Exhibit 10.1
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AMENDED AND RESTATED
SHAREHOLDERS AGREEMENT
by and among
XM SATELLITE RADIO HOLDINGS INC.
AND VARIOUS SHAREHOLDERS THEREOF
Dated August 8, 2000
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TABLE OF CONTENTS
Page
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ARTICLE I. DEFINITIONS................................................................................... 2
Section 1.1 Definitions............................................................................. 2
ARTICLE II. CONDUCT OF BUSINESS; NON-COMPETITION; COOPERATION OF
SHAREHOLDERS.............................................................................................. 7
Section 2.1 Conduct of Business..................................................................... 8
Section 2.2 Non-Competition......................................................................... 8
Section 2.3 Cooperation of Shareholders............................................................. 8
ARTICLE III. RESTRICTIONS ON TRANSFER.................................................................... 8
Section 3.1 Initial Transfer Restrictions for Investors............................................. 8
Section 3.2 Transfers and Assignment by Motient..................................................... 9
Section 3.3 Permitted Transfers..................................................................... 10
Section 3.4 Endorsement of Stock Certificates....................................................... 10
Section 3.5 Regulatory Approvals; Opinions.......................................................... 11
ARTICLE IV. CONVERSION OF CLASS B COMMON STOCK........................................................... 12
Section 4.1 Conversion of Class B Common Stock into Class A Common Stock............................ 12
Section 4.2 Submission of Proposal for Conversion to Public Stockholders............................ 12
ARTICLE V. CORPORATE GOVERNANCE; VOTING AGREEMENT........................................................ 12
Section 5.1 Board of Directors...................................................................... 12
Section 5.2 Observation Rights...................................................................... 14
Section 5.3 Removal of Directors.................................................................... 15
Section 5.4 Operational Involvement of Clear Channel, DIRECTV and the TCM Group..................... 15
Section 5.5 Shareholder Actions..................................................................... 15
ARTICLE VI. CERTAIN REPRESENTATIONS...................................................................... 15
Section 6.1 Existence and Power..................................................................... 15
Section 6.2 Due Authorization; No Contravention..................................................... 16
Section 6.3 Binding Effect.......................................................................... 16
ARTICLE VII. TAG-ALONG RIGHTS FOR PRIVATE TAG-ALONG SALE; right of first
OFFER; ANTIDILUTION PROTECTION............................................................................ 16
Section 7.1 Tag Along Rights........................................................................ 16
Section 7.2 Right of First Refusal.................................................................. 17
Section 7.3 Ratchet Antidilution Protection......................................................... 18
ARTICLE VIII. MISCELLANEOUS.............................................................................. 19
Section 8.1 Amendment and Restatement............................................................... 19
Section 8.2 TCM Agreement........................................................................... 19
Section 8.3 Notices................................................................................. 19
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Section 8.4 Waiver and Amendment.................................................................... 19
Section 8.5 Specific Performance.................................................................... 20
Section 8.6 GOVERNING LAW........................................................................... 20
Section 8.7 Parties In Interest..................................................................... 20
Section 8.8 Severability of Provisions.............................................................. 20
Section 8.9 Plural; Singular........................................................................ 21
Section 8.10 Counterparts............................................................................ 21
Section 8.11 Descriptive Headings.................................................................... 21
Section 8.12 Future Assurances....................................................................... 21
Section 8.13 Termination............................................................................. 21
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AMENDED AND RESTATED
SHAREHOLDERS AGREEMENT
This Amended and Restated Shareholders Agreement, dated as of August 8,
2000 (this "Agreement"), is hereby entered into by and among XM Satellite Radio
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Holdings Inc., a corporation duly organized under the laws of the State of
Delaware (the "Company"); Motient Corporation, a corporation duly organized
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under the laws of the State of Delaware ("Motient"); the Baron Asset Fund series
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("Baron Asset") and the Baron iOpportunity Fund series ("Baron iOpportunity") of
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Baron Asset Fund, a business trust organized under the laws of the Commonwealth
of Massachusetts, and the Baron Capital Asset Fund series of the Baron Capital
Funds Trust ("Baron Capital" and collectively with Baron Asset and Baron
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iOpportunity, "Baron"), a business trust organized under the laws of the State
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of Delaware; Clear Channel Investments, Inc., a corporation duly organized under
the laws of the State of Nevada ("Clear Channel"); Columbia XM Radio Partners,
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LLC, a limited liability company duly organized under the laws of the
Commonwealth of Virginia ("Columbia Radio Partners"); DIRECTV Enterprises, Inc.
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a corporation duly organized under the laws of the State of Delaware
("DIRECTV"); General Motors Corporation, a corporation duly organized under the
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laws of the State of Delaware ("GM"); Madison Dearborn Capital Partners III,
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L.P. ("Madison Capital"), Madison Dearborn Special Equity III, L.P. ("Madison
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Equity"), Special Advisors Fund I, LLC ("Madison Advisors" and, collectively
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with Madison Capital and Madison Equity, each an entity duly organized under the
laws of the State of Delaware, "Madison"); Telcom-XM Investors, L.L.C., a
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limited liability company duly organized under the laws of the State of Delaware
("Telcom"); AEA XM Investors I LLC and AEA XM Investors II LLC, each a limited
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liability company organized under the laws of the State of Delaware
(individually or collectively "AEA XM"), Columbia XM Satellite Partners III,
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LLC, a limited liability company duly organized under the laws of the
Commonwealth of Virginia ("Columbia Satellite Partners"), Columbia Capital
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Equity Partners III (QP), L.P., a limited partnership company duly organized
under the laws of the State of Delaware ("Columbia Equity Partners", and
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collectively with Columbia Radio Partners and Columbia Satellite Partners,
"Columbia"), and American Honda Motor Co, Inc., a corporation duly organized
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under the laws of the State of California ("Honda"). Baron Asset, Clear Channel,
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Columbia Radio Partners, DIRECTV, GM, Madison and Telecom, each in its capacity
as a holder of securities in the Company other than Series C Convertible
Preferred Stock (as defined below) or Common Stock (as defined below) issuable
upon conversion thereof, are collectively referred to herein as the "Original
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Investors." AEA XM, Baron, Columbia Satellite Partners, Columbia Equity
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Partners, Columbia Radio Partners, DIRECTV, Honda, Madison Capital and Madison
Equity, each in its capacity as a holder of the Series C Convertible Preferred
Stock or Common Stock issuable upon conversion thereof, are collectively
referred to herein as the "Series C Investors." The Original Investors and the
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Series C Investors are collectively referred to herein as the "Investors." The
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Company, Motient, and the Investors are collectively referred to herein as the
"Parties."
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WITNESSETH
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WHEREAS, Motient and the Original Investors are parties to a Shareholders
Agreement, dated July 7, 1999 (the "1999 Shareholders Agreement");
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WHEREAS, the Company owns one hundred percent (100%) of the issued and
outstanding shares of common stock of XM Satellite Radio Inc. ("XM");
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WHEREAS, XM Radio Inc., a wholly owned subsidiary of XM, holds a license
awarded by the U.S. Federal Communications Commission for the establishment of a
Satellite Digital Audio Radio Service ("SDARS") system in the United States;
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WHEREAS, the Series C Investors have entered into a purchase agreement with
the Company, dated as of July ___, 2000 (the "Series C Purchase Agreement"),
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under which the Series C Investors are purchasing Series C Convertible
Redeemable Preferred Stock, par value $.01 per share (the "Series C Convertible
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Preferred Stock"), on the terms and conditions described in the Series C
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Purchase Agreement; and
WHEREAS, the Company, Motient, and each of the Investors believe it to be
in the best interests of the Company, Motient, and the mutual best interests of
each of the Investors to set forth herein their agreements with respect to
certain matters related to the ownership and corporate governance of the Company
by amending and restating the 1999 Shareholders Agreement.
