EXECUTION COPY
Exhibit 4.1
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SIRIUS SATELLITE RADIO INC.
AND
THE BANK OF NEW YORK,
as Trustee
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THIRD SUPPLEMENTAL INDENTURE
Dated as of October 13, 2004
TO
Indenture
Dated as of May 23, 2003
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3 1/4% Convertible Notes due 2011
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THIRD SUPPLEMENTAL INDENTURE, dated as of
the 13th day of October 2004 (this "Third
Supplemental Indenture"), between Sirius Satellite
Radio Inc., a corporation duly organized and existing
under the laws of the State of Delaware (the
"Company"), and The Bank of New York, a New York
banking corporation, as trustee (the "Trustee"),
under the Indenture, dated as of May 23, 2003,
between the Company and the Trustee (the
"Indenture").
The Company executed and delivered the Indenture to the
Trustee to provide for the future issuance of its Securities, to be issued from
time to time in series as might be determined by the Company under the
Indenture, in an unlimited aggregate principal amount which may be authenticated
and delivered thereunder as in the Indenture provided.
Pursuant to the terms of the Indenture, the Company desires to
provide for the establishment of a new series of its Securities to be known as
its 3 1/4% Convertible Notes due 2011 (the "Series 3 1/4% Notes"), the form of
such Series 3 1/4% Notes and the terms, provisions and conditions thereof to be
as provided in the Indenture and this Third Supplemental Indenture.
The Company has requested the Trustee to join with it in the
execution and delivery of this Third Supplemental Indenture. All requirements
necessary to make this Third Supplemental Indenture a valid instrument,
enforceable in accordance with its terms, and to make the Series 3 1/4% Notes,
when executed by the Company and authenticated and delivered by the Trustee, the
valid obligations of the Company, have been performed and fulfilled, and the
execution and delivery of this Third Supplemental Indenture and the Series 3
1/4% Notes, have been in all respects duly authorized.
NOW, THEREFORE, in consideration of the purchase and
acceptance of the Series 3 1/4% Notes by the Holders thereof, and for the
purpose of setting forth, as provided in the Indenture, the form of the Series 3
1/4% Notes and the terms, provisions and conditions thereof, the Company
covenants and agrees with the Trustee as follows:
ARTICLE I
General Terms and Conditions of
the Series 3 1/4% Notes
SECTION 1.01. Title and Terms. There shall be and is hereby
authorized a series of Securities designated the "3 1/4% Convertible Notes due
2011", limited in aggregate principal amount up to $230,000,000. The Series 3
1/4% Notes shall mature and the principal thereof shall be due and payable,
together with all accrued and unpaid interest thereon, on October 15, 2011. The
Series 3 1/4% Notes shall be convertible into shares of common stock, $0.001 par
value, of the Company, as such shares shall be constituted at the time of
conversion ("Common Stock"), in accordance with Article III
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hereof. The Series 3 1/4% Notes and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A, which is hereby incorporated in
and expressly made part of this Indenture. The Series 3 1/4% Notes may have
notations, legends or endorsements required by law, stock exchange rule,
agreements to which the Company is subject, if any, or usage (provided that any
such notation, legend or endorsement is in a form acceptable to the Company).
Each Series 3 1/4% Note shall be dated the date of its authentication. The terms
of the Series 3 1/4% Notes set forth in Exhibit A are part of the terms of this
Third Supplemental Indenture.
ARTICLE II
The Securities
SECTION 2.01. Form and Dating. (a) The Series 3 1/4% Notes
will be offered and sold by the Company pursuant to the Terms Agreement (the
"Terms Agreement") dated as of October 8, 2004 between the Company and Morgan
Stanley & Co. Incorporated. The Series 3 1/4% Notes shall be issued initially in
the form of one or more permanent global Securities in definitive, fully
registered form (collectively, the "Global Securities") without interest
coupons, with the global securities legend set forth in Exhibit A hereto, which
shall be deposited on behalf of the purchasers of the Series 3 1/4% Notes
represented thereby with the Securities Custodian and registered in the name of
the Depository or a nominee of the Depository, duly executed by the Company and
authenticated by the Trustee as provided in the Indenture.
(b) Book-Entry Provisions. This Section 2.01(b) shall apply
only to a Global Security deposited with or on behalf of the Depository.
The Company shall execute and the Trustee shall, in accordance
with this Section 2.01(b), authenticate and deliver initially one or more Global
Securities that shall be (i) registered in the name of the Depository for such
Global Security or Global Securities or the nominee of such Depository and (ii)
delivered by the Trustee to such Depository or pursuant to such Depository's
instructions or held by the Trustee as custodian for the Depository.
Members of, or participants in, the Depository ("Agent
Members") shall have no rights under this Indenture with respect to any Global
Security held on their behalf by the Depository or by the Trustee as the
custodian of the Depository or under such Global Security, and the Company, the
Trustee and any agent of the Company or the Trustee shall be entitled to treat
the Depository as the absolute owner of such Global Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depository or impair, as between the Depository and its Agent Members, the
operation of customary practices of such Depository governing the exercise of
the rights of a holder of a beneficial interest in any Global Security.
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(c) Certificated Securities. Except as provided under the
Indenture or this Third Supplemental Indenture, owners of beneficial interests
in the Global Securities shall not be entitled to receive physical delivery of
certificated Series 3 1/4% Notes.
(d) Cancellation or Adjustment of Global Security. At such
time as all beneficial interests in a Global Security have either been redeemed,
purchased or canceled, such Global Security shall be returned to the Depository
for cancellation or retained and canceled by the Trustee. At any time prior to
such cancellation, if any beneficial interest in a Global Security is exchanged
redeemed, purchased or canceled, the principal amount of Securities represented
by such Global Security shall be reduced and an adjustment shall be made on the
books and records of the Trustee (if it is then the Securities Custodian for
such Global Security) with respect to such Global Security, by the Trustee or
the Securities Custodian, to reflect such reduction.
(e) No Obligation of the Trustee.
(i) The Trustee shall have no responsibility or obligation to
any beneficial owner of a Global Security, a member of, or a participant in the
Depository or other Person with respect to the accuracy of the records of the
Depository or its nominee or of any participant or member thereof, with respect
to any ownership interest in the Securities or with respect to the delivery to
any participant, member, beneficial owner or other Person (other than the
Depository) of any notice (including any notice of redemption) or the payment of
any amount, under or with respect to such Securities. All notices and
communications to be given to the Holders and all payments to be made to Holders
under the Securities shall be given or made only to or upon the order of the
registered Holders (which shall be the Depository or its nominee in the case of
a Global Security). The rights of beneficial owners in any Global Security shall
be exercised only through the Depository subject to the applicable rules and
procedures of the Depository. The Trustee may rely and shall be fully protected
in relying upon information furnished by the Depository with respect to its
members, participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer imposed
under this Indenture or under applicable law with respect to any transfer of any
interest in any Security (including any transfers between or among Depository
participants, members or beneficial owners in any Global Security) other than to
require delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by, the terms
of this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.
SECTION 2.02. Right To Require Repurchase. In the event that a
Fundamental Change (as defined in Section 2.05) shall occur, each Holder shall
have the right, at the Holder's option, to require the Company to repurchase,
and upon the exercise of such right the Company shall repurchase, all of such
Holder's Series 3 1/4% Notes, or any portion of the principal amount thereof
that is an integral multiple of $1,000 (provided that no single Series 3 1/4%
Note may be repurchased in part unless the portion
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of the principal amount of such Series 3 1/4% Note to be outstanding after such
repurchase is equal to $1,000 or an integral multiple of $1,000), on the date
(the "Repurchase Date") that is 30 days after the date of the occurrence of a
Fundamental Change or, if such 30th day is not a Business Day, the first
Business Day thereafter, for cash at a purchase price equal to 100% of the
principal amount to be repurchased plus interest accrued and unpaid thereon to,
but excluding, the Repurchase Date (subject to the right of Holders of record on
the Regular Record Date to receive interest on the relevant Interest Payment
Date) (the "Repurchase Price"), plus the Make Whole Premium, if any (the form
and amount of any such Make Whole Premium shall be determined pursuant to
Article VII). If the Repurchase Date is between a Regular Record Date and the
related Interest Payment Date, then the interest payable on such Interest
Payment Date shall be paid to the Holder of record of the Series 3 1/4% Note on
such Regular Record Date.
SECTION 2.03. Notices; Method of Exercising Repurchase Right,
Etc. (a) On or before the 10th day after the occurrence of a Fundamental Change,
the Company shall mail a notice to all Holders (and to beneficial owners as
required by applicable law) of Series 3 1/4% Notes (the "Company Notice") of the
occurrence of the Fundamental Change and of the repurchase right set forth
herein arising as a result thereof. If the Company gives such notice, the
Company shall also deliver a copy of such notice to the Trustee.
Each Company Notice shall include the form of a Fundamental
Change Purchase Notice (as defined below) to be completed by the Holder and
shall state:
(1) the date of such Fundamental Change and, briefly,
the events causing such Fundamental Change;
(2) the date by which the Fundamental Change Purchase
Notice must be delivered;
(3) the Repurchase Date;
(4) the Repurchase Price and the Make Whole Premium, if
any;
(5) a description of the procedure which a Holder must
follow to exercise its repurchase right under this Section
2.03;
(6) the procedures for withdrawing a Fundamental Change
Purchase Notice by a Holder, including a form of notice of
withdrawal;
(7) the place or places where such Series 3 1/4% Notes
are to be surrendered for payment of the Repurchase Price
and the Make Whole Premium, if any;
(8) briefly, the conversion rights of Holders of Series
3 1/4% Notes;
(9) the Conversion Rate and any adjustments thereto,
the date on which the right to convert the Series 3 1/4%
Notes will terminate and the
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places where such Series 3 1/4% Notes may be surrendered for
conversion; and
(10) that Holders who want to convert Series 3 1/4%
Notes must satisfy the requirements set forth in the Series
3 1/4% Notes in order to convert the Series 3 1/4% Notes.
