Borrower is a party
shall have been performed or complied with in all material respects.
(g) There shall not then be in effect any legal or other order
enjoining or restraining the transactions contemplated by this Agreement and the
other Transaction Documents to which a Borrower is party.
9
(h) The Concurrent Financing Transactions shall close prior to
or substantially concurrently with the execution and delivery of this Agreement,
each in the manner contemplated in the agreements governing such transactions
with all of the conditions therein satisfied.
(i) Each of the Lender and each Borrower shall have entered into
the other Transaction Documents to which it is a party.
(j) The Lender shall have received a completely executed copy of
each of the Transaction Documents to which it is a party.
4.2. CONDITIONS TO EACH ADVANCE
The obligation of the Lender to make each Advance, including the
initial Advance, is subject to the receipt of each of the following, in form and
substance reasonably satisfactory to the Lender, and to the Lender's reasonable
determination that the following conditions precedent have been satisfied on or
prior to the Funding Date with respect to such Advance:
(a) Either Borrower shall have delivered to the Lender a Request
for Advance satisfying the requirements set forth in Section 2.2(a).
(b) Lender shall have received a certificate of the Chief
Financial Officer, the Treasurer or any Assistant Treasurer of the Borrowers,
dated the date of the Funding Date, certifying satisfaction of the following
conditions:
(i) Minimum Subscribers. The Borrowers shall have
Subscribers, excluding all GM Subscribers, of not less than the number of
Subscribers set forth below opposite the fiscal year in which such Funding Date
occurs:
------------------------------------------------------------------
Fiscal Year Number of Subscribers
------------------------------------------------------------------
2003 537,500
------------------------------------------------------------------
2004 975,000
------------------------------------------------------------------
2005 1,525,000
------------------------------------------------------------------
2006 and thereafter 2,175,000
------------------------------------------------------------------
(ii) Pre-marketing Cash Flow. Holdings shall have
Pre-marketing Cash Flow of not less than the amount set forth below opposite the
fiscal year most recently then ended prior to the Funding Date for which
Holdings shall have filed its report on Form 10-K with the SEC:
------------------------------------------
Fiscal Year Pre-Marketing Cash Flow
------------------------------------------
2003 $ (150,000,000)
------------------------------------------
2004 (70,000,000)
------------------------------------------
2005 75,000,000
------------------------------------------
2006 225,000,000
------------------------------------------
2007 375,000,000
------------------------------- ----------
(c) No Default or Event of Default shall have occurred and be
continuing on such Funding Date.
10
5. REPRESENTATIONS AND WARRANTIES OF THE LENDER
The Lender represents and warrants to and agrees with each
Borrower that as of the date hereof:
5.1. RISKS OF INVESTMENT
Its management recognizes that the purchase of the Class A Common
Stock which may be issued in payment of interest on the Advances involves a high
degree of risk including, but not limited to, the following: (i) an investment
in the Borrowers is highly speculative, and only investors who can afford the
loss of their entire investment should consider investing in the Borrowers and
accepting the Class A Common Stock; (ii) the Lender may not be able to liquidate
its investment; (iii) transferability of the Class A Common Stock is restricted;
(iv) in the event of a disposition of the Class A Common Stock, the Lender could
sustain the loss of its entire investment and (v) the Borrowers do not
anticipate the payment of dividends in the foreseeable future.
5.2. INVESTMENT EXPERIENCE
Its management has prior investment experience, including
investment in securities which are non-listed, unregistered and/or not traded on
the Nasdaq National or SmallCap Market, a national or other stock exchange or on
the automated quotation system of the National Association of Securities
Dealers, Inc., for actively traded stocks. To the extent necessary, the Lender
has retained, at its own expense, and relied upon appropriate professional
advice regarding the investment, tax and legal merits and consequences of this
Agreement and its purchase of the Class A Common Stock hereunder.
5.3. ABILITY TO BEAR RISK
By reason of its management's business or financial experience
the Lender has the capacity to protect its own interests in connection with the
transaction contemplated hereby, and is able to bear the economic risk which it
hereby assumes.
5.4. RECEIPT AND REVIEW OF DOCUMENTATION
Its management has been furnished by the Borrowers during the
course of this transaction with information regarding the Borrowers which such
Lender's management has requested, has been afforded the opportunity to ask
questions of and receive answers from duly authorized officers or other
representatives of the Borrowers concerning the terms and conditions of the
Class A Common Stock, and has received any additional information which it's
management has requested.
5.5. ACQUISITION FOR OWN ACCOUNT.
The Lender is accepting the Class A Common Stock for its own
account for investment only, and not with a view towards their distribution in
violation of applicable securities laws.