NOW, THEREFORE, in consideration for the mutual covenants contained herein,
the adequacy, receipt, and sufficiency of which are hereby acknowledged, the
undersigned hereby agree as follows:
ARTICLE I.
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DEFINITIONS
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Section 1.1 Definitions. Capitalized terms not defined herein have the
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respective meanings ascribed to them in the Series C Purchase Agreement.
(a) Accredited Investor: has the meaning specified in Rule 501 of
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Regulation D promulgated under the Securities Act.
(b) Affiliate: means, as applied to any Person, any other Person directly
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or indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise. For purposes of
Sections 3.3, 5.1, 7.1 and 7.2, a member of a limited liability company or a
partner of a partnership shall be deemed an Affiliate of said company or
partnership.
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(c) Agreement: has the meaning specified in the Preamble.
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(d) Antidilution Protection: means any right to have the relevant price or
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price ratio for the conversion of securities of the Company into any class of
common stock of the Company, or the number of securities issuable upon such
conversion, adjusted where the Company sells common stock (or securities
convertible into or exercisable or exchangeable for common stock) for a price
below a specified dollar amount that is less than the then applicable conversion
price of the securities subject to the adjustment or below the market price (as
defined in the terms of such right) of the common stock. As used herein,
Antidilution Protection is not intended to include stock splits,
reorganizations, distributions of stock or rights to all holders of common stock
or similar transactions.
(e) Baron: has the meaning specified in the Preamble.
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(f) Baron Asset: has the meaning specified in the Preamble.
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(g) Baron Capital: has the meaning specified in the Preamble.
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(h) Baron iOpportunity: has the meaning specified in the Preamble.
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(h) Board or Board of Directors: means the Board of Directors of the
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Company or a committee consisting of one or more directors lawfully exercising
the powers of the Board.
(i) Business Day: means any day other than a Saturday, Sunday or any other
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day on which commercial banks are authorized or required by law to be closed in
New York City or the District of Columbia.
(j) Capital Stock: means any and all of the Company's shares, interests,
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warrants, options, rights to acquire equity or equity-linked securities of the
Company, participations or other equivalents (however designated, whether voting
or non-voting) in equity of the Company, whether now outstanding or issued
subsequently hereto, including, without limitation, all series and classes of
Common Stock and preferred stock of the Company, and all Convertible Securities,
including the Series A Convertible Preferred Stock, the Series B Convertible
Preferred Stock and the Series C Convertible Preferred Stock.
(k) Change of Control: means a transfer of control of XM Radio Inc. which
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would require approval by the FCC under any terms of XM Radio Inc.'s SDARS
license.
(l) Charter Documents: has the meaning specified in Section 5.5(b).
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(m) Class A Common Stock: means the Class A Common Stock, par value $0.01
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per share, of the Company having one (1) vote per share.
(n) Class B Common Stock: means the Class B Common Stock, par value $0.01
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per share, of the Company having three (3) votes per share.
(o) Class C Common Stock: means the Class C Common Stock, par value $0.01
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per share, of the Company having zero (0) votes per share.
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(p) Clear Channel: has the meaning specified in the Preamble.
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(q) Clear Channel Operational Assistance Agreement: means the operational
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assistance agreement dated on or about June 7, 1999, between Clear Channel and
the Company.
(r) "Columbia" has the meaning specified in the Preamble.
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(s) "Columbia Equity Partners" has the meaning specified in the Preamble.
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(t) "Columbia Radio Partners" has the meaning specified in the Preamble.
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(u) "Columbia Satellite" has the meaning specified in the Preamble.
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(v) Commencement of Commercial Operations: means the commencement of
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commercial operations of XM as publicly announced by it and as indicated in a
filing by the Company with the FCC of which the Company shall notify the
Investors.
(w) Commission: means the Securities and Exchange Commission or any other
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Federal agency at the time administering the Securities Act.
(x) Common Stock: means all classes and series of the common stock of the
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Company, any stock into which such common stock shall have been changed or
converted or any stock resulting from any capital reorganization or
reclassification of such common stock, and all other stock of any class or
classes (however designated) of the Company, the holders of which have the
right, without limitation as to amount, either to all or to a share of the
balance of current dividends and liquidating dividends after the payment of
dividends and distributions of any shares entitled to preference.
(y) Common Stock Deemed Outstanding: means, at any given time, the number
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of shares of Common Stock actually outstanding at such time, plus the number of
shares of Common Stock issuable upon the conversion, exchange, or exercise in
full, of all Convertible Securities whether or not the Convertible Securities
are convertible into or exercisable or exchangeable for Common Stock at such
time.
(z) Communications Act: has the meaning specified in Section 2.1.
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(aa) Company: has the meaning specified in the Preamble.
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(bb) Convertible Securities: means securities or obligations that are
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exercisable for, convertible into or exchangeable for shares of Common Stock.
The term includes options, warrants or other rights to subscribe for or purchase
Common Stock or to subscribe for or purchase other securities or obligations
that are convertible into or exercisable or exchangeable for Common Stock,
including, without limitation, the Series A Convertible Preferred Stock, the
Series B Convertible Preferred Stock and the Series C Convertible Preferred
Stock.
(cc) DBS: means direct broadcast satellite service.
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(dd) DIRECTV: has the meaning specified in the Preamble.
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(ee) DIRECTV Operational Assistance Agreement: means the operational
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assistance agreement dated on or about June 7, 1999 between DIRECTV, Inc. (an
Affiliate of DIRECTV) and XM.
(ff) Excluded Securities: means any (a) Common Stock or Convertible
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Securities outstanding as of the date hereof and any Common Stock issuable upon
exercise of such Convertible Securities, (b) Common Stock or Convertible
Securities issued under a Qualifying Stock Plan and (c) Common Stock or
Convertible Securities issued to Persons who are not Affiliates of the Company
as partial consideration for senior debt financing, equipment lease financing or
underwritten High Yield Debt financing pursuant to a registered public offering
under the Securities Act or pursuant to Rule 144A thereunder.
(gg) FCC: means the Federal Communications Commission, or successor agency
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thereof.
(hh) FCC Approval: means approval by the FCC of the transfer of control of
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the Company from Motient to a diffuse group of shareholders.
(ii) GM: has the meaning specified in the Preamble.
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(jj) High Yield Debt: means secured or unsecured debt securities issued by
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the Company or a Subsidiary of the Company in a registered public offering or an
offering to Qualified Institutional Buyers and/or institutional Accredited
Investors under Rule 144A of the Securities Act of at least $50 million after
the Series C Closing Date, with or without attached warrants or quasi-equity
rights issued by the Company or a Subsidiary of the Company.
(kk) Holders: means the Investors and Motient and their respective
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Permitted Transferees.
(ll) Honda: has the meaning specified in the Preamble.
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(mm) Investors: has the meaning specified in the Preamble and their
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Permitted Transferees.
(nn) Madison: has the meaning specified in the Preamble.
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(oo) Motient: has the meaning specified in the Preamble.
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(pp) Non-Public Capital Stock: means Capital Stock which the Company
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intends to issue without registration under the Securities Act.