No failure of the Company to give the foregoing notice or
defect therein shall limit any Holder's right to exercise its repurchase right
or affect the validity of the proceedings for the repurchase of Series 3 1/4%
Notes.
(b) To exercise its repurchase right, a Holder shall deliver
to the Paying Agent or an office or agency maintained by the Company for such
purpose in the Borough of Manhattan, The City of New York, prior to the close of
business on or before the Repurchase Date written notice of the Holder's
exercise of such right (the "Fundamental Change Purchase Notice"), which notice
shall set forth (i) the name of the Holder, (ii) the principal amount of the
Series 3 1/4% Notes to be repurchased (and, if any Series 3 1/4% Note is to be
repurchased in part, the portion of the principal amount thereof to be
repurchased and the name of the Person in which the portion thereof to remain
outstanding after such repurchase is to be registered), (iii) a statement that
an election to exercise the repurchase right is being made thereby pursuant to
the applicable provisions of the Series 3 1/4% Notes, and (iv) the certificate
numbers of the Series 3 1/4% Notes with respect to which the repurchase right is
being exercised.
(c) In the event a repurchase right shall be exercised in
accordance with the terms hereof, the Company shall pay or cause to be paid to
the Paying Agent the Repurchase Price in cash, and the Make Whole Premium, if
any, for payment to the Holder on the Repurchase Date, payable with respect to
the Series 3 1/4% Notes (or portion thereof) as to which the repurchase right
has been exercised; provided, however, that such Series 3 1/4% Note for which a
repurchase right shall have been exercised has been delivered to the Paying
Agent at any time after the notice of exercise of a repurchase right shall have
been given. Payment of the Repurchase Price and the Make Whole Premium, if any,
for such Series 3 1/4% Note shall be made promptly following the later of the
Business Day following the Repurchase Date and time of delivery of the Series 3
1/4% Note. If the Paying Agent holds money, securities or other property
sufficient to pay the Repurchase Price and the Make Whole Premium, if any, on
the Business Day following the Repurchase Date, then, immediately after the
Repurchase Date, such Series 3 1/4% Note shall cease to be outstanding and
interest will cease to accrue and will be deemed paid regardless of whether such
Series 3 1/4% Note has been delivered to the Paying Agent, and all other rights
of the Holder shall terminate (other than the right of such Holder to receive
the Repurchase Price and the Make Whole Premium, if any, upon delivery of such
Series 3 1/4% Note).
(d) On or prior to the Repurchase Date, the Company shall
deposit with the Trustee or with a Paying Agent (or, if the Company is acting as
its own Paying Agent, segregate and hold in trust as provided in Section 10.3 of
the Indenture) an amount of money, securities or other property sufficient to
pay the Repurchase Price and the Make
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Whole Premium, if any, of the Series 3 1/4% Notes which are to be repaid on the
Repurchase Date.
(e) If any Series 3 1/4% Note (or portion thereof) surrendered
for repurchase shall not be so paid on the Business Day following the Repurchase
Date, the principal amount of such Series 3 1/4% Note (or portion thereof, as
the case may be) shall, until paid, bear interest from the Repurchase Date at
the rate of 3 1/4% per annum, and each Series 3 1/4% Note shall remain
convertible into Common Stock in accordance with Article III herein until the
principal of such Series 3 1/4% Note (or portion thereof, as the case may be)
shall have been paid or duly provided for.
(f) Any Series 3 1/4% Note which is to be repurchased only in
part shall be surrendered to the Trustee (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder thereof
or its attorney duly authorized in writing), and the Company shall execute, and
the Trustee shall authenticate and deliver to the Holder of such Series 3 1/4%
Note without service charge, a new Series 3 1/4% Note or Series 3 1/4% Notes,
containing identical terms and conditions, each in an authorized denomination in
aggregate principal amount equal to and in exchange for the portion of the
principal of the Series 3 1/4% Note so surrendered that was not repurchased.
(g) Any Holder that has delivered to the Trustee a Fundamental
Change Purchase Notice shall have the right to withdraw such notice at any time
prior to the close of business on the Business Day immediately preceding the
Repurchase Date by delivery of a written notice of withdrawal to the Paying
Agent prior to the close of business on such date. The notice of withdrawal
shall state the principal amount and the certificate numbers of the Series 3
1/4% Notes as to which the withdrawal notice relates and the principal amount,
if any, which remains subject to the notice of exercise of a repurchase right. A
Series 3 1/4% Note in respect of which a Holder has exercised its option to
require repurchase upon a Fundamental Change may thereafter be converted into
Common Stock only if such Holder withdraws its notice in accordance with the
preceding sentence.
SECTION 2.04. Certain Definitions. For purposes of this
Article II:
(a) the term "beneficial owner" shall be determined in
accordance with Rules l3d-3 and 13d-5 promulgated by the
Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"), except that a Person shall be deemed to have
"beneficial ownership" of all securities that such Person
has the right to acquire, whether such right is exercisable
immediately or only after the passage of time; and
(b) the term "Person" shall include any syndicate or
group which would be deemed to be a "Person" under Section
13(d)(3) of the Exchange Act.
SECTION 2.05. Fundamental Change. A "Fundamental Change" shall
mean any transaction or event (whether by means of an exchange offer,
liquidation, tender offer, consolidation, merger, combination, reclassification,
recapitalization or
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otherwise) in connection with which 90% or more of the Common Stock outstanding
is exchanged for, converted into, acquired for or constitutes solely the right
to receive, consideration, less than 90% of which is common stock that:
(a) is listed on, or immediately after the transaction
or event will be listed on, a United States national
securities exchange; or
(b) is approved, or immediately after the transaction
or event will be approved, for quotation on the Nasdaq
National Market or any similar United States system of
automated dissemination of quotations of securities prices.
ARTICLE III
Conversion
SECTION 3.01. Conversion Privilege. (a) A Holder of a Series 3
1/4% Note may convert such Series 3 1/4% Note into Common Stock at any time
during the period stated in paragraph 7 of the Series 3 1/4% Notes. The number
of shares of Common Stock issuable upon conversion of a Series 3 1/4% Note per
$1,000 of Principal Amount thereof (the "Conversion Rate") shall be that set
forth in paragraph 7 of the Series 3 1/4% Notes, subject to adjustment as herein
set forth.
A Holder may convert a portion of the Principal Amount of a
Series 3 1/4% Note if the portion is $1,000 or an integral multiple of $1,000.
Provisions of this Third Supplemental Indenture that apply to conversion of all
of a Series 3 1/4% Note also apply to conversion of a portion of a Series 3 1/4%
Note.
(b) If a Holder converts its Series 3 1/4% Notes at any time
beginning on the date on which the Company gives notice to the Holders of the
occurrence of any Fundamental Change that occurred on or prior to July 15, 2011
(as set forth in Section 2.03(a) above), and ending at the close of business on
the Repurchase Date corresponding to such Fundamental Change, such holder shall
receive:
(i) the Make Whole Premium, if any, which shall be in an
amount and form determined as set forth in Article VII, and shall be paid on the
Repurchase Date corresponding to such Fundamental Change; plus
(ii) the number of shares of Common Stock into which such
Holder's Series 3 1/4% Notes are convertible as set forth in paragraph 7 of the
Series 3 1/4% Notes; plus
(iii) accrued but unpaid interest on such Series 3 1/4% Notes,
if any, to, but excluding the Conversion Date, which interest shall be payable
in cash.
(c) Notwithstanding any provision of this Third Supplemental
Indenture, in no event will the total number of shares of Common Stock issuable
upon conversion of
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the Series 3 1/4% Notes (including any shares of Common Stock issued pursuant to
Article VII) exceed in the aggregate 250.6265 per $1,000 principal amount of
Series 3 1/4% Notes, such number subject to adjustment as herein set forth.
SECTION 3.02. Conversion Procedure. To convert a Series 3 1/4%
Note a Holder must satisfy the requirements contained in paragraph 7 of the
Series 3 1/4% Notes. The date on which a Holder of Series 3 1/4% Notes satisfies
all those requirements is the conversion date (the "Conversion Date"). As soon
as practicable after the Conversion Date, the Company shall deliver to the
Holder, through the Conversion Agent, a certificate for the number of full
shares of Common Stock issuable upon the conversion and cash in lieu of any
fractional share determined pursuant to Section 3.03. The Person in whose name
the certificate is registered shall be treated as a stockholder of record on and
after the Conversion Date; provided, however, that no surrender of a Series 3
1/4% Note on any date when the stock transfer books of the Company shall be
closed shall be effective to constitute the Person or Persons entitled to
receive the shares of Common Stock upon such conversion as the record holder or
holders of such shares of Common Stock on such date, but such surrender shall be
effective to constitute the Person or Persons entitled to receive such shares of
Common Stock as the record holder or holders thereof for all purposes at the
close of business on the next succeeding day on which such stock transfer books
are open; such conversion shall be at the Conversion Rate in effect on the date
that such Series 3 1/4% Note shall have been surrendered for conversion, as if
the stock transfer books of the Company had not been closed. Upon conversion of
a Series 3 1/4% Note, such Person shall no longer be a Holder of such Series 3
1/4% Note unless the Company defaults in the delivery of shares of Common Stock
in respect of such conversion and such default continues for a period of 10
days.
No payment or adjustment will be made for dividends or other
distribution with respect to any Common Stock except as provided in this Article
III.
If the Holder converts more than one Series 3 1/4% Note at the
same time, the number of shares of Common Stock issuable upon the conversion
shall be based on the total Principal Amount of the Series 3 1/4% Notes
converted.
