EXHIBIT 4.4.1
EXECUTION COPY
================================================================================
NOTES REGISTRATION RIGHTS AGREEMENT
among
CD RADIO INC.
and
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
LEHMAN BROTHERS INC.
BEAR, STEARNS & CO. INC.
NATIONSBANC MONTGOMERY SECURITIES LLC
U.S. BANCORP LIBRA
The Initial Purchasers
Dated as of May 13, 1999
================================================================================
THIS NOTES REGISTRATION RIGHTS AGREEMENT (the
"Agreement") is made and entered into as of May 13, 1999, by
and among CD Radio Inc., a Delaware corporation (the
"Company"), and Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated ("Merrill Lynch"), Lehman Brothers
Inc., Bear, Stearns & Co. Inc., NationsBanc Montgomery
Securities LLC and U.S. Bancorp Libra, a division of U.S.
Bancorp Investments, Inc. (collectively, the "Initial
Purchasers").
WHEREAS, this Agreement is made pursuant to the Purchase
Agreement dated as of May 13, 1999 among the Company and the Initial Purchasers
(the "Purchase Agreement"), which provides for the sale by the Company to the
Initial Purchasers of 200,000 units (the "Units" or the "Securities"), each Unit
consisting of $1,000 principal amount of the Company's 14-1/2% Senior Secured
Notes due 2009 (the "Notes") and three warrants (collectively, the "Warrants"),
each Warrant entitling the holder thereof to purchase 3.65 shares of common
stock, par value $0.001 per share (the "Common Stock"), of the Company. In order
to induce the Initial Purchasers to enter into the Purchase Agreement, the
Company has agreed to provide to the Initial Purchasers and their direct and
indirect transferees and assigns the registration rights set forth in this
Agreement. The execution and delivery of this Agreement is a condition to the
closing of the transactions contemplated by the Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing, the parties
hereto agree as follows:
Article I
Definitions
As used in this Agreement, the defined terms shall have the
following meanings:
"1933 Act" shall mean the Securities Act of 1933, and the
rules and regulations of the SEC promulgated thereunder.
"1934 Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations of the SEC promulgated
thereunder.
2
"Agreement" shall have the meaning set forth in the first
introductory paragraph hereto.
"Closing Time" shall mean the Closing Time as defined in the
Purchase Agreement.
"Company" shall have the meaning set forth in the first
introductory paragraph hereto and also includes the Company's successors.
"Depositary" shall mean The Depository Trust Company, or any
other depositary appointed by the Company; provided, however, that any such
depositary must have an address in the City of New York.
"Exchange Notes" shall mean the 14-1/2% Senior Secured Notes
due 2009 issued by the Company under the Indenture containing terms identical to
the Notes (except that (a) interest thereon shall accrue from the last date on
which interest was paid on the Notes or, if no such interest has been paid, from
May 15, 1999, (b) the transfer restrictions thereon shall be eliminated and (c)
certain provisions relating to payment of additional interest thereon shall be
eliminated) to be offered to Holders of Notes in exchange for Notes pursuant to
the Exchange Offer.
"Exchange Offer" shall mean the exchange offer by the Company
of Exchange Notes for Notes pursuant to Article II(a) hereof.
"Exchange Offer Registration" shall mean a registration under
the 1933 Act effected pursuant to Article II(a) hereof.
"Exchange Offer Registration Statement" shall mean an exchange
offer registration statement on Form S-4 (or, if applicable, on another
appropriate form), and all amendments and supplements to such registration
statement, in each case including the Prospectus contained therein, all exhibits
thereto and all material incorporated by reference therein.
"Holder" or "Holders" shall mean the Initial Purchasers, for
so long as they own any Registrable Notes, and each of their successors, assigns
and direct and indirect transferees who become registered owners of Registrable
Notes under the Indenture.
"Indenture" shall mean the Indenture pursuant to which the
Notes are being issued, dated as of May 15, 1999, between the Company and United
States Trust Company of New
3
York, as trustee, as the same may be amended or supplemented from time to time
in accordance with the terms thereof.
"Initial Purchasers" shall have the meaning set forth in the
first introductory paragraph hereto.
"Majority Holders" shall mean the Holders of a majority of the
aggregate principal amount of Registrable Notes outstanding; provided that
whenever the consent or approval of Holders of a specified percentage of
Registrable Notes is required hereunder, Registrable Notes held by the Company
or any of its affiliates (as such term is defined in Rule 405 under the 1933
Act) (other than the Initial Purchasers or subsequent holders of Registrable
Notes if such subsequent holders are deemed to be such affiliates solely by
reason of their holding of such Registrable Notes or other non-voting securities
issued by the Company) shall be disregarded in determining whether such consent
or approval was given by the Holders of such required percentage or amount.
"Notes" shall have the meaning set forth in the second
introductory paragraph hereto.
"Person" shall mean an individual, trustee, partnership,
limited liability company, corporation, trust, unincorporated organization, a
government or agency or political subdivision thereof or other legal entity.
"Prospectus" shall mean the prospectus included in a
Registration Statement, including any preliminary prospectus, and any such
prospectus as amended or supplemented by any prospectus supplement, including a
prospectus supplement with respect to the terms of the offering of any portion
of the Registrable Notes covered by a Shelf Registration Statement, and by all
other amendments and supplements to a prospectus, including post-effective
amendments, and in each case including all material incorporated by reference
therein (it being understood that filings made pursuant to the 1934 Act which
become incorporated by reference in a prospectus do not constitute amendments or
supplements to such prospectus that would require redistribution to the selling
Holders).
"Purchase Agreement" shall have the meaning set forth in the
second introductory paragraph hereto.
"Registrable Notes" shall mean the Notes; provided, however,
that the Notes shall cease to be Registrable Notes when (a) a Registration
Statement with respect to such Notes shall have been declared effective
4
under the 1933 Act and such Notes shall have been disposed of pursuant to such
Registration Statement, (b) such Notes shall have been sold to the public
pursuant to Rule 144 (or any similar provision then in force, but not Rule 144A)
under the 1933 Act, (c) such Notes shall have ceased to be outstanding or (d)
such Notes have been exchanged for Exchange Notes upon consummation of the
Exchange Offer.
