EXECUTION COPY
SIRIUS SATELLITE RADIO INC.
(A Delaware corporation)
75,000,000 Shares of Common Stock
TERMS AGREEMENT
---------------
June 4, 2003
To: Sirius Satellite Radio Inc.
1221 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This is a Terms Agreement referenced in the Form Underwriting
Agreement filed on January 3, 2002 on Form 8-K as Exhibit 1.1 to Registration
Statement No. 333-64344. The terms of the Form Underwriting Agreement are hereby
incorporated herein. We understand that Sirius Satellite Radio Inc., a Delaware
corporation (the "Company"), proposes to issue and sell 75,000,000 shares of its
Common Stock, par value $.001 per share (the "Underwritten Securities"). Subject
to the terms and conditions set forth or incorporated by reference herein,
Xxxxxx Xxxxxxx & Co. Incorporated and UBS Warburg LLC (the "Underwriters")
severally and not jointly offer to purchase the number of Underwritten
Securities opposite their names set forth below at the purchase price set forth
below, and some or all of the Option Underwritten Securities set forth below, to
the extent any Underwritten Securities or Option Underwritten Securities are
purchased in accordance with the terms hereof.
2
Number of
Underwriter Underwritten Securities
----------- -----------------------
Xxxxxx Xxxxxxx & Co. Incorporated.................... 60,000,000
UBS Warburg LLC...................................... 15,000,000
The Underwritten Securities shall have the following terms:
Common Stock
------------
Title: Common Stock, par value $.001 per share.
Number of Shares 75,000,000
Number of Option Underwritten The Underwriters have an option to purchase up to an additional
Securities: 11,250,000 shares of Underwritten Securities (the "Option
Underwritten Securities") at the public offering price, less an
underwriting discount, within 30 days from the Closing Date to
cover over-allotments.
Initial public offering price: $1.80 per share.
Purchase price: $1.6875 per share.
Selling concession: $0.07 per share.
Listing requirements: Nasdaq National Market
Lock-up provisions: For a period of 180 days from the date of this Terms Agreement, the
Company and certain of its executive officers will not, without the
prior written consent of Xxxxxx Xxxxxxx & Co. Incorporated, (1)
offer, pledge, sell, contract to sell, sell any option or contract
to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, lend, or otherwise transfer
or dispose of, directly or indirectly, any shares of common stock
or any securities convertible into or exercisable or exchangeable
for common stock or (2) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic
consequences of ownership of the common stock, whether any such
transaction described in clause (1) or (2) above is to be settled
by delivery of common stock or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to (a) the sale
of any Underwritten Securities to the Underwriters pursuant to
3
the Form Underwriting Agreement and this Terms Agreement, (b)
transactions relating to shares of common stock or other
securities acquired in open market transactions after the
completion of the Public Offering or (c) the issuance by the
Company of additional options under the Company's existing stock
option plans, provided that such options are not exercisable
during the 180-day period. In addition, without the prior written
consent of Xxxxxx Xxxxxxx & Co. Incorporated on behalf of the
Underwriters, none of such officers will, during the period
commencing on the date hereof and ending on December 1, 2003, make
any demand for or exercise any right with respect to, the
registration of any shares of common stock or any security
convertible into or exercisable or exchangeable for common stock.
Such officers will also agree and consent to the entry of stop
transfer instructions with the Company's transfer agent and
registrar against the transfer of such officers' shares of common
stock except in compliance with the foregoing restrictions.
For a period of 30 days from the date of this Terms Agreement,
Apollo Investment Fund IV, L.P. and Apollo Overseas Partners IV,
L.P., stockholders of the Company, will agree to not, without the
prior written consent of Xxxxxx Xxxxxxx & Co. Incorporated, (1)
offer, pledge, sell, contract to sell, sell any option or contract
to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, lend, or otherwise transfer
or dispose of, directly or indirectly, any shares of common stock
or any securities convertible into or exercisable or exchangeable
for common stock or (2) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the
economic consequences of ownership of the common stock, whether
any such transaction described in clause (1) or (2) above is to be
settled by delivery of common stock or such other securities, in
cash or otherwise. The foregoing sentence shall not apply to
transactions relating to shares of common stock or other
securities acquired in open market transactions after the
completion of the Public Offering. In addition, without the prior
written consent of Xxxxxx Xxxxxxx & Co. Incorporated on behalf of
the Underwriters, none of such stockholders will, during the
period commencing on the date hereof and ending on July 4, 2003,
make any demand for or
4
exercise any right with respect to, the registration of any shares
of common stock or any security convertible into or exercisable or
exchangeable for common stock. Such stockholders will also agree
and consent to the entry of stop transfer instructions with the
Company's transfer agent and registrar against the transfer of
such stockholders' shares of common stock except in compliance
with the foregoing restrictions.
Comfort Letter: The Company shall cause the Accountant's Comfort Letter and the
Bring-down Comfort Letter referenced in, respectively Section 5(g)
and Section 5(h) of the Form Underwriting Agreement to be
delivered, except that such letters will be delivered by Ernst &
Young LLP in lieu of Xxxxxx Xxxxxxxx LLP.
