SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
UNDER
THE SECURITIES EXCHANGE ACT OF 1934
XM SATELLITE RADIO HOLDINGS INC.
(Name of Issuer)
CLASS A COMMON STOCK, $.01 PAR VALUE
(Title of class of securities)
983759-10-1
(CUSIP Number)
Nicholas S. Hodge, Esq.
Edwards & Angell, LLP
101 Federal Street
Boston, MA 02110-1800
(617) 439-4444
--------------
(Name, Address, and Telephone Number of person
authorized to receive notices and communications)
October 8, 1999
(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1 (b)(3) or (4), check the
following box: [__].
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the
liabilities of that section of the Exchange Act but shall be subject to all
other provisions of the Exchange Act (however, see the Notes).
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Page 2 of 20
CUSIP No. 983759-10-1
1. Name of Reporting Person / I.R.S. Identification No. of Above Person
Columbia XM Radio Partners, LLC
2. Check the Appropriate Box if a Member of a Group
(a) _____
(b) _____
3. SEC Use Only
4. Source of Funds
OO
5. Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e)
6. Citizenship or Place of Organization
Virginia
Number of 7 Sole Voting Power
Shares
Beneficially 2,776,626
Owned By 8 Shared Voting Power
Each
Reporting -0-
Person With 9 Sole Dispositive Power
2,776,626
10 Shared Dispositive Power
-0-
11. Aggregate Amount Beneficially Owned by Each Reporting Person
2,776,626
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
13. Percent of Class Represented by Amount in Row (11)
10.60%
14. Type of Reporting Person
CO
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Page 3 of 20
CUSIP No. 983759-10-1
1. Name of Reporting Person / I.R.S. Identification No. of Above Person
Columbia Capital, L.L.C.
2. Check the Appropriate Box if a Member of a Group
(a) _____
(b) _____
3. SEC Use Only
4. Source of Funds
OO
5. Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e)
6. Citizenship or Place of Organization
Delaware
Number of 7 Sole Voting Power
Shares
Beneficially -0-
Owned By 8 Shared Voting Power
Each
Reporting 2,776,626
Person With 9 Sole Dispositive Power
-0-
10 Shared Dispositive Power
2,776,626
11. Aggregate Amount Beneficially Owned by Each Reporting Person
2,776,626 (see Item 5)
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
13. Percent of Class Represented by Amount in Row (11)
10.60%
14. Type of Reporting Person
CO
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Page 4 of 20
CUSIP No. 983759-10-1
1. Name of Reporting Person / I.R.S. Identification No. of Above Person
Columbia Capital Equity Partners II (QP), L.P.
2. Check the Appropriate Box if a Member of a Group
(a) _____
(b) _____
3. SEC Use Only
4. Source of Funds
OO
5. Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e)
6. Citizenship or Place of Organization
Delaware
Number of 7 Sole Voting Power
Shares
Beneficially -0-
Owned By 8 Shared Voting Power
Each
Reporting 2,776,626
Person With 9 Sole Dispositive Power
-0-
10 Shared Dispositive Power
2,776,626
11. Aggregate Amount Beneficially Owned by Each Reporting Person
2,776,626 (see Item 5)
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
13. Percent of Class Represented by Amount in Row (11)
10.60%
14. Type of Reporting Person
PN
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Page 5 of 20
CUSIP No. 983759-10-1
1. Name of Reporting Person / I.R.S. Identification No. of Above Person
Columbia Capital Equity Partners II (Cayman), L.P.
2. Check the Appropriate Box if a Member of a Group
(a) _____
(b) _____
3. SEC Use Only
4. Source of Funds
OO
5. Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e)
6. Citizenship or Place of Organization
Cayman Islands
Number of 7 Sole Voting Power
Shares
Beneficially -0-
Owned By 8 Shared Voting Power
Each
Reporting 2,776,626
Person With 9 Sole Dispositive Power
-0-
10 Shared Dispositive Power
2,776,626
11. Aggregate Amount Beneficially Owned by Each Reporting Person
2,776,626 (see Item 5)
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
13. Percent of Class Represented by Amount in Row (11)
10.60%
14. Type of Reporting Person
PN
<PAGE>
Page 6 of 20
CUSIP No. 983759-10-1
1. Name of Reporting Person / I.R.S. Identification No. of Above Person
Columbia Capital Equity Partners II, L.P.
2. Check the Appropriate Box if a Member of a Group
(a) _____
(b) _____
3. SEC Use Only
4. Source of Funds
OO
5. Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e)
6. Citizenship or Place of Organization
Virginia
Number of 7 Sole Voting Power
Shares
Beneficially 2,776,626
Owned By 8 Shared Voting Power
Each
Reporting -0-
Person With 9 Sole Dispositive Power
2,776,626
10 Shared Dispositive Power
-0-
11. Aggregate Amount Beneficially Owned by Each Reporting Person
2,776,626 (see Item 5)
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
13. Percent of Class Represented by Amount in Row (11)
10.60%
14. Type of Reporting Person
PN
<PAGE>
Page 7 of 20
CUSIP No. 983759-10-1
1. Name of Reporting Person / I.R.S. Identification No. of Above Person
Columbia Capital Equity Partners, L.L.C.
2. Check the Appropriate Box if a Member of a Group
(a) _____
(b) _____
3. SEC Use Only
4. Source of Funds
OO
5. Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e)
6. Citizenship or Place of Organization
Delaware
Number of 7 Sole Voting Power
Shares
Beneficially -0-
Owned By 8 Shared Voting Power
Each
Reporting 2,776,626
Person With 9 Sole Dispositive Power
-0-
10 Shared Dispositive Power
2,776,626
11. Aggregate Amount Beneficially Owned by Each Reporting Person
2,776,626 (see Item 5)
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
13. Percent of Class Represented by Amount in Row (11)
10.60%
14. Type of Reporting Person
CO
<PAGE>
Page 8 of 20
CUSIP No. 983759-10-1
1. Name of Reporting Person / I.R.S. Identification No. of Above Person
Columbia Capital Investors, L.L.C.
2. Check the Appropriate Box if a Member of a Group
(a) _____
(b) _____
3. SEC Use Only
4. Source of Funds
OO
5. Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e)
6. Citizenship or Place of Organization
Delaware
Number of 7 Sole Voting Power
Shares
Beneficially -0-
Owned By 8 Shared Voting Power
Each
Reporting 2,776,626
Person With 9 Sole Dispositive Power
-0-
10 Shared Dispositive Power
2,776,626
11. Aggregate Amount Beneficially Owned by Each Reporting Person
2,776,626 (see Item 5)
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
13. Percent of Class Represented by Amount in Row (11)
10.60%
14. Type of Reporting Person
CO
<PAGE>
Page 9 of 20
CUSIP No. 983759-10-1
1. Name of Reporting Person / I.R.S. Identification No. of Above Person
James B. Fleming, Jr.
2. Check the Appropriate Box if a Member of a Group
(a) _____
(b) _____
3. SEC Use Only
4. Source of Funds
OO
5. Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e)
6. Citizenship or Place of Organization
U.S.
