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EXHIBIT 99.2
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SHAREHOLDERS AGREEMENT
BY AND AMONG
XM SATELLITE RADIO HOLDINGS INC.
AMERICAN MOBILE SATELLITE CORPORATION
BARON ASSET FUND
COLUMBIA XM RADIO PARTNERS, LLC
CLEAR CHANNEL INVESTMENTS, INC.
DIRECTV ENTERPRISES, INC.
GENERAL MOTORS CORPORATION
MADISON DEARBORN CAPITAL PARTNERS III, L.P.
MADISON DEARBORN SPECIAL EQUITY III, L.P.
SPECIAL ADVISORS FUND I, LLC
AND
TELCOM-XM INVESTORS, L.L.C.
DATED JULY 7, 1999
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TABLE OF CONTENTS
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ARTICLE I. DEFINITIONS......................................................................................................3
Section 1.1 Definitions.........................................................................................3
ARTICLE II. CONDUCT OF BUSINESS; NON-COMPETITION; COOPERATION OF SHAREHOLDERS...............................................8
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.......................................................................................9
Section 3.1 Initial Transfer Restrictions for Investors.........................................................9
Section 3.2 Notice of Proposed Transfer.........................................................................9
Section 3.3 Transfers and Assignment by American Mobile........................................................10
Section 3.4 Transfers and Assignment by Telcom, Columbia and Madison...........................................11
Section 3.5 Permitted Transfers................................................................................11
Section 3.6 Endorsement of Stock Certificates..................................................................11
Section 3.7 Regulatory Approvals; Opinions.....................................................................12
ARTICLE IV. SHAREHOLDER DEBT AND RECAPITALIZATION AT PUBLIC OFFERING.......................................................13
Section 4.1 Share and Debt Conversion..........................................................................13
Section 4.2 Conversion of Class B Common Stock into Class A Common Stock.......................................13
Section 4.3 Submission of Proposal for Conversion to Public Stockholders.......................................14
ARTICLE V. CORPORATE GOVERNANCE; VOTING AGREEMENT..........................................................................14
Section 5.1 Board of Directors.................................................................................14
Section 5.2 Observation Rights.................................................................................16
Section 5.3 Removal of Directors...............................................................................17
Section 5.4 Operational Involvement of Clear Channel, DIRECTV and the TCM Group................................17
Section 5.5 Shareholder Actions................................................................................17
ARTICLE VI. CERTAIN REPRESENTATIONS........................................................................................18
Section 6.1 Existence and Power................................................................................18
Section 6.2 Due Authorization; No Contravention................................................................18
Section 6.3 Binding Effect.....................................................................................18
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ARTICLE VII. TAG-ALONG RIGHTS; right of first refusal......................................................................18
Section 7.1 Tag Along Rights...................................................................................18
Section 7.2 Right of First Refusal.............................................................................19
ARTICLE VIII. MISCELLANEOUS................................................................................................20
Section 8.1 Notices............................................................................................20
Section 8.2 Waiver and Amendment...............................................................................21
Section 8.3 Specific Performance...............................................................................21
Section 8.4 GOVERNING LAW......................................................................................21
Section 8.5 Parties In Interest................................................................................21
Section 8.6 Severability of Provisions.........................................................................22
Section 8.7 Plural, Singular...................................................................................22
Section 8.8 Counterparts.......................................................................................22
Section 8.9 Descriptive Headings...............................................................................22
Section 8.10 Future Assurances..................................................................................22
Section 8.11 Termination........................................................................................22
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SHAREHOLDERS AGREEMENT
This Shareholders Agreement, dated as of July 7, 1999 ("Agreement"),
is hereby entered into by and among XM Satellite Radio Holdings Inc., a
corporation duly organized under the laws of the State of Delaware (the
"Company"), American Mobile Satellite Corporation, a corporation duly organized
under the laws of the State of Delaware ("American Mobile"), the Baron Asset
Fund series ("Baron") of Baron Asset Fund, a business trust organized under the
laws of the Commonwealth of Massachusetts, Clear Channel Investments, Inc., a
corporation duly organized under the laws of the State of Nevada ("Clear
Channel"), Columbia XM Radio Partners, LLC, a limited liability company duly
organized under the laws of the State of Virginia ("Columbia"), DIRECTV
Enterprises, Inc. a corporation duly organized under the laws of the State of
Delaware ("DIRECTV"), General Motors Corporation, a corporation duly organized
under the laws of the State of Delaware ("GM"), Madison Dearborn Capital
Partners III, L.P. ("Madison Capital"), Madison Dearborn Special Equity III,
L.P. ("Madison Equity"), Special Advisors Fund I, LLC ("Madison Advisors" and,
collectively with Madison Capital and Madison Equity, each an entity duly
organized under the laws of the State of Delaware, "Madison") and Telcom-XM
Investors, L.L.C., a limited liability company duly organized under the laws of
the State of Delaware ("Telcom"). Baron, Clear Channel, Columbia, DIRECTV, GM,
Madison and Telcom are collectively referred to herein as the "Investors". The
Company, American Mobile, and the Investors are collectively referred to herein
as the "Parties".
