EXHIBIT 4.5.1
THIS WARRANT AND ANY SECURITIES ACQUIRED UPON THE EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND NEITHER THIS WARRANT NOR
SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED,
PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER
SUCH ACT AND SUCH LAWS.
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CD RADIO INC.
COMMON STOCK PURCHASE WARRANT
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This certifies that, for good and valuable consideration, CD Radio Inc., a
Delaware corporation (the "Company"), grants to Ford Motor Company, a Delaware
corporation ("Ford"), or registered assigns (including Ford, the
"Warrantholder"), the right to subscribe for and purchase from the Company
4,000,000 validly issued, fully paid and nonassessable shares (the "Warrant
Shares") of the Company's common stock, par value $0.001 per share (the "Common
Stock"), at the purchase price per share equal to the greater of (i) $30 or (ii)
115% of the closing offer price for the Common Stock on the Nasdaq National
Market on June 11, 1999 (the "Exercise Price"), at any time and from time to
time, during the period from and including 9:00 AM, New York City time,
on the date the Company commences its commercial broadcasts from orbiting
satellites until 5:00 PM, New York City time, on the earlier of (a) June 11,
2009 and (b) the date of the termination or expiration of the Agreement, dated
as of June 11, 1999, between the Company and Ford (the "Expiration Date"), all
subject to the terms, conditions and adjustments herein set forth.
Certain capitalized terms used herein and not otherwise defined shall have
the meanings ascribed to them in Section 10.
Certificate No. 1
Number of Shares: 4,000,000
Name of Warrantholder: Ford Motor Company, a Delaware corporation
1. Duration and Exercise of Warrant; Limitations on Exercise; Payment of
Taxes.
1.1 Exercisability of Warrant. Subject to the terms and conditions set
forth herein, the right to exercise this Warrant shall vest, and this Warrant
shall become exercisable, as follows:
(a) with respect to 1,000,000 shares of Common Stock, on the date that
Ford has manufactured 500,000 Ford Enabled Vehicles;
(b) with respect to an additional 500,000 shares of Common Stock, on the
date that Ford has manufactured an aggregate of 1,000,000 Ford Enabled Vehicles;
(c) with respect to an additional 500,000 shares of Common Stock, on the
date that Ford has manufactured an aggregate of 2,000,000 Ford Enabled Vehicles;
(d) with respect to an additional 1,000,000 shares of Common Stock, on the
date that Ford has manufactured an aggregate of 3,000,000 Ford Enabled Vehicles;
and
(e) with respect to an additional 1,000,000 shares of Common Stock, on the
date that Ford has manufactured an aggregate of 4,000,000 Ford Enabled Vehicles.
The Warrantholder shall have no right to exercise this Warrant with respect to
shares of Common Stock which are not vested and exercisable as described in this
Section 1.1.
1.2 Duration and Exercise of Warrant. Subject to the terms and conditions
set forth herein, including Section 1.1, the Warrant may be exercised, in whole
or in part, by the Warrantholder by:
(a) the surrender of this Warrant to the Company, with a duly executed
Exercise Form specifying the number of Warrant Shares to be purchased, during
normal business hours on any Business Day prior to the Expiration Date; and
(b) the delivery of payment to the Company, for the account of the
Company, by cash, by certified or bank cashier's check or by wire transfer of
immediately available funds in accordance with wire instructions that shall be
provided by the Company upon request, of the Exercise Price for the number of
Warrant Shares specified in the Exercise Form in lawful money of the United
States of America.
The Company agrees that such Warrant Shares shall be deemed to be issued to the
Warrantholder as the record holder of such Warrant Shares as of the close of
business on the date on which this Warrant shall have been surrendered and
payment made for the Warrant Shares as aforesaid.
1.3 Limitations on Exercise. Notwithstanding anything to the contrary
herein, this Warrant may be exercised only upon (i) the delivery to the
Company of any certificates, legal
opinions, and other documents reasonably requested by the Company to satisfy the
Company that the proposed exercise of this Warrant may be effected without
registration under the Securities Act, (ii) receipt by the Company of FCC
approval of the proposed exercise, if such approval is required (as determined
by a written opinion of the Company's special FCC counsel, delivered to the
Warrantholder) to maintain any license granted to the Company by the FCC, or to
maintain the Company's eligibility for any license for which it has applied to
the FCC and (iii) receipt by the Company of approval of any other
applicable Governmental Authority of the proposed exercise. The Warrantholder
shall not be entitled to exercise this Warrant, or any part thereof, unless and
until such approvals, certificates, legal opinions or other documents are
reasonably acceptable to the Company. The cost of such approvals, certificates,
legal opinions and other documents, if required, shall be borne by the
Warrantholder.
