WARRANT AGREEMENT
between
CD RADIO INC.
and
IBJ XXXXXXXX BANK & TRUST COMPANY
Warrant Agent
-------------------------
Dated as of [ ], 1997
i
TABLE OF CONTENTS
Page
ARTICLE I
CERTAIN DEFINITIONS
Section 1.1 Definitions...................................................... 1
ARTICLE II
ORIGINAL ISSUE OF WARRANTS
Section 2.1 Form of Warrant Certificates..................................... 4
Section 2.2 Restrictive Legends.............................................. 5
Section 2.3 Execution and Delivery of Warrant Certificates................... 5
Section 2.4 Loss or Mutilation............................................... 5
Section 2.5 CUSIP Number..................................................... 6
ARTICLE III
EXERCISE PRICE; EXERCISE OF WARRANTS
Section 3.1 Exercise Price................................................... 6
Section 3.2 Exercise; Restrictions on Exercise............................... 6
Section 3.3 Method of Exercise................................................ 7
ARTICLE IV
Intentionally Omitted
ARTICLE V
WARRANT TRANSFER BOOKS; RESTRICTIONS ON TRANSFER
Section 5.1 Transfer and Exchange............................................. 8
Section 5.2 Registration, Registration of Transfer and Exchange............... 9
Section 5.3 Book-Entry Provisions for the Global Warrants.................... 10
Section 5.4 Surrender of Warrant Certificates................................ 11
ARTICLE VI
ii
COVENANTS OF THE COMPANY
Section 6.1 Reservation and Authorization.................................... 11
Section 6.2 Filing and Effectiveness of Warrant Securities Registration
Statement ......................................................12
Section 6.3 Blue Sky......................................................... 12
Section 6.4 Accuracy of Disclosure........................................... 13
Section 6.5 Indemnity........................................................ 13
Section 6.6 Expenses......................................................... 13
ARTICLE VII
REMEDIES
Section 7.1 Liquidated Damages............................................... 14
Section 7.2 Remedies; No Waiver.............................................. 15
ARTICLE VIII
THE WARRANT AGENT
Section 8.1 Duties and Liabilities........................................... 15
Section 8.2 Right to Consult Counsel......................................... 17
Section 8.3 Compensation; Indemnification.................................... 17
Section 8.4 No Restrictions on Actions....................................... 17
Section 8.5 Discharge or Removal; Replacement Warrant Agent.................. 17
Section 8.6 Successor Warrant Agent.......................................... 18
ARTICLE IX
WARRANT HOLDERS
Section 9.1 Warrant Holder Not Deemed a Holder of Notes...................... 19
Section 9.2 Right of Action.................................................. 19
ARTICLE X
MISCELLANEOUS
Section 10.1 Money Deposited with the Warrant Agent........................... 19
Section 10.2 Payment of Taxes................................................. 19
Section 10.3 Merger, Consolidation or Sale of Assets of the Company........... 20
Section 10.4 Reports to Holders............................................... 21
Section 10.5 Notices.......................................................... 21
Section 10.6 Severability..................................................... 21
Section 10.7 Binding Effect................................................... 21
iii
Section 10.8 Third Party Beneficiaries........................................ 22
Section 10.9 Amendments....................................................... 22
Section 10.10 Headings......................................................... 22
Section 10.11 GOVERNING LAW.................................................... 22
Section 10.12 Counterparts..................................................... 22
EXHIBIT A Form of Warrant Certificate
EXHIBIT B Form of Legend for Global Warrants
EXHIBIT C Form of Legend for Warrants Issued as Part of a Unit
WARRANT AGREEMENT
AGREEMENT (this "Agreement") dated as of [ ], 1997 between CD
Radio Inc. (the "Company"), a Delaware corporation, and IBJ Xxxxxxxx Bank &
Trust Company, Warrant Agent (the "Warrant Agent").
Pursuant to the terms of a Purchase Agreement dated [ ], 1997
(the "Purchase Agreement") among the Company on the one hand and Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated ("Xxxxxxx Xxxxx"), Xxxxxx Brothers Inc. and
Libra Investments, Inc. on the other hand (collectively, the "Underwriters"),
the Company has agreed to issue and sell to the Underwriters warrants (each, a
"Warrant") entitling the holders thereof to purchase an aggregate of [ ]
principal amount at maturity of [ ]% Senior Secured Discount Notes due 2007 (the
"Notes") to be issued pursuant to the provisions of an Indenture dated as of
[ ], 1997 (as in effect on the date hereof, the "Indenture") between the
Company, as issuer, and IBJ Xxxxxxxx Bank & Trust Company, trustee, as part of
[ ] units (the "Units"), each Unit consisting of $[ ] principal amount
at maturity of Notes and one Warrant. Each Warrant will entitle the registered
holder thereof to receive $[ ] principal amount at maturity of Notes.
The Notes and the Warrants included in each Unit will not be separately
transferable until the earliest of (i) the occurrence of an Exercise Event (as
defined herein), (ii) the occurrence of an Event of Default (as defined
in the Indenture), or (iii) such earlier date as determined by Xxxxxxx Xxxxx
in its sole discretion (the date of the occurrence of an event specified
in clauses (i) through (iii) above being the "Separability Date").
In consideration of the foregoing and of the agreements contained
in the Purchase Agreement and for the purpose of defining the terms and
provisions of the Warrants and the respective rights and obligations thereunder
of the Company, the record holders thereof (the "Holders") and the Warrant
Agent, the Company and the Warrant Agent each hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
Section 1.1. Definitions. (a) As used in this Agreement, the following terms
shall have the following meanings:
"Business Day" means any day which is not a Saturday, a Sunday,
or any other day on which banking institutions in New York City are not required
to be open.
2
"Bylaws" means the bylaws of the Company, as the same may be
amended or restated from time to time.
"Commission" means the Securities and Exchange Commission.
"Company Request" or "Company Order" means a written request or
order signed in the name of the Company by its Chairman, its Chief Executive
Officer, its President, any Vice President, its Treasurer or an Assistant
Treasurer, and delivered to the Warrant Agent.
"DTC" means The Depository Trust Company, its nominees and their
respective successors.
"Event of Default" has the meaning set forth in the Indenture.
"Exchange Act" means the United States Securities Exchange Act of
1934, as amended.
"Exercise Event" means the exercise of a Warrant or Warrants in
accordance with the terms of this Agreement.
"Expiration Date" means [ ], 1997.
"Issue Date" means [ ], 1997.
"Notes" means the [ ]% Senior Secured Discount Notes due 2007
issued under the Indenture.
"Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Securities Act" means the United States Securities Act of 1933,
as amended.
"Warrant Securities" means the Notes issuable upon exercise of
the Warrants.
