Exhibit 99.1
================================================================================
STOCK PURCHASE AGREEMENT
by and between
CD RADIO INC.
and
PRIME 66 PARTNERS, L.P.
Dated: October 8, 1998
================================================================================
TABLE OF CONTENTS
Page
----
ARTICLE 1 DEFINITIONS......................................................1
1.1 Definitions......................................................1
ARTICLE 2 PURCHASE AND SALE OF SECURITIES..................................4
2.1 Purchase and Sale of Securities..................................4
2.2 Closing..........................................................5
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY....................5
3.1 Corporate Existence and Power....................................5
3.2 Subsidiaries.....................................................5
3.3 Corporate Authorization; No Contravention........................6
3.4 Governmental Authorization; Third Party Consents.................6
3.5 Binding Effect...................................................6
3.6 Capitalization of the Company....................................6
3.7 SEC Filings; Financial Statements................................7
3.8 Absence of Certain Developments..................................7
3.9 Compliance with Laws.............................................7
3.10 Licenses.........................................................7
3.11 Litigation.......................................................8
3.12 Intellectual Property............................................8
3.13 Private Offering.................................................8
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER..................8
4.1 Existence and Power..............................................8
4.2 Authorization; No Contravention..................................9
4.3 Governmental Authorization; Third Party Consents.................9
4.4 Binding Effect...................................................9
4.5 Purchase for Own Account.........................................9
4.6 Sufficient Funds................................................10
ARTICLE 5 COVENANTS.......................................................10
5.1 Conduct of Business.............................................10
5.2 Indemnification of Brokerage....................................10
5.3 Rule 144........................................................11
5.4 HSR Approval....................................................11
5.5 Stockholder Approval............................................11
5.6 Amendment to Rights Agreement and Board Approval................11
ARTICLE 6 LOCK-UP AGREEMENTS..............................................12
i
Page
----
ARTICLE 7 CONDITIONS PRECEDENT TO THE OBLIGATION
OF THE PURCHASER TO CLOSE.......................................12
7.1 Representations and Covenants...................................13
7.2 Consents and Approvals..........................................13
7.3 Opinion of Counsel to the Company...............................13
7.4 HSR Act.........................................................13
7.5 No Claims.......................................................13
ARTICLE 8 CONDITIONS PRECEDENT TO THE OBLIGATION
OF THE COMPANY TO CLOSE.........................................13
8.1 Representations and Covenants...................................13
8.2 Consents and Approvals..........................................14
8.3 HSR Act.........................................................14
8.4 No Claims.......................................................14
ARTICLE 9 REGISTRATION RIGHTS.............................................14
9.1 Requested Registration..........................................14
9.2 Company Registration............................................15
9.3 Transferability.................................................15
9.4 Expenses of Registration........................................16
9.5 Registration Procedures.........................................16
9.6 Indemnification.................................................17
ARTICLE 10 TERMINATION OF AGREEMENT........................................19
10.1 Termination.....................................................19
10.2 Survival After Termination......................................19
ARTICLE 11 MISCELLANEOUS...................................................20
11.1 Expenses........................................................20
11.2 Notices.........................................................20
11.3 Successors and Assigns..........................................21
11.4 Amendment and Waiver............................................21
11.5 Counterparts....................................................21
11.6 Headings........................................................21
11.7 GOVERNING LAW...................................................21
11.8 Severability....................................................22
11.9 Entire Agreement................................................22
11.10 Further Assurances..............................................22
11.11 Public Announcements............................................22
SCHEDULE 3.2 Subsidiaries of the Company
ii
Page
----
SCHEDULE 3.4 Required Consents
EXHIBIT A Form of Opinion of Counsel to the Company
iii
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of October 8, 1998 (this
"Agreement"), by and between CD RADIO INC., a Delaware corporation (the
"Company"), and PRIME 66 PARTNERS, L.P., a Texas limited partnership (the
"Purchaser").
WHEREAS, the Company proposes to issue and sell to the Purchaser, and
the Purchaser proposes to buy, for an aggregate purchase price of One Hundred
Million Dollars ($100,000,000), a total of 5,000,000 shares of Common Stock, par
value $.001 per share, of the Company;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and for good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. As used in this Agreement, and unless the context
requires a different meaning, the following terms shall have the meanings set
forth below:
"Affiliate" means a Person that directly, or indirectly through one or
more intermediaries, controls or is controlled by, or is under common control
with the Person specified.
"Agreement" means this Agreement as the same may be amended,
supplemented or modified in accordance with the terms hereof.
"Beneficial Owner" shall mean a Person who beneficially owns any
securities within the meaning of Rule 13d-3 under the Exchange Act, and
"beneficially owned" and "beneficial ownership" shall have correlative meanings.
"Business Day" means any day other than Saturday, Sunday or other day
on which commercial banks in the State of New York are authorized or required by
law or executive order to close.
"Bylaws" means the bylaws of the Company, as the same may have been
amended and in effect as of the Closing Date.
2
"Certificate of Incorporation" means the Amended and Restated
Certificate of Incorporation of the Company, as the same may have been amended
and in effect as of the Closing Date.
"Claims" means actions, causes of action, suits, claims, complaints,
demands, litigations or legal, administrative or arbitral proceedings.
"Closing" has the meaning assigned to such term in Section 2.2.
"Closing Date" has the meaning assigned to such term in Section 2.2.
"Commission" means the Securities and Exchange Commission or any
similar agency then having jurisdiction to enforce the Securities Act.
"Common Stock" means the Common Stock, par value $.001 per share, of
the Company, or any other capital stock of the Company into which such stock is
reclassified or reconstituted.
"Contemplated Transactions" means the transactions contemplated by this
Agreement, including without limitation the purchase and sale of the Purchased
Shares.
"Contractual Obligation" means, as to any Person, any agreement,
undertaking, contract, indenture, mortgage, deed of trust or other instrument to
which such Person is a party or by which it or any of its property is bound.
"Convertible Preferred Stock" means the Company's 10 1/2% Series C
Convertible Preferred Stock.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission thereunder.
"GAAP" means United States generally accepted accounting principles as
in effect from time to time.