Upon surrender of a Series 3 1/4% Note that is converted in
part, the Company shall execute, and the Trustee shall authenticate and make
available for delivery to the Holder, a new Series 3 1/4% Note in an authorized
denomination equal in Principal Amount to the unconverted portion of the Series
3 1/4% Note surrendered.
If the last day on which a Series 3 1/4% Note may be converted
is a Legal Holiday in a place where the Conversion Agent is located, the Series
3 1/4% Note may be surrendered to the Conversion Agent on the next succeeding
day that is not a Legal Holiday.
SECTION 3.03. Fractional Shares. The Company will not issue a
fractional share of Common Stock upon conversion of a Series 3 1/4% Note.
Instead, the Company will deliver cash for the current market value of the
fractional share. The current market value of a fractional share shall be
determined to the nearest 1/10,000th of
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a share by multiplying the last reported sale price (determined as set forth in
the definition of Current Market Price), on the last Trading Day prior to the
Conversion Date, of a full share by the fractional amount and rounding the
product to the nearest whole cent.
SECTION 3.04. Taxes on Conversion. The Company shall pay any
documentary, stamp or similar issue or transfer tax due on the issue of shares
of Common Stock upon the conversion of a Series 3 1/4% Note in accordance with
Section 3.01. However, the Holder shall pay any such tax which is due because
the Holder requests the shares to be issued in a name other than the Holder's
name. The Conversion Agent may refuse to deliver the certificates representing
the Common Stock being issued in a name other than the Holder's name until the
Conversion Agent receives a sum sufficient to pay any tax that will be due
because the shares are to be issued in a name other than the Holder's name.
Nothing herein shall preclude any tax withholding required by law or
regulations.
SECTION 3.05. Company To Provide Stock. The Company shall,
prior to issuance of any Series 3 1/4% Notes hereunder, and from time to time as
may be necessary, reserve out of its authorized but unissued Common Stock a
sufficient number of shares of Common Stock to permit the conversion of the
Series 3 1/4% Notes into Common Stock.
All shares of Common Stock delivered upon conversion of the
Series 3 1/4% Notes shall be newly issued shares or treasury shares, shall be
duly and validly issued and fully paid and nonassessable and shall be free from
preemptive rights and free of any lien or adverse claim, other than any lien or
claim created by the Holder.
The Company shall endeavor promptly to comply with all Federal
and state securities laws regulating the offer and delivery of shares of Common
Stock upon conversion of Series 3 1/4% Notes, if any, and will use its best
efforts to list or cause to have quoted such shares of Common Stock on the
principal national securities exchange or in the over-the-counter or other
domestic market on which the Common Stock is then listed or quoted.
SECTION 3.06. Adjustment for Change in Capital Stock. In case
the Company shall (i) pay a dividend, or make a distribution, in shares of its
Common Stock, on its Common Stock, (ii) subdivide its outstanding Common Stock
into a greater number of shares, or (iii) combine its outstanding Common Stock
into a smaller number of shares, the Conversion Rate in effect immediately prior
thereto shall be adjusted so that the Holder of any Series 3 1/4% Note
thereafter surrendered for conversion shall be entitled to receive the number of
shares of Common Stock which it would have owned or have been entitled to
receive after the happening of any of the events described above had such Series
3 1/4% Note been converted immediately prior to the happening of such event. If
any dividend or distribution of the type described in clause (i) above is not so
paid or made, the Conversion Rate shall again be adjusted to the Conversion Rate
which would then be in effect if such dividend or distribution had not been
declared. An adjustment made pursuant to this Section 3.06 shall become
effective immediately after the record
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date, in the case of a dividend, and shall become effective immediately after
the effective date, in the case of subdivision or combination.
SECTION 3.07. Adjustment for Rights Issue. In case the Company
shall issue rights or warrants to all holders of its Common Stock entitling them
(for a period expiring within 45 days after the record date mentioned below) to
subscribe for or purchase Common Stock at a price per share less than the
Current Market Price (as defined herein) per share of Common Stock at the record
date for the determination of stockholders entitled to receive such rights or
warrants, the Conversion Rate in effect immediately prior thereto shall be
increased by multiplying the Conversion Rate in effect immediately prior to the
date of issuance of such rights or warrants by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding on the date of
issuance of such rights or warrants plus the number of additional shares of
Common Stock offered for subscription or purchase, and of which the denominator
shall be the number of shares of Common Stock outstanding on the date of
issuance of such rights or warrants plus the number of shares which the
aggregate offering price of the total number of shares so offered would purchase
at such Current Market Price. Such adjustment shall be made successively
whenever any such rights or warrants are issued, and shall become effective
immediately after the opening of business on the day following the record date
for the determination of the stockholders entitled to receive such rights or
warrants. To the extent that shares of Common Stock are not delivered after the
expiration of such rights or warrants, the Conversion Rate shall be readjusted
to the Conversion Rate which would then be in effect had the adjustments made
upon the issuance of such rights or warrants been made on the basis of delivery
of only the number of shares of Common Stock actually delivered. If such rights
or warrants are not so issued, the Conversion Rate shall again be adjusted to be
the Conversion Rate which would then be in effect if such record date for the
determination of stockholders entitled to receive such rights or warrants had
not been fixed. In determining whether any rights or warrants entitle the
holders to subscribe for or purchase shares of Common Stock at less than such
Current Market Price, and in determining the aggregate offering price of such
shares of Common Stock, there shall be taken into account any consideration
received by the Company for such rights or warrants, the value of such
consideration, if other than cash, to be determined by the Board of Directors of
the Company; provided, however, that if rules of such automated quotation system
or exchange permit the Company to defer the listing of such Common Stock until
the first conversion of the Series 3 1/4% Notes into Common Stock in accordance
with the provisions of this Third Supplemental Indenture, the conversion of the
Series 3 1/4% Notes in accordance with the requirements of such automated
quotation system or exchange at such time.
SECTION 3.08. Adjustment for Other Distributions. (a) In case
the Company shall distribute to all holders of its Common Stock (excluding any
distribution in connection with the liquidation, dissolution or winding up of
the Company, whether voluntary or involuntary) any shares of any class of
capital stock of the Company (other than Common Stock) or evidences of its
indebtedness or assets (including cash or securities) or rights or warrants to
subscribe for or purchase any of its securities (excluding those referred to in
Section 3.07) (any of the foregoing hereinafter in this Section 3.08(a) called
the "Distributed Securities") then, in each case, the Conversion
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Rate shall be increased by multiplying the Conversion Rate in effect immediately
prior to the date of such distribution by a fraction of which the numerator
shall be the Current Market Price per share of the Common Stock on the record
date mentioned below, and the denominator shall be the Current Market Price per
share of the Common Stock on such record date less the fair market value on such
record date (as determined by the Board of Directors of the Company, whose
determination shall be conclusive, and described in a certificate filed with the
Trustee; provided, however, that in the case of Distributed Securities that are
capital stock of, or similar equity interests in, a subsidiary or other business
unit of the Company that are listed or quoted on a national or regional exchange
or market, the fair market value of such Distributed Securities shall be the
average closing sales prices of such Distributed Securities for the ten Trading
Days commencing on and including the fifth Trading Day after the date on which
"ex-dividend trading" commences for such distribution on the Nasdaq National
Market or such other national or regional exchange or market on which the
Distributed Securities are then listed or quoted) of the Distributed Securities
so distributed applicable to one share of Common Stock. Such adjustment shall
become effective immediately after the record date for the determination of
stockholders entitled to receive such distribution.
(b) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash, then the Conversion Rate
shall be increased so that it equals the rate determined by multiplying the
Conversion Rate in effect on the record date with respect to the cash
distribution by a fraction, (x) the numerator of which shall be the Current
Market Price of a share of Common Stock on the record date, and (y) the
denominator of which shall be the same price of a share of Common Stock on the
record date less the amount of the distribution. For purposes of this Section
3.08(b) only, (A) "Current Market Price" shall mean the average of the daily
Closing Sale Prices per share of Common Stock for the ten consecutive Trading
Days ending on the earlier of the date of determination and the day before the
"ex" date with respect to the distribution requiring such computation and (B)
the term "ex" date, when used with respect to any distribution, means the date
on which the Common Stock trades, regular way, on the relevant exchange or in
the relevant market from which the Closing Sale Price was obtained without the
right to receive such distribution.
(c) In case a tender or exchange offer made by the Company or
any Subsidiary of the Company for all or any portion of the Common Stock shall
expire and such tender or exchange offer shall involve the payment by the
Company or such Subsidiary of consideration per share of Common Stock having a
fair market value (as determined by the Board of Directors of the Company or, to
the extent permitted by applicable law, a duly authorized committee thereof,
whose determination shall be conclusive, and described in a resolution of such
Board of Directors or such duly authorized committee thereof, as the case may
be, at the last time (the "Expiration Time") tenders or exchanges may be made
pursuant to such tender or exchange offer (as it shall have been amended)) that
exceeds the Current Market Price of the Common Stock on the Trading Day next
succeeding the Expiration Time, the Conversion Rate shall be increased by
multiplying the Conversion Rate in effect immediately prior to the Expiration
Time by a fraction of which the numerator shall be the sum of (x) the fair
market value (determined as aforesaid) of the aggregate consideration payable to
13
stockholders based on the acceptance (up to any maximum specified in the terms
of the tender or exchange offer) of all shares validly tendered or exchanged and
not withdrawn as of the Expiration Time (the shares deemed so accepted, up to
any such maximum, being referred to as the "Purchased Shares") and (y) the
product of the number of shares of Common Stock outstanding (excluding any
Purchased Shares) at the Expiration Time and the Current Market Price of the
Common Stock on the Trading Day next succeeding the Expiration Time, and the
denominator shall be the number of shares of Common Stock outstanding (including
any Purchased Shares) at the Expiration Time multiplied by the Current Market
Price of the Common Stock on the Trading Day next succeeding the Expiration
Time, such increase to become effective immediately prior to the opening of
business on the day following the Expiration Time. In the event that the Company
or such Subsidiary is obligated to purchase shares pursuant to any such tender
or exchange offer, but the Company or such Subsidiary is permanently prevented
by applicable law from effecting any such purchases or all such purchases are
rescinded, the Conversion Rate shall again be adjusted to be the Conversion
Rate, that would then be effect if such tender or exchange offer had not been
made.