(b) Each of the following terms is defined in the Section set
forth opposite such term:
Term Section
---- --------
Agent Members 5.3(a)
3
Agreement Preamble
Certificated Warrant 2.3
Company Preamble
Event Date 7.1(b)
Global Warrant 2.3
Holders Recitals
Indemnified Party 6.5
Indenture Recitals
Xxxxxxx Xxxxx Recitals
Notes Recitals
Purchase Agreement Recitals
Separability Date Recitals
Underwriters Recitals
Units Recitals
Warrant Recitals
Warrant Agent Preamble
Warrant Certificates 2.1
Warrant Register 5.1
ARTICLE II
ORIGINAL ISSUE OF WARRANTS
Section 2.1. Form of Warrant Certificates. Certificates
representing the Warrants (the "Warrant Certificates") shall be in registered
form only and substantially in the form attached hereto as Exhibit A. The
Warrant Certificates shall be dated the date on which countersigned by the
Warrant Agent and shall have such insertions as are appropriate or required or
permitted by this Agreement and may have such letters, numbers or other marks of
identification and such legends and endorsements typed, stamped, printed,
lithographed or engraved thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Agreement, or as may be required to
comply with any law or with any rule or regulation pursuant thereto, or to
conform to usage.
The terms and provisions contained in the form of Warrant
Certificate annexed hereto as Exhibit A shall constitute, and are hereby
expressly made, a part of this Agreement.
The definitive Warrant Certificates shall be typed, printed,
lithographed or engraved or produced by any combination of these methods, all as
determined by the officer of the Company executing such Warrant Certificates, as
evidenced by such officer's execution of such Warrant Certificates.
4
Pending the preparation of definitive Warrant Certificates,
temporary Warrant Certificates may be issued, which may be printed,
lithographed, typewritten, mimeographed or otherwise produced, and which will be
substantially of the tenor of the definitive Warrant Certificates in lieu of
which they are issued.
If temporary Warrant Certificates are issued, the Company will
cause definitive Warrant Certificates to be prepared without unreasonable delay.
After the preparation of definitive Warrant Certificates, the temporary Warrant
Certificates shall be exchangeable for definitive Warrant Certificates upon
surrender of the temporary Warrant Certificates to the Warrant Agent, without
charge to the Holder. Until so exchanged the temporary Warrant Certificates
shall in all respects be entitled to the same benefits under this Agreement as
definitive Warrant Certificates.
Section 2.2. Restrictive Legends. (a) Each Global Warrant shall
bear the legend set forth in Exhibit B on the face thereof.
(b) Each Warrant Certificate issued prior to the Separability
Date shall bear the legend set forth in Exhibit C on the face thereof.
Section 2.3. Execution and Delivery of Warrant Certificates.
Warrant Certificates evidencing Warrants to purchase an aggregate of up to
[ ] principal amount at maturity of Notes may be executed, on or after
the Issue Date, by the Company and delivered to the Warrant Agent for
countersignature, and the Warrant Agent shall thereupon countersign and deliver
such Warrant Certificates upon the order and at the direction of the Company to
the purchasers thereof on the date of issuance. The Warrant Agent is hereby
authorized to countersign and deliver Warrant Certificates as required by this
Section 2.3 or by Section 2.4, 3.3 or 5.3.
The Warrant Certificates shall be executed on behalf of the
Company by its Chief Executive Officer, President or any Vice President, either
manually or by facsimile signature printed thereon. The Warrant Certificates
shall be countersigned manually by the Warrant Agent and shall not be valid for
any purpose unless so countersigned. In case any officer of the Company whose
signature shall have been placed upon any of the Warrant Certificates shall
cease to be such officer of the Company before countersignature by the Warrant
Agent and issuance and delivery thereof, such Warrant Certificates may,
nevertheless, be countersigned by the Warrant Agent and issued and delivered
with the same force and effect as though such person had not ceased to be such
officer of the Company.
The Warrants shall be issued initially in the form of one or more
permanent global Warrant Certificates in definitive, fully registered form,
substantially in the form set forth in Exhibit A (the "Global Warrant"),
deposited with the Warrant Agent, as custodian for the depositary, duly executed
by the Company and countersigned by the Warrant Agent
5
as hereinafter provided. Pursuant to Section 5.3, interests in the Global
Warrant may be converted into or exchanged for one or more Warrant Certificates
in definitive, fully registered form, substantially in the form set forth in
Exhibit A ("Certificated Warrants").
Section 2.4. Loss or Mutilation. Upon receipt by the Company and
the Warrant Agent of evidence satisfactory to them, in their reasonable
discretion, of the ownership and the loss, theft, destruction or mutilation of
any Warrant Certificate and of indemnity satisfactory to them and (in the case
of mutilation) upon surrender and cancellation thereof, then, in the absence of
notice to the Company or the Warrant Agent that the Warrants represented thereby
have been acquired by a bona fide purchaser, the Company shall execute and the
Warrant Agent shall countersign and deliver to the registered Holder of the
lost, stolen, destroyed or mutilated Warrant Certificate, in exchange for or in
lieu thereof, a new Warrant Certificate of the same tenor and for a like
aggregate number of Warrants. Upon the issuance of any new Warrant Certificate
under this Section 2.4, the Company may require the payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto and other expenses (including the reasonable fees and expenses of the
Warrant Agent and of counsel to the Company) in connection therewith. Every new
Warrant Certificate executed and delivered pursuant to this Section 2.4 in lieu
of any lost, stolen or destroyed Warrant Certificate shall constitute a
contractual obligation of the Company, whether or not the allegedly lost, stolen
or destroyed Warrant Certificates shall be at any time enforceable by anyone,
and shall be entitled to the benefits of this Agreement equally and
proportionately with any and all other Warrant Certificates duly executed and
delivered hereunder. The provisions of this Section 2.4 are exclusive and shall
preclude (to the extent lawful) all other rights or remedies with respect to the
replacement of mutilated, lost, stolen, or destroyed Warrant Certificates.
Section 2.5. CUSIP Number. The Company in issuing the Warrants
may use a "CUSIP" number(s), and if so, the Warrant Agent shall use the CUSIP
number(s) in notices as a convenience to Holders; provided that any such notice
may state that no representation is made as to the correctness or accuracy of
the CUSIP number(s) printed in the notice or on the Warrants, and that reliance
may be placed only on the other identification numbers printed on the Warrants.
ARTICLE III
EXERCISE PRICE; EXERCISE OF WARRANTS
Section 3.1. No Exercise Price. Each Warrant Certificate shall,
when countersigned by the Warrant Agent, entitle the Holder thereof, subject to
and upon compliance with the provisions of this Agreement, to receive, without
exercise price, $[ ] aggregate principal amount at maturity of Notes.
6
Section 3.2. Exercise; Restrictions on Exercise. Subject to the
terms and conditions set forth herein, the Warrants shall be immediately
exercisable upon issuance. Any Warrants not exercised by 5:00 p.m., New York
City time, on the Expiration Date shall expire and all rights of the Holders of
such Warrants shall terminate.
Section 3.3. Method of Exercise. (a) (i) Each Warrant may only be
exercised in whole. In order to exercise all or any of the Warrants represented
by a Warrant Certificate, the Holder thereof shall surrender for exercise the
Warrant Certificate to the Warrant Agent, with the subscription form set forth
in the Warrant Certificate (or a copy thereof furnished by the Warrant Agent)
duly executed.
(ii) Upon receipt of the Warrant Certificate and the duly
executed Subscription Form, the Warrant Agent shall promptly notify the Company
in writing of such surrender.