5.6. NO PUBLIC MARKET; RULE 144
(a) Its management understands and hereby acknowledges that
Holdings is under no obligation to register the Class A Common Stock under the
Securities Act or any state securities or "blue sky" laws.
(b) The Lender's management acknowledges and agrees that the
shares of Class A Common Stock the Lender may receive in payment of interest
must be held indefinitely unless such shares are subsequently registered under
the Securities Act or an exemption from such registration is available. The
Lender has been advised or is aware of the provisions of Rule 144 promulgated
under the Securities Act, which permits limited resale of shares purchased in a
private placement subject to the satisfaction of certain conditions, including,
among other
11
things: the availability of certain current public information about the FCC
License Subsidiary, the resale occurring not less than one year after a party
has purchased and paid for the security to be sold, the sale being through an
unsolicited "broker's transaction" or in transactions directly with a market
maker (as said term is defined under the Exchange Act) and the number of shares
being sold during any three-month period not exceeding specified limitations.
5.7. ORGANIZATION, GOOD STANDING, CORPORATE AUTHORITY
It is duly organized and validly existing as a corporation and in
good standing under the laws of the State of Delaware, with requisite power and
authority (corporate and other) to own its properties and conduct its business.
5.8. DUE AUTHORIZATION
The execution and delivery of, and the performance by the Lender
of its obligations under this Agreement has been duly and validly authorized
and, upon execution and delivery thereof, this Agreement will constitute a
legal, valid, binding obligation of Lender, enforceable against Lender in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors' rights
generally, and subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law).
5.9. QUALIFIED INSTITUTIONAL BUYER OR ACCREDITED INVESTOR
It is:
(a) a Qualified Institutional Buyer and an institutional
Accredited Investor; and
(b) aware that the transfer of Class A Common Stock to it is
being made in reliance on the exemption from the registration requirements
provided by Section 4(2) of the Securities Act and the regulations promulgated
thereunder.
6. RESTRICTIONS ON TRANSFER
6.1. RESTRICTIONS; RESTRICTIVE LEGEND
The Lender agrees and each subsequent holder of the Class A
Common Stock by its acceptance thereof will agree to offer, sell or otherwise
transfer such Class A Common Stock only in compliance with the terms and
conditions set forth in the Noteholders Agreement. The Lender acknowledges that
each certificate representing Class A Common Stock will contain a legend
substantially to the following effect:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THESE
SECURITIES NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
RE-OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION UNLESS
SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION
UNDER THE SECURITIES ACT.
Certificates evidencing Securities shall not be required to
contain such legend (i) following any sale of such Securities pursuant to an
effective registration statement covering the resale of such Securities under
the Securities Act, (ii) following any sale of such Securities pursuant to Rule
144 under the Securities Act, (iii) if such
12
Securities are eligible for sale under Rule 144(k), or (iv) if such legend is
not, in the opinion of counsel to Holdings, required in the circumstances under
applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the Staff of the SEC).
(b) In addition, the Investor acknowledges that each certificate
representing Securities will contain a legend substantially to the following
effect:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE THE SUBJECT OF
A CERTAIN SHAREHOLDERS AND NOTEHOLDERS AGREEMENT WHICH, AMONG
OTHER THINGS, CONTAINS RESTRICTIONS ON THE TRANSFER OF SUCH
SECURITIES. A COPY OF THE SHAREHOLDERS AND NOTEHOLDERS AGREEMENT
IS AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICE OF XM
SATELLITE RADIO INC. AND XM SATELLITE RADIO HOLDINGS INC.
Upon termination of the Noteholders Agreement, the Borrowers
shall remove the applicable legend(s) from the certificate(s) representing such
shares promptly upon request of the holder thereof and shall promptly deliver
replacement certificate(s) to such holder.
7. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE BORROWERS
The Borrowers hereby represent, warrant and agree with the Lender
that as of the date hereof:
7.1. INCORPORATION, STANDING, ETC.
Each of the Borrowers and the Material Subsidiaries is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
own and operate its properties, to carry on its business as now conducted and as
presently proposed to be conducted, to enter into this Agreement and the other
Transaction Documents to which each is a party and to perform its obligations
hereunder and thereunder. Each of the Borrowers and the Subsidiary Guarantor
has, by all necessary corporate action, duly authorized the execution and
delivery of this Agreement and the other Transaction Documents to which each is
a party and the performance of its obligations hereunder and thereunder.
