Exhibit 4.12
THIS WARRANT AND ANY SECURITIES ACQUIRED UPON THE EXERCISE OF
THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND NEITHER THE
SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED
OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND
SUCH LAWS.
-------------------------------------------
CD RADIO INC.
COMMON STOCK PURCHASE WARRANT
-------------------------------------------
This certifies that, for good and valuable consideration, CD
Radio Inc., a Delaware corporation (the "Company"), grants to
___________________or registered assigns (including ____________, the
"Warrantholder"), the right to subscribe for and purchase from the Company
60,000 validly issued, fully paid and nonassessable shares (the "Warrant
Shares") of the Company's Common Stock, par value $0.001 per share (the "Common
Stock"), at the purchase price per share of $50.00 (the "Exercise Price"), at
any time and from time to time, (i) following the occurrence of a Change in
Control (as hereinafter defined), or (ii) during the period from and including
9:00 AM, New York City time, on June 15, 1998 until 5:00 PM, New York City time,
on June 15, 2005 (the "Expiration Date"), all subject to the terms, conditions
and adjustments herein set forth. Certain capitalized terms used herein and not
otherwise defined are used with the meanings ascribed to them in Section 17.
Certificate No.
Number of Shares:
Name of Warrantholder:
2
1. Duration and Exercise of Warrant; Limitation on
Exercise; Payment of Taxes.
1.1 Duration and Exercise of Warrant. Subject to the
terms and conditions set forth herein, the Warrant may be exercised, in whole or
in part, by the Warrantholder by:
(a) the surrender of this Warrant to the
Company, with a duly executed Exercise Form specifying the number of Warrant
Shares to be purchased, during normal business hours on any Business Day prior
to the Expiration Date; and
(b) the delivery of payment to the Company,
for the account of the Company, by cash, by certified or bank cashier's check or
by wire transfer of immediately available funds in accordance with wire
instructions that shall be provided upon request, of the Exercise Price for the
number of Warrant Shares specified in the Exercise Form in lawful money of the
United States of America. The Company agrees that such Warrant Shares shall be
deemed to be issued to the Warrantholder as the record holder of such Warrant
Shares as of the close of business on the date on which this Warrant shall have
been surrendered and payment made for the Warrant Shares as aforesaid.
1.2 Company's Option to Redeem. The Company may, at
its option, upon not less than 30 days' nor more than 60 days' notice given to
each Holder, call for redemption all of the outstanding Warrants at a call price
of $0.01 per warrant (the "Call Price") at any time after 9:00 AM, New York City
time, on June 15, 2000 (the "Callable Time"), provided that the closing market
price of the Company's Common Stock exceeds $75.00 per share (as adjusted for
stock splits, combinations, reclassifications and similar events) for at least
20 trading days in any period of 30 consecutive trading days beginning at any
time after the Callable Time, and provided further that any such call for
redemption shall be effective only if notice thereof is given to the
Warrantholder within 60 days following the most recent date on which a call for
redemption would have been permitted hereunder. In the event the Company
exercises its right to redeem the Warrants, such Warrants will be exercisable
until the close of business on the Business Day immediately preceding the date
fixed for redemption in such notice (the "Call Date"). If any Warrant called for
redemption is not exercised by such time, such Warrant shall cease to be
exercisable and the holder thereof shall be entitled only to receive the Call
Price. Payment of the Call Price will be made by the Company upon presentation
and surrender of the Warrant Certificates representing such Warrants to the
Company at its address specified in Section 18.6(a) herein (the "Company
Office").
1.3 Limitations on Exercise. Notwithstanding anything
to the contrary herein, this Warrant may be exercised only upon (i) the delivery
to the
3
Company of any certificates, legal opinions, or other documents reasonably
requested by the Company to satisfy the Company that the proposed exercise of
this Warrant may be effected without registration under the Securities Act, and
(ii) receipt by the Company of FCC approval of the proposed exercise, if such
approval is required (as determined by a written opinion of the Company's
special FCC counsel, delivered to the Warrantholder) to maintain any license
granted to the Company by the FCC, or to maintain the Company's eligibility for
any license for which it has applied to the FCC. The Warrantholder shall not be
entitled to exercise this Warrant, or any part thereof, unless and until such
approvals, certificates, legal opinions or other documents are reasonably
acceptable to the Company. Unless a registration statement covering the issuance
of the Warrant Shares upon exercise of the Warrant has been filed with the SEC
and declared effective and is then in effect, the cost of such approvals,
certificates, legal opinions and other documents, if required, shall be borne by
the Warrantholder; provided, however, that the Company shall bear such costs if
the foregoing condition is not fulfilled as a result of the Company's failure to
perform its obligations under Sections 7 and 8 hereof.
1.4 Warrant Shares Certificate. A stock certificate
or certificates for the Warrant Shares specified in the Exercise Form shall be
delivered to the Warrantholder within 5 Business Days after receipt of the
Exercise Form and receipt of payment of the purchase price. If this Warrant
shall have been exercised only in part, the Company shall, at the time of
delivery of the stock certificate or certificates, deliver to the Warrantholder
a new Warrant evidencing the rights to purchase the remaining Warrant Shares,
which new Warrant shall in all other respects be identical with this Warrant.
1.5 Payment of Taxes. The issuance of certificates
for Warrant Shares shall be made without charge to the Warrantholder for any
stock transfer or other issuance tax in respect thereto; provided, however, that
the Warrantholder shall be required to pay any and all taxes which may be
payable in respect of any transfer involved in the issuance and delivery of any
certificate in a name other than that of the then Warrantholder as reflected
upon the books of the Company.
1.6 Divisibility of Warrant; Transfer of Warrant.
(a) Subject to the provisions of this
Section 1.6, this Warrant may be divided into warrants of one thousand shares or
multiples thereof, upon surrender at the Company Office, without charge to any
Warrantholder. Upon such division, the Warrants may be transferred of record as
the then Warrantholder may specify without charge to such Warrantholder (other
than any applicable transfer taxes). In addition, subject to the provisions of
this Section 1.6, the Warrantholder shall also have the right to transfer this
Warrant in its entirety to any person or entity.
4
(b) Upon surrender of this Warrant to the
Company with a duly executed Assignment Form and funds sufficient to pay any
transfer tax, the Company shall, without charge, execute and deliver a new
Warrant or Warrants of like tenor in the name of the assignee named in such
Assignment Form, and this Warrant shall promptly be canceled. Each Warrantholder
agrees that no later than the fourth Business Day prior to any proposed transfer
(whether as the result of a division or otherwise) of this Warrant, such
Warrantholder shall give written notice to the Company of such Warrantholder's
intention to effect such transfer. Each such notice shall describe the manner
and circumstances of the proposed transfer in sufficient detail, and, if
requested by the Company, shall be accompanied by a written opinion of legal
counsel, which opinion shall be addressed to the Company and be reasonably
satisfactory in form and substance to the Company, to the effect that the
proposed transfer of this Warrant may be effected without registration under the
Securities Act. In addition, the Warrantholder and the transferee shall execute
any documentation reasonably required by the Company to ensure compliance with
the Securities Act or the applicable exemption from registration thereunder. The
Warrantholder shall not be entitled to transfer this Warrant, or any part
thereof, if such legal opinion is not acceptable to the Company or if such
documentation is not provided. The term "Warrant" as used in this Agreement
shall be deemed to include any Warrants issued in substitution or exchange for
this Warrant.