WITNESSETH
WHEREAS, American Mobile is the holder of one hundred percent (100%)
of the issued and outstanding shares of the Company's common stock;
WHEREAS, the Company owns one hundred percent (100%) of the issued
and outstanding shares of common stock of XM Satellite Radio Inc. ("XM");
WHEREAS, XM holds a license awarded by the U.S. Federal
Communications Commission (the "FCC") for the establishment of a Satellite
Digital Audio Radio Service ("SDARS") system in the United States;
WHEREAS, the Company desires to receive financing for capital
expenditures and for working capital;
WHEREAS, the Investors (other than Baron) have entered into a note
purchase agreement with the Company (the "Note Purchase Agreement"), dated as of
June 7, 1999, under which the Investors (other than Baron) shall purchase Series
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Subordinated Convertible Notes due December 31, 2004 (each a "Series A
Subordinated Convertible Note" and, collectively, the "Series A Subordinated
Convertible Notes"), on the terms and conditions described in the Note Purchase
Agreement;
WHEREAS, pursuant to an exchange agreement dated as of June 7, 1999
(the "WSI Exchange Agreement"), WorldSpace has agreed to release any related
security interest and to transfer to a trust created by WorldSpace ("XM
Ventures") all of WorldSpace's right, title and interest in and to, except as
noted below, all assets held by WorldSpace relating to the Company and XM
(collectively, the "XM Interest"), including without limitation, the following:
(i) The Company's common stock held by WorldSpace;
(ii) That certain Convertible Note dated April 1, 1998 in the
principal amount of $54,536,112 convertible into 62.3270 shares of the
Company's Common Stock, and any interest accrued or capitalized with
respect thereto;
(iii) The Bridge, Additional Amounts and Working Capital Loans
issued by WorldSpace to the Company pursuant to the Bridge, Additional
Amounts and Working Capital Facility dated as of May 16, 1997 among the
Company, XM, American Mobile and WorldSpace, as amended by Amendment No.
1 to Bridge, Additional Amounts and Working Capital Credit Facility, and
any interest accrued or capitalized with respect thereto, other than
$75,000,000 aggregate principal and accrued interest thereunder which
will be retained by WorldSpace and repaid and retired by the Company
under the WSI Exchange Agreement;
(iv) Options to purchase (A) 97.2222 shares of the Company's
Common Stock pursuant to the Bridge Option, (B) 128.8876 shares of the
Company's Common Stock pursuant to the Additional Amounts Option, and (C)
3.5111 shares of the Company's Common Stock pursuant to the Working
Capital Option, each of which is dated as of May 16, 1997 between the
Company and WorldSpace; and
(v) The 80.9389 shares of XM common stock pledged under the
Security Agreement, dated as of May 16, 1997 between the Company and
WorldSpace; and
WHEREAS, pursuant to the WSI Exchange Agreement, XM Ventures has
agreed to transfer the XM Interest to American Mobile;
WHEREAS, the Company, American Mobile, and each of the Investors
believe it to be in the best interests of the Company, American Mobile, and the
mutual
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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.
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.
DEFINITIONS
Section 1.1 Definitions. Capitalized terms not defined herein have
the respective meanings ascribed to them in the Note Purchase Agreement.
(a) Accredited Investor: has the meaning specified in the Note
Purchase Agreement.
(b) Affiliate: means, as applied to any Person, any other Person
directly 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 3.2, 3.5 and 7.1, a member of a limited liability company or a partner
of a partnership shall be deemed an Affiliate of said company or partnership.
(c) Agreement: has the meaning specified in the Preamble.
(d) American Mobile: has the meaning specified in the Preamble.