(iii) If fewer than all of the Warrants represented by a Global
Warrant are exercised, the Global Warrant shall not be surrendered to the
Warrant Agent in accordance with Section 3.3(a)(i) and the Warrant Agent shall
decrease or reflect on its records, as custodian for DTC, or its nominee, a
decrease in the aggregate number of Warrants represented by such Global Warrant
equal to the number of Warrants exercised.
(b) Upon exercise of any Warrants, following surrender of a
Warrant Certificate in conformity with the foregoing provisions, the Warrant
Agent shall instruct the Company to issue promptly, pursuant to the Indenture,
the Warrant Securities to which such Holder is entitled, in the form required
under such Indenture, registered in such name or names as may be directed by
such Holder; provided that the Holder of such Warrant shall be responsible for
the payment of any transfer taxes required as the result of any change in
ownership of such Warrants or the issuance of Warrant Securities other than to
the registered owner of such Warrants and the Company may deduct such taxes from
any payment of money to be made and shall not be required to issue or deliver
such Warrant Securities (if such taxes are not deducted in full) unless and
until the Holder shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company and the Warrant Agent that
such tax has been paid.
(c) A Warrant shall be deemed to have been exercised immediately
prior to the close of business on the date of exercise, as provided in and in
accordance with paragraph (a) of this Section 3.3, of such Warrant and, for all
purposes of this Agreement, the Person entitled to receive any Warrant
Securities shall, as between such Person and the Company, be deemed to be the
Holder of such Warrant Securities of record as of the close of business on such
date and shall be entitled to receive, and the Company shall deliver to such
Person, the Warrant Securities.
7
ARTICLE IV
Intentionally Omitted
ARTICLE V
WARRANT TRANSFER BOOKS; RESTRICTIONS ON TRANSFER
Section 5.1. Transfer and Exchange. The Warrant Certificates
shall be issued in registered form only. The Company shall cause to be kept at
the office of the Warrant Agent a register (the "Warrant Register") in which,
subject to such reasonable regulations as it may prescribe, the Company shall
provide for the registration of Warrant Certificates and transfers or exchanges
of Warrant Certificates as herein provided. All Warrant Certificates issued upon
any registration of transfer or exchange of Warrant Certificates shall be the
valid obligations of the Company, evidencing the same obligations, and entitled
to the same benefit under this Agreement, as the Warrant Certificates
surrendered for such registration of transfer or exchange.
A Holder may transfer its Warrants only by complying with the
terms of this Agreement. No such transfer shall be effected until, and such
transferee shall succeed to the rights of a Holder only upon, final acceptance
and registration of the transfer by the Warrant Agent in the Warrant Register.
Prior to the registration of any transfer of Warrants by a Holder as provided
herein, the Company, the Warrant Agent, any agent of the Company or the Warrant
Agent may treat the Person in whose name the Warrants are registered as the
owner thereof for all purposes and as the Person entitled to exercise the rights
represented thereby, any notice to the contrary notwithstanding. Furthermore,
any Holder of a Global Warrant, shall, by acceptance of such Global Warrant,
agree that transfers of beneficial interests in such Global Warrant may be
effected only through a book-entry system maintained by the Holder of such
Global Warrant (or its agent), and that ownership of a beneficial interest in
the Warrants represented thereby shall be required to be reflected in a book
entry. When Warrants are presented to the Warrant Agent with a request to
register the transfer or to exchange them for an equal amount of Warrants of
other authorized denominations, the Warrant Agent shall register the transfer or
make the exchange in accordance with the provisions hereof.
Section 5.2. Registration, Registration of Transfer and Exchange.
Each Warrant shall initially be issued as part of a Unit consisting of $[ ]
principal amount at maturity of Notes and one Warrant. Prior to the Separability
Date, the Warrants may not be transferred or exchanged separately from, but may
be transferred or exchanged only together
8
with, the Notes attached to such Warrants. Prior to the Separability Date, the
Trustee under the Indenture shall act as transfer agent ("Transfer Agent") for
both the Warrants and the Notes. Any request for transfer of a Warrant prior to
the Separability Date to the Transfer Agent shall be accompanied by the Note
attached thereto and the Transfer Agent will not execute any such transfer
without such Note attached thereto. Such Note will be duly endorsed and
accompanied by a written instrument of transfer in form satisfactory to the
Company, duly executed by the Holder thereof or the Holder's attorneys duly
authorized in writing. The Company shall provide notice to the Transfer Agent
and the Warrant Agent of the Separability Date five Business Days prior to such
date and the Transfer Agent will notify DTC of such date.
When Certificated Warrants are presented to the Warrant Agent
with a request from the Holder of such Warrants to register the transfer or to
exchange them for an equal number of Warrants of other authorized denominations,
the Warrant Agent shall register the transfer or make the exchange as requested;
provided that every Warrant presented and surrendered for registration of
transfer or exchange shall be duly endorsed and be accompanied by a written
instrument of transfer in form satisfactory to the Company, duly executed by the
Holder thereof or the Holder's attorneys duly authorized in writing.
To permit registrations of transfers and exchanges, the Company
shall make available to the Warrant Agent a sufficient number of executed
Warrant Certificates to effect such registrations of transfers and exchanges. No
service charge shall be made to the Holder for any registration of transfer or
exchange of Warrants, but the Company may require from the transferring or
exchanging Holder payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable upon exchanges pursuant to Section 2.4 and
exchanges in respect of portions of Warrants not exercised and the Company may
deduct such taxes from any payment of money to be made and such transfer or
exchange shall not be consummated (if such taxes are not deducted in full)
unless or until the Holder shall have paid to the Company the amount of such tax
or shall have established to the satisfaction of the Company and the Warrant
Agent that such tax has been paid.
Section 5.3. Book-Entry Provisions for the Global Warrants. (a)
The Global Warrant initially shall (i) be registered in the name of DTC or the
nominee of DTC, (ii) be delivered to the Warrant Agent as custodian for DTC and
(iii) bear legends as set forth in Section 2.2 hereof. Members of, or
participants in, DTC ("Agent Members") shall have no rights under this Agreement
with respect to the Global Warrant held on their behalf by DTC or the Warrant
Agent as its custodian, and DTC may be treated by the Company, the Warrant Agent
and any agent of the Company or the Warrant Agent as the absolute owner of such
Global Warrant for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Warrant Agent or any agent of the
Company or the Warrant Agent from giving effect to any written certification,
proxy or other authorization furnished by DTC or impair, as between DTC and its
Agent Members, the operation of
9
customary practices governing the exercise of the rights of a beneficial owner
of any Warrants.
(b) Transfers of the Global Warrant shall be limited to transfers
of such Global Warrant in whole, but not in part, to DTC, its successors or
their respective nominees. Interests of beneficial owners in the Global Warrant
may be transferred in accordance with the rules and procedures of DTC.
Certificated Warrants shall be transferred to all beneficial owners in exchange
for their beneficial interests in the Global Warrant if (i) DTC notifies the
Company that it is unwilling or unable to continue as depositary for the Global
Warrant or (ii) DTC ceases to be a "Clearing Agency" registered under the
Exchange Act and a successor depositary is not appointed by the Company within
90 days.