1.4 Warrant Shares Certificate. A stock certificate or certificates for
the Warrant Shares specified in the Exercise Form shall be delivered to the
Warrantholder within five Business Days after receipt of the Exercise Form and
receipt of payment of the purchase price. If this Warrant shall have been
exercised only in part, the Company shall, at the time of delivery of the stock
certificate or certificates, deliver to the Warrantholder a new Warrant
evidencing the rights to purchase the remaining Warrant Shares, which new
Warrant shall in all other respects be identical with this Warrant.
1.5 Payment of Taxes. The issuance of certificates for Warrant Shares
shall be made without charge to the Warrantholder for any documentary, stamp or
similar stock transfer or other issuance tax in respect thereto; provided,
however, that the Warrantholder shall be required to pay any and all taxes which
may be payable in respect of any transfer involved in the issuance and delivery
of any certificate in a name other than that of the then Warrantholder as
reflected upon the books of the Company.
1.6 Divisibility of Warrant; Transfer of Warrant. (a) This Warrant may
only be transferred by the Warrantholder with the prior written consent of the
Company. Any transfer of this Warrant without the prior written consent of the
Company shall be void and of no force and effect.
(b) Subject to the provisions of this Section, this Warrant may be divided
into warrants of one thousand shares or multiples thereof, upon surrender at the
office of the Company located at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx
00000, without charge to any Warrantholder. Subject to the provisions of this
Section, upon such division, the Warrants may be transferred of record as the
then Warrantholder may specify without charge to such Warrantholder (other than
any applicable transfer taxes).
(c) Subject to the provisions of this Section, upon surrender of this
Warrant to the Company with a duly executed Assignment Form and funds sufficient
to pay any transfer tax, the Company shall, without charge, execute and deliver
a new Warrant or Warrants of like tenor in the name of the assignee named in
such Assignment Form, and this Warrant shall promptly be canceled. Prior to any
proposed transfer (whether as the result of a division or otherwise) of this
Warrant, such Warrantholder shall give written notice to the Company of
such Warrantholder's intention to effect such transfer. Each such notice shall
describe the manner and circumstances of the proposed transfer in sufficient
detail, and, if requested by the Company, shall be accompanied by a written
opinion of legal counsel, which opinion shall be addressed to the Company and be
reasonably satisfactory in form and substance to the Company, to the effect that
the proposed transfer of this Warrant may be effected without registration under
the Securities Act. In addition to the restrictions contained in this Section,
the Warrantholder shall not be entitled to transfer this Warrant, or any part
thereof, if such legal opinion is not reasonably acceptable to the Company. The
term "Warrant" as used in this Agreement shall be deemed to include any Warrants
issued in substitution or exchange for this Warrant.
2. Restrictions on Transfer; Restrictive Legends.
Except as otherwise permitted by this Section 2, each Warrant shall (and
each Warrant issued upon direct or indirect transfer or in substitution for any
Warrant pursuant to Section 1.6 or Section 4 shall) be stamped or
otherwise imprinted with a legend in substantially the following form:
THIS WARRANT AND ANY SECURITIES ACQUIRED UPON THE EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
STATE SECURITIES LAWS AND NEITHER THIS WARRANT NOR SUCH SECURITIES NOR ANY
INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS.
Except as otherwise permitted by this Section 2, each stock certificate
for Warrant Shares issued upon the exercise of any Warrant and each stock
certificate issued upon the direct or indirect transfer of any such Warrant
Shares shall be stamped or otherwise imprinted with a legend in substantially
the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND
NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD,
TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS OR AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT AND SUCH LAWS.
Notwithstanding the foregoing, the Warrantholder may require the Company
to issue a Warrant or a stock certificate for Warrant Shares, in each case
without a legend, if either (i) such Warrant or such Warrant Shares, as
the case may be, have been registered for resale under the Securities Act or
(ii) the Warrantholder has delivered to the Company an opinion of legal
counsel, which opinion shall be addressed to the Company and be reasonably
satisfactory in form and substance to the Company, to the effect that such
registration is not required with respect to such Warrant or such Warrant
Shares, as the case may be.
