Agreement Not to Convert - XM Satellite Radio Holdings Inc., Black Bear Funds, Hughes Electronics Corp., George Haywood, Neera Singh and Rajendra Singh JTWROS, Hersh Raj Singh Educational Trust and Samir Raj Singh Educational Trust
AGREEMENT
This AGREEMENT, dated as of January 28, 2003 (this "Agreement"), is
entered into by and among XM Satellite Radio Holdings Inc., a corporation
organized under the laws of the State of Delaware (the "Company"), and each of
the noteholders of the Company identified on the signature pages hereto (each, a
"Noteholder" and, collectively, the "Noteholders"). Capitalized terms used
herein and not otherwise defined have the meanings ascribed to them in the Note
Purchase Agreement (as defined below).
WHEREAS, the Company, the Company's subsidiary, XM Satellite Radio
Inc. ("XM"), each of the Noteholders and certain other investors entered into a
Note Purchase Agreement, dated as of December 21, 2002 (the "Note Purchase
Agreement"), whereby the Noteholders and certain other investors agreed to
purchase the 10% Senior Secured Discount Convertible Notes due 2009 of the
Company and XM (the "Notes");
WHEREAS, pursuant to the Note Purchase Agreement, upon issuance of the
Notes, a holder of Notes may convert all or any portion of its Notes into shares
of the Company's Class A common stock, par value $.01 per share (the "Class A
Common Stock"), at a conversion price of $3.18 per share;
WHEREAS, the Company has reserved 40,000,000 of the 58,176,100 shares
of Class A Common Stock for issuance upon conversion of the aggregate initial
value of the Notes;
WHEREAS, the Company has agreed to seek stockholder approval to amend
the Company's Restated Certificate of Incorporation to increase the number of
authorized shares of Class A Common Stock to 600,000,000 in order to, among
other things, enable the Company to reserve additional shares of Class A Common
Stock to the extent issuable from time to time upon conversion of the Notes (the
"Charter Amendment"); and
WHEREAS, in order to facilitate the Concurrent Financing Transactions,
the parties hereto desire that certain of the Notes not be converted until such
stockholder approval has been obtained and the Charter Amendment has become
effective.
NOW, THEREFORE, the parties hereto, in consideration of the foregoing,
the mutual covenants and agreements contained herein and for other good and
valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, and intending to be legally bound hereby, agree as follows:
SECTION 1. AGREEMENT NOT TO CONVERT
Each Noteholder hereby agrees that it will not seek or attempt to
convert the Notes held by it into Class A Common Stock until the sixty-first day
following the earlier of: (i) the date of the next shareholder meeting of the
Company and (ii) the date that is six months after the Closing Date.
SECTION 2. SPECIFIC PERFORMANCE
The parties agree that irreparable damage would occur in the event
that any provision of this Agreement was, or is, not performed in accordance
with its specific terms or was, or is, otherwise breached. Each Noteholder
agrees that, in the event of any breach or threatened breach by such Noteholder
of any covenant or obligation contained in this Agreement, the Company shall be
entitled (in addition to any other remedy that may be available to it, including
monetary damages) to (a) a decree or order of specific performance to enforce
the observance and performance of such covenant or obligation,
<PAGE>
and (b) an injunction restraining such breach or threatened breach. Each
Noteholder further agrees that neither the Company nor any other person shall be
required to obtain, furnish or post any bond or similar instrument in connection
with or as a condition to obtaining any remedy referred to in this Section 2,
and each Noteholder irrevocably waives any objection to the imposition of such
relief or any right he may have to require the obtaining, furnishing or posting
of any such bond or similar instrument.
SECTION 3. ASSIGNMENT; BINDING EFFECT
This Agreement may not be assigned or delegated by a Noteholder
without the prior written consent of the Company, which consent shall not be
unreasonably withheld. This Agreement shall be binding upon, and inure to the
benefit of, the Noteholders and their respective successors and assigns, and
shall be binding upon, and inure to the benefit of, the Company and its
successors and assigns; provided, however, that a transferee of a Noteholder
that is not an Affiliate of such Noteholder shall not be subject to the
provisions of Section 1 hereof with respect to the conversion of any Notes.