(c) In connection with the transfer of the entire Global Warrant
to beneficial owners pursuant to paragraph (b) of this Section 5.3, the Global
Warrant shall be deemed to be surrendered to the Warrant Agent for cancellation,
and the Company shall execute, and the Warrant Agent shall countersign and
deliver, to each beneficial owner identified by DTC in exchange for its
beneficial interest in the Global Warrant, Certificated Warrants of authorized
denominations representing, in the aggregate, the number of Warrants theretofore
represented by the Global Warrant.
(d) Any Certificated Warrant delivered in exchange for an
interest in a Global Warrant pursuant to paragraph (b) or (c) of this Section
5.3 shall bear legends as set forth in Section 2.2 hereof.
(e) The registered holder of the Global Warrant may grant proxies
and otherwise authorize any Person, including Agent Members and persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Agreement or the Warrants.
(f) Beneficial owners of interests in the Global Warrant may
receive Certificated Warrants (which shall bear the legend set forth in Exhibit
C if required by Section 2.2) in accordance with the procedures of DTC. In
connection with the execution, countersigning and delivery of such Certificated
Warrants, the Warrant Agent shall reflect on its books and records a decrease in
the number of Warrants represented by the Global Warrant equal to the number of
Warrants represented by such Certificated Warrants and the Company shall execute
and the Warrant Agent shall countersign and deliver one or more Certificated
Warrants representing, in the aggregate, the number of Warrants theretofore
represented by the Global Warrant.
Section 5.4. Surrender of Warrant Certificates. Any Warrant
Certificate surrendered for registration of transfer, exchange or exercise of
the Warrants represented thereby shall, if surrendered to the Company, be
delivered to the Warrant Agent, and all
10
Warrant Certificates surrendered or so delivered to the Warrant Agent shall be
promptly cancelled by the Warrant Agent and shall not be reissued by the Company
and, except as provided in this Article V in case of an exchange or in Article
III hereof in case of the exercise of less than all the Warrants represented
thereby or in case of a mutilated Warrant Certificate, no Warrant Certificate
shall be issued hereunder in lieu thereof. The Warrant Agent shall deliver to
the Company from time to time or otherwise dispose of such cancelled Warrant
Certificates as the Company may direct in writing.
ARTICLE VI
COVENANTS OF THE COMPANY
Section 6.1. Reservation and Authorization. During the period
within which the Warrants may be exercised in accordance with this Agreement,
the Company will keep available for issue under the Indenture upon exercise of
Warrants as herein provided, such aggregate principal amount at maturity of
Notes sufficient to permit the exercise in full of all outstanding Warrants and
will cause appropriate evidence of ownership of such Notes to be delivered to
any Holder or to such Holder's order in accordance with this Agreement upon the
Warrant Agent's instruction for delivery upon the exercise of Warrants. The
Company shall use its best efforts to file and cause to be declared effective a
Warrant Securities Registration Statement with respect to the Warrant
Securities. The Company covenants that all Warrant Securities that may be issued
upon the exercise of the Warrants will, upon issuance, be duly executed, issued
and delivered by the Company and constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms and free
from all taxes, liens, charges and security interests with respect to the issue
thereof.
Section 6.2. Freely Tradable Warrant Securities. The Company
shall provide, upon exercise of Warrants in accordance with the terms of this
Agreement, Warrant Securities that are freely tradable without restriction and
are not "Restricted Securities" within the meaning of Rule 144 under the
Securities Act ("Restricted Securities"). If such Warrant Securities are not
freely tradable or are "Restricted Securities," the Company will, as soon a
practicable, prepare and file a registration statement under the Securities Act
and take any other necessary steps to ensure compliance with the first sentence
of this Section 6.2.
Section 6.3. Blue Sky. To the extent required to provide Warrant
Securities that are freely tradable and are not Restricted Securities, the
Company shall use its best efforts to register or qualify the Warrant Securities
under all applicable securities or "blue sky" laws of all jurisdictions in the
United States in which any Holder of Warrants may or may be deemed to purchase
Warrant Securities upon the exercise of Warrants and shall use
11
its best efforts to maintain such registration or qualification through the
earlier of the date upon which all Warrants have been exercised and the
Expiration Date; provided, however, that the Company shall not be required to
(i) qualify as a foreign corporation or as a dealer in securities in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 6.3, (ii) file any general consent to service of process or (iii)
subject itself to taxation in any jurisdiction if it is not otherwise so
subject.
Section 6.4. Accuracy of Disclosure. The Company and its
successors represent and warrant to each Holder and agree for the benefit of
each Holder that (i) any Warrant Securities Registration Statement and the
documents incorporated by reference therein will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein not misleading and (ii) the Prospectus delivered to such
Holder upon its exercise of the Warrants and the documents incorporated by
reference therein will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading, provided that
such representation shall not apply to statements in or omissions from any
Warrant Securities Registration Statement and the documents incorporated by
reference therein or the Prospectus contained therein and the documents
incorporated by reference therein or any amendment or supplement thereto made in
reliance upon and in conformity with written information furnished to the
Company through a representative by or on behalf of such Indemnified Party
specifically for use therein.
Section 6.5. Indemnity. The Company hereby indemnifies each
beneficial owner of a Warrant (whether or not it is, at the time the indemnity
provided for in this Section 6.5 is sought, such a beneficial owner) (each, an
"Indemnified Party") against all losses, damages or liabilities which such
beneficial owner suffers as a result of any breach, on the date of any exercise
of a Warrant by such beneficial owner, of the representations, warranties or
agreements contained in Section 6.4; provided, however, that the Company shall
not be liable in any such case to the extent that any such loss, claim, damage,
liability or action arises out of or is based upon an untrue statement in or
omission or alleged omission from any registration statement required to be
filed by the Company under Section 6.2 and the documents incorporated by
reference therein or the Prospectus contained therein and the documents
incorporated by reference therein or any amendment or supplement thereto made in
reliance upon and in conformity with written information furnished to the
Company through a representative by or on behalf of such Indemnified Party
specifically for use therein.
Section 6.6. Expenses. All expenses incident to the Company's
performance of or compliance with its obligations under this Agreement will be
borne by the Company, regardless of whether a Warrant Securities Registration
Statement becomes effective, including without limitation: (i) all Commission,
stock exchange or National Association of Securities Dealers, Inc. registration
and filing fees, (ii) all fees and expenses incurred in
12
connection with compliance with state securities or "blue sky" laws, (iii) all
expenses of any Persons incurred by or on behalf of the Company in preparing or
assisting in preparing, word processing, printing and distributing any Warrant
Securities Registration Statement, any Prospectus, any amendments or supplements
thereto and other documents relating to the performance of and compliance with
this Agreement, (iv) all rating agency fees, (v) the fees and disbursements of
the Warrant Agent, (vi) the fees and disbursements of counsel for the Company
and (vii) the fees and disbursements of the independent public accountants of
the Company, including the expenses of any special audits or "cold comfort"
letters required by or incident to such performance and compliance.
ARTICLE VII
REMEDIES
Section 7.1. Remedies; No Waiver. Notwithstanding any other
provision of this Agreement, if a default occurs and is continuing, the Holders
of the Warrants may pursue any available remedy to enforce the performance of
any provision of this Agreement. A delay or omission by any Holder of a Warrant
in exercising, or a failure to exercise, any right or remedy arising out of a
default shall not impair the right or remedy or constitute a waiver of or
acquiescence in the default. All remedies are cumulative to the extent permitted
by law.