"Registration Expenses" shall mean any and all expenses
incident to performance of or compliance by the Company with this Agreement,
including: (a) all SEC, stock exchange or National Association of Securities
Dealers, Inc. ("NASD") registration and filing fees; (b) all fees and expenses
incurred in connection with compliance with state or other securities or blue
sky laws and compliance with the rules of the NASD (including reasonable fees
and disbursements of one counsel for any underwriters and Holders in connection
with state or other securities or blue sky qualification of any of the Exchange
Notes or Registrable Notes); (c) all expenses of any Persons in preparing, or
assisting in preparing, word processing, printing and distributing any
Registration Statement, any Prospectus, any amendments or supplements thereto,
any underwriting agreements, securities sales agreements, certificates
representing the Exchange Notes and other documents relating to the performance
of and compliance with this Agreement; (d) all rating agency fees, if any, (e)
all fees and expenses incurred in connection with the listing, if any, of any of
the Registrable Notes on any securities exchange or exchanges; (f) all fees and
disbursements relating to the qualification of the Indenture under applicable
securities laws; (g) the fees and disbursements of counsel for the Company and
its subsidiaries and, in the case of a Shelf Registration Statement, the
reasonable fees and disbursements (including the expenses of preparing and
distributing any underwriting or securities sales agreement) of one counsel for
the Holders (which counsel shall be selected in writing by the Majority
Holders); (h) the fees and expenses of the independent public accountants of the
Company and any of its subsidiaries, including the expenses of any special
audits or "cold comfort" letters required by or incident to such performance and
compliance; (i) the fees and expenses of a "qualified independent underwriter"
as defined by Conduct Rule 2720 of the NASD, if required by the NASD rules, in
connection with the offering of the Registrable Notes; (j) the fees and expenses
of the Trustee, including its counsel, and any escrow agent or custodian; and
(k) any fees and disbursements (including any advertising expenses) of the
underwriters customarily required to be paid by issuers or sellers of securities
and the reasonable fees and expenses of any experts retained by
5
the Company in connection with any Registration Statement, but excluding in each
case above (as applicable) fees and expenses of counsel to the underwriters or
the Holders and underwriting discounts and commissions and transfer taxes, if
any, relating to the sale or disposition of Registrable Notes by a Holder.
"Registration Statement" shall mean any registration statement
of the Company which covers any of the Exchange Notes or Registrable Notes
pursuant to the provisions of this Agreement, and all amendments and supplements
to any such Registration Statement, including post-effective amendments, in each
case including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"SEC" shall mean the Securities and Exchange Commission.
"Shelf Registration" shall mean a registration effected
pursuant to Article II(b) hereof.
"Shelf Registration Statement" shall mean a "shelf"
registration statement of the Company pursuant to the provisions of Article
II(b) hereof which covers all of the then Registrable Notes on an appropriate
form under Rule 415 under the 1933 Act, or any similar rule that may be adopted
by the SEC, and all amendments and supplements to such registration statement,
including post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all material incorporated by
reference therein.
"Trustee" shall mean the trustee with respect to the Notes
under the Indenture.
Article II
Registration Under the 1933 Act
(a) Exchange Offer Registration. The Company shall (i) file
within 90 calendar days after the Closing Time an Exchange Offer Registration
Statement covering the offer by the Company to the Holders to exchange all of
the Registrable Notes for Exchange Notes, (ii) use its best efforts to cause
such Exchange Offer Registration Statement to be declared effective by the SEC
within 150 calendar days after the Closing Time and (iii) use its best efforts
to consummate the Exchange Offer within 30 calendar days following the effective
date of the Exchange Offer
6
Registration Statement. The Exchange Notes will be issued under the Indenture.
Upon the effectiveness of the Exchange Offer Registration Statement, the Company
shall promptly commence the Exchange Offer, it being the objective of such
Exchange Offer to enable each Holder (other than Participating Broker-Dealers
(as defined in Article III(f) hereof) eligible and electing to exchange
Registrable Notes for Exchange Notes (assuming that such Holder (i) is not an
affiliate of the Company within the meaning of Rule 405 under the 1933 Act, (ii)
acquires the Exchange Notes in the ordinary course of such Holder's business and
(iii) has no arrangements or understandings with any Person to participate in
the Exchange Offer for the purpose of distributing the Exchange Notes) to trade
such Exchange Notes from and after their receipt without any limitations or
restrictions under the 1933 Act and without material restrictions under the
securities laws of a substantial portion of the several states of the United
States.
In connection with the Exchange Offer, the Company shall:
(i) mail to each Holder a copy of the Prospectus (without
the materials incorporated by reference therein) forming part of the
Exchange Offer Registration Statement, together with an appropriate
letter of transmittal and related documents;
(ii) keep the Exchange Offer open for not less than 20
business days after the date notice thereof is mailed to the Holders
(or longer if required by applicable law);
(iii) use the services of the Depositary for the Exchange
Offer with respect to Notes evidenced by global certificates;
(iv) permit Holders to withdraw tendered Registrable Notes at
any time prior to the close of business, New York City time, on the
last business day on which the Exchange Offer shall remain open, by
sending to the institution specified in the notice, a telegram, telex,
facsimile transmission or letter setting forth the name of such Holder,
the principal amount of Registrable Notes delivered for exchange, and a
statement that such Holder is withdrawing its election to have such
Notes exchanged; and
(v) otherwise comply in all respects with all applicable
laws relating to the Exchange Offer.
7
As soon as practicable after the close of the Exchange Offer,
the Company shall:
(i) accept for exchange Registrable Notes duly tendered and
not validly withdrawn pursuant to the Exchange Offer in accordance with
the terms of the Exchange Offer Registration Statement and the letter
of transmittal which is an exhibit thereto;
(ii) deliver, or cause to be delivered, to the Trustee for
cancellation, or direct the Trustee to cancel, all Registrable Notes so
accepted for exchange by the Company; and
(iii) cause the Trustee promptly to authenticate and deliver
Exchange Notes (which may be in global form) to each Holder of
Registrable Notes equal in amount to the Registrable Notes of such
Holder so accepted for exchange.
Interest will accrue on each Exchange Note exchanged for a
Note in either case from the last date on which interest was paid on the Notes
surrendered in exchange therefor, or if no interest has been paid on the Notes,
from May 15, 1999. The Exchange Offer shall not be subject to any conditions,
other than that (A) the Exchange Offer, or the making of any exchange by a
Holder, does not violate applicable law or any applicable interpretation of the
staff of the SEC, (B) no action or proceeding shall have been instituted or
threatened in any court or before any governmental agency with respect to the
Exchange Offer which, in the Company's judgment, might impair the ability of the
Company to proceed with the Exchange Offer or, (C) there shall not have been
adopted or enacted any law, statute, rule or regulation which, in the Company's
judgment, would materially impair the ability of the Company to proceed with the
Exchange Offer, (D) there shall not have been any law, rule or regulation or
applicable interpretations of the staff of the SEC issued or promulgated which,
in the good faith determination of the Company, do not permit the Company to
effect the Exchange Offer and (E) there shall not have occurred any change in
the current interpretation by the staff of the SEC which permits the Exchange
Notes issued pursuant to the Exchange Offer in exchange for Notes to be offered
for resale, resold and otherwise transferred by holders thereof (other than any
such holder that is a broker-dealer or an "affiliate" of the Company within the
meaning of Rule 405 under the 1933 Act) without compliance with the registration
and prospectus delivery provisions of the 1933 Act provided that such Exchange
Notes are acquired in the ordinary course of such
8
holders' business and such holders have no arrangement with any person to
participate in the distribution of such Exchange Notes. Each Holder of Notes
(other than Participating Broker-Dealers) who wishes to exchange such Notes for
Exchange Notes in the Exchange Offer shall have represented that (i) any
Exchange Notes to be received by it were acquired in the ordinary course of
business, (ii) at the time of the commencement of the Exchange Offer it had no
arrangement or understanding with any Person to participate in the distribution
(within the meaning of the 1933 Act) of the Exchange Notes, (iii) it is not an
affiliate (as defined in Rule 405 under the 1933 Act) of the Company or, if it
is such an affiliate, it will comply with the registration and prospectus
delivery requirements of the 1933 Act to the extent applicable and (iv) it shall
have made such other representations as may be reasonably necessary under
applicable SEC rules, regulations or interpretations to render the use of Form
S-4 or another appropriate form under the 1933 Act available. The Company shall
inform the Initial Purchasers of the names and addresses of the Holders to whom
the Exchange Offer is made, to the extent available, and the Initial Purchasers
shall have the right to contact such Holders and otherwise facilitate the tender
of Registrable Notes in the Exchange Offer.