7.2. AUTHORIZATION OF AGREEMENT AND NOTES
Each of this Agreement and the other Transaction Documents to
which a Borrower or the Subsidiary Guarantor is a party has been duly, executed
and delivered by such Borrower or Subsidiary Guarantor, as applicable, and each
such agreement constitutes a valid, binding and enforceable obligation of such
Borrower or Subsidiary Guarantor, as applicable, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
creditors' rights generally, and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
7.3. ABSENCE OF DEFAULTS AND CONFLICTS
The execution, delivery and performance of this Agreement and the
Transaction Documents by the Borrowers and the Material Subsidiaries party
thereto in connection with the transactions contemplated hereby and thereby, and
the consummation of the transactions contemplated herein or therein and
compliance by the Borrowers and the Material Subsidiaries with their respective
obligations hereunder and thereunder, do not and will not, whether with or
without the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default (or an event that with notice or lapse of
time or both would become a default) under, require the Obligors to conduct an
offer to repurchase any outstanding Obligations in accordance with the documents
establishing the terms under which such Obligations were incurred, give any
others rights of termination, amendment, acceleration or cancellation (with or
without notice, lapse of time, or both), or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of either of the
Borrowers or any Material Subsidiary pursuant to any material contract,
indenture, mortgage, note lease or other instrument to which it is party, nor
will such action result
13
in any violation of the provisions of the certificate of incorporation, bylaws
or other charter documents of either of the Borrowers or any Material Subsidiary
or any applicable law, statute, rule, regulation, judgment, order, writ or
decree of any government, government instrumentality, stock exchange or Nasdaq
stock market or court, domestic or foreign, having jurisdiction over either of
the Borrowers or any Material Subsidiary or any of their assets or properties.
7.4. GOVERNMENTAL CONSENTS
Except as may be required to be obtained or made under the
Securities Act and applicable state securities laws in connection with the
exercise of any registration rights of a Holder provided for in the Registration
Rights Agreement or any registration rights granted to purchasers in the
offerings contemplated by clause (6) of the definition of Concurrent Financing
Transactions, neither Borrower nor its Material Subsidiaries are required to
procure, make or file any consent, approval or authorization of, or any notice
to, of filing, registration or qualification with, any court or administrative
or governmental body in order to execute and deliver this Agreement and to
perform its obligations hereunder and under any and. all Transaction Documents.
8. DEFAULTS AND REMEDIES
8.1. EVENTS OF DEFAULT.
An "Event of Default" occurs if:
(a) the Borrowers default in the payment when due of interest on
any Advance and such default continues for a period of 30 days;
(b) the Borrowers default in the payment when due of principal
of any Advance when the same becomes due and payable at maturity or pursuant to
Section 2.6 hereof;
(c) the Borrowers fail to observe or perform any other covenant
or other agreement in this Agreement for 60 days after notice to the Borrowers
by the Lender;
(d) a default occurs and is continuing under any mortgage,
indenture or instrument under which there may be issued or by which there may be
secured or evidenced any Indebtedness for money borrowed by a Borrower or any of
its Material Subsidiaries (or the payment of which is guaranteed by a Borrower
or any of its Material Subsidiaries), whether such Indebtedness or guarantee now
exists, or is created after the date hereof, which default results in the
acceleration of such Indebtedness prior to its express maturity or is caused by
a failure to pay principal of, or interest or premium, if any, on such
Indebtedness prior to the expiration of the grace period provided in such
Indebtedness on the date of such default (a "Payment Default") and, in each
case, either (i) the principal amount of such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates
$10,000,000 or more or (ii) such Indebtedness constitutes Indebtedness under the
Note Purchase Agreement;
(e) a final nonappealable judgment or final nonappealable
judgments for the payment of money are entered by a court or courts of competent
jurisdiction against a Borrower or any of its Material Subsidiaries and such
judgment or judgments remain undischarged for a period (during which execution
shall not be effectively stayed) of 60 days, provided that the aggregate of all
such undischarged judgments exceeds $10,000,000 (net of any amounts with respect
to which a reputable and creditworthy insurance company has acknowledged
liability in writing);
(f) a Borrower or any of its Significant Subsidiaries or any
group of Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary pursuant to or within the meaning of Bankruptcy Law:
(i) commences a voluntary case,
14
(ii) consents to the entry of an order for relief against
it in an involuntary case,
(iii) consents to the appointment of a custodian of it or
for all or substantially all of its property,
(iv) makes a general assignment for the benefit of its
creditors, or
(v) generally can not pay its debts as they become due;
(g) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(i) is for relief against a Borrower or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken
as a whole, would constitute a Significant Subsidiary in an
involuntary case;
(ii) appoints a custodian of a Borrower or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken
as a whole, would constitute a Significant Subsidiary or for all
or substantially all of the property of a Borrower or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken
as a whole, would constitute a Significant Subsidiary; or
(iii) orders the liquidation of a Borrower or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken
as a whole, would constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60
consecutive days;
(h) a Borrower or any Material Subsidiary shall breach any
material representation, warranty or agreement set forth in either of the
Security Agreements or shall repudiate any of its obligations under either of
the Security Agreements or either of the Security Agreements shall be held in
any judicial proceeding to be unenforceable or invalid or shall cease for any
reason to be in full force and effect; or
(i) any Agreement Guarantee shall be held in a judicial
proceeding to be unenforceable or invalid or shall cease for any reason to be in
full force and effect (except pursuant to its terms), or any Guarantor shall
deny or disaffirm its obligations under its Agreement Guarantee.