(d) In case a tender or exchange offer made by a Person other
than the Company or any Subsidiary of the Company for an amount that increases
the offeror's ownership of Common Stock to more than 25% of the Common Stock
outstanding shall expire and such tender or exchange offer shall involve the
payment by such Person of consideration per share of Common Stock having a fair
market value (as determined by the Board of Directors of the Company or, to the
extent permitted by applicable law, a duly authorized committee thereof, whose
determination shall be conclusive, and described in a resolution of such Board
of Directors or such duly authorized committee thereof, as the case may be) at
the Expiration Time that exceeds the Current Market Price of the Common Stock on
the Trading Day next succeeding the Expiration Time, and in which, as of the
Expiration Time the Board of Directors of the Company is not recommending
rejection of the offer, the Conversion Rate shall be increased by multiplying
the Conversion Rate in effect immediately prior to the Expiration Time by a
fraction of which the numerator shall be the sum of (x) the fair market value
(determined as aforesaid) of the aggregate consideration payable to stockholders
based on the acceptance (up to any maximum specified in the terms of the tender
or exchange offer) of all Purchased Shares and (y) the product of the number of
shares of Common Stock outstanding (excluding any Purchased Shares) at the
Expiration Time and the Current Market Price of the Common Stock on the Trading
Day next succeeding the Expiration Time, and the denominator shall be the number
of shares of Common Stock outstanding (including any Purchased Shares) at the
Expiration Time multiplied by the Current Market Price of the Common Stock on
the Trading Day next succeeding the Expiration Time, such increase to become
effective immediately prior to the opening of business on the day following the
Expiration Time. In the event that such Person is obligated to purchase shares
pursuant to any such tender or exchange offer, but such Person is permanently
prevented by applicable law from effecting any such purchases or all such
purchases are rescinded, the Conversion Rate shall again be adjusted to be the
Conversion Rate that would then be in effect if such tender or exchange offer
had not been made.
14
Notwithstanding the foregoing, the adjustment described in
this Section 3.08(d) shall not be made if, as of the Expiration Time, the
prospectus relating to such tender offer discloses a plan or an intention to
cause the Company to engage in any transaction described in Article VIII of the
Indenture.
SECTION 3.09. When Adjustment May Be Deferred. No adjustment
in the Conversion Rate need be made unless the adjustment would require an
increase or decrease of at least 1% in the Conversion Rate. Any adjustments that
are not made shall be carried forward and taken into account in any subsequent
adjustment.
All calculations under this Article III shall be made to the
nearest cent or to the nearest 1/l0,000th of a share, as the case may be.
SECTION 3.10. When No Adjustment Required. No adjustment need
be made for rights to purchase Common Stock pursuant to a Company plan for
reinvestment of dividends or interest.
No adjustment need be made for a change in the par value or no
par value of the Common Stock.
To the extent the Series 3 1/4% Notes become convertible or
exchangeable into cash, assets, property or securities (other than capital stock
of the Company), no adjustment need be made thereafter as to the cash, assets,
property or such securities. Interest will not accrue on the cash.
SECTION 3.11. Notice of Adjustment. Whenever the Conversion
Rate is adjusted, the Company shall promptly mail to the Holders of the Series 3
1/4% Notes a notice of such adjustment. The Company shall file with the Trustee
and the Conversion Agent such notice. The notice shall, absent manifest error,
be conclusive evidence that the adjustment is correct. Neither the Trustee nor
any Conversion Agent shall be under any duty or responsibility with respect to
any such notice except to exhibit the same to any Holder desiring inspection
thereof.
SECTION 3.12. Voluntary Increase. The Company may make such
increases in the Conversion Rate, in addition to those required by Sections
3.06, 3.07 and 3.08 of this Third Supplemental Indenture, as the Board of
Directors of the Company considers to be advisable to avoid or diminish any
income tax to holders of Common Stock or rights to purchase Common Stock
resulting from any dividend or distribution of stock (or rights to acquire
stock) or from any event treated as such for income tax purposes. To the extent
permitted by applicable law, the Company from time to time may increase the
Conversion Rate by any amount for any period of time, so long as the increase is
irrevocable during such period and the Board of Directors of the Company shall
have made a determination that such increase would be in the best interests of
the Company, which determination shall be conclusive. Whenever the Conversion
Rate is so increased, the Company shall mail to the Holders of the Series 3 1/4%
Notes and file with the Trustee and the Conversion Agent a notice of the
increase. The Company shall mail the notice at least two Trading Days before the
date the increased Conversion Rate takes
15
effect. The notice shall state the increased Conversion Rate and the period it
will be in effect.
SECTION 3.13. Notice of Certain Transactions. If:
(1) the Company makes any distribution or dividend that
would require an adjustment in the Conversion Rate pursuant
to Section 3.06, 3.07 or 3.08;
(2) the Company takes any action that would require a
supplemental indenture pursuant to Section 3.14; or
(3) there is a liquidation or dissolution of the
Company;
then the Company shall mail or shall deliver to the Trustee and direct the
Trustee to mail to Holders of the Series 3 1/4% Notes and file with the Trustee
and the Conversion Agent a notice stating the proposed record date for a
dividend or distribution or the proposed effective date of a subdivision,
combination, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up. The Company shall file and mail the
notice at least 15 days before such date. Failure to file or mail the notice or
any defect in it shall not affect the validity of the transaction.
SECTION 3.14. Effect of Reclassification, Consolidation,
Merger or Sale. If any of the following events occur, namely (i) any
reclassification of outstanding shares of Common Stock (other than a change in
par value, or from par value to no par value, or from no par value to par value,
or as a result of a subdivision or combination), (ii) any consolidation, merger
or combination of the Company with another Person as a result of which holders
of Common Stock shall be entitled to receive stock, securities or other property
or assets (including cash) with respect to or in exchange for such Common Stock,
or (iii) any sale or conveyance of the properties and assets of the Company as,
or substantially as, an entirety to any other Person as a result of which
holders of Common Stock shall be entitled to receive stock, securities or other
property or assets (including cash) with respect to or in exchange for such
Common Stock, then the Company or the successor or purchasing Person, as the
case may be, shall execute with the Trustee a supplemental indenture providing
that each Series 3 1/4% Note shall be convertible into the kind and amount of
shares of stock and other securities or property or assets (including cash)
receivable upon such reclassification, change, consolidation, merger,
combination, sale or conveyance by a Holder of a number of shares of Common
Stock issuable upon conversion of such Series 3 1/4% Notes immediately prior to
such reclassification, change, consolidation, merger, combination, sale or
conveyance. Such supplemental indenture shall provide for adjustments which
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Article.
The Company shall cause the Trustee to mail notice of the
execution of such supplemental indenture to each Holder of Series 3 1/4% Notes
at its address appearing on the Series 3 1/4% Note register provided for in
Section 7.4 of the Indenture.
16
The above provisions of this Section shall similarly apply to
successive reclassifications, consolidations, mergers, combinations and sales.
If this Section applies, none of Sections 3.06, 3.07 or 3.08
shall apply.
SECTION 3.15. Company Determination Final. Any determination
that the Company, or the Board of Directors of the Company or a duly authorized
committee thereof must make pursuant to Section 3.03, 3.06, 3.07, 3.08, 3.09,
3.10, 3.14 or 3.17 is conclusive.
SECTION 3.16. Trustee's Adjustment Disclaimer. The Trustee has
no duty to determine when an adjustment under this Article III should be made,
how it should be made or what it should be. The Trustee has no duty to determine
whether a supplemental indenture under Section 3.14 need be entered into or
whether any provisions of any supplemental indenture are correct. The Trustee
shall not be accountable for, and makes no representation as to, the validity or
value of any securities or assets issued upon conversion of Series 3 1/4% Notes.
The Trustee shall not be responsible for the Company's failure to comply with
this Article III. Each Conversion Agent shall have the same protection under
this Section 3.16 as the Trustee.
SECTION 3.17. Simultaneous Adjustments. In the event that this
Article III requires adjustments to the Conversion Rate under more than one of
Sections 3.06, 3.07, 3.08(a) or 3.08(b), and the record dates for the
distributions giving rise to such adjustments shall occur on the same date, then
such adjustments shall be made by applying, first, the provisions of Section
3.08(a); second, the provisions of Section 3.08(b); third, the provisions of
Section 3.06; and fourth, the provisions of Section 3.07.
SECTION 3.18. Successive Adjustments. After an adjustment to
the Conversion Rate under this Article III, any subsequent event requiring an
adjustment under this Article III shall cause an adjustment to the Conversion
Rate as so adjusted.
SECTION 3.19. General Considerations. Whenever successive
adjustments to the Conversion Rate are called for pursuant to this Article III,
such adjustments shall be made to the Current Market Price as may be necessary
or appropriate to effectuate the intent of this Article and to avoid unjust or
inequitable results as determined in good faith by the Board of Directors of the
Company.
Each share of Common Stock issued upon conversion of Series 3
1/4% Notes pursuant to this Article III shall be entitled to receive the
appropriate number of common stock or preferred stock purchase rights, as the
case may be (the "Rights"), if any, that shares of Common Stock are entitled to
receive and the certificates representing the Common Stock issued upon such
conversion shall bear such legends, if any, in each case as may be provided by
the terms of any stockholder rights agreement adopted by the Company, as the
same may be amended from time to time (in each case, a "Rights Agreement").