(e) American Mobile Exchange Agreement: means the Exchange,
Amendment and Recapitalization Agreement dated on or about the date hereof among
American Mobile and the Company, providing for the restructuring of the
investment of American Mobile in the Company.
(f) Baron: has the meaning specified in the Preamble.
(g) Board or Board of Directors: means the Board of Directors of the
Company or a committee consisting of one or more directors lawfully exercising
the powers of the Board.
(h) Business Day: means any day other than a Saturday, Sunday or any
other day on which commercial banks are authorized or required by law to be
closed in New York City or the District of Columbia.
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(i) Capital Stock: means any and all of the Company's shares,
interests, 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 any Series A Subordinated Convertible Note,
Series A Convertible Preferred Stock, the New American Mobile Note and the $21
Million Notes.
(j) Change of Control: means a transfer of control of XM which would
require approval by the FCC under any terms of XM's SDARS license.
(k) Charter Documents: has the meaning specified in Section 5.5(b).
(l) Class A Common Stock: means the Class A Common Stock, par value
$0.01 per share, of the Company having one (1) vote per share.
(m) Class B Common Stock: means the Class B Common Stock, par value
$0.01 per share, of the Company having three (3) votes per share.
(n) Class C Common Stock: means the Class C Common Stock, par value
$0.01 per share, of the Company having zero (0) votes per share.
(o) Clear Channel: has the meaning specified in the Preamble.
(p) Clear Channel Operational Assistance Agreement: means the
operational assistance agreement dated on or about June 7, 1999, between Clear
Channel and the Company.
(q) Closing: means the consummation of the transactions contemplated
by the Note Purchase Agreement, including the sale and purchase of the Series A
Subordinated Convertible Notes.
(r) Columbia: has the meaning specified in the Preamble.
(s) Commencement of Commercial Operations: means the commencement of
commercial operations of XM as publicly announced by it.
(t) Commission: means the Securities and Exchange Commission or any
other Federal agency at the time administering the Securities Act.
(u) Common Stock: means all classes and series of the common stock,
$0.01 par value per share, of the 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
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liquidating dividends after the payment of dividends and distributions of any
shares entitled to preference.
(v) Common Stock Deemed Outstanding: means, at any given time, the
number of shares of Common Stock actually outstanding at such time, plus the
number of shares of Common Stock issuable upon the conversion, 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.
(w) Company: has the meaning specified in the Preamble.
(x) Conversion Price: means $509,711, as such price may be adjusted
pursuant to the Note Purchase Agreement.
(y) Convertible Securities: means securities or obligations that
are 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 Subordinated Convertible
Notes, the Series A Convertible Preferred Stock, the $21 Million Notes and the
New American Mobile Note.
(z) DBS: means direct broadcast satellite service.
(aa) DIRECTV: has the meaning specified in the Preamble.
(bb) DIRECTV Operational Assistance Agreement: means the operational
assistance agreement dated on or about June 7, 1999 between DIRECTV and the
Company.
(cc) Excluded Securities: means any (a) Common Stock or Convertible
Securities outstanding as of the date hereof (as disclosed in the Note Purchase
Agreement or the Private Placement Memorandum Supplement No. 1 dated as of July
1, 1999 delivered by the Company to each Investor), or issuable pursuant to the
American Mobile Exchange Agreement or the WSI Exchange Agreement 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.
(dd) FCC: has the meaning specified in the Recitals.
(ee) FCC Approval: means approval by the FCC of the transfer of
control of the Company from American Mobile to a diffuse group of shareholders.
(ff) GM: has the meaning specified in the Preamble.
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(gg) High Yield Debt: has the meaning specified in the Note Purchase
Agreement.
(hh) Holders: means the Investors and American Mobile and their
respective Permitted Transferees.
(ii) Initial Public Offering: means the closing of a firm commitment
underwritten public offering of shares of Common Stock.
(jj) Investors: has the meaning specified in the Preamble and their
Permitted Transferees.
(kk) January 15, 1999 Letter Agreements: means, collectively, (i)
that certain letter agreement between American Mobile, Baron and WorldSpace and
(ii) that certain letter agreement between American Mobile and WorldSpace, each
such letter agreement dated as of January 15, 1999.
(ll) Madison: has the meaning specified in the Preamble.
(mm) Notice of Proposed Issuance: has the meaning specified in
Section 7.
(nn) New American Mobile Note: means the convertible note issued by
the Company to American Mobile on or about the date hereof pursuant to the
American Mobile Exchange Agreement.
