Conformed Copy
REGISTRATION RIGHTS AGREEMENT
This is a REGISTRATION RIGHTS AGREEMENT, dated as of June 12,
2003 (this "Agreement"), between Sirius Satellite Radio Inc., a Delaware
corporation (the "Company"), Blackstone CCC Capital Partners L.P., a Delaware
limited partnership ("BCC"), Blackstone CCC Offshore Capital Partners L.P., a
Cayman Islands limited partnership ("BCO"), Blackstone Family Investment
Partnership III L.P., a Delaware limited partnership ("BF", and together with
BCC and BCO and their subsequent Private Transferees (as defined below),
"Blackstone").
BACKGROUND
In December 1999, Blackstone purchased for approximately $199
million 1,993,604 shares of 9.2% Series D Junior Cumulative Convertible
Preferred Stock, par value $0.001 per share (the "Series D Preferred"), of the
Company, convertible into shares of Common Stock of the Company.
The shares of the Series D Preferred and the shares of Common
Stock into which they were convertible were entitled to registration rights
under the Securities Act pursuant to the Stock Purchase Agreement between the
Company and Blackstone Capital Partners III Merchant Banking Fund L.P., dated as
of December 23, 1999 (the "Original Registration Rights Agreement").
In accordance with the terms of the Lockup Agreement
(including the restructuring term sheet annexed to it), dated as of October 17,
2002, between the Company, Blackstone and the other parties thereto (the "Lockup
Agreement"), Blackstone agreed to support a plan for restructuring the debt and
equity capital structure of the Company. Pursuant to this Lockup Agreement and
upon consummation of such restructuring, Blackstone (i) exchanged with the
Company the shares of Series D Preferred held by Blackstone for 36,972,406
shares of Common Stock and two series of warrants (the "Warrants") to purchase
in the aggregate 42,055,024 shares of Common Stock (the "Warrant Shares")
(collectively, the "Preferred Stock Exchange") and (ii) invested in the Company
$24,937,500 in cash for 24,000,121 newly issued shares of Common Stock (the
"Common Stock Purchase").
Pursuant to the terms of the Lockup Agreement and the
Warrants, the Company agreed with Blackstone to provide registration rights
under the Securities Act for the shares included in the Common Stock Purchase as
well as the Warrant Shares issuable upon exercise of the Warrants acquired in
the Preferred Stock Exchange.
The Company has filed with the SEC (as defined below) a
registration statement on Form S-3 covering resales of the shares of Common
Stock, including the Warrant Shares, acquired by Blackstone in the Preferred
Stock Exchange and the Common Stock Purchase, as well as other shares of Common
Stock held by other stockholders, and such registration statement was declared
effective by the SEC on May 20, 2003 (the "Effective Registration Statement").
In order to provide for integrated contractual provisions that
will apply to the registration rights associated with both the shares of Common
Stock issued in the Preferred
Stock Exchange as well as the shares of Common Stock acquired in the Common
Stock Purchase and the Warrant Shares, the Company and Blackstone desire to
enter into this Agreement which will set forth such provisions.
As further inducement to the Company to enter into this
Agreement, BCC, BCO and BF have agreed not to exercise their Warrants after
September 7, 2004.
In consideration of the mutual covenants and agreements set
forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, each of the parties to
this Agreement hereby agrees as follows.
1. Definitions. In addition to the definitions provided above
or elsewhere in this Agreement, the following terms have the following meanings:
"Common Stock" means the common stock, par value $0.001 per
share, of the Company.
"Contractual Obligation" means any agreement, undertaking,
contract, indenture, mortgage, deed of trust or other instrument to which the
Company is a party or by which it or any of its property is bound.
"Effective Registration Statement" has the meaning assigned in
the Background hereto, and includes the related Prospectus, all amendments and
supplements to such registration statement (including post-effective
amendments), all exhibits and all material incorporated by reference or deemed
to be incorporated by reference in such registration statement.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Governmental Authority" means 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" means Blackstone or any Private Transferee that holds
Registrable Securities.
"Lien" means any mortgage, deed of trust, pledge,
hypothecation, assignment, encumbrance, lien (statutory or other), restriction
or other security interest of any kind or nature whatsoever.
"Person" means 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.
"Private Transferee" means any Person to whom Registrable
Securities or Warrants are transferred by Blackstone, or by another Private
Transferee, who agrees to be
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bound by the terms of this Agreement pursuant to Section 7(a), in a transaction
not involving a Public Offering.