Provided that such Rights Agreement requires that each share of Common Stock
issued upon conversion of Series 3 1/4% Notes at any time prior to the
distribution of separate certificates representing the Rights be entitled to
receive such Rights, then,
17
notwithstanding anything else to the contrary in this Article III, there shall
not be any adjustment to the conversion privilege or Conversion Rate as a result
of the issuance of the Rights, but an adjustment to the Conversion Rate shall be
made pursuant to Section 3.08(b) (to the extent required thereby) upon the
separation of the Rights from the Common Stock.
SECTION 3.20. Definitions.
"Current Market Price" per share of the Common Stock on any
date of determination means the average of the last reported sale prices of the
Common Stock for the ten consecutive Trading Days ending on and including such
date of determination.
The last reported sale price (the "Closing Sale Price") for
any Trading Day shall be (i) if the Common Stock is then listed or admitted for
trading on any national securities exchange, the last sale price, or the closing
bid price if no sale occurred, of the Common Stock on such Trading Day on the
principal securities exchange on which the Common Stock is listed, (ii) if the
Common Stock is not listed or admitted for trading as described in clause (i),
the last reported sale price of the Common Stock on such Trading Day on the
Nasdaq National Market, or any similar system of automated dissemination of
quotations of securities prices then in common use, if so quoted, or (iii) if
not listed or quoted as described in clause (i) or (ii), the mean between the
high bid and low asked quotations on such Trading Day for the Common Stock as
reported by the National Quotation Bureau Incorporated if at least two
securities dealers have inserted both bid and asked quotations for the Common
Stock on at least five of the ten preceding Trading Days. If none of the
conditions set forth above is met, the last reported sale price of the Common
Stock on any Trading Day or the average of such last reported sale prices for
any period shall be the fair market value of the Common Stock as determined by a
member firm of the New York Stock Exchange selected by the Company.
Notwithstanding the foregoing, the Current Market Price per
share of Common Stock for the purpose of any adjustment to the Conversion Ratio
pursuant to (x) Section 3.08(a) of this Third Supplemental Indenture in respect
of Distributed Securities that are capital stock of, or similar equity interests
in, a subsidiary or other business unit of the Company that are listed or quoted
on a national or regional exchange or market, means the average closing sales
prices of the Common Stock for the ten Trading Days commencing on and including
the fifth trading day after the date on which "ex-dividend trading" commences
for such distribution on the Nasdaq National Market or such other national or
regional exchange or market on which the Common Stock are then listed or quoted
and (y) Section 3.08(c) or Section 3.08(d) of this Third Supplemental Indenture
means the Closing Sale Price on the date of determination.
"Depository" means The Depository Trust Company, its nominees
and their respective successors.
"Securities Custodian" means the custodian with respect to a
Global Security (as appointed by the Depository), or any successor Person
thereto, and shall initially be the Trustee.
18
"Trading Day" means a day during which trading in securities
generally occurs on the Nasdaq National Market or, if the applicable security is
not quoted on the Nasdaq National Market, or if the applicable security is not
listed on the Nasdaq National Market, on the principal other national or
regional securities exchange or market on which the applicable security is then
listed or traded.
SECTION 3.21. Other Definitions.
Term Defined in Section:
---- ------------------
Additional Premium 7.01(a)
Additional Premium Table 7.01(b)(iii)
Agent Members 2.01(b)
Beneficial Owner 2.04
Beneficial Ownership 2.04
Common Stock 1.01
Company Preamble
Company Notice 2.03
Conversion Date 3.02
Conversion Rate 3.01
Current Market Price 3.08(b)
Distributed Securities 3.08
Effective Date 7.01(b)(i)
Expiration Time 3.08(c)
Fundamental Change 2.05
Fundamental Change Purchase Notice 2.03(b)
Global Securities 2.01(a)
Indenture Preamble
Make Whole Premium 7.01(b)(iv)
Person 2.04
Purchase Shares 3.08(c)
Repurchase Date 2.02
Repurchase Price 2.02
Rights 3.19
Series 3 1/4% Notes Recitals
Stock Price 7.01(b)(ii)
Stock Price Cap 7.01(b)(iv)(c)
Stock Price Threshold 7.01(b)(iv)(B)
Terms Agreement 2.01
Third Supplemental Indenture Preamble
Trustee Preamble
19
ARTICLE IV
Defaults and Remedies
SECTION 4.01. Events of Default. "Event of Default", wherever
used herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) default in the payment of any interest upon any
Series 3 1/4% Note or Make Whole Premium, if any, when it
becomes due and payable, and continuance of such default for
a period of 30 days; or
(2) default in the payment of the principal of any
Series 3 1/4% Note when it becomes due and payable; or
(3) failure by the Company to provide the notice of a
Fundamental Change in accordance with Section 2.03 hereof or
default in the payment of the Repurchase Price in respect of
any Series 3 1/4% Note on the Repurchase Date therefor; or
(4) failure by the Company to deliver shares of Common
Stock (together with cash in lieu of fractional shares) when
such Common Stock (or cash in lieu of fractional shares) is
required to be delivered following conversion of a Series 3
1/4% Note and continuation of such default for a period of
10 days; or
(5) default in the performance, or breach, of any
covenant or warranty of the Company contained in the Series
3 1/4% Notes, the Indenture or this Third Supplemental
Indenture (other than or those referred to in clauses (1)
through (4) above), and the continuance of such default or
breach for a period of 60 days after there has been given,
by registered or certified mail, to the Company by the
Trustee or to the Company and the Trustee by the Holders of
at least 25% in aggregate principal amount of the Series 3
1/4% Notes then Outstanding, a written notice specifying
such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder;
or
(6) failure by the Company to pay any sinking fund
payment when due; or
(7) the entry by a court having jurisdiction in the
premises of (A) a decree or order for relief in respect of
the Company or a Subsidiary in an involuntary case or
proceeding under any applicable Federal or state bankruptcy,
insolvency, reorganization or other similar law or (B) a
decree or order adjudging the Company or a Subsidiary
bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization, arrangement,
20
adjustment or composition of or in respect of the Company or
a Subsidiary under any applicable Federal or state law, or
appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the
Company or a Subsidiary or of any substantial part of their
respective properties, or ordering the winding up or
liquidation of the affairs of the Company or a Subsidiary,
and the continuance of any such decree or order for relief
or any such other decree or order unstayed and in effect for
a period of 60 consecutive days; or
(8) the commencement by the Company or a Subsidiary of
a voluntary case or proceeding under any applicable Federal
or state bankruptcy, insolvency, reorganization or other
similar law or of any other case or proceeding to be
adjudicated a bankrupt or insolvent, or the consent by
either the Company or a Subsidiary to the entry of a decree
or order for relief in respect of the Company or a
Subsidiary in an involuntary case or proceeding under any
applicable Federal or state bankruptcy, insolvency,
reorganization or other similar law or to the commencement
of any bankruptcy or insolvency case or proceeding against
either the Company or a Subsidiary, or the filing by either
the Company or a Subsidiary of a petition or answer or
consent seeking reorganization or relief under any
applicable Federal or state law, or the consent by either
the Company or a Subsidiary to the filing of such petition
or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or a
Subsidiary or of any substantial part of their respective
properties, or the making by either the Company or a
Subsidiary of an assignment for the benefit of creditors, or
the admission by either the Company or a Subsidiary in
writing of an inability to pay the debts of either the
Company or a Subsidiary generally as they become due, or the
taking of corporate action by the Company or a Subsidiary in
furtherance of any such action.
SECTION 4.02. Acceleration of Maturity; Rescission and
Annulment. If an Event of Default (other than an Event of Default specified in
Section 4.01(7) or (8) with respect to the Company) occurs and is continuing,
then in every such case the Trustee or the Holders of not less than 25% in
aggregate principal amount of the Series 3 1/4% Notes then Outstanding may
declare the principal of, and accrued interest on, all the Series 3 1/4% Notes
to be due and payable immediately, by a notice in writing to the Company (and to
the Trustee if given by Holders), and upon any such declaration such principal
and any accrued interest thereon shall become immediately due and payable. If an
Event of Default specified in Section 4.01(7) or (8) occurs with respect to the
Company, the principal of, and accrued interest on, all the Series 3 1/4% Notes
shall automatically, and without any declaration or other action on the part of
the Trustee or any Holder, become immediately due and payable.
At any time after such a declaration of acceleration has been
made and before a judgment or decree for payment of the money due has been
obtained by the
21
Trustee as hereinafter in this Article IV provided, the Holders of a majority in
aggregate principal amount of the Series 3 1/4% Notes then Outstanding, by
written notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences if:
(1) the Company has paid or deposited with the Trustee a
sum sufficient to pay:
(A) all overdue interest on all Series 3 1/4% Notes
or Make Whole Premium, if any;
(B) the principal of any Series 3 1/4% Notes which
have become due otherwise than by such declaration of
acceleration, and interest thereon from the required
payment date at an annual rate of 1% above the rate borne
by the Series 3 1/4% Notes;
(C) to the extent that payment of such interest is
lawful, interest upon overdue interest from the required
payment date at an annual rate of 1% above the rate borne
by the Series 3 1/4% Notes; and
(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel; and
(2) all Events of Default, other than the nonpayment of
the principal of, and accrued interest on, Series 3 1/4%
Notes, and the Make Whole Premium, if any, which have become
due solely by such declaration of acceleration, have been
cured or waived as provided in Section 5.13 of the Indenture.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 4.03. Company Notice to Trustee. The Company shall
file with the Trustee written notice of the occurrence of any Event of Default
within five Business Days of the Company's becoming aware of such Event of
Default.
ARTICLE V
Original Issue of Series 3 1/4% Notes
SECTION 5.01. Original Issue. Series 3 1/4% Notes in the
aggregate principal amount equal to $230,000,000 may, upon execution of this
Third Supplemental Indenture, be executed by the Company and delivered to the
Trustee for authentication,
22
and the Trustee shall thereupon authenticate and make available for delivery
said Series 3 1/4% Notes to or upon a Company Order.