(b) Shelf Registration. (i) If, because of any change in law
after the date of this Agreement or applicable interpretations thereof by the
staff of the SEC, the Company is not permitted to effect the Exchange Offer as
contemplated by Article II(a) hereof, or (ii) if for any other reason the
Exchange Offer is not consummated within 180 calendar days following the date
hereof, or (iii) if any Holder (other than an Initial Purchaser) is not eligible
to participate in the Exchange Offer or (iv) upon the request of any Initial
Purchaser (with respect to any Registrable Notes which it acquired from the
Company) following the consummation of the Exchange Offer if any such Initial
Purchaser shall hold Registrable Notes which it acquired directly from the
Company and if such Initial Purchaser is not permitted, in the opinion of
counsel to such Initial Purchaser, pursuant to applicable law or applicable
interpretation of the staff of the SEC, to participate in the Exchange Offer,
the Company shall, at its own cost:
(A) as promptly as practicable, file with the SEC a Shelf
Registration Statement relating to the offer and sale of the
then-outstanding Registrable Notes by the Holders from time to time in
accordance with the methods of distribution elected by the Majority
Holders of such Registrable Notes and set forth in such Shelf
Registration Statement, and use its best efforts to
9
cause such Shelf Registration Statement to be declared effective by the
SEC by the 180th calender day after the Closing Time (or promptly in
the event of a request by any Initial Purchaser pursuant to clause (iv)
above). In the event that the Company is required to file a Shelf
Registration Statement upon the request of any Holder (other than an
Initial Purchaser) not eligible to participate in the Exchange Offer
pursuant to clause (iii) above or upon the request of any Initial
Purchaser pursuant to clause (iv) above, the Company shall file and use
its best efforts to have declared effective by the SEC both an Exchange
Offer Registration Statement pursuant to Article II(a) hereof with
respect to all Registrable Notes and a Shelf Registration Statement
(which may be a Registration Statement combined with the Exchange Offer
Registration Statement) with respect to offers and sales of Registrable
Notes held by such Holder or such Initial Purchaser after completion of
the Exchange Offer;
(B) use its best efforts to keep the Shelf Registration
Statement continuously effective in order to permit the Prospectus
forming part thereof to be usable by Holders for a period of two years
after its effective date (or until one year after the effective date of
the Shelf Registration Statement if such Shelf Registration Statement
is filed upon the request of any Initial Purchaser pursuant to clause
(iv) above) or such shorter period which will terminate when all of the
Registrable Notes covered by the Shelf Registration Statement have been
sold pursuant to the Shelf Registration Statement; and
(C) notwithstanding any other provisions hereof, use its best
efforts to ensure that (i) any Shelf Registration Statement and any
amendment thereto and any Prospectus forming part thereof and any
supplement thereto complies in all material respects with the 1933 Act,
(ii) any Shelf Registration Statement and any amendment thereto does
not, when it becomes effective, contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading and
(iii) any Prospectus forming part of any Shelf Registration Statement,
and any supplement to such Prospectus (as amended or supplemented from
time to time), does not include an untrue statement of a material fact
or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
10
The Company further agrees, if necessary, to supplement or
amend the Shelf Registration Statement if requested by the Majority Holders with
respect to information relating to the Holders and otherwise as required by
Article III(b) below, to use all reasonable efforts to cause any such amendment
to become effective and such Shelf Registration to become usable as soon as
practicable thereafter and to furnish to the Holders of Registrable Notes copies
of any such supplement or amendment promptly after its being used or filed with
the SEC.
(c) Expenses. The Company shall pay all Registration Expenses
in connection with the registration pursuant to Articles II(a) and II(b) hereof
and, in the case of an Exchange Offer Registration Statement, will reimburse the
Initial Purchasers, as applicable, for the reasonable fees and disbursements of
one counsel in connection therewith. Each Holder shall pay all expenses of its
counsel other than as set forth in the preceding sentence, including
underwriting discounts, commissions and transfer taxes, if any, relating to the
sale or disposition of such Holder's Registrable Notes pursuant to the Shelf
Registration Statement.
(d) Effective Registration Statement. (i) The Company will be
deemed not to have used its best efforts to cause a Registration Statement to
become, or to remain, effective during the requisite periods set forth herein if
the Company voluntarily takes any action that could reasonably be expected to
result in any such Registration Statement not being declared effective or in the
Holders of Registrable Notes covered thereby not being able to exchange or offer
and sell such Registrable Notes during that period unless (A) such action is
required by applicable law or (B) such action is taken by the Company in good
faith and for valid business reasons (but not including avoidance of the
Company's obligations hereunder), including a material corporate transaction, so
long as the Company promptly complies with the requirements of Article III(k)
hereof, if applicable.
(ii) An Exchange Offer Registration Statement pursuant to
Article II(a) hereof or a Shelf Registration Statement pursuant to Article II(b)
hereof will not be deemed to have become effective unless it has been declared
effective by the SEC; provided, however, that if, after it has been declared
effective, the offering of Registrable Notes pursuant to a Registration
Statement is interfered with by any stop order, injunction or other order or
requirement of the SEC or any other governmental agency or court, such
Registration Statement will be deemed not to
11
have been effective during the period of such interference, until the offering
of Registrable Notes pursuant to such Registration Statement may legally resume.