(oo) Note Purchase Agreement: has the meaning specified in the
Preamble.
(pp) Offered Capital Stock: has the meaning specified in Section 7.
(qq) Participation Notice: has the meaning specified in Section
3.3(c).
(rr) Parties: has the meaning specified in the Preamble.
(ss) Permitted Transferees: means each transferee of any Capital
Stock, with the transfer being made in compliance with the provisions of Article
III hereof.
(tt) Person: means any individual, partnership, corporation, joint
venture, limited liability company, association, trust, unincorporated
organization, or a government or agency or political subdivision thereof.
(uu) Qualified Initial Public Offering: means an Initial Public
Offering which (a) raises not less than $100 million in gross proceeds and (b)
for which the offering price of the securities offered thereby is at least (i)
125% of the Conversion Price if the offering occurs within six months of the
Closing or (ii) 150% of the Conversion Price if the offering occurs more than
six months after the Closing, unless the Company obtains Requisite Approval (as
such term is defined in the Note Purchase Agreement) for a lower offering price
or lower amount of funds raised at which the Series A Subordinated Convertible
Notes may be automatically converted.
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(vv) Qualified Institutional Buyer: has the meaning specified in
the Note Purchase Agreement.
(ww) Qualifying Stock Plan: means, collectively, all approved stock
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 Holders of the Series A
Subordinated Convertible Notes and which approval shall include the approval of
such director so designated.
(xx) Registration Statement: means a registration statement filed
with the Commission pursuant to the Securities Act.
(yy) Resale-Restriction Termination Date: has the meaning
specified in Section 3.1
(zz) Right of First Refusal: means the rights granted to each
Holder pursuant to Section 7.2 hereof.
(aaa) SDARS: has the meaning specified in the Recitals.
(bbb) Series A Convertible Preferred Stock: means the Series A
Convertible Preferred Stock, par value $1.00 per share, of the Company having
zero (0) votes per share.
(ccc) Series A Subordinated Convertible Note: has the meaning
specified in the Recitals.
(ddd) Securities Act: means the Securities Act of 1933, as amended,
or any similar federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
(eee) Subsidiary: means, with respect to any Person, any
corporation, 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.
(fff) TCM Group: means Columbia, Madison and Telcom collectively.
(ggg) Telcom: has the meaning specified in the Preamble.
(hhh) TCM: means TCM, LLC, a Delaware limited liability company.
(iii) TCM Operational Assistance Agreement: means the operational
assistance agreement dated on or about the date hereof between TCM and the
Company.
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(jjj) Transfer Notice: has the meaning specified in Section 3.3(c)
(kkk) $21 Million Notes: means the convertible notes issued by the
Company to American Mobile as of January 15, 1999.
(lll) Unallocated Portion: has the meaning specified in Section
3.3(c).
(mmm) WorldSpace: means WorldSpace, Inc., a Maryland corporation.
(nnn) WSI Exchange Agreement: has the meaning specified in the
Recitals.
(ooo) XM Interest: has the meaning specified in the Recitals.
(ppp) XM Ventures: has the meaning specified in the Recitals.
ARTICLE II.
CONDUCT OF BUSINESS; NON-COMPETITION; COOPERATION OF
SHAREHOLDERS
Section 2.1 Conduct of Business. The Company shall act as the
holding company for XM. XM and the Company shall, and American Mobile shall
cause XM 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 rules
and regulations of the FCC).
Section 2.2 Non-Competition. American Mobile agrees not to compete
with XM or the Company in the SDARS business in the United States for so long as
American Mobile holds at least 5% of the Common Stock (assuming full conversion
of all of American Mobile's holdings of Capital Stock which are convertible into
Common Stock) and for a period of three years following the date on which
American Mobile ceases to hold 5% of the Common Stock (assuming full conversion
of all of American Mobile's holdings of Capital Stock which are convertible into
Common Stock). Notwithstanding the foregoing, nothing contained herein shall
limit American Mobile'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.
Section 2.3 Cooperation of Shareholders. American Mobile, the
Company and the Investors agree to work cooperatively in connection with the
preservation, maintenance and any extension or renewal by XM of its SDARS
license and to provide (and to cause the Company to provide), with reasonable
promptness, such information as may be required or appropriate in accordance
with FCC rules, regulations, and processes to preserve, maintain and extend or
renew XM's SDARS license.
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ARTICLE III.