"Prospectus" means the prospectus included in the Effective
Registration Statement, as amended or supplemented by any prospectus supplement,
with respect to the terms of the offering of any portion of the Registrable
Securities covered by such Effective Registration Statement and all other
amendments and supplements to such prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such prospectus.
"Public Offering" means a public offering of shares of Common
Stock, including Warrant Shares (but not Warrants), pursuant to and in
accordance with either the Effective Registration Statement or a Transfer
pursuant to Rule 144 in which the restrictive legend on the certificates
evidencing such Registrable Securities is removed.
"Registrable Securities" means the shares of Common Stock,
including Warrant Shares (but not Warrants), acquired in the Preferred Stock
Exchange and the Common Stock Purchase; provided, however, that, as to a
particular Holder, such shares of Common Stock will cease to be Registrable
Securities when (i) such shares of Common Stock have been sold or otherwise
transferred by the Holder thereof pursuant to the Effective Registration
Statement; (ii) such shares have been sold pursuant to Rule 144 under
circumstances in which the legend borne by such shares of Common Stock relating
to restrictions on transferability thereof, under the Securities Act or
otherwise, is removed; (iii) such shares of Common Stock have been otherwise
transferred, new certificates for such shares of Common Stock not bearing a
legend restricting further transfer have been delivered by the Company and
subsequent dispositions of such shares of Common Stock do not require
registration or qualification of such securities under the Securities Act or any
state securities or blue sky law then in force, or (iv) such shares of Common
Stock shall cease to be outstanding.
"Requirement of Law" means, as to any Person, the certificate
of incorporation and by-laws, 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.
"SEC" means the Securities and Exchange Commission.
"Securities" means the shares of Common Stock, including the
Warrant Shares, and Warrants.
"Securities Act" means the Securities Act of 1933, as amended.
"Transfer" means any sale, assignment, hypothecation, transfer
or other disposition.
2. Effective Registration Statement. The Company has filed the
Effective Registration Statement (which is a "shelf" registration statement as
contemplated by Rule 415
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under the Securities Act), and such Effective Registration Statement is
currently effective under the Securities Act. The Company agrees to use its best
efforts to keep such Effective Registration Statement effective until the date
that is one year following the exercise of the last Warrant or, if none of the
Warrants have been exercised, September 8, 2004 (the "Effective Period"). After
the distribution contemplated under the Effective Registration Statement has
been completed, the Company will have no further obligation under this Section
2.
3. Expenses of Registration. In connection with the Effective
Registration Statement, the Company will pay all registration, filing and NASD
fees, all fees and expenses of complying with securities or "blue sky" laws,
printing expenses, messenger, telephone and delivery expenses, the fees and
expenses incurred in connection with the listing of the Registrable Securities
on any securities exchange or quotation system, fees and disbursements of
counsel for the Company and all independent certified public accountants,
securities laws liability insurance (if the Company so desires), and fees and
expenses of other persons retained by the Company; provided, however, that each
Holder will pay its pro rata share of any commissions, fees and disbursements of
underwriters and their counsel customarily paid by sellers of securities (based
on offering proceeds to be received by it).
4. Registration Procedures. In the case of the Effective
Registration Statement, the Company will:
(a) furnish to the Holders such number of copies of the
Effective Registration Statement, each amendment and supplement thereto (in each
case including all exhibits thereto), the Prospectus included in such Effective
Registration Statement (including each preliminary prospectus) and such other
documents in such quantities as the Holders may reasonably request from time to
time in order to facilitate their distribution;
(b) notify Blackstone promptly of any request by the SEC for
the amending or supplementing of such Effective Registration Statement or
Prospectus or for additional information and promptly deliver to the Blackstone
and its counsel copies of any comments received by the SEC;
(c) advise the Holders promptly after the Company receives
notice or obtains knowledge of the issuance of any stop order or other action by
the SEC suspending the effectiveness of any such Effective Registration
Statement or amendment thereto, and promptly use its best efforts to prevent the
issuance of any stop order or to obtain its withdrawal promptly if such stop
order should be issued or promptly as is practicable cause the Effective