(qq) Notice of Proposed Issuance: has the meaning specified in Section 7.
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(rr) Offered Non-Public Capital Stock: has the meaning specified in
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Section 7.
(ss) Participation Notice: has the meaning specified in Section 3.2(c).
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(tt) Parties: has the meaning specified in the Preamble.
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(uu) Permitted Transferees: means each transferee of any Capital Stock,
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with the transfer being made in compliance with the provisions of Article III
hereof.
(vv) Person: means any individual, partnership, corporation, joint
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venture, limited liability company, association, trust, unincorporated
organization, or a government or agency or political subdivision thereof.
(ww) Primary Series C Investor: means AEA XM Investors I LLC and AEA XM
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Investors II LLC, individually or collectively, or any of its/their successors.
(xx) Private Financing Transaction: means a private placement or similar
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transaction which provides financing to the Company in the amount of $25,000,000
or more, excluding acquisitions and other strategic transactions in which the
Company receives consideration other than cash.
(yy) Private Tag-Along Sale: means a sale or other disposition to a
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purchaser or purchasers (including any "person" or "group" (as such terms are
used in Sections 13(d)(3) and 14(d)(2) of the Securities Exchange Act of 1934,
as amended, and including any group acting for the purpose of acquiring, holding
or disposing of securities within the meaning of Rule 13d-5(b)(1) under the
Securities Exchange Act of 1934, as amended)), other than Motient or its
subsidiaries (until Motient and its subsidiaries beneficially own less than 50%
of the voting securities of the Company), of Capital Stock where either before
or after the sale the purchaser or purchasers, together with their Affiliates,
has beneficial ownership (as defined in Rule 13d-3 promulgated under the
Securities Exchange Act of 1934, as amended, but assuming all rights to acquire
securities by conversion or exercise are currently exercisable and not subject
to conditions on exercise) of greater than 30% of the voting securities of the
Company.
(zz) Qualified Institutional Buyer: has the meaning specified in Rule
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144A promulgated under the Securities Act.
(aaa) Qualifying Stock Plan: means, collectively, all approved stock
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incentive plans for employees, consultants and non-employee directors, provided
that (i) issuances under a Qualifying Stock Plan do not exceed 10% in the
aggregate of the shares of Common Stock Deemed Outstanding and (ii) such
Qualifying Stock Plan has been approved by a compensation committee of the Board
of Directors or the full Board of Directors, which, in either case, shall
include at least one director designated by the Original Investors and which
approval shall include the approval of such director so designated.
(bbb) Registration Statement: means a registration statement filed with
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the Commission pursuant to the Securities Act.
(ccc) Resale-Restriction Termination Date: has the meaning specified in
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Section 3.1
(ddd) Right of First Offer: means the rights granted to each Holder
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pursuant to Section 7.2 hereof.
(eee) SDARS: has the meaning specified in the Recitals.
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(fff) Securities Act: means the Securities Act of 1933, as amended, or any
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similar federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect from time to time.
(ggg) Series A Convertible Preferred Stock: means the Series A Convertible
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Preferred Stock, par value $1.00 per share, of the Company having zero (0) votes
per share.
(hhh) Series B Convertible Preferred Stock: means the Series B Convertible
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Redeemable Preferred Stock, par value $.01 per share, of the Company having zero
(0) votes per share.
(iii) Series C Closing Date: means the date of closing under the Series C
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Purchase Agreement.
(jjj) Series C Convertible Preferred Stock: has the meaning specified in
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the Recitals, consisting of Series C Convertible Redeemable Preferred Stock, par
value $.01 per share, such series having the same voting rights as the Common
Stock determined on an as converted basis.
(kkk) Series C Purchase Agreement: has the meaning specified in the
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Preamble.
(lll) Subsidiary: means, with respect to any Person, any corporation,
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association or other business entity of which more than fifty percent (50%) of
the voting power of the outstanding Capital Stock is owned, directly or
indirectly, by such Person or one or other Subsidiaries of such Person.
(mmm) TCM Group: means Columbia, Madison and Telcom.
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(nnn) Telcom: has the meaning specified in the Preamble.
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(ooo) TCM: means TCM, LLC, a Delaware limited liability company.
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(ppp) TCM Operational Assistance Agreement: means the operational
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assistance agreement dated on or about the date hereof between TCM and the
Company.
(qqq) Transfer Notice: has the meaning specified in Section 3.2(c)
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(rrr) Unallocated Portion: has the meaning specified in Section 3.2(c).
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(sss) XM: has the meaning specified in the Preamble.
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ARTICLE II.
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CONDUCT OF BUSINESS; NON-COMPETITION; COOPERATION OF
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SHAREHOLDERS
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Section 2.1 Conduct of Business. The Company shall act as the holding
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company for XM and its Subsidiaries. XM and the Company shall, and Motient shall
cause XM, its
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Subsidiaries and the Company to, conduct their business in such manner as to
comply with all applicable laws and regulations (including but not limited to
the Communications Act of 1934, as amended (the"Communications Act"), and the
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rules and regulations of the FCC).
Section 2.2 Non-Competition. Motient agrees not to compete with XM or the
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Company or its Subsidiaries in the SDARS business in the United States for so
long as Motient holds at least 5% of the Common Stock (assuming full conversion
of all of Motient's holdings of Capital Stock which are convertible into Common
Stock) and for a period of three years following the date on which Motient
ceases to hold at least 5% of the Common Stock (assuming full conversion of all
of Motient's holdings of Capital Stock which are convertible into Common Stock).
Notwithstanding the foregoing, nothing contained herein shall limit Motient's
rights to fulfill its obligations under law as a common carrier licensed by the
FCC with respect to the selling of its capacity to third party resellers for any
business purpose, including those which may compete with the business of XM and
the Company or any Subsidiary of the Company or XM.
Section 2.3 Cooperation of Shareholders. Motient, the Company and the
Investors agree to work cooperatively in connection with the preservation,
maintenance and any extension or renewal by XM Radio Inc. of its SDARS license
and to provide (and to cause the Company to provide), with reasonable
promptness, such information, and assist in making all filings, as may be
required or appropriate in accordance with the Communications Act, FCC rules,
regulations, and processes to preserve, maintain and extend or renew XM Radio
Inc.'s SDARS license.
ARTICLE III.
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RESTRICTIONS ON TRANSFER
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Section 3.1 Initial Transfer Restrictions for Investors.
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Prior to July 7, 2000 (the "Resale-Restriction Termination Date"), each
Investor may transfer any shares of Capital Stock held by it only (i) to the
Company, (ii) pursuant to a Registration Statement that has been declared
effective under the Securities Act, (iii) for so long as such Capital Stock is
eligible for resale pursuant to Rule 144A under the Securities Act, to a person
it reasonably believes is a Qualified Institutional Buyer that purchases for its
own account or for the account of a Qualified Institutional Buyer to whom notice
is given that the transfer is being made in reliance on Rule 144A under the
Securities Act, (iv) pursuant to offers and sales that occur outside the United
States within the meaning of Regulation S under the Securities Act, (v)
commencing only with the period which is six months after the date of the
issuance of such Capital Stock, to an Accredited Investor purchasing for its own
account or for the account of such an Accredited Investor, (vi) pursuant to any
other available exemption from the registration requirements of the Securities
Act, or (vii) pursuant to Section 7.1 of this Agreement, subject in each of the
foregoing cases to any requirement of law that the disposition of its property
or the property of any investor account or accounts be at all times within its
or their control. The foregoing restrictions on resale will not apply subsequent
to the Resale-Restriction Termination Date. If any resale or other transfer of
any Capital Stock is proposed to be made pursuant to clause (v) above prior to
the Resale-Restriction Termination Date, the transferor shall deliver a
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letter from the transferee to the Company in form and substance reasonably
satisfactory to the Company, which shall provide, among other things, that the
transferee is an Accredited Investor that is acquiring such Capital Stock for
investment and not for resale or distribution in violation of the Securities
Act. Each Investor acknowledges that the Company reserves the right prior to any
offer, sale or other transfer of the Capital Stock pursuant to clauses, (iii),
(iv), (v) or (vi) above to require the delivery to the Company of an opinion of
counsel to the Investor, certifications and/or other information reasonably
satisfactory to the Company.