"Governmental Authority" means the government of any nation, state,
city, locality or other political subdivision of any thereof, and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government or any International regulatory body
having or asserting jurisdiction over a Person, its business or its properties.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and regulations of the Federal Trade Commission
thereunder.
3
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, encumbrance, lien (statutory or other), restriction or other
security interest of any kind or nature whatsoever.
"NASD" means the National Association of Securities Dealers, Inc.
"Person" means any individual, firm, corporation, partnership, limited
liability company, trust, incorporated or unincorporated association, joint
venture, joint stock company, Governmental Authority or other entity of any
kind.
"Prospectus" shall mean the prospectus included in any Registration
Statement (including without limitation a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by such
Registration Statement and all other amendments and supplements to such
prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such prospectus.
"Purchased Shares" has the meaning assigned to such term in Section
2.1.
"Registrable Securities" shall mean each of the Purchased Shares and
any capital stock of the Company issued as a dividend or other distribution with
respect to, or in exchange for or in replacement of, such Purchased Shares,
until, in the case of any such share, (i) it is effectively registered under the
Securities Act and disposed of in accordance with the Registration Statement
covering it, (ii) in the opinion of counsel to the Company, it is saleable by
the holder thereof pursuant to Rule 144(k), or (iii) it is distributed to the
public by the holder thereof pursuant to Rule 144; provided, however, that for
purposes of Sections 9.1, 9.2 and Article 6, Registrable Securities shall not
include any Purchased Shares that are subject to a lock-up agreement during the
period in which disposition of such Purchased Shares would violate the terms of
such lock-up agreement.
"Registration Expenses" means all expenses incurred by the Company in
compliance with Article 9, including without limitation all registration and
filing fees, printing expenses, fees and disbursements of counsel for the
Company, blue sky fees and expenses and the expense of any special audit
incident to or required by any such registration.
"Registration Statement" shall mean any registration statement of the
Company under the Securities Act that covers any of the Registrable Securities
pursuant to the provisions of this Agreement, including the related Prospectus,
all amendments and supplements to such registration statement (including
post-effective
4
amendments), all exhibits and all material incorporated by reference or deemed
to be incorporated by reference in such registration statement.
"Requirement of Law" means, as to any Person, the Certificate of
Incorporation and Bylaws or other organizational or governing documents of such
Person, and any law, treaty, rule, regulation, qualification, license or
franchise or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable or binding upon such Person or any of its
property or to which such Person or any of its property is subject or pertaining
to any or all of the transactions contemplated hereby.
"Rule 144" shall mean Rule 144 promulgated by the Commission under the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission.
"SEC Reports" means all proxy statements, registration statements,
reports and other documents filed or required to be filed by the Company or any
of its Subsidiaries with the Commission pursuant to the Securities Act or the
Exchange Act since December 31, 1997.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission thereunder.
"Selling Expense" means all underwriting discounts and commissions
applicable to the sale of the Purchased Shares.
"Subsidiary" means in respect of any Person any other Person which, at
the time as of which any determination is made, such Person or one or more of
its Subsidiaries has, directly or indirectly, voting control.
"Transfer" means any sale, assignment, hypothecation, transfer or other
disposition. "Transferor" and "Transferee" shall have correlative meanings.
ARTICLE 2
PURCHASE AND SALE OF SECURITIES
2.1 Purchase and Sale of Securities. Subject to the terms herein set
forth and in reliance upon the representations set forth below, the Company
agrees to sell to the Purchaser, and the Purchaser agrees to purchase from the
Company, on the Closing Date, 5,000,000 shares of Common Stock for the aggregate
purchase price of $100,000,000 (all of the shares of Common Stock being
purchased pursuant hereto being referred to herein as the "Purchased Shares").
5
2.2 Closing. The purchase and issuance of the Purchased Shares shall
take place at a closing (the "Closing") to be held at the offices of Paul,
Weiss, Rifkind, Wharton & Garrison, 1285 Avenue of the Americas, New York, New
York 10019-6064, at 10:00 A.M., local time, on the first Business Day after the
conditions to closing set forth in Articles 7 and 8 have been satisfied or
waived by the party entitled to waive such condition (the "Closing Date"). At
the Closing, the Company shall deliver to the Purchaser certificates
representing the Purchased Shares, duly registered in the name of the Purchaser
or its nominee, and the Purchaser shall deliver to the Company the aggregate
purchase price therefor by wire transfer of immediately available funds to an
account designated in writing by the Company to the Purchaser at least two
Business Days before the Closing.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Purchaser as follows:
3.1 Corporate Existence and Power. The Company (a) is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Delaware; (b) has all requisite corporate power and authority to own
and operate its property, to lease the property it operates as lessee and to
conduct the business in which it is engaged; and (c) has the corporate power and
authority to execute, deliver and perform its obligations under this Agreement.
The Company is duly qualified to do business as a foreign corporation in, and is
in good standing under the laws of, each jurisdiction in which the conduct of
its business or the nature of the property owned requires such qualification.
3.2 Subsidiaries. Except as set forth on Schedule 3.2, the Company has
no Subsidiaries and no interest or investments in any corporation, partnership,
limited liability company, trust or other entity or organization. Each
Subsidiary listed on Schedule 3.2 has been duly organized, is validly existing
and in good standing under the laws of the jurisdiction of its organization, has
the power and authority (corporate or otherwise) to own its properties and to
conduct its business and is duly registered, qualified and authorized to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or the nature of its properties requires such
registration, qualification or authorization. Except as disclosed on Schedule
3.2, all of the issued and outstanding capital stock (or equivalent interests)
of each Subsidiary set forth on Schedule 3.2 has been duly authorized and
validly issued, is fully paid and non-assessable and is owned by the Company
free and clear of any Liens and there are no rights, options or warrants
outstanding or other agreements to acquire shares of capital stock (or
equivalent interests) of such Subsidiary.