2. Restrictions on Transfer;
Restrictive Legends.
Except as otherwise permitted by this Section 2, each Warrant
shall (and each Warrant issued upon direct or indirect transfer or in
substitution for any Warrant pursuant to Section 1.6 or Section 4 shall) be
stamped or otherwise imprinted with a legend in substantially the following
form:
THIS WARRANT AND ANY SECURITIES ACQUIRED UPON THE EXERCISE OF
THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES NOR
ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR
OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION
UNDER SUCH ACT AND SUCH LAWS.
Except as otherwise permitted by this Section 2, each stock certificate for
Warrant Shares issued upon the exercise of any Warrant and each stock
certificate issued upon the direct or indirect transfer of any such Warrant
Shares shall be stamped or otherwise imprinted with a legend in substantially
the following form:
5
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY
BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH
LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS.
Notwithstanding the foregoing, the Warrantholder may require
the Company to issue a Warrant or a stock certificate for Warrant Shares, in
each case without a legend, if either (i) such Warrant or such Warrant Shares,
as the case may be, have been registered for resale under the Securities Act or
(ii) the Warrantholder has delivered to the Company an opinion of legal counsel,
which opinion shall be addressed to the Company and be reasonably satisfactory
in form and substance to the Company, to the effect that such registration is
not required with respect to such Warrant or such Warrant Shares, as the case
may be.
3. Reservation and Registration of Shares, Etc.
The Company covenants and agrees as follows:
(a) all Warrant Shares which are issued upon the
exercise of this Warrant will, upon issuance, be validly issued, fully paid, and
nonassessable, not subject to any preemptive rights, and free from all taxes,
liens, security interests, charges, and other encumbrances with respect to the
issue thereof, other than taxes with respect to any transfer occurring
contemporaneously with such issue;
(b) during the period within which this Warrant may
be exercised, the Company will at all times have authorized and reserved, and
keep available free from preemptive rights and any liens and encumbrances, a
sufficient number of shares of Common Stock to provide for the exercise of the
rights represented by this Warrant; and
(c) the Company will, from time to time, take all
such action as may be required to assure that the par value per share of the
Warrant Shares is at all times equal to or less than the then effective Exercise
Price.
4. Loss or Destruction of Warrant.
Subject to the terms and conditions hereof, upon receipt by
the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant and, in the case of loss, theft or
destruction, of such bond or indemnification as the Company may reasonably
require, and, in the case of such
6
mutilation, upon surrender and cancellation of this Warrant, the Company will
execute and deliver a new Warrant of like tenor.
5. Ownership of Warrant.
The Company may deem and treat the person in whose name this
Warrant is registered as the holder and owner hereof (notwithstanding any
notations of ownership or writing hereon made by anyone other than the Company)
for all purposes and shall not be affected by any notice to the contrary, until
presentation of this Warrant for registration of transfer.
6. Certain Adjustments.
6.1 The number of Warrant Shares purchasable upon the
exercise of this Warrant and the Exercise Price shall be subject to adjustment
as follows:
(a) Stock Dividends. If at any time after
the date of the issuance of this Warrant (i) the Company shall fix a record date
for the issuance of any stock dividend payable in shares of Common Stock or (ii)
the number of shares of Common Stock shall have been increased by a subdivision
or split-up of shares of Common Stock, then, on the record date fixed for the
determination of holders of Common Stock entitled to receive such dividend or
immediately after the effective date of subdivision or split-up, as the case may
be, the number of shares to be delivered upon exercise of this Warrant will be
increased so that the Warrantholder will be entitled to receive the number of
Shares of Common Stock that such Warrantholder would have owned immediately
following such action had this Warrant been exercised immediately prior thereto,
and the Exercise Price will be adjusted as provided below in paragraph (h).
(b) Combination of Stock. If the number of
shares of Common Stock outstanding at any time after the date of the issuance of
this Warrant shall have been decreased by a combination of the outstanding
shares of Common Stock, then, immediately after the effective date of such
combination, the number of shares of Common Stock to be delivered upon exercise
of this Warrant will be decreased so that the Warrantholder thereafter will be
entitled to receive the number of shares of Common Stock that such Warrantholder
would have owned immediately following such action had this Warrant been
exercised immediately prior thereto, and the Exercise Price will be adjusted as
provided below in paragraph (h).
(c) Reorganization, etc. If any capital
reorganization of the Company, any reclassification of the Common Stock, any
consolidation of the Company with or merger of the Company with or into any
other person, or any sale or lease or other transfer of all or substantially all
of the assets of the Company to
7
any other person, shall be effected in such a way that the holders of Common
Stock shall be entitled to receive stock, other securities or assets (whether
such stock, other securities or assets are issued or distributed by the Company
or another person) with respect to or in exchange for Common Stock, then, upon
exercise of this Warrant, the Warrantholder shall have the right to receive the
kind and amount of stock, other securities or assets receivable upon such
reorganization, reclassification, consolidation, merger or sale, lease or other
transfer by a holder of the number of shares of Common Stock that such
Warrantholder would have been entitled to receive upon exercise of this Warrant
had this Warrant been exercised immediately before such reorganization,
reclassification, consolidation, merger or sale, lease or other transfer,
subject to adjustments that shall be as nearly equivalent as may be practicable
to the adjustments provided for in this Section 6. The Company shall not effect
any such consolidation, merger or sale, lease or other transfer, unless prior to
or simultaneously with the consummation thereof, the successor person (if other
than the Company) resulting from such consolidation or merger, or such person
purchasing, leasing or otherwise acquiring such assets, shall assume, by written
instrument, the obligation to deliver to the Warrantholder the shares of stock,
securities or assets to which, in accordance with the foregoing provisions, the
Warrantholder may be entitled and all other obligations of the Company under
this Warrant. The provisions of this paragraph (c) shall apply to successive
reorganizations, reclassifications, consolidations, mergers, sales, leasing
transactions and other transfers.