Section 3.2 Transfers and Assignment by Motient.
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(a) Subject to the requirements of Article IV hereof, Motient shall not be
permitted to transfer any of its shares of Capital Stock or other securities of
the Company to any Person (excluding 1,314,914 shares of Capital Stock
transferred to Baron Asset in January 2000) until the earlier of (i) the
Commencement of Commercial Operations, or (ii) October 8, 2000; provided that no
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shares of Class B Common Stock may be transferred at any time until such shares
are converted to shares of Class A Common Stock.
(b) Notwithstanding Section 3.2(a) and subject to Section 3.3(b) and (c)
and Section 7.1, Motient shall have the right to (i) assign or transfer its
interest in the Company to any Person (1) if such Person is an Affiliate of
Motient or (2) if such Person owns 10% or more of the outstanding Common Stock
of Motient; provided that such assignment or transfer complies with applicable
law and regulations, including the Communications Act and the FCC rules and
regulations, and, in the case of an assignment or transfer to a 10% or more
holder, Motient's right to effect such assignment or transfer shall be subject
to Motient's furnishing 30 days prior written notice to the Company of any such
assignment or transfer, compliance with the provisions of Section 3.3(c) and
Section 7.1 and any such assignment or transfer may be subject to disallowance
if the Board reasonably determines and provides notice to Motient during the 30-
day period referred to above that the proposed assignment or transfer would (x)
result in a sale, assignment or transfer to a competitor of the Company for
SDARS service in the United States, (y) be reasonably likely to materially
adversely affect the Company's prospects for obtaining from the FCC or other
regulatory bodies or maintaining any necessary licenses or consents for the
Company's SDARS system; or (z) be reasonably likely to materially adversely
affect the Company's ability or prospects for successfully implementing or
operating its SDARS system, and (ii) pledge or hypothecate, in connection with
its customary bona fide financing arrangements (including under its current
guaranteed bank facilities), Capital Stock and any other interest in the
Company.
(c) In the event that Motient proposes to transfer all or a portion of its
interest in the Company in accordance with Section 3.2(b)(i)(2) hereof to a
Person who is not an Affiliate, Motient will provide notice thereof (including
the proposed terms thereof) (the "Transfer Notice"), at least ten (10) Business
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Days prior to the proposed transfer, to each Investor whereupon each Investor
shall have the right to purchase, at the same price and upon the same material
terms and conditions set forth in the Transfer Notice, a pro rata portion of
such interest based upon such Investor's portion of the Common Stock Deemed
Outstanding held by all Investors. Each Investor desiring to participate in such
purchase shall provide Motient and each other Investor notice of its agreement
to participate (the "Participation Notice") within ten (10) Business Days of
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receipt of the Transfer Notice with respect to its pro rata portion of the
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proposed transfer. In the event that one or more of the other Investors does not
provide a timely Participation Notice, whether and to the extent to which such
Investor would acquire any remaining, unallocated portion of the proposed
transfer (the "Unallocated Portion"), the Unallocated Portion shall be allocated
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in pro rata proportion based upon the Common Stock Deemed Outstanding held by
each of the Investors who submits a Participation Notice to the extent of such
Investor's indicated willingness to acquire any Unallocated Portion as provided
in such Investors' Participation Notice.
Section 3.3 Permitted Transfers.
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(a) Notwithstanding the restrictions on transfer set forth elsewhere in
this Article III (other than Sections 3.4 and 3.5), each Investor shall have the
right to transfer or assign its holdings of Capital Stock to an Affiliate of
such Investor, and each Investor shall be able to pledge or hypothecate, in
connection with bona fide financing arrangements, its Capital Stock and any
other interest in the Company; provided, however that no transfer to an
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Affiliate shall be effective if the purpose or intent of such transfer is to
circumvent the restrictions on transfers to non-Affiliates set forth herein.
(b) Transfers and encumbrances of Capital Stock may only be made in strict
compliance with all applicable terms of this Agreement. Any purported transfer
or encumbrance of Capital Stock that does not so comply with all applicable
provisions of this Agreement shall be void and ineffective and the Company shall
not recognize nor be bound by any such purported transfer or encumbrance and any
such purported transfer shall have no effect on the stock transfer books of the
Company.
(c) Any assignment or transfer of an interest in the Company pursuant to
the terms of this Agreement, other than in a public offering of the Company's
Common Stock or an offering pursuant to Rule 144 or 145 under the Securities
Act, shall be subject to the assumption by the transferee of the terms and
conditions set forth in this Agreement applicable to the transferor.
Section 3.4 Endorsement of Stock Certificates. Conformed copies of this
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Agreement shall be filed with the secretary of the Company and kept with the
records of the Company at its principal office. Until such time that the
Company, based on an opinion of counsel, shall have determined otherwise, an
officer of the Company shall endorse each certificate representing the Capital
Stock heretofore or hereafter issued by the Company to any Holder by causing to
be placed on the back thereof the following legend:
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
10
FROM, OR NOT SUBJECT TO, REGISTRATION UNDER THE
SECURITIES ACT.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE
ARE THE SUBJECT OF A CERTAIN SHAREHOLDERS
AGREEMENT WHICH, AMONG OTHER THINGS, CONTAINS
RESTRICTIONS ON THE TRANSFER OF SUCH
SECURITIES. A COPY OF THE SHAREHOLDERS
AGREEMENT IS AVAILABLE FOR INSPECTION AT THE
PRINCIPAL OFFICE OF THE COMPANY.
Upon registration of any Capital Stock under the Securities Act, the
Company shall remove such legend from the certificate(s) representing such
Capital Stock promptly upon request of the Holder thereof and delivery of such
certificate(s) to the Company. The Company shall, upon presentation of a
certificate representing shares of the Company's Capital Stock with respect to
which one or both of the foregoing restrictions have expired or are not
applicable, together with such evidence (including, when such an opinion would
customarily be required by the Company of its stockholders, an opinion of
counsel obtained at the Holder's expense and reasonably satisfactory to the
Company) of such lapse or nonapplicability as the Company would reasonably
request of stockholders who are similarly situated, promptly cause to be issued
a replacement certificate for such shares of the Company's Capital Stock without
the applicable restrictive legend.
Section 3.5 Regulatory Approvals; Opinions.
------------------------------
(a) To the extent that any regulatory approval, notification or other
submission or procedure is required or customarily provided in connection with
the exercise of any right or obligations as set forth in this Agreement with
respect to the transfer or assignment of Capital Stock (including, but not
limited to, FCC approvals (if required) and applicable securities laws), such
transfer or assignment of Capital Stock pursuant to this Agreement will be
delayed and will only take place after such approval, notification or other
submission or procedure has been obtained, submitted or completed.