ARTICLE VIII
THE WARRANT AGENT
Section 8.1. Duties and Liabilities. The Company hereby appoints
the Warrant Agent to act as agent of the Company as set forth in this Agreement.
The Warrant Agent hereby accepts the agency established by this Agreement and
agrees to perform the same upon the terms and conditions herein set forth, by
all of which the Company and the Holders of Warrants, by their acceptance
thereof, shall be bound. The Warrant Agent shall not have any obligation towards
or relationship of agency or trust for the Holders, except as provided in
Section 7.1(b) and Section 10.1 hereof. The Warrant Agent shall not, by
countersigning Warrant Certificates or by any other act hereunder, be deemed to
make any representations as to the validity or authorization of the Warrants or
the Warrant Certificates (except as to its countersignature thereon) or of any
securities or other property delivered upon exercise of any Warrant, or as to
the accuracy of the computation of the Exercise Price or the number or kind or
amount of stock or other securities or other property deliverable upon exercise
of any Warrant, or as to the correctness of the representations of the Company
made in the certificates that the Warrant Agent receives or the validity,
sufficiency or
13
adequacy of any offering materials. The Warrant Agent shall not be accountable
for the use or application by the Company of the proceeds of the exercise of any
Warrant. The Warrant Agent shall not (a) be liable for any recital or statement
of fact contained herein or in the Warrant Certificates or for any action taken,
suffered or omitted by it in good faith in the belief that any Warrant
Certificate or any other documents or any signatures are genuine or properly
authorized, (b) be responsible for any failure on the part of the Company to
comply with any of its covenants and obligations contained in this Agreement or
in the Warrant Certificates or (c) be liable for any act or omission in
connection with this Agreement except for its own gross negligence or willful
misconduct. The Warrant Agent is hereby authorized to accept instructions with
respect to the performance of its duties hereunder from the Chief Executive
Officer, President, any Vice President or the Secretary or Treasurer of the
Company and to apply to any such officer for instructions (which instructions
will be promptly given in writing when requested) and the Warrant Agent shall
not be liable for any action taken or suffered to be taken by it in good faith
in accordance with the instructions of any such officer; however, in its
discretion, the Warrant Agent may in lieu thereof accept other evidence of such
or may require such further or additional evidence as it may deem reasonable.
The Warrant Agent shall not be liable for any action taken, or failure to take
any action, with respect to any matter in the event it requests instructions
from the Company as to that matter and does not receive such instructions within
a reasonable period of time after the request therefor.
The Warrant Agent may execute and exercise any of the rights and
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys, agents or employees, and the Warrant Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys, agents or employees, provided reasonable care has been exercised
in the selection and in the continued employment of any such attorney, agent or
employee. The Warrant Agent shall not be under any obligation or duty to
institute, appear in or defend any action, suit or legal proceeding in respect
hereof, unless first indemnified to its satisfaction, but this provision shall
not affect the power of the Warrant Agent to take such action as the Warrant
Agent may consider proper, whether with or without such indemnity. The Warrant
Agent shall promptly notify the Company in writing of any claim made or action,
suit or proceeding instituted against it arising out of or in connection with
this Agreement.
The Warrant Agent may rely and shall be fully protected in acting
or refraining from acting upon any certificate, notice, instruction, Warrant,
document or other writing believed by it to be genuine and to have been signed
or presented by the proper Person. The Warrant Agent need not investigate any
fact or matter stated in any such certificate, notice, instruction, Warrant,
document or other writing. The Warrant Agent shall not be liable for any action
that it takes or omits to take in good faith which it believes to be authorized
or within its rights or powers.
14
The Company will perform, execute, acknowledge and deliver or
cause to be performed, executed, acknowledged and delivered all such further
acts, instruments and assurances as are consistent with this Agreement and as
may reasonably be required by the Warrant Agent in order to enable it to carry
out or perform its duties under this Agreement.
The Warrant Agent shall act solely as agent of the Company
hereunder. The Warrant Agent shall not be liable except for the failure to
perform such duties as are specifically set forth herein, and no implied
covenants or obligations shall be read into this Agreement against the Warrant
Agent, whose duties and obligations shall be determined solely by the express
provisions hereof.
With respect to the identity of beneficial owners of interests in
the Global Warrant and the number of Warrants beneficially owned by any
beneficial owner, the Warrant Agent shall be entitled to conclusively rely on
the records of DTC and shall be fully protected in so relying.
Section 8.2. Right to Consult Counsel. The Warrant Agent may at
any time consult with legal counsel acceptable to it (who may be legal counsel
for the Company), and the opinion or advice of such counsel shall be full and
complete authorization and protection to the Warrant Agent and the Warrant Agent
shall incur no liability or responsibility to the Company or to any Holder for
any action taken, suffered or omitted by it in good faith in accordance with the
opinion or advice of such counsel.
Section 8.3. Compensation; Indemnification. The Company agrees to
pay to the Warrant Agent from time to time compensation for all services
rendered by it hereunder as the Company and the Warrant Agent may agree in
writing from time to time, and to reimburse the Warrant Agent for reasonable
expenses and disbursements incurred in connection with the execution and
administration of this Agreement (including the reasonable fees and the expenses
of its counsel), and further agrees to indemnify the Warrant Agent for, and to
hold it harmless against, any claim, loss, liability or expense arising out of
or in connection with the acceptance and administration of this Agreement,
including the costs and expenses of defending itself against any such claim or
liability, except that the Company shall have no liability hereunder to the
extent that any such loss, liability or expense results from the Warrant Agent's
own gross negligence or willful misconduct. The obligations of the Company under
this Section 8.3 shall survive the exercise and the expiration of the Warrants
and the resignation or removal of the Warrant Agent. No provision of this
Agreement shall require the Warrant Agent to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder or in the exercise of any of its rights or powers if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
15
Section 8.4. No Restrictions on Actions. The Warrant Agent and
any stockholder, director, officer or employee of the Warrant Agent may buy,
sell or deal in any of the Warrants or other securities of the Company or become
pecuniarily interested in transactions in which the Company may be interested,
or contract with or lend money to the Company or otherwise act as fully and
freely as though it were not the Warrant Agent under this Agreement. Nothing
herein shall preclude the Warrant Agent from acting in any other capacity for
the Company or for any other legal entity.
Section 8.5. Discharge or Removal; Replacement Warrant Agent.