ARTICLE VI
Defeasance and Covenant Defeasance
SECTION 6.01. Applicability. The Company hereby elects,
pursuant to Section 14.1 of the Indenture, to make Sections 14.2 and 14.3
thereof applicable to the Series 3 1/4% Notes.
SECTION 6.02. References. (a) With respect to the Series 3
1/4% Notes, references to Section 5.1 or 5.2 of the Indenture shall be deemed to
be references to Section 4.01 or 4.02 hereof.
(b) With respect to the Series 3 1/4% Notes, references in
Section 14.4(a) of the Indenture to "Stated Maturity" shall be deemed to mean
"Stated Maturity, or any Redemption Date or Repurchase Date, or upon conversion
or otherwise". References in Section 14.4(a) of the Indenture to "Trustee" shall
be deemed to mean "Trustee, the Paying Agent or the Conversion Agent".
ARTICLE VII
Make Whole Premium
SECTION 7.01. Make Whole Premium. (a) If a Fundamental Change
occurs on or prior to July 15, 2011, the Company shall pay the Make Whole
Premium to Holders who convert their Series 3 1/4% Notes in connection with such
Fundamental Change pursuant to Section 3.01 and to Holders who tender their
Series 3 1/4% Notes for repurchase in connection with such Fundamental Change
pursuant to Section 2.02. The Make Whole Premium shall be paid on the Repurchase
Date and shall be paid solely in shares of the Common Stock (other than cash
paid in lieu of fractional shares) or in the same form of consideration into
which the shares of Common Stock have been converted or exchanged in connection
with such Fundamental Change, as described below. No Make Whole Premium shall be
paid if the Stock Price (as defined below) is less than $3.99 per share. The
Make Whole Premium shall be equal to (x) 1%, plus (y) a percentage (the
"Additional Premium"), of the principal amount of the Series 3 1/4% Notes
tendered for repurchase or conversion. The Make Whole Premium will be in
addition to, and not in substitution for, any cash, securities, or other assets
otherwise due to Holders upon conversion or repurchase as described in this
Third Supplemental Indenture.
(b) The Make Whole Premium shall be determined as follows:
(i) "Effective Date" means the date that a Fundamental Change
becomes effective.
23
(ii) "Stock Price" means the price paid (or deemed to be paid)
per share of Common Stock in the transaction constituting the Fundamental
Change, determined as follows:
(A) if holders of the Common Stock receive only cash
in the Fundamental Change, the Stock Price shall be the
cash amount paid per share of Common Stock; or
(B) otherwise, the Stock Price shall be the average
Closing Price of the Common Stock for the 10 consecutive
Trading Days immediately prior to but not including the
Effective Date.
(iii) The Additional Premium shall be the percentage set forth
on the table below (the "Additional Premium Table") for the Stock Price and the
Effective Date:
Additional Premium Upon Fundamental Change (table in percentages)
Stock Price
----------------------------------------------------------------------------------------------------------
Effective
Date in
Years $3.99 $4.25 $4.50 $4.75 $5.00 $5.50 $6.00 $6.50 $7.00 $7.50 $8.00 $9.00 $10.00 $11.00 $12.00
- ---------- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ------ ------ ------
0 to 1 1.9 6.0 10.0 14.0 18.1 22.7 21.7 20.8 20.0 19.3 18.7 17.6 16.6 15.8 15.0
1 to 2 2.2 6.2 10.1 14.0 18.0 22.4 21.3 20.3 19.4 18.6 17.9 16.7 15.7 14.8 14.0
2 to 3 2.5 6.3 10.0 13.9 17.7 21.9 20.6 19.5 18.5 17.6 16.8 15.5 14.4 13.5 12.7
3 to 4 2.7 6.3 9.8 13.4 17.2 21.1 19.5 18.2 17.1 16.1 15.2 13.8 12.7 11.7 11.0
4 to 5 2.7 5.9 9.2 12.6 16.1 19.7 17.9 16.4 15.1 14.0 13.0 11.5 10.4 9.5 8.7
5 to 6 2.2 5.0 7.9 11.0 14.2 17.3 15.2 13.5 12.0 10.9 9.9 8.4 7.3 6.5 6.0
6 to 7 0.9 3.0 5.3 7.9 10.7 13.1 10.6 8.7 7.2 6.1 5.2 4.1 3.4 3.0 2.8
Year 7 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
The exact Stock Price and Effective Dates may not be set forth on the table, in
which case, if the Stock Price is between two Stock Prices on the table or the
Effective Date is between two Effective Dates on the table, the Additional
Premium shall be determined by straight-line interpolation between Additional
Premium amounts set forth for the higher and lower Stock Prices and the two
Effective Dates, as applicable, based on a 365-day year. The Stock Prices set
forth in the column headers are subject to adjustment pursuant to Section 7.02.
(iv) "Make Whole Premium" means the amount per $1,000
principal amount of Series 3 1/4% Notes equal to:
(A) if the Effective Date is after July 15, 2011, $0;
(B) if the Stock Price is less than $3.99 per share
(subject to adjustment pursuant to Section 7.02) (the
"Stock Price Threshold"), $0;
(C) if the Stock Price exceeds $12.00 per share
(subject to adjustment pursuant to Section 7.02) (the
"Stock Price Cap"), $0; and
24
(D) otherwise, the dollar amount equal to (I) the
sum of (x) 1%, plus (y) the Additional Premium (expressed
as a percentage), times, (II) $1,000.
(c) The Company shall pay the Make Whole Premium solely in
shares of Common Stock (other than cash paid in lieu of fractional shares) or in
the same form of consideration into which the shares of Common Stock have been
converted or exchanged in connection with the Fundamental Change (except that
the Company will pay cash in lieu of fractional interests in any security or
other property delivered in connection with such fundamental change). If holders
of Common Stock receive or have the right to receive more than one form of
consideration in connection with such Fundamental Change, then for purposes of
the foregoing, the forms of consideration in which the Make Whole Premium will
be paid will be in proportion to the relative values, determined as described in
Section 7.01(d) below, of the different forms of consideration paid to holders
of Common Stock in connection with such Fundamental Change.
(d) The value of the shares of Common Stock or other
consideration for purposes of determining the number of shares of Common Stock
or other consideration to be issued or delivered, as the case may be, in respect
of the Make Whole Premium shall be calculated as follows:
(i) securities that are traded on a United States national
securities exchange or approved for quotation on Nasdaq or any similar system of
automated dissemination of quotations of securities prices shall be valued at
98% of the average Closing Price or last sale price, as the case may be, for the
10 consecutive Trading Days immediately prior to but excluding the Repurchase
Date,
(ii) other securities, assets or property (other than cash)
that holders will have the right to receive shall be valued based on 98% of the
average of the Fair Market Value of such securities, assets or property (other
than cash) as determined three Business Days immediately prior to the Repurchase
Date by two independent nationally recognized investment banks selected by the
Trustee, and
(iii) 100% of any cash.
Notwithstanding the foregoing, in no event shall the value of each share of
Common Stock be less than 50% of the Stock Price used to determine the amount of
the Make Whole Premium.
(e) A Calculation Agent appointed from time to time by the
Company shall, on behalf of and on request by the Company, calculate (A) the
Stock Price, and (B) the Additional Premium and Make Whole Premium with respect
to such Stock Price, based on the Effective Date specified by the Company, and
shall deliver its calculation of the Stock Price, Additional Premium and Make
Whole Premium to the Company and the Trustee within three Business Days of the
request by the Company or the Trustee. In addition, the Calculation Agent shall,
on behalf of and upon request by the Company or the Trustee make the
determinations described in Section 7.01(d) above and deliver its
25
calculations to the Company or the Trustee by 9:00 p.m., New York City time, on
the day prior to the Repurchase Date. The Company, or at the Company's request,
the Trustee in the name and at the expense of the Company, (X) shall notify the
Holders of the Stock Price and Make Whole Premium per $1,000 principal amount of
Series 3 1/4% Notes with respect to a Fundamental Change as part of the Company
Notice and (Y) shall notify the Holders, by registered first-class mail, sent
promptly upon the opening of business on the Repurchase Date, of the number of
shares of Common Stock (or such other securities, assets or property (including
cash) into which the shares of Common Stock have been converted as of the
Effective Date as described above) to be paid in respect of the Make Whole
Premium in connection with such Fundamental Change, in the manner provided in
this Third Supplemental Indenture, and the Company shall also publicly announce
such information. Any notice so given shall be conclusively presumed to have
been duly given, whether or not the holder receives such notice. The Company
shall verify, in writing, all calculations made by the Calculation Agent
pursuant to this Section 7.01(e).
(f) On or prior to the Business Day immediately following the
Repurchase Date, the Company shall deposit with the Trustee or with one or more
paying agents a number of shares of Common Stock (or in the case of a
Fundamental Change in which the shares of Common Stock have been, as of the
Effective Date, converted into or exchanged for the right to receive securities
or other assets or property (including cash), an amount of such other securities
or other assets or property (including cash)) sufficient to pay the Make Whole
Premium with respect to all Series 3 1/4% Notes to be repurchased on such date
and all Series 3 1/4% Notes converted in connection with such Fundamental
Change; provided that if such deposit is made on the Business Day immediately
following the Repurchase Date, it must be received by the Trustee or paying
agent, as the case may be, by 10:00 a.m., New York City time, on such date.
Payment of the Make Whole Premium for Series 3 1/4% Notes surrendered for
repurchase (and not withdrawn) within the period described in Section 2.03(b) or
surrendered for conversion within the period described in Section 3.02, shall be
made promptly on the Business Day immediately following the Repurchase Date, by
mailing checks in respect of cash (or if the Series 3 1/4% Notes are represented
by a Global Note, by wire transfer of immediately available funds to the
Depositary or its nominee) and otherwise delivering entitlements to securities,
other assets or property for the amount payable to the holders of such Series 3
1/4% Notes entitled thereto as they shall appear in the register kept by the
Notes Registrar.