By acceptance of this Warrant, the Warrantholder expressly agrees that it
will at all times comply with the restrictions contained in Rule 144(e) under
the Securities Act (as in effect on the date hereof) when selling, transferring
or otherwise disposing Warrant Shares, even if such restrictions would not then
be applicable to the Warrantholder.
3. Reservation and Registration of Shares, Etc. The Company covenants and
agrees as follows:
(a) all Warrant Shares which are issued upon the exercise of this Warrant
will, upon issuance, be validly issued, fully paid, and nonassessable, not
subject to any preemptive rights, and free from all taxes, liens, security
interests, charges, and other encumbrances with respect to the issue thereof,
other than taxes with respect to any transfer occurring contemporaneously with
such issue;
(b) during the period within which this Warrant may be exercised, the
Company will at all times have authorized and reserved, and keep available free
from preemptive rights and any liens and encumbrances, a sufficient number of
shares of Common Stock to provide for the exercise of the rights represented by
this Warrant; and
(c) the Company will, from time to time, take all such action as may be
required to assure that the par value per share of the Warrant Shares is at all
times equal to or less than the then effective Exercise Price.
4. Loss or Destruction of Warrant. Subject to the terms and conditions
hereof, upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of this Warrant and, in the case of
loss, theft or destruction, of such bond or indemnification as the Company may
reasonably require, and, in the case of such mutilation, upon surrender and
cancellation of this Warrant, the Company will execute and deliver a new Warrant
of like tenor.
5. Ownership of Warrant. The Company may deem and treat the Person in
whose name this Warrant is registered as the holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made by anyone
other than the Company) for all purposes and shall not be affected by any notice
to the contrary, until presentation of this Warrant for registration of
transfer.
6. Certain Adjustments.
6.1 The number of Warrant Shares purchasable upon the exercise of this
Warrant and the Exercise Price shall be subject to adjustment as follows:
(a) Stock Dividends. If at any time after the date of the issuance of this
Warrant (i) the Company shall fix a record date for the issuance of any
stock dividend payable in
shares of Common Stock; or (ii) the number of shares of Common Stock
shall have been increased by a subdivision or split-up of shares of Common
Stock, then, on the record date fixed for the determination of holders of Common
Stock entitled to receive such dividend or immediately after the effective date
of such subdivision or split-up, as the case may be, the number of shares to be
delivered upon exercise of this Warrant will be increased so that the
Warrantholder will be entitled to receive the number of shares of Common Stock
that such Warrantholder would have owned immediately following such action had
this Warrant been exercised immediately prior thereto, and the Exercise Price
will be adjusted as provided below in paragraph (g).
(b) Combination of Stock. If the number of shares of Common Stock
outstanding at any time after the date of the issuance of this Warrant shall
have been decreased by a combination of the outstanding shares of Common Stock,
then, immediately after the effective date of such combination, the number of
shares of Common Stock to be delivered upon exercise of this Warrant will be
decreased so that the Warrantholder thereafter will be entitled to receive the
number of shares of Common Stock that such Warrantholder would have owned
immediately following such action had this Warrant been exercised immediately
prior thereto, and the Exercise Price will be adjusted as provided below in
paragraph (g).
(c) Reorganization, etc. If any capital reorganization of the Company, any
reclassification of the Common Stock, any consolidation of the Company with or
merger of the Company with or into any other Person, or any sale or lease or
other transfer of all or substantially all of the assets of the Company to any
other Person, shall be effected in such a way that the holders of Common Stock
shall be entitled to receive stock, other securities or assets (whether such
stock, other securities or assets are issued or distributed by the Company or
another Person) with respect to or in exchange for Common Stock, then, upon
exercise of this Warrant, the Warrantholder shall have the right to receive the
kind and amount of stock, other securities or assets receivable upon such
reorganization, reclassification, consolidation, merger or sale, lease or other
transfer by a holder of the number of shares of Common Stock that such
Warrantholder would have been entitled to receive upon exercise of this Warrant
had this Warrant been exercised immediately before such reorganization,
reclassification, consolidation, merger or sale, lease or other transfer,
subject to adjustments that shall be as nearly equivalent as may be practicable
to the adjustments provided for in this Section 6. The Company shall not
effect any such consolidation, merger or sale, lease or other transfer, unless
prior to, or simultaneously with, the consummation thereof, the successor Person
(if other than the Company) resulting from such consolidation or merger, or such
Person purchasing, leasing or otherwise acquiring such assets, shall assume, by
written instrument, the obligation to deliver to the Warrantholder the shares of
stock, securities or assets to which, in accordance with the foregoing
provisions, the Warrantholder may be entitled and all other obligations of the
Company under this Warrant. The provisions of this paragraph (c) shall apply to
successive reorganizations, reclassifications, consolidations, mergers, sales,
leasing transactions and other transfers.