Except as otherwise provided in this Section 8.5, no resignation or removal of
the Warrant Agent and no appointment of a successor warrant agent shall become
effective until the acceptance of appointment by the successor warrant agent
provided herein. The Warrant Agent may resign from its position as such and be
discharged from all further duties and liabilities hereunder (except liabilities
arising as a result of the Warrant Agent's own gross negligence or willful
misconduct), after giving one month's prior written notice to the Company. The
Company may remove the Warrant Agent upon one month's prior written notice
specifying the date when such discharge shall take effect, and the Warrant Agent
shall thereupon in like manner be discharged from all further duties and
liabilities hereunder, except as aforesaid. The Warrant Agent or the Company
shall cause to be mailed (by first-class mail, postage prepaid) to each Holder
of a Warrant a copy of said notice of resignation or notice of removal, as the
case may be. Upon such resignation or removal the Company shall appoint in
writing a new warrant agent. If the Company shall fail to make such appointment
within a period of 30 calendar days after it has been notified in writing of
such resignation by the resigning Warrant Agent or after such removal, then the
resigning Warrant Agent or the Holder of any Warrant may apply to any court of
competent jurisdiction for the appointment of a new warrant agent. Any new
warrant agent, whether appointed by the Company or by such a court, shall be a
bank or trust company doing business under the laws of the United States or any
state thereof, in good standing and having a combined capital and surplus of not
less than $50,000,000. The combined capital and surplus of any such new warrant
agent shall be deemed to be the combined capital and surplus as set forth in the
most recent annual report of its condition published by such warrant agent prior
to its appointment, provided that such reports are published at least annually
pursuant to law or to the requirements of a federal or state supervising or
examining authority. After acceptance in writing of such appointment by the new
warrant agent, it shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named herein as the Warrant Agent,
without any further assurance, conveyance, act or deed; however, the original
Warrant Agent, upon payment of its fees and expenses, shall in all events
deliver and transfer to the successor Warrant Agent all property, if any, at the
time held hereunder by the original Warrant Agent and if for any reason it shall
be necessary or expedient to execute and deliver any further assurance,
conveyance, act or deed, the same shall be done at the expense of the Company
and shall be legally and validly executed and delivered by the resigning or
removed Warrant Agent. Not later than the effective date of any such
appointment, the Company shall file a
16
notice thereof with the resigning or removed Warrant Agent and shall forthwith
cause a copy of such notice to be mailed to each Holder of a Warrant. Failure to
give any notice provided for in this Section 8.5, however, or any defect
therein, shall not affect the legality or validity of the resignation of the
Warrant Agent or the appointment of a new warrant agent, as the case may be.
Section 8.6. Successor Warrant Agent. Any corporation into which
the Warrant Agent or any successor warrant agent may be merged or converted, or
any corporation resulting from any consolidation to which the Warrant Agent or
any successor warrant agent shall be a party, and any corporation which acquires
substantially all of the corporate trust business of the Warrant Agent, shall be
a successor Warrant Agent under this Agreement without any further act, provided
that such corporation would be eligible for appointment as successor to the
Warrant Agent under the provisions of Section 8.5 hereof. Any such successor
Warrant Agent shall promptly cause notice of its succession as Warrant Agent to
be mailed (by first-class mail, postage prepaid) to each Holder of a Warrant.
ARTICLE IX
WARRANT HOLDERS
Section 9.1. Warrant Holder Not Deemed a Holder of Notes. The
Company and the Warrant Agent may deem and treat the registered Holder(s) of the
Warrant Certificates as the absolute owner(s) thereof (notwithstanding any
notation of ownership or other writing thereon made by anyone), for the purpose
of any exercise thereof and for all other purposes, and neither the Company nor
the Warrant Agent nor any agent of the Company or the Warrant Agent shall be
affected by any notice to the contrary. Prior to the exercise of the Warrants,
no Holder of a Warrant Certificate, as such, shall be entitled to any rights of
a holder of Notes.
Section 9.2. Right of Action. All rights of action with respect
to this Agreement are vested in the Holders of the Warrants, and any Holder of
any Warrant, without the consent of the Warrant Agent or the Holder of any other
Warrant, may, on such Holder's own behalf and for such Holder's own benefit,
enforce, and may institute and maintain any suit, action or proceeding against
the Company suitable to enforce, or otherwise in respect of, such Holder's right
to exercise, exchange or tender for purchase such Holder's Warrants in the
manner provided in the Warrant Certificate representing his Warrants and in this
Agreement.
ARTICLE X
17
MISCELLANEOUS
Section 10.1. Money Deposited with the Warrant Agent. The Warrant
Agent shall not be required to pay interest on any moneys deposited pursuant to
the provisions of this Agreement except such as it shall agree in writing with
the Company to pay thereon. Any moneys, securities or other property which at
any time shall be deposited by the Company or on its behalf with the Warrant
Agent pursuant to this Agreement shall be and are hereby assigned, transferred
and set over to the Warrant Agent in trust for the purpose for which such
moneys, securities or other property shall have been deposited; but such moneys,
securities or other property need not be segregated from other funds, securities
or other property except to the extent required by law. The Warrant Agent shall
distribute any money deposited with it for payment and distribution to the
Holders by mailing by first-class mail a check in such amount as is required by
this Agreement to each such Holder at the address shown on the Warrant register
of the Company, or as it may be otherwise directed in writing by such Holder, in
accordance with the terms and conditions hereof. Any money, securities or other
property deposited with the Warrant Agent for payment or distribution to the
Holders that remains unclaimed for two years after the date the money,
securities or other property was deposited with the Warrant Agent shall be
delivered to the Company upon its written request therefor.
Section 10.2. Payment of Taxes. The Company shall pay any stamp,
registration, and other similar taxes and other governmental charges that may be
imposed under the laws of the United States of America or any political
subdivision or taxing authority thereof or therein in respect of the issue or
delivery thereof or of other securities deliverable upon exercise of Warrants
(other than income taxes imposed on the Holders). The Company shall not be
required, however, to pay any tax or other charge imposed in connection with any
transfer involved in the issue of any Warrant Securities to any Person other
than the Holder of a Warrant Certificate surrendered upon the exercise of a
Warrant, and in case of such transfer or payment, the Warrant Agent and the
Company shall not be required to issue any Warrant Securities or pay any cash
until such tax or charge has been paid or it has been established to the Warrant
Agent's and the Company's satisfaction that no such tax or other charge is due.
Section 10.3. Merger, Consolidation or Sale of Assets of the
Company.
(a) To the extent permitted in the Indenture, the Company may
consolidate with or merge into another corporation or other entity, or convey or
transfer all or substantially all of its properties and assets to any other
corporation or other entity. In case of any such consolidation, merger,
conveyance or transfer and upon any assumption of the duties and obligations of
the Company by the successor corporation, such successor corporation shall
succeed to and be substituted for the Company, with the same effect as if it had
been named in this Agreement, and the Company shall be relieved of any further
18
obligation under this Agreement and the Warrants. Such successor corporation
thereupon may cause to be signed, and may issue either in its own name or in the
name of the Company, any or all of the Warrant Securities issuable pursuant to
the terms of the Warrant Agreement and the Warrants. All the Warrant Securities
so issued shall in all respects have the same legal rank and benefit under the
Indenture as the Warrant Securities theretofore or thereafter issued in
accordance with the terms of this Agreement and the Indenture.
(b) In case of any consolidation, merger, conveyance or transfer
pursuant to Section 10.3(a), the Company shall cause to be mailed to the Warrant
Agent and each Holder of a Warrant, at the earliest practicable time (and, in
any event, not less than 20 calendar days before any date set for definitive
action), notice of the date on which such transaction shall take place. Such
notice shall also set forth such facts as shall indicate the effect of such
action (to the extent such effect may be known at the date of such notice) on
the holders of Notes and Warrants. Such notice shall also specify any date as of
which the holders of record of the Notes or Warrants shall be entitled to
exchange their securities for securities, money or other property deliverable
upon such consolidation, merger, conveyance or transfer, as the case may be.