8.2. ACCELERATION.
If (i) any Event of Default (other than an Event of Default
specified in clause (f) or (g) of Section 8.1 hereof with respect to a Borrower,
any Significant Subsidiary or any group of Significant Subsidiaries that, taken
as a whole, would constitute a Significant Subsidiary) occurs and is continuing
and (ii) the Indebtedness under the Note Purchase Agreement shall have been
accelerated pursuant to Section 8.2 thereof, the Lender may declare the
Obligations to be due and payable immediately. Upon any such declaration, the
principal amount of the Advances, together with all interest accrued thereon,
shall become due and payable immediately. Notwithstanding the foregoing, if an
Event of Default specified in clause (f) or (g) of Section 8.1 hereof occurs
with respect to a Borrower, any of its Significant Subsidiaries or any group of
Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary,
the outstanding principal amount of the Advances shall be due and payable
immediately without further action or notice. The Lender may rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree. and if all existing Events of Default (except nonpayment of
principal amount, interest or premium that has become due solely because of the
acceleration) have been cured or waived.
15
8.3. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Lender may
pursue any available remedy to collect the payment of the principal and interest
on the Advances or to enforce the performance of any provision of this
Agreement, the Agreement Guarantees, and the Security Agreements (subject to the
Intercreditor Agreements).
A delay or omission by the Lender in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
8.4. WAIVER OF PAST DEFAULTS.
Lender may waive an existing Default or Event of Default and its
consequences hereunder. Upon any such waiver, such Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been cured
for every purpose of this Agreement; but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon. Any waiver
of a Default or Event of Default under the Note Purchase Agreement shall
automatically constitute a waiver of all Defaults or Event of Defaults hereunder
that arise out of the same event or occurrence.
9. PRIORITY OF OBLIGATIONS
The Obligations shall rank equal to all Indebtedness incurred
pursuant to the Concurrent Financing Transactions and all Indebtedness under the
Prior Indenture.
10. EXPENSES
The Borrowers will pay at Closing all reasonable expenses
relating to this Agreement, including the reasonable fees and disbursements of
outside counsel for the Lender.
11. SURVIVAL
All express representations and warranties contained in this
Agreement or made in writing by or on behalf of a Borrower or its Subsidiaries
in connection with the transactions contemplated by this Agreement shall survive
the execution and delivery of this Agreement, any investigation at any time made
by the Lender or on the Lender's behalf and any disposition or payment.
12. AMENDMENTS AND WAIVERS
Any term of this Agreement may be amended, and the observance of
any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively) only with the written
consent of the Parties hereto. Any amendment or waiver effected in accordance
with this Section 12 shall be binding upon the Lender and the Borrowers.
16
13. GUARANTEES
13.1. EXECUTION AND DELIVERY OF AGREEMENT GUARANTEES
The Borrowers shall cause XM Leasing Subsidiary to execute and
deliver at the Closing to the Lender an Agreement Guarantee substantially in the
form included in Exhibit F hereto, duly executed on behalf of XM Leasing
Subsidiary by an Officer thereof.
13.2. SUBSIDIARY GUARANTORS MAY CONSOLIDATE, ETC. ON CERTAIN TERMS
(a) Nothing contained in this Agreement or in any Agreement Guarantee
shall prevent any consolidation or merger of a Subsidiary Guarantor with or into
a Borrower or another Subsidiary Guarantor, or shall prevent the transfer of all
or substantially all of the assets of a Subsidiary Guarantor to a Borrower or
another Subsidiary Guarantor. Upon any such consolidation, merger, transfer or
sale, the Agreement Guarantee of the Subsidiary Guarantor being consolidated or
merged or into a Borrower or such other Subsidiary Guarantor (or the assets of
which are being so transferred) shall no longer have any force or effect.