RESTRICTIONS ON TRANSFER
Section 3.1 Initial Transfer Restrictions for Investors
Prior to the date which is one year after the later of the date of
original issue of the Series A Subordinated Convertible Notes and the last date
that the Company or any Affiliate of the Company was the owner of such
Securities (or any predecessor thereto) (the "Resale-Restriction Termination
Date"), each Investor, except for Baron, 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, or (vi) pursuant to any other available exemption from the
registration requirements of the Securities Act, 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 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 Notice of Proposed Transfer
(a) Until an Initial Public Offering, except for transfers to Affiliates
permitted under this Agreement, each Holder of Capital Stock shall be required
to furnish at least 30 days prior written notice to the Company of any proposed
transfer of Capital Stock.
(b) During the 30-day period referred to in Section 3.2 (a), any proposed
sale, assignment or transfer may be disallowed if the Board of Directors
reasonably determines, and provides notice to such requesting Holder, that any
such proposed sale, assignment or transfer to the proposed transferee would:
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(i) result in a sale, assignment or transfer to a competitor of
the Company for SDARS service in the United States;
(ii) be reasonably likely to materially adversely affect the
Company's prospects for obtaining from the FCC or other regulatory bodies
any necessary licenses or consents for the Company's SDARS system; or
(iii) be reasonably likely to materially adversely affect the
Company's ability or prospects for successfully implementing or operating
its SDARS system.
(c) Upon any such disallowance by the Board of Directors of a proposed
sale, assignment or transfer by a Holder pursuant to Section 3.2(b), counsel to
the Company shall be available to discuss with such Holder the reasons for such
disallowance.
Section 3.3 Transfers and Assignment by American Mobile.
(a) Subject to the requirements of Article IV hereof, American Mobile
shall not be permitted to transfer any of its shares of Capital Stock or other
securities of the Company to any Person (except as contemplated in the January
15, 1999 Letter Agreements) until the earlier of (i) the Commencement of
Commercial Operations, or (ii) one year after the closing of the Company's
Initial Public Offering; provided that no 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 3.3(a) and subject to Section 3.5, American
Mobile 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 American Mobile or
(2) if such Person owns 10% or more of the outstanding Common Stock of American
Mobile (not including WorldSpace or any Affiliate of WorldSpace); provided that
such assignment or transfer complies with applicable law and, in the case of an
assignment or transfer to a 10% or more holder, American Mobile's right to
effect such assignment or transfer shall be subject to the notice requirement of
Section 3.2(a), compliance with the provisions of Section 3.3(c) and Section 7.1
and any such assignment or transfer may be subject to disallowance pursuant to
Section 3.2(b), 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 American Mobile proposes to transfer all or a
portion of its interest in the Company in accordance with Section 3.3(b)(i)(2)
hereof to a Person who is not an Affiliate, American Mobile will provide notice
thereof (including the proposed terms thereof) (the "Transfer Notice"), at least
ten (10) Business Days prior to the proposed transfer, to each Investor (other
than Baron), whereupon each Investor (other than Baron) 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 other than Baron. Each Investor desiring to participate in such
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purchase shall provide American Mobile and each other Investor notice of its
agreement to participate (the "Participation Notice") within ten (10) Business
Days of receipt of the Transfer Notice with respect to its pro rata portion of
the 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
in pro rata proportion to the Convertible Securities (or securities into which
such Convertible Securities had been converted) 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 3.4 Transfers and Assignment by Telcom, Columbia and Madison.
Prior to the Company's Initial Public Offering, none of Telcom, Columbia or
Madison shall transfer (including transfer to an Affiliate) any of their shares
of Common Stock, or other securities of the Company, to (i) any Person who,
directly or indirectly, derives 20% or more of its gross revenues from radio,
television or outdoor media or (ii) any Person who, directly or indirectly, then
provides, distributes or markets DBS services or who is then known to the
proposed transferor to be actively planning such activities.
Section 3.5 Permitted Transfers
(a) Notwithstanding the restrictions on transfer set forth elsewhere in
this Article III (other than Section 3.4, Section 3.6 and Section 3.7), 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 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 3.6 Endorsement of Stock Certificates. Conformed copies of this
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
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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 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 3.7 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
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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.