Section 10.4. Reports to Holders. The Company shall:
(a) file the reports (or copies of such portions of any of the
foregoing as the Commission may from time to time by rules and
regulations prescribe) required to be filed by it under the Securities
Act and the Exchange Act, and the rules, regulations and policies
adopted by the Commission thereunder in a timely manner in accordance
with the requirements of the Securities Act and the Exchange Act; or, if
the Company is not required to file information, documents or reports
pursuant to either of said Sections, then the Company will, upon the
request of any Holder or beneficial owner of Warrants, make available
such information as necessary to permit sales pursuant to Rule 144A
under the Securities Act; and
(b) file with the Warrant Agent and the Commission, in accordance
with rules and regulations prescribed from time to time by the
Commission, such additional information, documents and reports with
respect to compliance by the Company with the conditions and covenants
of this Agreement as may be required from time to time by such rules and
regulations.
Section 10.5. Notices. All notices and other communications
provided for or permitted hereunder shall be made in writing by hand-delivery,
registered first-class mail, telex, telecopier, or any air courier (i) if to a
Holder of the Warrants, at the address of such Holder maintained by the Warrant
Agent, (ii) if to the Company, to CD Radio Inc., 0000 00xx Xxxxxx, X.X.,
Xxxxxxxxxx, X.X. 00000, Attention: [ ], and (iii) if to the Warrant
19
Agent, to IBJ Xxxxxxxx Bank & Trust Company, Xxx Xxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Corporate Trust Administration.
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; at the time
received, if mailed or sent by air courier; when answered back, if telexed; and
when receipt is acknowledged, by recipient's telecopy operator, if telecopied.
Section 10.6. Severability. If any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
Section 10.7. Binding Effect. This Agreement shall be binding
upon and inure to the benefit of the Company and the Warrant Agent and their
respective successors and assigns, and the Holders from time to time of the
Warrants. Nothing in this Agreement is intended or shall be construed to confer
upon any Person, other than the Company, the Warrant Agent and the Holders of
the Warrants, any right, remedy or claim under or by reason of this Agreement or
any part hereof.
Section 10.8. Third Party Beneficiaries. The Holders shall be
third party beneficiaries to the agreements made hereunder between the Company,
on the one hand, and the Warrant Agent, on the other hand, and each Holder shall
have the right to enforce such agreements directly to the extent it deems such
enforcement necessary or advisable to protect its rights or the rights of
Holders hereunder.
Section 10.9. Amendments. The Company may, without the consent of
the Holders of the Warrants, by supplemental agreement or otherwise, make any
changes or corrections in this Agreement that it shall have been advised by
counsel (a) are required to cure any ambiguity or to correct or supplement any
provision herein which may be defective or inconsistent with any other provision
herein or (b) add to the covenants and agreements of the Company for the benefit
of the Holders, or surrender any rights or power reserved to or conferred upon
the Company in this Agreement; provided that, in each case, such changes or
corrections shall not adversely affect the interests of the Holders in any
material respect. Amendments or supplements which do not meet the requirements
of the preceding sentence shall require the written consent of the Holders of a
majority of the then outstanding warrants; provided, however, that the consent
of each Holder is required for any amendment or supplement pursuant to which the
Exercise Price would be increased or the Exercise Rate would be decreased (other
than pursuant to adjustments as provided in Article IV of this Agreement). The
Warrant Agent shall join with the Company in the execution and delivery of any
such supplemental agreements unless it affects the Warrant Agent's own rights,
duties
20
or immunities hereunder, in which case the Warrant Agent may, but shall not be
required to, join in such execution and delivery.
Section 10.10. Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning of any provision hereof.
Section 10.11. GOVERNING LAW. THIS AGREEMENT AND THE
WARRANTS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA.
Section 10.12. Counterparts. This Agreement may be executed in
any number of counterparts and by the parties hereto in separate counterparts,
each of which so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
21
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed, and their respective corporate seals to be hereto affixed
and attested, all as of the day and year first above written.
CD RADIO INC.
By _______________________________
Name:
Title:
IBJ XXXXXXXX BANK & TRUST
COMPANY, Warrant Agent
By _______________________________
Name:
Title:
Exhibit A
FORM OF WARRANT CERTIFICATE
CD RADIO INC.
CUSIP No. __________
No. _____ Certificate for ________ Warrants
WARRANTS TO PURCHASE
[ ]% SENIOR SECURED DISCOUNT NOTES DUE 2007
This certifies that _______________, or its registered assigns,
is the owner of the number of Warrants set forth above or such other number as
shall be represented from time to time by this Warrant Certificate in accordance
with the terms of the within-mentioned Warrant Agreement, each of which
represents the right to receive, immediately upon issuance of such Warrants,
from CD Radio Inc. (the "Company"), a Delaware corporation, $[ ] principal
amount at maturity of Notes per Warrant upon surrender hereof at the office of
IBJ Xxxxxxxx Bank & Trust Company or to its successor as the warrant agent under
the Warrant Agreement (any such warrant agent being herein called the "Warrant
Agent"), with the Subscription Form on the reverse hereof (or a copy thereof
furnished by the Warrant Agent) duly executed, with signature guaranteed as
therein specified, subject to the terms and conditions hereof and of the Warrant
Agreement.
This Warrant Certificate is issued under and in accordance with a
Warrant Agreement dated as of [ ], 1997 (the "Warrant Agreement"),
between the Company and IBJ Xxxxxxxx Bank & Trust Company, Warrant Agent, and is
subject to the terms and provisions contained therein, to all of which terms and
provisions the Holder of this Warrant Certificate consents by acceptance hereof.
The Warrant Agreement is hereby incorporated herein by reference and made a part
hereof. Reference is hereby made to the Warrant Agreement for a full description
of the rights, limitations of rights, obligations, duties and immunities
thereunder of the Company and the Holders of the Warrants. The summary of the
terms of the Warrant Agreement contained in this Warrant Certificate is
qualified in its entirety by express reference to the Warrant Agreement. All
terms used in this Warrant Certificate that are defined in the Warrant Agreement
shall have the meanings assigned to them in the Warrant Agreement.
Copies of the Warrant Agreement are on file at the office of the
Warrant Agent and may be obtained by writing to the Warrant Agent at the
following address:
IBJ Xxxxxxxx Bank & Trust Company
X-0
Xxx Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
To the extent permitted in the Indenture, the Company may
consolidate with or merge into another corporation or other entity, or convey or
transfer all or substantially all of its properties and assets to any other
corporation or other entity. In case of any such consolidation, merger,
conveyance or transfer and upon any assumption of the duties and obligations of
the Company by the successor corporation, such successor corporation shall
succeed to and be substituted for the Company, with the same effect as if it had
been named in the Warrant Agreement, and the Company shall be relieved of any
further obligation under the Warrant Agreement and the Warrants. Such successor
corporation thereupon may cause to be signed, and may issue either in its own
name or in the name of the Company, any or all of the Warrant Securities
issuable pursuant to the terms of the Warrant Agreement and the Warrants. All
the Warrant Securities so issued shall in all respects have the same legal rank
and benefit under the Indenture as the Warrant Securities theretofore or
thereafter issued in accordance with the terms of the Warrant Agreement and the
Indenture.