Number of 7 Sole Voting Power
Shares
Beneficially -0-
Owned By 8 Shared Voting Power
Each
Reporting 2,776,626
Person With 9 Sole Dispositive Power
-0-
10 Shared Dispositive Power
2,776,626
11. Aggregate Amount Beneficially Owned by Each Reporting Person
2,776,626 (see Item 5)
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
13. Percent of Class Represented by Amount in Row (11)
10.60%
14. Type of Reporting Person
IN
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Page 10 of 20
CUSIP No. 983759-10-1
1. Name of Reporting Person / I.R.S. Identification No. of Above Person
R. Philip Herget, III
2. Check the Appropriate Box if a Member of a Group
(a) _____
(b) _____
3. SEC Use Only
4. Source of Funds
OO
5. Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e)
6. Citizenship or Place of Organization
U.S.
Number of 7 Sole Voting Power
Shares
Beneficially -0-
Owned By 8 Shared Voting Power
Each
Reporting 2,776,626
Person With 9 Sole Dispositive Power
-0-
10 Shared Dispositive Power
2,776,626
11. Aggregate Amount Beneficially Owned by Each Reporting Person
2,776,626 (see Item 5)
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
13. Percent of Class Represented by Amount in Row (11)
10.60%
14. Type of Reporting Person
IN
<PAGE>
Page 11 of 20
CUSIP No. 983759-10-1
1. Name of Reporting Person / I.R.S. Identification No. of Above Person
Harry F. Hopper III
2. Check the Appropriate Box if a Member of a Group
(a) _____
(b) _____
3. SEC Use Only
4. Source of Funds
OO
5. Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e)
6. Citizenship or Place of Organization
U.S.
Number of 7 Sole Voting Power
Shares
Beneficially -0-
Owned By 8 Shared Voting Power
Each
Reporting 2,776,626
Person With 9 Sole Dispositive Power
-0-
10 Shared Dispositive Power
2,776,626
11. Aggregate Amount Beneficially Owned by Each Reporting Person
2,776,626 (see Item 5)
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
13. Percent of Class Represented by Amount in Row (11)
10.60%
14. Type of Reporting Person
IN
<PAGE>
Page 12 of 20
Item 1. Security and Issuer
This Statement relates to the Class A common stock, par value $.01 per
share ("Class A Stock"), of XM Satellite Radio Holdings Inc., a Delaware
corporation (the "Issuer"). The Issuer's principal executive offices are located
at 1250 23rd Street, N.W., Washington, DC 20037-1100. The Reporting Persons (as
defined below) have entered into a Joint Filing Agreement dated October 18,
1999, a copy of which is attached hereto as Exhibit 4.
Item 2. Identity and Background
This statement is being filed by Columbia XM Radio Partners, LLC, a
Virginia limited liability corporation ("Columbia"), its managing member,
Columbia Capital, LLC, a Delaware limited liability company (the "Manager"),
Columbia Capital Equity Partners II (QP), L.P., a Delaware limited partnership
("Columbia QP"), Columbia Capital Equity Partners II (Cayman), L.P., a Cayman
Islands limited partnership ("Columbia Cayman"), Columbia Capital Equity
Partners II, L.P., a Delaware limited partnership ("Columbia Equity"), Columbia
Capital Equity Partners, L.L.C., a Delaware limited liability company ("Columbia
Equity LLC"), Columbia Capital Investors, L.L.C., a Delaware limited liability
company ("Columbia Investors") and James B. Fleming, Jr., R. Philip Herget, III
and Harry F. Hopper III (each a "Reporting Person," and collectively, the
"Reporting Persons"). The Manager, Columbia QP, Columbia Cayman, and Columbia
Equity and Columbia Investors are the members of Columbia and the Manager is the
managing member of Columbia. Columbia Equity LLC is the general partner of each
of Columbia QP, Columbia Cayman and Columbia Equity. Pursuant to the limited
liability company agreement of the Manager, each of Messrs. Fleming, Herget and
Hopper (the "Individual Reporting Persons") exercises voting and dispositive
control over the Manager. Pursuant to the limited liability company agreement of
Columbia Equity LLC, each of the Individual Reporting Persons exercises voting
and dispositive control over Columbia Equity LLC. Columbia Investors is member
managed by the Individual Reporting Persons and each of the Individual Reporting
Persons exercises voting and dispositive control over Columbia Investors.
The principal business address of each of the Reporting Persons is 201 N.
Union Street, Suite 300, Alexandria, Virginia 22314.
Columbia was formed (i) to acquire, own, hold, sell, convert, exchange and
transfer equity interests in or indebtedness of the Issuer, and (ii) to conduct
such other activities as may be necessary or incidental to the foregoing.
The Manager was formed to (i) act as the manager of Columbia Capital Equity
Partners II, L.P., and (ii) to conduct such other activities as may be necessary
or incidental to the foregoing. Columbia Equity L.L.C. was formed to act as the
general partner of each of the partnerships of Columbia Capital Equity Partners
II, L.P. The Individual Reporting Persons serve in various management capacities
with the Manager, Columbia Equity LLC and Columbia Investors.
Each of Columbia QP, Columbia Cayman, Columbia Equity and Columbia
Investors was formed (i) seek income and capital appreciation through the
acquisition, holding, management, supervision and sale, exchange, distribution
or other disposition of investments, and (ii) to conduct such other activities
as may be necessary or incidental to the foregoing.
Prior to October 8, 1999, Columbia owned a Subordinated Convertible Note in
the amount of $25,000,000 issued and payable by the Issuer (the "Note"). On
October 8, 1999, the Issuer completed an initial public offering of 10,000,000
shares of Class A Stock (the "Offering"). As described under Item 4 below, upon
completion of the Offering, the Note converted into 2,696,626 shares of Class A
Stock. As a result of this conversion, as of October 8, 1999, Columbia owned
2,696,626 shares of Class A Stock of the Issuer.
In addition to the Class A Stock described above, Columbia purchased 80,000
shares of Class A Stock on October 8, 1999, as part of the Offering.
This Statement covers the 80,000 shares of Class A Stock purchased by
Columbia on October 8, 1999, as well as the 2,696,626 shares of Class A Stock
owned by Columbia as of such date (such shares of Class A Stock are sometimes
referred to in this Statement as the "Securities").
Information with respect to each of the Reporting Persons' executive
officers and managing directors or general partners (as applicable), including
name, business address, present principal occupation or employment, and the
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Page 13 of 20
name, principal business and address of any corporation or other organization in
which such employment is conducted, is listed on the schedule attached hereto as
Annex A, which is incorporated herein by reference.
None of the Reporting Persons nor, to the best of their knowledge, the
Reporting Persons' executive officers, managing directors or general partners
(as applicable) has, during the last five years, been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or been party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceedings was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
To the best knowledge of the Reporting Persons, with the exception of
Columbia Cayman, which is a Cayman Islands entity, each of the Reporting Persons
and their executive officers and managing directors are United States citizens.