(e) Accrual and Payment of Additional Interest. In the event
that (i) the Exchange Offer Registration Statement is not filed with the SEC on
or prior to the 90th calendar day following the Closing Time, (ii) the Exchange
Offer Registration Statement is not declared effective on or prior to the 150th
calendar day following the Closing Time, (iii) the Exchange Offer is not
consummated, or, if required, a Shelf Registration Statement with respect to the
Notes is not declared effective, on or prior to the 180th calendar day following
the Closing Time or (iv) the Exchange Offer Registration Statement or the Shelf
Registration Statement is declared effective but thereafter ceases to be
effective or usable (each event referred to in clauses (i) through (iv) above, a
"Registration Default"), then the Company shall pay additional interest in cash
on the Notes on each Interest Payment Date (as defined in the Indenture) in an
amount equal to one-half of one percent (0.5%) per annum of the principal amount
of the Notes, with respect to the first 90-day period following such
Registration Default. The amount of such additional interest will increase by an
additional one-half of one percent (0.5%) to a maximum of one and one-half
percent (1.5%) per annum for each subsequent 90-day period until such
Registration Default has been cured. Upon (w) the filing of the Exchange Offer
Registration Statement after the 90-day period described in clause (i) above,
(x) the effectiveness of the Exchange Offer Registration Statement after the
150-day period described in clause (ii) above, (y) the consummation of the
Exchange Offer or the effectiveness of a Shelf Registration Statement, as the
case may be, after the 180-day period described in clause (iii) above, or (z)
the cure of any Registration Default described in clause (iv) above, such
additional interest shall cease to accrue on the Notes from the date of such
filing, effectiveness, consummation or cure, as the case may be, if the Company
is otherwise in compliance with this paragraph; provided, however, that if,
after any such additional interest ceases to accrue, a different event specified
in clause (i), (ii), (iii) or (iv) above occurs, such additional interest shall
begin to accrue again pursuant to the foregoing provisions.
(f) Specific Enforcement. Without limiting the remedies
available to the Initial Purchasers and the Holders, the Company acknowledges
that any failure by the Company to comply with its respective obligations under
Articles II(a) and (b) hereof may result in material irreparable injury to the
Initial Purchasers or the Holders
12
for which there is no adequate remedy at law, that it will not be possible to
measure damages for such injuries precisely and that, in the event of any such
failure, the Initial Purchasers or any Holder may obtain such relief as may be
required to specifically enforce the Company's obligations under Articles II(a)
and (b) hereof.
Article III
Registration Procedures
In connection with the obligations of the Company with respect
to the Registration Statements pursuant to Articles II(a) and (b) hereof, the
Company shall:
(a) prepare and file with the SEC a Registration Statement,
within the time period specified in Article II hereof, on the
appropriate form under the 1933 Act, which form (i) shall be selected
by the Company, (ii) shall, in the case of a Shelf Registration, be
available for the sale of the Registrable Notes by the selling Holders
thereof and (iii) shall be appropriately responsive in all material
respects with the requirements of the applicable form required by the
SEC and include or incorporate by reference all financial statements
required by the SEC to be filed therewith, and use its best efforts to
cause such Registration Statement to become effective and remain
effective in accordance with Article II hereof;
(b) prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may be
necessary under applicable law to keep such Registration Statement
effective for the applicable period; cause each Prospectus to be
supplemented by any required prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 under the 1933 Act; and
comply with the provisions of the 1933 Act with respect to the
disposition of all securities covered by each Registration Statement
during the applicable period in accordance with the intended method or
methods of distribution by the selling Holders thereof;
(c) in the case of a Shelf Registration, (i) notify, or direct
that a notice be issued by the Trustee to, each Holder of Registrable
Notes, at least five days prior to filing, that a Shelf Registration
Statement with respect to the Registrable Notes is
13
being filed and advise such Holders that the distribution of
Registrable Notes will be made in accordance with the method elected by
the Majority Holders, (ii) furnish to each Holder of Registrable Notes,
to counsel for the Initial Purchasers, to counsel for the Holders and
to each underwriter of an underwritten offering of Registrable Notes,
if any, without charge, as many copies of each Prospectus (without the
materials incorporated therein by reference), including each
preliminary Prospectus, and any amendment or supplement thereto and
such other documents as such Holder or underwriter may reasonably
request, including financial statements and schedules and, if the
Holder so reasonably requests, all materials incorporated therein by
reference and exhibits (including those incorporated by reference) in
order to facilitate the public sale or other disposition of the
Registrable Notes and (iii) subject to the last paragraph of Article
III, hereby consent to the use of the Prospectus, including each
preliminary Prospectus, or any amendment or supplement thereto by each
of the selling Holders of Registrable Notes in connection with the
offering and sale of the Registrable Notes covered by the Prospectus or
any amendment or supplement thereto;
(d) use its reasonable efforts to register or qualify the
Registrable Notes under all applicable state securities or "blue sky"
laws of such jurisdictions as any Holder of Registrable Notes covered
by a Registration Statement and each underwriter of an underwritten
offering of Registrable Notes shall reasonably request by the time the
applicable Registration Statement is declared effective by the SEC, to
cooperate with the Holders in connection with any filings required to
be made with the NASD, keep each such registration or qualification
effective during the period such Registration Statement is required to
be effective and do any and all other acts and things which may be
reasonably necessary or advisable to enable such Holder to consummate
the disposition in each such jurisdiction of such Registrable Notes
owned by such Holder; provided, however, that the Company shall not be
required to (i) qualify as a foreign corporation or as a dealer in
securities in any jurisdiction where it would not otherwise be required
to qualify but for this Article III(d) or (ii) take any action which
would subject it to general service of process or taxation in any such
jurisdiction if it is not then so subject;
14
(e) in the case of a Shelf Registration, notify, or direct
that a notice be issued by the Trustee to, each Holder of Registrable
Notes and counsel for such Holders promptly and, if requested by such
Holder or counsel, confirm such advice in writing promptly (i) when a
Shelf Registration Statement has become effective and when any
post-effective amendments and supplements thereto become effective,
(ii) of any request by the SEC or any state securities authority for
post-effective amendments and supplements to a Shelf Registration
Statement and Prospectus or for additional information after the Shelf
Registration Statement has become effective, (iii) of the issuance by
the SEC or any state securities authority of any stop order suspending
the effectiveness of a Shelf Registration Statement or the initiation
of any proceedings for that purpose, (iv) if, during the period a
Registration Statement is effective, the representations and warranties
of the Company contained in any underwriting agreement, securities
sales agreement or other similar agreement, if any, relating to such
offering cease to be true and correct in all material respects, (v) of
the receipt by the Company of any notification with respect to the