SHAREHOLDER DEBT AND RECAPITALIZATION AT PUBLIC OFFERING
Section 4.1 Share and Debt Conversion. On the completion of an Initial
Public Offering, American Mobile shall convert the New American Mobile Note and
all other instruments of indebtedness issued to American Mobile pursuant to the
American Mobile Exchange Agreement and the WSI Exchange Agreement and all
interest accrued thereon into shares of Class B Common Stock, in accordance with
the terms and conditions of such instruments, and the Holder of the $21 Million
Notes shall convert the $21 Million Notes and all interest accrued thereon into
shares of Class B Common Stock, in accordance with the terms and conditions of
such notes.
Section 4.2 Conversion of Class B Common Stock into Class A Common Stock.
Following the earlier to occur of (a) completion of the Company's Initial Public
Offering, or (b) January 1, 2002, and either (i) at the discretion of American
Mobile or (ii) at the direction of the holders of a majority of the shares of
Common Stock Deemed Outstanding (excluding any shares held by American Mobile
and its Affiliates other than ▇▇▇▇▇, ▇▇, ▇▇▇▇▇▇ or DIRECTV), which majority, if
the Company has then completed an Initial Public Offering, shall include at
least 20% of the public holders of Class A Common Stock, American Mobile 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 American Mobile shall not
be obligated to convert any shares of Class B Common Stock into shares of Class
A Common Stock if such conversion, together with the conversion of all
Convertible Securities the Company reasonably believes would be converted at
such time, would not result in a Change of Control. The conversion rate shall be
one share of Class B Common Stock for each share of Class A Common Stock,
subject to adjustment in connection with any stock split, dividend or
combination or similar event involving the Common Stock; provided that no such
adjustment shall be made for shares of Common Stock issued pursuant to a
Qualifying Stock Plan. Each of American Mobile, the Company and the Investors
hereby agrees to prepare and file any and all applications, and furnish any
information, required by applicable FCC rules 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.
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Section 4.3 Submission of Proposal for Conversion to Public Stockholders.
At the direction of two (2) of the three (3) members of the Board of Directors
designated by the Investors (other than Baron) 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 appropriate material to provide
such holders of Class A Common Stock with the opportunity to vote to direct the
Company to cause American Mobile 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) From the date hereof until the completion of the Company's
Initial Public Offering, the Board of Directors and the boards of directors of
XM and any other material subsidiary, (collectively, the "Boards of Directors")
shall consist of seven (7) members (unless the constitution of the board of
directors of any material subsidiary other than XM shall be otherwise approved
by unanimous vote of the members of the Board of Directors designated, pursuant
to this Section 5.1, by the Holders of Series A Subordinated Convertible Notes
(or the holders of securities into which such Series A Convertible Notes may be
converted), of whom:
(i) three (3) members shall be designated by the Holders of
Series A Subordinated Convertible Notes (or the holders of securities
into which such Series A Convertible Notes may be converted), (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 a majority in interest of the TCM
Group; and
(ii) four (4) members shall be designated by American Mobile,
who shall include (x) the Chairman and (y) the President and CEO of the
Company (who shall be selected by American Mobile).
(b) Following the completion of the Company's Initial Public
Offering but prior to the receipt of FCC Approval, the Boards of Directors shall
consist of nine (9) members, of whom:
(i) three (3) members shall be designated by the Holders of
Series A Subordinated Convertible Notes (or the holders of securities
into which such Series A Subordinated Convertible Notes may be
converted), (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 a
majority in interest of the TCM Group;
(ii) four (4) members shall be designated by American Mobile,
who shall include (x) the Chairman and (y) the President and the CEO of
the Company (who shall be selected by American Mobile); and
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(iii) two (2) of whom shall be independent directors of
recognized industry expertise and stature, of whom (x) one (1) member
shall be approved by American Mobile and (y) the other of whom shall be
approved by the Investors who hold a majority of the Common Stock Deemed
Outstanding (excluding Baron) held by Investors (excluding Baron).
(c) Following the completion of the Company's Initial Public
Offering and upon receipt of the FCC Approval, the Boards of Directors shall
consist of nine (9) members, of whom:
(i) three (3) members shall be designated by the Holders of
Series A Subordinated Convertible Notes (or the holders of the securities
into which such Series A Subordinated Convertible Notes may be
converted), (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 a
majority in interest of the TCM Group;
(ii) three (3) members shall be designated by American Mobile;
(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 American Mobile and the Investors who hold a majority of the Common
Stock Deemed Outstanding (excluding Baron) held by Investors (excluding
Baron).