6
3.3 Corporate Authorization; No Contravention. The execution, delivery
and performance by the Company of this Agreement and the transactions
contemplated hereby, including, without limitation, the sale, issuance and
delivery of the Purchased Shares, (a) have been duly authorized by all necessary
corporate action of the Company; (b) do not contravene the terms of the
Certificate of Incorporation or Bylaws or the organizational documents of its
Subsidiaries; and (c) do not violate, conflict with or result in any breach or
contravention of, or the creation of any Lien under, any Contractual Obligation
of the Company or any Requirement of Law applicable to the Company or its
Subsidiaries. No event has occurred and no condition exists which, upon notice
or the passage of time (or both), would constitute a default under any
indenture, mortgage, deed of trust, credit agreement, note or other evidence of
indebtedness or other material agreement of the Company or its Subsidiaries or
the Certificate of Incorporation or Bylaws or the organizational documents of
the Company's Subsidiaries.
3.4 Governmental Authorization; Third Party Consents. Except for the
approvals and consents as specified on Schedule 3.4 hereto (collectively, the
"Required Consents"), no approval, consent, exemption, authorization or other
action by, or notice to, or filing with, any Governmental Authority or any other
Person in respect of any Requirement of Law, Contractual Obligation or
otherwise, and no lapse of a waiting period under a Requirement of Law, is
necessary or required in connection with the execution, delivery or performance
(including, without limitation, the sale, issuance and delivery of the Purchased
Shares) by the Company, or enforcement against the Company, of this Agreement,
or the transactions contemplated hereby.
3.5 Binding Effect. This Agreement has been duly executed and delivered
by the Company and constitutes the legal, valid and binding obligation of the
Company enforceable against the Company in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency, fraudulent
conveyance or transfer, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity.
3.6 Capitalization of the Company. The authorized capital stock of the
Company consists of (i) 200,000,000 shares of Common Stock, of which 17,761,122
shares were issued and outstanding on September 23, 1998 and 5,060,330 shares
which were, as of September 23, 1998, reserved for issuance upon the exercise of
outstanding stock options, warrants to purchase Common Stock and conversion of
Convertible Preferred Stock issuable pursuant to warrants to purchase
Convertible Preferred Stock, and (ii) 50,000,000 shares of Preferred Stock, of
which 1,538,561 shares of Convertible Preferred Stock were issued and
outstanding on September 23, 1998. Each share of Convertible Preferred Stock may
be converted at any time, at the option of the holder, unless previously
redeemed, into a number of shares of Common Stock calculated by dividing the
$100 liquidation preference of the Convertible Preferred Stock (without accrued
and unpaid dividends) by $18 (as adjusted from time to time). Except (a) as set
forth in this Section 3.6, (b) shares of
7
Common Stock issued (i) pursuant to the exercise of outstanding stock options or
warrants or (ii) on the conversion of outstanding shares of Convertible
Preferred Stock and (c) options granted under existing stock option plans, plans
subject to stockholder approval or plans for which stockholder approval has been
obtained, on the Closing Date there will be no shares of Common Stock or any
other equity security of the Company issuable upon conversion or exchange of any
security of the Company nor will there be any rights, options or warrants
outstanding or other agreements to acquire shares of capital stock of the
Company nor will the Company be contractually obligated to purchase, redeem or
otherwise acquire any of its outstanding shares of capital stock. Except for
Loral Space & Communications, Ltd. ("Loral"), no stockholder of the Company is
entitled to any preemptive or similar rights to subscribe for shares of capital
stock of the Company. All of the issued and outstanding shares of Common Stock
and Convertible Preferred Stock are, and the Purchased Shares (when issued
hereunder) after payment therefor to the Company, will be, duly authorized, and
validly issued, fully paid and nonassessable.
3.7 SEC Filings; Financial Statements. The Company has timely filed all
SEC Reports. The SEC Reports complied in all material respects with the
applicable requirements of the Securities Act or the Exchange Act, as
applicable, and did not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements in the SEC Reports, in light of the circumstances under
which they were made, not misleading. Each of the Company's financial statements
(including, in each case, any related notes) contained in the SEC Reports,
complied as to form in all material respects with applicable published rules and
regulations of the Commission with respect thereto, was prepared in accordance
with GAAP applied on a consistent basis throughout the periods involved (except
as may be indicated in the notes to such financial statements) and fairly
presented the financial position of the Company and its Subsidiaries as at the
respective dates and for the periods indicated, except that the unaudited
financial statements were subject to normal and recurring year-end adjustments
which were not or are not expected to be material in amount or effect.
3.8 Absence of Certain Developments. Since June 30, 1998, except as set
forth in the SEC Reports delivered to the Purchaser, there has been no material
adverse change, or any development involving a prospective material adverse
change, in or affecting the business, management or condition, financial or
otherwise, of the Company and its Subsidiaries, taken as a whole.
3.9 Compliance with Laws. None of the Company or its Subsidiaries is in
material violation of any Requirement of Law to which it is subject.
3.10 Licenses. The Company has no reason to believe that either (a) it
will not finally obtain any license, permit, franchise or other authorizations
necessary for it to conduct its business as described in the SEC Reports or (b)
such license, permit, franchise or authorization will not be obtained on a
timely basis.
8
3.11 Litigation. Except with respect to certain filings made with the
Federal Communications Commission by Primosphere, there is no legal action,
suit, arbitration or other legal, administrative or other governmental
investigation, inquiry or proceeding pending, or to the best knowledge of the
Company, threatened against or affecting the Company or its Subsidiaries which,
if determined adversely to the Company, would have a material adverse effect on
its business or financial condition.
3.12 Intellectual Property. The Company and its Subsidiaries own, free
and clear of all Liens, and has good and marketable title to, or holds adequate
licenses or otherwise possesses all such rights as are necessary to use all
patents (and applications therefor), patent disclosures, trademarks, service
marks, trade names, copyrights (and applications therefor), inventions,
discoveries, processes, know-how, scientific, technical, engineering and
marketing data, formulae and techniques (collectively, "Intellectual Property")
used or proposed to be used in or necessary for the conduct of its business as
now conducted or as proposed to be conducted in the SEC Reports. The Company has
not received notice or otherwise has reason to know of any conflict or alleged
conflict with the rights of others pertaining to the Company's Intellectual
Property. To the best of the Company's knowledge, the business of the Company as
presently conducted and as proposed to be conducted in the SEC Reports does not
infringe upon or violate any Intellectual Property rights of others.