All Warrant Securities shall be duly executed, issued and
delivered by the Company and the Company shall pay all stamp, registration or
other similar taxes and other governmental charges that may be imposed under the
laws of the United States of America or any political subdivision or taxing
authority thereof or therein in respect of the issue or delivery of such Warrant
Securities. The Company shall not be required, however, to pay any tax or other
charge imposed in connection with any transfer involved in the issue of any
Warrant Securities to any Person other than the Holder of a Warrant Certificate
surrendered upon the exercise or repurchase of a Warrant, and in case of such
transfer or payment, the Warrant Agent and the Company may deduct such taxes
from any payment of money to be made and shall not be required to issue any
Warrant Securities until such tax or charge has been paid or it has been
established to the Warrant Agent's and the Company's satisfaction that no such
tax or other charge is due.
Subject to the restrictions on transfer set forth in Article V of
the Warrant Agreement, this Warrant Certificate and all rights hereunder are
transferable by the registered Holder hereof, in whole or in part, on the
Warrant Register of the Company maintained by the Warrant Agent for such purpose
at its office in New York, New York, upon surrender of this Warrant Certificate
duly endorsed, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Warrant Agent duly executed, with signatures
guaranteed as specified in the attached Form of Assignment, by the registered
Holder hereof or his attorney duly authorized in writing and upon payment of any
necessary transfer tax or other governmental charge imposed upon such transfer.
Upon any partial transfer, the Company will issue and the Warrant Agent will
countersign and deliver
A-3
to such Holder a new Warrant Certificate or Certificates with respect to any
portion not so transferred. Each taker and Holder of this Warrant Certificate,
by taking and holding the same, consents and agrees that prior to the
registration of transfer as provided in the Warrant Agreement, the Company and
the Warrant Agent and any agent of the Company or the Warrant Agent may treat
the person in whose name the Warrants are registered as the absolute owner
hereof for any purpose and as the Person entitled to exercise the rights
represented hereby, any notice to the contrary notwithstanding.
This Warrant Certificate may be exchanged at the office of the
Warrant Agent maintained for such purpose in New York, New York for Warrant
Certificates representing the same aggregate number of Warrants, each new
Warrant Certificate to represent such number of Warrants as the Holder hereof
shall designate at the time of such exchange.
Prior to the exercise of the Warrants represented hereby, the
Holder of this Warrant Certificate, as such, shall not be entitled to any rights
of a holder of Notes.
This Warrant Certificate shall be void and all rights evidenced
hereby shall cease on [ ], 1997 unless sooner terminated by the
liquidation, dissolution or winding-up of the Company or as otherwise provided
in the Warrant Agreement upon the consolidation or merger of the Company with,
or sale of the Company to, another Person.
A-4
This Warrant Certificate shall not be valid for any purpose until
it shall have been countersigned by the Warrant Agent.
Dated:
CD RADIO INC.
By _______________________________
Name:
Title:
Countersigned:
IBJ Xxxxxxxx Bank & Trust Company,
Warrant Agent
By __________________________________
Authorized Signatory
A-5
FORM OF REVERSE OF WARRANT CERTIFICATE
SUBSCRIPTION FORM
(To be executed only upon exercise of Warrant)
To:
The undersigned irrevocably exercises ____________ of the
Warrants represented by the Warrant Certificate, each for the purchase of
$[ ] principal amount at maturity of [ ]% Senior Secured Discount
Notes due 2007 of CD Radio Inc. (the "Warrant Securities"), and on the terms and
conditions specified in the within Warrant Certificate and the Warrant Agreement
therein referred to, surrenders this Warrant Certificate and all right, title
and interest therein to and directs that the Warrant Securities deliverable upon
the exercise of such Warrants be registered or placed in the name and at the
address specified below and delivered thereto.
Dated: ____________________________ (1)
-----------------------------------
(Signature of Owner)
-----------------------------------
(Street Address)
-----------------------------------
(City) (State) (Zip Code)
Signature Guaranteed By:
-----------------------------------
Securities and/or check to be issued to: _______________________________________
Please insert social security or identifying number:____________________________
--------
(1) The signature must correspond with the name as written upon the face of the
within Warrant Certificate in every particular, without alteration or
enlargement or any change whatever, and must be guaranteed by a United
States national bank or trust company or by a member firm of any United
States national securities exchange.
A-6
Name:___________________________________________________________________________
Street Address:_________________________________________________________________
City, State and Zip Code:_______________________________________________________
A-7
FORM OF ASSIGNMENT
FOR VALUE RECEIVED the undersigned registered holder of the
within Warrant Certificate hereby sells, assigns, and transfers unto the
Assignee(s) named below (including the undersigned with respect to any Warrants
constituting a part of the Warrants evidenced by the within Warrant Certificate
not being assigned hereby) all of the right of the undersigned under the within
Warrant Certificate, with respect to the number of Warrants set forth below:
Name(s) of Assignee(s):_________________________________________________________
Address:________________________________________________________________________
No. of Warrants:_________________________
Please insert social security or other identifying number of assignee(s):
_______________
and does hereby irrevocably constitute and appoint _____________________________
the undersigned's attorney to make such transfer on the books of________________
maintained for the purposes, with full power of substitution in the premises.
Exhibit B to
Warrant Agreement
FORM OF LEGEND FOR GLOBAL WARRANTS
Any Global Warrant authenticated and delivered hereunder shall bear a legend in
substantially the following form:
THIS WARRANT IS A GLOBAL WARRANT WITHIN THE MEANING OF THE WARRANT AGREEMENT
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS WARRANT IS NOT
EXCHANGEABLE FOR WARRANTS REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
WARRANT AGREEMENT, AND NO TRANSFER OF THIS WARRANT (OTHER THAN A TRANSFER OF
THIS WARRANT AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A
NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE WARRANT AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
Exhibit C to
Warrant Agreement
FORM OF LEGEND FOR WARRANTS ISSUED AS PART OF A UNIT
THE WARRANT EVIDENCED BY THIS CERTIFICATE IS INITIALLY ISSUED AS PART OF AN
ISSUANCE OF UNITS, EACH OF WHICH CONSISTS OF $[ ] PRINCIPAL AMOUNT
AT MATURITY OF [ ]% SENIOR DISCOUNT NOTES DUE 2007 OF CD RADIO INC.
(THE "NOTES") AND ONE WARRANT. PRIOR TO THE CLOSE OF BUSINESS UPON THE
EARLIEST TO OCCUR OF (I) THE OCCURRENCE OF AN EXERCISE EVENT, (II)
THE OCCURRENCE OF AN EVENT OF DEFAULT, OR (III) SUCH EARLIER DATE AS DETERMINED
BY XXXXXXX XXXXX IN ITS SOLE DISCRETION (AS SUCH TERMS ARE DEFINED IN
THE WARRANT AGREEMENT REFERRED TO HEREIN), THE WARRANT EVIDENCED BY THIS
CERTIFICATE MAY NOT BE TRANSFERRED OR EXCHANGED SEPARATELY FROM, BUT MAY BE
TRANSFERRED OR EXCHANGED ONLY TOGETHER WITH, THE NOTES.