(b) Nothing contained in this Agreement shall prevent any
consolidation or merger of a Subsidiary Guarantor with or into a corporation or
corporations other than a Borrower or another Subsidiary Guarantor (whether or
not affiliated with the Subsidiary Guarantor), or successive consolidations or
mergers in which a Subsidiary Guarantor or its successor or successors shall be
a party or parties, or shall prevent the transfer of all or substantially all of
the assets of a Subsidiary Guarantor, to a corporation other than a Borrower or
another Subsidiary Guarantor (whether or not affiliated with the Subsidiary
Guarantor) authorized to acquire and operate the same in the event that such
consolidation, merger or transfer complies with the terms and conditions of this
Agreement and all Agreement Guarantees.
13.3. RELEASES FOLLOWING SALE OF ASSETS
Concurrently with any sale or other disposition of assets all or
substantially all of the assets of any Subsidiary Guarantor or all of the
Capital Stock of any Subsidiary Guarantor, in each case, in compliance with the
terms hereof, then such Subsidiary Guarantor (in the event of a sale or other
disposition of all of the Capital Stock of such Subsidiary Guarantor) or the
corporation acquiring the property (in the event of a sale or other disposition
of all or substantially all of the assets of a Subsidiary Guarantor) shall be
released from and relieved of its obligations under its Agreement Guarantee and
under this Section 13. Any Subsidiary Guarantor not released from its
obligations under its Agreement Guarantee shall remain liable for the full
amount of principal of and interest on the Advances and for the other
obligations of any Subsidiary Guarantor under the Agreement Guarantee as
provided in this Section 13.
13.4. APPLICATION OF CERTAIN TERMS AND PROVISIONS TO THE SUBSIDIARY
GUARANTORS
Any notice or demand which by any provision of this Agreement is required
or permitted to be given or served by the Lender to or on any Subsidiary
Guarantor may be given or served as described in this Agreement as if references
herein to the Borrowers were references to such Subsidiary Guarantor.
13.5. ADDITION OF SUBSIDIARY GUARANTORS
If at any time a Subsidiary of the Holdings guarantees any Indebtedness
represented by clauses (1) and (3) of the definition of "Concurrent Financing
Transactions", Holdings promptly shall cause such Subsidiary to issue an
Agreement Guarantee by causing such Subsidiary to execute and deliver to the
Lender an Agreement Guarantee substantially in the form of Exhibit F hereto. The
Agreement Guarantee so issued shall in all respects have the same legal rank and
benefit under this Agreement as the Agreement Guarantees theretofore and
thereafter issued in accordance with the terms of this Agreement as though such
Agreement Guarantee had been issued at the date of the execution hereof.
17
14. NOTICES
Except as otherwise provided in this Agreement, notices and other
communications under this Agreement shall be in writing and shall be deemed
properly served if: (i) mailed by registered or certified mail, return receipt
requested, (ii) delivered by a recognized overnight courier service, (iii)
delivered personally, or (iv) sent by facsimile transmission, addressed to the
General Counsel for each Party at the address set forth below for such party or
at such other address or to the attention of such other officers as such Party
shall have furnished in writing pursuant to this Section 14. Such notice shall
be deemed to have been received: (i) three (3) days after the date of mailing if
sent by certified or registered mail, (ii) one (1) day after the date of
delivery if sent by overnight courier, (iii) the date of delivery if personally
delivered, or (iv) the next succeeding business day after transmission by
facsimile.
If to either Borrower:
XM SATELLITE RADIO HOLDINGS INC.
0000 Xxxxxxxxx Xxxxx, XX
Xxxxxxxxxx, X.X. 00000-0000
Fax No.: (000) 000-0000
Attention: General Counsel
If to the Lender:
GENERAL MOTORS CORPORATION
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Fax No.: 000-000-0000
Attention: General Counsel
15. EXECUTION IN COUNTERPARTS
This Agreement may be executed in any number of counterparts and
by different Parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
16. BINDING EFFECT
This Agreement shall be binding upon and inure to the benefit of
the Parties and their respective successors and assigns, except that the
Borrowers shall not have the right to assign their respective rights or
obligations hereunder, other than to an Affiliate, or any interest herein
without the prior written consent of the Lender which may be withheld for any
reason.
17. GOVERNING LAW; CHOICE OF FORUM; JURY TRIAL WAIVER
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK OR THE CORPORATE LAWS OF THE
STATE OF DELAWARE, AS APPLICABLE, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW
PROVISIONS THEREOF OTHER THAN NEW YORK GENERAL OBLIGATIONS LAW SECTIONS 5-1401
AND 5-1402.