(d) Stock and Rights Offering at Less than
Fair Market Value. If at any time after the date of issuance of this Warrant,
the Company shall issue to all holders of its Common Stock or sell or fix a
record date for the issuance to all holders of its Common Stock of (A) Common
Stock or (B) rights, options or warrants entitling the holders thereof to
subscribe for or purchase Common Stock (or securities convertible or
exchangeable into or exercisable for Common Stock), in any such case, at a price
per share (or having a conversion, exchange or exercise price per share) that is
less than Fair Market Value (as defined in Section 17 hereof) on the date of
such issuance or such record date, and the Warrantholder does not elect to
participate pursuant to Section 6.2 hereof, then immediately after the date of
such issuance or sale or on such record date, the number of shares of Common
Stock to be delivered upon exercise of this Warrant shall be increased so that
the Warrantholder thereafter will be entitled to receive the number of shares of
Common Stock determined by multiplying the number of shares of Common Stock such
Warrantholder would have been entitled to receive immediately before the date of
such issuance or sale or such record date by a fraction, the denominator of
which will be the number of shares of Common Stock outstanding on such date plus
the number of shares of Common Stock that the aggregate offering price of the
total number of shares so offered for subscription or purchase (or the aggregate
initial conversion price, exchange price or exercise price of the convertible
securities or exchangeable securities or rights, options or warrants, as the
case may be, so offered) would purchase at such Fair Market Value, and the
numerator of which will be the
8
number of shares of Common Stock outstanding on such date plus the number of
additional shares of Common Stock offered for subscription or purchase (or into
which the convertible or exchangeable securities or rights, options or warrants
so offered are initially convertible or exchangeable or exercisable, as the case
may be), and the Exercise Price shall be adjusted as provided below in paragraph
(h).
(e) Distributions to All Holders of Common
Stock. If the Company shall, at any time after the date of issuance of this
Warrant, fix a record date to distribute to all holders of its Common Stock, any
shares of capital stock of the Company (other than Common Stock) or evidences of
its indebtedness or assets (not including cash dividends and distributions paid
from retained earnings of the Company) or rights or warrants to subscribe for or
purchase any of its securities, then the Warrantholder shall be entitled to
receive, upon exercise of the Warrant, that portion of such distribution to
which it would have been entitled had the Warrantholder exercised its Warrant
immediately prior to the date of such distribution. At the time it fixes the
record date for such distribution, the Company shall allocate sufficient
reserves to ensure the timely and full performance of the provisions of this
Section 6.1(e). The Company shall promptly (but in any case no later than five
Business Days prior to the record date of such distribution) give notice to the
Warrantholder that such distribution will take place.
(f) Fractional Shares. No fractional shares
of Common Stock or scrip shall be issued to any Warrantholder in connection with
the exercise of this Warrant. Instead of any fractional shares of Common Stock
that would otherwise be issuable to such Warrantholder, the Company will pay to
such Warrantholder a cash adjustment in respect of such fractional interest in
an amount equal to that fractional interest of the then current Fair Market
Value per share of Common Stock.
(g) Carryover. Notwithstanding any other
provision of this Section 6, no adjustment shall be made to the number of shares
of Common Stock to be delivered to the Warrantholder (or to the Exercise Price)
if such adjustment represents less than 1% of the number of shares to be so
delivered, but any lesser adjustment shall be carried forward and shall be made
at the time and together with the next subsequent adjustment which together with
any adjustments so carried forward shall amount to 1% or more of the number of
shares to be so delivered.
(h) Exercise Price Adjustment. Whenever the
number of Warrant Shares purchasable upon the exercise of this Warrant is
adjusted, as herein provided, the Exercise Price payable upon the exercise of
this Warrant shall be adjusted by multiplying such Exercise Price immediately
prior to such adjustment by a fraction, of which the numerator shall be the
number of Warrant Shares purchasable upon the exercise of the Warrant
immediately prior to such adjustment,
9
and of which the denominator shall be the number of Warrant Shares purchasable
immediately thereafter.
6.2 Rights Offering. In the event the Company shall
effect an offering of Common Stock pro rata among its stockholders, the
Warrantholder shall be entitled to elect to participate in each and every such
offering as if this Warrant had been exercised immediately prior to each such
offering. The Company shall promptly (but in any case no later than five
Business Days prior to such rights offering) give notice to the Warrantholder
that such rights offering will take place. The Company shall not be required to
make any adjustment with respect to the issuance of shares of Common Stock
pursuant to a rights offering in which the holder hereof elects to participate
under the provisions of this Section 6.2.
6.3 Notice of Adjustments. Whenever the number of
Warrant Shares or the Exercise Price of such Warrant Shares is adjusted, as
herein provided, the Company shall promptly give to the Warrantholder notice of
such adjustment or adjustments and a certificate of a firm of independent public
accountants of recognized national standing selected by the Board of Directors
of the Company (who shall be appointed at the Company's expense and who may be
the independent public accountants regularly employed by the Company) setting
forth the number of Warrant Shares and the Exercise Price of such Warrant Shares
after such adjustment, a brief statement of the facts requiring such adjustment,
and the computation by which such adjustment was made.
6.4 Notice of Extraordinary Corporate Events. In case
the Company after the date hereof shall propose to (i) distribute any dividend
(whether stock or cash or otherwise) to the holders of shares of Common Stock or
to make any other distribution to the holders of shares of Common Stock, (ii)
offer to the holders of shares of Common Stock rights to subscribe for or
purchase any additional shares of any class of stock or any other rights or
options, or (iii) effect any reclassification of the Common Stock (other than a
reclassification involving merely the subdivision or combination of outstanding
shares of Common Stock), any capital reorganization, any consolidation or merger
(other than a merger in which no distribution of securities or other property is
to be made to holders of shares of Common Stock), any sale or lease or transfer
or other disposition of all or substantially all of its property, assets and
business, or the liquidation, dissolution or winding up of the Company, then, in
each such case, the Company shall give to each Warrantholder notice of such
proposed action, which notice shall specify the date on which (a) the books of
the Company shall close, or (b) a record shall be taken for determining the
holders of Common Stock entitled to receive such stock dividends or other
distribution or such rights or options, or (c) such reclassification,
reorganization, consolidation, merger, sale, transfer, other disposition,
liquidation, dissolution or winding up shall take place or commence, as the case
may be, and the date, if any, as of which it is expected that holders of record
of Common Stock shall be entitled to receive securities or other
10
property deliverable upon such action. Such notice shall be given in the case of
any action covered by clause (i) or (ii) above at least ten days prior to the
record date for determining holders of Common Stock for purposes of receiving
such payment or offer, or in the case of any action covered by clause (iii)
above at least 30 days prior to the date upon which such action takes place and
20 days prior to any record date to determine holders of Common Stock entitled
to receive such securities or other property.
6.5 Effect of Failure to Notify. Failure to file any
certificate or notice or to give any notice, or any defect in any certificate or
notice, pursuant to Sections 6.3 and 6.4 shall not affect the legality or
validity of the adjustment to the Exercise Price, the number of shares
purchasable upon exercise of this Warrant, or any transaction giving rise
thereto.
7. Registration Rights.
7.1 On or before the date that is 180 days after the
New Financing Date (including any extensions under Section 7.2 hereof), and in
no event later than May 15, 1998 (the earlier to occur of such dates, the
"Registration Deadline"), the Company shall use its best efforts to register for
resale the Registrable Securities with the SEC pursuant to a "shelf"
registration on Form S-3 (if available) or Form S-1 (if Form S-3 is not
available) and to obtain all other necessary approvals, including that of the
FCC (if required), for the resale of such Registrable Securities. If in the
opinion of counsel for the Company a post-effective amendment to an existing
registration statement would be legally sufficient for such resale, the Company
shall use its best efforts to register for resale the Registrable Securities
pursuant to such a post-effective amendment within 90 days after the
Registration Deadline.