Registration Statement or amendment to be declared effective under the
Securities Act;
(d) notify Blackstone, promptly after the Company receives
notice thereof, of the time when any amendment or supplement or any prospectus
forming a part of the Effective Registration Statement has been filed;
(e) use all reasonable efforts to register or qualify the
Registrable Securities under such other securities or blue sky laws of such
jurisdictions as the Holders (or the managing underwriter, in the case of
underwritten offerings) reasonably request; provided that the
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Company will not be required to qualify to do business or become subject to
service of process or taxation in any jurisdiction in which it is not already so
qualified or subject;
(f) cause the Registrable Securities included in the Effective
Registration Statement to be listed on any securities exchange or authorized for
quotation on any national quotation system on which any of the Common Stock is
then listed;
(g) notify the Holders, (i) at any time when a prospectus
relating to the proposed sale is required to be delivered under the Securities
Act, of the happening of any event (which need not be specific) as a result of
which the Prospectus included in such Effective Registration Statement or
amendment contains an untrue statement of a material fact or omits to state any
material fact required to be stated therein in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and the Company will, as promptly as practicable, prepare a
supplement or amendment to such Prospectus (subject to Section 4(i) below) so
that, as thereafter delivered to the purchasers of the Registrable Securities,
such Prospectus will not contain an untrue statement of a material fact or omit
to state any material fact required to be stated therein in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading and (ii) at any time that the occurrence or existence of any
pending material corporate development that, in the reasonable discretion of the
Company based upon the advice of legal counsel, makes it appropriate to suspend
the availability of the Effective Registration Statement, and the Company shall
be entitled to suspend the availability of the Effective Registration Statement
for such period (the "Suspension Period"), and the Company will, as promptly as
practicable, allow the resumption of the use of the Effective Registration
Statement and, if required to reflect such material corporate development,
prepare a supplement or amendment to the Prospectus (subject to Section 4(i)
below); provided that the aggregate duration of any Suspension Periods shall not
exceed ninety (90) days in any twelve (12) month period;
(h) make senior management of the Company available to
participate in connection with an underwritten offering and on a reasonably and
customary basis in due diligence presentations to the Holders and their
representatives as may be requested from time to time by the Holders of
Registrable Shares having an aggregate market value of not less than $20
million;
(i) prepare and file with the SEC such amendments and
supplements to the Effective Registration Statement and the Prospectus used in
connection therewith as may be necessary to keep such Effective Registration
Statement effective as specified in Section 2, and to comply with the provisions
of the Securities Act with respect to the sale or other disposition of all
Registrable Securities covered by such Effective Registration Statement;
provided, however, that the Company shall not file any such amendment which
would suspend the effectiveness of the Effective Registration Statement unless
no other means is available for complying with the provisions of the Securities
Act and shall use its best efforts to cause such post-effective amendment to be
declared effective under the Securities Act as promptly as is practicable;
(j) make available, upon reasonable prior notice and during
normal business hours in New York City, for inspection by the Holders of
Registrable Securities having an aggregate market value of not less than $20
million, any underwriter participating in any
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disposition pursuant to the Effective Registration Statement and any attorney,
accountant or other agent retained by such Holders or any such underwriter all
relevant financial and other records, pertinent corporate documents and
properties of the Company and cause the Company's officers, directors and
employees, upon reasonable prior notice and during normal business hours in New
York City, to supply all relevant information reasonably requested by the
Holders or any such underwriter, attorney, accountant or agent in connection
with the Effective Registration Statement;
(k) cause the Company's independent public accountants (and
where applicable, provide such assistance and information as required) (i) to
deliver to the Company the report on the procedures performed by the accountants
as specified by the American Institute of Certified Public Accountants for a
review of the unaudited interim financial information as described in SAS No.
