Exhibit 1.2
SIRIUS SATELLITE RADIO INC.
(A Delaware corporation)
$200,000,000
3 1/4% Convertible Notes due 2011
TERMS AGREEMENT
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October 8, 2004
To: Sirius Satellite Radio Inc.
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
This is a Terms Agreement referenced in the Form Underwriting
Agreement attached hereto, as contemplated by the Registration Statement No.
333-108387. The terms of the Form Underwriting Agreement are hereby incorporated
herein. We understand that Sirius Satellite Radio Inc., a Delaware corporation
(the "Company"), proposes to issue and sell $200,000,000 principal amount of its
3 1/4% Convertible Notes due 2011 (the "Underwritten Securities"). The
Underwritten Securities are convertible into shares of the Company's common
stock, par value $.001 per share (the "Underlying Securities"). Subject to the
terms and conditions set forth or incorporated by reference herein, ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. Incorporated (the "Underwriter") offers to purchase the total
aggregate number of Underwritten Securities, and some or all of the Option
Underwritten Securities set forth below, to the extent any Underwritten
Securities or Option Underwritten Securities are purchased in accordance with
the terms hereof.
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The Underwritten Securities shall have the following terms:
3 1/4% Convertible Notes Due 2011
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Title: 3 1/4% Convertible Notes due 2011
Rank: The notes will be senior unsecured debt and will
rank on a parity with all of the Company's
existing and future senior unsecured debt and
prior to all of the Company's subordinated debt.
Aggregate principal amount: $200,000,000
Aggregate principal amount The Underwriter has an option to purchase up to an
of Option Underwritten additional $30,000,000 principal amount of Underwritten
Securities: Securities (the "Option Underwritten Securities")
at the public offering price, less an underwriting
discount, within 30 days from the Closing Date to
cover over-allotments.
Initial public 100% of the principal amount and accrued interest,
offering price: if any, from the Closing Date.
Purchase price: 97.875% of the principal amount, plus accrued
interest, if any, from the Closing Date.
Underlying Securities: 188.6792 shares of common stock, par value $.001
per share, of the Company for each $1,000
principal amount of the Underwritten Securities.
Indenture: Indenture dated as of May 23, 2003 between the
Company and The Bank of New York, as amended by
the Third Supplemental Indenture to be dated as of
October 13, 2004.
Listing requirements for the Nasdaq National Market
Underlying Securities:
Lock-up provisions: For a period of 90 days from the date of the
Prospectus Supplement relating to the Underwritten
Securities, the Company will not, without the
prior written consent of the Underwriter, (1)
offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any
option or contract to sell, grant any option,
right or warrant to purchase, lend, or otherwise
transfer or
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dispose of, directly or indirectly, any shares of
common stock or any securities convertible into or
exercisable or exchangeable for common stock or
(2) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of
the economic consequences of ownership of the
common stock, whether any such transaction
described in clause (1) or (2) above is to be
settled by delivery of common stock or such other
securities, in cash or otherwise, or (3) file or
cause to become effective a registration statement
relating to the offer and sale of any shares of
common stock or any securities convertible into or
exercisable or exchangeable for common stock,
other than (i) shares of stock that may be issued
in connection with the Company's long-term stock
incentive plan or 401(k) plan or (ii) amendments
to the Company's registration statement on Form
S-3 (File No. 333-115695) as are necessary to
permit holders of the Company's 2 1/2% Convertible
Notes due 2009 (issued on February 20, 2004) to
resell those securities or the underlying common
stock in a registered transaction. The foregoing
sentence shall not apply to (a) the sale of any
Underwritten Securities to the Underwriter
pursuant to the Form Underwriting Agreement and
this Terms Agreement, (b) transactions relating to
shares of common stock or other securities
acquired in open market transactions after the
completion of the Public Offering or (c) the
issuance by the Company of additional options
under the Company's existing stock option plans,
provided that such options are not exercisable
during such 90-day period.
Comfort Letter: The Company shall cause the Accountant's Comfort
Letter and the Bring-down Comfort Letter
referenced in, respectively Section 5(g) and
Section 5(h) of the Form Underwriting Agreement to
be delivered, except that such letters will be
delivered by ▇▇▇▇▇ & Young LLP in lieu of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP.
Additional Representations The Company represents and warrants to and
of the Company: agrees with the Underwriter that there are no
contracts, agreements or understandings between
the Company and any person granting such person
the right to require the Company to file a
registration statement under the Securities Act
with respect to any securities of the Company or
to require the Company to include such securities
with the Underwritten Securities registered
pursuant to the
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Registration Statement, other than the agreements
granting registration rights to affiliates of The
Blackstone Group L.P. and Apollo Management, L.P.