(b) Prior to the transfer of any Capital Stock, the Company at its option
may require an opinion of counsel reasonably satisfactory to the Company to the
effect that such transfer is in compliance with, or exempt from, the
registration requirements of the Securities Act.
ARTICLE IV.
-----------
CONVERSION OF CLASS B COMMON STOCK
----------------------------------
Section 4.1 Conversion of Class B Common Stock into Class A Common Stock.
------------------------------------------------------------
Either (i) at the discretion of Motient or (ii) at the direction of the holders
of a majority of the shares of Common Stock Deemed Outstanding (excluding any
shares held by Motient and its Affiliates other than Baron Asset, GM, Xxxxxx or
DIRECTV), which majority shall include at
11
least 20% of the public holders of Class A Common Stock, Motient shall convert
all of its shares of Class B Common Stock into shares of Class A Common Stock,
upon the receipt of FCC Approval; provided that Motient shall not be obligated
-------------
to convert any shares of Class B Common Stock into shares of Class A Common
Stock unless such conversion, together with the conversion of all Convertible
Securities the Company reasonably believes would be converted at such time,
would result in a Change of Control. Each of Motient, the Company and the
Investors hereby agrees to prepare and file any and all applications, and
furnish any information, required by the Communications Act or applicable FCC
rules, regulations and policies in order to obtain the FCC Approval and shall
agree to use all reasonable commercial efforts in order to obtain the FCC
Approval.
Section 4.2 Submission of Proposal for Conversion to Public Stockholders.
------------------------------------------------------------
At the direction of two (2) of the four (4) members of the Board of Directors
designated by the Investors pursuant to Section 5.1, the Company will insert
into any proxy statement scheduled by the Company to be delivered to the holders
of Class A Common Stock, holders of Series C Convertible Preferred Stock and
holders of any other stock that votes with the Class A Common Stock as a single
class, other than the Class B Common Stock ("Non-Series B Voting Stock")
appropriate material to provide such holders of Non-Series B Voting Stock with
the opportunity to vote to direct the Company to cause Motient to convert its
shares of Class B Common Stock into shares of Class A Common Stock.
ARTICLE V.
----------
CORPORATE GOVERNANCE; VOTING AGREEMENT
--------------------------------------
Section 5.1 Board of Directors.
------------------
(a) Prior to the receipt of FCC Approval, the Board of Directors and the
board of directors of XM and any other material subsidiary (collectively, the
"Boards of Directors") shall consist of eleven (11) members, of whom:
--------------------
(i) three (3) members shall be designated by the Original Investors, (x)
one (1) of whom shall be a designee of Clear Channel, (y) one (1) of whom shall
be a designee of GM or DIRECTV, as those two Parties may agree, and (z) one (1)
of whom shall be a designee of Telcom;
(ii) five (5) members shall be designated by Motient, who shall include
(x) the Chairman and (y) the President and the CEO of the Company (who shall be
selected by Motient);
(iii) two (2) members shall be independent directors of recognized industry
expertise and stature, of whom (x) one (1) member shall be approved by Motient
and (y) the other of whom shall be approved by the Investors who hold a majority
of the Common Stock Deemed Outstanding that is held by Investors; and
(iv) one (1) member shall be designated by the Primary Series C Investor
who shall be appointed to any Audit Committee and Executive Committee (subject
to meeting the Nasdaq Audit Committee and Charter requirements).
12
(b) Upon receipt of the FCC Approval, the Boards of Directors shall
consist of ten (10) members, of whom:
(i) three (3) members shall be designated by the Original Investors, (x)
one (1) of whom shall be a designee of Clear Channel, (y) one (1) of whom shall
be a designee of GM or DIRECTV, as those two Parties may agree, and (z) one (1)
of whom shall be a designee of Telcom;
(ii) three (3) members shall be designated by Motient;
(iii) one (1) member shall be the President and CEO of the Company; and
(iv) two (2) members shall be independent directors of recognized
industry expertise and stature both of whom shall be approved by Motient and the
Investors who hold a majority of the Common Stock Deemed Outstanding that is
held by the Investors; and
(v) one (1) member shall be designated by the Primary Series C Investor
who shall be appointed to any Audit Committee and Executive Committee (subject
to meeting the Nasdaq Audit Committee and Charter requirements).
(c) Each Holder agrees to vote its Common Stock in favor of the persons
nominated in accordance with the provisions herein. The rights of each of (i)
Clear Channel and (ii) GM or DIRECTV to designate a director and approve the
appointment of independent directors pursuant to this Section 5.1 shall continue
for so long as such Party (or GM and DIRECTV together) holds (A) in excess of 5%
of the Common Stock Deemed Outstanding or (B) the full amount of such Party's
original investment in the Company (whether or not converted into shares of
Series A Convertible Preferred Stock, if applicable, or Class A Common Stock).
The right of Telcom to designate a director shall continue for so long as Telcom
holds (i) at least 50% of its investment in the Company as of the Series C
Closing Date, or (ii) in excess of 2% of the Common Stock Deemed Outstanding.
Similarly, the right of the Primary Series C Investor to designate a director
shall continue for so long as AEA XM (or its Affiliates) holds at least 50% of
the stock that it originally purchased under the Series C Purchase Agreement,
either in Series C Convertible Preferred Stock or as converted into Class A
Common Stock. Similarly, following the Company's receipt of FCC Approval, the
right of Motient to designate directors and approve the appointment of
independent directors pursuant to this Section 5.1 shall continue for so long as
Motient holds (A) in excess of 15% of the Common Stock Deemed Outstanding or (B)
the full amount of Motient's investment in the Company on July 7, 1999
(excluding 1,314,914 shares of Motient's Capital Stock transferred to Baron
Asset in January 2000) (whether or not converted into shares of Class A Common
Stock) (the "Initial Motient Investment"); provided that, if Motient holds less
--------------------------
than 15% of the Common Stock Deemed Outstanding and less than the Initial
Motient Investment, (x) Motient shall be entitled to designate two (2) directors
(notwithstanding Section 5.1(b)(ii)) and approve the appointment of two (2)
independent directors (notwithstanding Section 5.1(b)(iv)) for so long as
Motient owns Capital Stock in excess of 10% of the Common Stock Deemed
Outstanding, and (y) Motient shall be entitled to designate one (1) director
(notwithstanding Section 5.1(b)(ii)) and approve the appointment of two (2)
independent directors (notwithstanding Section 5.1(b)(iv)) for so long as
Motient owns in excess of 5% of the Common Stock Deemed Outstanding.
13
(d) The right of each Original Investor to designate a director pursuant
to Sections 5.1(a)(i) and 5.1(b)(i) also shall terminate, and any director
designated by such Original Investor shall promptly resign from the Boards of
Directors:
(i) in the case of Clear Channel, if a majority of the ownership
interests of Clear Channel cease to be owned, directly or indirectly, by Clear
Channel Communications, Inc.;
(ii) in the case of DIRECTV, if a majority of the ownership interests of
DIRECTV cease to be owned, directly or indirectly, by Xxxxxx Electronics
Corporation or its Affiliates (provided that the loss of DIRECTV's right to
designate directors shall not affect GM's rights under this Section 5.1); and
(iii) in the case of Telcom, if a majority of the ownership interests of
Telcom cease to be owned, directly or indirectly, by Telcom Ventures, L.L.C.
Section 5.2 Observation Rights.