Item 3. Source and Amount of Funds or Other Consideration
Shares of Class A Stock Acquired upon Conversion of the Note
------------------------------------------------------------
The 2,696,626 shares of Class A Stock owned of record by Columbia as of the
date of this Statement were acquired, prior to the consummation of the Offering,
and prior to the Issuer becoming subject to Section 12(g) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). The details of the
purchase and conversion of the Note are set forth below.
Pursuant to a Note Purchase Agreement dated June 7, 1999 among the Issuer,
Columbia and certain other shareholders of the Issuer, on July 7, 1999, the
Issuer issued $250,000,000 of subordinated convertible notes to several new
strategic and financial investors including Columbia, and the Issuer used
$75,000,000 of the proceeds from these notes to repay the outstanding loan
payable to Worldspace, Inc., a Maryland corporation ("Worldspace"). Pursuant to
this Agreement, Columbia purchased the Note for a purchase price of $25,000,000.
On October 8, 1999, upon the completion of the Offering, the Note converted
into 2,696,626 shares of Class A Stock. As a result of this conversion, as of
October 8, 1999, Columbia owned an aggregate of 2,696,626 shares of Class A
Stock.
Shares of Class A Stock Purchased in the Offering
-------------------------------------------------
Columbia purchased 80,000 shares of Class A Stock of the Issuer in the
Offering. The consideration paid by Columbia was $960,000, or $12.00 per share,
which was the initial public offering price in the Offering. The source of such
consideration was cash on hand. As a result of the shares of Class A Stock
received upon conversion of the Note and the shares of Class A Stock purchased
in the offering, on October 8, 1999, Columbia owned an aggregate of 2,776,626
shares of Class A Stock.
Item 4. Purpose of Transaction
The 2,696,626 shares of Class A Stock owned by Columbia as a result of the
conversion of the Note as of the date of this Statement was acquired for
$25,000,000, on July 7, 1999, prior to the consummation of the Offering, and
prior to the Issuer becoming subject to Section 12(g) of the Exchange Act.
Columbia purchased 80,000 shares of Class A Stock in the Offering in order
to demonstrate its commitment to the Issuer's long-term business plans and
objectives, and because Columbia concluded that the initial public offering
price of the Offering represented an attractive opportunity to increase its
equity position in the Issuer. Columbia also noted that several of the other
significant equity stakeholders in the Issuer elected to similarly participate
in the Offering.
Certain of Columbia's rights with respect to the Issuer are governed by a
shareholders' agreement dated as of July 7, 1999 by and among the Issuer,
Columbia, and certain other significant shareholders of the Issuer (the
"Shareholders' Agreement"). The Shareholders' Agreement is incorporated herein
by reference as Exhibit 1. Pursuant to the Shareholders' Agreement, one of the
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Page 14 of 20
members of the Issuer's Board of Directors was appointed by Columbia and two
other parties to the Shareholders Agreement. Columbia's rights with respect to
the Securities are also governed by the TCM Group Agreement dated as of July 7,
1999 among Columbia and certain other shareholders of the Issuer (the "TCM Group
Agreement"). The TCM Group Agreement is incorporated herein by reference as
Exhibit 2. The TCM Group Agreement provides for good faith cooperation among the
parties thereto regarding the exercise of registration rights and the
appointment of a member of the Issuer's Board of Directors. Certain other
material provisions of the Shareholders' Agreement and the TCM Group Agreement
are described in more detail in Item 6 below.
There are certain restrictions on Columbia's ability to sell or otherwise
transfer the Securities. Under the Shareholders' Agreement and as provided in
the TCM Group Agreement, except for affiliated transactions, Columbia may not
transfer any of its Class A Stock until the date which is one year from the
issuance
of the Note.
In addition, Columbia has signed a "lock-up" agreement with Bear, Stearns &
Co. Inc. and Donaldson, Lufkin & Jenrette Securities Corporation, the lead
underwriters for the Offering. Pursuant to this agreement, Columbia has agreed
not to sell, offer to sell, contract to sell, pledge, hypothecate, sell any
option or contract to purchase or otherwise transfer or dispose of, directly or
indirectly, any shares of Class A Stock, for a period of 180 days after the
effective date of the registration statement filed by the Issuer in the
Offering.
Except as described above in this Item 4 and below in Item 6, the Reporting
Persons do not have any plans or proposals that relate to or would result in any
of the actions or events specified in clauses (a) through (j) of Item 4 of
Schedule 13D. Notwithstanding the foregoing, and subject to the restrictions
under the Shareholders' Agreement, and the TCM Group Agreement, the Reporting
Persons may determine to change their investment intent with respect to the
Issuer at any time in the future. Subject to the restrictions under the
Shareholders' Agreement and the TCM Group Agreement, the Reporting Persons
intend to vote their shares as they deem appropriate from time to time. In
determining from time to time whether to sell their shares of the Issuer's Class
A Stock (and in what amounts) or to retain such shares, the Reporting Persons
will take into consideration such factors as they deem relevant, including the
business and prospects of the Issuer, anticipated future developments concerning
the Issuer, existing and anticipated market conditions from time to time,
general economic conditions, regulatory matters, and other opportunities
available to the Reporting Persons. The Reporting Persons reserve the right to
acquire additional securities of the Issuer in the open market, in privately
negotiated transactions (which may be with the Issuer or with third parties) or
otherwise, to dispose of all or a portion of their holdings of securities of the
Issuer or to change their intention with respect to any or all of the matters
referred to in this Item 4.
To the best knowledge of the Reporting Persons, all shares identified in
Item 5 below as beneficially owned by persons listed in Annex A were acquired by
such persons for investment purposes. Such persons may buy or sell shares of
Class A Stock in the future as they deem appropriate, but, to the best knowledge
of the Reporting Persons, and except as otherwise indicated herein, such persons
have no present plan or proposal that relates to or would result in the actions
or events specified in clauses (a) through (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer
After giving effect to the issuance of 10,000,000 shares of Class A Stock
by the Issuer in the Offering, and based on information provided to the
Reporting Persons by the Issuer (the "Available Data"), there were 26,194,471
shares of Class A Stock of the Issuer outstanding on October 8, 1999.
As of October 8, 1999, each of the Reporting Persons beneficially owned
2,776,626 shares of Class A Stock, which represents approximately 10.6% of the
Class A Stock outstanding. Subject to the restrictions and agreements described
in Item 4 above, Columbia has the sole power to vote (or to direct the vote) and
the sole power to dispose (or to direct the disposition) of these shares.
Columbia acquired these shares in the Offering. As a result of the relationships
described above in Item 2, each of the Reporting Persons besides Columbia has
the shared power to vote (or to direct the vote) and the shared power to dispose
(or to direct the disposition) of the shares of Class A Stock held of record by
Columbia.
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Page 15 of 20
To the best knowledge of the Reporting Persons, none of the Reporting
Persons, nor any of their executive officers and managing directors beneficially
own shares of Class A Stock of the Issuer other than as set forth herein.