(d) Distributions to all Holders of Common Stock. If the Company shall, at
any time after the date of issuance of this Warrant, fix a record date to
distribute to all holders of its Common Stock any shares of capital stock of the
Company (other than Common Stock) or
evidences of its indebtedness or assets (not including regular quarterly cash
dividends and distributions paid from retained earnings of the Company) or
rights or warrants to subscribe for or purchase any of its securities, then the
Warrantholder shall be entitled to receive, upon exercise of this Warrant, that
portion of such distribution to which it would have been entitled had the
Warrantholder exercised its Warrant immediately prior to the date of such
distribution. At the time it fixes the record date for such distribution, the
Company shall allocate sufficient reserves to ensure the timely and full
performance of the provisions of this Subsection. The Company shall promptly
(but in any case no later than five Business Days prior to the record date of
such distribution) give notice to the Warrantholder that such distribution will
take place.
(e) Fractional Shares. No fractional shares of Common Stock or scrip shall
be issued to any Warrantholder in connection with the exercise of this Warrant.
Instead of any fractional shares of Common Stock that would otherwise be
issuable to such Warrantholder, the Company will pay to such Warrantholder a
cash adjustment in respect of such fractional interest in an amount equal to
that fractional interest of the then current Fair Market Value per share of
Common Stock.
(f) Carryover. Notwithstanding any other provision of this Section 6, no
adjustment shall be made to the number of shares of Common Stock to be delivered
to the Warrantholder (or to the Exercise Price) if such adjustment represents
less than 0.10% of the number of shares to be so delivered, but any lesser
adjustment shall be carried forward and shall be made at the time and together
with the next subsequent adjustment which together with any adjustments so
carried forward shall amount to 0.10% or more of the number of shares to be so
delivered.
(g) Exercise Price Adjustment. Whenever the number of Warrant Shares
purchasable upon the exercise of this Warrant is adjusted, as herein provided,
the Exercise Price payable upon the exercise of this Warrant shall be adjusted
by multiplying such Exercise Price immediately prior to such adjustment by a
fraction, of which the numerator shall be the number of Warrant Shares
purchasable upon the exercise of the Warrant immediately prior to such
adjustment, and of which the denominator shall be the number of Warrant Shares
purchasable immediately thereafter.
6.2 Rights Offering. In the event the Company shall effect an offering of
Common Stock pro rata among its stockholders, the Warrantholder shall be
entitled to elect to participate in each and every such offering as if this
Warrant had been exercised immediately prior to each such offering. The Company
shall promptly (but in any case no later than five Business Days prior to such
rights offering) give notice to the Warrantholder that such rights offering will
take place. The Company shall not be required to make any adjustment with
respect to the issuance of shares of Common Stock pursuant to a rights offering
in which the holder hereof elects to participate under the provisions of this
Section 6.2.
6.3 Notice of Adjustments. Whenever the number of Warrant Shares or the
Exercise Price of such Warrant Shares is adjusted, as herein provided, the
Company shall promptly give to the Warrantholder notice of such adjustment or
adjustments and a certificate of a firm
of independent public accountants of recognized national standing selected by
the Board of Directors of the Company (which shall be appointed at the Company's
expense and may be the independent public accountants regularly employed by the
Company) setting forth the number of Warrant Shares and the Exercise Price of
such Warrant Shares after such adjustment, a brief statement of the facts
requiring such adjustment, and the computation by which such adjustment was
made.