SECTION 4. AMENDMENT AND WAIVER
This Agreement shall not be amended, altered or modified except by an
instrument in writing duly executed and delivered on behalf of each of the
parties hereto that will be adversely affected thereby. No failure on the part
of the Company to exercise any power, right, privilege or remedy under this
Agreement, and no delay on the part of the Company in exercising any power,
right, privilege or remedy under this Agreement, shall operate as a waiver of
such power, right, privilege or remedy; and no single or partial exercise of any
such power, right, privilege or remedy shall preclude any other or further
exercise thereof or of any other power, right, privilege or remedy. The Company
shall not be deemed to have waived any claim available to the Company arising
out of this Agreement, or any power, right, privilege or remedy of the Company
under this Agreement, unless the waiver of such claim, power, right, privilege
or remedy is expressly set forth in a written instrument duly executed and
delivered on behalf of the Company; and any such waiver shall not be applicable
or have any effect except in the specific instance in which it is given.
SECTION 5. ENTIRE AGREEMENT
This Agreement and any other documents delivered by the parties in
connection herewith constitute the entire agreement between the parties with
respect to the subject matter hereof and thereof and supercede all prior
agreements and understandings between the parties with respect thereto.
SECTION 6. COUNTERPARTS
This Agreement may be executed and delivered in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed and delivered shall be deemed to be an original but all
of which taken together shall constitute one and the same agreement.
SECTION 7. GOVERNING LAW
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Delaware, regardless of the laws that might otherwise
govern under applicable principles of conflicts of law.
[SIGNATURE PAGES FOLLOW]
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement, or have caused this Agreement to be executed and delivered on
their behalf, as of the date first above written.
XM SATELLITE RADIO HOLDINGS INC.
By: /s/ Joseph M. Titlebaum
-------------------------------------
Name: Joseph M. Titlebaum
------------------------------------
Title: Senior Vice President, General Counsel and Secretary
----------------------------------------------------
NOTEHOLDERS:
BLACK BEAR FUND I, L.P.
By: Eastbourne Capital Management, L.L.C., its general
partner
By: /s/ Eric M. Sippel
-------------------------------------
Name: Eric M. Sippel
Title: Chief Operating Officer
BLACK BEAR FUND II, L.L.C.
By: Eastbourne Capital Management, L.L.C., its manager
By: /s/ Eric M. Sippel
-------------------------------------
Name: Eric M. Sippel
Title: Chief Operating Officer
BLACK BEAR OFFSHORE MASTER FUND LIMITED
By: Eastbourne Capital Management, L.L.C., its investment
adviser and attorney in fact
By: /s/ Eric M. Sippel
-------------------------------------
Name: Eric M. Sippel
Title: Chief Operating Officer
Signature Pages to Agreement Not to Convert
<PAGE>
HUGHES ELECTRONICS CORPORATION
By: /s/ Patrick T. Doyle
-------------------------------------
Name: Patrick T. Doyle
-------------------------------------
Title: Vice President, Treasurer and Controller
-----------------------------------------
GEORGE HAYWOOD
/s/ George Haywood
-------------------------------------
NEERA SINGH and RAJENDRA SINGH JTWROS
/s/ Neera Singh
----------------------------
/s/ Rajendra Singh
----------------------------
HERSH RAJ SINGH EDUCATIONAL TRUST
/s/ Neera Singh
------------------------------
Name: Neera Singh
Title: Trustee
/s/ J. T. Westermeier
------------------------------
Name: J. T. Westermeier
Title: Co-Trustee
SAMIR RAJ SINGH EDUCATIONAL TRUST
/s/ Neera Singh
------------------------------
Name: Neera Singh
Title: Trustee
/s/ J. T. Westermeier
------------------------------
Name: J. T. Westermeier
Title: Co-Trustee
Signature Pages to Agreement Not to Convert