Columbia may be deemed to comprise a group (within the meaning of Section
13(d)(3) of the Exchange Act) with the following entities by virtue of the
Shareholders' Agreement: (1) General Motors Corporation ("General Motors"); (2)
DIRECTV Enterprises, Inc. ("DIRECTV"); (3) Clear Channel Investments, Inc.
("Clear Channel"); (4) American Mobile Satellite Corporation ("American
Mobile"); (5) Telcom-XM Investors, L.L.C. ("Telcom"); and (6) Madison Dearborn
Capital Partners III, L.P. ("M-D Capital Partners"), Madison Dearborn Special
Equity III, L.P. ("M-D Special Equity"), and Special Advisors Fund I, L.L.C.
("Special Advisors," and, together with M-D Capital Partners and M-D Special
Equity, "Madison Dearborn"). Columbia and each of the other Reporting Persons
expressly disclaims beneficial ownership of the shares of Class A Stock of the
Issuer held by General Motors, DIRECTV, Clear Channel, American Mobile, Telcom,
or Madison Dearborn, and the filing of this Statement by the Reporting Persons
shall not be construed as an admission by the Reporting Persons that they are,
for purposes of Section 13(d) of the Exchange Act, the beneficial owner of any
of the shares of Class A Stock of the Issuer held by General Motors, DIRECTV,
Clear Channel, American Mobile, Telcom or Madison Dearborn.
Based solely upon the Available Data, the Reporting Persons believe that,
as of October 8, 1999 (the closing date of the Offering), General Motors,
DIRECTV, Clear Channel, American, Telcom and Madison Dearborn beneficially owned
the number of shares of Class A Stock of the Issuer set forth in the table
below, constituting in each case that percentage of the Class A Stock of the
Issuer outstanding on October 8, 1999 set forth in the table.
Name of Beneficial Owner Number of Shares Percentage
General Motors 11,106,504 (1) 30.03%
DIRECTV 5,553,252 (2) 17.58%
Clear Channel 8,329,877 31.80%
American Mobile 18,072,176 (3) 41.00%
Telcom 2,776,626 10.60%
M-D Capital Partners 2,702,200 10.31%
M-D Special Equity 58,247 *
Special Advisors 16,179 *
------------------
* Less than 1%
(1) Includes 10,7786,504 shares of Class A Stock issuable upon conversion of
Series A convertible preferred stock of the Issuer, 5,393,252 of which are
owned by DIRECTV, a subsidiary of General Motors. The shares of Class A
Stock issuable upon conversion of the Series A convertible preferred stock
were deemed to be outstanding for the purpose of computing the percentage
of the Class A Stock owned by General Motors, but not for the purpose of
computing the percentage of Class A Stock owned by any other person.
(2) Includes 5,393,252 shares of Class A Stock issuable upon conversion of
Series A convertible preferred stock of the Issuer. The shares of Class A
Stock issuable upon conversion of the Series A convertible preferred stock
were deemed to be outstanding for the purpose of computing the percentage
of the Class A Stock owned by DIRECTV, but not for the purpose of computing
the percentage of Class A Stock owned by any other person.
(3) Includes 17,872,176 shares of Class A Stock issuable upon conversion of
American Mobile's 17,872,176 shares of Class B common stock, $.01 par value
per share (the "Class B Stock") of the Issuer. The shares of Class A Stock
issuable upon conversion of the Class B Stock were deemed to be outstanding
for the purpose of computing the percentage of the Class A Stock owned by
American Mobile, but not for the purpose of computing the percentage of
Class A Stock owned by any other person.
Except for the transactions reported in this Statement, the Reporting
Persons have not engaged in any other transactions in the Issuer's Class A Stock
within the past 60 days.
To the best knowledge of the Reporting Persons, none the Reporting Persons'
executive officers, managing directors or general partners (as applicable) has
effected any transactions in the Class A Stock within the past 60 days.
<PAGE>
Page 16 of 20
Based solely upon the information set forth in the Issuer's Prospectus,
dated October 5, 1999, and on the Available Data, the Reporting Persons believe
that: (1) on October 8, 1999, each of General Motors and DIRECTV acquired from
the Issuer in a private placement 5,393,252 shares of the Issuer's Series A
convertible preferred stock upon conversion of $50,000,000 principal amount
(plus accrued interest) of convertible subordinated notes previously issued to
each of General Motors and DIRECTV by the Issuer, at a conversion price of
approximately $9.52 per share, and (2) on October 8, 1999, each of General
Motors and DIRECTV acquired 160,000 shares of the Issuer's Class A Stock in the
Offering, at a purchase price of $12.00 per share, the initial public offering
price of the Class A Stock.
Based solely upon the information set forth in the Issuer's Prospectus,
dated October 5, 1999, and on the Available Data, the Reporting Persons believe
that: (1) on October 8, 1999, Clear Channel acquired from the Issuer in a
private placement 8,089,877 shares of Class A Stock upon conversion of
$75,000,000 principal amount (plus accrued interest) of a convertible
subordinated note previously issued to Clear Channel by the Issuer, at a
conversion price of approximately $9.52 per share, and (2) on October 8, 1999,
Clear Channel acquired 240,000 shares of the Issuer's Class A Stock in the
Offering, at a purchase price of $12.00 per share, the initial public offering
price of the Class A Stock.
Based solely upon the information set forth in the Issuer's Prospectus,
dated October 5, 1999, and on the Available Data, the Reporting Persons believe
that: (1) on October 8, 1999 Telcom acquired from the Issuer in a private
placement 2,696,626 shares of Class A Stock upon conversion of $25,000,000
principal amount (plus accrued interest) of convertible subordinated notes
previously issued to Telcom by the Issuer, at a conversion price of
approximately $9.52 per share, and (2) on October 8, 1999, Telcom acquired
80,000 shares of the Issuer's Class A Stock in the Offering, at a purchase price
of $12.00 per share, the initial public offering price of the Class A Stock.
Based solely upon the information set forth in the Issuer's Prospectus,
dated October 5, 1999, and on the Available Data, the Reporting Persons believe
that: (1) on October 8, 1999, M-D Capital Partners acquired from the Issuer in a
private placement 2,622,200 shares of Class A Stock upon conversion of
$24,310,000 principal amount (plus accrued interest) of convertible subordinated
notes previously issued to M-D Capital Partners by the Issuer, at a conversion
price of approximately $9.52 per share, and (2) on October 8, 1999, M-D Capital
Partners acquired 80,000 shares of the Issuer's Class A Stock in the Offering,
at a purchase price of $12.00 per share, the initial public offering price of
the Class A Stock.
Based solely upon the information set forth in the Issuer's Prospectus,
dated October 5, 1999, and on the Available Data, the Reporting Persons believe
that on October 8, 1999, M-D Special Equity acquired from the Issuer in a
private placement 58,247 shares of Class A Stock upon conversion of $540,000
principal amount (plus accrued interest) of convertible subordinated notes
previously issued to M-D Special Equity by the Issuer, at a conversion price of
approximately $9.52 per share.