6.4 Notice of Extraordinary Corporate Events. In case the Company after
the date hereof shall propose to (i) distribute any dividend (whether stock or
cash or otherwise) to the holders of shares of Common Stock or to make any other
distribution to the holders of shares of Common Stock, (ii) offer to the holders
of shares of Common Stock rights to subscribe for or purchase any additional
shares of any class of stock or any other rights or options, or (iii) effect any
reclassification of the Common Stock (other than a reclassification involving
merely the subdivision or combination of outstanding shares of Common Stock),
any capital reorganization, any consolidation or merger (other than a merger in
which no distribution of securities or other property is to be made to holders
of shares of Common Stock), any sale or lease or transfer or other disposition
of all or substantially all of its property, assets and business, or the
liquidation, dissolution or winding up of the Company, then, in each such case,
the Company shall give to the Warrantholder notice of such proposed action,
which notice shall specify the date on which (a) the books of the Company shall
close, or (b) a record shall be taken for determining the holders of Common
Stock entitled to receive such stock dividends or other distribution or such
rights or options, or (c) such reclassification, reorganization, consolidation,
merger, sale, transfer, other disposition, liquidation, dissolution or winding
up shall take place or commence, as the case may be, and the date, if any, as of
which it is expected that holders of record of Common Stock shall be entitled to
receive securities or other property deliverable upon such action. Such notice
shall be given in the case of any action covered by clause (i) or (ii) above at
least ten days prior to the record date for determining holders of Common Stock
for purposes of receiving such payment or offer, or in the case of any action
covered by clause (iii) above at least 30 days prior to the date upon which such
action takes place and 20 days prior to any record date to determine holders of
Common Stock entitled to receive such securities or other property.
6.5 Effect of Failure to Notify. Failure to file any certificate or notice
or to give any notice, or any defect in any certificate or notice, pursuant to
Sections 6.3 and 6.4 shall not affect the legality or validity of the
adjustment to the Exercise Price, the number of shares purchasable upon exercise
of this Warrant, or any transaction giving rise thereto.
7. Reports Under Securities Exchange Act of 1934. With a view to making
available to the Holders the benefits of Rule 144 promulgated under the
Securities Act or any other similar rule or regulation of the SEC that may at
any time permit the Holders to sell securities of the Company to the public
without registration ("Rule 144"), the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144, at all times;
(b) file with the SEC in a timely manner all reports and other documents
required of the Company under the Securities Act and the Exchange Act; and
(c) furnish to each Holder so long as such Holder owns Warrants, promptly
upon request, (i) a written statement by the Company that it has complied with
the reporting requirements of Rule 144 (at any time after 90 days after the
effective date of the first registration statement filed by the Company), the
Securities Act and the Exchange Act (at any time after it has become subject to
such reporting requirements), (ii) a copy of the most recent annual or quarterly
report of the Company and such other reports and documents so filed by the
Company, and (iii) such other information as may be reasonably requested to
permit the Holders to sell such securities without registration.
8. Amendments. Any provision of this Warrant may be amended and the
observance thereof may be waived (either generally or in a particular instance
and either retroactively or prospectively), only with the written consent or
approval of the Company and the Holders who hold a majority in interest of the
Warrants; provided that it is not necessary that the exact form of the amendment
be approved by the holders of a majority in interest of the Warrants if such
holders have approved the substance of such amendment. Any amendment or waiver
effected in accordance with this Section 8 shall be binding upon each Holder and
the Company.
9. Expiration of the Warrant. The obligations of the Company pursuant to
this Warrant shall terminate on the Expiration Date.
10. Definitions.
As used herein, unless the context otherwise requires, the following terms
have the following respective meanings:
Assignment Form: an instrument of transfer of a warrant in the form
annexed hereto as Exhibit B.
Board: the Board of Directors of the Company or any duly authorized
Committee thereof.
Business Day: any day other than a Saturday, Sunday or a day on which
banks are required or authorized by law to close in The City of New York, State
of New York.
Bylaws: the bylaws of the Company, as the same may be amended and in
effect from time to time.
CD Radio Receiver: a Head Unit which is capable of providing the user
interface for CD Radio broadcasts, including displaying the artist and title
information transmitted as part of the CD Radio broadcast, and receiving the CD
Radio signal, either as a result of circuitry included in the unit itself or as
a result of another device, and an antenna suitable for receiving the CD Radio
signal.
Certificate of Incorporation: the Certificate of Incorporation of the
Company, as the same may be amended and in effect from time to time.
Common Stock: the meaning specified on the cover of this Warrant.
Company: the meaning specified on the cover of this Warrant.
Contractual Obligation: 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.
Ford: the meaning specified on the cover of this Warrant.
Exchange Act: the Securities Exchange Act of 1934 or any similar Federal
statute, and the rules and regulations of the SEC thereunder, all as the same
shall be in effect at the time. Reference to a particular section of the
Exchange Act shall include a reference to a comparable section, if any, of any
such similar Federal statute.
Exercise Form: a request to exercise a warrant in the form annexed hereto
as Exhibit A.
Exercise Price: the meaning specified on the cover of this Warrant.
Expiration Date: the meaning specified on the cover of this Warrant.