suspension of the qualification of the Registrable Notes for sale in
any jurisdiction or the initiation or threatening of any proceeding for
such purpose, (vi) of the happening of any event or the discovery of
any facts during the period a Shelf Registration Statement is effective
which makes any statement made in such Shelf Registration Statement or
the related Prospectus untrue in any material respect or which requires
the making of any changes in such Shelf Registration Statement or
Prospectus in order to make the statements therein not misleading and
(vii) of any determination by the Company that a post-effective
amendment to a Registration Statement would be appropriate;
(f) (A) in the case of an Exchange Offer, (i) include in the
Exchange Offer Registration Statement a "Plan of Distribution" section
covering the use of the Prospectus that is included in the Exchange
Offer Registration Statement by broker-dealers who have exchanged their
Registrable Notes for Exchange Notes for the resale of such Exchange
Notes, (ii) furnish to each broker-dealer who desires to participate in
the Exchange Offer, without charge, as many copies of each Prospectus
(without the materials incorporated therein by reference) included in
the Exchange Offer Registration Statement, including any preliminary
prospectus, any amendment or supplement thereto and
15
copies of the materials incorporated by reference in such Prospectus,
as such broker-dealer may reasonably request, (iii) include in the
Exchange Offer Registration Statement a statement that any
broker-dealer who holds Registrable Notes acquired for its own account
as a result of market-making activities or other trading activities (a
"Participating Broker-Dealer"), and who receives Exchange Notes for
Registrable Notes pursuant to the Exchange Offer, may be a statutory
underwriter and must deliver a prospectus meeting the requirements of
the 1933 Act in connection with any resale of such Exchange Notes, (iv)
subject to the last paragraph of Article III hereof, hereby consent to
the use of the Prospectus forming part of the Exchange Offer
Registration Statement or any amendment or supplement thereto, by any
broker-dealer in connection with the sale or transfer of the Exchange
Notes covered by the Prospectus or any amendment or supplement thereto,
and (v) include in the transmittal letter or similar documentation to
be executed by an exchange offeree in order to participate in the
Exchange Offer (x) the following provision:
"If the undersigned is not a broker-dealer, the undersigned
represents that it is not engaged in, and does not intend to
engage in, a distribution of Exchange Notes. If the
undersigned is a broker-dealer that will receive Exchange
Notes for its own account in exchange for Registrable Notes,
it represents that the Registrable Notes to be exchanged for
Exchange Notes were acquired by it as a result of
market-making activities or other trading activities and
acknowledges that it will deliver a prospectus meeting the
requirements of the 1933 Act in connection with any resale of
such Exchange Notes pursuant to the Exchange Offer; however,
by so acknowledging and by delivering a prospectus, the
undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the 1933 Act;"
and (y) a statement to the effect that a broker-dealer, by making the
acknowledgment described in subclause (x) and by delivering a
Prospectus in connection with the exchange of Registrable Securities,
will not be deemed to admit that it is an underwriter within the
meaning of the 1933 Act; and
(B) to the extent any Participating Broker-Dealer participates
in the Exchange Offer, the Company shall use its best efforts to cause
to be delivered at the
16
request of an entity representing the Participating Broker-Dealers
(which entity shall be one of the Initial Purchasers, unless it elects
not to act as such representative) only one, if any, "cold comfort"
letter with respect to the Prospectus in the form existing on the last
date for which exchanges are accepted pursuant to the Exchange Offer
and with respect to each subsequent amendment or supplement, if any,
effected during the period specified in clause (C) below; and
(C) to the extent any Participating Broker-Dealer participates
in the Exchange Offer, the Company shall use its best efforts to
maintain the effectiveness of the Exchange Offer Registration Statement
for a period of 120 calendar days following the closing of the Exchange
Offer; and
(D) the Company shall not be required to amend or supplement
the Prospectus contained in the Exchange Offer Registration Statement
as would otherwise be contemplated by Article III(b) hereof, or take
any other action as a result of this Article III(f), for a period
exceeding 180 calendar days after the last date for which exchanges are
accepted pursuant to the Exchange Offer (as such period may be extended
by the Company) and Participating Broker-Dealers shall not be
authorized by the Company to, and shall not, deliver such Prospectus
after such period in connection with resales contemplated by this
Article III.
(g) (A) in the case of an Exchange Offer, furnish counsel for
the Initial Purchasers and (B) in the case of a Shelf Registration,
furnish counsel for the Holders of Registrable Notes, copies of any
request by the SEC or any state securities authority for amendments or
supplements to a Registration Statement and Prospectus or for
additional information;
(h) use its best efforts to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement at the
earliest possible moment and provide notice promptly to each Holder of
the withdrawal of any such order;
(i) in the case of a Shelf Registration, furnish to each
selling Holder of Registrable Notes, and to each underwriter, if any,
without charge, at least one conformed copy of each Registration
Statement and any post-effective amendment thereto (without documents
incorporated therein by reference or exhibits thereto, unless
requested);
17
(j) in the case of a Shelf Registration, cooperate with the
selling Holders of Registrable Notes to facilitate the timely
preparation and delivery of certificates (which may be in global form
if requested) representing Registrable Notes to be sold and not bearing
any restrictive legends; and cause such Registrable Notes to be in a
form eligible for deposit with the Depositary, in such denominations
(consistent with the provisions of the Indenture) and registered in
such names as the selling Holders or the underwriters, if any, may
reasonably request at least three business days prior to the closing of
any sale of Registrable Notes;
(k) in the case of a Shelf Registration, promptly upon the
occurrence of any event or the discovery of any facts, each as
contemplated by Article III(e)(vi) hereof, use its best efforts to
prepare a supplement or post-effective amendment to a Registration
Statement or the related Prospectus or any document incorporated
therein by reference or file any other required document so that, as
thereafter delivered to the purchasers of the Registrable Notes, such
Prospectus will not contain at the time of such delivery any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements therein, in light of the circumstances under
which they were made, not misleading. During any 365-day-period, the
Company will have the ability to suspend the availability of such Shelf
Registration Statement for up to three periods of up to 30 consecutive
days, but no more than an aggregate 60 days during any 365-day period,
if any event shall occur as a result of which it shall be necessary, in
the good faith determination of the Board of Directors, to amend the
Shelf Registration Statement or to amend or supplement any prospectus
or prospectus supplement thereunder in order that each such document
not include any untrue statement of fact or omit to state a material
fact necessary to make the statements therein not misleading in light
of the circumstances under which such statements were made. The Company
agrees to notify, or direct that a notice be issued by the Trustee to,
each Holder to suspend use of the Prospectus as promptly as practicable
after the occurrence of such an event, and each Holder hereby agrees to
suspend use of the Prospectus until the Company has amended or
supplemented the Prospectus to correct such misstatement or omission.