100, Interim Financial Information, for the unaudited quarterly financial
information included in each Form 10-Q of the Company filed under the Exchange
Act and (ii) to be available to discuss with the Holders of Registrable Shares
having an aggregate market value of not less than $20 million, in connection
with an underwritten offering and in a reasonable and customary fashion, the
audit reports and interim financial information procedures as well as general
information concerning the relationship and review of the Company's financial
statements;
(l) cooperate and assist in any filings required to be made
with the NASD and in the performance of any due diligence investigation by any
underwriter in an underwritten offering;
(m) as promptly as is practicable after the date the Company
receives the information with respect to any Holder pursuant to Section 7(a) or
7(b), and in any event within three Business Days after such date, (i) if
required by applicable law, file with the SEC a supplement to the related
Prospectus or a supplement or amendment to any document incorporated therein by
reference or file any other required document so that the Holder delivering such
information is named as a selling security holder in the Effective Registration
Statement and the related Prospectus in such a manner as to permit such Holder
to deliver such Prospectus to purchasers of the Registrable Securities held by
it in accordance with applicable law and, if the Company is required to file a
post-effective amendment to the Effective Registration Statement, use its best
efforts to cause such post-effective amendment to be declared effective under
the Securities Act as promptly as is practicable; (ii) provide such Holder
copies of any documents filed pursuant to clause (i) of this Section 4(m); and
(iii) notify such Holder as promptly as practicable after the effectiveness
under the Securities Act of any post-effective amendment filed pursuant to
clause (i) of this Section 4(m); provided that if such information is delivered
during a period specified under Section 4(g)(i) or during a Suspension Period
specified under Section 4(g)(ii), the Company will so inform the Holder
delivering such information and shall take the actions set forth in clauses (i),
(ii) and (iii) of this Section 4(m) upon expiration of the suspension period in
accordance with Section 4(g)(i) or the Suspension Period specified under Section
4(g)(ii); and
(n) upon the request by or on behalf of one or more Holders of
Registrable Shares having an aggregate market value of not less than $20
million, which Holders intend to undertake a "block trade" or an underwritten
offering of Registrable Securities, enter into
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customary agreements (including without limitation, an underwriting agreement in
customary form that requires delivery (i) by the independent accountants of
comfort letters and (ii) by counsel for the Company of legal opinions, in each
case in customary form and covering such matters of the type customarily covered
by comfort letters and legal opinions, respectively, to underwriters in
connection with public offerings) and take such other actions (including,
without limitation, making senior management of the Company available to
participate on a reasonable and customary basis (1) in road show presentations
and (2) in due diligence presentations to such Holders, any underwriter
participating in any disposition pursuant to the Effective Registration
Statement and any attorney, accountant or other agent retained by such Holders
or any such underwriter) as are reasonably required in order to expedite or
facilitate the disposition of the Registrable Securities included in the
Effective Registration Statement.
5. Representations and Warranties of the Company. The Company
as of each of (i) the date hereof, (ii) the date of each filing under the
Securities Act of an amendment, supplement or Prospectus to the Effective
Registration Statement and (iii) the date of each filing under the Exchange Act
of a document incorporated by reference into the Effective Registration
Statement, represents and warrants to each Holder that:
(a) Corporate Power and Authority. The Company has the
corporate power and authority to execute, deliver and perform its obligations
under this Agreement.
(b) Corporate Authorization; No Contravention. The execution,
delivery and performance by the Company of this Agreement and the transactions
contemplated hereby (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 by-laws of the Company, 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.
(c) Governmental Authorization; Third Party Consents. No
approval, consent, exemption, authorization or other action by, or notice to, or
filing with, any Governmental Authority or any other Person in respect of any
Requirement of Law, Contractual Obligation or otherwise is necessary or required
in connection with the execution, delivery or performance by the Company, or
enforcement against the Company, of this Agreement and the transaction
contemplated hereby; except such as have been obtained and made under the
Securities Act and such as may be required under state securities laws.
(d) Binding Effect. This Agreement 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 the enforceability thereof may be limited by considerations of public
policy and subject to the effects of bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
(e) Effective Registration Statement; SEC Filings; Financial
Statements; Independent Accountants. The Effective Registration Statement has
been filed with the SEC and
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has become effective. The Company has timely filed all reports required to be
filed under the Exchange Act and incorporated by reference into the Effective
Registration Statement. The Effective Registration Statement and all reports
filed under the Exchange Act specified in the immediately preceding sentence
complied in all material respects with the applicable requirements of the
Securities Act or the Exchange Act, as applicable, and did not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading. Each of the
Company's financial statements (including, in each case, any related notes)
contained in the reports filed under the Exchange Act and included in or
incorporated by reference into the Effective Registration Statement complied as
to form in all material respects with applicable published rules and regulations
of the SEC with respect thereto, was prepared in accordance with generally
accepted accounting principles in the United States applied on a consistent
basis throughout the periods involved and fairly presented the financial
position of the Company and its subsidiaries as at the respective dates and for
the periods indicated. Ernst & Young LLP, who have certified certain financial
statements of the Company and its subsidiaries are independent public
accountants with respect to the Company and its subsidiaries as required by the
Securities Act.
(f) Listing. The Registrable Securities have been approved for
listing on the Nasdaq National Market, subject, in the case of the Warrant
Shares, to notice of issuance.
6. Legend on Securities.
(a) A copy of this Agreement will be filed with the secretary
of the Company and kept with the records of the Company.
(b) Each certificate representing Securities will for as long
as this Agreement is effective, and until such time as the Securities are
Transferred in a Public Offering as permitted by this Agreement, bear legends
substantially in the following forms:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE [in the case of
Warrants, insert: AND ANY SECURITIES ACQUIRED UPON THE EXERCISE OF THIS
SECURITY] HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE
SECURITIES MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN
APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH
LAWS.