Fair Market Value: With respect to a share of Common Stock as of a
particular date (the "Determination Date"):
(i) if the Common Stock is registered under the Exchange Act, (a) the
average of the daily closing sales prices of the Common Stock for the 20
consecutive trading days immediately preceding such date, or (b) if the
securities have been registered under the Exchange Act for less than 20
consecutive trading days before such date, then the average of the daily closing
sales prices for all of trading days before such date for which closing sales
prices are available, in the case of each of (a) and (b), as certified by any
Vice President or the Chief Financial Officer of the Company; or
(ii) If the Common Stock is not registered under the Exchange Act, then
the Fair Market Value shall be as reasonably determined in good faith by the
Board or a duly appointed committee of the Board (which determination shall be
reasonably described in the written notice given to the Warrantholder).
For the purposes of clause (i) of this definition, the closing sales price
for each such trading day shall be: (1) in the case of a security listed or
admitted to trading on any United States national securities exchange or
quotation system, the closing sales price, regular way, on such day, or if no
sale takes place on such day, the average of the closing bid and asked prices on
such day; (2) in the case of a security not then listed or admitted to trading
on any national
securities exchange or quotation system, the last reported sale price on such
day, or if no sale takes place on such day, the average of the closing bid and
asked prices on such day, as reported by a reputable quotation source designated
by the Company; (3) in the case of a security not then listed or admitted to
trading on any national securities exchange or quotation system and as to which
no such reported sale price or bid and asked prices are available, the average
of the reported high bid and low asked prices on such day, as reported by a
reputable quotation service, or a newspaper of general circulation in the
Borough of Manhattan, City and State of New York, customarily published on each
Business Day, designated by the Company, or if there shall be no bid and asked
prices on such day, the average of the high bid and low asked prices, as so
reported, on the most recent day (not more than 30 days prior to the date in
question) for which prices have been so reported; and (4) if there are no bid
and asked prices reported during the 30 days prior to the date in question, the
Fair Market Value shall be determined as if the securities were not registered
under the Exchange Act.
FCC: the Federal Communications Commission.
Ford Enabled Vehicle: any new vehicle which contains a CD Radio Receiver
that was installed in a factory owned or operated by Ford, a mass customization
center which is owned or operated by Ford or another service facility designated
in writing by Ford which may include dealerships as long as such installation
principally results from a program authorized by Ford.
Governmental Authority: 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.
Head Unit: a device, which is integrated in the dashboard of a vehicle,
which provides the user interface for the reception of radio signals and, in
some cases, the playback of recorded media, such as cassette tapes, compact
discs, minidiscs and DVDs.
Holder(s): holder(s) of Warrants.
Lien: any mortgage, deed of trust, pledge, hypothecation, assignment,
encumbrance, lien (statutory or other), restriction or other security interest
of any kind or nature whatsoever.
Nasdaq: the National Association of Securities Dealers Automated
Quotations System.
Person: 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.
Requirement of Law: 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: the meaning specified in Section 7.
SEC: the Securities and Exchange Commission or any other Federal agency at
the time administering the Securities Act or the Exchange Act, whichever is the
relevant statute for the particular purpose.
Securities Act: the meaning specified on the cover of this Warrant, or any
similar Federal statute, and the rules and regulations of the SEC thereunder,
all as the same shall be in effect at the time. Reference to a particular
section of the Securities Act, shall include a reference to the comparable
section, if any, of any such similar Federal statute.
Series A Junior Preferred Stock: the meaning specified in Section
13.10(c).
Series C Preferred Stock: the meaning specified in Section 13.10(c).
Subsidiary: in respect of any Person, any other Person of 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.
Warrantholder: the meaning specified on the cover of this Warrant.
Warrant Shares: the meaning specified on the cover of this Warrant.