Additional Representations of the The Company represents and warrants to and agrees with each of the
Company: Underwriters that there are no contracts, agreements or
understandings between the Company and any person granting such
person the right to require the Company to file a registration
statement under the Securities Act with respect to any securities
of the Company or to require the Company to include such
securities with the Underwritten Securities registered pursuant to
the Registration Statement.
Additional Covenants of the Company: The Company covenants with each of the Underwriters whether or not
the transactions contemplated in this Agreement are consummated or
this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of its obligations under this
Agreement, including: (i) the cost of printing or producing any
Blue Sky or Legal Investment memorandum in connection with the
offer and sale of the Underwritten Securities under state
securities laws and all expenses in connection with the
qualification of the Securities for offer and sale under state
securities laws as provided in Section 3(f) of the Form
Underwriting Agreement, including filing fees and the reasonable
fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue
Sky or Legal Investment memorandum, (ii) the cost of printing
certificates representing the Underwritten Securities, (iii) the
costs and charges of any transfer agent, registrar or depositary,
(iv) the document production charges and expenses associated with
printing
5
this Agreement and (v) all other costs and expenses incident to
the performance of the obligations of the Company hereunder for
which provision is not otherwise made in this Section. It is
understood, however, that except as provided in Sections 4, 6 and
7 of the Form Underwriting Agreement, "Additional Covenants of the
Company" and "Additional Termination Provisions" below, the
Underwriters will pay all of their costs and expenses, including
fees and disbursements of their counsel, stock transfer taxes
payable on resale of any of the Underwritten Securities by them
and any advertising expenses connected with any offers they may
make.
Additional Conditions of The obligations of the Underwriters to purchase and pay for the
Underwriters' Obligations: Underwritten Securities pursuant this Terms Agreement are subject
to the following further conditions: subsequent to execution and
delivery of this Terms Agreement and prior to the Closing Date
there shall not have occurred any change, or any development
involving a prospective change, in the condition, financial or
otherwise, or in the earnings, business or operations of the
Company and its subsidiaries, taken as a whole, from that set
forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement)
that, in Xxxxxx Xxxxxxx & Co. Incorporated's judgment, is material
and adverse and that makes it, in Xxxxxx Xxxxxxx & Co.
Incorporated's judgment, impracticable to market the Underwritten
Securities on the terms and in the manner contemplated in the
Prospectus.
Additional Termination Provisions: The Underwriters may terminate this Terms Agreement, by notice to
the Company at any time at or prior to the Closing Date if (i) trading
is suspended or materially limited on, or by, as the case may be, any
of the Chicago Board of Options Exchange, the Chicago Mercantile
Exchange or the Chicago Board of Trade, (ii) a material disruption
in securities settlement, payment or clearance services in the
United States shall have occurred, or (iii) there shall have
occurred any outbreak or escalation of hostilities, or any change
in financial markets or any calamity or crisis that, in Xxxxxx
Xxxxxxx & Co. Incorporated's judgment, is material and adverse and
which, singly or together with any other event specified in this
clause (iii), makes it, in Xxxxxx Xxxxxxx & Co. Incorporated's
judgment, impracticable or inadvisable to
6
proceed with the offer, sale or delivery of the Underwritten
Securities on the terms and in the manner contemplated in the
Prospectus.
If this Terms Agreement shall be terminated by any Underwriters,
or any of them because of any failure or refusal on the part of
the Company to comply with the terms or to fulfill any of the
conditions of this Terms Agreement, or if for any reason the
Company shall be unable to perform its obligations under this
Terms Agreement, the Company will reimburse the Underwriters or
such Underwriters as have so terminated this Terms Agreement with
respect to themselves, severally, for all out-of-pocket expenses
(including the fees and disbursements of their counsel) reasonably
incurred by such Underwriters in connection with this Terms
Agreement or the offering contemplated hereunder.
Additional Indemnification Provisions: The Company agrees to indemnify and hold harmless each affiliate
of an Underwriter within the meaning of Rule 405 under the 1933
Act.
Other Terms:
This Terms Agreement may be signed in counterparts, each of which
shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
Notices: All notices and other communications hereunder shall be in writing
and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to
the Underwriters shall be directed to Xxxxxx Xxxxxxx & Co.
Incorporated, 0000 Xxxxxxxx, Xxx Xxxx, XX 00000, Attention: Global
Capital Markets Syndicate Desk; notices to the Company shall be
directed to the Company at 1221 Avenue of the Xxxxxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx X. Xxxxxxxx,
Executive Vice President, General Counsel and Secretary.
Closing Date and location: June 10, 2003
10:00 a.m.
Cravath, Swaine & Xxxxx LLP
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
7
Please accept this offer by signing a copy of this Terms
Agreement in the space set forth below and returning the signed copy to us.
Very truly yours,
XXXXXX XXXXXXX & CO. INCORPORATED
UBS WARBURG LLC,
by XXXXXX XXXXXXX & CO. INCORPORATED
-----------------------------------------
Xxxxx X. Xxxxxx
Vice President
Accepted:
SIRIUS SATELLITE RADIO INC.,
by
--------------------------------------------------
Xxxxxxx X. Xxxxxxxx
Executive Vice President,
General Counsel and Secretary