7.2 Notwithstanding any provision of Section 7.1, the
Company may postpone the performance of its obligations under Section 7.1 for up
to 240 days after the New Financing Date if the performance of such obligations
at an earlier date would be seriously detrimental to the Company in the judgment
of the Board of Directors because the Company at the time is engaging or
planning to engage in an offering of securities or any other material
transaction.
7.3 If (A) the registration statement covering all
Registrable Securities is not effective by Registration Deadline, or (B) at any
time after the registration statement has been declared effective, the SEC
suspends the effectiveness of the registration statement or the Company suspends
the use of the prospectus used in connection with such registration statement
for an aggregate of more than 60 calendar days (the "Cumulative Suspension") in
any twelve-month period (taking into account all such suspensions), then the
Company shall (in addition to any other remedies available to such holders at
law or equity) pay to each Holder (other than, in
11
the case of (A) above, any Holder all of whose shares of Registrable Securities
were included in a registration statement declared effective by the date therein
specified) a cash payment (the "Registration Payment Amount") in an amount equal
to 0.25% of the sum of (i) the fair market value of the Warrants held by such
Holder and (ii) the excess of (x) the Fair Market Value of all shares of Common
Stock issued to such Holder upon exercise of the Warrant and then owned by such
Holder over (y) $50.00. The Registration Payment Amount shall accrue at a rate
of 1/30th of the Registration Payment Amount for each day (A) in the period
following the Registration Deadline until the registration statement is declared
effective or (B) during the Cumulative Suspension. Any cash payment required to
be made pursuant to this Section 7.3 shall be due and payable within 10 days of
the end of any month in which (A) the registration statement has yet to become
effective following the Registration Deadline or (B) any such Cumulative
Suspension occurs. For the purposes of this Section 7.3, all determinations of
value shall be made as of the last day of the immediately preceding month.
8. Obligations of the Company. In connection with the
registration of the Registrable Securities as contemplated by Section 7.1, the
Company shall:
8.1 prepare and file with the SEC a registration
statement or statements or similar documents (the "Registration Statement") with
respect to all Registrable Securities, and thereafter use its best efforts to
cause the Registration Statement to become effective and keep the Registration
Statement effective pursuant to Rule 415 at all times until the date that is two
years after the date upon which this Warrant has been exercised in full, which
Registration Statement (including any amendments or supplements thereto and
prospectuses contained therein) shall not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein, or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading;
8.2 prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to the Registration
Statement and the prospectus used in connection with the Registration Statement
as may be necessary to keep the Registration Statement effective and to comply
with the provisions of the Securities Act with respect to the disposition of all
Registrable Securities covered by the Registration Statement until such time as
the Company is no longer required hereunder to keep such Registration Statement
effective.
8.3 furnish to each Holder whose Registrable
Securities are included in the Registration Statement such number of copies of a
prospectus, including a preliminary prospectus and all amendments and
supplements thereto and such other documents, as such Holder may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such Holder;
12
8.4 (i) in the event Holders who hold a majority in
interest of the Registrable Securities select underwriters for the offering,
enter into and perform its obligations under an underwriting agreement with the
managing underwriter of such offering, in usual and customary form, including,
without limitation, customary indemnification and contribution obligations, (ii)
in the case of any non-underwritten offering, provide to broker-dealers
participating in any distribution of Registrable Securities reasonable
indemnification substantially similar to that provided by Section 11.1 and (iii)
in either case, make available one of its executive officers to respond to
questions relating to such offering from prospective purchasers of Registrable
Securities during normal business hours;
8.5 promptly notify each Holder of the happening of
any event of which the Company has knowledge, as a result of which the
prospectus included in the Registration Statement, as then in effect, includes
an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances then existing, not misleading, and use its best
efforts to prepare promptly, and in all cases within 30 days, a supplement or
amendment to the Registration Statement to correct such untrue statement or
omission, and deliver a number of copies of such supplement or amendment to each
Holder as such Holder may reasonably request;
8.6 promptly notify each Holder who holds Registrable
Securities being sold (or, in the event of an underwritten offering, the
managing underwriters) of the issuance by the SEC of any stop order or other
suspension of effectiveness of the Registration Statement, and make every
reasonable effort to obtain the withdrawal of any order suspending the
effectiveness of the Registration Statement at the earliest possible time;
8.7 permit counsel for Everest Capital Master Fund,
L.P. ("Everest") as well as a single firm of counsel designated as selling
stockholders' counsel by the Holders who hold a majority in interest of the
Registrable Securities (not including Registrable Securities held by Everest)
being sold to review the Registration Statement and all amendments and
supplements thereto a reasonable period of time prior to their filing with the
SEC, and shall not file any document in a form to which either such counsel
reasonably objects;
8.8 make generally available to its security holders
as soon as practical, but not later than ninety (90) days after the close of the
period covered thereby, an earnings statement (in form complying with the
provisions of Rule 158 under the Securities Act) covering a twelve-month period
beginning not later than the first day of the Company's fiscal quarter next
following the effective date of the Registration Statement;
13
8.9 at the request of the Holders who hold a majority
in interest of the Registrable Securities being sold, furnish on the date that
Registrable Securities are delivered to an underwriter for sale in connection
with the Registration Statement (i) a letter, dated such date, from the
Company's independent certified public accountants, in form and substance as is
customarily given by independent certified public accountants to underwriters in
an underwritten public offering, addressed to the underwriters; and (ii) an
opinion, dated such date, from counsel representing the Company for purposes of
such Registration Statement, in form and substance as is customarily given to
underwriters in an underwritten public offering, addressed to the underwriters;
8.10 make available for inspection by any Holder, any
underwriter participating in any disposition pursuant to the Registration
Statement, and any attorney, accountant, or other agent retained by any such
Holder or underwriter (collectively, the "Inspectors"), all pertinent financial
and other records, pertinent corporate documents and properties of the Company,
as shall be reasonably necessary to enable each Inspector to exercise its due
diligence responsibility, and cause the Company's officers, directors and
employees to supply all information reasonably requested by any such Inspector
in connection with the Registration Statement;
8.11 use its best efforts to cause all the
Registrable Securities covered by the Registration Statement to be listed on
each national securities exchange on which similar securities issued by the
Company are then listed, if any, if the listing of such Registrable Securities
is then permitted under the rules of such exchange;
8.12 provide a transfer agent and registrar, which
may be a single entity, for the Registrable Securities not later than the
effective date of the Registration Statement; and
8.13 cooperate with the Holders who hold Registrable
Securities being sold and the managing underwriter or underwriters, if any, to
facilitate the timely preparation and delivery of certificates (not bearing any
restrictive legends) representing Registrable Securities to be sold pursuant to
the Registration Statement and enable such certificates to be in such
denominations or amounts, as the case may be, and registered in such names as
the managing underwriter or underwriters, if any, or the Holders may reasonably
request.
