Exhibit 1.1
SIRIUS SATELLITE RADIO INC.
(A Delaware corporation)
25,000,000 Shares of Common Stock
TERMS AGREEMENT
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October 7, 2004
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 attached hereto, as contemplated by the Registration Statement No.
333-108387. 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 25,000,000 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 (the "Underwriter") offers to purchase the total
aggregate number of Underwritten Securities, 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.
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The Underwritten Securities shall have the following terms:
Common Stock
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Title: Common Stock, par value $.001 per share.
Number of Shares: 25,000,000
Number of Option The Underwriter has an option to purchase up to an
Underwritten Securities: additional 3,750,000 shares of Underwritten
Securities (the "Option Underwritten Securities")
at the purchase price set forth below, within
30 days from the Closing Date to cover over-allotments.
Purchase price: $3.85 per share.
Listing requirements: Nasdaq National Market.
Lock-up provisions: For a period of 90 days from the date of the
Prospectus Supplement relating to the Underwritten
Securities, the Company will not, without the
prior written consent of the Underwriter, (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, or
(3) file or cause to become effective a
registration statement relating to the offer and
sale of any shares of common stock or any
securities convertible into or exercisable or
exchangeable for common stock, other than (i)
shares of stock that may be issued in connection
with the Company's long-term stock incentive plan
or 401(k) plan or (ii) amendments to the Company's
registration statement on Form S-3 (File No.
333-115695) as are necessary to permit holders of
the Company's 2 1/2% Convertible Notes due 2009
(issued on February 20, 2004) to resell those
securities or the underlying common stock in a
registered transaction.
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The foregoing sentence shall not apply to (a) the
sale of any Underwritten Securities to the
Underwriter pursuant to 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 such 90-day period.
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 The Company represents and warrants to and
of the Company: agrees with the Underwriter 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, other than
the agreements granting registration rights to
affiliates of The Blackstone Group L.P. and Apollo
Management, L.P.
Additional Covenants of the The Company covenants with the Underwriter whether
Company: 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 Underwriter in connection with
such qualification and in connection with the Blue
Sky or Legal Investment memorandum, (ii) the cost
of printing certificates
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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 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
Underwriter will pay all of its costs and
expenses, including fees and disbursements of its
counsel, stock transfer taxes payable on resale of
any of the Underwritten Securities by it and any
advertising expenses connected with any offers it
may make.
Additional Conditions of The obligations of the Underwriter to purchase and pay
Underwriter's Obligations: for the 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 the
Underwriter's judgment, is material and adverse
and that makes it, in the Underwriter's judgment,
impracticable to market the Underwritten
Securities on the terms and in the manner
contemplated in the Prospectus.
Additional Termination The Underwriter may terminate this Terms
Provisions: 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 the Underwriter's judgment, is material and
adverse and which, singly or together with
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any other event specified in this clause (iii),
makes it, in the Underwriter's judgment,
impracticable or inadvisable to 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 the
Underwriter 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
Underwriter for all out-of-pocket expenses
(including the fees and disbursements of its
counsel) reasonably incurred by the Underwriter in
connection with this Terms Agreement or the
offering contemplated hereunder.
Additional Indemnification The Company agrees to indemnify and hold harmless
Provisions: each affiliate of the 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
Underwriter 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: October 13, 2004
10:00 a.m.
Cravath, Swaine & Xxxxx LLP
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
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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
by
/s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
Vice President
Accepted:
SIRIUS SATELLITE RADIO INC.
by
/s/ Xxxxxxx X. Xxxxxxxx
---------------------------------
Xxxxxxx X. Xxxxxxxx
Executive Vice President,
General Counsel and Secretary