At such time as such public disclosure is otherwise made or the Company
determines that such disclosure is not necessary, in each case to
18
correct any misstatement of a material fact or to include any omitted
material fact, the Company agrees promptly to notify each selling
Holder of such determination and to furnish each selling Holder such
number of copies of the Prospectus (without the information
incorporated therein by reference), as amended or supplemented, as such
Holder may reasonably request;
(l) obtain CUSIP numbers for all Exchange Notes, or
Registrable Notes, as the case may be, not later than the effective
date of a Registration Statement, and provide the Trustee with global
certificates (or, if requested, physical certificates) for the Exchange
Notes or the Registrable Notes, as the case may be, in a form eligible
for deposit with the Depositary;
(m) (i) cause the Indenture to be qualified under the Trust
Indenture Act of 1939, as amended (the "TIA"), in connection with the
registration of the Exchange Notes, or Registrable Notes, as the case
may be, (ii) cooperate with the Trustee and the Holders to effect such
changes to the Indenture as may be required for the Indenture to be so
qualified in accordance with the terms of the TIA and (iii) execute,
and use its reasonable efforts to cause the Trustee to execute, all
documents as may be required to effect such changes, and all other
forms and documents required to be filed with the SEC to enable the
Indenture to be so qualified in a timely manner;
(n) in the case of a Shelf Registration, enter into agreements
(including underwriting agreements, if applicable) and take all other
customary and appropriate actions (including those reasonably requested
by the Majority Holders) in order to expedite or facilitate the
disposition of such Registrable Notes, and in such connection, whether
or not an underwriting agreement is entered into and whether or not the
registration is an underwritten registration:
(i) make such representations and warranties to the
Holders of such Registrable Notes and the underwriters, if
any, in form, substance and scope as are customarily made by
issuers to underwriters in similar underwritten offerings as
may be reasonably requested by them;
(ii) obtain opinions of counsel to the Company and
its subsidiaries and updates thereof (which counsel and
opinions (in form, scope and
19
substance) shall be reasonably satisfactory to the managing
underwriters, if any, and the holders of a majority in
principal amount of the Registrable Notes being sold)
addressed to each selling Holder and the underwriters, if any,
to the effect provided to the Initial Purchasers on the
Closing Date and covering the matters customarily covered in
opinions requested in sales of securities or underwritten
offerings and such other matters as may be reasonably
requested by such Holders and underwriters;
(iii) obtain "cold comfort" letters and updates
thereof from the Company's independent certified public
accountants addressed to the underwriters, if any, and use its
reasonable efforts to have such letters addressed to the
selling Holders of Registrable Notes, such letters to be in
customary form and covering matters of the type customarily
covered in "cold comfort" letters to underwriters in
connection with similar underwritten offerings;
(iv) enter into a securities sales agreement with
the selling Holders and an agent of the selling Holders
providing for, among other things, the appointment of such
agent for the selling Holders for the purpose of soliciting
purchases of Registrable Notes, which agreement shall be in
form, substance and scope customary for similar offerings;
(v) if an underwriting agreement is entered into,
cause the same to set forth indemnification provisions and
procedures substantially equivalent to the indemnification
provisions and procedures set forth in Article V hereof with
respect to the underwriters and all other parties to be
indemnified pursuant to said Article; and
(vi) deliver such documents and certificates as are
customarily delivered in similar offerings and as may be
reasonably requested by the Holders of a majority in principal
amount of the Registrable Notes being sold and the managing
underwriters, if any.
The above shall be done at (i) the effectiveness of such Shelf
Registration Statement (and, if appropriate, each post-effective
amendment thereto) and (ii) each closing under any underwriting or
similar agreement as
20
and to the extent required thereunder. In the case of any underwritten
offering, the Company shall cause to be sent a written notice to the
Holders of all Registrable Notes of such underwritten offering at least
20 calendar days prior to the filing of a prospectus supplement for
such underwritten offering. Such notice shall (x) offer each such
Holder the right to participate in such underwritten offering, (y)
specify a date, which shall be no earlier than 10 calendar days
following the date of such notice, by which such Holder must inform the
Company of its intent to participate in such underwritten offering and
(z) include the instructions such Holder must follow in order to
participate in such underwritten offering;
(o) in the case of a Shelf Registration, make available for
inspection by representatives of the selling Holders of the Registrable
Notes and any underwriters participating in any disposition pursuant to
a Shelf Registration Statement and any counsel or accountant retained
by such Holders or underwriters, all financial and other records,
pertinent corporate documents and properties of the Company reasonably
requested by any such persons, and cause the respective officers,
directors, employees, and any other agents of the Company to supply all
information reasonably requested by any such representative,
underwriter, special counsel or accountant in connection with such
Shelf Registration Statement.
(p) (i) in the case of an Exchange Offer, a reasonable time
prior to the filing of any Exchange Offer Registration Statement, any
Prospectus (except for the materials incorporated therein by reference)
forming a part thereof, any amendment to an Exchange Offer Registration
Statement or amendment or supplement to a Prospectus, provide copies of
such document to the Initial Purchasers, and make such changes in any
such document prior to the filing thereof as any of the Initial
Purchasers or their counsel may reasonably request; (ii) in the case of
a Shelf Registration, a reasonable time prior to filing any Shelf
Registration Statement, any Prospectus (except for the materials
incorporated therein by reference) forming a part thereof, any
amendment to such Shelf Registration Statement or amendment or
supplement to such Prospectus, provide copies of such document to the
selling Holders of Registrable Notes, to the Initial Purchasers, to
counsel on behalf of the selling Holders and to the underwriter or
underwriters of an underwritten offering of Registrable Notes, if any,
and
21
make such changes in any such document prior to the filing thereof as
the selling Holders of Registrable Notes, the Initial Purchasers on
behalf of such Holders, their counsel and any underwriter may
reasonably request; and (iii) cause the representatives of the Company
and its subsidiaries to be available for discussion of such document as
shall be reasonably requested by the selling Holders of Registrable
Notes, the Initial Purchasers on behalf of such Holders or any
underwriter and not at any time make any filing of any such document of
which such Holders, the Initial Purchasers on behalf of such Holders,
their counsel or any underwriter shall not have previously been advised
and furnished a copy or to which such Holders, the Initial Purchasers
on behalf of such Holders, their counsel or any underwriter shall
reasonably object;
(q) in the case of a Shelf Registration, use its reasonable
efforts to cause all Registrable Notes to be listed on any securities
exchange on which similar debt securities issued by the Company are
then listed if requested by the Majority Holders or by the underwriter
or underwriters of an underwritten offering of Registrable Notes, if
any;
(r) in the case of a Shelf Registration, unless the rating in
effect for the Notes applies to the Exchange Notes and the Notes to be
sold pursuant to a Shelf Registration, use its reasonable efforts to
cause the Registrable Notes to be rated by an appropriate rating
agency, if so requested by the Majority Holders or by the underwriter
or underwriters of an underwritten offering of Registrable Notes, if
any, unless the Registrable Notes are already so rated;
(s) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC and make available to its
security holders, as soon as reasonably practicable, an earnings
statement covering at least 12 months which shall satisfy the
provisions of Section 11(a) of the 1933 Act and Rule 158 thereunder;
and
(t) cooperate and assist in any filings required to be made
with the NASD and in the performance of any due diligence investigation
by any underwriter and its counsel (including, any "qualified
independent underwriter" that is required to be retained in accordance
with the rules and regulations of the NASD).
22
In the case of a Shelf Registration Statement, the Company may
(as a condition to a selling Holder's participation in the Shelf Registration)
require each selling Holder of Registrable Notes to furnish to the Company (1) a
notice that such Holder wishes to sell Registrable Notes and (2) such
information regarding such Holder, securities of the Company beneficially owned
by such Holder and the proposed distribution by such Holder of such Registrable
Notes as the Company may from time to time reasonably request in writing.