Based solely upon the information set forth in the Issuer's Prospectus,
dated October 5, 1999, and on the Available Data, the Reporting Persons believe
that on October 8, 1999, Special Advisors acquired from the Issuer in a private
placement 16,179 shares of Class A Stock upon conversion of $150,000 principal
amount (plus accrued interest) of convertible subordinated notes previously
issued to Special Advisors by the Issuer, at a conversion price of approximately
$9.52 per share.
Based solely upon the information set forth in the Issuer's Prospectus,
dated October 5, 1999, and on the Available Data, the Reporting Persons believe
that: (1) in January 1999, American Mobile loaned the Issuer approximately $21.4
million, in exchange for shares of common stock of the Issuer and a note
convertible into additional shares of common stock of the Issuer, (2) on July 7,
1999, American Mobile acquired from XM Ventures, a trust established by
Worldspace, all of Worldspace's debt and equity interests in the Issuer, other
<PAGE>
Page 17 of 20
than a $75 million loan from Worldspace to the Issuer, in exchange for 8,614,244
shares of American Mobile's common stock, par value $.01 per share (the
"Exchange Transaction"), (3) immediately after the Exchange Transaction, the
Issuer reorganized its capital structure and the shares of common stock of the
Issuer owned by American Mobile were exchanged on a one-for-one basis for shares
of Class B Stock and as a result, American Mobile owned 125 shares of Class B
Stock of the Issuer, which constituted 100% of the outstanding Class B Stock,
and which were the only shares of the Issuer's capital stock then outstanding;
also as part of this reorganization, certain of the debt interests acquired by
American Mobile in the Exchange Transaction were exchanged for a single
convertible note issued by the Issuer, convertible into shares of the Issuer's
Class B common stock, (4) in September 1999, the Issuer effected a 53,514 for 1
stock split and as a result, the 125 shares of Class B Stock then owned by
American Mobile were exchanged for 6,689,250 shares of Class B Stock, (5) on
October 8, 1999, upon the completion of the Offering, all of the convertible
notes of the Issuer owned by American Mobile converted into 11,182,926 shares of
Class B Stock and as a result of this conversion, as of October 8, 1999,
American Mobile owned an aggregate of 17,872,176 shares of Class B Stock, and
(6) on October 8, 1999, American Mobile acquired 200,000 shares of the Issuer's
Class A Stock in the Offering, at a purchase price of $12.00 per share, the
initial public offering price of the Class A Stock.
The Reporting Persons do not know of any other person having the right to
receive or the power to direct the receipt of dividends from, or the proceeds
from the sale of, the shares of Class A Stock of the Issuer beneficially owned
by the Reporting Persons.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to
Securities of the Issuer
Shareholders' Agreement
-----------------------
Set forth below is a description of certain material provisions of the
Shareholders' Agreement:
Governance Provisions. The Issuer's board of directors consists of nine
members, one of whom is selected by a majority in interest of Columbia, Madison
Dearborn and Telcom, six of whom are selected by certain other shareholders, and
two independent directors, one of whom must be approved by American Mobile, and
one of whom must be approved by a majority of certain other shareholders.
Following receipt of approval of the FCC to transfer control of the Issuer from
American Mobile to a diffuse group of shareholders, the Issuer's board of
directors will consist of nine members, one of whom will be selected by a
majority in interest of Columbia, Madison Dearborn and Telcom, five of whom will
be selected by certain other shareholders, two of whom will be independent
directors of recognized industry experience and stature whose nominations must
be approved by American Mobile and a majority of certain other shareholders
including Columbia, and one of whom will be the Issuer's President and Chief
Executive Officer. The foregoing board rights are subject to the parties to the
Shareholders' Agreement maintaining their original investment or certain minimum
share percentages in the Issuer.
Restrictions on Transfer of Securities. As described in Item 4 above,
except for affiliated transactions and certain other permitted transfers,
Columbia may not transfer any of its Class A Stock until the date which is one
year from the issuance of the Note.
Registration Rights Agreement
-----------------------------
In addition to the contracts and agreements described above and in Item 4
above, Columbia has certain registration rights with respect to the Securities,
pursuant to a registration rights agreement, dated July 7, 1999 (the
"Registration Rights Agreement"), by and among the Issuer, Columbia and certain
other stockholders named therein. Commencing July 7, 2000, Columbia and the
other stockholders that are party to the Registration Rights Agreement are
entitled to demand registration with respect to their Class A Stock, including
shares issuable upon conversion of other securities. Together with Telcom and
Madison-Dearborn, Columbia is entitled to make one demand. These rights are
subject to the Issuer's right to defer the timing of a demand registration and
an underwriters' right to cut back shares in an underwritten offering. In
<PAGE>
Page 18 of 20
addition to these demand rights, following the Issuer's commencement of
commercial operation, parties to the Registration Rights Agreement holding, in
the aggregate, the shares of Class A Stock having a fair market value of not
less than $25,000,000, may request the Issuer to file a registration statement
pursuant to Rule 415. Parties to the Registration Rights Agreement also have
rights to include their Class A Stock in registered offerings initiated by the
Issuer, other than an offering for high yield debt.
TCM Group Agreement
-------------------
The TCM Group Agreement provides that the parties thereto agree that: (1)
they will make good faith efforts to reach a unanimous decision regarding the
rights granted in the Registration Rights Agreement, (2) they will make a good
faith effort to select one individual to be their representative on the Issuer's
Board of Directors in accordance with the Shareholders' Agreement, and (3) that
each party may transfer or assign its Issuer securities to affiliates provided
that such affiliate agrees to become a party the TCM Group Agreement and in the
event a party desires to make a transfer or assignment of its Issuer securities
which would bring such party's ownership in the Issuer below 6% equity interest
level (on a fully diluted and as-converted basis) such party shall first offer
such securities to the other parties.
Other than the Shareholders' Agreement, the Registration Rights Agreement
and the TCM Group Agreement described in Item 4 above, there are no contracts,
arrangements, understandings, or relationships between the Reporting Persons or,
to the best of their knowledge, any executive officer or director of the
Reporting Persons, and any other person with respect to any securities of the
Issuer, including any contract, arrangement, understanding or relationship
concerning the transfer or the voting of any securities of the Issuer, finder's
fees, joint ventures, loan or option arrangements, puts or calls, guarantees of
profits, division of profits or loss, or the giving or withholding of proxies.
Item 7. Material to be Filed as Exhibits
Exhibit 1 Shareholders' Agreement, dated as of July 7, 1999, by and among
the Issuer, American Mobile Satellite Corporation, Baron Asset
Fund, Clear Channel Investments, Inc., Columbia XM Radio
Partners, LLC, DIRECTV, Inc., General Motors Corporation, Madison
Dearborn Capital Partners III, L.P., Special Advisors Fund I,
LLC, Madison Dearborn Special Equity III, L.P., and Telcom-XM
Investors, L.L.C. (incorporated by reference to Exhibit 99.2 to
American Mobile's registration statement on Form S-3 (File No.
333-81459)).
Exhibit 2 Registration Rights Agreement, dated July 7, 1999, by and among
the Issuer, American Mobile Satellite Corporation, the Baron
Asset Fund, and the holders of Series A subordinated convertible
notes of the Issuer named in such agreement (incorporated by
reference to Exhibit 99.3 to American Mobile's registration
statement on Form S-3 (File No. 333-81459)).