3.13 Private Offering. No form of general solicitation or general
advertising was used by the Company or its representatives in connection with
the offer or sale of the Purchased Shares. No registration of the Purchased
Shares pursuant to the provisions of the Securities Act or any state securities
or "blue sky" laws will be required by the offer, sale, or issuance of the
Purchased Shares pursuant to this Agreement, assuming the accuracy of the
Purchaser's representation contained in Section 4.5.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Company as follows:
4.1 Existence and Power. The Purchaser (a) is duly organized and
validly existing as a limited partnership under the laws of the jurisdiction of
its formation and (b) has the requisite power and authority to execute, deliver
and perform its obligations under this Agreement.
4.2 Authorization; No Contravention. The execution, delivery and
performance by the Purchaser of this Agreement and the transactions contemplated
hereby, including, without limitation, the purchase of the Purchased Shares, (a)
have
9
been duly authorized by all necessary action, (b) do not contravene the terms of
the Purchaser's organizational documents, or any amendment thereof, and (c) do
not violate, conflict with or result in any breach or contravention of, or the
creation of any Lien under, any Contractual Obligation of the Purchaser or any
Requirement of Law applicable to the Purchaser, except for such violation,
conflict, breach or Lien which will not result in a material adverse effect on
the Purchaser's ability to consummate the Contemplated Transactions.
4.3 Governmental Authorization; Third Party Consents. Except for the
Required Consents, no approval, consent, exemption, authorization, or other
action by, or notice to, or filing with, any Governmental Authority or any other
Person in respect of any Requirement of Law, and no lapse of a waiting period
under a Requirement of Law, is necessary or required in connection with the
execution, delivery or performance by the Purchaser, or enforcement against the
Purchaser, of this Agreement or the consummation of the Contemplated
Transactions.
4.4 Binding Effect. This Agreement has been duly executed and delivered
by the Purchaser and constitutes the legal, valid and binding obligation of the
Purchaser, enforceable against it in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or similar laws
affecting the enforcement of creditors' rights generally or by general
principles of equity.
4.5 Purchase for Own Account. The Purchased Shares to be acquired by
the Purchaser pursuant to this Agreement are being acquired for its own account
and with no intention of distributing or reselling such Purchased Shares or any
part thereof in any transaction that would be in violation of the securities
laws of the United States of America or any state, without prejudice, however,
to the rights of the Purchaser at all times to sell or otherwise dispose of all
or any part of such Purchased Shares under an effective Registration Statement
under the Securities Act or under an exemption from said registration available
under the Securities Act. The Purchaser understands and agrees that if the
Purchaser should in the future decide to dispose of any Purchased Shares, it may
do so only in compliance with the Securities Act and applicable state securities
laws, as then in effect. The Purchaser agrees to the imprinting, so long as
required by law, of a legend on all certificates representing such Purchased
Shares to the following effect:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF
ANY STATE AND MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN
10
APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND
SUCH LAWS.
4.6 Sufficient Funds. The Purchaser has sufficient funds, either in the
form of cash or committed lines of credit, to purchase the Purchased Shares in
accordance with the terms of this Agreement and to perform its obligations
hereunder.
ARTICLE 5
COVENANTS
5.1 Conduct of Business. From the date hereof through the Closing Date,
the Company and its Subsidiaries shall conduct their businesses in a manner such
that the representations and warranties contained in Article 3 shall continue to
be true and correct in all material respects on and as of the Closing Date
(except for representations and warranties made as of a specific date) as if
made on and as of the Closing Date. The Company shall give the Purchaser prompt
notice of any event, condition or circumstance occurring from the date hereof
through the Closing Date that would constitute a violation or breach of (i) any
representation or warranty, whether made as of the date hereof or as of the
Closing Date, or (ii) any covenant of the Company contained in this Agreement.
5.2 Indemnification of Brokerage. The Company represents and warrants
to the Purchaser that no broker, finder, agent or similar intermediary (a
"Broker") has acted on behalf of the Company or its Subsidiaries in connection
with this Agreement or the Contemplated Transactions, and that, except for a fee
to Batchelder & Partners, Inc. (the "Sellers' Fee"), there are no brokerage
commissions, finder's fees or similar fees or commissions payable in connection
therewith based on any agreement, arrangement or understanding with the Company
or any of the Subsidiaries or any action taken by the Company or any of its
Subsidiaries. The Company agrees to pay the Sellers' Fee and to indemnify and
hold harmless the Purchaser from any Claim or demand for commission or other
compensation by any Broker claiming to have been employed by or on behalf of the
Company or any of its Subsidiaries and to bear the cost of legal expenses
incurred in defending against any such claim. The Purchaser represents and
warrants to the Company that no Broker has acted on behalf of the Purchaser in
connection with this Agreement or the Contemplated Transactions, and that there
are no brokerage commissions, finders' fees or similar fees or commissions
payable in connection therewith based on any agreement, arrangement or
understanding with the Purchaser, or any action taken by the Purchaser. The
Purchaser agrees to indemnify and hold harmless the Company from any Claim or
demand for commission or other compensation by any Broker claiming to have been
employed by or on behalf of the Purchaser, and to bear the cost of legal
expenses incurred in defending against any such claim.
11
5.3 Rule 144. The Company hereby covenants and agrees with the
Purchaser that it shall file all reports required to be filed by it under the
Securities Act and the Exchange Act and shall take such further action as the
Purchaser may reasonably request, all to the extent required to enable the
Purchaser to sell the Purchased Shares pursuant to and in accordance with Rule
144 adopted by the Commission under the Securities Act (as such rule may be
amended from time to time) ("Rule 144") or any similar rule or regulation
hereafter adopted by the Commission. Such action shall include, but not be
limited to, making available adequate current public information meeting the
requirements of paragraph (c) of Rule 144.