THE SALE, ASSIGNMENT, HYPOTHECATION, TRANSFER OR OTHER
DISPOSITION (EACH A "TRANSFER") OF ANY OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE [in the case of Warrants, insert: AND ANY SECURITIES ACQUIRED UPON
THE EXERCISE OF THIS SECURITY] ARE RESTRICTED BY THE TERMS OF A REGISTRATION
RIGHTS AGREEMENT AMONG THE COMPANY AND THE STOCKHOLDERS NAMED THEREIN, A COPY OF
WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY. BY ACCEPTING DELIVERY OF
THIS CERTIFICATE
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THE HOLDER WILL BE DEEMED TO HAVE AGREED TO BE SUBJECT TO SUCH REGISTRATION
RIGHTS AGREEMENT AS A HOLDER AS DEFINED THEREIN. [In the case of Warrants,
insert: THE WARRANTS REPRESENTED BY THIS CERTIFICATE MUST BE EXERCISED PRIOR TO
OR ON SEPTEMBER 7, 2004, NOTWITHSTANDING THE CONTRARY TERMS CONTAINED IN THIS
WARRANT CERTIFICATE.]
(c) The Company agrees to promptly remove (or cause to be
removed) the legends set forth above and to take such further action to remove
any restrictions on the Registrable Securities in connection with the Transfer
of the Registrable Securities in a Public Offering.
7. Agreements of Holders.
(a) Each Holder agrees that it will not, directly or
indirectly, Transfer any shares of Common Stock or Warrants unless such Transfer
complies with the provisions hereof and (i) such Transfer is made pursuant to an
effective registration statement under the Securities Act and, if required, has
been registered under all applicable state securities or "blue sky" laws or (ii)
no such registration is required because of the availability of an exemption
from registration under the Securities Act and all applicable state securities
or "blue sky" laws. By accepting the Transfer of any of the Registrable
Securities, a Private Transferee will be deemed to have agreed to be bound by
this Agreement as a Holder.
(b) Each Holder agrees to provide any information reasonably
required by the Company with respect to such Holder to be disclosed in the
Effective Registration Statement or in any supplement to a prospectus included
therein for purposes of complying with the Securities Act. The Company may
require each Holder of Registrable Securities as to which any registration
pursuant to Section 2 is being effected to furnish to the Company such
information regarding such Holder and such Holder's intended method of
distribution of such Registrable Securities as the Company may from time to time
reasonably request in writing, but only to the extent that such information is
required in order to comply with the Securities Act. Each such Holder agrees to
notify the Company as promptly as practicable of any inaccuracy or change in
information previously furnished by such Holder to the Company or of the
occurrence of any event in either case as a result of which any Prospectus
relating to such registration contains or would contain an untrue statement of a
material fact regarding such Holder or such Holder's intended method of
disposition of such Registrable Securities or omits to state any material fact
regarding such Holder or such Holder's intended method of disposition of such
Registrable Securities required to be stated therein or necessary to make the
statements therein not misleading, and promptly to furnish to the Company any
additional information required to correct and update any previously furnished
information or required so that such Prospectus shall not contain, with respect
to such Holder or the disposition of such Registrable Securities, an 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 not misleading.
(c) Each Holder agrees that, upon receipt of any notice from
the Company of the happening of any event of the kind described in Section 4(g),
such Holder will forthwith discontinue disposition of Registrable Securities
pursuant to an Effective Registration Statement until such Holder's receipt of
the copies of the supplemented or amended Prospectus
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contemplated by Section 4(g), and, if so directed by the Company, such Holder
will deliver to the Company (at the Company's expense), all copies in its
possession, 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.
(d) Each Holder agrees that notwithstanding that the stated
expiration time of the Warrants is 5:00 PM, New York City time, on March 7,
2005, the Holder will only exercise the Warrant at any time and from time to
time, during the period from the date hereof until 5:00 PM, New York City time,
on September 7, 2004, and each Holder agrees to cooperate in taking such action
reasonably requested by the Company, including inserting legends on the
certificates representing the Warrants, that is necessary to effect the
agreement contained in this Section 7(d). Any purported exercise of a Warrant by
a Holder after September 7, 2004 shall be null and void.