Exhibit 3 TCM Group Agreement dated July 7, 1999, by and among Telcom-XM
Investors, L.L.C., Columbia XM Radio Partners, LLC, Madison
Dearborn Capital Partners III, L.P., Madison Dearborn Special
Equity III, L.P. and Special Advisors Fund I, LLC.
Exhibit 4 Joint Filing Agreement set forth below.
<PAGE>
Page 19 of 20
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Statement is true, complete and
correct.
Date: October 18, 1999
COLUMBIA XM RADIO PARTNERS, LLC
By: Columbia Capital LLC, its Managing Member
By:
---------------------------------------------
Name: James B. Fleming, Jr.
Title: Managing Member
COLUMBIA CAPITAL LLC
By:
---------------------------------------------
Name: James B. Fleming, Jr.
Title: Managing Member
COLUMBIA CAPITAL EQUITY PARTNERS II (QP), L.P.
By: Columbia Capital Equity Partners LLC, its Managing Member
By:
-------------------------------------------
Name: James B. Fleming, Jr.
Title: Managing Member
COLUMBIA CAPITAL EQUITY PARTNERS II (CAYMAN), L.P.
By: Columbia Capital Equity Partners LLC, its Managing Member
By:
---------------------------------------------
Name: James B. Fleming, Jr.
Title: Managing Member
<PAGE>
Page 20 of 20
COLUMBIA CAPITAL EQUITY PARTNERS II, L.P.
By: Columbia Capital Equity Partners LLC, its Managing Member
By:
---------------------------------------------
Name: James B. Fleming, Jr.
Title: Managing Member
COLUMBIA CAPITAL EQUITY PARTNERS LLC
By:
---------------------------------------------
Name: James B. Fleming, Jr.
Title: Managing Member
COLUMBIA CAPITAL INVESTORS, L.L.C.
By:
---------------------------------------------
Name: James B. Fleming, Jr.
Title: Managing Member
JAMES B. FLEMING, JR.
------------------------------------------------
R. PHILIP HERGET, III
------------------------------------------------
HARRY F. HOPPER
------------------------------------------------
<PAGE>
EXHIBIT
-------
In accordance with Rule 13d-1(k) promulgated under the Securities Exchange
Act of 1934, the undersigned agree to the joint filing of a Statement on
Schedule 13D (including any and all amendments thereto) with respect to the
shares of Class A Common Stock, $.01 par value, of XM Satellite Radio Holdings
Inc., and further agree that this Joint Filing Agreement be included as an
Exhibit thereto. In addition, each party to this Agreement expressly authorizes
each other party to this Agreement to file on its behalf any and all amendments
to such Statement.
Date: October 18, 1999
COLUMBIA XM RADIO PARTNERS, LLC
By: Columbia Capital LLC, its Managing Member
By:
---------------------------------------------
Name: James B. Fleming, Jr.
Title: Managing Member
COLUMBIA CAPITAL LLC
By:
---------------------------------------------
Name: James B. Fleming, Jr.
Title: Managing Member
COLUMBIA CAPITAL EQUITY PARTNERS II (QP), L.P.
By: Columbia Capital Equity Partners LLC, its Managing Member
By:
-------------------------------------------
Name: James B. Fleming, Jr.
Title: Managing Member
COLUMBIA CAPITAL EQUITY PARTNERS II (CAYMAN), L.P.
By: Columbia Capital Equity Partners LLC, its Managing Member
By:
---------------------------------------------
Name: James B. Fleming, Jr.
Title: Managing Member
<PAGE>
COLUMBIA CAPITAL EQUITY PARTNERS II, L.P.
By: Columbia Capital Equity Partners LLC, its Managing Member
By:
---------------------------------------------
Name: James B. Fleming, Jr.
Title: Managing Member
COLUMBIA CAPITAL EQUITY PARTNERS LLC
By:
---------------------------------------------
Name: James B. Fleming, Jr.
Title: Managing Member
COLUMBIA CAPITAL INVESTORS, L.L.C.
By:
---------------------------------------------
Name: James B. Fleming, Jr.
Title: Managing Member
JAMES B. FLEMING, JR.
------------------------------------------------
R. PHILIP HERGET, III
------------------------------------------------
HARRY F. HOPPER
------------------------------------------------
<PAGE>
ANNEX A
DIRECTORS OF COLUMBIA CAPITAL, L.L.C., COLUMBIA CAPITAL EQUITY PARTNERS LLC AND
COLUMBIA CAPITAL INVESTORS, L.L.C.
Present Principal
Name and Business Address Occupation or Employment
- ------------------------- ------------------------
James B. Fleming, Jr. President/Managing Director of Columbia
201 N. Union Street, Suite 300 Capital, L.L.C.
Alexandria,VA 22314
R. Philip Herget, III Executive Vice President/Managing Director
of 201 N. Union Columbia Capital, L.L.C.
Street, Suite 300
Alexandria,VA 22314
Harry F. Hopper III Executive Vice President/Managing Director
of 201 N. Union Columbia Capital, L.L.C.
Street, Suite 300
Alexandria, VA 22314
<PAGE>
EXECUTIVE OFFICERS OF CAPITAL, L.L.C., COLUMBIA CAPITAL EQUITY PARTNERS LLC AND
COLUMBIA CAPITAL INVESTORS, L.L.C.
Present Principal
Name and Business Address Occupation or Employment
- ------------------------- ------------------------
James B. Fleming, Jr. President/Managing Director of Columbia
201 N. Union Street, Suite 300 Capital, L.L.C.
Alexandria,VA 22314
R. Philip Herget, III Executive Vice President/Managing Director
of 201 N. Union Columbia Capital, L.L.C.
Street, Suite 300
Alexandria, VA 22314
Harry F. Hopper III Executive Vice President/Managing Director
of 201 N. Union Columbia Capital, L.L.C.
Street, Suite 300
Alexandria, VA 22314
Donald A. Doering Chief Financial Officer/Asst. Secretary of
201 N. Union Street, Suite 300 Columbia Capital, L.L.C.
Alexandria, VA 22314
COLUMBIA XM RADIO PARTNERS, LLC is a member managed limited liability company.
Columbia Capital LLC is its Managing Member.
Columbia Capital Equity Partners LLC is the General Partner of each of COLUMBIA
CAPITAL EQUITY PARTNERS II (QP), L.P., COLUMBIA CAPITAL EQUITY PARTNERS II
(CAYMAN), L.P. and COLUMBIA CAPITAL EQUITY PARTNERS II, L.P.