(b) IN THE EVENT THAT A JUDICIAL PROCEEDING IS NECESSARY, THE
SOLE FORUM FOR RESOLVING DISPUTES ARISING OUT OF OR RELATING TO THIS AGREEMENT
IS THE SUPREME COURT OF THE STATE OF NEW YORK IN AND FOR THE COUNTY OF NEW YORK
OR THE FEDERAL COURTS LOCATED IN SUCH STATE AND COUNTY, AND RELATED APPELLATE
COURTS.
18
THE PARTIES HEREBY IRREVOCABLY CONSENT TO THE JURISDICTION OF SUCH
COURTS AND AGREE TO SAID VENUE.
(c) THE PARTIES HEREBY IRREVOCABLY WAIVE ALL RIGHT TO A TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY OTHER DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY.
18. MISCELLANEOUS
18.1. SEVERABILITY
The holding of any provision of this Agreement to be invalid or
unenforceable by a court of competent jurisdiction shall not affect any other
provision of this Agreement, which shall remain in full force and effect. If any
provision of this Agreement shall be declared by a court of competent
jurisdiction to be invalid, illegal or incapable of being enforced in whole or
in part, such provision shall be interpreted so as to remain enforceable to the
maximum extent permissible consistent with applicable law and the remaining
conditions and provisions or portions thereof shall nevertheless remain in full
force and effect and enforceable to the extent they are valid, legal and
enforceable, and no provisions shall be deemed dependent upon any other covenant
or provision unless so expressed herein.
18.2. NO WAIVER
It is agreed that a waiver by any Party of a breach of any
provision of this Agreement shall not operate, or be construed, as a waiver of
any subsequent breach by the breaching Party.
18.3. FURTHER ASSURANCES
The Parties agree to execute and deliver all such further
documents, agreements and instruments and take such other and further action as
may be necessary or appropriate to carry out the purposes and intent of this
Agreement, including without limitation, entering into the other Transaction
Documents to which each is a party.
18.4 JOINT AND SEVERAL LIABILITY
The obligations of the Borrowers hereunder and under the other
Transaction Documents shall be joint and several and, as such, each Borrower
shall be liable for the obligations of the other Borrower under this Agreement
and the other Transaction Documents. The liability of each Borrower for the
obligations of the other Borrower under this Agreement and the other Transaction
Documents shall be absolute, unconditional and irrevocable, irrespective of: (a)
any lack of validity, legality or enforceability of any Transaction Document;
(b) the failure of the Lender (i) to assert any claim or demand or to enforce
any right or remedy against such other Borrower, any Subsidiary Guarantor or any
other Person under the provisions of this Agreement or any other Transaction
Document or (ii) to exercise any right or remedy against any guarantor of, or
collateral securing, any of the Obligations; (c) any change in the time, manner
or place of payment of, or in any other term of, all or any of the Obligations,
or any other extension or renewal of any obligation of such other Borrower or
any Subsidiary Guarantor; (d) any reduction, limitation, impairment or
termination of any of the Obligations for any reason other than the written
agreement of the Lender to terminate the Obligations in full, including any
claim of waiver, release, surrender, alteration or compromise, and shall not be
subject to, and each Borrower hereby waives any right to or claim of, any
defense or setoff, counterclaim, recoupment or termination whatsoever by reason
of the invalidity, illegality, nongenuineness, irregularity, compromise,
unenforceability of, or any other event or occurrence affecting, any Obligations
of the other Borrower, any Subsidiary Guarantor or otherwise; (e) any amendment
to, rescission, waiver, or other modification of, or any consent to departure
from, any of the terms of this Agreement or any Transaction Document; (f) any
addition, exchange, release, surrender or non-perfection of any Collateral, or
any
19
amendment to or waiver or release or addition of, or consent to departure from,
any guaranty held by the Lender securing any of the Obligations; or (g) any
other circumstance which might otherwise constitute a defense available to, or a
legal or equitable discharge of, such other Borrower or any Subsidiary
Guarantor.
18.5. CONSTRUCTION
The headings herein are for convenience only, do not constitute a part of
this Agreement and shall not be deemed to limit or affect any of the provisions
hereof. The language used in this Agreement will be deemed to be the language
chosen by the parties to express their mutual intent, and no rules of strict
construction will be applied against any party. The word "including" as used
herein shall not be construed so as to exclude any other thing not referred to
or described.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be
duly signed as of the date first above written.
XM SATELLITE RADIO INC.
/s/ Xxxxxx X. Xxxxxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Senior Vice President,
General Counsel and Secretary
XM SATELLITE RADIO HOLDINGS INC.