11. Preemptive Right. (a) If at any time after the date hereof and prior
to the Expiration Date, the Company proposes to issue shares of Common Stock
(excluding any warrants, options or securities or units comprising securities
convertible into or exchangeable for Common Stock or rights to acquire the same
issued as part of or simultaneously with any preferred stock or debt securities
of the Company) in an underwritten public offering, then the Company shall (i)
prior to the completion of such underwritten public offering, notify the
Warrantholder of such underwritten public offering and (ii) offer to issue to
the Warrantholder as part of such underwritten public offering, for cash, a
number of shares of Common Stock such that, after giving effect to the shares of
Common Stock issued in such underwritten public offering, the number of shares
of Common Stock owned by Warrantholder plus the shares of Common Stock
receivable by the Warrantholder upon exercise of any Warrants equals the same
percentage of the total number of shares of Common Stock issued and outstanding
immediately prior to the consummation of such offering as after giving effect to
such offering. The purchase price for such shares of Common Stock shall be equal
to the price of the shares of Common Stock sold in such underwritten public
offering (prior to deducting any underwriting discounts and commissions). The
Warrantholder must exercise its purchase rights hereunder in whole within five
Business Days after receipt of such notice from the Company and close such
purchase, by payment of immediately available funds,
simultaneously with the closing of such underwritten public offering. If after
the date that the Company notifies the Warrantholder of the proposed
underwritten public offering of Common Stock the actual number of shares of
Common Stock offered is increased or decreased as a result of demand for such
Common Stock offering, then the Company shall not be required to make an
additional offer to the Warrantholder to give effect to the increased or
decreased size of such offering.
(b) Upon the expiration of any offer to the Warrantholder described above,
or if the Warrantholder shall default in paying for or purchasing the Common
Stock on the terms offered by the Company, the Company will be under no further
obligation to offer any Common Stock to the Warrantholder pursuant to the terms
of this Section.
12. No Impairment. The Company shall not by any action, including, without
limitation, amending the Certificate of Incorporation or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at all
time in good faith assist in the carrying out of all such terms and in the
taking of all such reasonable actions as may be necessary or appropriate to
protect the rights of the Warrantholder against impairment. Without limiting the
generality of the foregoing, the Company shall (a) take all such actions as may
be necessary or appropriate in order that the Company may validly and legally
issue fully paid and nonassesable shares of Common Stock upon the exercise of
this Warrant, and (b) provide reasonable assistance to the Warrantholder in
obtaining all authorizations, exemptions or consents from any Governmental
Authority which may be necessary in connection with the exercise of this
Warrant.
13. Miscellaneous.
13.1 Entire Agreement. This Warrant constitutes the entire agreement
between the Company and the Warrantholder with respect to the Warrants.
13.2 Binding Effects; Benefits. This Warrant shall inure to the
benefit of and shall be binding upon the Company and the Warrantholders and
their respective heirs, legal representatives, successors and assigns. Nothing
in this Warrant, expressed or implied, is intended to or shall confer on any
Person other than the Company and the Warrantholders, or their respective heirs,
legal representatives, successors or assigns, any rights, remedies, obligations
or liabilities under or by reason of this Warrant.
13.3 Section and Other Headings. The section and other headings
contained in this Warrant are for reference purposes only and shall not be
deemed to be a part of this Warrant or to affect the meaning or interpretation
of this Warrant.
13.4 Pronouns. All pronouns and any variations thereof refer to the
masculine, feminine or neuter, singular or plural, as the context may require.
13.5 Further Assurances. Each of the Company and the Warrantholder
shall do and perform all such further acts and things and execute and deliver
all such other
certificates, instruments and documents as the Company or the Warrantholder may,
at any time and from time to time, reasonably request in connection with the
performance of any of the provisions of this Warrant.
13.6 Notices. All notices and other communications required or
permitted to be given under this Warrant shall be in writing and shall be deemed
to have been duly given if (i) delivered personally or (ii) sent by facsimile or
recognized overnight courier or by United States first class certified mail,
postage prepaid, to the parties hereto at the following addresses or to such
other address as any party hereto shall hereafter specify by notice to the other
party hereto:
if to the Company, addressed to:
CD Radio Inc.
1221 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Financial Officer
if to the Warrantholder, addressed to:
Ford Motor Company
The American Road
Dearborn, Michigan
Attention: Chief Financial Officer
Except as otherwise provided herein, all such notices and communications shall
be deemed to have been received (a) on the date of delivery thereof, if
delivered personally or sent by facsimile, (b) on the second Business Day
following delivery into the custody of an overnight courier service, if sent by
overnight courier, provided that such delivery is made before such courier's
deadline for next-day delivery, or (c) on the third Business Day after the
mailing thereof.
13.7 Separability. Any term or provision of this Warrant which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the terms and provisions of this Warrant or
affecting the validity or enforceability of any of the terms or provisions of
this Warrant in any other jurisdiction.
13.8 Governing Law. This Warrant shall be deemed to be a contract
made under the laws of New York and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to such
agreements made and to be performed entirely within such State.
13.9 No Rights or Liabilities as Stockholder. Nothing contained in
this Warrant shall be deemed to confer upon the Warrantholder any rights as a
stockholder of the
Company or as imposing any liabilities on the Warrantholder to purchase any
securities whether such liabilities are asserted by the Company or by creditors
or stockholders of the Company or otherwise.