------------------
(a) For such time as GM and DIRECTV (i) continue to hold, in the
aggregate, in excess of 5% of the Common Stock Deemed Outstanding, or (ii) each
retains the full amount of its original investment in the Company, (whether or
not converted into shares of Series A Convertible Preferred Stock or Class A
Common Stock), GM or DIRECTV shall be allowed one observer at Board of Directors
meetings to represent whichever company does not designate a member of the Board
of Directors at that time.
(b) For such time as any of Columbia and Madison (i) continues to hold
in excess of 2% of the Common Stock Deemed Outstanding, or (ii) such Investor
retains at least 50% of its investment in the Company as of the Series C Closing
Date, such Investor shall be allowed to have an observer at Board of Directors
meetings so long as such company(ies) does not have an Affiliate serving as a
member of the Board of Directors at that time.
(c) For such time as Clear Channel (i) continues to hold in excess of 5%
of the Common Stock Deemed Outstanding, or (ii) retains the full amount of its
original investment in the Company, Clear Channel shall be allowed an observer
at Board of Directors meetings.
(d) For such time as Honda retains at least 50% of its investment in the
Company as of the Series C Closing Date, Honda shall be allowed an observer at
Board of Directors meetings.
Section 5.3 Removal of Directors. Motient and the Investors agree to
--------------------
vote so that each member of the Board of Directors nominate designated in
accordance with Section 5.1 shall serve as a director of the Company until
removed, upon the instructions of the Party designating such director, and each
Party agrees to vote its shares of Common Stock in accordance with such
directions. To the extent permitted by law, Motient and each Investor agree not
to take any action to remove or replace (and to use all reasonable efforts to
cause the Board of Directors not to replace), with or without cause, any
director of the Company that has not been designated for removal or replacement
by the Party having originally nominated or designated such director.
Section 5.4 Operational Involvement of Clear Channel, DIRECTV and the
---------------------------------------------------------
TCM Group.
---------
14
(a) For such time as Clear Channel (i) continues to hold in excess of 5%
of the Common Stock Deemed Outstanding, or (ii) retains the full amount of its
original investment in the Company, the Company agrees that Clear Channel shall
have operational rights and involvement as set forth in the Clear Channel
Operational Assistance Agreement, provided that such rights and involvement
-------------
shall terminate if Clear Channel ceases to be a wholly-owned subsidiary of Clear
Channel Communications, Inc.
(b) For such time as DIRECTV (i) continues to hold in excess of 5% of the
Common Stock Deemed Outstanding, or (ii) retains the full amount of its original
investment in the Company, (whether or not converted into shares of Series A
Convertible Preferred Stock or Class A Common Stock), the Company agrees that
DIRECTV, Inc. shall have operational rights and involvement as set forth in the
DIRECTV Operational Assistance Agreement.
(c) For such time as Telcom, Columbia and Madison (i) continue to hold,
in the aggregate, in excess of 5% of the Common Stock Deemed Outstanding, or
(ii) retain, in the aggregate, at least 50% of their investment in the Company
as of the Series C Closing Date, the Company agrees that the TCM Group shall
have operational rights and involvement as set forth in the TCM Operational
Assistance Agreement.
Section 5.5 Shareholder Actions. Each Party shall at all times take
-------------------
all actions necessary (i) to give effect to the terms and conditions of this
Agreement and (ii) to ensure that the certificate of incorporation and bylaws of
the Company (the "Charter Documents") do not, at any time, conflict with the
-----------------
provisions of this Agreement, and hereby agrees to make or authorize any
amendments to the Charter Documents that may hereafter be required to give
effect to this Agreement.
ARTICLE VI.
-----------
CERTAIN REPRESENTATIONS
-----------------------
Each Party hereby represents and warrants on behalf of itself to each other
Party that:
Section 6.1 Existence and Power.
-------------------
(a) It is an entity duly organized, validly existing and in good standing
under the laws of its jurisdiction of formation;
(b) It has the power and authority to own its assets, carry on its
business and execute, deliver, and perform its obligations under this Agreement;
and
(c) It is duly qualified to do business and is licensed and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such qualification
or license.
Section 6.2 Due Authorization; No Contravention. The execution,
-----------------------------------
delivery and performance by it of this Agreement have been duly authorized by
all necessary action, and do not and will not:
15
(a) Breach or violate the terms of its certificate of incorporation (or
similar constituent document) or bylaws (or similar constituent document);
(b) Breach or violate the terms of any material agreement to which it is
party; or
(c) Violate any law or regulation applicable to it, including but not
limited to the Communications Act and the rules and regulations promulgated from
time to time by the FCC.
Section 6.3 Binding Effect. This Agreement has been duly authorized,
--------------
executed and delivered by it and constitutes the legal, valid and binding
obligation of it enforceable against it in accordance with the terms hereof,
subject to applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and similar laws affecting creditors' rights generally and
to general principles of equity (regardless of whether enforcement is sought in
a proceeding in equity or at law).
ARTICLE VII.
------------
TAG-ALONG RIGHTS FOR PRIVATE TAG-ALONG SALE; RIGHT OF FIRST
-----------------------------------------------------------
OFFER; ANTIDILUTION PROTECTION
------------------------------
Section 7.1 Tag Along Rights Upon Private Tag-Along Sale. Each Investor
--------------------------------------------
(and Motient, to the extent Motient holds shares of Class A Common Stock) shall
have the right to participate on the same terms (without paying any portion of
the transaction costs associated with such sale except for their own legal
expense and selling commission) in any Private Tag-Along Sale by any other Party
and its Affiliates, whether in one transaction or in a series of related
transactions. This right shall not apply to a Transfer by a Party to a
controlled Affiliate or parent company owning 50% or more of such Party, to any
open-market or reasonably similar "blind" transaction or to a sale pursuant to a
tender or exchange offer made to all securities holders. Such participation
shall be shared pro rata with each other Investor (and Motient, if applicable,
with respect to its Class A Common Stock) desiring to participate, based upon
such Investor's (or Motient's, with respect to its Class A Common Stock) Common
Stock Deemed Outstanding relative to the Common Stock Deemed Outstanding held by
all Investors (and Motient, as applicable, with respect to its Class A Common
Stock). In addition, if the Company grants additional tag along rights to any
Party, it shall grant such rights to all other Parties (provided, however, that
Motient's eligibility to utilize any such right shall arise only to the extent
Motient holds shares of Class A Common Stock).
Section 7.2 Right of First Offer. The Company shall only issue Non-
--------------------
Public Capital Stock in a Private Financing Transaction in accordance with the
following terms:
(a) The Company shall not issue any Non-Public Capital Stock unless it
first delivers to each Investor and Motient who is then an Eligible Purchaser
(as defined below) (each such Person being referred to in this Section 7 as a
"Buyer") a written notice (the "Notice of Proposed Issuance") specifying the
----- ---------------------------
type and total number of such shares of Non-Public Capital Stock that the
Company then intends to issue (the "Offered Non-Public Capital Stock"), all of
--------------------------------
the material terms, including the price upon which the Company proposes to issue
the Offered Non-Public Capital Stock and stating that the Buyers shall have the
right to purchase the Offered Non-Public
16
Capital Stock in the manner specified in this Section 7.2(a) for the same price
per share and in accordance with the same terms and conditions specified in such
Notice of Proposed Issuance.