/s/ Xxxxxx X. Xxxxxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Senior Vice President,
General Counsel and Secretary
GENERAL MOTORS CORPORATION
/s/ X. X. Xxxxxxx
----------------------------------------
Name: X. X. Xxxxxxx
Title:
Signature Page to Credit Agreement
EXHIBIT A
SECOND AMENDED DISTRIBUTION AGREEMENT
[Filed separately as Exhibit 10.9 hereto]
EXHIBIT B
FORM OF REQUEST FOR ADVANCE
[Date]
General Motors Corporation, as Lender
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Fax: 000-000-0000
Attention: General Counsel
Ladies and Gentlemen:
The undersigned, [Name of Borrower or Borrowers] (the "Borrower(s)"),
refers to the Credit Agreement, dated as of ____________, 2003 (as amended from
time to time, the "Credit Agreement", the terms defined therein being used
herein as therein defined), among XM Satellite Radio Inc. and XM Satellite Radio
Holdings Inc., as Borrowers, and General Motors Corporation as Lender
("Lender"), hereby gives you, Lender, irrevocable notice, pursuant to Section
2.2(a) of the Credit Agreement, that the undersigned hereby requests an Advance
under the Credit Agreement, and in that connection sets forth below the
information relating to such Advance as required by Section 2.2(a) of the Credit
Agreement:
(i) The Business Day of the proposed Borrowing is ___________,
___ (the "Funding Date")/1/
(ii) The aggregate amount of the proposed Borrowing is
$__________.
(iii) The proposed Borrowing is being requested for
[______________]./2/
The undersigned hereby certifies that (A) each of the conditions set forth in
Section 4.2(b) of the Credit Agreement have been satisfied as of the Funding
Date and (B) no Default or Event of Default has occurred and is continuing
Very truly yours,
[NAME OF BORROWER(S)]
By
--------------------------------------
Title:
[Must be signed by an authorized officer.]
----------
/1/ This date shall be the date on which the Contractual Obligation being funded
by such Advance become due and owing in respect of any Contractual Obligation.
/2/ Describe the agreement and payment obligations for which the Advance is
being requested.
EXHIBIT C
FORM OF WARRANT
[See Exhibit 4.12 hereto]
EXHIBIT D
FORM OF FCC LICENSE SUBSIDIARY PLEDGE AGREEMENT
[Filed separately as Exhibit 4.5 hereto]
EXHIBIT E
FORM OF GENERAL SECURITY AGREEMENT
[Filed separately as Exhibit 4.4 hereto]
EXHIBIT F
FORM OF AGREEMENT GUARANTEE
This Agreement Guarantee is delivered by the undersigned (the
"Subsidiary Guarantor") pursuant to the Credit Agreement dated as of __________,
2003 among XM Satellite Radio Inc., XM Satellite Radio Holdings Inc. and General
Motors Corporation (the "Credit Agreement"). Capitalized terms used but not
defined herein shall have the meanings ascribed to them in the Credit Agreement.
For value received, the Subsidiary Guarantor hereby fully and
unconditionally guarantees to the Lender that: (a) the principal amount of, and
premium and interest on, the Advances will be duly and punctually paid in full
when due, whether at maturity, by acceleration or otherwise, and interest on
overdue principal and premium amount and (to the extent permitted by law)
interest on any interest, if any, on the Advances and all other obligations of
the Borrowers to the Lender under the Credit Agreement or the Security
Agreements (including fees, expenses or other) will be promptly paid in full or
performed, all in accordance with the terms hereof and thereof; and (b) in case
of any extension of time of payment or renewal of the Advances or any of such
other obligations the same will be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, whether at the
Maturity Date, by acceleration or otherwise.
The Subsidiary Guarantor, and by its acceptance hereof, the
Lender, hereby confirms that it is the intention of such parties that the
guarantee by such Subsidiary Guarantor pursuant to this Agreement Guarantee not
constitute a fraudulent transfer or conveyance for purposes of the Bankruptcy
Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act
or any similar federal or state law. To effectuate the foregoing intention, the
Lender and the Subsidiary Guarantor hereby irrevocably agree that the
obligations of the Subsidiary Guarantor under this Agreement Guarantee shall be
limited to the minimum extent necessary to ensure that, after giving effect to
all other contingent and fixed liabilities of the Subsidiary Guarantor and after
giving effect to any collections from or payments made by or on behalf of any
other Subsidiary Guarantor in respect of the obligations of such other
Subsidiary Guarantor under this Agreement Guarantee, the obligations of the
Subsidiary Guarantor under this Agreement Guarantee do not constitute a
fraudulent transfer or conveyance under applicable law.