9. Obligations of the Holders.
9.1 It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Agreement with
respect to each Holder that such Holder shall furnish to the Company such
information regarding itself, the Registrable Securities held by it and the
intended method of disposition of such
14
securities as shall be reasonably required to effect the registration of the
Registrable Securities and shall execute such documents and agreements in
connection with such registration as the Company may reasonably request. At
least twelve days prior to the first anticipated filing date of the Registration
Statement, the Company shall notify each Holder of the information the Company
requires from each such Holder (the "Requested Information"). If within five
Business Days of the filing date the Company has not received the Requested
Information from a Holder (a "NonResponsive Holder"), then the Company may file
the Registration Statement without including Registrable Securities of such
Non-Responsive Holder and the Company shall have no further obligation to such
Non-Responsive Holder under Section 7 or Section 8 of this Warrant;
9.2 Each Holder, by his acceptance of the Registrable
Securities, agrees to cooperate with the Company in connection with the
preparation and filing of any registration statement hereunder, unless such
Holder has notified the Company in writing of his election to exclude all of his
Registrable Securities from the Registration Statement.
9.3 In the event Holders holding a majority in
interest of the Registrable Securities select underwriters for the offering,
each Holder agrees to enter into and perform his obligations under an
underwriting agreement, in usual and customary form, including without
limitation customary indemnification and contribution obligations (provided that
any such indemnification and contribution shall be expressly limited to losses
incurred relating to misstatements or omissions in information provided by such
Holder specifically for use in the Registration Statement, and then only to the
extent of net proceeds to such Holder as a result of the sale of Registrable
Securities pursuant to such Registration Statement), with the managing
underwriter of such offering and take such other actions as are reasonably
required in order to expedite or facilitate the disposition of the Registrable
Securities, unless such Holder has notified the Company in writing of his
election to exclude all of his Registrable Securities from the Registration
Statement.
9.4 Each Holder agrees that, upon receipt of any
notice from the Company of the happening of any event of the kind described in
Section 8.5, such Holder will immediately discontinue disposition of Registrable
Securities pursuant to the Registration Statement covering such Registrable
Securities until such Holder's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 8.5 and, if so directed by the
Company, such Holder shall deliver to the Company (at the expense of the
Company) or destroy (and deliver to the Company a certificate of such
destruction) all copies, other than permanent file copies then in such Holder's
possession, of the prospectus covering such Registrable Securities current at
the time of receipt of such notice; and
15
9.5 No Holder may participate in any underwritten
registration hereunder unless such Holder (i) agrees to sell such Holder's
Registrable Securities on the basis provided in any underwriting arrangements
approved by the Holders entitled hereunder to approve such arrangements, (ii)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements and (iii) agrees to pay such Holder's pro rata
portion of all underwriting discounts and commissions.
10. Expenses of Registration. With respect to a registration
under Section 7, all expenses other than fees and disbursements of counsel for
the Holders and underwriting discounts and commissions incurred in connection
with registration, filings or qualifications pursuant to Section 8, including,
without limitation, all registration, listing, filing and qualification fees,
printers and accounting fees, and the fees and disbursements of counsel for the
Company shall be borne by the Company. Notwithstanding the preceding sentence,
the Company shall pay the reasonable fees and disbursements of counsel for
Everest and of a single firm of counsel designated as selling stockholders'
counsel by the Holders who hold a majority in interest of the Registrable
Securities being sold.
11. Indemnification. In the event any Registrable Securities
are included in a Registration Statement under this Agreement:
11.1 To the extent permitted by law, the Company will
indemnify and hold harmless each Holder who holds such Registrable Securities,
the directors, if any, of such Holder, the officers, if any, of such Holder, who
sign the Registration Statement, each person, if any, who controls such Holder,
any underwriter (as defined in the Securities Act) for the Holders, and each
person, if any, who controls any such underwriter within the meaning of the
Securities Act or the Securities Exchange Act of 1934, as amended (the "Exchange
Act") (each, an "Indemnified Holder") against any losses, claims, damages,
expenses, liabilities (joint or several) (collectively, "Claims") to which any
of them may become subject under the Securities Act, the Exchange Act or
otherwise, insofar as such Claims (or actions or proceedings, whether commenced
or threatened, in respect thereof) arise out of or are based upon any of the
following statements, omissions or violations (collectively, a "Violation"): (i)
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or any post-effective amendment thereof, or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, (ii)
any untrue statement or alleged untrue statement of a material fact contained in
any preliminary prospectus if used prior to the effective date of such
Registration Statement, or contained in the final prospectus (as amended or
supplemented if the Company files any amendment thereof or supplement thereto
with the SEC), or the omission or alleged omission to state therein a material
fact required to be stated therein, or
16
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, or (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, the Federal
Communications Act, any state securities law, or any rule or regulation
promulgated under the Securities Act, the Exchange Act, the Federal
Communications Act or any state securities law. Subject to the restrictions set
forth in Section 11.3 with respect to the number of legal counsel, the Company
shall reimburse each Indemnified Holder, promptly as such expenses are incurred
and are due and payable, for any legal fees and expenses or other reasonable
expenses incurred by them in connection with investigating or defending any such
Claim, whether or not such claim, investigation or proceeding is brought or
initiated by the Company or a third party. If multiple claims are brought
against an Indemnified Holder in an arbitration proceeding, and indemnification
is permitted under applicable law and is provided for under this Section 11 with
respect to at least one such claim, the Company agrees that any arbitration
award shall be conclusively deemed to be based on claims as to which
indemnification is permitted and provided for, except to the extent the
arbitration award expressly states that the award, or any portion thereof, is
based solely on a claim as to which indemnification is not available.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 11.1 (a) shall not apply to a Claim arising
out of or based upon a Violation which occurs in reliance upon and in conformity
with information furnished in writing to the Company by any Indemnified Holder
expressly for use in connection with the preparation of the Registration
Statement or any such amendment thereof or supplement thereto; and (b) shall not
apply to amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of the Company, which consent shall not be
unreasonably withheld. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Indemnified Holder
and shall survive the transfer of the Registrable Securities by the Holders
pursuant to Section 14.
1.2 In connection with any Registration Statement in
which a older is participating, each such Holder agrees to indemnify and hold
harmless, to the same extent and in the same manner set forth in Section 11.1,
the Company, each of its directors, each of its officers who sign the
Registration Statement, each person, if any, who controls the Company within the
meaning of the Securities Act or the Exchange Act, any underwriter and any other
stockholder selling securities pursuant to the Registration Statement or any of
its directors or officers or any person who controls such stockholder or
underwriter (collectively and together with an Indemnified Holder, an
"Indemnified Party"), against any Claim to which any of them may become subject,
under the Securities Act, the Exchange Act or otherwise, insofar as such Claim
arises out of or is based upon any Violation, in each case to the extent (and
only to the extent) that such Violation occurs in reliance upon and in
conformity with written information furnished to the Company by such Holder
expressly for use in connection with such Registration Statement; and such
Holder will reimburse any
17
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such Claim; provided, however, that the indemnity
agreement contained in this Section 11.2 shall not apply to amounts paid in
settlement of any Claim if such settlement is effected without the prior written
consent of such Holder, which consent shall not be unreasonably withheld;
provided, further, that the Holder shall be liable under this Section 11.2 for
only that amount of a Claim as does not exceed the net proceeds to such Holder
as a result of the sale of Registrable Securities pursuant to such Registration
Statement.