Exhibit 99
TCM GROUP AGREEMENT
THIS TCM GROUP AGREEMENT (the "Agreement") is made this 7th day of July,
1999, by and among Telcom-XM Investors, L.L.C., a Delaware limited liability
company ("Telcom"), Columbia XM Radio Partners, LLC, a Virginia limited
liability company ("Columbia"), Madison Dearborn Capital Partners III, L.P., a
Delaware limited partnership ("MDCP"), Madison Dearborn Special Equity III,
L.P., a Delaware limited partnership ("MDSE") and Special Advisors Fund I, LLC,
a Delaware limited liability company ("SAFI", and together with MDCP and MDSE,
"Madison"), each of Telcom, Columbia and Madison a "Party" and collectively, the
"Parties" or the "TCM Group". For all purposes of this TCM Group Agreement,
Madison shall be regarded and shall collectively have the rights of one "Party".
R E C I T A L S
WHEREAS, pursuant to that certain Note Purchase Agreement, dated as of June
7, 1999, between XM Satellite Radio Holdings Inc., a Delaware corporation
("XM"), each of the Parties and the other parties named therein (the "Note
Purchase Agreement"), each of the Parties has agreed to purchase certain Series
A Subordinated Convertible Notes ("Notes") to be issued by XM, which Notes are
convertible into shares of the Common Stock of XM ("XM Stock" and collectively
with the Notes, "XM Securities");
WHEREAS, each of the Parties shall, at the closing of the Note Purchase
Agreement, enter into a Shareholders Agreement, in a form substantially similar
to Exhibit A hereto, by and among XM, each of the Parties and the other parties
named therein (the "Shareholders Agreement") setting forth certain rights and
obligations of the TCM Group, the other purchasers of Notes and XM;
WHEREAS, each of the Parties shall also, at the closing of the Note
Purchase Agreement, enter into a Registration Rights Agreement, in a form
substantially similar to Exhibit B hereto, by and among XM, each of the Parties
and the other parties named therein (the "Registration Rights Agreement")
setting forth certain rights and obligations of the TCM Group, the other
purchasers of Notes and XM with respect to the XM Securities;
WHEREAS, the Parties wish to set forth the procedures which will govern the
exercise of the rights granted to the TCM Group in each of the Registration
Rights Agreement and the Shareholders Agreement;
WHEREAS, each of the Parties has, simultaneously with the execution of this
Agreement, entered into the Limited Liability Company Agreement of TCM, LLC (the
"LLC Agreement") pursuant to which each of the Parties has become a member of
TCM, LLC, a Delaware limited liability company (the "LLC");
WHEREAS, the Parties, as members of the LLC have consented to the LLC's
entry into an Operational Assistance Agreement with XM (the "XM Agreement")
pursuant to which the LLC will have a strategic business relationship with XM
and shall have the right, so long as the TCM group, in the aggregate, maintains
a five percent level of ownership of XM Securities, to utilize certain
"bandwidth" (as defined in the XM Agreement") licensed to XM for commercial
purposes;
NOW, THEREFORE, in consideration of the terms and conditions herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. Defined Terms. Capitalized terms used herein and not otherwise defined
shall have the respective meanings provided therefor in the Note Purchase
Agreement, the Shareholders Agreement or the Registration Rights Agreement, as
applicable.
2. Registration Rights Agreement.
a) Actions Requiring Majority Approval. The Parties shall each make
good faith efforts to reach unanimous decisions relating to the exercise by
the TCM Group (or any of the Parties) of any of the following rights
granted to the TCM Group in the Registration Rights Agreement.
Notwithstanding the immediately preceding sentence, the exercise of such
rights, in the absence of such a unanimous decision by the Parties, shall
only require the prior written consent of Parties holding a majority in
interest of XM Securities:
(i) the exercise of the Demand Registration rights provided for
in Section 2.1 of the Registration Rights Agreement; or
(ii) except as set forth in Section 2(c) below, the taking of any
material actions or decisions (e.g. selection of underwriters) under
the Registration Rights Agreement.
a) Expenses. Any expenses to be borne by the TCM Group pursuant to the
Registration Rights Agreement shall be shared equally by each of the
Parties.
b) Discretionary Actions. Any Party may, on its own and in its own
discretion, take any of the following actions or exercise any of the
following rights granted to it as a member of the TCM Group under the
Registration Rights Agreement:
(i) register any of its Registrable Securities pursuant to the
Shelf Registration provisions set forth in Section 2.2 of the
Registration Rights Agreement; or
(ii) register any of its Registrable Securities pursuant to the
Piggyback Registration rights provisions set forth in Section 2.3 of
the Registration Rights Agreement.
3. Shareholders Agreement.
a) XM Board Member Selection. The Parties shall each make good faith
efforts to select, by a unanimous written consent, one individual to be
their representative on the XM Board of Directors pursuant to Section 5.1
of the Shareholders Agreement (the "TCM Group Director"). Notwithstanding
the preceding sentence, in the absence of such a unanimous decision, the
Parties holding a majority in interest of XM Securities may, by written
consent, select the TCM Group Director.
b) Initial Director. The Parties hereby select Dr. Rajendra Singh as
the initial TCM Group Director. Removal/Successor Directors. Removal of the
TCM Group Director and appointment of successor TCM Group Directors shall
require the approval of Parties holding a majority in interest of XM
Securities.
4. Transfers of XM Securities. In each case subject to the applicable
provisions of the Shareholders Agreement, each Party may transfer all or part of
its holdings of XM Securities, provided, however, that:
a) any transfer or assignment to an affiliate is permitted so long as
such affiliate agrees to join this Agreement as a Party;
b) subject to clause (a) above, each transferee, successor or assign
of any XM Securities shall agree to be bound by and to comply with the
terms of this TCM Group Agreement and shall document such agreement by
executing a counterpart of this Agreement prior to such transfer (however,
the failure of any such transferee to so execute this Agreement shall not
act as a waiver of the effects of this Section 4);
c) in the event any Party (a "Selling Party") intends to make a
transfer or assignment of XM Securities which would bring the TCM Group's
(in the aggregate) ownership of XM Securities below a 6% equity interest
level (on a fully diluted and as-converted basis) such Selling Party shall,
prior to effecting any such transfer, deliver or mail by certified mail or
overnight courier a written notice ("Right of First Offer Notice") to each
other Party stating its bona fide intention to sell, transfer or assign
some or all of its XM Securities (the "Offered Securities") and agrees to
negotiate in good faith with each other Party for a period of 30 days
following the date of such Right of First Offer Notice (the "Exclusivity
Period"), whereby each other Party (each a "Buying Party") shall be given
the first exclusive and irrevocable option (but not the obligation) to
purchase any or all of the Offered Securities; provided that if there is
more than one Buying Party, no Buying Party may purchase more than its
proportionate share (based on the number (or principal amount) of XM
Securities held by all Buying Parties) of the XM Securities so offered
unless one or more or the other Buying Parties elects to purchase less than
its proportionate share of the Offered Securities;
d) if the Selling Party does not agree to accept any offers (or there
are not offers made with respect to all of the Offered Securities) made by
the Buying Parties (each and any such offer, a "Purchase Offer") prior to
the expiration of the Exclusivity Period, the Selling Party shall, for a
period of 60 days from the expiration of the Exclusivity Period (the "Sale
Period"), be permitted to sell any Offered Securities not subject an
accepted Purchase Offer to a third-party buyer for a purchase price or
other consideration not equal to or lower than the highest Purchaser Offer
for any of the Offered Securities and on terms and conditions no more
favorable to such third-party buyer than those set forth in the highest
Purchaser Offer;
e) if Purchase Offers for all of the Offered Securities are accepted
by the Selling Party, the sale of such Offered Securities shall be closed
at a time and location mutually acceptable to the Selling Party and the
Buying Parties, but in no event later than thirty days following the
expiration of the Exclusivity Period;
f) the Selling Party shall, at the earliest of (x) the closing of any
sale of Offered Securities to a third party and (y) the expiration of the
Sale Period, sell to each Buying Party from which it accepted a Purchase
Offer the Offered Securities subject to such Purchase Offer;
g) any Offered Securities not subject to an accepted Purchase Offer
and not sold to a third party or a Buying Purchaser prior to the expiration
of the Sale Period shall become subject again to the provisions of Sections
4(c)-(f) hereof and any future offer of such Offered Securities or any
other XM Securities held by the Selling Party shall be made pursuant to
such provisions;
h) each Party shall, upon any attempted transfer or assignment by
another Party of any of its holdings of XM Securities in contravention of
this Agreement, have the right to take appropriate legal action, including,
but not limited to seeking an injunction or the imposition of other
equitable remedies, in order to enforce the terms of this Agreement.