5.4 HSR Approval. Promptly upon execution and delivery (and in any
event within three (3) Business Days of the date) of this Agreement, the
Purchaser and the Company will prepare and file, or cause to be prepared and
filed, with the appropriate Governmental Authorities, a notification with
respect to the Contemplated Transactions pursuant to the HSR Act, supply all
information requested by Governmental Authorities in connection with the HSR Act
notification and cooperate with each other in responding to any such request.
5.5 Stockholder Approval. As promptly as possible following the
execution of this Agreement, the Company shall seek to obtain approval of the
Contemplated Transactions from its stockholders and, in connection therewith,
shall make such filings and prepare and distribute to its stockholders such
documents as shall be necessary to complete the Contemplated Transactions.
5.6 Amendment to Rights Agreement and Board Approval. The Company
hereby covenants and agrees with the Purchaser that on or before the Closing
Date it shall (a) amend the Rights Agreement, dated as of October 22, 1997 (the
"Rights Agreement"), between the Company and Continental Stock Transfer & Trust
Company, as rights agent, to render the Rights Agreement inapplicable to the
Contemplated Transactions and permit the Purchaser, and any other Person deemed
to "Beneficially Own" the shares of Common Stock owned by the Purchaser (within
the meaning of the Rights Agreement), to purchase and own up to an additional 1%
of the outstanding shares of Common Stock without the Purchaser becoming an
"Acquiring Person" under the Rights Agreement and (b) take all action necessary
to cause the restrictions contained in Section 203 of the Delaware General
Corporation Law to be inapplicable to the Contemplated Transactions and to
approve the Purchaser becoming an "interested stockholder" within the meaning of
Section 203 of the Delaware General Corporation Law.
12
ARTICLE 6
LOCK-UP AGREEMENTS
At any time prior to the earlier of (a) October 1, 2001 and (b) the
date that the Purchaser ceases to beneficially own 10% or more of the Common
Stock, the Company and its underwriters, by written notice from the Company and
its lead underwriter to the Purchaser (a "Lock-up Request"), given as provided
herein on or after the time of the initial filing with the Commission of any
registration statement (other than a registration statement relating to an
offering described in Section 9.1) with respect to any offering of Common Stock
or securities convertible into Common Stock (the "Offering"), may request that
the Purchaser agree not to offer, sell or transfer any of the Purchased Shares,
or engage in any hedging transactions with respect to the Purchased Shares,
during the 180-day period (the "Lock-up Period") beginning on a date specified
in the Lock-up Request, which date may be as early as five (5) Business Days
prior to the expected effective date (but no later than the effective date) with
respect to the registration statement for the Offering, and the Purchaser agrees
to consent to and be bound by the restrictions specified in any such Lock-up
Request; provided, however, that such a lock-up agreement with respect to any
Offering shall not prevent Purchaser from selling Purchased Shares which it is
entitled to sell in such Offering pursuant to Section 9.2 if it shall have made
the request specified therein. The Company shall specify the expected effective
date of any Offering by notice to the Purchaser given not later than two (2)
Business Days prior to the beginning of the Lock-up Period. The Purchaser shall
cause each Person to whom it Transfers, in one or a series of related
transactions, 1,000,000 or more shares of Common Stock to execute and deliver to
the Company a letter agreement pursuant to which such transferee agrees (and to
cause each other Person to whom it Transfers any shares of Common Stock if,
after giving effect to such Transfer, such Person, together with its Affiliates,
would beneficially own 1,000,000 or more shares of Common Stock to execute and
deliver to the Company a similar letter agreement) to comply with the
requirements of this Article 6 (including this sentence) to the same extent and
subject to the same terms and conditions as the Purchaser.
ARTICLE 7
CONDITIONS PRECEDENT TO THE OBLIGATION
OF THE PURCHASER TO CLOSE
The obligation of the Purchaser to enter into and complete the Closing
is subject, at the option of the Purchaser acting in accordance with the
provisions of Article 10 with respect to termination of this Agreement, to the
fulfillment on or prior to the Closing Date of the following conditions, any one
or more of which may be waived by the Purchaser:
13
7.1 Representations and Covenants. The representations and warranties
of the Company contained in this Agreement shall be true in all material
respects on and as of the Closing Date with the same force and effect as though
made on and as of the Closing Date; the Company shall have performed and
complied with all covenants and agreements required by this Agreement to be
performed or complied with by the Company on or prior to the Closing Date; and
the Company shall have delivered to the Purchaser a certificate, dated the date
of the Closing and signed by an executive officer of the Company, to the
foregoing effect.
7.2 Consents and Approvals. All Required Consents shall have been
obtained and be in full force and effect, and the Purchaser shall have been
furnished with evidence reasonably satisfactory to it that such Required
Consents have been granted and obtained.
7.3 Opinion of Counsel to the Company. The Purchaser shall have
received the legal opinion of Paul, Weiss, Rifkind, Wharton & Garrison, counsel
to the Company, dated the date of the Closing, addressed to the Purchaser, to
the effect set forth in Exhibit A.
7.4 HSR Act. Any Person required in connection with the Contemplated
Transactions to file a notification and report form in compliance with the HSR
Act shall have filed such form and the applicable waiting period with respect to
each such form (including any extension thereof by reason of a request for
additional information) shall have expired or been terminated.
7.5 No Claims. No Claims shall be pending before any Governmental
Authority (including investigations instituted by the United States Department
of Justice or the Federal Trade Commission in connection with antitrust
regulations) to restrain or prohibit this Agreement or the consummation of the
Contemplated Transactions.
ARTICLE 8
CONDITIONS PRECEDENT TO THE OBLIGATION
OF THE COMPANY TO CLOSE
The obligation of the Company to enter into and complete the Closing is
subject, at the option of the Company acting in accordance with the provisions
of Article 10 with respect to termination of this Agreement, to the fulfillment
on or prior to the Closing Date of the following conditions, any one or more of
which may be waived by the Company:
8.1 Representations and Covenants. The representations and warranties
of the Purchaser contained in this Agreement shall be true in all material
respects on and as of the Closing Date with the same force and effect as though
made
14
on and as of the Closing Date; the Purchaser shall have performed and complied
with all covenants and agreements required by this Agreement to be performed or
complied with by it on or prior to the Closing Date; and the Purchaser shall
have delivered to the Company a certificate, dated the date of the Closing and
signed by a general partner of the Purchaser, to the foregoing effect.