(d) 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, (ii) GM or DIRECTV, and (iii) the TCM Group to designate a
director and, if applicable, 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). Similarly, following the
Company's receipt of FCC Approval, the right of American Mobile to designate
directors and approve the appointment of independent directors pursuant to this
Section 5.1 shall continue for so long as American Mobile holds (A) in excess of
15% of the Common Stock Deemed Outstanding or (B) the full amount of American
Mobile's investment in the Company on the date of this Agreement excluding the
portion of its investment contemplated in the January 15 Letter Agreements
(whether or not converted into shares of Class A Common Stock) (the "Initial
AMSC Investment"); provided that, if American Mobile holds less than 15% of the
Common Stock Deemed Outstanding and less than the Initial AMSC Investment, (x)
American Mobile shall be entitled to designate two (2) directors (pursuant to
Section 5.1(a)(ii) and (c)(ii)) and approve the appointment of two (2)
independent directors (pursuant to Section 5.1(c)(iv)) for so long as American
Mobile owns Capital Stock in excess of 10% of the Common Stock Deemed
Outstanding, and (y) American Mobile shall be entitled to
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designate one (1) director (pursuant to Section 5.1(a)(ii) and (c)(ii)) and
approve the appointment of two (2) independent directors (pursuant to Section
5.1(c)(iv)) for so long as American Mobile owns excess of 5% of the Common Stock
Deemed Outstanding.
(e) The right of each Investor to designate a director pursuant to
Sections 5.1(a)(i), 5.1(b)(i) and 5.1(c)(i) also shall terminate, and any
director designated by such 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
DIRECTV, Inc. (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 the TCM Group, if a majority of the
ownership interests of both Telcom and Columbia cease to be owned,
directly or indirectly, by Telcom Ventures, L.L.C. and the existing
members of Columbia (one of which is Columbia Capital, LLC).
Section 5.2 Observation Rights.
(a) Following the Closing and 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) Following the Closing and for such time as any of Telcom,
Columbia and Madison (i) continues to hold, in the aggregate, in excess of 5% of
the Common Stock Deemed Outstanding, or (ii) such Investor retains the full
amount of its original investment in the Company, 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) Following the Closing and 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.
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Section 5.3 Removal of Directors. American Mobile and the Investors agree
to vote so that each member of the Board of Directors nominated or 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, American Mobile and each Investor
agree not to take any action to remove or 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.
(a) Following the Closing and 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) Following the Closing and 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 shall have operational rights and
involvement as set forth in the DIRECTV Operational Assistance Agreement.
(c) Following the Closing and 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) each retains the full amount of its original
investment in the Company, 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.
(a) Each Party acknowledges that the Company's bylaws provide for
certain notice, quorum and voting requirements for actions taken thereby to be
valid and agrees not to take any action inconsistent with such provisions.
(b) 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.
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(c) In the event of any conflict between the terms of this Agreement
and the bylaws of the Company, the terms of this Agreement shall prevail.
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:
(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 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; RIGHT OF FIRST REFUSAL
Section 7.1 Tag Along Rights. Prior to a Qualified Initial Public
Offering, each Holder of Convertible Securities (and/or the Holders of
securities into which such
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Convertible Securities may be converted), other than Baron, shall have the right
to participate in any sale or transfer (without paying any portion of the
transaction costs associated with such sale except for their own legal expense
and selling commission), in one transaction or in a series of transactions, to
any Person not an Affiliate of such transferor, of Capital Stock (including the
Series A Subordinated Convertible Notes) representing, at the time of such sale,
more than 5% of the Common Stock Deemed Outstanding, such participation to be
shared pro rata with each other Holder of Convertible Securities desiring to
participate and/or the Holders of securities into which such Convertible
Securities may be converted.
Section 7.2 Right of First Refusal. Prior to a Qualified Initial Public
Offering, the Company shall only issue Capital Stock in accordance with the
following terms:
(a) The Company shall not issue any Capital Stock unless it first
delivers to each Holder of Convertible Securities (or the Holders of securities
into which such Convertible Securities may be converted) (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
Capital Stock that the Company then intends to issue (the "Offered Capital
Stock"), all of the material terms, including the price upon which the Company
proposes to issue the Offered Capital Stock and stating that the Buyers shall
have the right to purchase the Offered 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) During the thirty (30) consecutive day period commencing on the
date the Company delivers to all of the Buyers the Notice of Proposed Issuance
(the "Thirty Day Period"), the Buyers shall have the option to purchase all of
the Offered 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 Capital Stock must give written notice of its election to
the Company prior to the expiration of the Thirty Day Period. If the Offered
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 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 Capital Stock as shall be equal to the number of shares of
the Offered 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 Capital
Stock that each Buyer is entitled to purchase under this Section 7 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 Capital Stock, the other Buyer(s) shall, among them, have the
right to purchase up to the balance
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of such Offered 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 Capital Stock by so indicating in their written notice
given during the Thirty Day Period. If, as a result thereof, such
oversubscription elections exceed the total number of the Offered 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 Capital Stock has not been purchased 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 Thirty
Day Period, to issue the Offered 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 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 Capital Stock.