11.3 Promptly after receipt by an Indemnified Party
under this Section 11 of notice of the commencement of any action (including any
governmental action), such Indemnified Party shall, if a Claim in respect
thereof is to be made against any indemnifying party under this Section 11,
deliver to the indemnifying party a written notice of the commencement thereof,
and the indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other indemnifying
party similarly noticed, to assume control of the defense thereof with counsel
satisfactory to the Indemnified Parties; provided, however, that an Indemnified
Party shall have the right to retain its own counsel, with the fees and expenses
to be paid by the indemnifying party, if, in the reasonable opinion of counsel
for the Indemnified Party, representation of such Indemnified Party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such Indemnified Party and any other
party represented by such counsel in such proceeding. The Company shall pay for
only one legal counsel for the Holders; such legal counsel shall be selected by
the Holders holding a majority in interest of the Registrable Securities. The
failure to give written notice to the indemnifying party within a reasonable
time of the commencement of any such action shall not relieve such indemnifying
party of any liability to the Indemnified Party under this Section 11, except to
the extent that such failure to notify results in the forfeiture by the
indemnifying party of valid rights or defenses. The indemnification required by
this Section 11 shall be made by periodic payments of the amount thereof during
the course of the investigation or defense, as such expense, loss, damage or
liability is incurred and is due and payable.
12. Contribution. To the extent any indemnification by an
indemnifying party is prohibited or limited by law, the indemnifying party
agrees to make the maximum contribution with respect to any amounts for which it
would otherwise be liable under Section 11 to the fullest extent permitted by
law; provided, however, that (i) no contribution shall be made under
circumstances where the maker would not have been liable for indemnification
under the fault standards set forth in Section 11, (ii) no seller of Registrable
Securities guilty of fraudulent misrepresenta tion (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
seller of Registrable Securities who was not guilty of such fraudulent
misrepresentation and (iii) contribution by any seller of Registrable
18
Securities shall be limited in amount to the net amount of proceeds received by
such seller from the sale of such Registrable Securities.
13. Reports Under Securities Exchange Act of 1934. With a view
to making available to the Holders the benefits of Rule 144 promulgated under
the Securities Act or any other similar rule or regulation of the SEC that may
at any time permit the Holders to sell securities of the Company to the public
without registration ("Rule 144"), the Company agrees to:
13.1 make and keep public information available, as
those terms are understood and defined in Rule 144, at all times;
13.2 file with the SEC in a timely manner all reports
and other documents required of the Company under the Securities Act and the
Exchange Act; and
13.3 furnish to each Holder so long as such Holder
owns Registrable Securities, promptly upon request, (i) a written statement by
the Company that it has complied with the reporting requirements of Rule 144 (at
any time after 90 days after the effective date of the first registration
statement filed by the Company), the Securities Act and the Exchange Act (at any
time after it has become subject to such reporting requirements), (ii) a copy of
the most recent annual or quarterly report of the Company and such other reports
and documents so filed by the Company, and (iii) such other information as may
be reasonably requested to permit the Holders to sell such securities without
registration.
14. Assignment of Registration Rights. The right to have the
Company register Registrable Securities pursuant to this Warrant shall be
automatically assigned by the Holders to transferees or assignees of this
Warrant or such Registrable Securities, provided that immediately following such
transfer or assignment, the further disposition of such securities by the
transferee or assignee would be subject to restrictions on resale under the
Securities Act. The term "Holders" as used herein shall include permitted
assignees and transferees.
15. Amendments. Any provision of this Warrant (including
registration rights) may be amended and the observance thereof may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Holders who
hold a majority in interest of the Registrable Securities. Any amendment or
waiver effected in accordance with this Section 15 shall be binding upon each
Holder and the Company.
16. Expiration of the Warrant. Except with respect to Sections
11, 12, and 13, the obligations of the Company pursuant to this Warrant shall
terminate on the Expiration Date.
19
17. Definitions.
As used herein, unless the context otherwise requires, the
following terms have the following respective meanings:
Assignment Form: an Assignment Form in the form annexed hereto
as Exhibit B.
Board: the Board of Directors of the Company.
Business Day: any day other than a Saturday, Sunday or a day
on which national banks are authorized by law to close in The City of New York,
State of New York.
Bylaws: the bylaws of the Company, as the same may have been
amended and in effect as of June 15, 1997.
Certificate of Incorporation: the Certificate of Incorporation
of the Company, as the same may have been amended and in effect as of June 15,
1997.
Change in Control: a change in control over the Company
occurring prior to the Expiration Date of a nature that would be required to be
reported by the Company in response to either (a) Item 6(e) of Schedule 14A of
Regulation 14A promulgated under the Exchange Act, or (b) Item 1(a) of Form 8-K,
each as in effect on the date hereof, whether or not the Company is then subject
to such reporting requirements; provided that, without limitation of the
foregoing, a Change in Control shall be deemed to have occurred if, prior to the
Expiration Date:
(i) there shall be consummated (A) any consolidation, merger
or recapitalization of the Company or any similar transaction involving the
Company pursuant to which shares of the Company's Common Stock would be
converted into cash, securities or other property, other than a merger of the
Company in which the holders of Common Stock immediately prior to the merger
have the same proportion and ownership of common stock of the surviving
corporation immediately after the merger, (B) any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all or
substantially all of the assets of the Company or (C) the adoption of a plan of
complete liquidation of the Company (whether or not in connection with the sale
of all or substantially all of the Company's assets) or a series of partial
liquidations of the Company that is de jure or de facto part of a plan of
complete liquidation of the Company; provided, that the divestiture of less than
substantially all of the assets of the Company in one transaction or a series of
related transactions, whether effected by sale, lease, exchange, spin-off, sale
of the stock or merger of a subsidiary or otherwise, or a transaction solely for
the purpose of
20
reincorporating the Company in another jurisdiction, shall not constitute a
Change in Control; or
(ii) during any period of not more than 24 consecutive months
(not including any period prior to June 15, 1997) there shall cease to be a
majority of the Board constituted as follows: individuals who at the beginning
of such period were members of the Board and any new director(s) whose election
by the Board or nomination for election by the Company's stockholders was
approved by a vote of at least two-thirds of the directors then still in office
who either were directors at the beginning of the period or whose election or
nomination for election was previously so approved.
Call Date: the meaning specified in Section 1.2.
Call Price: the meaning specified in Section 1.2.
Callable Time: the meaning specified in Section 1.2.