SECTION 7.02. Adjustments Relating To Make Whole Premium.
Whenever the Conversion Rate shall be adjusted from time to time by the Company
pursuant to Article III, the Stock Price Threshold and the Stock Price Cap shall
be adjusted and each of the Stock Prices set forth in the Additional Premium
Table shall be adjusted. The adjusted Stock Price Threshold, Stock Price Cap and
Stock Prices set forth in the Additional Premium Table shall equal the Stock
Price Threshold, Stock Price Cap and such Stock Prices, as the case may be,
immediately prior to such adjustment multiplied by a fraction, the numerator of
which is the Conversion Rate immediately prior to the adjustment giving rise to
such adjustment and the denominator of which is the Conversion Rate so adjusted.
26
ARTICLE VIII
Miscellaneous Provisions
SECTION 8.01. Defined Terms. Except as otherwise expressly
provided in this Third Supplemental Indenture or in the form of Series 3 1/4%
Note or otherwise clearly required by the context hereof or thereof, all terms
used herein or in said form of Series 3 1/4% Note that are defined in the
Indenture shall have the several meanings respectively assigned to them thereby.
SECTION 8.02. Indenture. The Indenture, as supplemented by
this Third Supplemental Indenture, is in all respects ratified and confirmed.
This Third Supplemental Indenture shall be deemed part of the Indenture in the
manner and to the extent herein and therein provided.
SECTION 8.03. Trustee. The recitals herein contained are made
by the Company and not by the Trustee, and the Trustee assumes no responsibility
for the correctness thereof. The Trustee makes no representation as to the
validity or sufficiency of this Third Supplemental Indenture or of the Series 3
1/4% Notes. The Trustee shall not be accountable for the use or application by
the Company of the Series 3 1/4% Notes or the proceeds thereof.
SECTION 8.04. Execution in Counterparts. This Third
Supplemental Indenture may be executed in any number of counterparts each of
which shall be an original; but such counterparts shall together constitute but
one and the same instrument.
27
IN WITNESS WHEREOF, the parties hereto have caused this Third
Supplemental Indenture to be duly executed as of the day and year first above
written.
SIRIUS SATELLITE RADIO INC.,
by /s/ David J. Frear
----------------------------------
David J. Frear
Executive Vice President and
Chief Financial Officer
THE BANK OF NEW YORK, as Trustee,
by /s/ Dorothy Miller
----------------------------------
: Dorothy Miller
Vice President
28
Exhibit A
[FORM OF FACE OF SECURITY]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
NEW YORK, NEW YORK, 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 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.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.(1)
- ----------------------
(1) These paragraphs should be included only if the Security is a Global
Security.
29
SIRIUS SATELLITE RADIO INC.
CUSIP No. 82966UAD5 No. [o]
ISIN No. US82966UAD54
3 1/4% CONVERTIBLE NOTE DUE 2011
Sirius Satellite Radio Inc., a Delaware corporation (the
"Company", which term shall include any successor corporation under the
Indenture referred to on the reverse hereof), promises to pay to [o], or
registered assigns, the principal sum of [o] on October 15, 2011 [or such
greater or lesser amount as is indicated on the Schedule of Exchanges of
Securities on the other side of this Security].(2)
Interest Payment Dates: April 15 and October 15, beginning
April 15, 2005
Record Dates: April 1 and October 1
This Security is convertible as specified on the reverse
hereof. Additional provisions of this Security are set forth on the reverse
hereof.
SIGNATURE PAGE FOLLOWS
- ----------------------
(2) This phrase should be included only if the Security is a Global Security.
30
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed.
SIRIUS SATELLITE RADIO INC.,
by
--------------------------
Name:
Title:
Attest:
By:
----------------------------
Name:
Title:
Trustee's Certificate of Authentication: This is one
of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
Dated:
THE BANK OF NEW YORK,
as Trustee,
By:
---------------------------
Authorized Signatory
31
[FORM OF REVERSE SIDE OF SECURITY]
SIRIUS SATELLITE RADIO INC.
3 1/4% CONVERTIBLE NOTE DUE 2011
1. Interest
Sirius Satellite Radio Inc., a Delaware corporation (the "Company",
which term shall include any successor corporation under the Indenture
hereinafter referred to), promises to pay interest on the principal amount of
this Security at the rate of 3.25% per annum. The Company shall pay interest
semiannually on April 15 and October 15 of each year, commencing April 15, 2005.
Interest on the Securities shall accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from October 13, 2004;
provided, however, that if there is not an existing Default in the payment of
interest and if this Security is authenticated between a record date referred to
on the face hereof and the next succeeding interest payment date, interest shall
accrue from such interest payment date. Interest will be computed on the basis
of a 360-day year of twelve 30-day months. The Company will pay interest on
overdue principal at the rate borne by the Securities plus 1% per annum, and it
will pay interest on overdue installments of interest at the same rate as
interest on the overdue principal to the extent lawful.
2. Method of Payment
The Company shall pay interest on this Security (except defaulted
interest) to the person who is the Holder of this Security at the close of
business on April 1 or October 1, as the case may be, next preceding the related
interest payment date. The Holder must surrender this Security to a Paying Agent
to collect payment of principal. The Company will pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts. The Company may, however, pay principal and
interest in respect of any Certificated Security by check or wire transfer
payable in such money; provided, however, that a Holder with an aggregate
principal amount in excess of $2,000,000 will be paid by wire transfer in
immediately available funds at the election of such Holder. The Company may mail
an interest check to the Holder's registered address. Notwithstanding the
foregoing, so long as this Security is registered in the name of a Depository or
its nominee, all payments hereon shall be made by wire transfer of immediately
available funds to the account of the Depository or its nominee.
3. Paying Agent, Registrar and Conversion Agent
Initially, The Bank of New York (the "Trustee," which term shall
include any successor trustee under the Indenture hereinafter referred to) will
act as Paying Agent, Registrar and Conversion Agent. The Company may change any
Paying Agent, Registrar or Conversion Agent without notice to the Holder. The
Company or any of its
32
Subsidiaries may, subject to certain limitations set forth
in the Indenture, act as Paying Agent or Registrar.
4. Indenture Limitations
This Security is one of a duly authorized issue of Securities of the
Company designated as its 3 1/4% Convertible Notes due 2011 (the "Securities")
issued under an Indenture dated as of May 23, 2003, as supplemented by the Third
Supplemental Indenture dated as of October 13, 2004 (the "Third Supplemental
Indenture" and as so supplemented, together with any other supplemental
indentures thereto, the "Indenture"), between Sirius Satellite Radio Inc. (the
"Company"), and the Trustee. Capitalized terms herein are used as defined in the
Indenture unless otherwise defined herein. The terms of this Security include
those stated in the Indenture and those required by or made part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended, as in
effect on the date of the Indenture. This Security is subject to all such terms,
and the Holder of this Security is referred to the Indenture and said Act for a
statement of them. The Securities are senior unsecured obligations of the
Company limited to $230,000,000 aggregate principal amount. The Indenture does
not limit other debt of the Company, secured or unsecured, including Senior
Indebtedness.
5. Optional Redemption
The Company shall not have the option to redeem the Securities prior to
October 15, 2011.
6. Purchase of Securities at Option of Holder Upon a Fundamental Change
At the option of the Holder, and subject to the terms and conditions of
the Indenture, the Company shall become obligated to purchase all or any part
specified by the Holder (so long as the principal amount of such part is $1,000
or an integral multiple of $1,000 in excess thereof) of the Securities held by
such Holder on the date that is 30 days (or if such 30th day is not a Business
Day, the next succeeding Business Day) after the date of the notice of the
occurrence of a Fundamental Change provided to Holders as provided in Section
2.03 of the Third Supplemental Indenture, at a purchase price equal to 100% of
the principal amount thereof together with accrued interest up to, but
excluding, the Repurchase Date, plus the Make Whole Premium, if any (the form
and amount of any such Make Whole Premium determined pursuant to Article VII of
the Third Supplemental Indenture). The Holder shall have the right to withdraw
any Fundamental Change Purchase Notice (in whole or in a portion thereof that is
$1,000 or an integral multiple of $1,000 in excess thereof) at any time prior to
the close of business on the Business Day immediately preceding the Repurchase
Date by delivering a written notice of withdrawal to the Paying Agent in
accordance with the terms of the Indenture.