(b) For a period of ten (10) calendar days from the date the Company
delivers to all of the Buyers the Notice of Proposed Issuance (the "Ten Day
-------
Period"), the Buyers may elect to subscribe to purchase all of the Offered Non-
------
Public Capital Stock at the same price per share and upon the same terms and
conditions specified in the Notice of Proposed Issuance. Each Buyer electing to
purchase Offered Non-Public Capital Stock must give written notice of its
election to the Company prior to the expiration of the Ten Day Period. If the
Offered Non-Public Capital Stock is being offered as part of an investment unit
together with debt or other instruments, any election by a Buyer to purchase
Offered Non-Public Capital Stock shall also constitute an election to purchase a
like portion of such debt or other instruments.
(c) Each Buyer shall have the right to purchase that number of shares of
the Offered Non-Public Capital Stock as shall be equal to the number of shares
of the Offered Non-Public Capital Stock multiplied by a fraction, the numerator
of which shall be the number of shares of Common Stock then held by such Buyer
plus all shares of Common Stock issuable upon conversion of all Convertible
Securities then held by such Buyer and the denominator of which shall be the
aggregate number of shares of Common Stock Deemed Outstanding. The amount of
such Offered Non-Public Capital Stock that each Buyer is entitled to purchase
under this Section 8 shall be referred to as its "Proportionate Share."
-------------------
(d) Each Buyer shall have a right of oversubscription such that if any
other Buyer fails to elect to purchase his or its full Proportionate Share of
the Offered Non-Public Capital Stock, the other Buyer(s) shall, among them, have
the right to purchase up to the balance of such Offered Non-Public Capital Stock
not so purchased. The Buyers may exercise such right of oversubscription by
electing to purchase more than their Proportionate Share of the Offered Non-
Public Capital Stock by so indicating in their written notice given during the
Ten Day Period. If, as a result thereof, such oversubscription elections exceed
the total number of the Offered Non-Public Capital Stock available in respect to
such oversubscription privilege, the oversubscribing Buyers shall be cut back
with respect to oversubscriptions on a pro rata basis in accordance with their
respective Proportionate Share or as they may otherwise agree among themselves.
(e) If all of the Offered Non-Public Capital Stock has not been
subscribed for by the Buyers pursuant to the foregoing provisions, then the
Company shall have the right, until the expiration of one-hundred eighty (180)
consecutive days commencing on the first day immediately following the
expiration of the Ten Day Period, to issue the Offered Non-Public Capital Stock
not purchased by the Buyers at not less than, and on terms no more favorable in
any material respect to the purchaser(s) thereof than, the price and terms
specified in the Notice of Proposed Issuance. If such remaining Offered Non-
Public Capital Stock is not issued within such period and at such price and on
such terms, the right to issue in accordance with the Notice of Proposed
Issuance shall expire and the provisions of this Agreement shall continue to be
applicable to the Offered Non-Public Capital Stock.
(f) The Company may proceed with the issuance of Non-Public Capital Stock
without first following the foregoing procedures provided that (i) any purchaser
of such Non-
17
Public Capital Stock acquiring more than 5% of the Common Stock Deemed
Outstanding agrees in writing to be bound by Section 7.1, and (ii) within ten
(10) days following the issuance of such Non-Public Capital Stock, the Company
or the purchaser of the Non-Public Capital Stock undertakes steps substantially
similar to those described above to offer to all Buyers the right to purchase
from such purchaser or from the Company such amount of such Non-Public Capital
Stock at the same price and terms applicable to the purchaser's purchase thereof
as is necessary for the Buyers to maintain the same ownership percentage of the
Company on a fully diluted basis as existed prior to such issuance of Non-Public
Capital Stock.
(g) Notwithstanding the foregoing, the Right of First Offer described in
this Section 7 shall not apply with respect to the issuance of Excluded
Securities or to any Investor who is not an Eligible Purchaser. For purposes of
this Section 7, any Investor or Motient shall be an "Eligible Purchaser" with
respect to a proposed issuance of Non-Public Capital Stock if such Investor or
Motient meets the Company's reasonable requirements for investors generally
(such as being an Accredited Investor or Qualified Institutional Buyer) to
purchase Non-Public Capital Stock in the particular Private Financing
Transaction.
(h) The Right of First Offer described in this Section 7 shall terminate
(i) as to any Investor who transfers more than 50% of its original Capital Stock
to a Person other than an Affiliate, or (ii) upon the Company achieving positive
EBITDA for a period of six consecutive calendar months.
Section 7.3 Antidilution Protection. In the event that, at a time when
-----------------------
Series C Convertible Preferred Stock is then outstanding, the Company grants any
Antidilution Protection to any purchaser(s) of 1% or more (on a fully diluted
basis) of the Capital Stock which would (if granted to the holders of the Series
C Convertible Preferred Stock) be materially more favorable (taken as a whole)
to the holders of the Series C Convertible Preferred Stock than the Antidilution
Protection then applicable to the Series C Convertible Preferred Stock (a "New
---
Antidilution Protection"), then if the holders of a majority of the Series C
-----------------------
Convertible Preferred Stock so elect by written notice to the Company, the
Company and the Series C Investors shall use their best efforts to take all
steps determined in good faith by the Board of Directors to be reasonably
necessary to provide (and the Investors shall vote in favor of any amendment to
the Certificate of Designation of the Series C Convertible Preferred Stock which
may be necessary), as nearly as practicable under the circumstances and
consistent with the other terms of Certificate of Designation for the Series C
Convertible Preferred Stock, the New Antidilution Protection to the holders of
the Series C Convertible Preferred Stock as a replacement for the Antidilution
Protection then applicable to the Series C Convertible Preferred Stock.
ARTICLE VIII.
-------------
MISCELLANEOUS
-------------
Section 8.1 Amendment and Restatement. This Agreement hereby restates,
-------------------------
amends and supersedes the 1999 Shareholders Agreement.
Section 8.2 TCM Agreement. Concurrently with the execution and delivery
-------------
of the execution of this Agreement by all of the members of the TCM Group, the
TCM Group
18
Agreement dated as of July 7, 1999 between members of the TCM Group regarding
designation of a director under the 1999 Shareholder Agreement shall be
terminated.
Section 8.3 Notices. Except as otherwise provided in this Agreement,
-------
notices and other communications under this Agreement shall be in writing and
shall be deemed properly served if: (i) mailed by registered or certified mail,
return receipt requested, (ii) delivered by a recognized overnight courier
service, (iii) delivered personally, or (iv) sent by facsimile transmission
addressed to each Party at its address for notices specified on Schedule I
attached hereto, or at such other address, or to the attention of such officer,
as any Party shall have furnished to each other Party in writing pursuant to
this Section 8.2. Such notice shall be deemed to have been received: (i) three
(3) Business Days after the date of mailing if sent by certified or registered
mail, (ii) one (1) Business Day after the date of delivery if sent by overnight
courier, (iii) the date of delivery if personally delivered, or (iv) the next
succeeding Business Day after transmission by facsimile with confirmation of
receipt.