8.2 Consents and Approvals. All Required Consents shall have been
obtained and be in full force and effect.
8.3 HSR Act. Any Person required in connection with the Contemplated
Transactions to file a notification and report form in compliance with the HSR
Act shall have filed such form and the applicable waiting period with respect to
each such form (including any extension thereof by reason of a request for
additional information) shall have expired or been terminated.
8.4 No Claims. No Claims shall be pending before any Governmental
Authority (including investigations instituted by the United States Department
of Justice or the Federal Trade Commission in connection with antitrust
regulations) to restrain or prohibit this Agreement or the consummation of the
Contemplated Transactions.
ARTICLE 9
REGISTRATION RIGHTS
9.1 Requested Registration. If the Company shall receive from the
Purchaser, at any time after October 1, 2000, a written request (which shall
specify whether the distribution will be made by means of an underwriting) that
the Company effect any registration with respect to all or a part of the
Purchased Shares that constitute Registrable Securities (a "Demand Notice"),
which Demand Notice shall request registration of not less than 1,000,000 shares
of Common Stock or all remaining shares of Common Stock then held by the
Purchaser, the Company will, as soon as practicable, use its best efforts to
effect such registration as may be so requested and as would permit or
facilitate the sale and distribution of the Purchased Shares as are specified in
such request. After the Company has effected two (2) such registrations pursuant
to this Section 9.1 and such registration has been declared effective and the
distribution contemplated thereunder completed, the Company shall have no
further obligation under this Section 9.1. Notwithstanding the foregoing, if the
Company shall furnish to the Purchaser a certificate signed by the President or
the Chief Executive Officer of the Company stating that in the good faith
judgment of the Board of Directors of the Company, it would be seriously
detrimental to the Company and its stockholders for such registration statement
to be filed and it is therefore desirable and in the best interests of the
Company to defer the filing of such registration statement, then the Company
shall have the right to defer such filing for a period of not more than 90 days
after receipt of the request of the Purchaser.
15
9.2 Company Registration. (a) If the Company shall determine to
register any shares of Common Stock for the account of a security holder or
holders (other than a registration relating solely to employee benefit plans, or
a registration relating solely to a Commission Rule 145 transaction, or a
registration on any registration form which does not permit secondary sales or
does not include substantially the same information as would be required to be
included in a registration statement covering the sale of Purchased Shares), the
Company will promptly give to the Purchaser a written notice thereof and include
in such registration, and in any underwriting involved therein, all the
Purchased Shares that constitute Registrable Securities specified in a written
request made by the Purchaser within ten Business Days after receipt of the
written notice from the Company described above. The Purchaser shall be entitled
to have its shares included in an unlimited number of registrations pursuant to
Section 9.2.
(b) If the registration of which the Company gives notice is
for a registered public offering involving an underwriting, the Company shall so
advise the Purchaser as a part of the written notice given pursuant to Section
9.2(a). In such event, the right of the Purchaser to registration pursuant to
Section 9.2(a) shall be conditioned upon the Purchaser's participation in such
underwriting and the inclusion of the Purchased Shares in the underwriting to
the extent provided herein. If the Purchaser shall have elected to exercise its
rights under Section 9.2(a), it shall enter into an underwriting agreement in
customary form with the representative of the underwriter or underwriters
selected for underwriting by the Company. Notwithstanding any other provision of
this Section 9.2, if the representative determines and so advises the Company in
writing that marketing factors require a limitation on the number of shares to
be underwritten, the Company shall so advise the Purchaser. In such an event,
the number of Purchased Shares that may be included in the registration and
underwriting by the Purchaser shall be reduced, on a pro rata basis (based on
the number of shares held by the Purchaser and each other Person (other than the
Company) registering shares under such registration), by such minimum number of
shares as is necessary to comply with such limitation. If the Purchaser
disapproves of the terms of any such underwriting, it may elect to withdraw
therefrom by written notice to the Company and the underwriter. Any Purchased
Shares excluded or withdrawn from such underwriting shall be withdrawn from such
registration.
9.3 Transferability. The registration rights granted pursuant to this
Article 9 shall be assignable, in whole but not in part, to any Transferee of
the Purchased Shares; provided, however, that the rights granted under Section
9.1 shall be assignable only to a Transferee who, after giving effect to such
Transfer, beneficially owns at least 1,000,000 shares of Common Stock.
9.4 Expenses of Registration. All Registration Expenses incurred in
connection with any registration, qualification or compliance pursuant to this
Article 9 shall be borne by the Company, and all Selling Expenses shall be borne
by the Purchaser.