Failing payment when due of any amount so guaranteed or failing
performance of any other obligation of the Borrowers to the Lender, for whatever
reason, the Subsidiary Guarantor will be obligated to pay or to perform or to
cause the performance of, the same immediately without the necessity of any
action by the Lender. An Event of Default under the Credit Agreement shall
constitute an event of default under this Agreement Guarantee, and shall entitle
the Lender to accelerate the obligations of the Subsidiary Guarantor hereunder
in the same manner and to the same extent as the obligations of the Borrowers.
The Subsidiary Guarantor hereby agrees that its obligations
hereunder shall be unconditional, irrespective of the validity, regularity or
enforceability of the Credit Agreement, the absence of any action to enforce the
same, any waiver or consent by the Lender with respect to any thereof, the entry
of any judgment against a Borrower, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of the Subsidiary Guarantor.
The Subsidiary Guarantor hereby waives and relinquishes: (a) any
right to require the Lender to proceed against the Borrowers, any other
Subsidiary Guarantor or any other Person or to proceed against or exhaust any
security held by or on behalf of the Lender at any time or to pursue any other
remedy in any secured party's power before proceeding against the Subsidiary
Guarantor; (b) any defense that may arise by reason of the incapacity, lack of
authority, death or disability of any other Person or Persons or the failure of
the Lender to file or enforce a claim against the estate (in administration,
bankruptcy or any other proceeding) of any other Person or Persons; (c) demand,
protest and notice of any kind, including but not limited to notice of the
existence, creation or incurring of any new or additional Indebtedness or
obligation or of any action or non-action on the part of the Subsidiary
Guarantor, the Borrowers, the Lender, any creditor of the Subsidiary Guarantor
or on the part of any other Person whomsoever in connection with any obligations
the performance of which are hereby guaranteed; (d) any defense based upon an
election of remedies by the Lender, including but not limited to an election to
proceed
against the Subsidiary Guarantor for reimbursement; (e) any defense
based upon any statute or rule of law which provides that the obligation of a
surety must be neither larger in amount nor in other respects more burdensome
than that of the principal; (f) any defense arising because of the Lender's
election, in any proceeding instituted under the United States Bankruptcy Code
(the "Bankruptcy Code"), of the application of Section 1111 (b)(2) of the
Bankruptcy Code; and (g) any defense based on any borrowing or grant of a
security interest under Section 364 of the Bankruptcy Code.
The Subsidiary Guarantor hereby covenants that this Agreement
Guarantee will not be discharged except by payment in full of all principal and
interest on the Advances and all other costs provided for under the Credit
Agreement, or as provided in Section 13.3 of the Credit Agreement.
If the Lender is required by any court or otherwise to return to
either the Borrowers or the Subsidiary Guarantor, or any custodian, trustee, or
similar official acting in relation to the Borrowers or the Subsidiary
Guarantor, any amount paid by the Borrowers or the Subsidiary Guarantor to the
Lender, this Agreement Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect. The Subsidiary Guarantor agrees that it
will not be entitled to any right of subrogation in relation to the Lender in
respect of any obligations guaranteed hereby until payment in full of all
obligations guaranteed hereby.
The Subsidiary Guarantor agrees that, as between it, on the one
hand, and the Lender, on the other hand, (x) the maturity of the obligations
guaranteed hereby may be accelerated as provided in Section 8 of the Credit
Agreement for the purposes hereof, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any acceleration of such obligations
as provided in Section 8 of the Credit Agreement, such obligations (whether or
not due and payable) shall forthwith become due and payable by the Subsidiary
Guarantor for the purpose of this Agreement Guarantee.
The Subsidiary Guarantor hereby acknowledges that it shall not
consolidate or merge with or into a corporation or any other entity other than a
Borrower or another Subsidiary Guarantor (whether or not affiliated with the
Subsidiary Guarantor), or transfer all or substantially all of its assets to a
corporation or any other entity other than a Borrower or another Subsidiary
Guarantor (whether or not affiliated with the Subsidiary Guarantor), unless this
Agreement Guarantee shall be expressly assumed (in the event that the Subsidiary
Guarantor is not the surviving corporation in the merger) or a new Agreement
Guarantee shall be signed by such successor corporation or other entity and
delivered to the Lender. Any Agreement Guarantee so issued shall in all respects
have the same legal rank and benefit under the Credit Agreement as any Agreement
Guarantee theretofore and thereafter issued in accordance with the terms of the
Credit Agreement as though all of such Agreement Guarantees had been issued at
the date of the execution thereof.
This Agreement Guarantee shall be governed by and construed in
accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the undersigned Subsidiary Guarantor has
caused this Agreement Guarantee to be duly executed as of __________, 200_.
[Name of Subsidiary Guarantor]
By:
-------------------------------------
Name:
Title:
