EXHIBIT III
TCM GROUP AGREEMENT
THIS TCM GROUP AGREEMENT (the "Agreement") is made this 7th day of
July, 1999, by and among Telcom-XM Investors, L.L.C., a Delaware limited
liability company ("Telcom"), Columbia XM Radio Partners, LLC, a Virginia
limited liability company ("Columbia"), Madison Dearborn Capital Partners III,
L.P., a Delaware limited partnership ("MDCP"), Madison Dearborn Special Equity
III, L.P., a Delaware limited partnership ("MDSE") and Special Advisors Fund I,
LLC, a Delaware limited liability company ("SAFI", and together with MDCP and
MDSE, "Madison"), each of Telcom, Columbia and Madison a "Party" and
collectively, the "Parties" or the "TCM Group". For all purposes of this TCM
Group Agreement, Madison shall be regarded and shall collectively have the
rights of one "Party".
R E C I T A L S
WHEREAS, pursuant to that certain Note Purchase Agreement, dated as
of June 7, 1999, between XM Satellite Radio Holdings Inc., a Delaware
corporation ("XM"), each of the Parties and the other parties named therein (the
"Note Purchase Agreement"), each of the Parties has agreed to purchase certain
Series A Subordinated Convertible Notes ("Notes") to be issued by XM, which
Notes are convertible into shares of the Common Stock of XM ("XM Stock" and
collectively with the Notes, "XM Securities");
WHEREAS, each of the Parties shall, at the closing of the Note
Purchase Agreement, enter into a Shareholders Agreement, in a form substantially
similar to Exhibit A hereto, by and among XM, each of the Parties and the other
parties named therein (the "Shareholders Agreement") setting forth certain
rights and obligations of the TCM Group, the other purchasers of Notes and XM;
WHEREAS, each of the Parties shall also, at the closing of the Note
Purchase Agreement, enter into a Registration Rights Agreement, in a form
substantially similar to Exhibit B hereto, by and among XM, each of the Parties
and the other parties named therein (the "Registration Rights Agreement")
setting forth certain rights and obligations of the TCM Group, the other
purchasers of Notes and XM with respect to the XM Securities;
WHEREAS, the Parties wish to set forth the procedures which will
govern the exercise of the rights granted to the TCM Group in each of the
Registration Rights Agreement and the Shareholders Agreement;
WHEREAS, each of the Parties has, simultaneously with the execution
of this Agreement, entered into the Limited Liability Company Agreement of TCM,
LLC (the "LLC Agreement") pursuant to which each of the Parties has become a
member of TCM, LLC, a Delaware limited liability company (the "LLC");
WHEREAS, the Parties, as members of the LLC have consented to the
LLC's entry into an Operational Assistance Agreement with XM (the "XM
Agreement") pursuant to which the LLC will have a strategic business
relationship with XM and shall have the right, so long as the TCM group, in the
aggregate, maintains a five percent level of ownership of XM Securities, to
utilize certain "bandwidth" (as defined in the XM Agreement") licensed to XM for
commercial purposes;
NOW, THEREFORE, in consideration of the terms and conditions herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. Defined Terms. Capitalized terms used herein and not otherwise
defined shall have the respective meanings provided therefor in the Note
Purchase Agreement, the Shareholders Agreement or the Registration Rights
Agreement, as applicable.
2. Registration Rights Agreement.
a) Actions Requiring Majority Approval. The Parties shall each make
good faith efforts to reach unanimous decisions relating to the exercise
by the TCM Group (or any of the Parties) of any of the following rights
granted to the TCM Group in the Registration Rights Agreement.
Notwithstanding the immediately preceding sentence, the exercise of such
rights, in the absence of such a unanimous decision by the Parties, shall
only require the prior written consent of Parties holding a majority in
interest of XM Securities:
(i) the exercise of the Demand Registration rights provided
for in Section 2.1 of the Registration Rights Agreement; or
(ii) except as set forth in Section 2(c) below, the taking of
any material actions or decisions (e.g. selection of underwriters) under the
Registration Rights Agreement.
b) Expenses. Any expenses to be borne by the TCM Group pursuant to
the Registration Rights Agreement shall be shared equally by each of the
Parties.
c) Discretionary Actions. Any Party may, on its own and in its own
discretion, take any of the following actions or exercise any of the
following rights granted to it as a member of the TCM Group under the
Registration Rights Agreement:
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(i) register any of its Registrable Securities pursuant to the
Shelf Registration provisions set forth in Section 2.2 of the
Registration Rights Agreement; or
(ii) register any of its Registrable Securities pursuant to the
Piggyback Registration rights provisions set forth in Section
2.3 of the Registration Rights Agreement.
3. Shareholders Agreement.
a) XM Board Member Selection. The Parties shall each make good faith
efforts to select, by a unanimous written consent, one individual to be
their representative on the XM Board of Directors pursuant to Section 5.1
of the Shareholders Agreement (the "TCM Group Director"). Notwithstanding
the preceding sentence, in the absence of such a unanimous decision, the
Parties holding a majority in interest of XM Securities may, by written
consent, select the TCM Group Director.
b) Initial Director. The Parties hereby select Xx. Xxxxxxxx Xxxxx as
the initial TCM Group Director.
c) Removal/Successor Directors. Removal of the TCM Group Director
and appointment of successor TCM Group Directors shall require the
approval of Parties holding a majority in interest of XM Securities.
4. Transfers of XM Securities. In each case subject to the
applicable provisions of the Shareholders Agreement, each Party may transfer all
or part of its holdings of XM Securities, provided, however, that:
a) any transfer or assignment to an affiliate is permitted so long
as such affiliate agrees to join this Agreement as a Party;
b) subject to clause (a) above, each transferee, successor or assign
of any XM Securities shall agree to be bound by and to comply with the
terms of this TCM Group Agreement and shall document such agreement by
executing a counterpart of this Agreement prior to such transfer (however,
the failure of any such transferee to so execute this Agreement shall not
act as a waiver of the effects of this Section 4);
c) in the event any Party (a "Selling Party") intends to make a
transfer or assignment of XM Securities which would bring the TCM Group's
(in the aggregate) ownership of XM Securities below a 6% equity interest
level (on a fully diluted and as-converted basis) such Selling Party
shall, prior to effecting any such transfer, deliver or mail by certified
mail or overnight courier a written notice ("Right of First Offer Notice")
to each other Party stating its bona fide intention to sell, transfer or
assign some or all of its XM Securities (the "Offered Securities") and
agrees to negotiate in good faith with each other Party for a period of 30
days following the date of such Right of First Offer Notice (the
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"Exclusivity Period"), whereby each other Party (each a "Buying Party")
shall be given the first exclusive and irrevocable option (but not the
obligation) to purchase any or all of the Offered Securities; provided
that if there is more than one Buying Party, no Buying Party may purchase
more than its proportionate share (based on the number (or principal
amount) of XM Securities held by all Buying Parties) of the XM Securities
so offered unless one or more or the other Buying Parties elects to
purchase less than its proportionate share of the Offered Securities;
d) if the Selling Party does not agree to accept any offers (or
there are not offers made with respect to all of the Offered Securities)
made by the Buying Parties (each and any such offer, a "Purchase Offer")
prior to the expiration of the Exclusivity Period, the Selling Party
shall, for a period of 60 days from the expiration of the Exclusivity
Period (the "Sale Period"), be permitted to sell any Offered Securities
not subject an accepted Purchase Offer to a third-party buyer for a
purchase price or other consideration not equal to or lower than the
highest Purchaser Offer for any of the Offered Securities and on terms and
conditions no more favorable to such third-party buyer than those set
forth in the highest Purchaser Offer;
e) if Purchase Offers for all of the Offered Securities are accepted
by the Selling Party, the sale of such Offered Securities shall be closed
at a time and location mutually acceptable to the Selling Party and the
Buying Parties, but in no event later than thirty days following the
expiration of the Exclusivity Period;
f) the Selling Party shall, at the earliest of (x) the closing of
any sale of Offered Securities to a third party and (y) the expiration of
the Sale Period, sell to each Buying Party from which it accepted a
Purchase Offer the Offered Securities subject to such Purchase Offer;
g) any Offered Securities not subject to an accepted Purchase Offer
and not sold to a third party or a Buying Purchaser prior to the
expiration of the Sale Period shall become subject again to the provisions
of Sections 4(c)-(f) hereof and any future offer of such Offered
Securities or any other XM Securities held by the Selling Party shall be
made pursuant to such provisions;
h) each Party shall, upon any attempted transfer or assignment by
another Party of any of its holdings of XM Securities in contravention of
this Agreement, have the right to take appropriate legal action,
including, but not limited to seeking an injunction or the imposition of
other equitable remedies, in order to enforce the terms of this Agreement.
5. Notices. Notices hereunder shall be sent by certified mail,
return receipt requested, hand delivery or facsimile transmission (promptly
followed by certified mail) or overnight courier as follows:
To: Telcom-XM Investors, L.L.C.
000 X. Xxxxx Xxxxxx, Xxxxx 000
XXXX-0
Xxxxxxxxxx, XX 00000
Fax: 000-000-0000
Attn: President and General Counsel
with a copy to:
Xxxxx Xxxxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Fax: 000-000-0000
Attn: Xxxxxxx X. Xxxxxxxx, Esq.
To: Columbia XM Radio Partners, LLC
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Fax: 000-000-0000
Attn: Xxxxx X. Xxxxxxx
with a copy to:
Xxxxxxx & Xxxxxx, LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Fax: 000-000-0000
Attn: Xxxxxxx X. Xxxxxxxx, Esq.
To : Madison Dearborn Capital Partners III, L.P.
Madison Dearborn Special Equity III, L.P.
Special Advisors Fund I, LLP
Three First Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Fax: 000-000-0000
Attn: Xxxxx X. Xxxxx, Xx.
with a copy to:
Xxxxxxx & Xxxxxx, LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Fax: 000-000-0000
Attn: Xxxxxxx X. Xxxxxxxx, Esq.
6. Cumulative Remedies. The rights and remedies provided by this
Agreement are cumulative and the use of any one right or remedy by any party
shall not preclude or waive its right to use any or all other remedies. Said
rights and remedies are given in addition to any other rights the parties may
have by law, statute, ordinance or otherwise.
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7. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of all of the Parties and, to the extent permitted by this
Agreement, their successors, legal representatives and assigns.
8. Interpretation. Throughout this Agreement, nouns, pronouns and
verbs shall be construed as masculine, feminine, neuter, singular or plural,
whichever shall be applicable. All references herein to "Sections" and clauses
shall refer to corresponding provisions of this Agreement unless specified
otherwise in a particular instance.
9. Severability. The invalidity or unenforceability of any
particular provision of this Agreement shall not affect the other provisions
hereof, and this Agreement shall be construed in all respects as if such invalid
or unenforceable provision were omitted. 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.
10. Counterparts. This Agreement may be executed in any number of
counterparts with the same effect as if all parties hereto had signed the same
document. All counterparts shall be construed together and shall constitute one
instrument.
11. Entire Agreement. This Agreement, along with the Shareholders
Agreement and the Registration Rights Agreement, constitutes the entire
agreement among the parties hereto pertaining to the subject matter hereof and
supersedes all prior agreements and understandings pertaining thereto.
12. Governing Law. This Agreement and the rights of the parties
hereunder shall be interpreted in accordance with the laws of the State of New
York, and all rights and remedies shall be governed by such laws.
13. 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 each of the Parties.
14. Specific Performance. Each Party, in addition to being entitled
to exercise all rights provided herein or granted by law, will be entitled to
specific performance of its rights under this Agreement. Each Party agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by it of the provisions of this Agreement and hereby agrees
to waive the defense in any action for specific performance that a remedy at law
would be adequate.
15. Choice of Forum; Jury Trial Waiver. 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
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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.
THE PARTIES HEREBY IRREVOCABLY CONSENT TO THE JURISDICTION OF SUCH COURTS AND
AGREE TO SAID VENUE.
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.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed on the date first above written.
TELCOM-XM INVESTORS, L.L.C.
By: /s/ Xxxxx Xxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxx
Title: President
COLUMBIA XM RADIO PARTNERS, LLC
By Columbia Capital LLC, its Managing Member
By: Xxxxx X. Xxxxxxx, Xx.
-------------------------------------
Name: Xxxxx X. Xxxxxxx, Xx.
Title: Managing Member
MADISON DEARBORN CAPITAL PARTNERS III, L.P.
By: Madison Dearborn Partners III, L.P., its general partner
By: Madison Dearborn Partners LLC, its general partner
By: /s/ Xxxxx X. Xxxxx, Xx.
-------------------------------------
Name: Xxxxx X. Xxxxx, Xx.
Title: Managing Director
MADISON DEARBORN SPECIAL EQUITY III, L.P.
By: Madison Dearborn Partners III, L.P., its general partner
By: Madison Dearborn Partners LLC, its general partner
By: /s/ Xxxxx X. Xxxxx, Xx.
-------------------------------------
Name: Xxxxx X. Xxxxx, Xx.
Title: Managing Director
SPECIAL ADVISORS FUND I, LLC
By: Madison Dearborn Partners III, L.P., its manager
By: Madison Dearborn Partners LLC, its general partner
By: /s/ Xxxxx X. Xxxxx, Xx.
-------------------------------------
Name: Xxxxx X. Xxxxx, Xx.
Title: Managing Director
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EXHIBIT A
ATTACH FORM OF SHAREHOLDERS AGREEMENT
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EXHIBIT B
ATTACH FORM OF REGISTRATION RIGHTS AGREEMENT
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