Additional Covenants The Company covenants with the Underwriter whether
of the Company: or not the transactions contemplated in this
Agreement are consummated or this Agreement is
terminated, to pay or cause to be paid all
expenses incident to the performance of its
obligations under this Agreement, including: (i)
the cost of printing or producing any Blue Sky or
Legal Investment memorandum in connection with the
offer and sale of the Underwritten Securities
under state securities laws and all expenses in
connection with the qualification of the
Securities for offer and sale under state
securities laws as provided in Section 3(f) of the
Form Underwriting Agreement, including filing fees
and the reasonable fees and disbursements of
counsel for the Underwriter in connection with
such qualification and in connection with the Blue
Sky or Legal Investment memorandum, (ii) the cost
of printing certificates representing the
Underwritten Securities, (iii) the costs and
charges of any transfer agent, registrar or
depositary, (iv) the document production charges
and expenses associated with printing this
Agreement and (v) all other costs and expenses
incident to the performance of the obligations of
the Company hereunder for which provision is not
otherwise made in this Section. It is understood,
however, that except as provided in Sections 4, 6
and 7 of the Form Underwriting Agreement,
"Additional Covenants of the Company" and
"Additional Termination Provisions" below, the
Underwriter will pay all of its costs and
expenses, including fees and disbursements of its
counsel, stock transfer taxes payable on resale of
any of the Underwritten Securities by it and any
advertising expenses connected with any offers it
may make.
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Additional Conditions of The obligations of the Underwriter to purchase and pay
Underwriter's Obligations: for the Underwritten Securities pursuant this Terms
Agreement are subject to the following further
conditions: subsequent to execution and delivery
of this Terms Agreement and prior to the Closing
Date there shall not have occurred any change, or
any development involving a prospective change, in
the condition, financial or otherwise, or in the
earnings, business or operations of the Company
and its subsidiaries, taken as a whole, from that
set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to
the date of this Agreement) that, in the
Underwriter's judgment, is material and adverse
and that makes it, in the Underwriter's judgment,
impracticable to market the Underwritten
Securities on the terms and in the manner
contemplated in the Prospectus.
Additional Termination The Underwriter may terminate this Terms
Provisions: Agreement, by notice to the Company at any time at
or prior to the Closing Date if (i) trading is
suspended or materially limited on, or by, as the
case may be, any of the Chicago Board of Options
Exchange, the Chicago Mercantile Exchange or the
Chicago Board of Trade, (ii) a material disruption
in securities settlement, payment or clearance
services in the United States shall have occurred,
or (iii) there shall have occurred any outbreak or
escalation of hostilities, or any change in
financial markets or any calamity or crisis that,
in the Underwriter's judgment, is material and
adverse and which, singly or together with any
other event specified in this clause (iii), makes
it, in the Underwriter's judgment, impracticable
or inadvisable to proceed with the offer, sale or
delivery of the Underwritten Securities on the
terms and in the manner contemplated in the
Prospectus.
If this Terms Agreement shall be terminated by the
Underwriter because of any failure or refusal on
the part of the Company to comply with the terms
or to fulfill any of the conditions of this Terms
Agreement, or if for any reason the Company shall
be unable to perform its obligations under this
Terms Agreement, the Company will reimburse the
Underwriter for all out-of-pocket expenses
(including the fees and disbursements of its
counsel) reasonably incurred by the Underwriter in
connection with this Terms Agreement or the
offering
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contemplated hereunder.
Additional Indemnification The Company agrees to indemnify and hold harmless
Provisions: each affiliate of the Underwriter within the
meaning of Rule 405 under the 1933 Act.
Other Terms: This Terms Agreement may be signed in
counterparts, each of which shall be an original,
with the same effect as if the signatures thereto
and hereto were upon the same instrument.
Notices: All notices and other communications hereunder
shall be in writing and shall be deemed to have
been duly given if mailed or transmitted by any
standard form of telecommunication. Notices to the
Underwriter shall be directed to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
Co. Incorporated, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇, Attention: Global Capital Markets Syndicate
Desk; notices to the Company shall be directed to
the Company at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Executive Vice President,
General Counsel and Secretary.
Closing Date and location: October 13, 2004
10:00 a.m.
▇▇▇▇▇▇▇, Swaine & ▇▇▇▇▇ LLP
Worldwide Plaza
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Please accept this offer by signing a copy of this Terms
Agreement in the space set forth below and returning the signed copy to us.
Very truly yours,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO.
INCORPORATED
by
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
Accepted:
SIRIUS SATELLITE RADIO INC.
by
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Executive Vice President,
General Counsel and Secretary