Claims: the meaning specified in Section 11.1.
Common Stock: the meaning specified on the cover of this Warrant.
Company: the meaning specified on the cover of this Warrant.
Company Office: the meaning specified in Section 1.2.
Contractual Obligation: as to any Person, any agreement,
undertaking, contract, indenture, mortgage, deed of trust or other instrument to
which such Person is a party or by which it or any of its property is bound.
Cumulative Suspension: the meaning specified in Section 7.3.
Everest: Everest Capital Master Fund, L.P.
Exchange Act: the meaning specified in Section 11.1 or any similar
Federal statute, and the rules and regulations of the SEC thereunder, all as the
same shall be in effect at the time. Reference to a particular section of the
Exchange Act shall include a reference to a comparable section, if any, of any
such similar Federal statute.
Exercise Form: an Exercise Form in the form annexed hereto as
Exhibit A.
Exercise Price: the meaning specified on the cover of this
Warrant.
21
Expiration Date: the meaning specified on the cover of this
Warrant.
Fair Market Value: With respect to a share of Common Stock as
of a particular date (the "Determination Date"):
(i) If the Common Stock is listed or admitted for trading on a
national securities exchange, then the Fair Market Value shall be the average of
the last 30 "daily sales prices" of the Common Stock on the principal national
securities exchange on which the Common Stock is listed or admitted for trading
on the last 30 Business Days prior to the Determination Date, or if not listed
or traded on any such exchange, then the Fair Market Value shall be the average
of the last 30 "daily sales prices" of the Common Stock on the Nasdaq National
Market or the Nasdaq SmallCap Market, as applicable, on the last 30 Business
Days prior to the Determination Date. The "daily sales price" shall be the
closing price of the Common Stock at the end of each day; or
(ii) If the Common Stock is not so listed or admitted to
unlisted trading privileges or if no such sale is made on at least 25 of such
days, then the Fair Market Value shall be as reasonably determined in good faith
by the Board or a duly appointed committee of the Board (which determination
shall be reasonably described in the written notice given to the Warrantholder
together with the Common Stock certificates).
FCC: the Federal Communications Commission.
Governmental Authority: the government of any nation, state,
city, locality or other political subdivision of any thereof, and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government or any International regulatory body
having or asserting jurisdiction over a Person, its business or its properties.
Holder(s): holder(s) of Registrable Securities.
Indemnified Holder: the meaning specified in Section 11.1.
Indemnified Party: the meaning specified in Section 11.2.
Inspectors: the meaning specified in Section 8.11.
Lien: any mortgage, deed of trust, pledge, hypothecation,
assignment, encumbrance, lien (statutory or other), restriction or other
security interest of any kind or nature whatsoever.
Nasdaq: the National Association of Securities Dealers
Automated Quotations System.
22
New Financing Date: the date on which the Company closes any
financing (including financing contemplated by the Summary Term Sheet/Commitment
dated June 15, 1997 between the Company and the Investors named therein, but
only to the extent "Gross Proceeds" (defined for the purposes of this paragraph
as the total amount received from the issuance and sale of securities of the
Company, without deduction for fees, commissions, underwriters' or similar
discounts, or expenses incurred in connection therewith) from such financing
exceed the product of 1.3865 and the Liquidation Preference of all 5% Delayed
Convertible Preferred Stock (as such Liquidation Preference is defined in the
Certificate of Designations for the 5% Delayed Convertible Preferred Stock)
outstanding as of the New Financing Date) that yields new money Gross Proceeds
of not less than $150,000,000 and is completed on or prior to November 15, 1997.
Non-Responsive Holder: the meaning specified in Section 9.2.
Person: any individual, firm, corporation, partnership, limited
liability company, trust, incorporated or unincorporated association, joint
venture, joint stock company, Governmental Authority or other entity of any
kind.
Ravich: The Ravich Revocable Trust of 1989.
Registrable Securities: (i) the Warrant Shares and other
securities issued or issuable upon exercise of this Warrant and (ii) any
securities issued or issuable with respect to any Common Stock or other
securities referred to in subdivision (i) by way of stock dividend or stock
split or in connection with a combination or other reorganization or otherwise.
Registration Deadline: the meaning specified in Section 7.1.
Registration Payment Amount: the meaning specified in Section 7.3.
Registration Statement: the meaning specified in Section 8.1.
Requested Information: the meaning specified in Section 9.1.
Requirement of Law: as to any Person, the Certificate of
Incorporation and Bylaws or other organizational or governing documents of such
Person, and any law, treaty, rule, regulation, qualification, license or
franchise or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable or binding upon such Person or any of its
property or to which such Person or any of its property is subject or pertaining
to any or all of the transactions contemplated hereby.
Rule 144: the meaning specified in Section 13.
23
Rule 415: Rule 415 under the Securities Act or any successor
rule providing for offering securities on a continuous basis.
SCDR: Satellite CD Radio, Inc.
SEC: the Securities and Exchange Commission or any other
Federal agency at the time administering the Securities Act or the Exchange Act,
whichever is the relevant statute for the particular purpose.
Securities Act: the meaning specified on the cover of this
Warrant, 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. Reference
to a particular section of the Securities Act, shall include a reference to the
comparable section, if any, of any such similar Federal statute.
Subsidiary: in respect of any Person, any other Person of
which, at the time as of which any determination is made, such Person or one or
more of its Subsidiaries has, directly or indirectly, voting control.
Violation: the meaning specified in Section 11.1.
Warrantholder: the meaning specified on the cover of this
Warrant.
Warrant Shares: the meaning specified on the cover of this
Warrant.
18. Miscellaneous.
18.1 Entire Agreement. This Warrant constitutes the entire
agreement between the Company and the Warrantholder with respect to the
Warrants.
18.2 Binding Effects; Benefits. This Warrant shall inure to
the benefit of and shall be binding upon the Company and the Warrantholder and
their respective heirs, legal representatives, successors and assigns. Nothing
in this Warrant, expressed or implied, is intended to or shall confer on any
person other than the Company and the Warrantholder, or their respective heirs,
legal representatives, successors or assigns, any rights, remedies, obligations
or liabilities under or by reason of this Warrant.
18.3 Section and Other Headings. The section and other
headings contained in this Warrant are for reference purposes only and shall not
be deemed to be a part of this Warrant or to affect the meaning or
interpretation of this Warrant.
24
18.4 Pronouns. All pronouns and any variations
thereof refer to the masculine, feminine or neuter, singular or plural, as the
context may require.
18.5 Further Assurances. Each of the Company and the
Warrantholder shall do and perform all such further acts and things and execute
and deliver all such other certificates, instruments and documents as the
Company or the Warrantholder may, at any time and from time to time, reasonably
request in connection with the performance of any of the provisions of this
Agreement.
18.6 Notices. All notices and other communications
required or permitted to be given under this Warrant shall be in writing and
shall be deemed to have been duly given if (i) delivered personally or (ii) sent
by facsimile or overnight courier as well as by United States first class
certified mail, postage prepaid, to the parties hereto at the following
addresses or to such other address as any party hereto shall hereafter specify
by notice to the other party hereto:
(a) if to the Company, addressed to:
CD Radio Inc.