8. Reports Under Exchange Act. 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 Registrable Securities of the Company to the public without
registration ("Rule 144"), the Company agrees to use best efforts to:
(a) make and keep public information available, as those terms
are understood and defined in Rule 144, at all times;
(b) 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
(c) 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, the
Securities Act and the Exchange Act, (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.
9. Observer Rights. The Company hereby agrees that at all
times on and after the date hereof, so long as BCC continues to hold more than
10 million shares of Common Stock or Warrants to purchase more than 10 million
shares of Common Stock or any combination of Common Stock and Warrants to
purchase Common Stock that, in the aggregate, is more than 10 million shares of
Common Stock (including on a Warrant exercised basis), the Company shall:
(a) Make appropriate officers and/or directors of the Company
available periodically and at such times as reasonably requested by BCC for
consultation with BCC or its designated representative (to the extent not
prohibited by Applicable Law) with respect to matters relating to the business
and affairs of the Company and its subsidiaries, including, without limitation,
significant changes in management personnel and compensation of employees,
introduction of new products or new lines of business, important acquisitions or
dispositions of plants and equipment, significant research and development
programs, the
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purchasing or selling of important trademarks, licenses or concessions or the
proposed commencement or compromise of significant litigation;
(b) Provide BCC or its designated representative (to the
extent not prohibited by Applicable Law) with such other rights of consultation
as may reasonably be determined by BCC to be necessary to qualify BCC's
investment in the Company as a "venture capital investment" for purposes of the
United States Department of Labor Regulation published at 29 C.F.R. Section
2510.3-101(d)(3)(i) (the "Plan Asset Regulation");
(c) Grant BCC the right to designate one non-voting board
observer who will be entitled to attend all meetings of the board of directors
of the Company and receive copies of all materials provided to the board of
directors of the Company, provided that such observer shall have no voting
rights with respect to actions taken or elected not to be taken by the board of
directors of the Company; provided, further, that such observer (i) is deemed
acceptable to the board of directors of the Company acting reasonably and in
good faith and (ii) executes, prior to his or her attendance at the first of
such meetings, a standard non-disclosure and market stand-off agreement with the
Company in a form acceptable to the Company and BCC; and
(d) Consider, in good faith, the recommendation of BCC or its
designated representative in connection with the matters on which it is
consulted as described above, recognizing that the Company shall retain the
ultimate discretion with respect to all such matters.
In the event Blackstone transfers all or any of the Securities
to an affiliated entity that is intended to qualify as a "venture capital
operating company" under the Plan Asset Regulation, such transferee shall be
afforded the same rights with respect to the Company afforded to BCC hereunder
and shall be treated, for such purposes, as a third party beneficiary hereunder.
10. Indemnification. (a) The Company will indemnify each
Holder, each of its officers and directors, and each Person controlling such
Holder within the meaning of Section 15 of the Securities Act and the rules and
regulations thereunder, with respect to the Effective Registration Statement,
and each underwriter, if any, and each Person who controls any underwriter
within the meaning of Section 15 of the Securities Act and the rules and
regulations thereunder, each of which shall be treated, for such purposes, as a
third party beneficiary hereunder, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any Prospectus or other document (including any related registration statement,
notification or the like) incident to any such registration or based on any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
any violation by the Company of the Securities Act or any rule or regulation
thereunder applicable to the Company and relating to action or inaction required
of the Company in connection with any such registration and will reimburse such
Holder, each of its officers and directors, and each Person controlling such
Holder, each such underwriter and each Person who controls any such underwriter,
for any legal and any other expenses reasonably incurred in connection with
investigating and defending any such claim, loss, damage, liability or action;
provided that the Company will not be liable in any such case to the extent that
any such claim, loss, damage, liability or expense arises out of or is based on
(i) any untrue statement or omission
11
based upon information furnished in writing to the Company by or on behalf of
such Holder with respect to such Holder and stated to be specifically for use
therein, (ii) a Holder failing to send or deliver a copy of the Prospectus that
is in compliance with this Agreement with or prior to the delivery of written
confirmation of the sale by such Holder to the person asserting such claim upon
which the loss, damage or liability arises, or (iii) a Holder sending or
delivering a Prospectus in violation of Section 4(g) with respect to a
suspension period pursuant to Section 4(g)(i) or a Suspension Period with
respect to Section 4(g)(ii) to the person asserting such claim upon which the
loss damage or liability arises where such Prospectus, as a result of the events
specified in Section 4(g)(i) or 4(g)(ii), contains any untrue statement of a
material fact or omits to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of any indemnified Holder and shall survive the transfer of
the Registrable Securities by the Holder.