(f) The Company may proceed with the issuance of Capital Stock
without first following the foregoing procedures provided that (i) the purchaser
of such Capital Stock agrees in writing to be bound by this Section 7, and (ii)
within ten (10) days following the issuance of such Capital Stock, the Company
or the purchaser of the 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 Capital Stock at the same
price and terms applicable to the purchaser's purchase thereof as is necessary
to provide the Buyers with substantially the same antidilution protection
offered by this Section 7 as if the procedures set forth above had been followed
prior to the issuance of such Capital Stock.
(g) Notwithstanding the foregoing, the Right of First Refusal
described in this Section 7 shall not apply with respect to the issuance of
Excluded Securities.
ARTICLE VIII.
MISCELLANEOUS
Section 8.1 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 8.1. 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
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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 8.2 Waiver and Amendment. 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 (a) the Company, (b) American Mobile and (c)
Investors (other than Baron) holding, (i) in the case of amendments to or
waivers of provisions of this Agreement generally, eighty-one percent (81%) of
the aggregate of the Common Stock Deemed Outstanding held by Investors (other
than Baron), and (ii) in the case of any other non-material change or technical
correction of this Agreement, a majority of the aggregate of the Common Stock
Deemed Outstanding held by Investors (other than Baron); provided that no
Investor's rights, preferences or obligations hereunder may be materially
adversely modified without the consent of such Investor unless the rights,
preferences or obligations hereunder of each other Investor is modified in a
substantially equivalent manner. Any amendment or waiver effected in accordance
with this Section 8.2 shall be binding upon each future Holder and the Company.
Section 8.3 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.
Section 8.4 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 8.4, 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 8.5 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
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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 8.6 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 8.7 Plural, Singular. When used herein, the singular of each term
includes the plural and the plural of each term includes the singular.
Section 8.8 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 8.9 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 8.10 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 8.11 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.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly
signed as of the date first above written.
XM SATELLITE RADIO HOLDINGS INC. AMERICAN MOBILE SATELLITE CORPORATION
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------- -------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇ Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President and CEO Title: Chairman of the Board of Directors
BARON ASSET FUND CLEAR CHANNEL INVESTMENTS, INC.
on behalf of BARON ASSET FUND SERIES
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
---------------- ----------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: Chairman and CEO Title: Executive VP and CFO
COLUMBIA XM RADIO PARTNERS, LLC DIRECTV ENTERPRISES, INC.
By Columbia Capital LLC, its Managing Member
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇
-------------------- -----------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇
Title: Managing Director Title: Senior Vice President of New Ventures
GENERAL MOTORS CORPORATION MADISON DEARBORN CAPITAL PARTNERS
III, L.P.
By Madison Dearborn Partners III, L.P., its
general partner
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇ By Madison Dearborn Partners LLC, its general
-------------------- partner
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Director, Business Development As Attorney-
in-fact for ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Vice President and
Treasurer By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: Managing Director
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: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
----------------------- -----------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: Managing Director Title: Managing Director
27
TELCOM--XM INVESTORS, L.L.C.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
28
SCHEDULE I
NAMES, ADDRESSES AND FACSIMILE NUMBERS OF PARTIES
The Company: XM Satellite Radio Holdings Inc. 202-969-7124
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
American Mobile: American Mobile Satellite Corporation 703-758-6134
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Baron: Baron Asset Fund 212-583-2014
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
Clear Channel: Clear Channel Investments, Inc. ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Mr. ▇▇▇▇ ▇▇▇▇▇▇▇
Columbia: Columbia XM Radio Partners, L.L.C. ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
DIRECTV: DIRECTV Enterprises, Inc. ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇
GM: General Motors Corporation ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ - 1000
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇
Telcom: Telcom-XM Investors, L.L.C. ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Madison: Madison Dearborn Partners, Inc. ▇▇▇-▇▇▇-▇▇▇▇
Three First ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