0000 00xx Xx., XX
Xxxxxxxxxx, XX 00000
Attention: Chief Executive Officer
-and-
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxx
(b) if to the Warrantholder, addressed to:
Except as otherwise provided herein, all such notices and communications shall
be deemed to have been received on the date of delivery thereof, if delivered
personally or sent by facsimile, on the second Business Day following delivery
into the custody of an overnight courier service, if sent by overnight courier,
provided that such
25
delivery is made before such courier's deadline for next-day delivery, or on the
third Business Day after the mailing thereof.
18.7 Separability. Any term or provision of this
Warrant which is invalid or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the terms and
provisions of this Warrant or affecting the validity or enforceability of any of
the terms or provisions of this Warrant in any other jurisdiction.
18.8 Governing Law. This Warrant shall be deemed to
be a contract made under the laws of New York and for all purposes shall be
governed by and construed in accordance with the laws of such State applicable
to such agreements made and to be performed entirely within such State.
18.9 No Rights or Liabilities as Stockholder. Nothing
contained in this Warrant shall be determined as conferring upon the
Warrantholder any rights as a stockholder of the Company or as imposing any
liabilities on the Warrantholder to purchase any securities whether such
liabilities are asserted by the Company or by creditors or stockholders of the
Company or otherwise.
18.10 Representations of the Company. The Company
hereby represents and warrants, as of the date hereof, to the Warrantholder as
follows:
(a) Corporate Existence and Power. The
Company (i) is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware; (ii) has all requisite
corporate power and authority to own and operate its property, to lease the
property it operates as lessee and to conduct the business in which it is
engaged; and (iii) has the corporate power and authority to execute, deliver and
perform its obligations under this Warrant. The Company is duly qualified to do
business as a foreign corporation in, and is in good standing under the laws of,
each jurisdiction in which the conduct of its business or the nature of the
property owned requires such qualification.
(b) Subsidiaries. Except for SCDR, the
Company has no Subsidiaries. SCDR has been duly organized, is validly existing
and in good standing under the laws of the jurisdiction of its organization, has
the power and authority (corporate or otherwise) to own its properties and to
conduct its business and is duly registered, qualified and authorized to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or the nature of its properties requires such
registration, qualification or authorization. All of the issued and outstanding
capital stock (or equivalent interests) of SCDR has been duly authorized and
validly issued, is fully paid and non-assessable and is owned by the Company
free and clear of any Liens and there are no rights, options or warrants
26
outstanding or other agreements to acquire shares of capital stock (or
equivalent interests) of SCDR.
(c) Corporate Authorization; No
Contravention. The execution, delivery and performance by the Company of this
Warrant and the transactions contemplated hereby, including, without limitation,
the sale, issuance and delivery of the Warrant Shares, (i) have been duly
authorized by all necessary corporate action of the Company; (ii) do not
contravene the terms of the Certificate of Incorporation or Bylaws or the
organizational documents of SCDR; and (iii) do not violate, conflict with or
result in any breach or contravention of, or the creation of any Lien under, any
Contractual Obligation of the Company or any Requirement of Law applicable to
the Company or SCDR. No event has occurred and no condition exists which, upon
notice or the passage of time (or both), would constitute a default under any
indenture, mortgage, deed of trust, credit agreement, note or other evidence of
indebtedness or other material agreement of the Company or SCDR or the
Certificate of Incorporation or Bylaws or the organizational documents of SCDR.
(d) Issuance of Warrant Shares. The Warrant
Shares have been duly authorized and reserved for issuance. When issued, such
shares will be validly issued, fully paid and non-assessable, and free and clear
of all liens, claims, encumbrances and preemptive rights, and the holders
thereof shall be entitled to all rights and preferences accorded to a holder of
Common Stock.
(e) Binding Effect. This Warrant has been
duly executed and delivered by the Company and constitutes the legal, valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance or transfer, moratorium or other
similar laws affecting the enforcement of creditors' rights generally and by
general principles of equity.
18.11 FCC Approval.
(a) The Company hereby covenants that it
will use reasonable best efforts to secure FCC approval of any proposed exercise
of this Warrant if receipt of such approval is a condition of such exercise
pursuant to Section 1.3 hereof. Such reasonable best efforts shall include,
without limitation, the filing with the FCC of necessary submissions seeking
such FCC approval.
(b) Provided that on or before the
Expiration Date the Company has received notice from the Warrantholder of its
intention to exercise the Warrant, if such exercise on or before the Expiration
Date is prevented solely by reason of the non-receipt of FCC approval as set
forth in Section 1.3 hereof, then the Warrant shall remain exercisable until the
earlier of (x) 5:00 PM, New York City time, on the date that is ten Business
Days after the Warrantholder has received notice
27
from the Company that FCC approval of such exercise has been received or is not
required and (y) 5:00 PM, New York City time, on June 15, 2007, provided that if
FCC approval of such exercise is denied on a date that is after the Expiration
Date, the Warrant shall in no case remain exercisable beyond the expiration of
any period in which the Company or the Warrantholder may appeal such denial if
no such appeal is brought.
IN WITNESS WHEREOF, the Company has caused this Warrant to be
signed by its duly authorized officer.
CD RADIO INC.
By: _______________________
Name:
Title:
Dated: __________, 1997
Attest:
By:_______________________
Name:
Title: Secretary
Exhibit A
EXERCISE FORM
(To be executed upon exercise of this Warrant)
The undersigned hereby irrevocably elects to exercise the
right, represented by this Warrant, to purchase __________ of the Warrant Shares
and herewith tenders payment for such Warrant Shares to the order of CD Radio
Inc. in the amount of $__________, which amount includes payment of the par
value for _________ of the Warrant Shares, in accordance with the terms of this
Warrant. The undersigned requests that a certificate for such Warrant Shares or
shares of Common Stock, as applicable, be registered in the name of
__________________ and that such certificates be delivered to __________________
whose address is______________________________________________________________.
Dated:______________
Signature_____________________________
-----------------------------
(Print Name)
-----------------------------
(Street Address)
-----------------------------
(City) (State) (Zip Code)
Signed in the Presence of:
-------------------------
Exhibit B
FORM OF ASSIGNMENT
(To be executed only upon transfer of this Warrant)
For value received, the undersigned registered holder of the
within Warrant hereby sells, assigns and transfers unto ______________________
the right represented by such Warrant to purchase ________________ shares of
Common Stock of CD Radio Inc. to which such Warrant relates and all other rights
of the Warrantholder under the within Warrant, and appoints
______________________ Attorney to make such transfer on the books of CD Radio
Inc. maintained for such purpose, with full power of substitution in the
premises.
Dated: ___________________
Signature_____________________________
-----------------------------
(Print Name)
-----------------------------
(Street Address)
-----------------------------
(City) (State) (Zip Code)
Signed in the presence of:
-------------------------