13.10 Representations of the Company. The Company hereby represents
and warrants, as of the date hereof, to the Warrantholder as follows:
(a) Corporate Existence and Power. The Company (i) is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Delaware; (ii) 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 (iii) has the corporate power
and authority to execute, deliver and perform its obligations under this
Warrant. 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.
(b) Corporate Authorization; No Contravention. The execution,
delivery and performance by the Company of this Warrant and the transactions
contemplated hereby, including, without limitation, the sale, issuance and
delivery of the Warrant Shares, (i) have been duly authorized by all necessary
corporate action of the Company; (ii) do not contravene the terms of the
Certificate of Incorporation or Bylaws; and (iii) do not violate, conflict with
or result in any breach or contravention of, or the creation of any Lien under,
any Contractual Obligation of the Company or any Requirement of Law applicable
to the Company. 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 the Certificate of
Incorporation or Bylaws.
(c) Capitalization of the Company. The authorized capital stock of
the Company consists of (i) 200,000,000 shares of Common Stock, of which, as of
May 31, 1999 (a) 23,243,279 shares were issued and outstanding and (b)
34,877,533 shares were reserved for issuance upon the exercise of outstanding
stock options, warrants to purchase Common Stock and conversion of outstanding
shares of 10-1/2% Series C Convertible Preferred Stock (the "Series C Preferred
Stock"), 9.2% Series A Junior Cumulative Convertible Preferred Stock (the
"Series A Junior Preferred Stock") and shares of Series C Preferred Stock
issuable pursuant to warrants to purchase Series C Preferred Stock, and (ii)
50,000,000 shares of Preferred Stock, of which 1,467,416 shares of Series C
Preferred Stock were issued and outstanding as of May 31, 1999 and 1,350,000
shares of Series A Junior Preferred Stock were issued and outstanding as of May
31, 1999. Each share of Series C 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
Series C Preferred Stock (without accrued and unpaid dividends) by $18 (as
adjusted from time to time). Each share of Series A Junior 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 Series A Junior Preferred Stock (with accrued
and unpaid dividends) by $30 (as adjusted from time to time).
(d) Issuance of Warrant Shares. The Warrant Shares have been duly
authorized and reserved for issuance. When issued, such shares will be validly
issued, fully paid and non-assessable, and free and clear of all Liens and
preemptive rights, and the holders thereof shall be entitled to all rights and
preferences accorded to a holder of Common Stock.
(e) Binding Effect. This Warrant 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.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer.
CD RADIO INC.
By: /s/ Xxxxxx X. Xxxxxxxxxx
-------------------------------
Xxxxxx X. Xxxxxxxxxx
Executive Vice President and
Chief Financial Officer
Dated: June 11, 1999
Attest:
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------
Xxxxxxx X. Xxxxxxxx
Executive Vice President,
General Counsel and Secretary
Exhibit A
EXERCISE FORM
(To be executed upon exercise of this Warrant)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant, to purchase __________ shares of Common Stock
and herewith tenders payment for such Common Stock to the order of CD
Radio Inc. in the amount of $__________, which amount includes payment of
the par value for _________ of the Common Stock, in accordance with the
terms of this Warrant. The undersigned requests that a certificate for
such shares of Common Stock be registered in the name of
__________________ and that such certificates be delivered to
__________________ whose address is ___________________________________.
Dated:______________
Signature______________________________
______________________________
(Print Name)
______________________________
(Xxxxxx Xxxxxxx)
______________________________
(City) (State) (Zip Code)
Signed in the Presence of:
__________________________
Exhibit B
FORM OF ASSIGNMENT
(To be executed only upon transfer of this Warrant)
For value received, the undersigned registered holder of the within
Warrant hereby sells, assigns and transfers unto ______________________
the right represented by such Warrant to purchase ________________ shares
of Common Stock of CD Radio Inc. to which such Warrant relates and all
other rights of the Warrantholder under the within Warrant, and appoints
______________________ Attorney to make such transfer on the books of CD
Radio Inc. maintained for such purpose, with full power of substitution in
the premises. This sale, assignment and transfer has been previously
approved in writing by CD Radio Inc.
Dated:______________
Signature______________________________
______________________________
(Print Name)
______________________________
(Xxxxxx Xxxxxxx)
______________________________
(City) (State) (Zip Code)
Signed in the Presence of:
__________________________