16
9.5 Registration Procedures. In the case of each registration effected
by the Company pursuant to Article 9, the Company will:
(a) furnish to the Purchaser prior to the filing of the
requisite Registration Statement copies of drafts of such Registration Statement
as is proposed to be filed, and thereafter such number of copies of such
Registration Statement, each amendment and supplement thereto (in each case
including all exhibits thereto), the Prospectus included in such Registration
Statement (including each preliminary prospectus) and such other documents in
such quantities as the Purchaser may reasonably request from time to time in
order to facilitate its distribution;
(b) notify the Purchaser promptly of any request by the
Commission for the amending or supplementing of such Registration Statement or
Prospectus or for additional information;
(c) advise the Purchaser promptly after the Company shall
receive notice or obtain knowledge of the issuance of any stop order by the
Commission suspending the effectiveness of any such Registration Statement or
amendment thereto or of the initiation or threatening of any proceeding for that
purpose, and promptly use its best efforts to prevent the issuance of any stop
order or to obtain its withdrawal promptly if such stop order should be issued;
(d) use all reasonable efforts to register or qualify the
Purchased Shares under such other securities or blue sky laws of such
jurisdictions as the Purchaser (or the managing underwriter, in the case of
underwritten offerings) reasonably requests; provided that the Company shall not
be required to qualify to do business or become subject to service of process or
taxation in any jurisdiction in which it is not already so qualified or subject;
(e) use all reasonable efforts to cause the Purchased Shares
included in the Registration Statement to be listed on a securities exchange or
authorized for quotation on a national quotation system on which any of the
Common Stock is then listed;
(f) notify the Purchaser, at any time when a prospectus
relating to the proposed sale is required to be delivered under the Securities
Act, of the happening of any event as a result of which the Prospectus included
in such Registration Statement or amendment contains an untrue statement of a
material fact or omits to state any material fact required to be stated therein
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading, and the Company will prepare a supplement
or amendment to such Prospectus so that, as thereafter delivered to the
purchasers of the Purchased Shares, such Prospectus will not contain an untrue
statement of a material fact or omit to state any material fact required to be
stated therein in order to make the statements therein, in light of the
circumstances under which they were made, not misleading;
17
(g) enter into customary agreements (including without
limitation, an underwriting agreement in customary form) and take such other
actions as are reasonably required in order to expedite or facilitate the
disposition of the Purchased Shares included in the Registration Statement; and
(h) in the case of a Registration Statement filed pursuant to
Section 9.1 involving a shelf Registration Statement, prepare and file with the
Commission such amendments and supplements to such shelf Registration Statement
and the Prospectus used in connection therewith as may be necessary to keep such
shelf Registration Statement effective until the earlier of (i) the sale of all
Registrable Securities covered thereby or (ii) three years (exclusive of any
period during which the distribution is postponed pursuant to Section 9.1), and
to comply with the provisions of the Securities Act with respect to the sale or
other disposition of all Registrable Securities covered by such Registration
Statement.
9.6 Indemnification. (a) The Company will indemnify the Purchaser, each
of its officers and directors, and each person controlling the Purchaser within
the meaning of Section 15 of the Securities Act and the rules and regulations
thereunder, with respect to each registration which has been effected pursuant
to this Article 9, and each underwriter, if any, and each person who controls
any underwriter within the meaning of Section 15 of the Securities Act and the
rules and regulations thereunder, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any Prospectus or other document (including any related registration statement,
notification or the like) incident to any such registration, qualification or
compliance, or based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or any violation by the Company of the Securities Act or
any rule or regulation thereunder applicable to the Company and relating to
action or inaction required of the Company in connection with any such
registration, qualification or compliance, and will reimburse the Purchaser,
each of its officers and directors, and each person controlling the Purchaser,
each such underwriter and each person who controls any such underwriter, for any
legal and any other expenses reasonably incurred in connection with
investigating and defending any such claim, loss, damage, liability or action,
provided that the Company will not be liable in any such case to the extent that
any such claim, loss, damage, liability or expense arises out of or is based on
any untrue statement or omission based upon written information furnished to the
Company by the Purchaser with respect to the Purchaser and stated to be
specifically for use therein.
(b) The Purchaser will, if Purchased Shares held by it are
included in the securities as to which such registration, qualification or
compliance is being effected, indemnify the Company, each of its directors and
officers and each underwriter, if any, of the Company's securities covered by
such a registration statement, each person who controls the Company or such
underwriter within the meaning of Section 15 of the Securities Act and the rules
and regulations thereunder,
18
against all claims, losses, damages and liabilities (or actions in respect
thereof) arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact with respect to the Purchaser contained in any
such registration statement, prospectus or other document made by the Purchaser,
or any omission (or alleged omission) to state therein a material fact with
respect to the Purchaser required to be stated therein or necessary to make the
statements by the Purchaser therein not misleading, and will reimburse the
Company and such other directors, officers, partners, persons, underwriters or
control persons for any legal or any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action, in each case to the extent, but only to the extent, that
such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus or other document
in reliance upon and in conformity with written information furnished to the
Company by the Purchaser with respect to the Purchaser and stated to be
specifically for use therein; provided, however, that the obligations of the
Purchaser hereunder shall be limited to an amount equal to the proceeds to the
Purchaser of securities sold as contemplated herein.
(c) If the indemnification provided for in this Section 9.6 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage or expense referred to
herein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage or expense
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions which resulted in such loss,
liability, claim, damage or expense, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
ARTICLE 10
TERMINATION OF AGREEMENT
10.1 Termination. This Agreement may be terminated prior to the Closing
as follows:
(a) at the election of the Purchaser, if any one or more of
the conditions to the obligation of the Purchaser to close set forth in Article
7 has not been fulfilled as of March 31, 1999;
19
(b) at the election of the Company, if any one or more of the
conditions to the obligation of the Company to close set forth in Article 8 has
not been fulfilled as of March 31, 1999;
(c) at the election of the Company or the Purchaser, if any
legal proceeding is commenced and pending by any Governmental Authority seeking
to prevent the consummation of the Closing or any other Contemplated Transaction
and the Company or the Purchaser, as the case may be, reasonably and in good
faith deems it impracticable or inadvisable to proceed in view of such legal
proceeding;
(d) at the election of the Company, if the Purchaser has
breached any material representation, warranty, covenant or agreement contained
in this Agreement, which breach cannot be or is not cured by March 31, 1999;
(e) at the election of the Purchaser, if the Company has
breached any material representation, warranty, covenant or agreement contained
in this Agreement, which breach cannot be or is not cured by March 31, 1999;
(f) at the election of the Purchaser, if the Closing Date
shall not have occurred by March 31, 1999; or
(g) at any time on or prior to the Closing Date, by mutual
written consent of the Company and the Purchaser.
If this Agreement so terminates, it shall become null and void and have
no further force or effect, except as provided in Section 10.2.
10.2 Survival After Termination. If this Agreement terminates pursuant
to Section 10.1 and the Contemplated Transactions are not consummated, this
Agreement shall become null and void and have no further force or effect, except
that any such termination shall be without prejudice to the rights of any party
on account of the nonsatisfaction of the conditions set forth in Articles 7 and
8 resulting from the intentional or willful breach or violation of the
representations, warranties, covenants or agreements of another party under this
Agreement. Notwithstanding anything in this Agreement to the contrary, the
provisions of Sections 5.3, this Section 10.2 and Article 11 shall survive any
termination of this Agreement.