Section 8.4 Amendment. Any term of this Agreement may be amended only
---------
with the written consent of (a) the Company, (b) Motient, (c) Investors holding,
(i) in the case of amendments to provisions of this Agreement generally,
seventy-five percent (75%) of the aggregate of the Common Stock Deemed
Outstanding held by Investors, and (ii) in the case of any non-material change
or technical correction of this Agreement, a majority of the aggregate of the
Common Stock Deemed Outstanding held by Investors, (d) in the case of amendments
to Section 7 of this Agreement, in addition to the consents listed in (a), (b)
and (c) of this Section, at least 66-2/3% of the aggregate of the Common Stock
Deemed Outstanding held by Series C Investors, and (e) in the case of amendments
to any provision of Section 5.1(a) or 5.1(b) which adversely affect the right of
any Investor to designate one or more directors, in addition to the consents
listed in (a), (b) and (c) of this Section, the Investor having the right that
would be adversely affected; provided, however, that in the event the rights,
preferences or obligations hereunder of one or more Investors are being amended
in a manner that is materially adverse to such Investors and in a manner that is
different from those of other Investors, such rights, preferences or obligations
may be so amended only with the consent of the Investors holding at least 75% in
the aggregate of the Common Stock Deemed Outstanding held by Investors whose
rights, preferences or obligations are being materially adversely amended in
such different manner.. Any amendment effected in accordance with this Section
8.4 shall be binding upon each future Holder and the Company.
Section 8.5 Specific Performance. Each Party acknowledges (i) that it
--------------------
will be impossible to measure in money the damage to each other Party if any of
them or any legal representative of any Party fails to comply with any of the
provisions of this Agreement, (ii) that every such provision is material, and
(iii) that in the event of any such failure, the Company and the Investors will
not have an adequate remedy at law or in damages. Accordingly, each Party hereto
consents to the issuance of an injunction or the enforcement of other equitable
remedies against it at the suit of an aggrieved Party without the posting of any
bond or other security, to compel specific performance of all of the terms
hereof and to prevent any disposition of shares of Capital Stock in
contravention of any terms of this Agreement, and waives any defense thereto,
including, without limitation, the defenses of (i) failure of consideration,
(ii) breach of any other provision of this Agreement and (iii) availability or
relief in damages.
19
Section 8.6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
-------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT GIVING
EFFECT TO ANY CONFLICT OF LAW PROVISIONS THEREOF.
EACH OF THE PARTIES ACKNOWLEDGES THAT (i) IT IS A KNOWLEDGEABLE, INFORMED,
SOPHISTICATED BUSINESS ENTITY CAPABLE OF UNDERSTANDING AND EVALUATING THE
PROVISIONS SET FORTH IN THIS AGREEMENT, INCLUDING THIS SECTION 8.5, AND (ii) IT
HAS BEEN REPRESENTED BY SUCH COUNSEL AND OTHER ADVISORS OF ITS CHOOSING AS IT
HAS DEEMED APPROPRIATE IN CONNECTION WITH ITS DECISION TO ENTER INTO THIS
AGREEMENT.
Section 8.7 Parties In Interest. This Agreement shall be binding upon
-------------------
and shall inure to the benefit of each Party and their respective successors and
assigns as provided for herein, and by their signatures hereto, and each Party
intends to and does hereby become bound. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any Person other than the
Parties hereto and their respective successors and assigns any legal or
equitable right, remedy or claim under or in or in respect of this Agreement or
any provision herein contained.
Section 8.8 Severability of Provisions. In case any one or more of the
--------------------------
provisions contained in this Agreement should be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby.
Section 8.9 Plural; Singular. When used herein, the singular of each
----------------
term includes the plural and the plural of each term includes the singular.
Section 8.10 Counterparts. This Agreement may be executed in any number
------------
of counterparts all of which taken together shall constitute one agreement and
any Party hereto may execute this Agreement by signing any such counterpart.
Section 8.11 Descriptive Headings. The descriptive headings of the
--------------------
several sections of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
Section 8.12 Future Assurances. Each Party shall execute and deliver all
-----------------
such future instruments and take such other and further action as may be
reasonably necessary or appropriate to carry out the provisions of this
Agreement and the intention of the Parties as expressed herein.
Section 8.13 Termination. This Agreement shall be immediately terminated
-----------
upon any of the following: (i) the unanimous written consent to the termination
hereof by the Parties hereto, (ii) the dissolution, bankruptcy or receivership
of the Company, or (iii) at such time as only one (1) Holder remains a Party
hereto.
20
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly
signed as of the date first above written.
XM SATELLITE RADIO HOLDINGS INC. MOTIENT CORPORATION
By:____________________________________ By:__________________________________________
Name: Name:
Title: Title:
BARON ASSET FUND CLEAR CHANNEL INVESTMENTS, INC.
on behalf of THE BARON ASSET FUND SERIES
By:____________________________________ By:__________________________________________
Name: Name:
Title: Title:
COLUMBIA XM RADIO PARTNERS, LLC DIRECTV ENTERPRISES, INC.
By Columbia Capital LLC, its Managing Member
By:____________________________________ By:__________________________________________
Name: Name:
Title: Title:
GENERAL MOTORS CORPORATION MADISON DEARBORN CAPITAL PARTNERS III, L.P.
By Madison Dearborn Partners III, L.P., its
general partner
By:____________________________________ By Madison Dearborn Partners LLC, its general
Name: partner
Title:
By:__________________________________________
Name:
Title:
MADISON DEARBORN SPECIAL EQUITY III, L.P. SPECIAL ADVISORS FUND I, LLC
By Madison Dearborn Partners III, L.P., its general By Madison Dearborn Partners III, L.P., its
partner manager
By Madison Dearborn Partners LLC, its general By Madison Dearborn Partners LLC, its general
partner partner
By:____________________________________ By:__________________________________________
Name: Name:
Title: Title:
TELCOM--XM INVESTORS, L.L.C. AEA XM INVESTORS I LLC
By:____________________________________ By: ________________________________________
Name: Name:
Title: Title:
COLUMBIA XM SATELLITE PARTNERS III, LLC AEA XM INVESTORS II LLC
By:
By:____________________________________ By: ________________________________________
Name: Name:
Title: Title:
COLUMBIA CAPITAL EQUITY PARTNERS III AMERICAN HONDA MOTOR CO., INC.
(QP), L.P.,
By: Columbia Capital Equity Partners III, L.P., its
General Partner
By:____________________________________ By: ________________________________________
Name: Name:
Title: Title:
BARON ASSET FUND BARON CAPITAL FUND TRUST
on behalf of THE BARON iOPPORTUNITY FUND SERIES on behalf of THE BARON CAPITAL ASSET FUND SERIES
By: ___________________________________ By: _________________________________________
Name: Name:
Title: Title:
SCHEDULE I
----------
NAMES, ADDRESSES AND FACSIMILE NUMBERS OF PARTIES
The Company: XM Satellite Radio Holdings Inc. 000-000-0000
0000 Xxxxxxxxx Xxxxx, X.X.
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
Motient: Motient Corporation 703-758-6134
00000 Xxxxxxxxx Xxxx.
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx, Esq.
Clear Channel: Clear Channel Investments, Inc. 000-000-0000
000 Xxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attention: Xxx Xxxxx, Esq.
Columbia: Columbia XM Radio Partners, L.L.C. 000-000-0000
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxxxx
DIRECTV: DIRECTV Enterprises, Inc. 000-000-0000
0000 Xxxx Xxxxxxxx Xxxxxxx
Xx Xxxxxxx, XX 00000
Attention: Xx. Xxxxxx X. Xxx
GM: General Motors Corporation 000-000-0000
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000 - 1000
Attention: Xxxx Xxxxx, Esq.
Telcom: Telcom-XM Investors, L.L.C. 000-000-0000
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Xxx X. Xxxxxxx, Esq.
Madison: Madison Dearborn Partners, Inc. 000-000-0000
Three First Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxx
AEA XM: AEA Investors, Inc. 212-888-1459
00 X. 00/xx/ Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