In the case of a Shelf Registration Statement, each Holder
agrees that, upon receipt of any notice from the Company of the happening of any
event or the discovery of any facts, each of the kind described in Article
III(e)(ii)- (vii) hereof, such Holder will forthwith discontinue disposition of
Registrable Notes pursuant to a Registration Statement until such Holder's
receipt of the copies of the supplemented or amended Prospectus (without the
information incorporated therein by reference) contemplated by Article III(k)
hereof, and, if so directed by the Company, such Holder will deliver to the
Company (at its expense) all copies in its possession, other than permanent file
copies then in such Holder's possession, of the Prospectus covering such
Registrable Notes current at the time of receipt of such notice. If the Company
shall give any such notice to suspend the disposition of Registrable Notes
pursuant to a Shelf Registration Statement as a result of the happening of any
event or the discovery of any facts, each of the kind described in Article
III(e)(vi) hereof, the Company shall be deemed to have used its best efforts to
keep the Shelf Registration Statement effective during such period of suspension
provided that the Company shall use its best efforts to file and to have
declared effective (in the case of an amendment) as soon as practicable an
amendment or supplement to the Shelf Registration Statement and shall extend the
period during which the Shelf Registration Statement shall be maintained
effective pursuant to this Agreement by the number of days during the period
from and including the date of the giving of such notice to and including the
date when the selling Holders shall have received copies of the supplemented or
amended Prospectus (without the information incorporated therein by reference)
necessary to resume such dispositions.
23
Article IV
Underwritten Registration
If any of the Registrable Notes covered by any Shelf
Registration are to be sold in an underwritten offering, the investment banker
or investment bankers and manager or managers that will manage the offering will
be selected by the holders of a majority in principal amount of such Registrable
Notes included in such offering and shall be reasonably acceptable to the
Company.
No Holder of Registrable Notes may participate in any
underwritten registration hereunder unless such Holder (a) agrees to sell such
Holder's Registrable Notes on the basis provided in any underwriting
arrangements approved by the persons entitled thereunder to approve such
arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.
Article V
Indemnification and Contribution
(a) The Company shall indemnify and hold harmless each Initial
Purchaser, each Holder, including Participating Broker-Dealers, each underwriter
who participates in an offering of Registrable Notes, their respective
affiliates, and their respective directors, officers, employees, agents and each
Person, if any, who controls any of such parties within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act (the "indemnified parties") as
follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in any
Registration Statement (or any amendment thereto) pursuant to which
Exchange Notes or Registrable Notes were registered under the 1933 Act,
including all documents incorporated therein by reference, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact contained in any Prospectus (or any
amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the
24
statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Article V(d) below) any such settlement is effected
with the written consent of the Company; and
(iii) against any and all expenses whatsoever, as incurred
(including fees and disbursements of counsel chosen by any indemnified
party), reasonably incurred in investigating, preparing or defending
against any litigation, or investigation or proceeding by any court or
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under subparagraph (i) or (ii) of this Article
V(a);
provided, however, that this indemnity shall not apply to any loss, liability,
claim, damage or expense to the extent arising out of an untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company by the Initial
Purchasers or any Holder, including Participating Broker-Dealers, or any
underwriter expressly for use in the Registration Statement (or any amendment or
supplement thereto) or the Prospectus (or any amendment or supplement thereto);
and provided further, that the Company will not be liable to an indemnified
party with respect to any preliminary Prospectus to the extent the Company shall
sustain the burden of proving that any such loss, liability, claim, damage or
expense resulted from the fact that such indemnified party, in contravention of
a requirement of this Agreement or applicable law, sold Registrable Notes to a
person to whom such indemnified party failed to send or give, at or prior to the
Closing Time, a copy of the final Prospectus, as then amended or supplemented
if: (A) the Company has previously furnished copies thereof (sufficiently in
advance of the Closing Time to allow for distribution by the Closing Time) to
the Initial Purchaser and the loss, liability, claim, damage or expense of such
indemnified party resulted from a misstatement or omission of a material fact
contained in or omitted from the
25
preliminary Prospectus which was corrected in the final Prospectus as, if
applicable, amended or supplemented prior to the Closing Time and such final
Prospectus was required by law to be delivered at or prior to the written
confirmation of sale to such person and (B) such failure to give or send such
final Prospectus by the Closing Time to the party or parties asserting such
loss, liability, claim, damage or expense would have constituted the sole
defense to the claim asserted by such person.
(b) In the case of a Shelf Registration, each selling Holder
agrees, severally and not jointly, to indemnify and hold harmless the Company,
each Initial Purchaser, each underwriter who participates in an offering of
Registrable Note and the other selling Holders and each of their respective
directors and officers (including each officer of the Company who signed the
Shelf Registration Statement) and each Person, if any, who controls the Company,
any Initial Purchaser, any underwriter or any other selling Holder within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, against any
and all loss, liability, claim, damage and expense whatsoever described in the
indemnity contained in Article V(a) hereof, as incurred, but only with respect
to untrue statements or omissions, or alleged untrue statements or omissions,
made in the Shelf Registration Statement (or any amendment thereto) or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such Holder, as
the case may be, expressly for use in the Shelf Registration Statement (or any
amendment thereto), or the Prospectus (or any amendment or supplement thereto);
provided, however, that no such Holder shall be liable for any claims hereunder
in excess of the amount of net proceeds received by such Holder from the sale of
Registrable Notes pursuant to such Shelf Registration Statement.
(c) In case any action shall be commenced involving any person
in respect of which indemnity may be sought pursuant to either paragraph (a) or
paragraph (b) above, such indemnified party shall give notice as promptly as
reasonably practicable to each person against whom such indemnity may be sought
(the "indemnifying party"), but failure to so notify an indemnifying party shall
not relieve such indemnifying party from any liability hereunder to the extent
it is not materially prejudiced as a result thereof and in any event shall not
relieve it from any liability which it may have otherwise than on account of
this indemnity. An indemnifying party may participate at its own expense in the
defense of such action; provided, however, that counsel to the indemnifying
party shall not (except
26
with the consent of the indemnified party) also be counsel to the indemnified
party. In no event shall the indemnifying party or parties be liable for the
fees and expenses of more than one counsel (in addition to any local counsel)
for all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances. In case any such action is brought against
any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel satisfactory to such indemnified
party; provided, however, that if the defendants in any such action include both
the indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded (based upon advice of counsel) that there may be one
or more legal defenses available to it and/or other indemnified parties which
are different from or additional to those available to the indemnifying party,
the indemnifying party shall not have the right to direct the defense of such
action on behalf of such indemnified party or parties and such indemnified party
or parties shall have the right to select separate counsel to defend such action
on behalf of such indemnified party or parties. After notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof and approval by such indemnified party of counsel appointed to
defend such action, the indemnifying party will not be liable to such
indemnified party under this Article V for any subsequent legal or other
expenses incurred pursuant to such action, other than reasonable costs of
investigation, subsequently incurred by such indemnified party in connection
with the defense thereof, unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the next preceding sentence
(it being understood, however, that in connection with such action the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (in addition to local counsel) in any one action or separate
but substantially similar actions in the same jurisdiction arising out of the
same general allegations or circumstances, selected by any indemnified party in
the case of Article V(a), representing the indemnified parties under such
paragraph (a) who are parties to such action or actions) or (ii) the
indemnifying party does not promptly retain counsel satisfactory to the
indemnified party or (iii) the indemnifying party has authorized the employment
of counsel for the indemnified party at the expense of the indemnifying party.