4. Notices. Notices hereunder shall be sent by certified mail, return
receipt requested, hand delivery or facsimile transmission (promptly followed by
certified mail) or overnight courier as follows:
To: Telcom-XM Investors, L.L.C.
211 N. Union Street, Suite 300
Alexandria, VA 22314
Fax: 703-706-3837
Attn: President and General Counsel
with a copy to:
Dewey Ballantine LLP
1301 Avenue of the Americas
New York, NY 10019
Fax: 212-259-6333
Attn: William J. Phillips, Esq.
To: Columbia XM Radio Partners, LLC
201 North Union Street, Suite 300
Alexandria, VA 22314
Fax: 703-519-3904
Attn: James B. Fleming
with a copy to:
Edwards & Angell, LLP
101 Federal Street
Boston, MA 02110
Fax: 617-439-4170
Attn: Stephen O. Meredith, Esq.
To : Madison Dearborn Capital Partners III, L.P.
Madison Dearborn Special Equity III, L.P.
Special Advisors Fund I, LLP
Three First National Plaza
Chicago, IL 60602
Fax: 312-895-1225
Attn: James M. Perry, Jr.
with a copy to:
Edwards & Angell, LLP
101 Federal Street
Boston, MA 02110
Fax: 617-439-4170
Attn: Stephen O. Meredith, Esq.
5. Cumulative Remedies. The rights and remedies provided by this Agreement
are cumulative and the use of any one right or remedy by any party shall not
preclude or waive its right to use any or all other remedies. Said rights and
remedies are given in addition to any other rights the parties may have by law,
statute, ordinance or otherwise.
6. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of all of the Parties and, to the extent permitted by this Agreement,
their successors, legal representatives and assigns.
7. Interpretation. Throughout this Agreement, nouns, pronouns and verbs
shall be construed as masculine, feminine, neuter, singular or plural, whichever
shall be applicable. All references herein to "Sections" and clauses shall refer
to corresponding provisions of this Agreement unless specified otherwise in a
particular instance.
8. Severability. The invalidity or unenforceability of any particular
provision of this Agreement shall not affect the other provisions hereof, and
this Agreement shall be construed in all respects as if such invalid or
unenforceable provision were omitted. If any provision of this Agreement shall
be declared by a court of competent jurisdiction to be invalid, illegal or
incapable of being enforced in whole or in part, such provision shall be
interpreted so as to remain enforceable to the maximum extent permissible
consistent with applicable law and the remaining conditions and provisions or
portions thereof shall nevertheless remain in full force and effect and
enforceable to the extent they are valid, legal and enforceable, and no
provisions shall be deemed dependent upon any other covenant or provision unless
so expressed herein.
9. Counterparts. This Agreement may be executed in any number of
counterparts with the same effect as if all parties hereto had signed the same
document. All counterparts shall be construed together and shall constitute one
instrument.
10. Entire Agreement. This Agreement, along with the Shareholders Agreement
and the Registration Rights Agreement, constitutes the entire agreement among
the parties hereto pertaining to the subject matter hereof and supersedes all
prior agreements and understandings pertaining thereto.
11. Governing Law. This Agreement and the rights of the parties hereunder
shall be interpreted in accordance with the laws of the State of New York, and
all rights and remedies shall be governed by such laws.
12. Amendments and Waivers. Any term of this Agreement may be amended, and
the observance of any term of this Agreement may be waived (either generally or
in a particular instance and either retroactively or prospectively) only with
the written consent of each of the Parties.
13. Specific Performance. Each Party, in addition to being entitled to
exercise all rights provided herein or granted by law, will be entitled to
specific performance of its rights under this Agreement. Each Party agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by it of the provisions of this Agreement and hereby agrees
to waive the defense in any action for specific performance that a remedy at law
would be adequate.
14. Choice of Forum; Jury Trial Waiver. IN THE EVENT THAT A JUDICIAL
PROCEEDING IS NECESSARY, THE SOLE FORUM FOR RESOLVING DISPUTES ARISING OUT OF OR
RELATING TO THIS AGREEMENT IS THE SUPREME COURT OF THE STATE OF NEW YORK IN AND
FOR THE COUNTY OF NEW YORK OR THE FEDERAL COURTS LOCATED IN SUCH STATE AND
COUNTY, AND RELATED APPELLATE COURTS. THE PARTIES HEREBY IRREVOCABLY CONSENT TO
THE JURISDICTION OF SUCH COURTS AND AGREE TO SAID VENUE.
THE PARTIES HEREBY IRREVOCABLY WAIVE ALL RIGHT TO A TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR ANY OTHER DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the date first above written.
TELCOM-XM INVESTORS, L.L.C.
By:
--------------------------------------------
Name:
Title:
COLUMBIA XM RADIO PARTNERS, LLC
By Columbia Capital LLC, its Managing Member
By:
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Name:
Title:
MADISON DEARBORN CAPITAL PARTNERS III, L.P.
By: Madison Dearborn Partners III, L.P., its
general partner
By: Madison Dearborn Partners LLC, its general
partner
By:
--------------------------------------------
Name:
Title:
MADISON DEARBORN SPECIAL EQUITY III, L.P.
By: Madison Dearborn Partners III, L.P., its
general partner
By: Madison Dearborn Partners LLC, its general
partner
By:
--------------------------------------------
Name:
Title:
SPECIAL ADVISORS FUND I, LLC
By: Madison Dearborn Partners III, L.P., its
manager
By: Madison Dearborn Partners LLC, its general
partner
By:
--------------------------------------------
Name:
Title:
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EXHIBIT A
ATTACH FORM OF SHAREHOLDERS AGREEMENT
<PAGE>
EXHIBIT B
ATTACH FORM OF REGISTRATION RIGHTS AGREEMENT