(b) Each Holder will indemnify the Company, each of its
directors and officers and each underwriter, if any, of the Company's securities
covered by such a registration statement, each Person who controls the Company
or such underwriter within the meaning of Section 15 of the Securities Act and
the rules and regulations thereunder, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact with respect
to such Holder contained in any such registration statement, prospectus or other
document made by such Holder, or any omission (or alleged omission) to state
therein a material fact with respect to such Holder required to be stated
therein or necessary to make the statements by such Holder therein not
misleading, and will reimburse the Company and such other directors, officers,
partners, persons, underwriters or control Persons for any legal or any other
expenses reasonably incurred in connection with investigating or defending any
such claim, loss, damage, liability or action, in each case to the extent, but
only to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such registration statement,
prospectus or other document in reliance upon and in conformity with information
furnished in writing to the Company by such Holder with respect to such Holder
and stated to be specifically for use therein; provided, however, that the
obligations of such Holder hereunder shall be limited to an amount equal to the
proceeds to such Holder of securities sold as contemplated herein.
(c) If the indemnification provided for in this Section 10 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage or expense referred to
herein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage or expense
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions which resulted in such loss,
liability, claim, damage or expense, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
12
(d) Promptly after receipt by an indemnified party under this
Section 10 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party pursuant to Section 10(a) or 10(b), notify the indemnifying
party in writing of the claim or the commencement of that action; provided,
however, that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have under this Section 10 except to the extent
that it has been prejudiced (through the forfeiture of substantive rights or
defenses) by such failure; and provided, further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may have to
an indemnified party otherwise than under this Section 10. If any such claim or
action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 10 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than the reasonable costs of investigation; provided, however,
that an indemnified party shall have the right to employ its own counsel in any
such action, but the fees, expenses and other charges of such counsel for the
indemnified party will be at the expense of such indemnified party unless (i)
the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (ii) the indemnified party has reasonably
concluded (based upon written advice of counsel to the indemnified party) that
there may be legal defenses available to it or other indemnified parties that
are different from or in addition to those available to the indemnifying party,
(iii) a conflict or potential conflict exists (based upon written advice of
counsel to the indemnified party) between the indemnified party and the
indemnifying party (in which case the indemnifying party will not have the right
to direct the defense of such action on behalf of the indemnified party) or (iv)
the indemnifying party has not in fact employed counsel reasonably satisfactory
to the indemnified party to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the action, in
each of which cases the reasonable fees, disbursements and other charges of
counsel will be at the expense of the indemnifying party or parties. Each
indemnified party, as a condition of the indemnity agreements contained in
Sections 10(a) and 10(b), shall use all reasonable efforts to cooperate with the
indemnifying party in the defense of any such action or claim. No indemnifying
party shall be liable for any settlement of any such action effected without its
written consent (which consent shall not be unreasonably withheld), but if
settled with its written consent or if there be a final judgment for the
plaintiff in any such action, the indemnifying party agrees to indemnify and
hold harmless any indemnified party from and against any loss or liability by
reason of such settlement or judgment or if the indemnifying party has not paid
the expenses and fees for which it is liable 20 days after notice by the
indemnified party of request for reimbursement. No indemnifying party shall,
without the prior written consent of the indemnified party (which consent shall
not be unreasonably withheld), effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such proceeding and does not include a
13
statement or admission of fault, culpability or a failure to act, by or on
behalf of the indemnified party.
11. Amendments and Modifications. The provisions of this
Agreement may not be amended, modified or supplemented, and waivers or consents
to departures from the provisions hereof may not be given, except in writing
signed by the Company and the Holders. Notwithstanding the foregoing, a waiver
or consent to depart from the provisions hereof with respect to a matter that
relates exclusively to the rights of Holders whose Securities are being sold
pursuant to the Effective Registration Statement and that does not directly or
indirectly affect the rights of other Holders may be given in writing by Holders
of a majority in aggregate amount of the Securities being sold by such Holders
pursuant to the Effective Registration Statement.
12. No Waiver. Each of the parties to this Agreement expressly
acknowledges and agrees that, except as expressly provided in this Agreement,
nothing in this Agreement is intended to, or does, in any manner waive, limit,
impair or restrict the ability of any party to this Agreement to protect and
preserve all of its rights, remedies and interests.
13. Further Assurances. Each of the parties to this Agreement
hereby further covenants and agrees to execute and deliver all further documents
and agreements and take all further action that may be reasonably necessary or
reasonably desirable in order to enforce and effectively implement the terms and
conditions of this Agreement.