After such notice from the indemnifying party to such indemnified
27
party, the indemnifying party will not be liable for the costs and expenses of
any settlement of such action effected by such indemnified party without the
consent of the indemnifying party. No indemnifying party shall, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Article V hereof (whether or not the
indemnified parties are actual or potential parties thereof), unless such
settlement, compromise or consent (i) includes an unconditional release of each
indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(d) Except with respect to fees and expenses not required to
be reimbursed pursuant to the assumption of the defense of an action in
accordance with Article V(c) above, if at any time an indemnified party shall
have requested an indemnifying party to reimburse the indemnified party for fees
and expenses of counsel, such indemnifying party agrees that it shall be liable
for any settlement of the nature contemplated by Article V(a)(ii) hereof
effected without its written consent if (i) such settlement is entered into more
than 45 calendar days after receipt by such indemnifying party of the aforesaid
request, (ii) such indemnifying party shall have received notice of the terms of
such settlement at least 30 calendar days prior to such settlement being entered
into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
(e) If the indemnification provided for in any of the
indemnity provisions set forth in this Article V is for any reason unavailable
to or insufficient to hold harmless an indemnified party in respect of any
losses, liabilities, claims, damages or expenses referred to therein, then each
indemnifying party shall contribute to the aggregate amount of such losses,
liabilities, claims, damages and expenses incurred by such indemnified party, as
incurred, in such proportion as is appropriate to reflect the relative fault of
such indemnifying party or parties on the one hand, and such indemnified party
or parties on the other hand, in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages or expenses, as well
as any other relevant equitable considerations. The relative fault of such
indemnifying party or parties on the
28
one hand, and such indemnified party or parties on the other hand shall be
determined by reference to, among other things, whether any such untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by such indemnifying party
or parties and such indemnified party or parties and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company, the Initial Purchasers and the Holders
of the Registrable Notes agree that it would not be just and equitable if
contribution pursuant to this Article V were determined by pro rata allocation
(even if the Initial Purchasers were treated as one entity, and the Holders were
treated as one entity, for such purpose) or by another method of allocation
which does not take into account the equitable considerations referred to above
in Article V. The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this Article
V shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by an governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the 1933 Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresenta tion. For purposes of this Article V,
each Person, if any, who controls an Initial Purchaser or Holder within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have
the same rights to contribution as such Initial Purchaser or Holder, and each
director of the Company, each officer of the Company who signed the Registration
Statement, and each Person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as the Company.
6.Miscellaneous. (a) Rule 144 and Rule 144A. For so long as
the Company is subject to the reporting requirements of Section 13 or 15(d) of
the 1934 Act, the Company covenants that it will file the reports required to be
filed by it under Section 13(a) or 15(d) of the 1934 Act and the rules and
regulations adopted by the SEC thereunder, that if it ceases to be so required
to file such reports, it will upon the request of any Holder of Registrable
Notes (i) make publicly available such information as is necessary to permit
sales pursuant to Rule 144 under the 1933 Act, (ii) deliver such information to
a prospective purchaser as is
29
necessary to permit sales pursuant to Rule 144A under the 1933 Act and it will
take such further action as any Holder of Registrable Notes may reasonably
request, and (iii) take such further action that is reasonable in the
circumstances, in each case, to the extent required from time to time to enable
such Holder to sell its Registrable Notes without registration under the 1933
Act within the limitation of the exemptions provided by (x) Rule 144 under the
1933 Act, as such Rule may be amended from time to time, (y) Rule 144A under the
1933 Act, as such Rule may be amended from time to time, or (z) any similar
rules or regulations hereafter adopted by the SEC. Upon the written request of
any Holder of Registrable Notes, the Company will deliver to such Holder a
written statement as to whether it has complied with such requirements.
(b) No Conflicting Agreements. The Company has not entered
into nor will the Company on or after the date of this Agreement enter into any
agreement which conflicts with the rights granted to the Holders of Registrable
Notes in this Agreement. The rights granted to the Holders hereunder do not in
any way conflict with the rights granted to the holders of the Company's other
issued and outstanding securities under any such agreements.
(c) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of Holders
of at least a majority in aggregate principal amount of the outstanding
Registrable Notes affected by such amendment, modification, supplement, waiver
or departure; provided, however, that no amendment, modification, supplement or
waiver or consent to any departure from the provisions of Article V hereof shall
be effective as against any Holder of Registrable Notes unless consented to in
writing by such Holder.
(d) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telecopier, or any courier guaranteeing overnight delivery (i)
if to a Holder (other than an Initial Purchaser), at the most current address
set forth on the records of the Registrar under the Indenture, (ii) if to an
Initial Purchaser, at the most current address given by such Initial Purchaser
to the Company by means of a notice given in accordance with the provisions of
this Article VI(d), which address initially is the address set forth in the
Purchase Agreement, and (iii) if to the Company, initially
30
at the address set forth in the Purchase Agreement and thereafter at such other
address, notice of which is given in accordance with the provisions of this
Article VI(d) .
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
when receipt is acknowledged, if telecopied; and on the next business day if
timely delivered to a courier guaranteeing overnight delivery.
Copies of all such notices, demands, or other communications
shall be concurrently delivered by the Person giving the same to the Trustee, at
the address specified in the Indenture.
(e) Successors and Assign. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of each
of the parties, including, without limitation and without the need for an
express assignment, subsequent Holders; provided that nothing herein shall be
deemed to permit any assignment, transfer or other disposition of Registrable
Notes in violation of the terms hereof or of the Purchase Agreement or the
Indenture. If any transferee of any Holder shall acquire Registrable Notes, in
any manner, whether by operation of law or otherwise, such Registrable Notes
shall be held subject to all of the terms of this Agreement, and by taking and
holding such Registrable Notes, such Person shall be conclusively deemed to have
agreed to be bound by and to perform all of the terms and provisions of this
Agreement, including the restrictions on resale set forth in this Agreement and,
if applicable, the Purchase Agreement, and such Person shall be entitled to
receive the benefits hereof.
(f) Third Party Beneficiaries. The Holders shall be third
party beneficiaries to the agreements made hereunder between the Company, on the
one hand, and the Initial Purchasers, on the other hand, and shall have the
right to enforce such agreements directly to the extent they deem such
enforcement necessary or advisable to protect their rights.
(g) Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
31
(h) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT 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.
(j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of
[The rest of this page has been left intentionally blank]
32
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
CD RADIO INC.
by ______________________________
Name:
Title:
Confirmed and accepted as of
the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
LEHMAN BROTHERS INC.
BEAR, STEARNS & CO. INC.
NATIONSBANC MONTGOMERY SECURITIES LLC
U.S. BANCORP LIBRA
by MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
by ______________________________________
Name:
Title:
32
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
CD RADIO INC.
by /s/ Patrick L. Donnelly
-------------------------------
Name: Patrick L. Donnelly
Title: Executive Vice
President & General
Counsel
Confirmed and accepted as of
the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
LEHMAN BROTHERS INC.
BEAR, STEARNS & CO. INC.
NATIONSBANC MONTGOMERY SECURITIES LLC
U.S. BANCORP LIBRA
by MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
by /s/ Marcey Becker
--------------------------------------------
Name: Marcey Becker
Title: Vice President