7. Conversion
A Holder of a Security may convert the principal amount of such
Security (or any portion thereof equal to $1,000 or any integral multiple of
$1,000 in excess thereof) into shares of Common Stock at any time prior to the
close of business on October 15, 2011;
33
provided, however, that if the Security is subject to purchase upon a
Fundamental Change, the conversion right will terminate at the close of business
on the Business Day immediately preceding the Repurchase Date for such Security
or such earlier date as the Holder presents such Security for purchase (unless
the Company shall default in making the Repurchase Payment when due, in which
case the conversion right shall terminate at the close of business on the date
such default is cured and such Security is purchased). The initial Conversion
Rate is 188.6792 shares of Common Stock per $1,000 principal amount of
Securities, subject to adjustment under certain circumstances. The number of
shares of Common Stock issuable upon conversion of a Security is determined by
multiplying the number of $1,000 principal amount Securities to be converted by
the Conversion Rate in effect on the Conversion Date. No fractional shares will
be issued upon conversion; in lieu thereof, an amount will be paid in cash based
upon the Closing Price (as defined in the Indenture) of the Common Stock on the
Trading Day immediately prior to the Conversion Date. To convert a Security, a
Holder must (a) complete and manually sign the conversion notice set forth below
and deliver such notice to a Conversion Agent, (b) surrender the Security to a
Conversion Agent, (c) furnish appropriate endorsements and transfer documents if
required by a Registrar or a Conversion Agent, and (d) pay any transfer or
similar tax, if required. Securities so surrendered for conversion (in whole or
in part) during the period from the close of business on any regular record date
to the opening of business on the next succeeding interest payment date
(excluding Securities or portions thereof that are subject to purchase following
a Fundamental Change on a date during the period beginning at the close of
business on a regular record date and ending at the opening of business on the
first Business Day after the next succeeding interest payment date, or if such
interest payment date is not a Business Day, the second such Business Day) shall
also be accompanied by payment in funds acceptable to the Company of an amount
equal to the interest payable on such interest payment date on the principal
amount of such Security then being converted, and such interest shall be payable
to such registered Holder notwithstanding the conversion of such Security,
subject to the provisions of the Indenture and the Third Supplemental Indenture
relating to the payment of defaulted interest by the Company. If the Company
defaults in the payment of interest payable on such interest payment date, the
Company shall promptly repay such funds to such Holder. A Holder may convert a
portion of a Security equal to $1,000 or any integral multiple thereof. A
Security in respect of which a Holder had delivered a Fundamental Change
Purchase Notice exercising the option of such Holder to require the Company to
purchase such Security may be converted only if the Fundamental Change Purchase
Notice is withdrawn in accordance with the terms of the Indenture and the Third
Supplemental Indenture.
If a Holder converts its Securities at any time beginning on the date
on which the Company gives notice to the Holders of the occurrence of any
Fundamental Change that occurred on or prior to July 15, 2011, and ending at the
close of business on the Repurchase Date corresponding to such Fundamental
Change, such holder shall receive:
(a) the Make Whole Premium, if any, which shall be in an
amount and form determined as set forth in Article VII of the Third
Supplemental Indenture, and shall be paid on the Repurchase Date
corresponding to such Fundamental Change; plus
34
(b) the number of shares of Common Stock into which such
Holder's Securities are convertible as set forth in this paragraph 7;
plus
(c) accrued but unpaid interest on such Securities, if any,
to, but excluding the Conversion Date, which interest shall be payable
in cash.
8. Denominations, Transfer, Exchange
The Securities are in registered form without coupons in denominations
of $1,000 and integral multiples of $1,000. A Holder may register the transfer
of or exchange Securities in accordance with the Indenture. The Registrar may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and to pay any taxes or other governmental charges that may
be imposed in relation thereto by law or permitted by the Indenture.
9. Persons Deemed Owners
The Holder of a Security may be treated as the owner of it for all
purposes.
10. Unclaimed Money
If money for the payment of principal or interest remains unclaimed for
two years, the Trustee or Paying Agent will pay the money back to the Company at
its written request. After that, Holders entitled to money must look to the
Company for payment.
11. Amendment, Supplement and Waiver
Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented with the consent of the Holders of at least a majority
in principal amount of the Securities then outstanding, and an existing Event of
Default and its consequence or compliance with any provision of the Indenture or
the Securities may be waived in a particular instance with the consent of the
Holders of a majority in principal amount of the Securities then outstanding.
Without the consent of or notice to any Holder, the Company and the Trustee may
amend or supplement the Indenture or the Securities to, among other things, cure
any ambiguity, defect or inconsistency or make any other change that does not
adversely affect the rights of any Holder.
12. Successor Person
When a successor Person assumes all the obligations of its predecessor
under the Securities and the Indenture in accordance with the terms and
conditions of the Indenture, the predecessor Person will (except in certain
circumstances specified in the Indenture) be released from those obligations.
13. Defaults and Remedies
Under the Indenture, an Event of Default includes:
35
(1) default in the payment of any interest upon any Security
or any Make Whole Premium, if any, when it becomes due and payable, and
continuance of such default for a period of 30 days; or
(2) default in the payment of the principal of any Security
when it becomes due and payable; or
(3) failure by the Company to provide the notice of a
Fundamental Change in accordance with Section 2.03 of the Third
Supplemental Indenture or default in the payment of the Repurchase
Price in respect of any Security on the Repurchase Date therefor; or
(4) failure by the Company to deliver shares of Common Stock
(together with cash in lieu of fractional shares) when such Common
Stock (or cash in lieu of fractional shares) is required to be
delivered following conversion of a Security and continuation of such
default for a period of 10 days; or
(5) default in the performance, or breach, of any covenant or
warranty of the Company contained in the Securities, the Indenture or
the Third Supplemental Indenture (other than or those referred to in
clauses (1) through (4) above), and continuance of such default or
breach for a period of 60 days after there has been given notice by the
Trustee or by the Holders of at least 25% in aggregate principal amount
of the Securities then Outstanding; or
(6) failure by the Company to pay any sinking fund payment
when due; or
(7) certain events of bankruptcy or insolvency with respect to
the Company and its Subsidiaries.
If an Event of Default (other than an event of default as described in
clause (7) with respect to the Company) occurs and is continuing, the Trustee or
the Holders of at least 25% in principal amount of the Securities then
outstanding may declare all unpaid principal to the date of acceleration on the
Securities then outstanding to be due and payable immediately, all as and to the
extent provided in the Indenture. If an Event of Default occurs as a result of
certain events of bankruptcy, insolvency or reorganization with respect to the
Company as described in clause (7) herein, unpaid principal of the Securities
then outstanding shall become due and payable immediately without any
declaration or other act on the part of the Trustee or any Holder, all as and to
the extent provided in the Indenture. Holders may not enforce the Indenture or
the Securities except as provided in the Indenture. The Trustee may require
indemnity satisfactory to it before it enforces the Indenture or the Securities.
Subject to certain limitations, Holders of a majority in principal amount of the
Securities then outstanding may direct the Trustee in its exercise of any trust
or power. The Trustee may withhold from Holders notice of any continuing default
(except a default in payment of principal or interest) if it determines that
withholding notice is in their interests. The Company is required to file
periodic reports with the Trustee as to the absence of an Event of Default.
14. Trustee Dealings with the Company
36
The Bank of New York, the Trustee under the Indenture, in its
individual or any other capacity, may make loans to, accept deposits from and
perform services for the Company or an Affiliate of the Company, and may
otherwise deal with the Company or an Affiliate of the Company, as if it were
not the Trustee.
15. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or the Indenture nor for any claim based on, in respect of or by
reason of such obligations or their creation. The Holder of this Security by
accepting this Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of this Security.
16. Authentication
This Security shall not be valid until the Trustee or an authenticating
agent manually signs the certificate of authentication on the other side of this
Security.
17. Abbreviations and Definitions
Customary abbreviations may be used in the name of the Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (=joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian) and UGMA (= Uniform Gifts to Minors Act).
All terms defined in the Indenture and used in this Security but not
specifically defined herein are defined in the Indenture and are used herein as
so defined.
18. Indenture to Control; Governing Law
In the case of any conflict between the provisions of this Security and
the Indenture, the provisions of the Indenture shall control. This Security
shall be governed by, and construed in accordance with, the laws of the State of
New York without regard to principles of conflicts of law which would require
the application of the laws of another jurisdiction.
The Company will furnish to any Holder, upon written request and
without charge, a copy of the Indenture. Requests may be made to: Sirius
Satellite Radio Inc., 1221 Avenue of the Americas, 36th Floor, New York, NY
10020, Attention: Patrick L. Donnelly, Executive Vice President, General Counsel
and Secretary.
37
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
- -------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
- ------------------------------------------------------------
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him or her.
Your Signature:
Date:
--------------- --------------------------------------
(Sign exactly as your name appears
on the other side of this Security)
38
Signature Guarantee:
- -------------------------------------- --------------------------------------
Signature must be guaranteed Signature
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
39
CONVERSION NOTICE
To convert this Security into Common Stock of Sirius Satellite
Radio Inc., check the box: [ ]
To convert only part of this Security, state the principal
amount to be converted (must be $1,000 or a multiple of $1,000): $_____________.
If you want the stock certificate made out in another person's
name, fill in the form below:
- -------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
Your signature:
Date:
-------------------------------- --------------------------------------
(Sign exactly as your name appears on
the other side of this Security)
Signature Guarantee:
- -------------------------------------- --------------------------------------
Signature must be guaranteed Signature
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
40
OPTION TO ELECT REPURCHASE
UPON A FUNDAMENTAL CHANGE
To: Sirius Satellite Radio Inc.
The undersigned registered owner of this Security hereby
irrevocably acknowledges receipt of a notice from Sirius Satellite Radio Inc.
(the "Company") as to the occurrence of a Fundamental Change with respect to the
Company, and requests and instructs the Company to redeem the entire principal
amount of this Security, or the portion thereof (which is $1,000 or an integral
multiple thereof) below designated, in accordance with the terms of the
Indenture referred to in this Security at the Repurchase Price, plus the Make
Whole Premium, if any, together with accrued interest to, but excluding, such
date, to the registered Holder hereof.
Date:
-------------------------------- --------------------------------------
Signature(s)
Signature Guarantee:
- -------------------------------------- --------------------------------------
Signature must be guaranteed Signature
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
Principal amount to be redeemed (in an
integral multiple of $1,000, if less than all):
- --------------------------------------
NOTICE: The signature to the foregoing Election must correspond to the name
as written upon the face of this Security in every particular,
without alteration or any change whatsoever.
41
SCHEDULE OF EXCHANGES OF SECURITIES(3)
The following exchanges, redemptions, repurchases or
conversions of a part of this global Security have been made:
Principal
Amount of this Amount of Amount of
Global Security Decrease in Increase in
Following Such Authorized Principal Amount Principal Amount
Decrease Signatory of of this of this
Date (or Securities Global Global
of Exchange Increase) Custodian Security Security
----------- --------------- ------------ ---------------- ----------------
- ----------------------
(3) This schedule should be included only if the Security is a Global
Security.