14. Notices. All notices, requests, demands, claims and other
communications hereunder shall be in writing and shall be (a) transmitted by
hand delivery, or (b) mailed by first class, registered or certified mail,
postage prepaid, or (c) transmitted by overnight courier, or (d) transmitted by
telecopy, and in each case, if to the Company, at the address set forth below:
Sirius Satellite Radio Inc.
1221 Avenue of the Americas, 36th Floor
New York, New York 10020
Telephone: (212) 584-5100
Fax: (212) 584-5353
Attention: Patrick L. Donnelly
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Telephone: (212) 455-2000
Fax: (212) 455-2500
Attention: Gary L. Sellers
14
if to Blackstone, to the address set forth on the applicable signature pages to
this Agreement for the particular Blackstone party, and if to any other Holder,
to such address in writing as the Holder or Blackstone on behalf of a Holder has
provided to the Company in writing.
Notices mailed or transmitted in accordance with the foregoing
shall be deemed to have been given upon receipt.
15. Governing Law. This Agreement shall be governed in all
respects by the laws of the State of New York.
16. Jurisdiction. By its agreement to be a party to this
Agreement, each of the parties to this Agreement irrevocably and unconditionally
agrees that any legal action, suit or proceeding against it with respect to any
matter under or arising out of or in connection with this Agreement or for
recognition or enforcement of any judgment rendered in any such action, suit or
proceeding, shall be brought in a federal or state court of competent
jurisdiction in the State of New York located in the Borough of Manhattan. By
its agreement to be a party to this Agreement, each of the parties to this
Agreement irrevocably accepts and submits itself to the jurisdiction of the
court of competent jurisdiction in the State of New York with respect to any
such action, suit or proceeding.
17. Consent to Service of Process. Each of the parties to this
Agreement irrevocably consents to service of process by mail at the address
specified pursuant to Section 14. Each of the parties to this Agreement agrees
that its submission to jurisdiction and consent to service of process by mail is
made for the express benefit of each of the other parties to this Agreement.
18. Specific Performance. It is understood and agreed by each
of the parties to this Agreement that money damages would not be a sufficient
remedy for any breach of this Agreement by any party and each non-breaching
party shall be entitled to specific performance, injunctive, rescissionary or
other equitable relief as remedy for any such breach and each breaching party
shall waive the defense that a remedy at law would be adequate.
19. Headings. The headings of the sections, paragraphs and
subsections of this Agreement are inserted for convenience only and shall not
affect the interpretation hereof.
20. Successors and Assigns. This Agreement is intended to bind
and inure to the benefit of the parties to this Agreement and their respective
successors, permitted assigns, heirs, executors, administrators and
representatives, including the Private Transferees. The agreements,
representations and obligations of the parties to this Agreement are, in all
respects, several and not joint.
21. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original and all of which
shall constitute one and the same agreement. Delivery of an executed counterpart
of a signature page by facsimile shall be effective as delivery of a manually
executed counterpart.
[SIGNATURES BEGIN ON NEXT PAGE]
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IN WITNESS WHEREOF, each of the parties has caused this
Agreement to be executed and delivered by its duly authorized officers as of the
date first written above.
SIRIUS SATELLITE RADIO INC.
By: /s/ Patrick L. Donnelly
---------------------------------------------
Patrick L. Donnelly
Executive Vice President, General Counsel and
Secretary
[Signature pages to the Registration Rights Agreement dated as of June 12, 2003]
BLACKSTONE CCC CAPITAL PARTNERS L.P.
By: Blackstone Management Associates III
L.L.C., its general partner
By: /s/ Robert L. Friedman
--------------------------------------
Robert L. Friedman
Authorized Person
c/o The Blackstone Group L.P.
345 Park Avenue
31st Floor
New York, New York 10154
BLACKSTONE CCC OFFSHORE CAPITAL
PARTNERS L.P.
By: Blackstone Management Associates III
L.L.C., its general partner
By: /s/ Robert L. Friedman
--------------------------------------
Robert L. Friedman
Authorized Person
c/o The Blackstone Group L.P.
345 Park Avenue
31st Floor
New York, New York 10154
BLACKSTONE FAMILY INVESTMENT
PARTNERSHIP III L.P.
By: Blackstone Management Associates III
L.L.C., its general partner
By: /s/ Robert L. Friedman
--------------------------------------
Robert L. Friedman
Authorized Person
c/o The Blackstone Group L.P.
345 Park Avenue
31st Floor
New York, New York 10154