20
ARTICLE 11
MISCELLANEOUS
11.1 Expenses. Each of the Company and Purchaser shall pay its own
expenses incurred in connection with the negotiation, execution, delivery and
performance of this Agreement.
11.2 Notices. All notices or other communications required or permitted
hereunder shall be in writing and shall be delivered personally, telecopied or
sent by certified, registered or express mail, postage prepaid. Any such notice
shall be deemed given if delivered personally or telecopied, on the date of such
delivery or sent by reputable overnight courier, on the first Business Day
following the date of such mailing, as follows:
(a) if to the Company:
CD Radio Inc.
1180 Avenue of the Americas
New York, New York 10036
Attention: Patrick L. Donnelly
Telecopy: (212) 899-5036
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Attention: Mitchell S. Fishman
Telecopy: (212) 757-3990
(b) if to the Purchaser:
Prime 66 Partners, L.P.
201 Main Street
Suite 2600
Fort Worth, TX 76102
Attention: W. R. Cotham
Telecopy: (817) 390-8739
21
with a copy to:
Kelly, Hart & Hallman
201 Main Street
Suite 2500
Fort Worth, TX 76102
Attention: Thomas W. Briggs, Esq
Telecopy: (817) 878-9280
Any party may by notice given in accordance with this Section 11.2 designate
another address or person for receipt of notices hereunder.
11.3 Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and permitted assigns of the parties
hereto. No Person other than the parties hereto and their successors and
permitted assigns is intended to be a beneficiary of this Agreement. No party
hereto may assign its rights under this Agreement without the prior written
consent of the other party hereto.
11.4 Amendment and Waiver.
(a) No failure or delay on the part of the Company or the
Purchaser in exercising any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. The remedies provided for herein are
cumulative and are not exclusive of any remedies that may be available to the
Company or the Purchaser at law, in equity or otherwise.
(b) Any amendment, supplement or modification of or to any
provision of this Agreement and any waiver of any provision of this Agreement
shall be effective only if it is made or given in writing and signed by the
Company and the Purchaser.
11.5 Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, all of which
when so executed shall be deemed to be an original and both of which taken
together shall constitute one and the same agreement.
11.6 Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
11.7 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
CONFLICTS
22
OF LAW PRINCIPLES THEREOF WHICH WOULD REQUIRE THE APPLICATION OF THE LAWS OF
ANOTHER STATE.
11.8 Severability. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired, unless the provisions held
invalid, illegal or unenforceable shall substantially impair the benefits of the
remaining provisions hereof.
11.9 Entire Agreement. This Agreement, together with the schedules and
exhibits hereto, is intended by the parties as a final expression of their
agreement and intended to be a complete and exclusive statement of the agreement
and understanding of the parties hereto in respect of the subject matter
contained herein and therein. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein or therein. This
Agreement, together with the schedules and exhibits hereto, supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
11.10 Further Assurances. Each of the parties shall execute such
documents and take, or cause to be taken, all appropriate action, and shall do
or cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the Contemplated
Transactions and obtaining any consents, exemptions, authorizations, or other
actions by, or giving any notices to, or making any filings with, any
Governmental Authority or any other Person.
11.11 Public Announcements. Except to the extent required by law or the
regulations of any national securities exchange or the Nasdaq National Market,
neither party hereto will issue or make any reports, statements or releases to
the public with respect to this Agreement or the Contemplated Transactions
without consulting the other.
23
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their respective officers hereunto duly authorized as
of the date first above written.
CD RADIO INC.
By: /s/ Andrew J. Greenebaum
----------------------------
Name: Andrew J. Greenebaum
Title: Executive Vice President and
Chief Financial Officer
PRIME 66 PARTNERS, L.P.
By: P-66, INC.,
as general partner
By: /s/ William P. Hallman, Jr.
-------------------------------
Name: William P. Hallman, Jr.
Title: Vice President
By: P-66 GENPAR, L.P.,
as general partner
By: Carmel Land & Cattle Co.,
as general partner
By: /s/ William P. Hallman, Jr.
-------------------------------
Name: William P. Hallman, Jr.
Title: Vice President
SCHEDULE 3.2
Subsidiaries of the Company
---------------------------
Jurisdiction of
Name Incorporation
- ---- ---------------
Satellite CD Radio, Inc. 1/ Delaware
- ----
1/ All of the stock of this Subsidiary is pledged to secure the Company's
outstanding 15% Senior Secured Discount Notes due 2007.
SCHEDULE 3.4
Required Consents
-----------------
1. The filings required under the HSR Act.
2. Approval of the Company's common stockholders in accordance with rules
of the NASD.
3. Waiver by Loral Space & Communications Ltd. of its rights under
Sections 5.2(b) and 5.3 of the Stock Purchase Agreement dated August 5,
1997 by and among CD Radio Inc., David Margolese and Loral Space &
Communications Ltd. in respect of the Contemplated Transactions.
EXHIBIT A
[Form of Opinion of Counsel to the Company]
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware with full
corporate power and authority to own, lease or operate its properties and to
conduct its businesses as described in the SEC Reports and to consummate the
transactions contemplated under this Agreement.
(ii) The Purchased Shares have been duly authorized for issuance and
sale to the Purchaser pursuant to this Agreement and, when issued in accordance
with the terms of this Agreement, the Purchased Shares will be duly authorized,
validly issued, fully paid and non-assessable shares of the Company, free of all
preemptive or similar rights.
(iii) This Agreement has been duly authorized, executed and delivered
by the Company and constitutes a valid and legally binding obligation of the
Company enforceable against it in accordance with its terms, subject as to
enforcement, to bankruptcy, insolvency, rehabilitation, reorganization and other
laws of general applicability relating to or affecting creditors' rights and to
general principles of equity.
(iv) No consent, approval, authorization, order, registration or
qualification of or with any Governmental Authority is required for the issue
and sale of the Purchased Shares by the Company or the consummation by the
Company of the Contemplated Transactions.
(v) The issuance and sale of the Purchased Shares do not require
registration under Section 5 of the Securities Act or qualification under any
state securities or the blue sky laws of the State of New York.